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Posts Tagged ‘Supply chain

Metrics

Metrics are good.  They make us do something that psychologists call “operationalize”.  Operationalize isn’t some complicated Freudian notion.  It just means that we take a rather vague slippery idea and say exactly what we mean.  We don’t use “operationalize” to sort out clients who are in an emotional mess. We use it to sort out us ~ to make sure we are clear about what we want to do.

Applying the wrong metrics . . . ouch!

It’s alarming then when we look out into the world and we see people using the wrong metrics.  Often people take a technology and use it in the wrong circumstances, terribly impressed that they are generating a number but apparently unaware that the numbers they are looking  at does not match what they say they are doing, or need to be doing.  It’s doubly scaring because it is clear they haven’t simply made an error.  They have no idea about what they need to do or how to do it.  Nor, it is clear, do they understand the very ‘technology’ they are applying.

New organizations

The world is changing and we are going to need new ‘technologies’ for new situations and new metrics to define exactly what it is we are doing and how well we do it.

Choosing people to join an organization

Big organizations will still have a familiar task: choosing people to join them.

The old idea that we would match people as pegs to holes like the game we give to 1 year old’s just doesn’t wash anymore. What was designed to quickly allocate hundreds of thousands of conscripts to roles in WWI and WWII is not well suited to today’s business.

We have a ‘talent war’ now.  This means that our success depends upon know-how brought into the organization by our people. What we do and how we do it depends more on their ingenuity,creativity and judgment than our preconceived notion of what to do and not do.  After all, if we knew what to do, we  wouldn’t be hiring them as talent.  If we knew what to do, we could probably use a computer or a robot.

There are some roles still where “Mac” jobs rule.  Goody.  Just knowing that the organization runs on “mac” jobs is enough to make look for something better.  Decide the level of your product.  If it is . .  well least said.

Metrics for new selection

What is, then, the essence of selection for new organizations?  And what would be the metric.

I like the idea of assessments that are genuinely two way: in which the candidates find out about us.  Even if they choose not to join us, through that exploration they become clearer and optimistic about their opportunities.  And we become clearer about what we are doing, and the value of what we are doing because of the questions they asked and the conversation they stimulated.

My metric for new selection

Could the measure of an assessment system be the percentage of people who believe that the conversation we invited, initiated, and managed was worthwhile?

Thinking like an academic,

  • Would the opinions of the applicants be uni-dimensional, or would we have to break it up?
  • Would the applicants’ opinions of our conversations tally with our own?
  • Do good quality conversations predict good quality conversations in the future?
  • What are the features of good quality conversations and do they fit known models (such as Losada’s model of team performance)?
  • Would good quality conversations lead to increases in productivity in the units hiring?
  • Do good quality conversations lead to insights about how to negotiate the improvement of the entire supply chain?
  • Are good conversations associated with JIT labour supply?
  • Are good conversations associated with lower total costs of HR administration?

Hmm, I’ve seen this rolled out without the metrics. And I’ve seen plenty of utterly misplaced metrics.

When are we going to step up and serve the knowledge industries of the global information age?

When, o When?

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Business models in knowledge network industries

Earlier today, I commented on a post by Jon Husband and it released for me an understanding about university business models that has lain around in the back of my mind for a number of years.

Most of us see one side of universities – the extension of high school. We arrive as undergraduates and we can be forgiven for thinking the university is about us.  After all, we only see what we are involved with.

Universities don’t care all that much about undergraduates though.  Oh, yes, students are there.  And they must be taught properly.

But universities care about research.  And they care about research for a good reason.  Because when undergraduates are taught by someone who is actively developing the discipline, then students learn to think about where the discipline is going and how it will get there.

The ‘knowledge’ they acquire is very different from the ‘knowledge’ acquired from someone who knows the current state of the field but who sees it as a static subject.

Herein lies the difficulty for universties.  Knoweledge isn’t created within universities. It is created between them.  It is created in the give-and-take between active researchers in the discipline.

