Friday, November 02, 2012

Perspectives - To buy or not to buy a book?


I am working on a new book, the working title is Perspectives. The purpose of the book is to show how the lofty ideas about management and leadership applies to everyday management decisions. I want to show how having more than one perspective can have a great impact on every day decision making.

The following essay is an early sketch that may become a chapter in the book. I will publish more preview chapters in the newsletter supporting LESS!, the book I co-wrote with eleven other management experts not too long ago. By the way, the ePub version of LESS! is free, if you promise to write and publish an honest review.

Here is the preview chapter for Perspectives:

To buy or not to buy a book?
Imagine you are running an IT department employing fifteen people. Anna, a young software developer asks you if the company will pay for a book she wants to read. The book is about XML Forms. You have no idea what XML Forms are. The book costs $17. Should you let her buy it?

This is one of the countless every day decisions a manager has to deal with. You obviously can’t do a detailed Cost/Benefit analysis every time a decision like this is called for. Instead, you make a quick decision based on your gut feeling. However, depending on your perspective, your gut feeling will be very different. Let’s have a look at the implicit reasoning behind your gut feeling. We will use the following perspectives:
  • Cost Accounting
  • Theory X
  • Theory Y
  • Options thinking
  • Queueing Theory
  • Strategy
Cost Accounting perspective
The answer, straight from the gut, is no, no book!
The reasons are simple and obvious: Spending money on a book incurs a cost, but there is no clear benefit for the company. No customer has asked for XML Forms. Anna does not currently work in a project where XML Forms would be needed. Even if she did work in such a project, it would probably be cheaper to use currently available technology instead of spending time and effort learning something new.
Theory X perspective
The quick answer is no, no book!
Anna is not trusted to make a $17 decision, but you are. The reason is that you, as a manager, have a much better grasp of the big picture than Anna. If you cannot see how the book would benefit the company, then it probably won’t.
Another reason is that the expenditure of buying the book would go on record. If you give Anna permission to buy the book, your own manager might hold you responsible for incurring a needless expense. If you deny Anna’s request, the matter ends right there. There will be no record of the request being denied, because no transaction has taken place. Thus you will not be held responsible for any opportunities that might be lost by Anna not reading the book. As we have already concluded, the probability of such an opportunity occurring is very low anyway.
Options thinking perspective
The gut answer is yes, Anna can buy the book!
If Anna reads the book, the company will gain the ability to use more options in certain situations. Are those options likely to be worth more than $17? The average value of the options is:
Probability of using the options x Value of options used - Cost of buying the options
The cost of buying the options is $17. You have no clue what the other variables are for this particular book, but you can make an educated guess if you pose the question this way:
If employees in your unit read 100 work related books, can they, and you, leverage the knowledge gained to make more than $1,700 for the company?
If you are in a business where technology changes rapidly and customer requirements are varied, the answer will almost certainly be yes.
Theory Y perspective
Anna bought the book on her own initiative, without asking you.
Anna is an intelligent, responsible adult. She works on software worth millions of dollars. Every day, a decision made by her can make a difference of many thousands of dollars on the bottom line of your company. That is part of the nature of knowledge work. Obviously, she can make a $17 decision on her own.
If Anna had asked you before buying the book, that would have been a sign that you must help her gain confidence and rely more on her own ability to make decisions.
Queueing Theory perspective
Anna can buy the book on her own initiative, without asking.
Let’s assume that Anna costs $100 per hour, or $1.67 per minute. You cost $130 per hour, or $2.17 per minute. If Anna makes the decision herself, she can make it in less than a minute. The cost of the decision is about $1.67. If Anna has to ask you, you will spend at least five minutes each. Anna has to explain the reason for her request before you can make a decision. Those 5 minutes will cost $19.2 (5x1.67+5x2.17).  The decision will cost $17.53 more (19.2-1.67) if you make the decision than if Anna does it. That is $0.53 more than the cost of the book itself.
Even if you always made the right book buying decision and Anna always made the wrong one, it would still be cheaper to let Anna make her own decision. Thus, the simple rule is that Anna can make such minor decisions for herself.
Strategy perspective (Maneuver Conflict)
As a commander in Vietnam, I wanted to unleash my marines on the enemy, not control them.
Thinking Like Marines, by Col. Mike Wyly USMC (Ret.)
Anna bought the book on her own initiative, read it and liked it. She wrote a review for goodreads.com, made a video review for amazon.comamazon.co.uk, and your company’s book review channel on Youtube.com. She also made an entry about XML Forms in the company’s wiki based online encyclopedia. She added links to the PDF article, and updated the PDF article with a link to the XML Forms article. (As it turned out, the PDF 1.5 specification references the XML Forms specification, and your company has an interest in PDF technology.)
Finally, Anna used the book as source material for the monthly Pecha Kucha[1] night at your company. When Anna was done with the book, she put it in the bookshelf in the company cafeteria. You saw the links to the reviews on the company Twitter list, which aggregates tweets from every tweeter in the company.
You like Anna’s energy and initiative. Based on her presentation at Pecha Kucha night, you might give the book a quick read, just so you know what the developers are talking about when you have lunch with them. You make a note to ask Anna to show you how XML Forms can be integrated in the tactics of your unit.
In this version, Anna did what you trained her to do: She took the initiative and made the most of the opportunity that presented itself. By reading the book she increased her own competence and created new options for your company and yourself. She then proceeded to spread an important message outside the company: “These people know their stuff! They are actively building their competence.” Note that every person who reads or watches one of her reviews, will also see your company name. Inside your company, Anna made sure that everyone who is interested in forms technology knows about the book, and also knows that she knows how to use XML forms.
