How would you coach?

Below is a made up situation that represents known misunderstandings or misapplications of MBM®. Use the comments to leave your thoughts about how you would coach in this situation.

William comes to you in a panic. He says, “We have to come up with a talent strategy pronto. My team doesn’t have all the capabilities we need. Of the six listed in the new vision statement, I think we have 3 at best.” 


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Studying the Guiding Principles: Respect

Guiding Principle 9 – Respect:

Treat others with honesty, dignity, respect and sensitivity. Appreciate the value of diversity. Encourage and practice teamwork.

Many of you know that there are no idle words in MBM®. Each word is there for a purpose, and often the ordering of words is important as well. If you want to learn more about MBM, get good at studying – not just reading. You can discover answers to your questions if you develop the ability to look closely and ask thoughtful questions.

Let’s take a look at the Guiding Principles of Respect as an example of how studying, reading closely and asking a few questions can help discover some deeper layers of MBM. Below are some questions that I think would come up naturally if you were really studying this guiding principle:

  • Why does the word honesty come up first in that list of four things?
  • Why even have honesty in this guiding principle – we have a guiding principle of integrity?
  • What does sensitivity mean? How can I both treat someone with honesty and sensitivity if I have to tell them something that will hurt their feelings?
  • What is the value of diversity? What do we mean by diversity?
  • Why does it call out teamwork and not teams? How can I practice teamwork?
  • Why is this a Guiding Principle in the first place? How does it help us create value?

These are just examples of some of the questions you might come up with if you really study this guiding principle. I’m sure there are endless others. What questions do you have about the Guiding Principle of Respect? What if someone asked you one of the questions above, how would you answer?

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Competitive Advantage versus Comparative Advantage

Often, when I get the chance to hear about a new project or initiative I’m told, “we have the comparative advantage.”  My immediate reaction to this is (sometimes voiced, sometimes not): “Compared to whom or what?” The beauty of comparative advantage is that you are comparing among different people or things in a group and figuring out who or what has the lowest opportunity cost. If you do this for the whole group, the group will maximize its output. So if I say, “Joe has the comparative advantage,” I’d better be prepared to tell you who is in the comparison group and why I believe Joe has the lowest opportunity cost.

Comparative advantage is different from competitive advantage and is meant for a different purpose. Competitive advantage is about looking at your competition. Most of the time, we don’t know our competitors opportunity costs. What we can do is make an assessment of how well we are doing compared to the competition. Think of it as a foot race. While you don’t know the opportunity costs of each runner, you can tell who is fastest. So if I say, “I believe we have a competitive advantage in capital deployment,” I’d better be ready to tell you what competitors I was thinking about and show evidence about capital deployment.

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Responsibility without Decision Rights

In MBM, we’ve learned from free societies that owners bear the consequences of their actions (both positive and negative). We translate that idea into the organization by establishing responsibilities, and then holding employees accountable for their responsibilities. Notice that these statements make no guarantee that one will have all the decision rights s/he needs to accomplish his/her responsibilities.

It could be that one has all the decision rights, none of the decision rights or partial decision rights. This is done deliberately.  Below are several reasons why someone may have responsibility without having all the decision rights necessary to execute on those responsibilities:

  • Knowledge: It could be the individual doesn’t have the best knowledge. By having someone else holding the decision right, the two will have to meet and exchange knowledge.
  • Skill: Sometimes the responsible party isn’t good at making certain types of decisions, so it’s a deliberate way to make sure someone with better judgment is making the final call.
  • Perspective: It could be there needs to be a broader or different perspective to make the best decision. For instance, if I’m working on a research paper that is going organization-wide, it’s probably best for someone who is familiar with the entire organization to have the final say on when and how it is released.
  • Customer Focus: In certain cases, not having decision rights encourages one to treat the decision maker more like a customer. I think this is a bit like the president having a speech writer. The speech writer doesn’t have final say in what the president says, and that’s a good thing. The speech writer has to treat the president like a customer: talk to him to understand the goal, stay closely connected with likes/dislikes and so forth.
  • Challenge: It could be there are decisions that require a lot of challenge to make the best possible decision. For instance, supervisors do not have decision rights to change the base pay of direct reports – but they do have responsibility to ensure direct reports are getting base pay reviews. This is done deliberately to make sure that supervisors are getting lots of challenge around this very important decision.