To be a ‘player’, a university must be able to fund a researcher. This means a salary, pension & insurances,  office space, computers, libraries, laboratories and international travel to conferences and meetings.  For all this, a lecturer (professor) normally delivers 4 lectures a week for about 25 weeks and hosts a handful of tutorials or labs.

In so far as money comes from government, clearly the amount provided must allow this level of activity and the quality of a university  is dependent on providing this funding.  A university can be a player in the great game of knowledge development if it has a lot of money.

Turning business models on their heads

Universities have tried to reverse this model where research activity brings in revenue.  This is all very well, but value is not created within the university.   It is created by having the “table stakes” to take part in the supply chain (or network)  that is cutting edge research.  Turning things on its head is a good try but it won’t work.

Consulting firms often try the same gambit.  They try to hire in staff hoping the staff will bring in the clients.

Turning business models the right way up again

The thinking needs to be turned around.

If we want to be players in the development of business systems in this town, then what will it take?  What endowment is needed to support the people who are working with other people in other firms to define the cutting edge?

For people entering either industry as researchers or consultants (as opposed to equity and working capital providers), then we ask other question?

  • What part of the supply chain/network do we want to work in?
  • Who takes up our work and on whose work do we depend?
  • How and where do we get together to work out goals for the whole of our supply chain/network?

That’s the thinking that turns us into  players.

Managing in knowledge network industries

For HR manages and other system designers, we have to remember this essential fact: we cannot produce knowledge within the firm.

Knowledge is created when we work on projects with people in other firms.   So we are not ‘in control’.  All we can ask is what does it take to be a player in this game?

When we undertand this question, and we depend on our ‘employees’ to explain the game to us, then we can broker the resources to allow us to host chunks of the game.

This is simply not a factory model where we make something and sell something.  This a game where we negotiate participation in a supply chain network that is advantageous to our stakeholders.

To take an example, in physics, obviously we want representation at CERN.   And so it goes with other subjects too.  Which are the frontiers where we want to be represented?  Why?  When we understand the what and the why, we might know who is motivated to pay.

We are brokers in these businesses, not managers or even private equity players.  If anyone suggests otherwise, you can be sure that business is not cutting edge.  It can’t be.  No enterprise has such a narrow knowledge base that it can be cutting edge and under the control of a handful of people.

Our job in knowledge work is to have knowledge workers on one hand and people who need knowledge on the other.   And broker the match.

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Facets of business psychology

Being a business psychologist can be giddy-making. Well, that is our job.  To have the giddy-experience so other people don’t have to.

Industrial or work psychology

When we want to improve productivity, we ask “what is the best way of doing this work?”  Whether you do it or whether I do it, what is the best way (and when we get sophisticated, what is the error range and variance)?

Personnel psychology

When we want to choose someone to do the job, who will find it easiest to do the job?

Organizational psychology

What is the best way of organizing the work so that we can all get along with the minimum of emotional friction?

The thinking behind business psychology

The answers to these question do not necessarily contradict each other but the thought process behind them is contradicting.

Work psychology assumes we are all the same and can learn easily. Personnel psychology assumes we are all different and our differences are hard to change.  Work & personnel psychology looks at what we do as individuals and organizational psychology might ask us to sacrifice efficiency for the sake of the group.

Who’s right and who is wrong?  No one.  Each question offers a slightly different perspective.  And that is giddy-making.  What we are good at is separating the questions  and asking them one at a time so that we don’t end up with a confused, useless mess. That is what we are trained to do and we train for a long time – 5 years.

Modern questions in business psychology

Our giddy life doesn’t stop with the 3 traditional questions, though.

Old management theory assumed that change was slow, that there was a ‘best way’, that people were happy with the social and political relationships suffered and enjoyed by their forefathers, and that someone, somewhere knew what to do and how to do it and that the world would be sufficiently obliging to wait while they decided what to do and told everyone in the organization.

We know now that the world is not like that.

Work psychology

Laying out work for others to do while we decide is so, so, last century and bankrupt motor corp, we should be shot for suggesting it.

We’ve known for I don’t know how long in the military, and at least 40 years in psychology, that we should set a goal that is appropriate for a person’s skill level, give them the resources, free access to incoming feedback, and let them get on with it.

