Political correctness is just noise

Business Leadership

In signal processing there's a measurement called Signal to Noise Ratio or SNR. A given 'channel' can only carry a limited, finite amount of information during a given time period and will have a particular SNR. Here's a practical example of SNR. Let's say you are talking on a phone to someone with a cellular phone. They're standing on a windy street. Some of what you hear is the wind blowing across the microphone. This is noise. Your voices are the signal. You can talk louder and that may help but as the wind gets louder you will have to start repeating yourselves in order to be understood. It will eventually get to a point, if the wind is strong enough, at which you will not be able to understand anything he/she is saying. As the noise increases, the amount of information that can be conveyed drops.

The same is true of political correctness. Have you ever felt you couldn't speak directly about a problem because if you did people would become offended or angry? In consequence they may dismiss what you're saying because their defensiveness will get in the way of them placing any value on what you're saying. This need to couch uncomfortable realities in niceties is a problem. All of the finessing that goes into our politically correct conversations is noise, preventing the information - that which is valuable - from getting through. This doesn't mean we should dispense with manners or politeness. As Peter Drucker says in his essay, Managing Oneself,

"Manners are the lubricating oil of an organization. It is a law of nature that two moving bodies in contact with each other create friction."

Rudeness or insensitivity are no more justifiable if done in the name of 'honesty'. Let's consider the following two approaches:

"Although it was a sound decision to delay the move on our process improvement effort until some of the uncertainty around our contracts and revenue was sorted out at the time, we really need to reconsider our position on this given the new competitive information we have..."

or

"We made a mistake in delaying this decision. We're now behind the eight-ball and haven't got the efficiencies we should have. Our bid on the such and such contract failed because we were too expensive, too inefficient. Now that we know this a) we'd better act to fix it and b) we need to challenge our thinking more. We shouldn't have delayed. What other negative outcomes are facing us now because of this inability to make tough decisions we seem to have? How are we going to learn from this?"

The first approach is soft and non-confrontational. No one could possible get offended. No one will feel any urgency to change. The sins of the past/present will be repeated in the future. You can bet on it. The honesty and directness of the second approach lets us see the problems so we can make the changes we need to. It also shows you have confidence in the maturity of your colleagues and that they are capable of confronting and dealing with reality - even if it's unpleasant.

Massive project failures are really massive leadership failures in disguise

Business Leadership

We can now add another colossal IT failure to the list already in the heads of CIOs. ZDNet has an excellent article chronicling the Heathrow Terminal 5 project, a joint British Airways and British Airports Authority £4.3bn ($8.5 billion) effort, of which a reported £175m ($346 million) represents IT systems. Apparently Queen Elizabeth herself gave the opening speech calling it a “a 21st Century gateway to Britain.” I'm sure that in her mind she was not thinking about "canceled flights (54 short-haul in one day), lost baggage, and substantial delays". Hmmm, maybe she should have picked up The Standish Group's Chaos Report first. I doubt BA's CEO was anticipating a 3% one-day share price drop when news of the extensive problems became public. Since I started writing this post (1 1/2 weeks ago) two senior executives, a director of operations and director of customer services have been fired over the T5 problems. I'm surprised the CIO still has a job...maybe they're afraid to fire him until the problems have been fixed.

We know about Nike's runaway i2 supply-chain implementation that resulted in excess inventory imbalances triggering a 20% share price drop and a $100 million quarterly earnings shortfall. It prompted then Nike Chairman Phil Night to ask, "This is what you get for $400 million?" Nicholas Carr, famous - or infamous - for his May 2003 Harvard Business Review article, "IT Doesn't Matter", wrote another article, "Does Not Compute" in the January 22, 2005 Op-Ed section of the New York Times. In it he details a number of high-profile IT failures including the FBI's 170 million dollar virtual paperweight and Ford's supply-chain project - abandoned when it was $200 million over budget.

Here's what I find alarming. We've known the root cause of project failures for some time. A number of really solid project management methodologies, proven to work, have arisen to counter these risks. So what's the problem?


The Challenger disaster was not ultimately a technology failure but was rather caused by broken and dysfunctional lines of communication through the NASA hierarchy.

