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April 14, 2011

Communication is key to teamwork

The title might sound trite, and obvious, but it has been an interesting cognitive realisation for me the last few days, working on the KBAM task. We were having real trouble for a while. We had all been working on the different parts, but when it came to linking it all together, there was a sense that we were utterly lost. How do you about combatting this, with such a huge task in front of you?

Happily, our approach soon became obvious to us. We really needed to TALK to each other. Like I said, that sounds obvious, but it can be really hard to do when everyone has different areas of expertise, and everybody is mainly interested in their own work. Once this became clear to me, I realised we were committing the ultimate sin - there was no systems thinking going on! We were going to end up with sub-optimised output.

Well, I'm the leader, so this was my fault, and I tried to set about correcting it. We wrote all the different areas that we were working on, on the board at once, so everybody in the team could see every area that we were trying to cover as part of our presentation to the board. At this stage, I told everybody to forget their sections, but look at the areas that everyone else was working on, and spend a few minutes asking each other person questions about what they were working on, and about areas of intersection between topics. In this way, we started to build up a picture of the system as a whole, and we could start making higher quality assumptions and deciding on plans together. The task became about the imagined reality of WaveRiders, and no longer about underlying theory. I feel like this was an important breakthrough, without which you would all have been facing a pretty disjointed presentation on Friday.

It is an important reflection for me. A criticism I have of LE is that every leadership opportunity was short-term, even in the mini-projects, because everyone was leading a project, and we switched between them quickly. This was why I was keen to take the role in KBAM - it's an extended, much more challenging test for me. You feel real elements of pressure when things are not going well, and as much as you might try to distribute leadership, you always feel the weight that little bit more.

So, in summary, goodbye Point 9, hello Point 14. If you're as much of an MBE geek as me, that will make perfect sense to you...:P


April 13, 2011

Asset Management and Lean

I was thinking earlier, that asset management is effectively everything you have to do in business, that isn't directly what you are trying to do in business! What I mean is, it is everything but the product or service that you offer, and the processes or functions that support it. It is one of the most important business enablers, and to do it well is something of a skill. In fact, the Institute of Asset Management has this to say:

"Asset Management is the art and science of making the right decisions and optimising these processes."

Also, "the management of physical assets (their selection, maintenance, inspection and renewal) plays a key role in determining the operational performance and profitability of industries that operate assets as part of their core business."

So with all this in mind, I started thinking about all this in the context of lean, which admittedly I don't know much about. The way I understand it, the purpose of lean is to minimise waste in the system, such that anything that is not directly adding value to your product in the eyes of the product should be avoided. My question is, does this have implications for excellent asset management, or are you having to compromise on an excellent approach because it is not directly improving products for the customer? If this is the case, what is the point of expending money on things like health and safety, or better security, which I happen to think ARE necessary, but don't seem to add value.

Maybe I have some misunderstandings about lean, but it seems like an interesting area of conflict. I feel like I must be wrong, because Toyota seem like a pretty excellent company to me, and were also of course the creators of lean production. But, I bet there are also plenty out there who are actually reducing their own capabilities too.


Situationally–aware leaders, and the reason I'm always late.

Yesterday's session made me feel a little uneasy about being a leader in the future. We all saw some of the terrible things that happened when people are not properly aware of their surroundings, and the bad decisions or poor judgement that this can result in. Obviously, these people are responsible for their own actions. However, we also discussed that leaders hold a great level of responsibility for the working environment they create. If the team fails from a business perspective, that is likely to be down to them to some degree. But, imagine if you were a leader, and someone working for you died on the job. How terrible would you feel? How scary a thought is that. That makes me question whether I want the responsibility of leadership. I know it's an extreme case, but we saw over and over again that these things can happen. What are your thoughts on this? I'm really curious.

Also, we spoke about the errors people can make, relating to: information gathering, interpretation, and anticipation. I wanted to apply this to myself, and decided to analyse why I am so often late by just a few minutes. There are probably a lot of reasons, and this is likely just a simplification, using this model, but I figure it's worth a shot! Is it about gathering of information? No, I don't think so - I'm quite organised, and I pretty much always know what time I am meant to be somewhere, or what time the train leaves, etc. Is it about interpretation? Well, no I don't think so, I always think about what I have to do, how it all fits together, what time I have to leave in order to be somewhere, etc. I think my problem is anticipation - not just for this, but for a lot of errors I make, I tend to be an optimist, and rarely think about the worse case scenario. This results in leaving things to the last minute, assuming things will take the minimum amount of time that they could, not being able to think ahead about sources of so-called 'randomness' in my day, like stopping to talk to someone on the street, or getting an important email, or the air in my bike wheels being low and requiring pumping, etc.

