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Thursday, July 28, 2005

 

The McKinsey Quarterly: From push to pull: The next frontier of innovation

I can't read this without membership. However, this is a very important part of MWT. This is like 'you are responsible for your own communication' (see core concepts in the 'MWT Model' area). Subscribe models are also important but first need to push something that can be subscribed to... The McKinsey Quarterly: From push to pull: The next frontier of innovation: "From push to pull: The next frontier of innovation

* Most companies now mobilize resources by deploying push systems, in the mistaken belief that they promote efficiency.
* Push systems—characterized by top-down, centralized, and rigid programs of previously specified tasks and behavior—hinder participation in the distributed networks that are now indispensable to competitive advantage.
* More versatile and far-reaching pull systems—characterized by modularly designed, decentralized platforms connecting a diverse array of participants—are now starting to emerge in a variety of arenas.
* As pull systems reach center stage, executives will have to reassess almost all aspects of the corporation."

Saturday, July 23, 2005

 

Josh Kaufman: Inside My Bald Head: The Personal MBA 40

Perhaps the Personal MBA could be converted to an Open-MBA... Josh Kaufman: Inside My Bald Head: The Personal MBA 40: "Great list!

I would also add Mintzberg's The Rise and Fall of Strategic Planning. So glad you included Economics in One Lesson (it's certainly on my recommended reading list but you'd expect that with my market-based ManageWithoutThem model).

Perhaps Mises' Human Action could be in the Doctorate programme. Adding some other classics like Bastiat's The Law might make it an open-MBA...?

Posted by: Matthew De George at July 24, 2005 01:07 AM"

 

Management Teams as Cartels

In addition to The New MWT Hierarchy I'd like to introduce the management team transformation slides. I've always had a slight problem with the idea of a 'management team'. To me the same economic analysis which applies to a cartel applies to a management team.

Before: Management Team as Cartel


After: Management Team with Governance



Annotations coming soon...

Friday, July 22, 2005

 

Harry Potter Book 7 Revealed *spoilers*

I haven’t read any of the Harry Potter books, but I have seen two of the movies and read a review of the latest book that contained ‘spoilers’. So it’s painfully obvious to me now what the final book will be about and what J.K. Rowling’s ultimate plan for our children actually is.

Before I get to what will appear in the final book let’s look at the cunning precedents that Rowling is establishing in our hearts and minds which will allow her to achieve her ultimate goal. Which it is now clear, is the corruption of children everywhere.

Look at how each new Potter release is accompanied by increasing amounts of security and miscommunication about details of the plot. For the final book it is expected that this secrecy will have been perfected. No reliable details of the plot will be available until half the world's children have already completed reading the book.

False rumours and extracts will appear on the Internet weeks before the release. It will be denied by Rowling but these rumours will have been started by Rowling herself. They will serve to render the impression that this is just another harmless children’s story that only a Pope would have objections to.

So why is this secrecy so important to Rowling. Because in the final Potter novel Harry’s true character will be revealed. Currently, the goodness of Harry rests on the fact that it is set up against the evil of “You-Know-Who” (Voldemont). You-Know-Who allegedly killed Harry’s parents when Harry was still a baby.

When I read that Dumbledore had been killed in the latest book it all became clear to me. Some may think that Dumbledore will just come back again in the next book like he did when he died in the Lord of the Rings movie – but I’m sorry Dumbledore is gone for good.

In fact it is Dumbledore’s death that finally draws Harry to the dark side. Yes; that’s right Harry will convert to the dark side of the force in the final book! He couldn’t save his parents, then he couldn't save his godfather, and then he couldn’t save Dumbledore. Only the dark side give will give him power over death. This is a power that he can’t live without.

But who really killed Harry’s parents? The story is that You-Know-Who couldn’t kill Harry. Why is that do you think is? We know now that it’s because You-Know-Who IS Harry. It was indeed ‘his mother’s love’ that saved Harry. His mother who helped turn Voldemort into Harry (making Voldemort ‘disappear’ except when Harry is around). Harry’s internal struggles being depicted in the physical world when Harry ‘fights’ Voldemort.

I wont spelt the rest of this theory out in detail because it’s actually quite obvious. But it should be noted that Harry has often been referred to as ‘the chosen one’. Those in the know believe that Harry will save the [re]public from dark magic. We all know that such prophecies can be misinterpreted...

Anyway. Enough of that. This is what Rowling has planned for your children to read…..

