Thanks — JJ

Is risk analysis an art or a science?  I would say it is an art.  If it were a science, you probably know the risks pretty well in advance, and then they stop being the really important risks.  The real risks are those whose probability of occurrence and impact are difficult to predict by using analytical models.  What then are the alternatives to discover and cover these potential risks?

I would say, the ability to listen keenly is the most important attribute required to manage risks effectively.  Listen to the subtle messages, often half-spoken.  Amplify and explore them in depth to bring out the nuances of the perceived risks.  Ask questions, and listen without rationalization. If you have a choice, go to the HR department and ask for a list of people who got the least ratings in the last performance appraisal. Randomly choose a few of them to be part of your project team. They will tell you more about what the real risks are, than your star team members!

In a recent book titled What You Don’t Know: How Great Leaders Prevent Problems Before They Happen, Michael A. Roberto narrates how William LeMessurier, the famous structural engineer of Citicorp building in Manhattan responded to a seemingly innocuous question by an engineering student and eventually discovered a flaw in his structural design for the building. The book also describes how LeMessurier took personal responsibility to rectify the error.  (For excerpts from the book, see: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2285)  The way LeMessurier responded to the potential risk, though it was discovered rather late (after the building was completed), is a case study in the ethics of engineering and project management.

It would also be helpful to use system dynamics modeling as a method for risk analysis.  With system dynamics modeling you bring out various assumptions and mental models regarding the interplay of various parameters and inter-relationships that comprise the system.  In reality, the technical and social/organizational dimensions are very much inter-related.  As a first level of analysis we may analyze them separately; but to get the complete picture that reveals the greater risks, we need to see the interplay of various dimensions.  This is facilitated by system dynamics modeling.  The use of system dynamics modeling for risk management in complex engineering systems, with reference to NASA projects is given in a research paper by an MIT team: http://www.informs-sim.org/wsc05papers/160.pdf Also, see excellent study material on system dynamics, developed under the guidance of Prof. Jay Forrester, available on MIT OpenCourseWare:  http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-988Fall-1998-Spring-1999/CourseHome/index.htm

The new web will be dramatically different from what we experience today.  It is not just about better interactivity or more interesting social networking sites.  It is not just better Internet access on mobile devices or improved user experience in video chat.  It will be all these, plus something that challenges our existing paradigms. Something new is to be created, if we are to call it as the new web.  Seeds for the new web are being laid by IBM.  I recently heard and read about the ‘Spoken Web’ project of IBM.

First announced in March 2009, the Spoken Web is still at the experimental stages.  But its potential is big enough to make it really an exciting piece of technology in the making.

Here are a few possibilities that I imagine becoming part of our daily lives within the next few years based on the technology being developed by IBM:

1. I use my mobile phone for taking notes in meetings and classrooms.  This is quite different from the use of a voice recorder. I can later go back to the content and add your comments, hyperlink the pieces of information to other content in almost any media and network.  The spoken content now gets hyperlinked to other spoken content as well as resources on the company network and the Internet.
2. Most of my financial transactions are carried out securely and quickly by voice.   The entire financial network adapts to rely on voice instructions.
3. A new web gets built without using keyboard and mouse.  So anyone who can dial numbers on a telephone can use it as well as contribute their own bit.
4. Millions of people create their own radio stations using only their landline or mobile phones.  And these millions of radio stations are easy to search, browse and access on any device, including mobile phones, computers, TV and even the car stereo.  And all the content is stored, with powerful indexing for easy retrieval at any time.  And the pieces of content can be hyperlinked, so that any contributor can refer to or build on the content contributed by someone else.  The Spoken Web becomes the fastest way for sharing information as well as to stay in touch with friends and family.
5. New search engines are developed to discover information on the Spoken Web and present it in interesting ways. This throws up new challenges for researchers who work on the frontiers of collaboration between computer scientists, neuroscientists, psychologists and designers.
6. In the long run the human auditory system develops as much power as the human visual system.