So why am I unable to learn this? To understand the upper and lower limits properly, rather than just assuming the lower limits will apply to me. I think it comes down to poor judgement, and there are perhaps a lot of different internal biases I can use to explain. For example, the representativeness heuristic - I don't seem to understand the underlying statistics, and always assume that lower limits apply to me. This could be due to overconfidence bias. I also seem to have a short memory when it comes to being late - I think that I'll learn, it won't happen again, and I make the same old estimates about how long things take. This is anchoring at play. And why don't I ever learn? Perhaps it is the curse of knowledge - maybe I tend to think looking back that it was a simple certain reason, that I won't make the mistake again, and that I don't need to change approach. Hopefully, developing this thought on the blog will help...

Linking back to leaders and situational awareness - I think that bias can play a part in all three types of error. I have only shown the ones that apply to me, and for anticipation at that.


April 09, 2011

It's just too big! I'm going to be selfish.

I'm not the first person to say it, and I doubt I'll be the last, but the field of leadership theory is just too huge! Much like KBAM, the challenge is to work out what is useful, relevant, or important, and ignore the rest. It's making this the toughest PMA to date, because it's just so open-ended that you end up feeling lost unless you have a really good ability to focus (I think I don't!). I know that this is meant to be representative of reality, but that doesn't make me feel any better about it. Unless, the purpose is to realise that we will always be confused and lost, and we'd better get used to dealing with it?! 

Also, it makes me think about my role in the PMA as a leadership coach. How can I coach anyone on anything, if I have so little experience with it. It is at times difficult to remember that we are also playing the role of the CEO and Director being coached in all this, and perhaps it is fair to say that their character and background are the ones that we are more easily able to identify with. With that in mind, the theories that I selected to help them improve were also the ones that I felt I most wanted to apply to myself, which is why I chose the likes of creative, strategic, transformational and servant leadership to work on. I think being selfish here is justified ;-)

I also came across this quote from Warren Bennis, which perhaps because of my musical background, I really like: 

"I used to think that running an organization was equivalent to conducting a symphony orchestra. But I don't think that's quite it; it's more like jazz. There is more improvisation."

That sums it up for me perfectly.


April 05, 2011

I'm seeing the connections

I have to learn to stop being surprised by things that Paul says to us, which then go on to be true. Some of you may remember that he mentioned in our introductory KBAM session, that last year's MBE group found that this was the module where everything came together for them. Maybe it is because he said this, and so my bias has taken over and I have been looking, but for the past week, I have been seeing the connections everywhere, and when least expected. I feel like Russell Crowe in A Beautiful Mind (although hopefully a little less crazy - I'll let you all be the judge!).

For example, from CBE, the topic of organisational learning is vital to future asset management strategies. There's little point in getting assets in order unless you have developed the capabilities to continue to do so. From PEUSS, we are using the ideas of considering the product and our assets in a life cycle management approach, so that we can get the best possible use of them for ourselves and our customers. Risk management is also relevant. LE's influence is clear to everyone in all we do, particularly for those of us who volunteered to be leaders, but certainly also for everyone who has taken the time to consider the role they play within their team, and whether they want to be a star, fan, walking dead or urban terrorist. It also taught us about how to implement strategy. RDM has made us aware of our biases, and how assumptions we make impact our results, as well as methods for making the hard decisions on what to do with our assets, in an organised way. I could think of examples for the others, but I think you get the idea! ;-)

I think that the only EFQM enablers we haven't looked at directly are people, and partnerships. And people have been covered indirectly in pretty much everything we have done anyway; they are inseparable from the system! Not to mention we have OPP to look forward to... (and MOC still for me!) As for partnerships, well they haven't been ignored either exactly - there was the option in the CBE PMA, they featured in FACS and could well be a part of KBAM, especially if we decide to outsource. Not to mention that my project is focusing on them to a degree...

Ladies and gentlemen, we have the tools! It might only be April, but I feel it is incredible how good an overview we have of so many aspects of business and management. I've said it a lot, but I'll say it again - doing this MSc was the best decision I ever made.


