Extreme risk management

In a recent article about a new report on Japan's nuclear accident following the tsunami, I read that "In the darkest moments of last year’s nuclear accident, Japanese leaders did not know the actual extent of damage at the plant and secretly considered the possibility of evacuating Tokyo, even as they tried to play down the risks in public, an independent investigation into the accident disclosed on Monday"

Fair enough. How could they know the full extent of the damage? Even those at the plant site did not really know, and what they knew was changing pretty quickly anyway. Managing public safety is not always done best in a public spotlight. I've got no problem with the secret considerations.

But here's what caught my eye: the confluence of competing risk attitudes, risk management agendas, and domains: business--meaning the plant owners and operators; project--meaning the on-site plant manager and the emergency team working the accident; and political--meaning the Japanese government, both the bureaucrats and the politicians.

In a confrontation between the plant project manager and the the plant owner, we learn that the owner did not want the plant destroyed in order to save it from further nuclear disaster.  Specifically, the owner did not want sea water pumped in for cooling. The project manager, in an act of disobedience out of order for the Japanese business culture, went ahead anyway. A mutiny of sorts.

But, if you've read the book or seen the movie of "The Caine Mutiny" (available at Amazon for streaming), or more recently "Crimson Tide", then you've seen two examples of mutiny at the tactical level that were a matter of extreme risk management, and that proved to be strategically correct calls.

And, then there is the business-political dimension. Apparently, the prime minister gets in the loop and engages with the plant owner. The plant owner is apparently under a rock somewhere. The reporter opines:

Prime Minister Kan had his minuses and he had his lapses,” ..... “but his decision to storm into Tepco and demand that it not give up saved Japan

That's pretty strong stuff! Politicians demanding that the business not give up and do their job. Wow! What a concept!


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Leadership without easy answers

Ronald A. Heifetz is a leading academic on the subject of leadership. I've been working through his first book  "Leadership without easy answers" looking for--what else--answers!

Here are the crib notes for those that don't want to get into the book itself.

Disclosure: the book was published in 1994; I got if for $1 at a yard sale in 2012. That's more about my shopping for a bargain than it is "why now?" for a book that's 18 years old. Even at 18, it's great stuff.

The big ideas

Heifetz gets into your head a bit with his big  ideas:

1. Leadership is an activity, less so a thing, with a take action orientation: Set direction, establish cultural values, resolve conflicts, bestow protection and security, and restore/maintain order.
2. Values and effective activity are separable: This is the "Hitler was a great leader" school.
3. Leadership can be very technocratic, bordering on--gasp!--management; in effect, leading with the solution (I've got the answer right here; follow me! model).
4. Leadership is often most innovative when driving adaptive participation, leading with the problem rather than the solution ("it takes a village" model); and
5. Authority is neither necessary nor sufficient (you know you're a leader when .....), but if you got it (authority of position) you still may not be a leader

 Here's your sign

Of course, sometimes the leader is not the "appointed one" in the corner office. (Indeed, with the open plan, there may not be an office at all to badge the leader)

 Heifetz posits four leadership profiles. The first two (really, the first three) most of us are familar with; but the fourth is less familiar but it actually holds interesting possibilities for everyday project management:

1. Trait—The “great-man/woman” or “history maker” approach. These people are "on a mission". They know who they are; they feel called to a mission. Not content with the small bore of every day issues, they synthesize the big and the bold. And, they are quite capable of leading without authority if need be.

We all have our favorite examples. In business: Donald Trump? or better yet Steve Jobs; in politics: Theodore Roosevelt (the Great White Fleet; the Grand Canyon). More recently: Margaret Thatcher (restore the "Great" in Great Britain)

2. Situational—Times and social forces “call forth” leaders. Such situation leaders usually depend on formal authority. They are put in charge and expected to restore order and set direction. The military always has these figures in the wings, to wit: General Dwight Eisenhower. Without WW II, he likely would have retired as an obscure but competent colonel rather than have led millions in Europe with 5 stars.*

3. Contingency—An attempt to synthesize the first two types: a person, born to leadership, steps forward in times of great stress or demand. Military, political, and religious figures are often contingent leaders.

But, here's the one that shows up day to day in project management:


4. Transactional—“Authority consists of reciprocal relationships.” The appointed leader, but draws authority from the confidence of, and the authority granted by those led; competent to set direction, instill order, resolve conflict. Steady in times of stress, earning the respect of followers. Great CEOs are often transactional leaders: Jeff Imelt, CEO of General Electric. Closer to home: portofolio leaders and project managers.