Given below are some suggested links for further reading (sites viewed on December 12, 2009):

HSTP: Hyperspeech Transfer Protocol (by Sheetal, Dipanjan, Arun, Amit and Nitendra of IBM India Research Laboratory):  http://domino.research.ibm.com/comm/research_people.nsf/pages/arun_kumar.pubs.html/$FILE/ht07.pdf

Spoken Web: the next transformational change wave (Conversation between Dr. Manish Gupta of IBM and V. Sudhakshina of Cybermedia News, posted on April 13, 2009): http://www.ciol.com/News/Interviews/Spoken-Web-the-next-transformational-change-wave/13409118312/0/

IBM Aims At Rural VAS By Providing Talk To Web Technology (by Pradeep Kumar, posted on March 20, 2009): http://www.watblog.com/2009/03/20/ibm-aims-at-rural-vas-by-providing-talk-to-web-technology/

HSTP: Hyperspeech Transfer Protocol (by Lidija Davis, posted on March 15, 2009): http://www.readwriteweb.com/archives/hstp_hyperspeech_transfer_protocol.php

– JJ

How do scientists at ISRO or NASA put a satellite in its correct orbit and orient it with such precision?  How does a missile intercept moving targets in mid-air?  These feats of high performance become possible through a system of sophisticated feedback control.

Why do some organisms survive and thrive, while others perish and become extinct?  Again we see that feedback systems are in operation in nature.  Some organisms receive feedback from the environment and develop the needed abilities to adapt.  They survive.  Others do not take feedback or are too slow to react to the environmental changes.  They perish.

We see companies which are in constant touch with the market and their customers.  They adpat quickly to changes in the economic, political, legal, social and demographic environment.  They track changing customer preferences.  They are in constant dialogue internally and externally to give and receive feedback.  Such organizations thrive.

Some companies cut themselves off from the environment.  They sink in their own brew.

The same is the case with teams as well. Teams (as well as departments in organizations) which are constantly in touch with other teams and operate as part of feedback loops perform much better than others which are too internally focused.  Many teams comprising of bright individuals, who also work in harmony with each other, fail because they lack the constant dialogue with those outside the team – their customers and other stakeholders.  (This is an idea expressed very forcefully in a book that I am currently reading – “X-teams: How to Build Teams That Lead, Innovate and Succeed Teams” by Deborah Ancona and Henrik Bresman.)

What about individuals?  How important is feedback for their performance and personal development?  No doubt, we agree that it is absolutely important.  Without feedback, individuals stagnate.

Recall the basic concepts that we might have learnt through the famous Johari Window.  There are a few things about us, which we know and others know.   Then there are a few things that we know about ourselves,  but others do not know.  We were too shy to share them with others, out of a sense of modesty or shame.  If these are things that others should know, we better tell them.  There are also a few things that others know about us, but we may not be aware of.  They might never have told us, and we never bothered to ask if they had something to tell us.  This quadrant offers high potential for personal growth and development.  By being willing to seek feedback and listen without defence, we get valuable insights about ourselves - both our strenghts and areas for improvement.

There are also aspects of our personality that are still unknown to us as well as others.  They remain in the mystery of the unconscious.  I am not going to deal with this quadrant right now.  I may just hint that we get to know our unconscious by a variety of means such as paying attention to our dreams, observing our mood swings, taking note of something that we say or do without much thought and by observing other people’s reaction to our words and body language.

Coming back to the subject of feedback it would be useful to keep in mind a few guidelines for giving and receiving feedback.  The following guidelines would help us to give feedback more effectively:

1. Describe your observations, rather than pass judgements about intentions or motivations behind the behaviour.
2. Point out specific instances of behaviour, rather than generalize across different behaviours.  By being specific about your observation, you ensure that subjectivity is minimized in the feedback process.  You also do not leave too many things to the imagination of the receiver.  Giving generalized feedback may be easier for you, but it leaves the receiver wondering what it is that he or she has to correct.
3. Separate feedback from advice and suggestions.
4. Give feedback only if you are genuinely interested in a behavioural change in the receiver of the feedback.  This may be because you love the person (as in a family relationship) or you expect improvements in product or service quality (as in a customer-supplier relationship).  Whatever the case may be, avoid giving feedback only to show how powerful you are, or how much better off you are than the other person. Feedback should never be an ego trip.
5. Refrain from giving feedback if there is hardly anything that the receiver can do about it.
6. Ensure that you build trust and convey respect by expressing gratitude and giving feedback about things that you appreciate.  Do not limit the power of feedback by using it only for correction of undesirable behaviour.
7. Word negatives as areas for improvement.  But do not camouflage it as positives and leave the receiver confused.
8. Give feedback at the earliest appropriate occasion.
9. Chek to ensure that the receiver of the feedback has clearly understood what you wanted to convey.

Receiving feedback is harder than giving feedback.  But there is nothing that is as useful as honest feedback when it comes to your own personal development.  We must count ourselves as lucky if we are in the company of people who give us feedback on a regular basis.  If we are not that lucky, we must take the initiative to ask for feedback.  We can ask for feedback from different people – our family members, friends, colleagues, customers, suppliers, teachers etc.  Taking feedback and acting on them is one of the most effective ways of improving our performance and developing our capabilities to higher levels.

The following guidelines would be useful in receiving feedback:

1. Withhold judgement, until you have got all that the person giving feedback wants to tell you. If the feedback comes to you in a conversation, ensure that you apply all the skills of being a good listener.  Be willing to listen, and also demonstrate your willingness through appropriate body language. If the communication is in writing, read carefully, looking not only for the factual content, but also the emotions behind what is expressed in writing.
2. Ask questions for clarification without becoming defensive.  Ask for additional data if required; but do so politely.
3. There is hardly any point in telling the giver of feedback how wrong he or she is.  If you honestly feel that you are right, and that the person giving the feedback has misunderstood you, of course you need to make it clear to him or her.  But wait until you have listened to the whole story.  Then take a few minutes to compose yourself.  Respond without aggression or excessive modesty.
4. Do not brood over negative feedback.  Take it and process it rationally, segregating the more important points from the less important ones.  This type of a ‘thinking approach’ helps you to retain perspective and prevents over-correction.
5. Do not belittle yourself by recounting the negative feedback given by others.  It is for you to act on, not for public confession.
6. Develop some understanding about various psychological defence mechanisms that come in the way of receiving feedback.  These are behaviours such as aggression, withdrawal, denial, displacement, rationalization, suppression, sublimation, projection etc.  We need not be professional psychologists, but we all need to constantly work on increasing our self awareness.  We must identify our recurrent patterns of defence.  This will help us to get out from our own unhealthy behavioural traps.
7. Develop a network of development partners (trusted friends and family members), who are interested in your welfare.  Ask them for their honest feedback.  When you receive feedback, which you are not sure about, verify with your trusted partner.

Feedback is a communication process.  It can suffer from all the problems in communication.  Constantly work on improving your communication skill to be effective in giving and receiving feedback.

I have briefly described a few thoughts on the importance of feedback, and a few guidelines for giving and receiving feedback.  I firmly believe that feedback is very important, perhaps the most important process that we have for improving performance – our own, and that of our team members.  It is a skill that is indispensable for every manager, leader, educator and parent.

Organizations operate as networks of stakeholders. Possibilities are discovered when members of the network engage in dialogue. They may not have the same vision, but they become ready to share, and even go to the extent of being selfless, because in some mysterious way that establishes a connection with their deeper aspirations.

Management in the co-creation paradigm is mutual and collaborative. The focus moves to management of relationships rather than resources.

Co-creation does not happen through restructuring or re-engineering. In fact often there is no need to tinker with the organization structure or hierarchy. Even flattening the organization may not be required. What is required for co-creation to happen is an openness to working together. It is mutual respect. Look at how a parent and child co-create a sand castle on the beach. See how they enjoy it! In the process they both derive value — an enjoyable evening on the beach.

