Clear Thinking - The Business Experience

Thinking

Intelligence®

The Business Experience
Ideas Consultancy in Improving Organisation
and Team performance

   Case Studies

   See our regular Case Studies in Thinking Intelligence below

THINKING INTELLIGENCE® CASE STUDIES are expressions of honest opinion on the contents of articles in the media that we have analysed and believe demonstrate the huge impact on performance of clear - or unclear - thinking by management teams.

Our sole purpose is to help our readers to:
- learn valuable lessons from the success, or failure, of their peers
- be more aware of HOW they, and others, are THINKING
- see the need to FLEX THEIR BRAINS across a wide rage of whole-brained Thinking Styles
- think in the right way at each stage of a Business Thinking Process 
- and develop FLEXIBLE, AGILE, CONTROLLED, FOCUSSED, CLEAR THINKING skills.

In each Case Study we pinpoint the causes of success - or failure. We also explain the clear - or unclear - thinking by the planning teams and which of over 16 key Thinking Styles were used - or fudged - or missed - usually unwittingly.

Any statements made have been taken from these media articles or based on our own experience when observing, or working with/for, multi-national corporations.

Find out how our Thinking Intelligence® and Flexible, Agile, Controlled, Focussed, Clear Thinking models can impact your business success.
 See What is Thinking Intelligence® ... Clear Thinking is not as simple as you might think, as these Stories show.

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"Radical Thinking leading to Transformational Improvement"  Sept 2017  ... read more

"Theresa May's election manifesto 'screw-up' - the dangers of small-team thinking" June 2017 ... read more

"May and Trump: their preferred Leadership and Thinking Styles"  Feb 2017 ... read more

"Coming Soon - Brexit, Trump, and other sharp jolts to rational thinking"  Nov 2016 ... read more

"What the West can learn from China's success - different ways of Thinking"  Dec 2015 ... read more

"Productivity - what affects a Team's Performance, its Productivity? Lessons for all Leaders"  Sept 2015 ... read more

"Leadership and motivation - four similar businesses compared"  Apr 2015 ... read more

"Alps air crash - lessons in thinking about Risk"  Mch 2015 ... read more

"Tax Avoidance; Leadership Roles; Accountability - clear thinking on some vague concepts"  Feb 2015 ... read more

"Agile Thinking - was it lacking at McDonald's and the Bank of England?"   Jan 2015 ... read more

"Strategic Thinking on a grand scale - Saudi Arabia's oil price influencing - dumping Nimrod"  Nov-Dec 2014 ... read more

"Customer Feedback systems compared, and how businesses miss opportunities"  Oct 2014 ... read more

"Teams mess up 'simple' £bn projects, yet can chase a comet for 4bn miles"  Aug-Sept 2014 ... read more

"Risk and Safety - how people and organisations have difficulty thinking clearly about these key issues"  July 2014 ... read more

"Heart versus Mind - newsworthy examples of a difficult balancing act"  May - Jun 2014  ...  read more

"Think your way to success - how Liverpool Football Club massively improved their performance"  Mch-Apr 2014 ... read more

"Wish-washy thinking on the UK floods problem"  Feb 2014 ... read more

"Profitable Customer Focus - easyJet shows Ryanair how to do it"  Dec 2013 ... read more

"Burberry, a whole-brained 600% success story - but can Ahrendts' successor be equally flexible?"  Oct 2013 ... read more

"A classic Change story - reforming the dysfunctional UK education system"  Sept 2013 ... read more

"Does Microsoft need a visionary Leader (like Steve Jobs)?"  Aug 2013 ... read more

"The Problem-Solving Process - a classic example of chaotic thinking: the NHS Problem"  June-July 2013 ... read more

"Ideas from visiting other countries - a trip to California"  May 2013 ... read more

"Customer Feedback Systems - how do yours compare with the Pharmaceutical industry and the NHS?"  April 2013 ... read more

"How highly intelligent teams can make 'stupid' and costly thinking errors - even at board level"  Mar 2013 ... read more

"Are YOU a Clear Thinker?  98% of visitors to our exhibition stand failed our Clear Thinking Test"  Feb 2013 ... read more

