I Don’t Like to Read — How Can I Learn More about the Foundations of MBM?

If you ask a typical MBM Team member what you can do to learn more about the foundations of MBM, there’s usually a few things that come up over and over. One of those is reading a book, essay or article. I believe reading is one of the core answers because in the past that was one of the few ways a person could learn about three key topics: economics, government, and philosophy.

First, I don’t think you can get completely away from reading. Part of the job of the MBM Team is to articulate key aspects of MBM through writing and talking. By writing things down we can get challenge, share it more easily, and preserve things for the future. However, once you get the basics of MBM, I do think you can do quite a bit to learn some of the foundational material without reading big tomes.

Here are a few thoughts about how you can learn more:

  • Free and open online courses: I’m currently watching a Yale Open Course about Political Philosophy. There’s no sweet graphics. It’s basically a professor just teaching a class. Since I’m more of an audio learner than and I a visual learner, this appeals to my style. Plus, I don’t have to read all of Plato’s Republic in order to know about it.
  • Videos on the basics: Some of the mental models in MBM are pulled directly from other disciplines. For instance, opportunity cost is a mental model pulled directly from economics. If you search for videos about opportunity cost and find someone reputable (economics professors, MBA programs, etc), chances are you’ve got the gist of the mental model. [Please note: this is not true of all mental models. For instance, if you search for CPV Triangle, I bet you get little/nothing. Our ABC Process is different than say Jack Welch's ABC stuff. One way you can tell is to cross-reference with the Science of Success. If the basics seem on track, chances are you've got something worth watching.]
  • Seek out someone in the organization that studied these things and ask them to teach you. It doesn’t have to be anything fancy. An added bonus to this is that most people learn even more by teaching.
  • Feed your intellectual curiosity: don’t study the things you hate (at least not at first). Out of the foundational topics, philosophy is my least favorite. I’ve learned that if I study things that bump up against philosophy (like some political science topics), I’m more likely to absorb. Like any discipline — dieting, working out, you name it — you have to do things that make it fun enough to keep doing it over the long-haul.

Before you take advantage of the alternative learning methods out there, I think you need to have some of the following skills:

  • Critical thinking skills to recognize that even topics and people that are very consistent with MBM may have aspects that aren’t exactly on target. In other words, don’t believe everything you hear or see. Even when you’re reading MBM Team generated material, put your critical thinking skills to use. We need employees who are thinking and challenging us about the ideas.
  • Have a sense of if something seems to fit with MBM or not. There’s no way one person is going to catch every nuance of a lecture or recording. However, having a high level sense of if something is generally consistent or not is key to learning more, whether it’s reading a book or watching a video.
  • Find a learning partner who you feel assured you can have safe conversations with. By safe, I mean that person you can ask the “dumb questions” to — even if they don’t have the answers, sometimes asking the questions can be just as useful as trying to answering them.

Have you found ways to learn more about the foundations of MBM that don’t involve reading? What’s worked for you in the past?

 

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Working the land

Today in the US, we are celebrating Labor Day. Labor Day is a holiday intended to be a tribute to the workers who have contributed to making the US a prosperous country. (Note: I say intended because I think most people just enjoy a day off with a cook-out.) While I agree that it is people who do the work that result in prosperity, it’s not people working alone. I hate the idea of toiling for no reward.

Yet, there’s been a picture from outer space that has been circulating lately that paints a stark picture of what laboring in one set of circumstances looks like compared to another. Click here to see “Where China and Kazakhstan Meet.” The difference from space is astounding.

I’ve had the pleasure of knowing people from both countries. From what I can tell of my friends, both countries have people who are willing to work hard to improve their lives and want to do the right thing. Yet, when you just take a glance (from outer space), something doesn’t seem to be going well in Kazakhstan. If you read the article attached to the picture, it states that this area of Kazakhstan still seems to run like it did during Soviet times.

So today if you’re thinking about the laborers who worked hard to build whatever country it is you live in, don’t forget about other things that mattered too: economic freedom, rule of law, capital, risk-taking entrepreneurs, and a culture that looks a lot like our Guiding Principles.

For those of you celebrating Labor Day, have a safe and happy day off! 