Situational leadership
Heifetz, at least in this book, keeps his arguments and examples more strategic. It's easy to port his examples into "change the world" projects, strategic portfolios, and the like. He doesn't say too much about might be thought of as "retail leadership". Leadership at the small unit level where person to person relationships count for a lot.

This is the stuff of  what Hersey and Blanchard called "situational leadership". In the Hersey-Blanchard model, leaders have four primary traits on a scale from totally delegating to totally directing. Any one leader has all these traits, but they are selectively applied according the situation set up by followers. Followers, in turn, have four traits from very capable to all but incapable. A matrix between leader and follower forecasts the intersection of leader-follower traits.

Leading without authority

Whether you're a situational disciple or more in Heifetz's adaptive/technocratic transactional corner, either is influenced by whether the leader has postional authority. With positional authority, you can occupy the commanding heights and direct resources towards your mission and passion.

But I'm sort of captured by the idea of leading without authority. This comes up in the agile business quite often. Leading without authority does not mean committee leadership; it doesn't mean the laws of dominance have been repealed. Indeed, someone without portfolio may well dominate the discussion, may be a "great man (or woman)", and may go for bold, even without the corner office.

And, in the case of agile, situational leadership needs may draw forward a natural leader. In Heifetz's view, leadership is an activity, meaning leadership is actionable. Leadership is willingness to take responsbility.  And, if position, authority, and responsibility are not in technical alignment, a true leader presses forward anyway.

Consider the possibilities of "no authority" as summarized in the crib notes:

Without the constraints of authority, one has, ...., more latitude for creative deviance “from the norms of authoritative decision making.” Unfettered from a broader array of concerns and “holding environment” responsibilities, the informal leader can focus on a single issue or selected, limited issues.

The leader without the formal position of authority is also usually on the frontline where he/she can get the “detailed experiences” of stakeholders. And perhaps most importantly, that informal leader has “the latitude to use himself as the embodiment of the issue,” as did Martin
Luther King, Jr.

Summary: leadership is not waiting for the in-box to fill up, whether email, txt, or paper. Leadership is activity.

Photo (Bill Engvall)
*(A wartime rank, equivalent to the European field marshall, held only by Eisenhower, Hap Arnold, MacArthur, and George Marshall in the US Army, and subsequently Omar Bradley; and a similar number of admirals in the wartime US Navy)

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Review: Against the Gods

"Against the Gods, The remarkable story of Risk" by Peter L. Bernstein is an excellent read and ambitious premise well delivered. Perhaps the best general history of risk and presentation of the major concepts of risk that is understandable by all practitioners at any level.

The content is presented in a general historical order in major sections by epoch, the first being from the ancients to 1200, then the middle ages and Renaissance, and then into the industrial revolution, and modern era. Along the way, Bernstein recounts not only the emerging understanding of risk per se, but also the allied concepts of counting, numbers, chance, and of course, business management.

There is not much math or statistics to trip up the qualitative mind, but the presentation of the evolution of our understanding of chance introduces many of the main characters and demonstrates their contributions with just enough math/quantitative examples to make it interesting. Much of this material describes the period 1700 - 1900 when much of the modern underpinnings of chance, probability, and statistics were developed and made understandable to the general business population. We learn, for instance, that it was in this period that the notion of risk in the modern sense emerged from the mystical and devine to the cause-effect concept.

While the parallel developments of mathematics, business practices--like insurance--and a math/cause-effect foundation for risk are presented with a storyteller's gift, I found Bernstein's recounting of the ideas that developed after 1900 to be the most interesting and insightful.

Of course, the story in this book ends just about the time that the ideas of Amos Trversky and Daniel Kahneman, first developed in the 1970's, are gaining popular acclaim in the 90's. Thus, in this part of the book we get a great explanation of the expansion of utility theory first developed in the 1700's but advanced into Prospect Theory by Tversky and Kahneman.

There is also excellent explanations of various biases and other congnitive maladies that intrude on the rational and objective. We learn a good deal about the failure of invariance--the idea that same manager can be risk averse and risk seeking depending on not only the point of view presented (glass half full/half empty) but also whether there is a sure loss or a sure win at stake.

Bernstein's expertiese is in the financial world. John Kenneth Galbraith write of "Against the Gods": "Nothing like it will come out of the financial world this year or ever. I speak carefully; no one should miss it".