I’m sure there may be other reasons why one may have responsibility without decision rights. This isn’t to say that this is always an ideal situation. There may instances where the person with responsibility has decision rights and it works quite well.

Regardless of the situation, we do not believe that one has to have decision rights in order to get things done. This is where our ideas about Principled EntrepreneurshipTM come into play. Out in free societies, successful entrepreneurs are not deterred by their lack of authority.  Inside the organization, if one lacks decision rights, they have to be entrepreneurial, find the person with decision rights, and work to convince that person to use resources.

Have you been a situation where you had responsibility but not all the decision rights you needed? What did you learn from that situation?

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Quick Takes: Spontaneous Order

While looking for resources about spontaneous order, I stumbled upon this quote. I thought it was too good to keep it to myself.

 Is this all so very differentFrom what Lao-Tzu says
In his fifty-seventh poem?:
If I keep from meddling with people
They take care of themselves,
If I keep from commanding people,
They behave themselves,
If I keep from imposing on people,
They become themselves.

Friedrich A. Hayek. Original epilogue to “The Principles of a Liberal Social Order,” delivered at the Tokyo meeting of the Mont Pelerin Society, September, 1966.


Source: The Online Library of Liberty

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Mentoring in an MBM Organization

Mentoring is almost always a hot topic in management circles. Most people agree that mentoring is crucial to developing new skills, expanding one’s network, and generally advancing one’s career. This is why so many organizations have developed extensive mentoring programs. Here are the usual hallmarks of a non-MBM® company mentoring program:

  • Centralization: one person (or a group of people) matches employees based on certain factors. Usually it’s impossible to know every important factor to ensure a productive mentoring relationship, but long forms are a typical way to attempt to get the right knowledge.
  • Group-based: Generally mentoring programs group people. Typical groupings of people who are to be mentored include things like “high potential,” “less than 5 years experience,” “women,” or “minorities.” Ironically, mentors tend to be grouped as well. The labels are less obvious, but they include things like “women in leadership positions,” “minorities with more than 10 years of experience,” “people with a title of director or higher.”
  • THE mentor: Usually there’s a bad mental model of one mentor per person. This mentor is supposed to help with all facets of one’s professional career.

From my experience, these type of mentoring programs just do not work. There are too many factors that a centralized program cannot take into account: personalities, individual goals, and logistics. Plus, overly relying on one person to be the subject matter expert for all things career-related is never good idea.

Instead, in MBM we turn to free societies to help us understand general principles we can apply. Here are a few important mental model/concepts from free societies that apply to mentoring:

  • Spontaneous order: Free societies are not centrally planned, but they aren’t chaotic/disordered either. Instead, free societies have institutions (structures) that allow individuals to make decisions based on their local knowledge. An MBM mentoring program cannot be a centralized program. Instead, we have to find ways to set up conditions so that individuals can make good mentoring connections, based on their own personal needs, career goals and personalities. These are the type of mentoring relationships that tend to be the most productive.
  • Individual-Based: Free societies are based on individuals. Individuals are the ones who will know the right things to help set a mentoring relationship up for success. For instance, a person being mentored will know what s/he is trying to learn from the mentor. The mentor will know if s/he is the right person for the job. Often, a sentence or two on a form isn’t enough to capture this type of knowledge. This type of thinking blows away ideas that a particular group “must” be mentors or “must” be mentored.
  • Experimental Discovery: Most people learn by trying out a bunch of different things. This means many of us can benefit from having multiple mentors. They don’t all have to be deep secret-sharing type mentors. It can a short mentoring relationship that allows you to learn a particular skill. It can be as simple as an informal lunch that allows you to learn more about a position you’ve been thinking might be a good fit for you.

What does this look like in a practical sense? In an MBM organization, there are many mentoring relationships. One of the most important is the supervisor-direct report mentoring relationship. Supervisors help direct reports define what they’d like to get from a mentoring relationship and help connect direct reports to someone who may be able to help. HR is a critical partner in this process. HR can help employees make connections to others and support supervisors in their mentoring responsibilities.

What questions do you have about mentoring? What were the conditions that led to the most productive mentoring experiences you’ve had?

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For the slow times…

Many of the management blogs I read regularly have started to get those inevitable what-to-do-when-it’s-slow-at-work questions. While December may not be your slow time (especially if you deliver packages for a living!), there are certainly some times throughout the year when work slows down a bit. The standard management advice runs the gambit from working on your personal stuff if there’s nothing else to do to seeing if you can get dismissed from work early. But what do the principles of MBM® suggest?

