Is There a Disconnect Between Knowledge Workers and Business Leaders?

The past two weeks I’ve read a number of articles about the End of Agile and subsequent rebuttals. Yesterday I read an excellent article asking “Whatever Happened to Six Sigma?” Both of these articles are fascinating. The rebuttals to the first are incredibly enlightening. I don’t think these are the last of these sorts of articles. I expect to read “The End of Lean” down the road as well.

I think there are a few reasons, one of them is common between Six Sigma and Agile. Snake Oil Salespeople. Basically, what has happened with all methodologies (except for PMI’s Waterfall approach – which I’ll get to) there reaches a point in time where it becomes impossible to determine the quality of credentials for a given certification. At that point, the certification is valueless even if the training, like you dear reader received, was actually the top of the top. Because there’s no actual way to determine if the quality is any good or not.

I experienced this first hand while I was teaching Lean Six Sigma at AMD. I had some fantastic mentors when I was working there, that lived and breathed Six Sigma for their entire careers. They knew this stuff inside and out. Which made me gain a much deeper appreciation for the methodology. However, there was another small company in Austin that also taught Six Sigma to their employees, Dell. Whenever we hired people from Dell with a certification in Six Sigma, a Green Belt or even a Black Belt, we essentially had to retrain them. Many of them, did not truly internalize what they were taught, or the material was less rigorous. This was likely a trade off the Six Sigma training team had to make to ensure their team remained relevant to Dell.

However, whenever you cannot trust the training from an organization like Dell, it makes it a lot more difficult to trust training for any other organization. You just don’t know the standards. Agile’s currently experiencing the exact same issue. There’s been a huge influx of organizations giving certifications. Not all of them have the same level of quality.

I think as a reaction to this, the software development industry has created DevOps and DevSecOps. Which doesn’t have a certification process, but a general set of ideas, such as Trunk development, rigorous testing, continuous integration, and on the extreme continuous deployment.

I think all this goes back to a basic premise though. Knowledge workers, like engineers and software developers look at problems very differently than business leaders. I first experienced this while I was in college. I was studying Industrial Engineering (which pulls in elements from Six Sigma, Lean, Network Theory, Simulation, Human Factors, etc…) while a good friend was studying Business. We had a few conversations about how businesses should be run and it was very obvious to me, that we were talking about two completely different views of how a firm should be run.

I was arguing against (in 2003) off-shoring, because it decreased the efficiency of engineering and collaboration between manufacturing and engineering. Both Agile and Lean argue against off-shoring due to these reasons. Given the change in the approach, the salary savings, overall, didn’t make the effort worth it, because of the reasons I listed. My friend thought lowering cost was the right thing to do.

This isn’t just an anecdotal thing though. If you read books about Agile, Theory of Constraints, or Innovation, they all make the same arguments. The ideas taught in business school are causing business leaders to make bad ideas. Theory of Constraints was popularized in the book The Goal by Eliyahu Goldratt and came out in 1984. The ideas he espoused in that book were considered counter intuitive. If you read the Phoenix Project by Gene Kim which came out in 2013, which is written to model The Goal,¬†you’ll find the characters running into, literally, the exact same type of thinking by managers and other team members. To me, this means there are other cultural organizations that are pushing back against the approaches technical leaders find work best and what our business leaders find work best for their goals.

The two most obvious cases for this are Accounting (which The Goal sets up as something of an antagonist) and Executives. Accounting has the weight of Law on its side, which is problematic, because Accounting organizations has their own reason for maintaining a status quo. They have their own certification process to become a CPA. From the executives standpoint, in many cases these folks are presented as having an MBA and excellent business training.

Despite that, they are still making poor business decisions for the technical team, poor decisions about how to structure their organization, and poor decisions about how to run projects. Most projects are run using a Waterfall approach, because that is the defacto approach we’re all taught throughout school. We manage to dates and push to get things done. The Project Management Institute has managed to corner the market on this approach, because most people can “do waterfall” without needing a certification. You learn through osmosis, by doing. The certification certainly elevates some PMs in some organizations. However, I don’t really think that having a PMP matters to most hiring managers.

So, where does this leave us? It leaves us with Knowledge Workers using ideas like Six Sigma, Lean, DevOps, Agile, and more to dress up their structured problem solving approaches to add structure and credibility. They need structure to compete with the Date Managed Waterfall approach. They need credibility of a methodology to put their approach on the same level as a PMP certification. In the case of Six Sigma, I’d argue its biggest success was internalizing the cost saving analysis. This helped translated the output in terms of money, which executives understand.

Every other approach tries to create an alternative measure. Elimination of Waste or “Working Software is the Measure of Progress” are nice alternatives to reducing costs or meeting due dates.

However, most share holders don’t care about that. They only care about what’s going to make them more money. Ethics and approach be damned. Until that is resolved. We’ll continue to have more fads or business fashions, as Knowledge Workers push back against Business Leaders.

Adoption of Agile compared to Lean

This is part of my ongoing series devoted to understanding the connection between Disruption Theory, Lean Startup, Lean product development, and Agile software development.

In many organizations the adoption of Agile software development techniques have been adopted rather quickly. For those unfamiliar with Agile software development, the point is to focus on user experience through developing software that is created through user stories (there’s a lot more to it obviously). Agile grew out of an understanding of Lean practices, where there is a strong focus on learning, daily standups, and understanding where and why things went wrong. This includes the use of the 5Whys which was highlighted in the Lean Startup. In away the company becomes a learning organization as there is a set meeting every sprint to reflect on the last few weeks of work. Agile was initially conceived around the turn of the century and has seen steady adoption over the past 15 or so years.