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Work-Life Balance

I bet many of you were surprised by the title of this post. Work-life balance is something that has gotten a lot of press for the last decade or so. If you search the right terms, you’ll get all sorts of articles that make you feel really good or really bad about your work-life balance.

What does MBM have to do with work-life balance? What’s funny is if you comb MBM materials, chances are you won’t find that phrase anywhere. If you work in an MBM organization like I do, chances are you don’t even hear that phrase often (if at all). I bet if you talk to a typical person, they care a great deal about work-life balance.

What (if any) mental models can help us think through the implications of work-life balance in an MBM context? Here are a few of my ideas, leave your thoughts in the comments:

  • Subjective value: What a “good” work-life balance looks like for one employee is not going to be the same for another. In fact, one employee may have very different ideas about what an optimal work-life balance is over his/her career. In MBM, we embrace subjective value and the uniqueness of each person. Often, there are tools at our disposal to help make things happen if we feel it creates value.
  • Self-interest: We understand that each person is self-interested. This means that each and every employee is working for us not out altruism, but because this current work arrangement appeals to their self-interest. My personal experience is that it is usually a bundle of things that make a job in someone self-interest (a combination of salary, benefits, type of work, location, etc.). We don’t shy away from this.
  • Competitive Advantage: We have to find ways to bring together the subjective value and self-interest of each employee with the needs of the organization. Organizations have to keep their competitive edges if they’re going to be successful.

When you put these three mental models together, there’s no blanket answer to the work-life balance question. It might make sense in one situation to allow part time or seasonal work, while in others it just won’t do. In some roles, great flexibility and working from home can be a possibility and other roles just can’t have that. Because we approach each situation as a unique opportunity to create value, there is a great deal of flexibility can be used to help make the situation into a win-win situation.

So what are some practical things you can do if you work in an MBM organization and you’re not happy with your work-life balance?

  • 1st and foremost — talk to your supervisor! If your supervisor doesn’t know how frustrated you are because you’ve been working 80 hour weeks or that you’d like to work more hours whenever possible, how can s/he help when the opportunity arises?
  • Be entrepreneurial: Can you find ways to create more value AND get closer to the work-life balance you want? Perhaps this is finding new projects that can get you more hours (or the type of work you want). Maybe it’s finding a way to shape your role (or find a different role) that lets you work remotely for a day or two a week. Maybe it’s talking to your colleagues and seeing if someone is interested in working on the project you’re sick of.
  • Focus on contribution. The more you contribute to value creation, the more valuable you are to an organization. Many supervisors view getting closer to optimal work-life balance as an incentive (and in some cases a more powerful incentive than straight financial incentives). Supervisors are on the look out for win-win situations. The more you add to the organization, the more opportunity there is for a supervisor to help you get what you want.

So these are my initial thoughts about work-life balance. I’ll admit this isn’t a topic I’ve studied in depth, so I turn to you for more thoughts. Use the comments to add mental models or ideas for action when it comes to work-life balance. And last but not least, I wish you the best of luck in finding the work-life balance that best suits your subjective value!

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MBM and Ambiguity

Once you’ve been in an MBM organization for a bit, you’ll notice there’s a level of ambiguity that comes along with MBM. Here are some examples:

  • The flexibility of RR&Es can result in an ever-evolving day-to-day. I have a job that has tended to have significantly different responsibilities every 6-12 months. While this isn’t true for everyone, it’s a possibility since we’re not restricted to rigid job descriptions.
  • Compensation isn’t constrained by pay ranges or formulas (unless required by law or contract). Unlike some professions/companies where employees know exactly what their bonuses will be at the beginning of the year, there is much more flexibility in the amounts and types of compensation an MBM organization can use.
  • Visions tend to continually evolve in an MBM organization because we’re constantly looking for ways to create value. Sometimes this evolution is smooth and steady. Sometimes it is a major shift.
  • Using principles instead of detailed rules means there isn’t going to be an employee handbook for every situation that comes our way. We deliberately coach supervisors not to tell direct reports exactly what to do or how to do when they can instead ask questions and build the employees’ capability up to do it for themselves. This can lead to frustration for some.

