What is the smart company?
For a few years any book, study, article on the competitive situation of companies and the challenges they have to face, begin by noting how the situation of continuous change, globalization, greater national and international competitiveness, pose the need for changes continuous, of permanent adaptations to environments in a permanent state of imbalance. I will not insist on the same arguments because, surely, the reader knows them well.
The concept of business strategy has also evolved from a relatively static model, based on formal planning, from top to bottom, to an emerging and adaptive one, precisely because of the uncertainties of technology, innovation, markets, etc. Within this frame of reference, the analysis of the company's resources, those it possesses, those it should acquire to improve its competitive position, the measures and actions it has to take to sustain and improve these resources, becomes more important than otherwise. some tend to deterioration and wear.
Research and empirical studies show that the most differentiating resources, and therefore with the greatest competitive capacity, are knowledge and human capital. There are already examples of companies that incorporate the valuation of these two factors into their balance sheets - and stock market analysts are closely observing this new phenomenon - as some years ago they included the valuation of their brands.
The intelligent company continually creates and re-creates its future; assumes that learning is a continuous and creative activity of its human components, and is continually transformed in response to the needs of the individuals that compose it and also those of the companies, organizations and individuals with whom it relates (customers, suppliers, social groups, etc.). The company that decides to tackle this process experiences a qualitative change. To design and execute this emerging strategy model, it is necessary to create or modify the vision of the company, and therefore its mission, to be sensitive to capture the changes and how they affect the company and to foresee the possibilities of action; and all this related to the extent to which we develop, maintain and use our fundamental human capacities.If we do not build and use our skills to think critically and creatively, to communicate ideas and concepts, and to cooperate in inquiry and action, we may be building the company's vision, perceptions of reality, and our expectations. The intelligent organization is based on and rewards - not necessarily with material rewards - the skills, attitudes, knowledge and understanding that contribute to add value to the company, the company with high value that is characterized by a continuously expanding network of people very capable and with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.Critically and creatively, to communicate ideas and concepts, and to cooperate in inquiry and action, we may be building on quicksand the vision of the company, the perceptions of reality and our expectations. The intelligent organization is based and rewarded -not necessarily with material prizes- the skills, attitudes, knowledge and understanding that contribute to adding value to the company, the company with high value that is characterized by a continuously expanding network of highly capable people with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.Critically and creatively, to communicate ideas and concepts, and to cooperate in inquiry and action, we may be building on quicksand the vision of the company, the perceptions of reality and our expectations. The intelligent organization is based and rewarded -not necessarily with material prizes- the skills, attitudes, knowledge and understanding that contribute to adding value to the company, the company with high value that is characterized by a continuously expanding network of highly capable people with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.we can be building on the quicksand the vision of the company, the perceptions of reality and our expectations.The intelligent organization is based on and rewards - not necessarily with material rewards - the skills, attitudes, knowledge and understanding that contribute to add value to the company, the company with high value that is characterized by a continuously expanding network of highly capable people with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.we can be building on the quicksand the vision of the company, the perceptions of reality and our expectations.The intelligent organization is based on and rewards - not necessarily with material rewards - the skills, attitudes, knowledge and understanding that contribute to add value to the company, the company with high value that is characterized by a continuously expanding network of highly capable people with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.The intelligent organization builds on and rewards - not necessarily with material rewards - the skills, attitudes, knowledge and understanding that contribute to adding value to the company, the high-value company characterized by a continually expanding network of highly capable and with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.The intelligent organization builds on and rewards - not necessarily with material rewards - the skills, attitudes, knowledge and understanding that contribute to adding value to the company, the high-value company characterized by a continually expanding network of highly capable and with the ability to deepen their analysis. It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.It is not surprising that as one advances along this path there is a progressive identification of the social nexus, that is, it reinforces the ties that unite us.
To start and achieve the transformation process, four routes are opened.
- The internal regulations of the company must commit to developing, maintaining, facilitating and using the essential human capacities of all those linked to the company, to the extent possible.Through training and education, expand the essential human capacities that include the skills, knowledge, understanding and attitudes to understand the needs of others and be able to network with them.Using training and development, form a whole with all the aforementioned resources so that they become useful skills for the company and for their competitiveness. Develop new principles and in-depth analysis to be able to put all of the above into practice in a more productive and humane way.