Many of these ideas came from Lean. While retrospective isn’t specifically called out in Lean, it happens consistently through a Plan Do Check Act cycle. Furthermore it happens through Root Cause analysis which happens on nearly a daily basis whenever issues arise. Much of the most ardent Lean practitioners are found in manufacturing, however it is making headway in other areas of the organization over time. Lean was Popularized in the early 90’s by the book “The Machine that Changed the World” but is much older than that and had been adopted by Toyota competitors as early as the 70’s.

So, then why, when Lean is the inspiration for Agile (as well as the Lean Startup), has Agile been heavily adopted while Lean has not? I do not mean to say that Lean isn’t used; it’s used a lot of places. However, it’s not used in the bulk of companies around the world or used uniformly throughout an organization. Agile has been adopted as a methodology across many industries and within many different types of companies. It is also not possible to say that one works while the other doesn’t. Both have been shown to improve processes and drive cultural change within an organization. I think that Agile has been more quickly adopted in broader corporate America than Lean because, similarly to Lean, it was made by and for the people that use it the most; Corporate IT. IT/Software development has owned the deployment of Agile practices which has made them much more successful at adopting them than those same corporations adopting Lean practices.

Agile has had the luxury of being successful in many organizations in a very public manner. Which has lead to a lot of top down support and required adoption of the methodology. This makes adopting specific methods for project management significantly easier for adoption of any given methodology. In fact, Lean and Six Sigma deployments are only successful whenever those deployments are attached to specific strategic initiatives. With IT any project that is funded for development is by definition strategic resulting in clear alignment between the Agile deployment and the execution of the project. Lean typically does not have this luxury.

Furthermore, Lean is not well regarded in many leadership circles as it is not typically taught in high level MBA courses. Agile on the other hand has made it into Masters programs for both IT and Computer Science. Meaning that the leaders responsible for owning processes and project results learned about how to deploy Agile in their education and it was a highly stressed practice. On the other hand Lean is part of Industrial/Manufacturing Engineering and to specific business niches. Which means that there’s a clear misunderstanding of Lean and the management practices that accompany the tools.

Coming to Agile from the Lean perspective, I believe that Lean practitioners have a lot to learn from the Agile community around adoption. Much of the actual practices are extremely similar and anyone with a strong Lean background will be able to transition into an Agile environment easily. The transition the other direction will be only slightly harder, mostly because of the broader range of performance metrics associated with Lean compared to a handful with Agile.

MBAs, Ethics and Morals

Yesterday on Facebook I started quite the little discussion after posting a discussion about MBA education based on an article on Bloomberg. The author of the article, a professor at the University of Chicago Booth School of Business. Essentially the article argues that the method used to discuss ethics results in amoral education. What this is saying isn’t that they are teaching a lack of morality, it’s that they aren’t teaching the actual moral result of these choices in a way that makes it clear that one option is moral while the other is not.   Without explicitly stating which option is moral or immoral, it can create ambiguity (we know that business people hate uncertainty) and the illusion that either one of the options could be moral.

Why does this cause a problem? First, not many people actually have any education in ethics to begin with. If someone put together a list of 8 must take classes ethics would be somewhere around 100. Ethics courses aren’t easy and they make you really look at how you think about things, figure out why you think that way and try to make you change the way you think. They aren’t always successful, but ethical thinking is like critical thinking, the more exposure you have to it the more you are able to practice it. The second reason why this is a problem, is that many people going into business school may have less scruples, be willing to take advantage of people or are amoral. Not everyone is, but we know from research that business leaders tend to have personality traits of psychopaths. We also know that in games like prisoner’s dilemma business leaders act the most ruthless (same goes for economists). The only question is the direction of causality. Does business school create these types of people, does it exacerbate these personality types or do these people go into business already behaving in these manners? I don’t know the answer to that question.

While I was in the Netherlands I listened to a seminar that discussed the way that ethics is taught within the Dutch military. All new recruits must go through ethics courses and then every so many years they are required to recertify on the ethics course. The goal is to bring in new officers with a sense of ethical norms that can prevent atrocities and allow officers to do the right thing when they need to. Of course the military believes there is a fine line between creating a thinking solider and a solider that ends up in analysis paralysis because they are going through too many ethical situations in their mind. The goal of the education is to ingrain many of these ethical situations so reaction is more instinctual even for the ethical choice.

I believe that there is a similar balance that needs to be considered in business. What are the social norms for ethical behavior in many institutions? Well, I think that this really does depend on the institution and the environment that they are in. I think there are no ethical norms within the big banks, which has been played out over and over again with the sub prime, then LIBOR and now HSBC’s money laundering. Perhaps the ethics are there, it’s just considered ethical to make as much money as you can without getting caught doing something that is obviously screwing someone over. The question becomes, can a truly ethical MBA graduate come into an environment and succeed? I think that they will be able to do well compared to your average person, but they will quickly be out shined by their unethical colleagues.  These are businessmen, they understand incentives well, so they will adjust their behavior based on their incentives. This is a normal and rational thing to do.

Are there ways to instill more ethical behavior at companies? I think there are ways. Some are through legal changes, which lower the bar for what is considered a crime when it comes to fraud and unethical behavior. This would either drive the behavior more underground (likely) or change some of it. Other ways would be through forcing a cultural norm where these companies are punished through lack of investment and loss of business. This one has a coordination issue. Many people have no qualms about ethical issues that would use a service like this. Additionally, the sheer number of firms behaving unethically makes it unrealistic for a person to buy ethically made products. I wrote about this at the Urban Times, noting that Apple is being singled out when the entire industry behaves in this manner.

Ethics needs to be taught at many different levels, it encourages critical thinking and self reflection. Developing ethical leaders in all respects of business and politics should be a goal of all universities. However, ethics courses are being cut and many people just don’t see the value in them.