March 31, 2011

To manage assets, you must manage knowledge.

I stumbled across one of the major links between knowledge and asset management today. It might sound really obvious, but assets generate information! To effectively manage assets, be they property, machines, people, etc, you need to have a way of dealing with the flows of important information surrounding them, and of converting that into knowledge that is useful, and an aid to your decision-making processes. This is where the Knowledge Management comes in.

It's not just that you're managing assets based on knowledge and theory (which you should be anyway of course - theory is the basis for action), it's that the assets themselves need continuous monitoring/maintenance/support and all of this generates information that must be handled appropriately for effective use later. For example, for a single component of a machine you own, you must: record the decision-making process that led to purchase, the cost, market and book value, likely depreciation values, how often it needs maintaining, what kind of maintenance is required, its productivity, etc. Now, if you scale that up, that needs to be repeated for every machine you have. In every factory you own... that's a LOT of information, and this is just one small area of asset management!

Even then, as we have previously discussed, that's a small part of the battle. It's fair to assume that you require more than just one person's input in your asset management. If you had a small operation and you didn't, life might be a little easier. But, assuming you do, because the operation is big and there is too much for one person to consider, then you have fresh problems, because it is no longer just about making sure the information is collected and occasionally used; no, you have to get past communication barriers. And we know that while this isn't too tough with explicit information, it's much tougher with tacit information. Even with just two people managing all assets, an incredibly high level of communication would be required for effectiveness, and with every extra person involved in the process, it becomes even harder to sustain!

And yet it is vital that you do have a lot of people involved, or else, you completely lose access to the huge volumes of tacit information within them, as well as their buy-in and consequent compliance or interest in 'your' (not 'their'/'the company's') asset management policies.

So it appears this is the challenge: Knowledge and Assets are inextricably linked in this way, and you need to manage both effectively to succeed. Wow... good luck to us all... no wonder KBAM seems so big!


March 18, 2011

Explore your options

In one of the lectures last week, Jeff touched on the point that one of the key steps of the decision-making process was exploring and developing the options or alternatives available, through various means. Doing so tends to result in having more choice obviously, but it's also likely that you might spot a more out-of-the-box solution than otherwise that challenges what is expected. If I'm honest, the creative solutions that our team came up with were not the result of a particular brainstorming session, or any special technique. They spontaneously arose during the natural course of our collective approach. Perhaps we had an element of luck in this, but I think that the really open nature of our working environment helped this.

I think that this is a really important lesson to take-away. Always take the time to think what else you could do, before you take a decision. This is especially important if you're not particularly happy with any of your present options! Real progress only ever occurs by step change, when someone like Gandhi brings to the fore the ideas of total non-violence, or Steve Jobs introduces the Ipod, or Ipad for that matter. You can bet that they were not happy with the status quo!

It's obviously a difficult thing to do in practice - there is not always time to generate alternatives or to challenge the assumptions of a given situation. But, you can be sure that if you have done so, your eventual decision is likely to be more robust, because you know a lot more about what else you (or others competing with you) might have done. It's quite similar in that sense to having more information when making any decision. Sure, you might become paralysed, waiting to act until you are sure, but the very fact that you have considered what is relevant means that your informed decision is one you can have confidence in.


Good research for robust decisions

We gave our decision-making presentations today; wow that was a long, tough session to endure! I’m not sure anyone was able to sustain their focus through the whole thing, especially due to how tired we all were. Still, in the moments that I wasn’t completely vacant (some might say that these are rare, or non-existent even! ;-)), I did get to note some interesting comparisons between the approaches of other groups and our own.

Something that surprised me though was the lack of research that some groups put into their marketing strategy and budgeting. I don’t know whether anybody was already quite familiar with the industry and so didn’t need to do much research, but I am pretty sure that the task specifically asked for it. How can you expect to make a robust decision without having the requisite knowledge to base it on (I’m sure you can hear the undertones of Deming in what I am saying hehe!)?