"Facts versus Assumptions - Hewlett Packard and Autonomy; Plebgate and Plodgate - what went so badly wrong?" Dec-Jan 2013 ... read more

"Turning Concepts into Products - the difficulties in implementing ideas in an un-Balanced Team" Nov 2012 ... read more

"West Coast Rail Bid fiasco - a Design Thinking failure, with nasty ramifications?"  Sept Oct 2012 ...read more

"Reputation of Banks and Financial Advisers shredded - yet again"  Jun - Aug 2012 ... read more

"PastyGate and other Government U-turn thinking calamities"  May 2012 ...read more

"Petrol Panic, and How long is three months? UK Government thinking challenges"  Mch-Apr 2012 ...read more

"How safe are cruise ships - after Costa Concordia?"  Jan-Feb 2012 ... read more

"Should Marketing merge with Sales? Hot topic gets Marketers steamed up"  Dec 2011 ... read more

“What is Design? Who can explain this key, but vague, concept?”  Nov 2011 ... read more

"Hewlett Packard and Netflix get painful lesson in Customer-Focused Strategic Change Communications" 
August - September 2011 ... read more

"The Customer's Viewpoint on Marketing and Selling"  July 2011 ... read more

"Britain's schools get lessons in Concept Thinking from Singapore"  June 2011 ... read more

"Bye Bye PPI? - another Financial Services mis-selling 'scandal'"  May 2011 ... read more

"The Continuous Creative Process - Pixar's incredible run of success"  April 2011 ... read more

"The Joy of Chess Problems - great for developing your Thinking Skills  March 2011 ... read more

"Caution - Women on Board. Diversity of Thinking?"  February 2011 ... read more

"Steve Jobs - highly successful Whole-Brained Leader"  December-January 2011 ... read more

 "Delusional Thinking - England's 'humiliating' World Cup bid"  November 2010 ... read more

"Finding Improvements - Traffic Management Systems"  October 2010 ... read more

"Business---Customer Thinking. Carrefour's new store design"  September 2010 ... read more

"High Performers compared: Hewlett Packard v Reckitt Benckiser"  August 2010 ... read more

“How do you assess Innovation R&D Value for Money?”  July 2010 … read more

“BP’s Deepwater Disaster: We’ve never hit an iceberg before – full steam ahead”  May-June 2010 … read more

“Wembley - £757million for a ‘scandalous’ pitch”  April 2010 … read more

“Tories election message - It’ll be all clear on the night”  March 2010 … read more

“Toyota – where did it all go wrong?”  February 2010 … read more

“ClimateGate – credibility lost by simple errors”  January 2010 … read more .

 


Sept  2017

Two recent examples and one due for a refresh

"Radical Thinking leading to Transformational Improvement" 

“Ryanair targets carry-on bags to stem delays” and “Google and Apple in line of fire as EU moves to tax US tech groups’ revenues”. These two recent Financial Times articles are prime examples of Radical Thinking in practice – major changes in the way you think about a subject which can have significant, perhaps transformational, impacts.

CRINE, standing for ‘Cost Reduction In the New Era’, was a collaborative radical thinking effort applied by the North Sea Oil & Gas industry to find ways to cut costs in offshore production. This resulted in a cost reduction of 40%.

We examine the thinking behind these three Radical Thinking plans/programmes to demonstrate this hugely valuable Creative Thinking process. Radical Thinking is the form of Creative Thinking which leads to major positive change.

Thinking Styles and Processes covered in this Case Story:

Radical Thinking … Creative Thinking … Design Thinking … “Why do it the way we’ve always done it?” … Business Thinking … Problem-Solving Process … Concept Thinking … Opportunity Thinking … Thinking Traps … Making Assumptions … Transformational Improvement

Ryanair’s ‘niceness’ campaign continues, at an extra cost

The popular budget airline has announced plans to encourage passengers to put their ‘too-large’ carry-on wheelie bags in the hold to cut the time taken to board and disembark from planes. Unless you pay extra you will only be allowed to take one handbag or laptop-sized bag into the cabin. You can, however, take 5kg more in your main luggage bag (up from 15kg) for £10 less than the normal extra charge.