Peter Senge, author of the book "The Fifth Discipline" affirms that an intelligent company is one that is organized in a manner consistent with human nature. This author indicates that five types of competencies should be developed:
- Quality of judgment. Think of organizations and their environments as systems in which there are connections in such a way that an action on one part affects the system as a whole. It allows us the long-term vision and see all and not parts. Personal domain. It is the competence to clarify and deepen the personal vision, capturing reality more clearly, to see relationships more than isolated resources and patterns or structure more than isolated events. Manage mental models.Bringing out our internal visions of the world, how it works and, once on the surface, submitting them to scrutiny. It requires the practice of conversation that balances the investigation of the positions of others and the defense of our own, that is, to expose our thinking and be open to that of others. Harmonize personal visions. It is the leadership ability to build a vision shared by the entire company. Visions are always personal and that is why they have to be harmonized by those who lead, not through "command and control" but because the entire company wants it. Team learning. Smart teams are made up of smart people. Group work cannot and should not crush the individual.
Although to develop and implement all of the above, the company may need the help of a consultant, this should be a mere facilitator of the processes so that they are later assumed by the company itself
What matters is the structure
On the way home, I leave Santander on the A-68 highway until exit 16. Here I take a regional road. At the junction between both roads there is a “stop” sign, and, a few meters away, a distributor of these and other roads. When reaching the "stop" visibility is very good and some drivers do not respect the sign, turning it into a "Give way". Frequently, the Civil Traffic Guard is stationed at the distributor and I check how they report drivers. My first thought is: "another driver who has not respected the signal"; this is the fact. Then I can say to myself: “I frequently observe this situation: drivers reported for not respecting the traffic sign”; I have gone from the isolated event to the pattern or pattern. But I must go deeper and ask myself “why this fact and these guidelines? When I ask myself this question,I am in a position to begin to analyze the structure. Since the exit has sufficient visibility, some drivers slow down but do not come to a complete stop; some drivers don't respect the signs; the Civil Guard of Traffic is stationed in that place to denounce the transgressors. Complaining is the right procedure for them. Are there alternatives to complaints that take place here? For example, an information campaign. These are some of the structural factors of the problem. He could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”Since the exit has sufficient visibility, some drivers slow down but do not come to a complete stop; some drivers don't respect the signs; the Civil Guard of Traffic is stationed in that place to denounce the transgressors. Complaining is the right procedure for them. Are there alternatives to complaints that take place here? For example, an information campaign. These are some of the structural factors of the problem. He could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”Since the exit has sufficient visibility, some drivers slow down but do not come to a complete stop; some drivers don't respect the signs; the Civil Guard of Traffic is stationed in that place to denounce the transgressors. Complaining is the right procedure for them. Are there alternatives to complaints that take place here? For example, an information campaign. These are some of the structural factors of the problem. He could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”the Civil Guard of Traffic is stationed in that place to denounce the transgressors. Complaining is the right procedure for them. Are there alternatives to complaints that take place here? For example, an information campaign. These are some of the structural factors of the problem. She could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”the Civil Guard of Traffic is stationed in that place to denounce the transgressors. Complaining is the right procedure for them. Are there alternatives to complaints that take place here? For example, an information campaign. These are some of the structural factors of the problem. She could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”These are some of the structural factors of the problem. He could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”These are some of the structural factors of the problem. He could go even deeper: “The mental models of some drivers induce them to take risks”; or “those of us who are already a certain age maintain a negative image of the Civil Guard: they post in the places where they can report”
Now let's move on to the realm of business. The structure of business organizations is made up of factors that do not change frequently: plants, offices, locations, surroundings, etc; and of processes that are carried out and that can change often, and of themes that the members of the organization express or feel. When the organization needs to improve or change, we must bear in mind that the structure determines the behavior and not the other way around. When we understand the former, its cause and effect relationships, we will be in a position to change behavior and attitude. When an organization modifies its behavior in response to new knowledge and perceptions, it is acquiring new skills or aptitudes to create, acquire and transfer knowledge:we are facing an intelligent organization that pursues and is achieving higher levels of morale, participation and productivity; cost reductions and margin increases; innovative products; improvements in customer service and market share.
If our perception of the world consists of a series of events, the best we can do, if we want to be effective, is to react. If we do it quickly, we will be more efficient, more flexible. At this level we limit ourselves to observing and asking ourselves what has happened? If we broaden our gaze beyond isolated events, we can find patterns and trends and we can take action, anticipate, ask ourselves what has been happening? We can represent the three levels as an iceberg in which events and patterns can be seen on the surface of the water. Below the surface, invisible, is the structure. To observe and modify it, it is not enough to react, you have to anticipate, “pre-act”, be proactive instead of reactive.
The manager has to be able to see all three levels; but what is structure ?; How can it be identified ?; What distinguishes it from the rest?