:-)

 

MWT Book Extract - Governance, Hierarchy, and the Delivery Architect

Unavoidable Hierarchy of Responsibility

Hierarchies are powerful organising constructs. One of the assumptions people often make about the MWT Model is that if it is market-based it must also be against hierarchical organisation. This is not true as hierarchical organisation is an important feature of corporate governance. Without the overriding principle that the CEO and Board are ultimately responsible for the organisation’s performance (and the organisation's overall impact on society) there can be no corporate governance. The unavoidable hierarchy of responsibility draws a line from each employee, through their managers, directly to the Board.

It is the unflinching burden of this hierarchy of responsibility that often causes the best-seller lists for management books to be dominated by what are essentially self-help books for people in positions of power and responsibility. Indeed, much of the management profession has been developed to push this burden of responsibility down the hierarchy. This is different to delegation. Delegation, or rather the correct distribution of decision rights, is by definition always a positive contribution to the organisation’s effectiveness. Distribution of decision rights is in fact enabled through the hierarchy of responsibility. If a manager is ultimately responsible regardless of delegations then there is no point restating the managers responsibilities and calling it management. This is what subtlety occurs with Single Point Management (see Chapter xxx). In a sense, when I say 'management is the process of determining which decisions don't have to be made by consensus' I am also saying that management is the process of determining which decisions don't have to be made by the manager.

Management should always involve the organised delegation of responsibilities. You will often hear that you can delegate responsibility but not accountability (or something like that). This management truism is indeed true. What it is saying is that the manager is always accountability even though they have given the task to somebody else. The problem arrises when the one class within an organisation (in this case that class is the management class) has both the right to delegate and the right to judge capability. This violates the MWT principle to ‘make management one step removed from measurement’. Too often I have seen managers attribute their failure to 'unskilled resources' and too often this is the case when those same resources have been working for the manager for months or even years. Though not always the case in well matrixed organisations and project, managers are responsible for the capabilities of their people – so blaming your resources for failure is not an option.

Market-based management partially solves this problem by providing mechanisms for people to choose their managers. However, this is not an ideal solution as it will mean that truly challenging endeavours will never be resourced. Also, as discussed in Chapter xxx, competitive differentiation and alignment to strategy would be ineffective under a strictly market-based management model. In order to resource truly difficult endeavours and maintain a strategy of differentiation, you have to strictly follow the rule that if a subordinate is responsible then the manager is also responsible.

Due credit should be given to organisations who try to solve this governance problem with such mechanisms as '360 degree' assessments and other elements of a comprehensive performance management processes. In fact, even the very existence of a human resources department is supposed to provide a mechanism for resolving problems with managers who have taken advantage of the largely political relationship between the manager and the managed which allows their own failings to be exploited and reframed as leadership. However, the problem with 360 degree assessment and reliance on a separate human resources department is that these involve interventions. As mentioned in Chapter xxx, any management model which relies on interventions cannot improve corporate governance because managers control resource allocation and therefore they control which interventions are resourced. So in effect they control which interventions occur. If those resource allocations are ineffective (from the organisations perspective) the interventions simply wont occur and the risks to effective corporate governance will not be managed.

The New MWT Hierarchy

The New MWT Hierarchy reinforces the idea of an unavoidable hierarchy of responsibility. More importantly is provides a more comprehensive explanation of the forces which are already acting within the management hierarchy. The New MWT Hierarchy should be considered a management pattern (in the sense of Christopher Alexander's A Pattern Language as discussed in Chapter xxx). In the diagram for this pattern each of the olive green components are a different person performing a different role. It is important that these are physically different people. It is only then that the correct incentives are in place for the pattern to work.

However, some will correctly note that this is overkill for smaller organisations or projects. It is true that this pattern evolves too many people to be suitable for small organisations. However, it does more effectively represent the forces which need to be in place to govern the hierarchy. It is only because the risks are smaller in smaller organisations that roles can be combined into less resources. It may even be possible that the roles are combined into a single manager. This is of course exactly what the traditional view of a management hierarchy would suggest. But I believe that in all cases where the roles are combined a risk is introduced. It is only because management practices have developed an unquestioned value proposition unto themselves that this idea of risk management within the management model will be unintuitive to many. This is why risk management within the management model is such an important component of the MWT Model.

Note also that it is not just the size of the organisation that indicates the roles should be separated into different people. Other risks such as the combining of diverse capabilities with a new collaboration / delivery architecture also indicate that separate people in each role should be used. Also, any time when an independent project management firm is used to manage other firms the roles should be separate people (or perhaps separate firms).