This FT article didn’t actually refer to Radical Thinking but as soon as we read it we realised that Ryanair’s move could have a major impact in the whole airline industry. This is Radical Thinking about how planes are designed and how luggage is handled.

Why are planes designed with huge overhead luggage lockers?

This thought occurred to us as we read the article – Design Thinking. It is almost as if planes were designed to cause boarding delays and worries by passengers that they won’t find space in the overhead lockers. Why not design planes so that most luggage is stored in the hold?

Space in the plane cabin could be allocated for those passengers travelling light, eg business passengers, or for precious items. It would also be necessary to make airport baggage-handling more reliable to avoid bags going to the wrong destination, but this process is way overdue for improvement.

The simple Radical Thinking here is “Why do it the way we’ve always done it?”

 Brussels gets tough on tax avoidance – a radical idea worth £billions

The big US technology companies have been too ‘tax efficient’. Business Thinking means maximising profits, which also means minimising costs, including tax. Why pay more tax than you need to? The current tax system in the EU allows clever companies like Google to declare all their profits from EU business operations in low-tax countries such as Ireland and Luxemburg. All perfectly legal. According to the FT article, Airbnb paid tax of less than 100,000 euro in France last year.

But now, Brussels has applied Radical Thinking to their Problem-Solving processes. They plan to tax these wayward companies on their sales revenues in each country they sell in. Clever. Again, the basic technique is “Why do it the way we’ve always done it?” In this case it means asking “What should be taxed, and where, etc?” It means getting down to the basics of the concept of Tax – Concept Thinking.

 One tricky barrier to this Radical idea

The prime cause of the problem is the way the EU allowed its tax system to develop randomly. Some member countries have low-tax regimes which just beg to be taken advantage of. The barrier to the ‘Tax on sales’ idea is getting all EU members to agree to it. Best of luck … but it must be worth a try.

 CRINE Cost Reduction

In 1994 an industry-wide project got down to some Radical Thinking about how to reduce costs in North Sea oil and gas production. “Why do it the way we’ve always done it?” Results were transformational.

For example, it was always assumed (a common Thinking Trap) that each production platform had to be built to include spare equipment put in place in case a pump (for example) broke down. Similarly, a veritable hotel was required to house all the workers needed to operate the production processes. And massive control rooms and equipment were required to minimise process downtime.

“We don’t need it” The project teams realised that the cost of fabricating these huge platforms could be cut ‘radically’ if they excluded most of the duplicated equipment and moved control onshore. Similarly, they realised that they could allow production to shut down occasionally and ship the repair/maintenance teams out to the platform on an as-needed basis, cutting the requirement of the living quarters on the platform. This thinking dramatically reduced the weight of the ‘topside’ plant etc, which in turn significantly reduced the weight and cost of the whole platform.
Key Learnings

If you sense the opportunity exists for major change (Opportunity Thinking) then it is worth getting a team/group together to apply Radical Thinking to the subject. This means exploring and defining the core concept/s of the issue (Concept Thinking) then asking key questions such as “Why do it this way?”, “What other ways could it be done?”, etc. And constantly checking for subconscious Thinking Traps such as ‘Making Assumptions’.

This radical ‘way of thinking’ can stimulate creative ideas for Transformational Improvement in any organisation.

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June  2017

A close-knit team
thinking in the wrong ways

"Theresa May’s election manifesto ‘screw-up’ – the dangers of small-team thinking" 

Theresa May stepped outside her Preferred Thinking Style range and took a gamble on a snap election. Mrs May is not a natural risk-taker but she clearly saw an opportunity too good to miss. On paper, it looked a near certainty to enlarge her majority in government and ease the Brexit process through parliament.

We examine what went wrong, and how this disastrous result of a hung parliament could have been avoided had Mrs May and her team been thinking in the right ways at key stages of the election campaign.