We can say that the structure is what channels human energy, what affects what happens. The structure is the whole, the network of relationships of things, not things. Instead of thinking of the iceberg in terms of different things that exist in the world, let's see it as different ways of looking at the world - that is, let's focus on the structures, causal connections, relationships that explain what is happening.
A structural observation may be: “our incentive system makes our staff short-term oriented”; or going back to the example of the motorway: “the“ stop ”signs tend to be neglected when the visibility is sufficient”; and for those with a certain image of authority agents: "They bet where they can make many complaints."
When we have difficulty identifying structural relationships, it can be helpful to return to the level of events and patterns or trends, asking ourselves "what explains these trends?"
Ultimately, it is about stimulating observation, thinking and apprehension of the deepest aspects to act and modify our companies.
In the next article we present a real business case, based on the apprehension of the structure. (By the way, a few months ago the “stop” sign was replaced by another “give way”; it was clear that the external structure, the decision to order the absolute stop of the vehicles was unnecessary; in the meantime, there have surely been thousands of complaints in that place).
Observe the writing in the Company - Mental Models
Observe the structure
To achieve intelligent organizations, and to maintain them, since they are always unfinished processes, tools of systems thinking are used, understood as the science and art of making behavioral inferences developing a greater and deep understanding of the underlying structure. Systems thinking is a point of observation and a set of reflective skills; a learning method that includes process, language and technology. It is about, at the same time, seeing the trees and the forest.
Let's look at a real example of a consulting job, slightly modified to ensure confidentiality. The commercial director of a company that sells computer software products receives a complaint from a very important customer They just installed an application that was working perfectly when the technicians finished their task, but now, a month later, there is a part of the application or damaged or unable to start. The commercial director apologizes and assures that he will immediately send someone to solve the problem. He then talks to other people in the department and they tell him that, although they usually do not inform him because they solve them themselves, there have been quite a few complaints recently about similar situations in newly installed applications. In some cases,the claim is identical to the one received by the commercial director; in others, the equipment “falls” when all the installed ones work simultaneously; Some customers have commented that they have found features of the application that either do not appear in the technical manuals or, if they do, the specifications do not match those that the system actually performs. The commercial department is exceeding the sales budget for the year and since the situation is favorable, also helped by the introduction of the euro and the effect of the year 2000, it is expanding its sales network. All the new salespeople hired by the department are graduates in computer science, with a commercial vocation and receive at least three months of training on the company's products, its technology and also on sales techniques.It is an in-depth and expensive training that has to be carried out jointly by the commercial and technical departments. The remuneration of the vendors has a very important variable component that depends on the volume of hiring of new facilities. The maintenance service depends on the technical department and also has its incentive system that is measured by objectives of cost savings, speed of service and a survey of customers on the quality of service they receive. One of the company's strengths, in addition to its products, has been its strict compliance with deadlines and an accredited after-sales service.The remuneration of the vendors has a very important variable component that depends on the volume of hiring of new facilities. The maintenance service depends on the technical department and also has its incentive system that is measured by objectives of cost savings, speed of service and a survey of customers on the quality of service they receive. One of the company's strengths, in addition to its products, has been its strict compliance with deadlines and an accredited after-sales service.The remuneration of the vendors has a very important variable component that depends on the volume of hiring of new facilities. The maintenance service depends on the technical department and also has its incentive system that is measured by objectives of cost savings, speed of service and a survey of customers on the quality of service they receive. One of the company's strengths, in addition to its products, has been its strict compliance with deadlines and an accredited after-sales service.One of the company's strengths, in addition to its products, has been its strict compliance with deadlines and an accredited after-sales service.One of the company's strengths, in addition to its products, has been its strict compliance with deadlines and an accredited after-sales service.
When the commercial director asks for reports of all the complaints of the last year, he verifies that more than 70% correspond to the last two months and more than 80% affect the components or modules of the system related to the communications of the client companies. They have also occurred in the last six months. The first pattern to emerge is that the situation has recently worsened; With respect to the coincidence that most of the problems occur in the communications area of the installed applications, our commercial director is lost - he cannot find an explanation - and he turns to the technical director of the company who is also directly responsible for facilities, after-sales service and research and development.
