A core element in the LIVING supply chain is the concept around the “Anti-Control Tower”, of what has been called a “data democracy”. An important shift in human behavior is required to adopt to a world where individuals at a user level are given the authority to make decisions independently, while acting collaboratively in a virtual team environment.
I had a chance to hear New York Times write and author Charles Duhigg speak in New York last week, on how the best teams in the world were organized and governed in leading organizations worldwide. He also spoke about how the best teams he studied operated in the face of massive uncertainty and new data. His examples were drawn from individual teams of comedians working on Saturday Night Live, to massive global organizations like Google. Duhigg started out by noting that individuals are exposed to cues, which results in behaviors, that is either rewarded or punished. The presence of continuous rewards will lead to habits, which is the reason why individuals develop habits. Part of our brain recognizes that rewards are produced by behaviors, which is a good thing. Eventually behaviors are formed into habits. But because the world is changing so quickly, our brains sometimes cannot keep up with all the changes, and sometimes we have so many diverse elements hitting us that our brain is unable to form habits. But why is it that some people are able to adapt to changes more quickly, while others stumble in the face of constant new information? Given the explosion of data that we are exposed to, it is important that people are given accurate information, in order to transfer the data into knowledge, and create good habits?
The question of course is how can individuals take information and make it more usable? Why are some people good at using data, and others aren’t? For instance, a dimension of IQ measures people’s ability to see patterns and shapes, and in a similar vein, to be able to see and understand data in the context of the situation, interpret it, and act. An important concept to consider here is that many people have made decisions purely on intuition. Intuition is a “gut feeling”, and while this cannot be completely discounted, data can challenge intuition. But a common theme here is that a distinguishing capability around data interpretation in the face of uncertainty is the idea of narrative storytelling.
When people are exposed to data, some individuals are very good at taking data and processing it in a manner that becomes information. This requires that they not just read the information, but that they interpret it, and extract what is important about the data that is noteworthy, unusual, or can spot a trend. But the really important part involves taking the important elements of data, noticing the patterns, and weaving a story around it that relates that information back to elements in the real world. This connection is essential for data interpretation.
As we move into a connected, LIVING supply chain, the people who will be the most productive in this environment will be uniquely adept at building mental models around new and emerging data. The essence of this involves an ability to tell ourselves a “story” around the data. Very few managers teach their direct reports how to do this, and it is certainly not taught in most university analytics and supply chain classes. But it is such an essential part of what is needed to manage in the digital economy.
In this book, “Smarter Faster Better”, Duhigg provides multiple examples of this capability. For instance, he describes how experienced firefighters have an uncanny ESP that they use when fighting a fire. They effectively tell themselves a story about where the fire will be whenever they enter a room, and are thus prepared for unexpected eruptions This is a skill that is learned from entering many rooms with fires, and paying attention to the cues. Another example is how taking notes by laptop versus writing it down is more efficient in the classroom. Students who wrote manually had less information to study with after the class was over, and this made it more difficult for the information to be absorbed, and thus more difficult to convert it into knowledge.
In a similar manner, teams operate better when they are asked to tell a story, and this dramatically increases productivity. Duhigg also spoke about how intelligence was the ability to absorb information, but being smart was the ability to interpret it and apply it to storytelling. And our experience often drives us to look for the familiar that is in our context of what we know. For example, the tendency is for managers to hire people that are just like they are. This is often an error in judgement, because we want to hear from people who fit our definition of what we think is smart. I have biases, and may be wrong, but I may not appreciate other points of view that in fact may be right.
Google spent over $15M on a study of over 15,000 teams, to try to understand what made them successful. In the end, they found that there were no singular predictive elements of what made teams successful! Finally, they decided to examine the culture of the teams, and examine their patterns and habits to see if anything made a difference. The research team noted that successful teams had one common element: psychological safety. That is, people on the teams had an environment where anyone on the team felt comfortable in saying anything without consequences, ridicule, or belittlement. In effect, these teams had an element of trust that allowed more creativity to occur through engagement of all team members.
Further, two elements were found to be instrumental in creating productive teams. First, it was critical to ensure that everyone spoke up. Some team members will always sit back and not say anything, but successful teams force everyone to speak. Google found that teams that actually monitored how many times each team member spoke up, using checklists, and ensured that everyone on the team spoke, had more successful outcomes. A good team leader will pay attention to non-verbal cues, and urge those who aren’t talking to engage. A second component involves ensuring that other team members are listening and responding! It is important to encourage people to disagree, and in fact, to reward people for saying what they think, and then reward them for disagreeing! Too often, people don’t speak up because they are afraid of appearing naïve, stupid, uninformed, or making a mistake. The importance of pulling people out of their comfort zone will drive the creativity process. Not every creative idea will be a good idea, but you will never get to a great idea if you don’t jumpstart the creativity process. And sometimes the feedback creates a new idea that is a winner.
Duhigg described the importance of this, as he observed how Lorne Michaels initiated the process of creating a show on “Saturday Night Live”. Before every show, he would bring together the group of comedians, and have a team meeting to “come up with jokes”, as well as the skits that would accompany them. Comedians are a moody and often disruptive bunch, often at odds with one another, and not always cooperative, so this was no easy task. Michaels would force every single comedian to speak up over the course of his meeting. In fact, he would use strategies to ensure this happened. For example, if a comedian came up with a joke or idea that was “stupid”, he would perk up and say “that’s a great idea, and it makes me think we could do such and such…” On the other hand, if a comedian had a fantastic idea for a skit, he would react in a non-committal and silent manner. IN the end, the good idea would end up being on the show, but during the meeting Michaels would act like it was no big deal. In effect, he was rewarding comedians for bad ideas, not just tolerating them!
This is an important concept that relates to how transparent supply chains need to create a culture of openness across the network, and virtual teams that can quickly work on emerging issues. We want to be able to reward suppliers and distributors for transparency and openness, as well as for “bad ideas” that are part of the creative innovation process. By explicitly addressing those elements of a team interaction that are the most stressful and directly having conversations that people are the most scared of, the process of sharing the concern openly makes it less stressful, reduces the emotionality, and increases the ability of all parties to learn and address potential problems that may arise. Duhigg mentions the idea of the best hospitals having post mortem discussions that specifically discuss things that went wrong during the operation, as one of the most important element of learning and improvement. He discussed the example of Alcoa, and their CEO who instead of focusing on revenue and costs, focused on worker safety. By measuring and focusing exclusively on safety, it drove habits on the part of workers that helped drive other components of productivity, that were essential to eventually improving revenue and reducing costs! Alcoa became the darling of the Dow Jones as a result.
Duhigg emphasized the importance of proving to yourself who you are, and creating a sub-conscious self-image. Telling a story to yourself about the person you are, and believing that story through self-actualization becomes important. Tell yourself a story of how you want things to work around you, and then perform the actions to make it happen. Nobody wants to disappoint others, nobody wants to be shamed. By knowing yourself and understanding what works for yourself, you can address the issues that are preventing the story from being told are enacted. And when this spirit is pervasive across an entire supply chain, a true culture for transparency can emerge.
Establishing basic rules for strong virtual teams that operate in an environment of extreme complexity and little time will be an important element for operating in the LIVING Supply Chain.