Preferred Thinking Styles … Planning Thinking … Decision-making Thinking process … Risk Thinking … Opportunity Thinking … Strategic Thinking … Assumptions Thinking Trap … Adaptability … Thinking Intelligence … Imagination Thinking … Contingency Thinking … Whole-Brained Thinking Team … Home Office mindset … Task Thinking … Controls thinking … Overconfidence Thinking Trap … Customer Thinking … Visionary Thinking … Empathy Thinking

The basic causes of the campaign ‘screw-up’

The phrase ‘screw-up’ was quoted by several Tory MP’s to describe Mrs May’s team’s planning for the election campaign. We have broken down the basic causes into six interlinked, Planning Thinking segments:

  • decision to have a snap election
  • fatal unconscious Thinking Trap
  • planning team size and balance of Thinking Styles
  • campaign strategy – the core manifesto message
  • inflexible campaign tactics
  • Mrs May’s struggle to flex her thinking beyond her natural Styles

Snap election decision: Risk v Opportunity Thinking

Theresa May is not a natural risk-taker and took a huge gamble on a snap election. She saw an opportunity that seemed too good to miss. At the time, it looked a near certainty to enlarge her majority. The Labour party was in disarray and Jeremy Corbyn was viewed as a liability even by many Labour MP’s. The opportunity was there to massively increase her majority. This decision-making Thinking Process came down to assessing the risks – Risk Thinking. This is where Mrs May’s team’s thinking first went wrong.

It was essential to assess the risk that the campaign might go wrong. This was the prime cause of the debacle. They failed to assess the risk of their campaign strategy (see below). A combination of poor Risk Thinking and poor Strategic Thinking.

 Fell into a Thinking Trap: making Assumptions

Another key failure in May’s team’s Risk Thinking was to assume that Corbyn would not be capable of changing and adapting his personality, appeal, message, and leadership skills. Jeremy amazed his friends and enemies and proved extremely adaptable in his thinking. Adaptability is a fundamental benefit of Thinking Intelligence.

May’s team fell into the common unconscious Thinking Trap of making Assumptions that turn out incorrect. They assumed Corbyn would carry on as before. But he transformed himself into a loveable grandad figure that appealed to younger voters whilst smartening up his image for the cameras. The complete opposite of May’s team’ assessment. A change they failed to anticipate (poor Imagination Thinking) and allow for (Contingency Thinking).

 May’s planning team: too small to be Whole-Brained

A Whole-Brained Thinking team requires a good balance of Preferred Thinking Styles amongst its members. May’s team seems to have consisted of a very small team of trusted advisers she had worked with for years at the Home Office. One commentator wrote well before the election that her team was still stuck in the Home Office mindset. And that is essentially Task Thinking, and Controls Thinking in particular.

This is a graphic illustration of the dangers of a team whose members all think the same way or lack a good balance of ‘natural’ or Preferred Thinking Styles. And May’s team also suffered from the personalities of Mrs May’s advisers who curtailed dissenting opinions. One newspaper headline labelled them the ‘Gruesome Twosome’.

 Campaign Strategy: flawed Strategic Thinking

Fundamental Strategic Thinking is thinking about what you should be selling, to whom. Probably driven by Overconfidence (another Thinking Trap), Mrs May opted for an austerity manifesto that she felt was still needed to balance the budget. Unfortunately, she went too far and alienated her core voters with a social care policy quickly labelled a Dementia Tax. This affected not only the older voters’ property but also their children who could have their inheritance severely ‘taxed’.

In doing a U-turn trying to deal with the negative reaction Mrs May dented her campaign image (‘Strong and stable’) by pretending that “Nothing had changed” when the opposite was clear to all.

Another fatal strategic error was to focus her campaign on attacking Corbyn as a potential PM. Attacking the entire Labour party and its manifesto would have made more sense, particularly ‘weak’ shadow ministers such as Dianne Abbott who seemed to have no grasp of numbers. Focusing on Brexit was also a mistake when it was such a divisive (and ‘old’) issue.

Jeremy Corbyn simply pushed a positive manifesto which had much greater appeal to most of the electorate. Getting rid of tuition fees had great appeal to younger voters. Whether the whole package was financially viable didn’t seem to matter – voters welcomed the approach.