Management, and I include all involved parties from the CEO and CIO down, continues to ignore best practices time and again or simply fails in their execution. I'm not going to get into iterative development and/or integration nor will I discuss the principal behind detailed (but iterative) analysis nor architectural prototypes. I'm not going to talk about project failure rates and their correlation with total person-years or budget - I'll review these in later posts. The failure is not due lack of data or sufficient guidance in effective implementation methods. Every time you see a project failure like this your are seeing evidence of management failure in the organization. Management who does not deal with employees who aren't equipped with the 'process' tools they need to get their jobs done. Who are not dealing with breakdowns in communication across the company's departments (looks like BA's failures are at least partly due to this). Management who are not hands-on and fully engaged in the project - passing the buck down through the organization instead.

What are the solutions? Make sure departmental responsibilities are not only defined but that there is also accountability. The CEO should be fully engaged in major projects. Deal with non-performers in your organizations. Make sure the project's business case is results-oriented. Once the project is over, compare actual to planned results. In short, senior management needs to create a culture of execution throughout the company that starts with the C-level and flows on down through the departments and project teams.

If you expect people to deliver results and they know it, the one's who you'll want to keep on in your organization are the same ones who will find the right methods to get those results. They're the people who hate to fail. Within a culture of execution they are also the ones who will thrive.

Once You've Outsourced Everything, What's Left?

Business Future Offshore Outsource

Many of us have witnessed the rise of outsourcing across numerous business sectors. IT outsourcing was big in the post-Y2K days. Outsource everything and cut your costs was the utopian's, I mean consultant's cry. Many companies did just that. I know of one organization that has since repatriated core strategic functions like Enterprise Architecture, Project Management, and Business Analysis from their outsourcer. Why? Architecture will determine your organizations flexibility and ability to adapt to new demands. It will also determine the cost burden you bear for the maintenance of your infrastructure. In the wrong hands (which are any that aren't directly attached to the organization), this can spell disaster, albeit stretched over a 5-10 year period. Similar things can be said for the Project Management and Analysis disciplines.

Since the early days of outsourcing and offshoring the focus has shifted from technology services to business services. Outsource your call/contact centre. Outsource HR, manufacturing, payroll, even your business strategy (many companies do this by bringing in management consultants to do what their own managers should be doing).

Some of these make a lot of sense. Payroll is largely a low value-add and commodity business process that can easily be outsourced without risking a loss in cost-effectiveness or strategic leverage. What about manufacturing?

We do not need to name the number of manufacturers that are moving their operations oversees. Goodyear is moving a portion of its manufacturing to China. IBM, Intel, and Cisco and others have or are building R&D centres in India. Offshore your knowledge! Hey, that's smart! Or is it? How will they even be able to answer these questions when they've offshored their brains?

When you remove manufacturing from North America, you remove the skills required to build plants, and develop factory automation from the society. People go where the job demands are high. How many MBA students with a focus on manufacturing are there in Canada and the US today? How about the rest of the world? Although I'm interested in knowing what the hard numbers are and what the last decade's trends show I don't really need to - it's clear. Read the newspaper and management journals and then go back to history. MIT's Sloan Management Review has an excellent article on what management 'gurus' did to (accidentally) shift the power over product pricing from the manufacturer to the distributor and mega-retailer (say Wal-Mart). These experts taught that to compete head-on with higher-quality manufacturers in Japan, companies had to divest themselves of activities that were not part of their core competencies. They did. They got rid of sales and distribution among other functions. From the article:

"Although Goodyear started using alternate distribution channels in the 1970s, the shift away from its dealer network accelerated dramatically in the early 1990s when the company introduced its tires to Sears and Wal-Mart stores. As a direct result, the company went from having a global network of loyal and faithful dealers and strong brand loyalty to becoming the manufacturer of a commodity that could be purchased at an ever-growing number of outlets for a lower price...The prices of Goodyear tires to consumers fell precipitously...A slow degeneration of the company began...unable to raise its prices ...Goodyear was faced with the inevitable: the removal of costly manufacturing centres from within the United States."

What some managers fail to account for when making major structural changes to their organizations is their systemic impact. Major changes, made within an isolated framework - such as only thinking about cost-cutting or improving quality (as in Goodyear's case)- can have significant negative impacts on an organization.

Government and policymakers need to start attacking this problem today. Again, it is systemic. Labor costs are only part of the problem. Education is another as is the relative complacency of today's 'Western' workforce. Is protectionism the answer? I don't think it is that simple but countries like Canada and the US are in the process of losing control over their economies, a fair extrapolation of the final outcome of offshoring, have to make some tough and likely radical decisions.