Let me start with a few items I’m certain the MBM principles DO NOT imply:

  • Busy work: don’t make up work so you can look busy.
  • Idleness: don’t stare off into space or stare at the clock just to be at your workstation for the allotted time.
  • Flash: don’t overdo or be over dramatic about the small tasks you do need to accomplish.

Here a few items I think are implied by MBM:

  • Pull out your RR&E summary document. Use it to ensure you have actually met your expectations.
  • Revisit your team’s vision. Is there an idea you’ve had that could help realize the vision? Now is the time to develop and research the possibilities.
  • Read the Guiding Principle of Value Creation. One way we create value is applying MBM. If you truly don’t have anything more to work on AND you cannot think of an idea that will create value, one option is to study MBM.

Surely these are not the only things implied by the principles of MBM. What else comes to mind when you think about the slow times at work? What MBM principles, mental models, or tools could help us figure out what to do in these situations?

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Economic Thinking

Did a shiver go down your spine when you read the title of this post? For some reason, economics and economic thinking has gotten a bad reputation. Many people just hear the word economics and they have flashbacks to bad ECON101 courses, playing the stock market game in high school, or cramming the night before an exam to memorize how supply and demand graphs move around. For people who don’t understand the basic principles of economics, it seems like a series of abstract semi-math problems.

I’ve always found this to be a bit tragic - not just because I think economics is great, but because many people are very good economists in their day-to-day lives. Fundamentally, economics is about making decisions in a world of scarcity, which involves weighing the costs, benefits and risks of alternatives. If you watch a typical people, they tend to be good (not perfect) about making choices with their own scare resources.

So why does the average person get a chill down their spine when they see the word “economics”? Usually it starts a bad experience with a class, book, or an economist. Then, many people tell me that they are “bad” at economics. Yet, I would wager you could take many of these “bad economists” and put them in a situation where they weigh the costs, benefits and risks of alternatives and pick an alternative that works best for them, they will do well.

So what makes this difficult when we come to work? Besides the fact that the range of alternatives may be much greater within an organization (due to more resources), think about everything you need to understand in order to make a good economic decision:

  • Benefits: In our own personal decisions, we know exactly what the value scale is — I prefer this over that. At work, we have to be well-connected to the vision and values of the organization to have a good grasp on what exactly the benefits are.
  • Costs: Accounting costs are one thing and economic costs are another. When we make decisions in our personal lives, we only have to worry about our opportunity cost (and maybe the costs of a few others around us). At work, because there are so many people who may share in the costs of the decision (like when a team takes on a new project), there are many opportunity costs to consider.
  • Risks: In our own decisions we can judge how much risk we’re willing to take on. At work, we have to align our risk appetite to that of the organization’s.

The good news is that economic thinking comes natural to many of us. The other side of the coin is that economic thinking at work requires us to be intentionally connected and knowledgeable, which can take time and effort.

What have you done in the past to learn more about economic thinking? What are some ways we can practice better economic thinking at work?

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Vision Statement(s)

The purpose of the Vision Dimension is to determine where and how, given our capabilities and available opportunities, the organization can create the most long-term value for customers and society. This is a big purpose – one that requires a good deal of thought and a good grasp on reality. A well-done vision will address the needs of customers, the organization and society while taking into account what the group can achieve.

In case you hadn’t guessed, a vision statement just doesn’t hack it. There is no way a vision statement alone can summarize all the thought, effort, and nuance of a vision. There is no way a vision statement can tell employees everything they need to know in order to make good decisions. There is no way a vision statement can inform our thinking on variety of possible outcomes inherent in every business decision. There is no way a vision statement can help us predict the future.

Vision statements are not intended to be the point of the Vision Dimension. Instead, vision statements are tools intended to support the purpose of the Vision Dimension. Once an organization has a good grasp on its vision — including a reality-based view of their own capabilities and the opportunities — a vision statement summarizes their thinking. When an employee reads a relevant vision statement, it should remind her of how and for whom she creates value. In an ideal world, it will remind her of the pertinent detail and nuance the Vision Development Process discovered. A vision statement that flows out of and supports the purpose of the vision can help employees make decisions because it will remind them of the right things.