From a strategy perspective, Anna has strengthened interactions with potential allies outside your company, and also strengthened interactions between people inside the company. She has considerably reduced friction, in this case the startup cost of using a particular technology.
Your role in this is as a leader and an enabler. You have trained Anna in IOHAI leadership[2]. You have participated in setting up the company Wiki, the book review channel on Youtube, and the accounts your unit has on Twitter and Goodreads. You are responsible for keeping your unit targeted on the overall Noble Vision of your company.
In this version, your company is very likely to be organized as a network of small units, capable of independent action, responsible for their own value streams, but working to achieve a common goal, a Noble Vision. You are much more likely to be the leader of such a unit, than to be the manager of a functional department.
Implications
In 1995 I was co-owner of a small technical documentation company. One of my co-owners, who remains a close friend of mine, and I each bought a book about the Structured Generic Markup Language (SGML), Developing SGML DTDs: From Text to Model to Markup, by Eve Maler and Jeanne El Andaloussi. We quickly took to calling it “The Green Book”, because of the color of the cover. Buying The Green Book was the first step on our journey to become SGML experts. We did a lot more than just buying and reading a book of course: We bought and read many, many more SGML and XML books. We built SGML/XML document authoring systems just for the fun of it. I built a system for reading FrameMaker MIF documents and converting them to XML. I also built a system for managing XLinks in XML documents. XLink is a way of creating various types of links in XML documents.
We adapted our company strategy to incorporate the things we were passionate about. As a result, we were in a perfect position when our largest customer decided to switch from using FrameMaker to using an SGML/XML based document authoring system in 1999. A couple of years later, the MIF to XML conversion system I built for practice became an integral part of a system for processing medical records. My friend integrated the XLink system I built into a commercially successfull XML document management system. Today, more than ten years later, not a single line of the original code remains, but the ideas about how to build a robust, user friendly XLink system live on.
At least five different companies benefited from our original decision to buy and read The Green Book. The total profits accrued from that decision amounts to millions of dollars. I buy and read about twenty work related books a year. The cost is negligible compared to the total profits accrued from reading The Green Book. Even if my friend and I had never bought anything useful again, our reading habits would have paid off handsomely. Note that in monetary terms, other people benefited much more than we did. I think we got most of the fun and excitement though. However, had we not owned our own company, it is unlikely that any of this would have happened.
The most common answer when an employee asks if their employer will spring for a book is “no!”. The employees learn quickly that knowledge is not valued in the organization. The people who are passionate about what they do will eventually leave, not because of the book buying decision, but because of the underlying mental models of the managers. Only the apathetic will remain, because apathy is the only alternative to going crazy.
Without a steady flow of new knowledge, the company will be increasingly out of touch with the world around it. Customers and competitors will adopt new technologies faster than the company can. Strategy, tactics and organization will fall behind. When the customers leave, this is merely the result of a long process of erosion within the company.
The problem is that the Cost Accounting and Theory X perspectives are so prevalent in our companies. Cost Accounting is based on the ideas of taylorism. Taylorism is based on Theory X premises about workers. If you work in a Theory X based hierarchical, functionally divided organization, and is evaluated on cost Accounting measures, you are unlikely to even know about other ways of thinking, and other ways of doing. Even the idea that there may be other ways is unlikely to occur. You, your co-workers, and your company, are trapped in a closed system.
If you can break out of the closed loop, you will be able to see that there is great value in other ways of doing things. Reading a book might be the first step.
Further thinking
  • How do the managers and leaders at your company value new knowledge and learning? What is the message they are sending to employees? If they do not actively support learning, what does that tell you? How often do you hear them speak about what they have learned themselves?
  • As a manager/leader, would you prefer the Theory X/Cost Accounting style of management, or the Theory Y/Maneuver Conflict style of leadership? If you prefer the Theory Y/Maneuver Conflict model, what are your fellow managers most likely to prefer? If most of you are likely to prefer the Theory Y/Maneuver Conflict style, what is stopping you from doing it? How can you remove or get around the obstacles?
  • The US Marine Corps has a reading list, providing a list of books that Marines must have read at each grade level. The list includes both fiction and science books, books about strategy, tactics, philosophy, and different cultures around the world. Higher ranking marines must read everything lower ranking marines read, plus the books graded at their own rank. What would a reading list for your company look like? If you find it difficult to put such a reading list together, why is that? If you find it easy, why?
  • Are there any other perspectives that might be important to a book buying decision? What are they? What insights do they add?

  • [1] Pecha Kucha is a presentation format where all presentations use 20 presentation slides. Each slide is hown exactly 20 seconds. Slide transitions are automatic. This forces presentations to be short and to the point. There is a Pecha Kucha organization that arranges Pecha Kucha presentation nights all over the world. See www.pecha-kucha.org.
    [2] IOHAI is a military leadership model. It is part of the Maneuver Conflict strategy framework. I have described IOHAI in more detail in my book Tempo!.

2 comments:

Ari N said...

Ah, the Green Book. It's still the best book I've read about information analysis, and I've read a few. Cheers, mate, that was a trip down memory lane.

Henrik said...

Yep. As I recall it, it never occurred to us not to buy a book, if we had reason to suspect it could be interesting. :-)