What role do the executive have in an organisation?

Today I read one of the more disturbing articles about Apple and its manufacturing processes in China. It was from the New York Times and has been linked on many other sites. The scariest thing about this article is the blasé way in which a senior Apple executive referenced the working conditions in one of the manufacturing centres in China. I've never been one for conspiracy theories and I've always defended an organisations right to set up shop wherever they believe value is but I think this article is the classic demonstration of how capitalism without regulation can be completely screwed up.

Now I created mbh in 1999 with the full passion of a capitalist working within democratic frameworks that provide freedom of thought with associated stability of government. And yet, I can't help feel that all those who rage against the machine and fight for workers rights/regulation are being proven right but this article. This is the classic modern day version of chemical companies dumping toxic waste down river systems in the 19th century leading to the modern day FPA regulation environments.

And yet, I can't help thinking that this is an opportunity for Apple's competitors. Surely people would shy away from Apple's products if they new that staff were treated in such an inhumane manner. Perhaps their competitors can't differentiate because they are no different?

As a managing director and owner of a small company that has done reasonably well, I can't understand the logic of this philosophy against the human race. Within our company people are to be respected. Criticised constructively when they say something in error, challenged to achieve but never to be received as anything other than an equal in the group.

I was on a flight on the weekend from Melbourne to Sydney. Due to flight cancellations and my premium loyalty qualification with the airline I was upgraded to business class. Now the flight is only of 1 hour duration so why there needs to be a class differentiation I have no idea but here I was in business class. The main reason I have always used this airline is that as apposed to their competition, they've never gone in for the elitist garbage that makes up the class system on planes. All people were treated equal and entertained. This flight had 8 people in business class and about 170 in economy. These 170 were made to feel as inferior as possible. AND, sitting in business class, the air steward was trying so hard to treat us like royalty that she stood next to me for at least 1 minute waiting for the person sitting next to me to notice her waiting to deliver her meal. Eventually, I couldn't handle it any longer and tapped the persons shoulder and waved her to the fear stricken steward. WHAT IS GOING ON!!!

Class driven societies and a lack of respect for other human beings seems counter productive to me. It impacts negatively on all private organsations as the few bad apples (pun intended) make it more expensive for the rest of us to do businesses. If the worker could trust the boss to respect them and not rip them off we'd all be able to do business far cheaper than we do today (even though all workers would be paid more). The logic for this is that the burden of compliance and the overhead of union negotiations would be eliminated. Kind of like collaborative contracting where everyone is in it together so you may as well make it work....for everyone.

The role of the executive in a modern capitalist organisation operating in a democratic country has to change to one that includes social responsibility and the requirement that respect is shown to all employees no matter what their background. How you affect this change is depressingly beyond my comprehension.

Distributed information systems

A week after posting on my UniPhi blog about capturing programme management data through the aggregation of distributed project data entered by project managers, an article about distributed energy and communication comes online at my preferred energy blog http://peakenergy.blogspot.com/2012/01/jeremy-rifkins-third-industrial.html. This guys positive views on the growth and potential of a third industrial revolution are very refreshing. There are several risks to this revolution coming to fruition. One of which is corporations lack of awareness of the distributed communication possible through web based platforms.

Organisations that realise the power of distributed data capture will definitely be able to invest in systems and processes that generate significant competitive advantage. The primary advantage is the ability to know when something goes wrong (or right) the moment it does so. Through the power of Twitter it was possible for any person with internet access anywhere in the world to know that the US were engaging with Osama bin Laden as it was happening. Although at first it was unknown who it was they were attacking, the fact that hundreds of millions of people could have known about a top secret mission as it was happening is an incredible example of distributed information systems. Suddenly, managing a multi-national business with 50,000 employees doesn't seem too difficult, and yet all the example companies I have worked with that fit the 50k plus definition would struggle to generate real time financial, customer and product related information. 

Most organisations still track their progress towards their vision through centralised systems. The main reason for this is the perceived need for security when all security is only as strong as the employee who wants to keep his or her password a secret (or even accidently release this information through the need of tracking the ever growing number of usernames and passwords). It seems that large IT business units pride themselves on restricting the implementation of a distributed data capture model. Actually, it seems large IT business units pride themselves on being as value destroying as possible rather than enabling the true power of software to transform the way businesses function.

These business units are supported by the product development of traditional enterprise software houses producing thick client software with complicated user interfaces that only the specialist business analyst, accountant or marketing guru can master.

Why is Oracle, SAP, Sun and others still insisting on developing centralised thick client financial systems? I know of one project manager that knows the true financial position of their project as at 31st of October 2011! He thinks they may have under invoiced $10m but isn't sure because he has to wait for the head office processes to catch up with where his multi billion dollar programme that crosses multiple countries and states is at. He is trying to catch up through the use of an excel shadow system. Good luck!

what happens when a company achieves its vision?

One of the interesting things that is commented on in change management texts and can be observed as a frequent phenomena for nearly every company that has ever succeeded is the plateau and slow decline that occurs once they have achieved what it was that they originally set out to achieve. This diagram below best illustrates what I'm talking about:

This graph demonstrates the linear growth trajectory of a successful start-up. However, once the initial vision has been reached and the product range that supported that vision is no longer unique, success plateau's and finally starts to fall. During this contraction phase, a serious of wake-up spikes occur where management reacts to the fall and tries new strategies to re-invigorate the company. However, the loss of an end state (see previous post) means that none of these periods last very long and are always followed by an even sharper fall. Finally, pending doom either results in bankruptcy and death or the re-emergence through a new vision and new mind-set of the organisation. Of course, there are many permutations in how these events take place, but in each permutation the overriding problem of a loss in ends state or vision driving failure. Often it is hard for the original successful organisation to let go of its sacred cows. These are, after all, the things that made them successful in the first place. But, ultimately, what will make the company grow again is an organisation the barely resembles the original at all. Some examples of this may help:

Having nearly died at the end of the 90s, IBM re-invigorated itself to the point where it no longer manufactures computers and makes nearly all its revenue from IT services and software(who would have thought that in the 80s).

Apple went through a tortuous period during the 90s and nearly went out of existence before its original founder created a new vision for the company centred around sleek design that has led to the iPod, iPhone and even a re-emergence of its original Mac product.

Yahoo is currently going through a period of chaos centred around identity (will it re-emerge or die)?

General Motors is representative of the automotive industry in general but as been slower to respond. It is going through a period of chaos centred around a lack of vision now that its big is beautiful vision has been cast aside by society. Will it re-emerge along with the automotive into the new world of electric powered automobiles. There's no doubt in my mind that this is the vision to aspire to in the automotive industry and several organisations have taken up the challenge of meeting this all electric vision (e.g. Better Place, Nissan etc). Progress has been remarkably rapid due to their commitment to a vision they know is real.

What can we learn from this? The truth is that it is difficult to move a big ship once its course has been set and if you don't set a new destination once you reach the original one, you will fail. However, methodologies and tools to do this re-alignment are few on the ground. We have some ideas but are yet to really test them in the marketplace. Any thoughts?