Above are just a few examples. I’ve been kicking around MBM organizations long enough to know that not everyone likes the ambiguity. Employees have left because they wanted to work somewhere with a very clear career ladder. We’ve lost employees because they prefer to know their exact bonuses every year from day 1. In my opinion, these folks are giving up some serious upside in order to have a bit more certainty in their lives — it’s simply a preference to have less ambiguity.

Some employees love the ambiguity. They have a bring-it-on attitude. They want to swing for the fences and love that they work in a place that doesn’t put ceilings on what an employee can contribute or earn.

However, most employees (like me) fall somewhere in the middle. There are times when I love the ambiguity. Sometimes I like that I may have a new responsibility that could totally shift my day-to-day. Sometimes I wish there was more clarity, especially in instances where I work on a project and it just doesn’t seem to pan out.

So if you’re more like me and kind of go back-and-forth on the ambiguity thing, is there anything you can do to get more comfortable with the ambiguity that comes along with applying MBM? Here are some thoughts, and I hope the readers add more in the comments:

  • Work hard to truly understand your team’s vision and how you personally create value. A firm understanding of how what your team does day-to-day to create value can make some of the organizational changes easier to understand and embrace.
  • Use the tools as your disposal. The RR&E Process is a great tool to help employees raise questions and concerns about what is going on around them. I find most employees don’t use this tool enough.
  • Get to know your supervisor and make sure s/he knows you. In an MBM organization, supervisors do more than more traditional organizations. Supervisor develop RR&Es and performance reviews, are expected to coach employees day-to-day, and initiate the compensation review process. The more confidence you have in your supervisor’s character and ability — and the more s/he knows about you — the more comfortable you’ll start to get with some of the ambiguity.
  • Give it a little time. It was some where around the 3 year mark for me (and it’s different for everyone), where I truly felt a trust develop. The trust was that the leaders I work under were doing their best to apply MBM. This isn’t to say mistakes aren’t made, but genuinely trying to apply MBM has a certain feel to it that makes the ambiguity not feel pointless. I firmly believe that leaders make all the difference in if MBM is a part of an organization culture or is just buzzwords. If you don’t trust your leaders, chances are the ambiguity is always going to be scary.
  • Make friends with someone in HR. This one sounds funny, but in most MBM organizations, the HR folks are in a good position to answer questions and help others apply MBM. Personally, I do a lot of work with the HR community where  I work and if they are any reflection of other MBM organizations, it’s these folks who can help you when there are questions or sticky situations.

Last but not least, I think a big component of this is knowing yourself. I do believe there are people out there would never get used to this type of ambiguity. I don’t think it’s worth your health, personal relationships, or general well-being to work at a place that gives you ulcers. Each employee has to determine for himself or herself if they can put up with the ambiguity.

Okay readers, let’s hear from you. What are your thoughts on ambiguity? Please leave any additional tips in the comments.

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The Sweetness of Freedom

Today marks a special day. This day in history, 31 years ago, a trusted mentor of mine landed in the US. He didn’t have much money in his bank account, but he craved the freedom and since then has forged his own path. While this story feels especially personal, it’s not all that uncommon.

For those of you who have been studying MBM for awhile, you’ve seen the arguments about free societies: people are better off — they tend to live longer, healthier, and happier lives. That’s true, but it’s incomplete. When individuals are free to pursue their own goals and objectives, have true ownership over their actions and thoughts, and enjoy the fruits of their accomplishments, they are more likely to feel the true joy of being oneself. For those of you familiar with Abraham Maslow’s work, it’s that elusive self-actualization. The depth of what one can experience in a free society can’t be expressed in numbers or data.

In a free society, individuals get to answer questions about why and how they should work. They determine what to consume and what the save. Individuals get to forge their own path. Perhaps John Tomasi says it best:

The particular pattern of decisions one makes in response to these questions about working often goes a long way to defining what makes one person’s life distinct from the lives of other people. A society that denied individuals the right to make decisions regarding those aspects of their working experience would truncate the ability of those people to be responsible authors of their own lives. Indeed, denied these fuller freedoms…, citizens would no longer be authors of their own lives. Decisions about matters that affect them intimately would have been taken out of their hands and decided for them by others (quoted from “Why Note Capitalism?” by Jason Brennan).

I don’t want you to think that I believe free societies are perfect. They are not. No society full of flawed human beings ever will be. However, in free societies individuals have a chance of crafting their own versions of what good (or even great) looks like. In other societies, only a very few have that opportunity and it usually comes at the price of great sorrow for others.