Campaign tactics:
tv debate mistake
Several tactical errors, such as trying to win over voters in Labour strongholds and failing to change a losing message. But the killer error may have been Mrs May’s refusal to join a tv debate. Many voters would have seen this as a weakness of leadership and an inability to ‘think on her feet’. This was poor Customer Thinking by Mrs May’s team – not seeing this situation from the customers’ viewpoint. A calm, cool, guarded performance (her preferred thinking style) would have been more acceptable than a no-show.
Mrs May’s struggle to flex her thinking

An effective leader needs to at least attempt to develop all the four quartiles of Whole-Brained Thinking. Mrs May seems to be content to display only her Task Thinking quartile, constantly using phrases such as “Let’s get on with the job”. She gives the impression that she is sure of her mind by statements like “Brexit means Brexit”. This may mean that she has a clear vision of what Brexit means (Visionary Thinking). Unfortunately, she fails to put a reality to that vision that most other people can understand and follow. Hence, we get ‘Hard Brexit’, ‘Soft Brexit’, ‘Open Brexit’, ‘Breakfast’, etc.

There is perhaps one good thing that has come out of this. It has encouraged Mrs May to adopt a more conciliatory approach to Brexit as opposed to confrontational. She is being forced into developing Empathy Thinking – learning to influence by using charm and political thinking. If Corbyn can change, maybe May can too.

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Feb  2017

Initial indicators on how they lead and think

"May and Trump: their preferred Leadership and Thinking Styles" 

Donald Trump is in the news every single day, and Theresa May is close behind. These news stories provide good clues into these leaders’ preferred Leadership Styles and Thinking Styles. But the stories also demonstrate yet again how even highly able and experienced people can make simple, avoidable Thinking Errors due to failing to think in the right ways at critical stages.

This article is an example of how we will be following these two leaders’ development ‘on the job’.

Leadership Styles … Autocratic … Pace-Setting … Thinking Styles … Visionary … Reasoning … Task … People … Left-Brained … Doer … Thinker … Analytical … Logical … Controls … Detailed … Empathy … Strategic Thinking … Risk … Opportunity Thinking … Concept Thinking

First thoughts on their preferred Leadership Styles

Donald Trump’s Leadership Style has been described as ‘Despotic’. First impressions would certainly indicate a preference for using the Autocratic or Coercive Leadership Style – a leader who likes to centralise and control. Theresa May also would appear to prefer this Leadership Style, although going about it in a far quieter way.

Mr Trump is also displaying a Pace-Setting Leadership Style, a drive to achieve, by issuing Executive Orders virtually daily. Mrs May, on the other hand, clearly prefers a more considered approach. She will take her time to ‘think things through’. Whilst generally commendable in a leader, this more cautious Leadership Style can be very frustrating to followers. Apparent delays over producing a plan for Brexit and an Industrial Strategy criticised as “still at the first stage of thinking" might also indicate a lack of support from her team or a desire to do everything herself.

Mrs May’s preferred Thinking Styles

Looking at the four quartiles of Whole-Brained Thinking – Visionary, Reasoning, Task, and People Thinking – our first impressions are that Theresa May is definitely Left-Brained. She is strongly Analytical and Logical (Reasoning) and Controls and Detail Thinking (Task). She appears be to less natural with Empathy Thinking (People) and Strategic Thinking (Visionary).

An unexpected example of her Thinking Style Preferences came when she visited Donald Trump in the White House and offered him a State Visit in London this year. When news broke in England of this invitation there was almost universal dismay. Media articles included concerns about a public row on climate change with Prince Charles and general embarrassment of the Queen.

A public petition that parliament should debate the invitation was signed by nearly 2 million people. This seems to be a situation where Theresa May didn’t flex between the two polar-opposite Thinking Styles of Risk Thinking and Opportunity Thinking. She clearly saw an Opportunity to curry favour with Donald Trump to develop that ‘Special Relationship’ but didn’t focus her mind on the Risks (one of her strengths).

She also clearly failed to engage People Thinking when it came to the stage of thinking “How might people react?” to the plan. No other US president has ever been invited to a State Visit in his first year in office. And for all his strengths, Mr Trump must be considered as a high-risk president at this stage. Nobody knows what he will do next!