I was really proud of the fact that my group did spend quite a lot of time on this. After initially struggling, and trying to base the decisions on our own biases (e.g. “we all do our shopping on the internet, so fishermen will too”, or, “I always take in adverts that I hear on the radio”) the availability heuristic in particular was clearly present for all to see. When we could find no academic work related to what we were looking for, we simply decided to ask those who might know! This entailed looking for companies producing fishing boats in the UK, and effectively calling them up and speaking to their leaders or marketing departments in order to ascertain the information about the best and most effective marketing methods. From this, we learned that TV and radio were virtually useless (we had previously assumed fishermen listened to the radio all day, and that it would be an effective route), but also, most importantly, that internet and advertising in fishing magazines was good. However, the best find for us, which wasn’t one of the options given originally, was that boat shows were the most effective route for selling boats. For example, the Southampton boat show is the biggest in the UK, runs for 10 days each year, and brings in around 120,000 people each year, with average incomes above £95,000 and around 80% of visitors making a purchase from exhibitors of the show. What a fantastic way to target customers who have disposable income and want to buy from you! And we would never have known without picking up the phone and speaking to professional boat salesmen. Doing so informed our decision no-end, leading to confidence that if we had to implement our plan for the different methods, we are relatively sure we would have been successful. Good theory (or knowledge or experience) should be the backbone of decision-making.


I guess I’m a (Decision) tree–hugger!

After spending a lot of time looking at a lot of different tools lately, I have decided that DT’s are probably one of the best (obviously, depending on the situation and the information that you have. Their ability to get to the heart of a problem through finances (or utility) is quite amazing, and the structuring of the process is brilliant in that it helps you to ensure that you have covered every eventuality. It is especially good at helping you to avoid the confirmation trap. For example, any time you make a branch, you also have to question if there is an opposite alternative at the very least, if not more completely distinct ones. They are also hard to argue with, and help you make informed decisions based on the likelihood of certain scenarios playing out. The power of decision trees is something that I am unlikely to forget, and they are probably something I will integrate into my general System-2 decision-making methodology.

In terms of helping our team to reach a final decision, about whether to continue or not, and where to locate, they were absolutely invaluable. Of course, the tree doesn’t know anything that you don’t tell it, so qualitative factors are very hard to incorporate, and something like Grid Analysis or Analytical Hierarchy Process are much more appropriate. Similarly, while we did include marketing costs, or factory re-sale gains, other costs that are difficult to estimate, such as the potential training costs of workers for the Exmouth factory, were not included.

So it can be argues that DT’s do not always give you the full picture, which is true. But, you don’t have to take the outcome as fact. Even after evaluating the tree, you need a high degree of judgement to decide what is important or not, and how risky certain paths really are. The chance of the worst case-scenario playing out for Waveriders (so, product doesn’t get developed until Dec 2012, and when production begins in Jan 2014, the market conditions are poor) is around 0.15. That is the only situation under which producing at both factories might be a problem, so it is worth balancing the risk and pursuing that course of action anyway.

However, DT’s are clearly an excellent tool for decision making, and when used correctly, are capable of judging a situation in a way that our own cognitive processes are rarely capable of. Of course, there is still potential for bias, and they are no substitute for experience and good judgement. They cannot be relied upon to actually make the decision, as they will certainly NOT be taking the blame for bad decisions!


March 12, 2011

Group Decisions in the Real World

Not that we need to make this task harder, but while reading earlier, I thought of a complication that would often be present in group decision making in the real world. In our groups, no-one really has their own agenda; we are all working together, collaborating for the group in order to do as well as we can. There are no competing agendas or ulterior motives. Additionally, we are all equals - no one person has any more say than another in theory (that might be different in practice!).

However, within a business for example, many groups might be composed of multi-functional teams, or with management of varying levels of positional power present. Each of these might have different areas of concern, i.e. the finance manager's role might be to cut costs, the engineer might be attempting to maximise quality, the marketing manager might wish to preserve the size of the budget available, etc. So how do the competing agendas of these people affect their decision making, and consequently, the ability of the group to make decisions? There is bound to be some bias in the proceedings. We know that Deming would advise that the best way forward would be to break down the barriers between these people, instill constancy of purpose, and get everyone thinking about the organisations goal as a system, rather than their own. But of course, in practice, this is difficult.

So, I wonder, what would this task have been like if we were all to play a role? Pretty difficult I imagine, to the point that it might even defeat the purpose of trying to use all the tools and work together. However, maybe there is cause to have a seminar on this, or some (LE style) role-playing exercise to explore the challenges of a situation like this?


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  • Nice examples Yanik, especially the second one from OPP that shows that the redundancy of knowledge … by on this entry
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  • Hi, Surya. I agree with you that human being get extremely paranoid now. It is extremely unfair to u… by on this entry
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