The technical director informs the salesperson that he already knows the problem and that it is very simple: since the third operator will start in two months, they have asked him for the technical specifications and thus have been able to incorporate the capacity into the applications - ahead of the competition - to use and contract simultaneously with the three fixed telephone companies. It happens that the installers of the applications - always very pressured to meet the deadlines - do not inform their customers of the new utility because, after all, it will not be able to be used until the third operator comes on the market. It has common elements with the communication modules of the two telephone systems that are already on the market and, without the necessary information, interference occurs that causes the application to “crash”.They have not yet been able to update the technical manuals to incorporate this new feature and –adds the technical director- “all the training budget and human resources that would be needed in my department to expand the staff of the implementation and post-service staff. sale ”are being invested in the commercial”. In any case, he adds, “before December the problem will be solved and I have already included in the 1999 budget, which I hope will be approved, an important item both to prepare new technical manuals and to expand the staff of my department. I say that I hope I will be approved because the CFO has already told me that in 1999 we will have to tighten our belts because a significant game is planned to buy from a competitor and, furthermore,the “euro” and “year 2000” effects will foreseeably not pull both sales and therefore our growth will come mostly from the purchase of that new company ”.
The sales manager then turns to his finance colleague and tells him about his department's problem and the conversation he just had with the technician. The first adds, in addition, that although he has not dared to raise it directly with the technician, he would like to know whose idea of getting ahead of the market has come by incorporating a module that is not yet in demand because he does not need it. The financial director replies to this last observation: "You already know that in the strategic plan we set out to anticipate the competition by incorporating all the innovations that were technically possible." We are assigning, training and expanding the commercial network, true that because your department is working at 200%.Thanks to the increase in sales and profits, we are going to self-finance the purchase of the new company, which, as you know, was already in the target of our headquarters in the Netherlands for three years from now. The President told me that if we advance this acquisition two years we will be able to buy cheaper and consolidate our balance sheets sooner. The Netherlands are delighted with our management because the French and Italian investees are contributing very little to the group's income statement. Until two years ago we were in the queue because of the mistake we made in 1994 and that was about to end us. The Dutch had already decided to close us down. In any case, if you want me to assign you two more people to deal with complaints, it is not necessary for us to go to the President;I authorize them from now on because I am empowered to do so "
The event is clear: The commercial director receives a complaint and his department informs him of the existence of others that have not been communicated to him. Which makes him go from reaction to a state in which he begins to observe patterns and trends. Whereas before the event the question is what has happened? When he discovers that more than an isolated event it is a trend, the question becomes what is happening? He decides to investigate and thus goes from a reactive behavior to a proactive or anticipatory one.
With his visits, the information he receives and how he analyzes them, he has decided to enter the structure, wondering what the forces are at work and why and how it has been happening. The behavior is characterized by understanding, designing and changing although this last phase will not depend only on our commercial director.
I invite the reader to write to me analyzing the structure and proposing solutions.
Mental models
Culture and behavior are perhaps the most powerful and ambiguous forces in business organization. Many attempts at change fail because existing values and patterns of behavior are threatened. Our behavior is driven by mental models and the values they contain. The situations that we provoke with our behaviors reflect the values on which we base ourselves. For example, if I want to win a poker game I will lie, pretend and obstruct the flow of correct information (about my cards). If I do it smartly, I will win. My value here is "winning is good" and I act effectively to achieve it. This is correct and achieves good results at the gaming table but has serious drawbacks in solving organizational problems.
The question becomes more complicated when we are not aware of our mental models. What's more, we act against the values we preach.
Of the five disciplines of Peter Senge, the second refers to mental models. A mental model is the way one sees and understands the world. They are a frame of reference for our cognitive mental processes. In other words, they determine how we think and act. A very simple but illustrative example is an exercise proposed in Peter Senge's book "The Fifth Discipline in Practice." Participants in a training workshop are asked to break into pairs and “pulse”. The one who manages to force his opponent's arm to the table the most times will win. Most of the contestants make an effort to lower the arm of their partner, who logically opposes a similar effort. His mental model is that there can only be one winner and it will be the one who lowers the opponent's arm the most.Chris Argyris says that these people have the wrong mental model. The alternative model would be for the members of the pair to agree and raise and lower their arms unopposed, thereby winning all other participants. Both will win. Argyris concludes by stating that most of our mental models are faulty. He says that we all have "theories for action" which are a set of rules that we use in our behavior, and to understand that of others. However, individuals rarely follow the theories for action that they preach. On the contrary, the “theories of use” apply:with which they would win all the other participants. Both will win. Argyris concludes by stating that most of our mental models are faulty. He says that we all have "theories for action" which are a set of rules that we use in our behavior, and to understand that of others. However, individuals rarely follow the theories for action that they preach. On the contrary, the “theories of use” apply:with which they would win all the other participants. Both will win. Argyris concludes by stating that most of our mental models are faulty. He says that we all have "theories for action" which are a set of rules that we use in our behavior, and to understand that of others. However, individuals rarely follow the theories for action that they preach. On the contrary, the “theories of use” apply:
- Remain in unilateral control Maximize profits and minimize losses Suppress negative feelings Be as rational as possible, understanding that it is about defining clear objectives and evaluating their behavior in terms of whether they have achieved them or not.
