I’ve been toying around with a new hypothesis. Here it is:

Formality in business is dying.

Now I am not talking about Blue Jeans Friday and Bring Your Pet to Work Day all of the sudden cropping up everywhere. I’ve seen very formally-run businesses where people showed up in jeans with their dogs or whatever. So much superficial informality.

What I’m talking about is a fundamental shift of business culture and management practices from formal to informal in many innovative companies. What do I mean? Let’s take a step back.

Here are two of the ways Merriam-Webster defines the word formal.

- relating to or involving the outward form, structure, relationships, or arrangement of elements rather than content
- having the appearance without the substance

That first definition of formality stands out for me as a perfect description of almost every formal business practice I have ever encountered. “Relating to or involving the outward form, structure, relationship of arrangement of elements rather than the content” (emphasis mine).

Organizational charts. Job titles. Performance reviews. Operational reviews. Strategic planning projects.

In your experience, do these things usually reflect the man-on-the-street reality of the business? Or are they an attempt to impose structure on things that do their best to defy it?

The irony is that, while most formal business practices are attempts to manage the complexity of business by defining structure, they usually fail miserably to capture the true complexity of business. They focus on the structure rather than the real content—and they usually don’t even get that right.

In my experience, most business practices that attempt to formalize structure are about as successful as attempts to construct buildings out of clouds. By the time we finish the plan, everything has already changed beyond recognition.

[Read the rest of this post on opensource.com]

Of all of the people talking or writing about the future of business right now, no one has more street cred than Gary Hamel. I’ve written about him many times before, and his book The Future of Management is one of the most inspiring and meaningful business books of the last 10 years.

Last year at the World Business Forum, when Gary called open source one of the greatest management innovations of the 21st century, there was some serious high-fiving going on amongst us open source business types.

So I’ve been watching closely as Gary and a team of management superstars have launched an open innovation experiment called the Management Innovation Exchange, or MIX. In the video below, Gary explains a little bit about the goals of the MIX.

Here’s how they describe the MIX on the website:

“The Management Innovation eXchange (MIX) is an open innovation project aimed at reinventing management for the 21st century. The premise: while “modern” management is one of humankind’s most important inventions, it is now a mature technology that must be reinvented for a new age.”

From spending some time on the site, it clearly shares a lot of the same foundations as the open source way, even if the MIX folks prefer the term open innovation.

One of the most wonderful bits? The MIX is a meritocracy, where anyone can join, submit management hacks, stories, or barriers, and then collaborate with others to explore the ideas further.

[Read the rest of this post on opensource.com]

Earlier this week some colleagues and I attended a fantastic gathering of business and political leaders called the Emerging Issues Forum. The theme of the forum—interestingly enough for a bunch of business folks—was creativity, and speakers included some of my favorite thinkers/authors who analyze the future of business:

Roger Martin, Dean of the Rottman School of Management at the University of Toronto, and author of The Responsibility Virus, The Opposable Mind, and a new book on design thinking called The Design of Business.

Tom Kelley, General Manager of legendary design firm IDEO, and author of The Art of Innovation and The Ten Faces of Innovation. IDEO’s CEO Tim Brown also has a book out on the subject on Design Thinking, called Change by Design, which my friend Jonathan Opp wrote a nice review of here.

Daniel Pink, bestselling author of A Whole New Mind, a book that has been extremely influential in my thinking about how the left brain and right brain can play nice in the business world. Pink also has a new book out, called Drive: The Surprising Truth About What Motivates Us.

During their talks, I couldn’t help but notice all three touched on a similar thematic: the crucial role that inspiring creativity plays in driving innovation.

[Read the rest of this post over at opensource.com]

In the software development industry the results are in and open source is the winner. As Matt Asay predicts in a recent blog, future dialogues about open source will be less about evangelism and there will be more focus on putting open source into practice.

Which forces us to look, fundamentally, at exactly what we’re putting into practice? Open source software? Or open source itself? What do we mean when we say open source?

At New Kind, we believe that open source is— simply stated—  a beautiful and effective way to scale creative thinking and culture. What is amazing is the rapid acceptance of “open source” beyond software development. Today businesses are looking at open source as a way to create new business models, new management strategies, new marketing, innovation and community-building paradigms.

As we’ve noted before (and will, no doubt continue to note) evangelists in this broader understanding of open source include many of the world’s most influential business thinkers including Gary Hamel, Roger Martin and Tom Peters. Two weeks ago I watched Coke’s VP of Global Branding— David Butler— introduce open source as a powerful branding/design concept to AIGA’s national conference for professional designers. These speakers are not referring to open source software.

