And Vijay Says…

There are three things that ruin good companies the most (in my personal opinion, that is ), or at a minimum they stand in the way of them becoming great companies .

1 hierarchy

In all the companies I have worked for , there have been steep hierarchies . There was just one exception and that company got acquired by a big company with a steep hierarchy in couple of years . This is true for my customers too . I can’t think of a single good thing to say about steep hierarchies. None at all. Nada

Hierarchy is a necessary evil when scale comes into picture . Startups are not immune to it – look at the number of levels in Apple or HP today compared to when they started .

Hierarchy is often set up as an insurance . In an upturn , hierarchy is your friend – there are enough people to check the checkers of the double checkers to make sure the machine is humming along . In a downturn , hierarchy is your worst enemy. It prevents the decision makers to get information in time. And by the time they get it – every level below them would have changed the information “just a little”. This has been true all the time and executives know this well – but usually talk about flat organizations are just that – talk ! No action gets taken.

Very frequently I get asked by someone if they should leave technology and move into management . The answer is a “definite maybe “. In an upturn -management roles get you a lot farther . In a down turn, it increases your odds to get fired . But I digress.

Hierarchy restricts flexibility and leads to situations where power of leaders get measured by number of people they manage – not by customer satisfaction , revenue , etc. The evil effect is that when a new bright idea crops up – there is very little incentive to share resources (or credit if the idea turned successful). Hard boundaries are drawn – and it practically eliminates flexibility and leads to a direct loss of ability to execute .

Ergo – such kind of company crawls to insignificance and mediocrity while wondering all along as to what is going wrong .

2 The matrix

When a hierarchy in one dimension runs out of nodes and leaves – a new dimension gets added . Ask an experienced mid level employee “who do you work for ?” – and you will know the cluster $&@) this is .

Most companies have at least a 2 dimensional matrix . This is in addition to what traditionally was called line and staff jobs . Or put more simply – over time , less people in a company have line jobs – and more have staff jobs . In general – if you are not creating a product or selling it , you are overhead and you should be dispensable. Yet – you see more and more nebulous roles get created around product and sales jobs all the time .

Matrix is good for some scenarios – but often there is no balance . In many cases – I think companies resort to matrix to just cater to executive ego . There isn’t enough room at the top of the pyramid – so adding more dimensions is an easy way to prevent top executive talent from walking away . However , in the long term – this results in extreme grief, every single time .

There is no “undo” button – the decision to resort to matrix structure is irreversible in the short to medium term. This leads to reorganizing the structure multiple times – which usually leads to the executives walking away (usually happy) to other jobs , but the worker bee employees suffering a lot of uncertainty and lost opportunities .

3 concentric inner circles

Leaders need a fine balance of loyalty and merit in their employees . If all you look for is merit , and you don’t have any loyalty from employees – your decisions might not get executed without loss of time and energy and opportunity . If all you look for is loyalty – you will risk promoting people without merit , and those with merit will not hang around to watch the circus. When attrition happens – remember the job mobility of A players is always greater than C players . The good ones will walk – others will cry or become numb , but won’t walk away . The average quality of the organization can come down in a hurry really fast .

Striking that balance is very key for the long term survival of the company – and if you have to err , err on the side of more merit than loyalty . But that can happen only if you are secure . Many leaders are not very secure .

During WW2, General Eisenhower once said to a major general who wanted special treatment because he was in the inner circle “There are no inner circles – there are just men who live and men who die”. Today’s leaders would do well to make an introspection as to whether they are living up to the spirit of those words .

These three evils kill effective team work, even if there are plenty of talented leaders and followers in those teams . As Michael Jordan famously said “talent wins games , team work wins championships”.

As always , just my personal views here – nothing official about it .

The world of data is roughly split into two – preparation of data (master data management, cleansing, quality, integration etc) AND use of data (Analytics , transactions etc ). I think one of the biggest reasons that companies never get a grip of their data is because these two sides of data are some lbw treated differently .

The whole idea of preparing data exists because it is to be used for something like analysis or transactions . When do we know for sure that data is bad ? When we cannot do transactions and analysis meaningfully with it .

How do we define quality of data ? One way is to do so in somewhat technical terms – like 20% of the data is duplicated , or 15% zip codes do not have valid values etc . This means nothing really to the people who have to use the data . If this is represented as “you will incur $500K of return orders because of wrong addresses” – a rational decision can be made whether to spend time , effort and money to fix it .

How do we find this $500K impact? By Analytics of course . What do we analyze to find this ? The transactions that happened in the past , and those that might happen in future. In essence – data prep, Analytics and transactions all exist in real life without hard boundaries . Boundaries were drawn by IT , by vendors and by analysts . And because these boundaries were drawn – the various parts of the data world are busy thinking how to create the next best visualization tool or next best data cleansing engine , instead of thinking about how to create the next best holistic decision making system . We brought the curse of incrementalism on ourselves – no one else is to blame .