People act in this way to avoid embarrassment or threats. Most of us practice defensive reasoning and since we are part of organizations, they act in the same way. At the same time that organizations avoid embarrassing and threatening situations, they are impeding learning, intelligence.
Differences between individual mental models explain why two people observe the same event and describe it differently. His attention is focused on different details. Mental models shape our way of acting. Working with mental models is always difficult (Senge et al. 1995). “Sometimes teams understand that their communication skills are not yet up to the task. An atmosphere must be created where frustrations can be investigated. If the group lacks the knowledge to have an adequate mental model (of its clientele, for example), it can use questions to explore this lack: What do we know about our clients? What things do we intuit as true even though we cannot back up with data ?; What things do we ignore? What are our questions and guesses?what is impossible to know ?; What limited experiments can we design to verify our current model of clientele? "This would be an exercise in mental models about one aspect of the company's environment, but what are the internal mental models that hinder or impede communication and therefore the company's effectiveness? To analyze this situation, Argyris proposes to create "The column on the left." Let's see what it consists of based on the case reported in the third article of this series.What limited experiments can we design to verify our current model of clientele? "This would be an exercise in mental models about one aspect of the company's environment, but what are the internal mental models that hinder or impede communication and therefore the company's effectiveness? To analyze this situation, Argyris proposes to create "The column on the left." Let's see what it consists of based on the case reported in the third article of this series.What limited experiments can we design to verify our current model of clientele? "This would be an exercise in mental models about one aspect of the company's environment, but what are the internal mental models that hinder or impede communication and therefore the company's effectiveness? To analyze this situation, Argyris proposes to create "The column on the left." Let's see what it consists of based on the case reported in the third article of this series.
THE COMMERCIAL DIRECTOR
Left column Right column:
What he thought what he said
| Once again I don't filter my calls well. I am here to sell and for everything else there is my assistant and the rest of the sales team. Also, I have no idea about the technical issues and I don't know how to answer. | I just received a call from the Director of our client, SFD and he tells me that the application we just installed does not work for him |
| We are training new salespeople and I think we would need it more in the department itself. They do not inform me of what is happening, communication between us fails. | I believed that, in addition to receiving the part of the Technical Department, you or someone from the sales department would check directly with the client, their satisfaction or receive complaints. |
| I can't trust anyone. I have to control this department more or it gets out of hand. Or if I delegate, with a good information and control system. | At least you could have told me; and, even better, having asked for my authorization because you already know that this is a very delicate task. |
| Good thing I'm going over the sales budget and these problems have to be solved by the technicians. I don't want to lose my job again due to missing goals. | You hadn't told me either (that in the last two months the complaints were 70% of the whole year and that 80% of them corresponded to the communications module). What data do you have? |
ASSISTANT
Left column Right column:
What he thought what he said
| This Director of mine is so concerned with exceeding the sales target that he is not interested in whether or not there are complaints. You could also try to have at least a technical "varnish" to give a first response to customers. | It is the first news I have. According to the parties in my possession, the installation was completed on time and with the approval of the customer. |
| . We are training new sellers at a very high cost and then we do not attend the after-sales. I do not see the coordination between us and the technical department This is going to discredit us | This is what I did personally until you put me in charge of the new salesperson training program and told me that this task had absolute priority over all the others. For this reason, I commissioned Fernández to follow up on the clients. |
| Much talk about delegating, as those who speak “Spanglish” say “empowering”, and when push comes to shove, no one has the least autonomy or initiative | You are right and I apologize, but I did it so as not to burden you with more work. Anyway, I want you to know that I think Fernández is doing well. In fact he presents me with some statistics of the contacts and the results. |
| In the Technical Department they have answered me that
All the problems come from the little training of the users who should take better advantage of the training hours that are given to them with the installation of the application. On the other hand, this high percentage of the last two months has to have some explanation but sometimes it is better don't ask too much. |
They are not very reassuring (the news): In the last two months we have had 70% of all complaints for the year; 80% of them correspond to the communications module of the application. We have informed the technical department promptly and asked for explanations, but so far we have not received any response. |
Does this situation or a similar one sound familiar to the reader? Certainly, some of the thoughts in the right column may never be revealed. But others, in a trust-based company culture, if explored reciprocally, can lead to a smarter organization and company.
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