But, through the proven success of the open source software development model, in part, they have discovered the competitive power of such creative collaborative, design thinking cultures. And they are advising today’s business leaders to rapidly adopt these new kinds of models across their organizations; internally and externally.

Acceptance will be slow among executives who are just now being introduced to open source creative models. Hamel says they are locked into “archaic beliefs” that must be changed if they are to remain competitive. It took nearly 15 years for the technology acceptance; how long will this take?

The time is now. For organizations where innovation is now a strategic necessity, open source creative cultures are a powerful if frightening alternative to the habitual thinking of analytical-driven, MBA-type cultures. As Martin’s book The Responsibility Virus makes clear, fear is a powerful force that shuts down innovation. Most executives and senior managers have little clue how strongly fear influences their thinking and actions, and the effect that has on the competitive positioning of the organizations they lead.

Open source and design thinking are anecdotes. But there are countless traditional players— individuals and corporations; large and powerful— who have no interest in seeing new competitive threats to their status quo arise. Open source is revolutionary change; landowners seldom start revolutions. These players will not welcome the change open source promises. And they will not play nicely.

Such opposition will look for evidence that open source doesn’t work. To borrow Roger Martin’s language, “reliable” actions will trump more “viable” solutions. When they find ‘reliable’ evidence, they can and will be ruthless adversaries. Open source practitioners must not be naive; evangelism can become a detriment in this environment. Even the Christian Bible (a fair prophet on evangelism) warns, “Faith without works is dead.”

In that context, Matt Asay is correct. Evangelist must begin to play a secondary role to the practitioner. And if Malcolm Gladwell is right, then it takes 10,000 hours for an individual to grasp the nuance and expertise necessary to play that role. That’s a small community of practitioners.

That’s the next challenge for open source.

……………………..

additional resources:

https://www.mckinseyquarterly.com/ghost.aspx?ID=/Strategy/Innovation/Innovative_management_A_conversation_between_Gary_Hamel_and_Lowell_Bryan_2065

http://www.rotman.utoronto.ca/rogermartin/publications.htm

I was going to write a blog, but just watch this.

This blog has been too idle too long.

I’ve been reading the book Iconoclast: A Neuroscientist Reveals How to Think Differently written by Emory professor of neuroeconomics, Gregory Berns. Berns uses brain-scanning technologies to explain the decision-making process of human minds. As such he is a highly respected researcher and speaker on the science of innovation.

According to his publicist, his book asks these questions:
+   what makes true innovators so creative, so successful — and so rare?
+   what makes them tick?
+   how can we learn to be a little more like them?’

Here’s more from Berns’ publicist:
Gregory Berns is the Distinguished Chair of Neuroeconomics at Emory University, where he is a professor in the departments of Psychiatry and Economics, and at the Gouzueta Business School. The field he has helped put on the map, Neuroeconomics, is, fittingly, a blend of neuroscience, economics and psychology. In his work, he is breaking ground in everything from the biological roots of political conflict to predicting which teenagers are likely to make fatally bad judgments. Even better, he possesses a rare ability to translate dense technical material for a general audience. He has been profiled — and his work has been ecstatically reviewed — in The New York Times, Forbes and The Wall Street Journal, as well as other leading business and science publications. In addition to Iconoclast: A Neuroscientist Reveals How to Think Differently, he is also the author of Satisfaction: The Science of Finding True Fulfillment.

I’m digging the book. Great research and surprising observations. It will sit proudly on my shelf next to the books of Roger Martin, Gary Hamel, and Rollo May’s classic The Courage to Create. Well written and funny. Here are a few of my favorite lines:

“This is a story of the search for the holy grail of creativity,
an almost childlike imagination and willful abandonment to dream crazy thoughts.”

“Before one can muster the strength to tear down conventional thinking,
one must first imagine the possibility that conventional thinking is wrong.”

“The brain is fundamentally a lazy piece of meat.” You gotta love that.

“The brain takes shortcuts whenever it can.” Well, that would explain a lot, wouldn’t it.

Business leaders looking to compete by being more innovative would do well to read and follow the professor’s advice. Or they could ask an  artist or designer who’s experienced in managing creative teams.

” Organizations are ill prepared for the arrival of a new breed of uncompromising consumer and maverick employee…If organizations do not keep pace, they will cease to exist.”  — Gary Hamel

Yesterday I concentrated on the first part of Hamel’s equation— uncompromising consumers. Today I want to visit his second but equally important factor— the maverick employee.

Why are organizations facing this growing challenge? I believe there are at least three important causes.