People cannot function with our constant back-seating driving.  And the world will not wait for an organization that is that slow.  It might seem like it will wait but that is probably because of some artificial barrier to entry.  Best to see how much that barrier costs and how long that will be sustained.  More under organizational.

Personnel psychology

Much of the work we do in personnel psychology is for really large organizations, like armies, where gathering “objective” information and allocating people on a “best fi”t model makes sense.   We introduce efficiencies for everyone.

In smaller organizations, we are expensive ,and frankly managers don’t listen.  Why is it that?  This is an organizational psychology issue not a personnel psychology issue. So let’s move on.

Organizational psychology

Getting along in an organization is about human relations and “passing the ball” without dropping it.  Management and organizational theory comes into play along with a raft of other issues, including politics.

The biggest issue in organizational psychology is “what is in it for me?” When managers are insecure, they will look for people who will protect their interests.

In big organizations, it is our job to reassure the managers and put the brakes on their worst self-interested excesses.  We flag up artificial barriers to entry that are maintained at huge financial and moral cost (e.g. apartheid in South Africa and excessive privilege like doctor’s payments in the US).  We put in procedures to balance managerial interest with organizational interest, in pay, for example, and in the selection of people who are good for the organization and not simply good for the manager.

We provide stability, in other words.  Sometimes we even introduce a generative, healthy upward spiral.  Though world events in the last two years show clearly that preventing a destructive tail spin would be a pretty good outcome.

We have to include people.  Honorably.  Allowing a core group to take over is very, very destructive.

Future organizations

Having said that.  What is the future of large organizations?

We are much more likely to move towards a system of local modularization in which smaller companies cooperate to complete specific contracts as the aerospace industry did with the Boeing 787.  Our business will change accordingly.

My predictions for the future of business psychology

This is how I see our profession moving.

Work psychology

In depth understanding of the work of an industry and the critical factors affecting productivity and learning in each sub-sector.  We will become a mirror to the industry.

Personnel psychology

Continue to show people the limits of occupations.  To give an obvious example, if I am a sprinter I’ll run the sprints not the marathon, and so on.

Beyond this well developed technology that needs to be updated to keep us informed about the limits of new professions, we might possibly change our focus to understanding careers over a lifetime: how do we develop a narrative that sustains us over the rapid changes in industry structures that we are likely to see over 50 years of our working life?

I think developmental psychology might become more important than personnel psychology and understanding business might become more important that the brute horsepower of “intelligence”.

Organizational psychology

The biggest change will be the nature of organizational life and the work that we are called upon to do. Companies will become smaller and more specialized and a new beast will emerge. Akin to entrepreneurial and holding companies, and replete with negotiation-minded supply chain specialists, these new organizations will create the projects and organizational conditions that set the boundary conditions for specialists to work together to be creative.

Specifically, it is my best guess, at March 2010, that these new organizations will analyse the markets and flag up what markets want, host discussions between relevant suppliers and arrange consortium funding, and carry the market risk themselves, though conceivably they may make innovative arrangements on the demand side too.

Further, some firms will specialize in backing up the market “seers” with infrastructure to allow global cooperation – firms like Cisco and firms specializing in virtual law and financing.

And then we will have people doing their stuff.  The producers.  Who are doing what they love and who morph and develop as they respond to the market. Hmm, I think there may be a role for people who develop the industry, much like the aerospace industry in the UK.

These aren’t my ideas. The first three strands were developed by Hagel & Brown, now of Deloittes.

My advice to young business psychologists

In not so brief words, that’s where I see us going.  My advice to young psychologists is

1. Pick an industry that you love and understand how it is developing and changing and the skills needed within it.

2. Learn more developmental psychology and narrative counselling than psychometrics.  Testing is a mature field.  Little is happening there.

3.  Think whether you want to serve producers, coordinators or entrepreneurs.  Maybe try all three out. Maybe in you industry you have to do all three.  Or, maybe you should specialize.

You need to map the ecology of your industry, see where your heart is, and join the people you love to serve.

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