It might also be the case that a strong general manager will require a separate delivery architect to supplement their general management skills with domain or task-specific skills. There is a long standing argument about whether a good manager can manage anything. The answer to this is 'it depends'. An understand of The New MWT Hierarchy allows the decision to be made by assessment of the managers skills in relation to the domains they are managing. The discussion on the relationship between the manager and delivery architect will make that clear.

The individual components of the diagram are introduced in the section below. As for all MWT collaboration architectures (as The New MWT Hierarchy is simply a generic collaboration architecture) in addition to the component descriptions a set of traversals across components will also be provided.

<--- continued --->

Tuesday, July 12, 2005

 

New MWT Hierarchy


New MWT Hierarchy
Originally uploaded by MatthewD42.
I'm developing the general MWT hierarchy. This introduces the domain-specific delivery / collaboration architecture which supplements the 'plans and events' focus of general [project] management. The MWT hierarchy is also driven by the core concept to seperate management from measurement.

Sunday, July 10, 2005

 

Naturual Law and Order

Hans-Hermann Hoppe is always interesting. Sit back and listen to a great introduction to natural law, property and easements, and the evolution of natural law into the order provided by feudalism. It's a facinating trip through history. Unfortunately he runs out of time before he finishes the lecture.

Even if you don't enjoy the content you could make a drinking game out of he number of times he says 'So to speak' :-)

Found in Mises media.

Friday, July 08, 2005

 

Why are programmers supposed to know everything?

Interesting rant called Programmers Need To Learn Statistics Or I Will Kill Them All. My immediate reaction was to see this as just another example of people being upset that programmers don't know everything.

To wish that programmers knew everything is generally a waste of time (how could they?). But I think this guy is onto something - I just don't yet know what it is. There is certainly something wrong with the way many IT people think the world works which comes out when they try to manage.

 

David Crow: Why software development is not only programming

There is a void between programming and software development. In the absence of good software development management the struggles of that void are taken up by the programmers. Unfortunately, when that struggle becomes too much of a burden for the programme to bare the programmer is taken to be incompetent when in reality it is the unmanaged void that was too blame... David Crow: Why software development is not only programming: "Successful software development is so much more than programming. Or maybe better put programming is so much more than being able to write code."

Monday, July 04, 2005

 

Sarbanes-Oxley and Internal Markets

Something I've never commented on in the Blog before (though it appears in the MWT Book manuscript / notes) is the relationship between Sarbanes-Oxley and the technology-enabled markets which are one of the foundation pillars of the ManageWithoutThem Model. I'm not a lawyer. So nobody should take my opinions as legal advice. In fact, anybody trying to Google for legal advice should be very careful indeed...

Sarbanes-Oxley is all about the retention of records. It started because some audit company is supposed to have shredded the audit records of one of their clients. If you look at the Mises Blog I think you will find one of the few references to the fact that the charges against the audit company have seen been dropped (Is this right? Check Mises Blog). However the ruling still exists and organisations are scurrying to comply with it.

The thing is Sarbanes-Oxley doesn't just stop at retention of records. The intension of the ruling includes both retention of records and assurances that the records are accurate. This bit is important and interesting. It means that audits are required at some regular interval to ensure that the records are accurate.

Let's take a simple example of asset records. Just as most organisations are struggling to keep simple records of the assets that they own, the Sarbanes-Oxley ruling says you have to audit the records to make sure they are accurate. So every three years you have to collect all the information about your assets again.

I have to be clear here; you can't just download the information from your asset register. The purpose of the audit is to ensure that the asset register is correct. So you need something to compare the information in the asset register to. So every three years you have to ask everybody in your organisation what assets they have - even if you think you already know. This is the only way you can make sure and prove that you already know.

While the intension is arguably good this is clearly ineffective. I also think it's not sustainable. Also, I think the risk here is that organisations can still fudge the audit. To take an extreme example, the organisation could fake all of the collected records by writing a small script which takes the asset register and turns it into emails. The script could throw in some mismatches so it looks realistic, the mismatches could be resolved, and the organisation would have compliance.

So in a way the law doesn’t really guarantee real compliance. This menas that eventually one of three things will happen. The most unlikely is that the government will decide not to interfere anymore. Alternatively, the intent of the law will be made more clear and additional laws will be created to cover individual cases of fraud (the typical approach of law propagation). Or lastly, the courts might shift the focus from ‘reporting requirements’ (what you have to submit) to ‘operating requirements’ (how your organisation actually has to work).