So if you read a vision statement and it doesn’t trigger some deeper thought or help you make decisions there are some of possibilities why:

  •  The vision statement isn’t well written.
  • The vision of the organization just doesn’t make a lot of sense. 
  • The vision hasn’t been well communicated. 
  • The vision statement isn’t written for you.

For those of us working in large organizations, there are likely many vision statements that could apply to you. In my role, the vision statement of the larger corporation just isn’t meaningful for what I do day-to-day. Instead, I often refer to the vision statement of the MBM Team (which connects to the larger corporation vision). When I read the vision statement of the MBM Team, I don’t just see a single statement. I read a single statement that causes all sorts of things to flash through my mind.

For instance, one phrase in our vision statement says that we advance MBM by building capability. When I read that, it reminds me of our point of view about how people change, learn, and grow. Also, it helps me make decisions about how I interact with customers. Often, I find myself asking, “Is this going to build capability or is this just doing the work for them?” This phrase causes me to pause and think about the many conversations and the varied research we’ve done about how individuals absorb and apply knowledge.

Sometimes it makes sense to have multiple vision statements. I use the MBM Team vision statement as an overarching approach to my work, but I also have project vision statements when I have a long term project. Most of my role in the past two years has required me to work on long-term projects. A vision statement is incredibly useful for projects that are particularly large, new to the portfolio of projects, or last a long time.

So it’s not about finding or writing THE vision statement. It’s about developing a tool to help communicate, remind, and aid in making decisions. What are some of your experiences with vision statements? Is there a vision statement that works for you and your group? When was the last time your team discussed your team’s vision statement?

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Why bother with theory?

One common misunderstanding about MBM (and about philosophies in general) is that it is a bunch of mental exercises, theory – not practice. So you’re probably not surprised to hear that I often get questions and comments that have an underlying tone which says, “Why even bother with all the theory?” Usually, these come from well-meaning people who are very action oriented (which is a good thing).

Ideas Matter: Movements in History
I believe there is a reason movies like Inception and The Matrix strike a chord with so many people: they are built on the premise that what happens in someone’s mind can be powerful. Moreover, shared ideas have great potential. Think about the major triumphs and failures throughout history: they are all rooted in ideas. For instance, the US was built upon ideas about the proper role of government and the right to life, liberty and the pursuit of happiness. People risked (and lost) much to bring these ideas to fruition.

Point to any number of turning points in history, and they are built upon ideas. From the fall of the Berlin Wall to the Arab Spring to the fall of Apartheid, great changes (both positive and negative) can be traced back to ideas. It is a rare thing indeed for humans to rise up and change without a grand idea — a vision of a better state.

Ideas Matter: Everyday Stuff
It can be interesting to look at the big ideas that caused the great shifts of history. However, ideas matter for everyday stuff and everyday people. Mental models (ideas, theories, beliefs, etc.) impact the way we behave and the way we interpret the world around us. Many of our mental models are built subconsciously, so we don’t even know we have them until something happens we can’t explain.

What’s even better is that we can train our brains to learn new mental models and let go of old mental models. Usually the process goes something like this: unconsciously incompetent, consciously incompetent, consciously competent, and unconsciously competent. Think about a skill you’ve learned in the past like riding a bike. Most people fit this general pattern. Until you try riding the bike, you don’t realize how hard it is. Then, you keep trying and practicing until you reach a point where you can ride without training wheels, but it takes concentration. Eventually, you just hop on your bike and ride. Once you hit the last stage (unconsciously competent), you just do it without even thinking.

Why Bother with Theory?
One of the many reasons there are people dedicated to studying, advancing and growing the theoretical side of MBM is because of the unconsciously incompetent stage. Instead of having everyone discover what works best by trail and error, the mental models (theory) in MBM helps to move one toward being unconsciously competent by starting with useful ideas.

For instance, I could try to figure out how to create value. I could go through a trial and error process or just do whatever without a plan. Alternatively, I could turn to a body of thought, like MBM or any number of management philosophies to get me started. It’s still up to me to learn the ideas, practice and apply. In MBM, we have a distinct view of how to develop a vision (the vision development process), which was developed over decades of business experience AND it is consistent with the rest of MBM.

The theory part of MBM should enable better results because it gives us the benefit of learning from decades of business experience. It’s up to each person to practice and use the mental models that are most pertinent to what they do until they become unconsciously competent at applying them.

Sound theory leads to sound actions. Now imagine for second how if shared ideas can change a society for the better what shared mental models can do for an organization.

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