So on this day when my friend and mentor arrived in the US ready to grasp the opportunities in front of him, I hope you take a moment to reflect on the beauty of what free societies offer. The material benefits are good but they are only a fraction of the true prosperity free societies generate.

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Ownership

Often when discussing the idea of ownership and property rights in a classroom setting, it seems silly — almost too straightforward. Most people in a theoretical sense will agree that people take better care of what they own than what they don’t own. Then for some reason it starts to break down. Ask a typical person what to do about a diminishing precious resource and many will be quick to advocate laws, regulations, rules and even government take over.

Yet if you study history, you’ll see that often the opposite is true – give individuals property rights and the resource is preserved. The most vivid stories are ones about environmental issues, like the elephants in Africa. A more recent example is of the rainforests in Brazil. Here’s an excerpt from a recent paper:

The best way to protect rainforests is to keep people out, right? Absolutely not. The best way to keep the trees, and prevent the carbon in them from entering the atmosphere, is by letting people into the forests: local people with the legal right to control what happens there.

It makes sense if you understand private property rights and what owning something does. For most people, the sense of ownership encourages a natural desire to preserve for the future, cultivate and foster growth, and generally to care for something as if it was an extension of oneself.

Let’s play with translating these ideas into the organization for moment. Of course employees don’t technically own the organization’s resources. Employees can have a sense of ownership over what they do and the equipment they work on. Most people are okay with things like designated computers or specific tools for each individual. Yet, when it comes to that very-precious-something, I think it’s easy to fall back into detailed rules (just as it’s easy to say let’s regulate something). When you look throughout your work group, is there something that you need to take a closer look at to see if there’s a way to establish ownership instead of using a detailed set of rules? Is there something you consider very precious to the group that could possibly be dealt with in another way — a way that establishes ownership?

Ownership isn’t a cure-all by any stretch. However, like property rights are a key ingredient for free societies, so is ownership a key ingredient to applying MBM. How have you seen ownership make things run more smoothly at work? Leave your examples in the comments.

Thanks to Gary P. for sending along the article about the rainforests! 

 

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So you’re new to MBM… What now?

Lately I’ve been in a lot of meetings with people who are new to MBM. When I say new to MBM, I mean people who have worked in an MBM organization from a couple of days to up a year or so. I draw the line around a year because for most people after a year they’ve been exposed to the major MBM performance management tools (RR&Es, performance reviews, compensation reviews, coaching, etc). There’s something about seeing a full cycle of this that helps people put it all together.

The most frequently asked question from folks who are new to MBM has got to be this: “What can I do to learn more about MBM?” See some of my thoughts below (please note this is not meant to be a “must do” list, but simply some ideas). I know many of our readers have some thoughts on this, so please add to my list in the comments.

  • Study some of the basics. Read the Guiding Principles with a close eye. Use the Science of Success as a reference tool. Get curious about whatever MBM tools you use regular (ex: MBM Framework, DMF, etc).
  • Discuss MBM with your colleagues. You don’t have to be an expert in MBM to toss around ideas, look for examples, and dissect what principles to use in a given situation.
  • Find a mentor. A good MBM mentor doesn’t have to be someone on an MBM Team. It’s someone who you can bounce ideas off of, be intentional about discussing MBM regularly, and is far enough down the road on MBM learning that they can give you some guidance.
  • Ask lots of questions to your supervisor, HR folks, the MBM Team, colleagues and folks who’ve been around MBM for awhile. I have yet to encounter someone in an MBM company who isn’t willing to spend some time helping another person learn (Guiding Principle of Knowledge). I’ve even go so far as to cold-call people in other MBM organizations to ask questions, and my questions have always been received with a genuine willingness to help. Just make asking questions a habit.
  • Get comfortable with the ambiguity. Because MBM is based on principles, there are going to be many situations where many approaches could work or there may not be a clear sign to do this specific thing or do that specific thing. Even as you learn more about MBM, the ambiguity never goes away — getting used to it early can help smooth the path as your MBM knowledge/application evolves.

