Monday, July 21, 2003

Why follow the money?

When we sit inside an organization, it is very difficult to diagnose our problems accurately. In my experience, most companies contact a consultant with a fairly specific service request (e.g., team-building, market analysis, strategy development, technology audit, etc.)--one that is based on a faulty diagnosis. For the consultant to take this at face value is usually a mistake. Few among us, no matter how smart or skilled, are able to be objective about our own lives. Why should we expect a CEO, director, division head, etc. to be any different? In other words and more succinctly: "A fool is his own lawyer."

The question then becomes, what is the problem and what lies at its source? Following the money is a superb diagnostic tool, because money is in some ways the most tangible manifestation of relationships--within the organization and with the outside world. It is not the only tool, of course, but it has an incredibly useful way of clarifying the reality that underlies the verbiage. It's like a road map, but one with special powers. Once you have used it to track a problem to its source you find, lo and behold, that you have in your hands an essential lever for positive change....which is a fine thing indeed.

Saturday, July 19, 2003

Song for tonight

Nora Jones, Come Away With Me

A meandering tale wanders back to the topic at hand

What a meandering tale this is turning out to be. But at least I'm amusing myself, and I'm chipping away at that encrusted fork.

The main point of "Follow the Money" is that we (humans) invented money, that it is an expression of who we are, and that the nature of economic relationships between people or groups of people tell us an awful lot about the nature of their relationship more broadly. Moreover, it suggests that when organizational relationships are dysfunctional, there is often a corollary dysfunction in the financial relationships and that to 'fix' one, you have to 'fix' the other.

For instance, I once consulted to an organization where the "presenting problem" was weak revenue in a particular division. The CEO believed that they simply needed some market research so they could better position themselves in a tight market.

In fact, after many months of interviews, market scans, financial analyses, etc., we concluded that the CEO's diagnosis was incorrect: the market was huge, underserved, and anything but tight. The requirements of the most attractive market segments were clear, and meeting them was entirely feasible - if - the various divisions could collaborate to deliver what they wanted.

As it turns out, the primary obstacle to success lay within the company. The divisions were so busy bickering with one another, thwarting each other's efforts, and generally working at cross-purposes that the market barely made it on to their mental radar screens.

Seeking to understand the source of the problem, we learned that the conflict was neither personal nor a matter of corporate culture. Rather, it had to do with financial and structural differences in the relationship between the executive office and the various divisions. Some divisions operated as little mini-companies: they had almost complete control over their own finances, and could keep most of the money they brought in to reinvest in the business and to incent performance. Others were expected to bring in profits, but were not allowed to keep them. In other words, they were expected to produce, but had little or no control over the means of production. The autonomous divisions tended to bully the non-autonomous ones, while the latter group invested its energy finding work-arounds that provided more control (another word for this is subterfuge). Oh, by the way, the division we were hired to help was the most extreme among the "low autonomy" group.

Obviously, this is not a recipe for collaboration. No amount of team-building would have been enough to change the built-in imbalances and conflicting incentives between the different divisions. I shudder to think of the grueling months, weeks, and years of retreats, "sharing" sessions, and the like that could have resulted from the belief that the lack of collaboration was personality- or communication- driven.....Or of the endless data presentations that would have been endured by all if we had stuck with the original "market research" diagnosis.

Incidentally, the "every division has its own deal" financial structure was a vestige of a past era, when authoritarian leadership was the model and silo-ism was in the ascendant. So, in a sense the problem we encountered was much bigger than financial arrangements, communication, the market, and/or leadership style. The point is that without following the money and addressing the dysfunction located there (which was not easy), it would not have been possible to move forward in any of these arenas.

In all fairness,

Non-profits are not likely to be much different. Speaking one's truth at work, when someone else calls the shots, is always risky--no matter where you are or what type of work you do.

Sunday, July 13, 2003

Still following the money (but looking for the train of thought....)

Perhaps I overstate the case. No one really ignores the numbers in a business. In fact lots of business people don't merely attend to them; they anthropomorphize, reify (which means, to regard something abstract as a material thing and in so doing distort its very nature) or even deify them. The numbers become more important than the economic engine of which they are a by-product. Keep in mind that the numbers are as much outcome variables as they are input variables. Yes, you input (invest) money, but that is merely the most easily quantifiable investment. The most important "things" you invest in a business (time, passion, energy, ideas) are much harder to measure.