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What is perfection?

“… perfection is achieved not when there is nothing left to add, but when there is nothing left to take away.” 

Antoine de St. Exupéry, Terre des Hommes, 1939, chap.3

This, of course, is another witty input on the simplicity-complexity-complicated discourse. I say witty, but it's serious stuff. Click here and here for some references.

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When there are no written rules

In the domain of project management there are rules, protocols, methods, process, knowledge areas, templates, scorecards, and checklists.

But in one key area there are no written rules: culture. And, of course, PMs run into culture every minute of every day. And, culture is at all levels:

• Teams are said to have culture
• There is a project or program culture
• Business units have culture
• There are regional differences that are cultural
• National cultures are well known in many respects

But with all the acknowledgement and recognition, there are precious few rules for the rule-based among us. In fact, we may not even define it the same way.

Just to have a working definition, culture is:

• It's the way we do things around there
• It's what we believe and accept without proof that underlies how we act
• A consequence of shared values, shared experience, shared environment, and the shared influence of leadership
• An integrated pattern of human knowledge, belief, and behavior

So, in these definitions we find the knub of the issue with culture: it's really hard to port around. It doesn't fit well in an email, a standards manual, or in the signage on the back of an badge or ID. And, it does't port well through an electronic network from one virtual team member to another.

Even if you did write down all the rules and try to codify culture, you just can't roll up to someone and tell them they must "now believe"; and how do you get sharing if there is no opportunity to share values? And, what about an "integrated pattern"? How is that done without opportunity to interact over time?

Project managers are left with just a few tools: encourage sharing, common experience, and co-location. Drive up "density" so that integrated patterns must emerge. Of course, language  is the greatest integration tool ever invented.

If we are to achieve a richer culture, rich in contrasting values, we must recognize the whole gamut of human potentialities, and so weave a less arbitrary social fabric, one in which each diverse human gift will find a fitting place.

Margaret Mead

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What do leaders want from agile?

Jim Highsmith has a suscint posting on the title question: "What do leaders want from agile", so I thought I would pass it along: click here.

Mr Highsmith posits these four answers, gleaned from his recent and continuing networking in the business, but--as of now--provides no companion strategy, thus a work in progress:

• Are eager to understand their role beyond delivery
• Want to explore how to expand Agile concepts outside IT
• Are figuring out ways to be more responsive to business and technology opportunities
• Are eager to connect with other leaders and managers.

It's not hard to see the value in these four "wants".

Agile has been delivery centric focusing as it dows on quality, timeliness, and faithfulness to user needs. But of course, delivery is only the end of earned value and the beginning of business value. It's natural that everyone wants to contribute to business value, and so the first place to look is in product support and maintenance--those things that enhance the brand and attract users.

To get beyond IT, agile will be challenged by the more structured world of projects that have to meet ordained specifications so that all the parts have fit and function with the larger scope. One can't be a too evolutionary and emergent when building software for safety centric systems, for instance, like flight controls.

Agile is already one of the most responsive methodologies, so perhaps this is not the highest priority

A lot of managers are not comfortable with, nor do they understand, the non-predictability of agile scope, even if they buy into the predictability of iterative delivery and capped investment. A lot of incentive systems and business scorecards are simply not compatible with emergent scope. Thus, a lot of work to be done here.

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National cultures

I've been consulting a bit on change management, offering some advice and in turn learning some things.

 

One of the things I learned is that Geert Hofstede has a pretty informative website on national cultures.

 

If you ever worked virtual teams internationally, as I have, you'll understand immediately the importance of understanding culture: e.g. that one person's aggressive plan may be another person's failure to plan enough.

 

Hofstede defines culture this way:

“Culture is the collective programming of the mind distinguishing the members of one group or category of people from others”

 

He has developed dimensions for cultural properties. There are six:

1. Power Distance (PDI)
2. Individualism versus Collectivism (IDV)
3. Masculinity versus Femininity (MAS)
4. Uncertainty Avoidance (UAI)
5. Long term orientation (LTO)
6. Indulgence vs restraint

What he has done with this is conduct interviews and analysis of the cultural properties of  dozens countries around the globe and given scores for each according to the dimensions.

On his website, his data and conclusions are available for interactive query. You can pick a country from a drop and pick up the scores of each of the dimensions.

Pretty engaging stuff if you're going to doing business internationally.

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