These are very broad. I’m hoping for some reader comments to add to this list. Even if it’s a specific question you asked, something you read or a type of conversation you had, let’s get some good ideas out there for folks trying to learn more about MBM in their early days with an MBM organization.

 

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Learning from Stories: James Bond and How Swiss Watches Survived

I think we can learn a lot about MBM® from stories and case studies – even stories that don’t happen in MBM organizations. A colleague of mine sent me a great story about disruptive innovation. It’s told in the form of a slide show you can click through at your own pace and to whet your appetite, it does in fact (as promised in the post title) involve James Bond.

So here’s my challenge to you:

  • Click on the link below and page through the story.
  • As you go through the story, think about what MBM lessons we can take from it – including any mental models that you see illustrated in the story.
  • Leave a comment (or two) with what you see.
  • If you know of a good business story with some possible MBM learnings, send it to me (or leave a link in the comments).

Here’s the link to the story. Thanks to Pablo for sending it along! I hope we can all learn something from it.

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Leadership

Leadership never seems to go out of style. Type “leadership” into any search engine and you’ll get everything from the latest blog post from an MBA student to a CEO’s manifesto to that latest sports figure memoir to who knows what. Ask 100 people to define leadership and you’ll like get 75 different answers.

One question I get fairly often is, “What makes a good leader in an MBM organization?” I don’t have a tidy answer, but here are a few things I’ve discovered are at least minimum requirements for being a good leader in an MBM organization:

  • Applying the five dimensions. If you have an MBM Framework, look at the column labeled MBM Five Dimensions and that’s a good start for some things a leader must do.
  • Holding people accountable – I know this is technically covered in the MBM Framework, but it’s a specific area that leaders must be better at than a typical employee. If leaders don’t hold people accountable (both in a positive sense and a negative sense), then this whole MBM thing just doesn’t work.
  • Consistency with MBM Guiding Principles. Leaders have to walk the walk and talk the talk. It’s not enough to just demonstrate, leaders need to be willing and able to identify and articulate when others are being consistent with MBM Guiding Principles.
  • Some level of commitment to understanding the ideas of a free society. How can you truly apply to an entire organization MBM if you don’t understand some of the fundamentals of a free society?

Those are just some high level thoughts for you. I’ve encountered a number of leaders with a variety of personality traits and personal styles that have the ability to do all of these things, so I want to steer clear of personalities and focus on behaviors and values and beliefs. What do you think makes a good leader in an MBM organization?

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Prices Convey Knowledge

As a graduate student, I spent many hours in a computer lab writing code to run statistical models (yes, it was almost as awful as it sounds). One afternoon, after hours of doing battle with my code, I picked up my plastic soda bottle and walked over to the trash and recycling cans. I stood for a moment between the two cans and then threw the bottle into the trash. A student nearby snorted. I asked if she had a problem. She said she did have a problem because I didn’t recycle my bottle, even though the recycling bin was “right there.”

Little did she know that I was an economics student who had a dedicated and intellectually honest environmentalist for a professor. Here’s a taste of some of his research.

 

 

You see one of the many problems with the way we currently recycle is that there’s no price mechanism to tell me what is worth recycling and what is not worth recycling. If I knew my empty bottle was worth 5 cents, I would have the knowledge I need to know it’s worth recycling. If I knew no one was willing to pay for my bottle, then I would know it was trash. If you look at the data, the majority of household level recycling isn’t worth it (some exceptions are shown in the video). Without prices, I have to rely on (costly) studies that cannot be up-to-the-minute. This is just one of many examples of how prices convey knowledge and when you take the knowledge away it gets difficult. Without that knowledge there is more waste than there would be otherwise.

In MBM®, we try to take a concept from free societies – like prices—and translate it into our organization. The idea of prices is one of those concepts we can’t take one-for-one into the company (imagine how awful it would be negotiate prices with your co-workers every time you needed to work together). Instead, we want to take the essence of what prices do for a free society. Prices convey knowledge. They send signals that allow us to make better decisions. If you want to get the essence of prices into your organization, you want to ensure that people have appropriate measures that help them make decisions. You want to make sure that people have the appropriate knowledge to eliminate waste and know what is valued.

What has your experience with knowledge seeking and sharing been? Do you have an example where certain measures helped people make better decisions? What else about prices would you want to bring inside the organization?

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