 The Donald’s preferred Thinking Styles

Donald is a natural Doer, not a deep Thinker. He is an action man. He likes to get things done (Task) and he himself says he is a People Person (People). Donald Trump is, however, also quite an Opportunity Thinker – he saw the opportunity to present himself as a man of the people, despite his business/wealth history. And his messages were clear and highly emotional. They appealed to the millions of Americans who felt left behind whilst those people in Washington and Wall Street got ever more powerful and richer.

One of the problems of a strong Doer, though, is the risk that initiatives can go massively wrong because of too little thought in the planning stages. The huge rejection he encountered to his sudden Executive Order on immigration clampdown, even from top companies in Silicon Valley, indicates a lack of thought about the whole concept of America, never mind how people would react. America’s wealth developed from immigration. Apple was developed by the son of an immigrant. There clearly was no Concept Thinking (Visionary) engaged in this ‘action’.

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Nov  2016

Coming Shortly

Several case studies in Unclear Thinking

"Coming soon – Brexit, Trump, and other sharp jolts to rational thinking" 

There have been so many big stories lately about rational thinking upsets that we decided to make a short list of cases to highlight the difficulties even experts have in thinking clearly.

We will be delving more deeply into these case studies later but here is our current “What were they thinking?” short-list:

 

How did David Cameron and Hillary Clinton et al get their thinking screwed up, so badly?

 

 

  • David Cameron’s cataclysmic decision to have a referendum on remaining/leaving the EU
  • The referendum Opinion Polls debacle
  • God save America - the unsavoury Donald Trump v Hillary Clinton election fight
  • The ‘Trump win’ shock horror, and those Opinion Polls getting it wrong again
  • Theresa May’s leadership style and preferred Thinking Styles
  • The cat-and-mouse ‘secret’ Brexit negotiation process

  • The UK Flat-Productivity problem – are we still at the ‘Define the Problem’ stage?
  • The Croydon tram disaster – classic safety design errors?
  • Drones – is anybody in control of this accident in waiting?
  • Electric cars and self-driving cars – the Innovation Process in action. Question is: who wants to ‘drive’ a silent autonomous car?
  • Tax Avoidance schemes – some grey-sky thinking re legal/risk analysis. Don’t ask a celebrity for advice.
  • Brain-training and dementia – brain training does work; can’t remember what they said about dementia

Design Thinking, Risk/safety Thinking,
and many more examples of non-engaged
Thinking Styles

All these case studies are highly revealing about how we think and how easy it can be for experienced leaders, teams, and individuals to make costly Thinking Errors. Mistakes that could have been avoided, we maintain, had people been thinking in the right ways.

For example: how can a tram system be designed to allow a sleepy driver to take a sharp bend at over 40 miles per hour? A chronic shortage of Design Thinking and Risk/safety Thinking for starters.

Our analysis and Thinking Intelligence lessons ... Coming Soon.

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The Story

Dec 2015

Success comes from the mind, the way you THINK

"What the West can learn from China’s success - different ways of thinking" 

We spent 16 days travelling around the south of China to get an overview of the country and see how the West could learn from this dynamic economic success story. From big cities like Shanghai and Chengdu, to smaller cities and towns such as Huangshan (near the Mount Huangshan tourist area), beautiful Lijiang in Yunnan province, an unforgettable Li river cruise, and the highly creative Yangzhou sound & light show.

We looked for the drivers of this successful growth and realised that a major factor is the way the Chinese people think.

 

 Analysis and Lessons 

Strategic Thinking … Design Thinking … Risk Thinking … Planning Thinking … Visionary Thinking … Business Thinking … Work at Learning … Sharp, flexible minds … Customer Thinking … Creative Thinking … Opportunity Thinking

 

Ambition, Vision, and Planned Economic Growth

 Shanghai

China’s growth may have slowed (from superlative) in recent years but it was obvious from our travels that the country has massive ambitions and is successfully executing a huge infrastructure plan involving new airports, high-speed-rail stations and motorways. Grand Strategic Thinking.

The airports and rail stations in particular are massive. Rail stations are more like airports with a gate system leading to platforms, some having over 20 platforms. And, like airports, passengers have to pass through security checks. Excellent Design Thinking and Risk Thinking.