Co-creation is not customization. Customization is getting a different dressing for your sandwich. But it would be co-creation if you could get into the kitchen and stand by, occasionally giving your suggestions for the recipe, or tasting the item and giving feedback. In fact traditional kitchens are the best places of co-creation.

Co-creation is not choosing a different set of options when you buy a Dell computer. But it is co-creation when a child walks into a Build-a-Bear Workshop, builds her own teddy bear and walks out with unspeakable excitement. It makes her the happiest person on earth.

Choosing a different elective for your University course is not co-creation. But it would be co-creation if you had opportunities to collaborate with the teachers and make use of the resources at the University to put together a course for you as an individual learner. Co-creation is not choosing from a menu, it is creating the menu.

Business success and failures are result of a large number of forces acting simultaneously, in a complex system of inter-dependent events. But they can probably be simplified (at the risk of oversimplification) to two factors – capacity for execution and ability to respond to the unpredictable events.

Let me explain. I would first explain why I think of business failures as accidents. I disagree with the opinion that the number of business failures are more than the number of business successes. True, the number of failure stories may be more than the number of success stories. That’s probably because most people outside the business circles find failure stories more interesting than the success stories. There’s hardly anything juicy in the success stories, whereas the failure stories can be spiced up with anecdotes and third-party opinions. A business shutting down may not really amount to business failure. A business that has served some purpose is not a failure even if it shuts down.

However, I agree that there are some genuine stories of business failure. They are businesses which shut down before they have been able to serve any purpose. What leads to such failures? I mentioned earlier that all business failures are accidents. Accidents occur when unpredictable events of significance occur at the points of capacity constraint. Businesses fail when they are taken by surprise by events that occur in conjunction with resource constraints.

An intuitive decision is a well thought out decision.  Contrary to popular notions, it is not one that is made on the spur of the moment. It is based on the gut feel answer to a question that had been in your mind for quite some time.  The gap between the question and the intuitive answer is often a few days, or in some cases it may be only a few minutes.  But in any case there is a time delay between the question and the answer, or the dilemma and the decision.  Intuition is not related to speed of decision making.  It is just another way of decision making.  Intuitive decisions may sometimes be arrived at quickly, but more often they take time.

Leaders are good at the art of intuitive decision making.  Why?  Because their job is to make decisions in the absence of enough data.  They are dealing with things about which there cannot be enough data.  They are dealing with the future state of things.  They have to put together all the disparate pieces of information from various sources, connect the dots and arrive at a decision by intuition.  There is hardly a way to explain how they arrived at the choice. There are often explanations in retrospect, but they are given only to satisfy our need to make things fit neatly into a logical structure of decision making.

As contrasted with intuitive decision making, impulsive decision making is deciding on the spur of the moment.  There is hardly any time gap between the question and the answer.  In management, speed of decision making is often considered to be a virtue.  Thus unwittingly, we praise the impulsive decision maker.

Many businesses have fallen due to the impulsive decisions made by their managers.  Intuition helps a manager to take moderate, calculated risks, whereas impulse lead to foolhardiness.  However much the sage of Omaha may use data and analytics, in the end his decisions are intuitive.  His success is phenomenal.  Likewise is the case with Bill Gates, whose intuition led him to invest himself in the business of PC software.  On the other hand there is Nick Leeson whose impulsive decisions led to the fall of Britain’s oldest merchant bank.  Leeson did not use his intuition.  Rather he blocked his intuition, from interfering with his impulse.  He bet his bank on impulse, wiping out close to a billion Dollars in trading loss.  Barings had to fold up due to impulsive decisions, not intuitive decisions.

How much of the recent economic turmoil can be attributed to people in responsible positions taking impulsive decisions?  I believe, quite a lot.  In fact most of it is the result of impulsive decision making by individuals who distrusted their own intuitions and relied on impulse.  In a complex inter-related system of economic entities, impulsive decisions wreak havoc.  Impulsive behaviour is mob behaviour.  Intuition is nature’s gift to individuals, not to mobs.  Economic recovery is the result of individuals paying attention to their intuitions, without being guided by their impulses.