Those with backgrounds in finance might assert that it's best to "manage by the numbers." This world view could best be described as a form of wishful thinking wherein one assumes it is possible to wield power and control over life's vicissitudes if one is only smart/disciplined enough to figure out and enact the formula. Of course, mad and reckless spending, investing, and saving are ill-advised--who doesn't know that?

But I digress. In the field of organizational development, we have a different problem. In contrast to finance types, many of my pals in the OD field believe it's all about relationships, group process, or other economics-free theoretical models wherein the recommended 'treatments' ultimately devolve to a Baba Ram-Dassian "be here now" experience of life, coupled with National Training Labs (NTL) group process methods and a slew of self-awareness techniques that assume once a person "owns up" to whatever their hangups are, the truth will set them free.....except, for the most part, it doesn't--especially in a corporate setting where it is more likely to get you fired.

Friday, July 11, 2003

Follow the Money, continued.........

Except there was one small thing: I could not get a job doing this kind of work to save my life. I was 28 but I looked 21, and I had no work experience outside of the mental health profession (nonetheless, some of my early clients prepared me very well for later ones--see note below). However, I could get corporate work doing that which I had done in my many moments of anxiety/boredom: playing with numbers. I was hired as "consumer research manager" in a large bank, and given my generally high level of anxiety/boredom, I was pretty good at it. Within three years I was a division head, managing the whole market research function and calculating away with reckless abandon. I still wanted to do organizational consulting, but in the mean time rather enjoyed crunching numbers.

Fast forward to 1994: I finally do get a job at a firm where the focus is on organizational consulting......And discover, in doing the work, that ignoring the numbers in a business is a bit like trying to help a family have better relationships while ignoring the economic engine upon which they depend. How silly.

The "Follow the Money" approach to organizational consulting

Prompted by the gentle goading of my friend/colleague Meg, I will attempt to briefly describe what this is all about. I know I've been avoiding the subject, even though it's incredibly interesting to me, because I imagine it will be a challenge to present in a way that makes sense. Yet, in the spirit of my original courageous endeavor to wash one fork, here goes.

When I was in college, all I wanted was to be a therapist. I thought human emotions were completely fascinating and hoped to have some one day myself. I had no interest in organizations or finance or anything of the like--although when anxious I did like to balance my checkbook, then hand-calculate regression equations to estimate what my bank balance might be in a week or a month (no comments on this are solicited or will be considered!). Then, as I neared the end of a lengthy and expensive stint in graduate school, it dawned on me that I would need to support myself and that I preferred to do so in style. Given that newly minted social science Ph.D's do not usually receive lucrative job offers, I decided to go to business school....Sort of. I attended a program at Wharton that was, in effect, a combination finishing school/boot camp for Ph.D's and ABD's in non-business fields who wanted to get jobs in the business world. By this time, I had shifted my fondest hopes and aspirations to doing organizational consulting--in other words, corporate therapy.

Thursday, July 10, 2003

A propos de quelque chose ou rien:

Early warning signs that a career in consulting was in the cards for me:

1. Since I was a small child, I have been genuinely motivated both to achieve conventional success (good grades, good schools, good jobs, etc.) and to express my equally powerful subversive/creative tendencies.

2. I came of age (no, not that kind of coming of age) in Phnom Penh, Cambodia in 1971, a city under siege. Other than being marginally-to-quite terrified at all times, I had fun water-skiing on the Tonle Sap river, learning to speak French, and squabbling with my equally adolescent brothers. Banality amidst mayhem became quite comfortable for me then, and my view of what constitutes a crisis was forever calibrated downwards.

3. My first job after graduating from college was on the all-male locked unit of an inpatient psychiatric hospital. After the initial shock, which was considerable, I found it quite interesting.

4. When I was nineteen years old, I travelled with a friend to Timbuctou, Mali a) because it was in the 'neighborhood;' b) because it seemed worth doing; and c) because everyone said it couldn't be done. It was one of the most amazing experiences of my life, if not the most sanitary.

5. I wrote my doctoral dissertation in ten days (didn't want to miss a 'client' deadline). Note to all present or future doctoral students: I do not recommend this approach.

................seems pretty consistent.