I'm betting on the last scenario where 'operating requirements' are imposed. And this is where technology-enabled markets come in. The scenario I'm going to describe is 5 to 10 years into the future. Even though the technologies largely exist it will take that long for the law, and our transition from command-based management models to market-based management models, to catch up.

A technology-enabled market approach to enforcing impending 'operating requirements' with the same intent as Sarbanes-Oxley would look like this...

--- To be continued ---

 

Aloha! What's in a name?

This is a quickly typed response to Rosa’s comments on my comments about the ChangeThis manifesto which accompanies her book ‘Managing with Aloha’. In my comments I might have accidentally kinda sorta let slip that I didn’t like her title. Actually, I think close to half of my comments were either ‘I haven’t read it all’ or ‘I don’t like the title’. Oh, and then I went on to talk about me and what I think... Oops :-)

From what I’ve read ‘Managing with Aloha’ sounds like a great way to manage. There is nothing I don’t like about it yet (Mind you I still haven’t finished reading even the ChangeThis manifesto. And don’t yet own the book.). I think if a manager learns its lessons and genuinely adopts the principles they will become a better manager - simply because the principles represent a better way to manage. I hope the book is very successful (perhaps it already is).

So what don’t I like about the title? Fact is, I don’t dislike the title quite as much now I’ve (almost) read the manifesto. And the reasons are touched on about a third of the way through the manifesto. I didn’t know the real meaning of ‘aloha’. So when I read the title of the book I think I subconsciously read it as ‘Managing with jolly and mindless enthusiasm’. Now I’m all for enthusiasm; but when I read the title it sounded like another quick fix. So I’m glad I read further because it’s made me realise something.

What it made me realise is that there is a place for quality management books for people who genuinely want to be better managers. Books for people who aren’t just interested in being ‘more successful’ managers. What I realised is that I probably under-estimate the number of people who genuinely want to become better managers just for the love of management - and that’s unfair of me. I tend to be very hard on managers (though some would say I’m a little ‘soft’ on people who actually report to me - unless they are managers).

My focus in my research for my book (and the way I tend to read organisations) is only partially about looking at what managers are individually doing. Like I said in the original post about the Aloha manifesto, my thinking is part technology, part economics, and part values. So when I think of a management model I think of not only of what individual managers are doing but also what mechanisms (or ‘institutions’) exist in the organisation to ensure that the best management behaviours are the ones that are rewarded and encouraged. In other words, my definition of management actually touches on governance - that is, what managers the managers?

When I read the title ‘Managing with Aloha’ I immediately thought it was going to be a shallow effort with little to offer management science. Something similar the Fish! philosophy (sorry Pike Place Market). That is, harmless enough but adding little to the science of management or the theory of what makes organisations effective. But the content in 'Aloha' doesn’t appear to be like that. ‘Managing with Aloha’ really does sound like the mentor-in-a-book it claims to be - directed at people who have decided to personally become better managers. And why not stop there? My problem is that I want to change the world - and I’m sure Rosa does too. I’d hate to see a poor manager faking the ‘Managing with Aloha’ messages. Hopefully I can contribute in a way that means managers who are ‘Managing with Aloha’, 'Managing Without Them', and similarly-styled managers are the ones that get the resources.

So perhaps I would have been more interested in the book if it was called ‘Managing with unconditional love’. I at least would have understood the book more intuitively from that title. But I probably still wouldn’t have bought it! Or at least I would have had to buy it with a copy of ‘Business Leadership the Marine Corps Way’ just to keep my street credibility (And this is me talking. The only Australia who doesn’t love sport and who owns two Jewel albums).

Lastly, I don’t think I’m the only one who has misread the title. Take a look at the first comment at the bottom of Slacker Manager Bren’s post on the manifesto:



Updated:
I have the manifesto open in front of me now and would also like to say I agree entirely that the ‘premature and faulty condescension’ Rosa sights around the whole leadership versus management issue is disturbing. For the same reasons but also a different one. I agree that we need both leaders and managers and they are different skills. However, this is also related to the expanded scope I apply to ‘management’. I say ‘What’s so special about leadership?’ as we are still left with the same problem: What mechanisms decide who are the genuine leaders? Without the right levels of transparency within the organisation the criteria isn’t always effectiveness...

Saturday, July 02, 2005

 

ChangeThis - Managing With Aloha

I haven’t read it all yet but the 'Managing with Aloha' ChangeThis manifesto is excellent. I was never interested in the book because I really don't like the title. But now I'm interested.

Actually, the MWT book is part technology, part economics, and part values. Aloha seems to cover the values side with the same approach I am.