1. the end of the industrial age
2. loyalty doesn’t pay
3. we are all connected

I’ll take a look at the first cause in today’s blog:

Most historians agree that the Industrial Age started in the late 18th century. As the scientific advances of the Renaissance met with the economic theories of Adam Smith and the democratic revolution was made real in the United States, the conditions were set.

Businesses found new ways to compete. Freed from the limits of monarchical governments and religious influences of previous generations, new competitive businesses formed anywhere plentiful natural resources found populations willing to trade their desperate existence for the security of machine-like jobs. Soon, educational systems and societal norms changed to create cultures supportive of the new technological advances. A new human paradigm emerged.

The successes of these times is well chronicled. By the end of the 20th century, the industrial age found perhaps its ultimate expression. Efficiency and productivity advances lead to the creating of ever-more-segmented and analyzed processes. Those organizations too ‘fat’ and unproductive failed to keep pace. Eventually, they ‘failed to exist.’

In a few short decades, efficiency and productivity tools became commodities. Today, they are simply the cost of doing business. Like the ante in a poker game, they only get you in the game. You still have to play the hand. Organizations are again forced to find new ways to compete.

The humans still necessary to ‘do the work’ are less and less interested in playing the role of machines. Having moved up Maslow’s triangle, they are unsatisfied and unfulfilled with their roles as machine parts. Baby boomers are leaving the workplace and taking their domain knowledge with them. And the ‘Millennials‘ who replace them will not play by the same rules.

While the current financial crisis may cause organizational leaders to feel more confident that their workforces will be frightened into submission, I’m afraid they will not be happy with the long term results. These leaders would do well to remember the old adage: be careful what you wish for.

Because workforces ‘treated in the manner’ and who stay with the company will be increasingly unfulfilled and unhappy. They will give the least amount of effort and do the least amount of work necessary to keep their job. They will be unlikely to think through challenges on behalf of the company or the customer. They will not take risks. They will not solve complex problems. The dysfunctional play of internal politics will only grow more stifling over time.

Clearly, such work forces are hardly the builders of the competitive brands and innovative cultures necessary to compete in the 21st century.

More tomorrow…

This story in yesterday’s New York Times caught my eye:

Tropicana Discovers Some Buyers Are Passionate About Packaging
The PepsiCo Americas Beverages division of PepsiCo is bowing to public demand and scrapping the changes made to a flagship product, Tropicana Pure Premium orange juice. Redesigned packaging that was introduced in early January is being discontinued, executives plan to announce on Monday, and the previous version will be brought back in the next month.

There are several highly relevant points in this story:
* people are passionate about what they buy;
* people are passionate about how what they buy is presented to them;
* and when it comes to companies and their advertising agencies telling us what to buy, we just aren’t going to take it anymore.

Facebook learned the same lesson just days earlier. When it’s users realized the full extent of the changes the social networking site made in regard to copyright ownership, a furor was unleashed— ironically using the site itself to scale the outcry (talk about being hoisted on one’s own pittard!). Like PepsiCo’s Tropicana, public pressure caused Facebook to do a very quick and very public about face.

All of this reminds of a quote from Gary Hamel— one of the most published authors in the history of the Harvard Business Review— taken from an interview published in Australia from October 2007:

Organizations are ill prepared for the arrival of a new breed of uncompromising consumer and maverick employee… If organizations do not keep pace, they will cease to exist.

More on the ‘maverick employee’ later. But what Hamel noted in regards to ‘uncompromising consumers— less than 18 months ago— is now becoming a daily occurrence. His warning is dire for those companies and organizations who ‘fail to keep pace.”

Organizations that continue to invest in the top-down marketing ideas of the previous century are— at best— wasting their investment. Riskier still, they are frustrating and alienating their loyal base of customers. Clearly, Tropicana has a strong, loyal customer base. What if PepsiCo had assumed that they and their advertising agencies didn’t know all the answers. What if they had humbly asked those passionate customers what they wanted Tropicana to be? What might PepsiCo have learned?

Let me be clear, I’m certain the new design succeeded when put through the test of countless customer focus groups. Here’s the dirty little secret your advertising agency won’t tell you— focus groups don’t work. They’re easily manipulated, inauthentic and unreliable. Think the new packaging design wasn’t tested in countless focus groups? Think New Coke wasn’t? Think again.

Open sourcing is a powerful alternative. In the hands of experienced, agnostic facilitators, open sourcing drives authentic relationships and provides highly relevant strategic direction to the organizations that employ it. Failing to ‘keep the pace’ has dire consequences. But those companies willing to set the pace have an opportunity to discover powerful new ways to compete.