With every passing day, more and more information is created outside our firewalls than inside of it . But look at the data models used in systems – they are all mostly defined by in house systems . So then why exactly are we surprised that it is like pulling teeth to consolidate external and internal data to make decisions ? Rigid data models based on tables and fields and so on are not going away – transactions and some operational Analytics still need those . But we need to start dealing with real world data as it exists – as entities that have evolving relationships with other entities . That needs to be a part of both the preparation of data and the use of data .

Does data need to be fixed before we make use of it ? I think we should move beyond a binary yes/no answer . In real life that is not how we make decisions . So why should our systems behave differently ?

Case in point – if a CEO asks HR “who is the best sales person in the company today?” , HR system can probably answer that saying “That would be Mike”. Then an HR analyst will need to look at the information to come up with a more realistic answer “It is really a toss up between Mike and Sara” . Why don’t we have system that gives answers like ” 50% sure it is Sara and 60% sure it is Mike” ?

HR probably needed to check with Sales colleagues to find this answer . Decision making is collaborative in real life – you can’t predefine rigid workflows for every possible question that an executive should ask . Yet, we see collaboration and data technologies evolve rapidly in parallel tracks without much of a convergence . Shouldn’t this change ?

No system can fix all data problems – but the approach to solving problems is still stuck in the past for most part . Humans don’t magically know all answers either . But over time , humans can see patterns in data and make intelligent guesses . Machines can do that too in many cases – and can crunch more data than humans can . It is time machines did a little more of the heavy lifting before asking humans for help .

In pockets , all these things are happening. Technology is not the biggest hindrance to making the world of data more real life like . It is the approach of creating these artificial boundaries that stands in the way the most .

President Reagan famously said “Tear down this wall ” in a different context . I would like to borrow his words and say “Tear down these data walls please !” .

First – 6 weeks away from blogging was great . I am very grateful to all of you who encouraged me to start blogging again .

I stopped blogging rather abruptly – after reading my posts this year, I couldn’t think of a reason why anyone would want to read most of what I post. But seeing the responses from many of you – I guess I over estimated the deficiencies if my writing .

And so I am back. I am still going to stay away from twitter for now . So please leave comments here rather than on twitter like usual .

Over the last month, one topic kept on coming up in conversations . That is about why employees and managers feel “us and them” more often than not .

I think the root cause is goal setting and performance appraisals . It is a stupid idea in general to set goals formally once a year and then check back to see if you made it or not . The CXOs of the company cannot usually foresee how the market will work in next 3 months – so how will an individual and their manager predict what has to be done for 12 months ?

When the results of appraisals are given out – many managers feel an obligation to also give a speech on the topic . This is the beginning of the trouble . Generic messages are counter productive and usually insult the intelligence of the employee . More than the actual rating and rewards – it is the insult to intelligence that irritates most employees.

Performance appraisals set the pace of disillusionment – and other managerial communications sustain it.

Say an employee has a bright idea and brings it to his manager and asks for funding . Four scenarios generally are possible

1. Manager sits on it and in a passive way make sure nothings comes off the idea.

2. Manager says he will fund it – but doesn’t do it, and eventually gives a generic reply like “This is not a priority for now”.

3. Manager dismisses the idea completely upfront with no debate

4. Manager asks proving questions to see if the idea is worth pursuing and takes it up the chain. Manager keeps employee in the loop and explains the rationale for the final decision – even if the answer is “no go “. Better managers will also coach the employee on what needs to change for the next time

The first 3 makes the employee feel that her sole purpose in life is to do what others decide for her . There is no value for her original ideas or intelligence .

Option 4 in most cases ends well – and makes the employee feel he is appreciated , and he will try harder to find a better idea next time .

Sadly, option 4 happens in only the absolute minority of cases . If this managerial behavior is properly addressed – I bet the bitterness felt by employees will be eliminated in most cases .

I will make one last point – on rewards . Why are people promoted and compensated for performance in HR cycles ? If my daughter earns straight As in class and I tell her “good job kiddo – end of your school year, I will buy you two bars of chocolate. But make sure you keep straight A’s till then “, what are the odds of this being effective parenting ?

An employee that does something for the company that benefits the company should be rewarded closely after that – at least partially . If a development team creates a product that brings in profit today , what is the rational explanation of paying them their reward after the company enjoys 6 months of that profit ?
. The typical answer from managers is “that is out policy”. Employee probably tells in her mind “stupidity is not an admirable policy” 🙂

That was a long winded way of saying whatever you do as a manager – pls don’t insult the intelligence of people at the receiving end