The high-speed trains we traveled on were incredibly fast, smooth, and comfortable. And clean – each carriage seemed to have its own cleaner sweeping the floor and cleaning the toilet throughout our journey. And every train and internal plane journey we took was fully booked.

China’s strategic infrastructure vision

 

This trip made us realise how short-sighted the UK Governments have been regarding infrastructure. The UK’s airports, rail system, and roads seem years behind those of China. The political system in China obviously speeds up the planning process but their government deserves high praise for executing a grand vision.

Their new airports, rail stations, and motorways are spacious and underutilised at the moment but are clearly designed for the future. One new dual-carriageway we saw at the edge of a town had road-side trees planted well before the surrounding land was being developed. Impressive Planning Thinking.

Their strategic vision extends outwards to a ‘New Silk Road’ initiative to build 900 infrastructure projects costing $890bn across 64 countries linked by China’s ancient trade routes. The financing is designed to develop greater world use of the Chinese currency, the renminbi. Incredible Visionary Thinking.

Organisational Design and Efficiency

 

We booked our rail journeys from England via an agent in China and collected all the tickets when we went to our first rail station. Each ticket showed the precise journey, times, price, ‘boarding’ gate, carriage number, and seat number. For a particular journey, passengers could sit in a large waiting area (just as in airports) and then walk to the specified gate when the announcement board showed the time to ‘board’ the train.

The gate led to a platform where the location of our carriage stop point was clearly indicated on the platform floor. The train stopped at precisely the designated position for our access from the platform. No pushing, shoving, or jostling. A highly efficient system. Superb Design Thinking.

Productivity – the Chinese work ethic and business thinking

The Chinese are very hard workers. Many shops stay open until 11pm. We saw very few people idly standing around. Everybody seemed busy and purposeful, usually trying to sell their products. When we examined the excellent training facilities in one of our hotels we were surprised to find a group attending a management course on a Sunday morning. Everybody seemed to understand Business Thinking.

Education 

With this keen business sense and work ethic it was easy to see how China’s economy has grown so rapidly. But it also clear from the behaviour of Chinese children that work attitudes are embedded from an early age. A recent UK tv programme where English schoolchildren were taught by a group of Chinese teachers shockingly demonstrated an enormous gap in learning attitudes.

The English children were virtually unmanageable by Chinese teachers accustomed to respect and self-discipline from keen pupils in China. This should be of grave concern for our educators, and parents. Again, it is no surprise that UK school performance in difficult subjects such as maths is way behind that of China. Chinese children are prepared to work at learning, and have far longer attention spans than Western youth.

Skills and flexibility – and open space roads

One of the many things that impressed us about China was the skill and flexibility of road users, especially taxi drivers and scooter riders. Taxis weaved in and out of traffic queues with inches to spare, yet we never saw any accidents. Zebra crossings were treated more as a guidance for pedestrians rather than a designated safe-crossing path – drivers and riders just weaved their way around people.

This was the best demonstration we have ever seen of ‘open space’ road usage, where traffic and pedestrians ‘share’ the roads. The result seems to be a highly effective traffic management system for all stakeholders. Organised chaos from sharp, flexible minds.

Service ethic

Especially for the people who spoke English, we found that most Chinese people were always willing to help. The China agents who arranged our internal flights and train journeys seemed to work 24-hour days. One hotel concierge even called us after our journey to check that a taxi driver didn’t overcharge us. This service ethic is even more remarkable considering that tips are not expected. An eagerness to please which is rarely seen in Europe, especially in France and the UK. Good Customer Thinking.

Fanatical Cleanliness – except for the air

We mentioned above about constantly sweeping the train carriages. The Chinese even sweep their dual carriageways, manually, whilst traffic whizzes by.  This would be considered absurdly dangerous by western safety standards, but drivers are considerate and make allowances.

But one area of huge concern, to China and the rest of the world, is air quality. On many days, even in country areas, the smog blotted out the distant landscape. In Shanghai one afternoon, the daylight disappeared two hours early. The effects on people’s health must be horrendous. Thankfully, it now looks like China’s rulers have realised the dangers and are taking a more serious look at their pollution. However, whilst they continue to build highly polluting coal-powered energy stations, achieving targets will be very difficult.

Creativity 

The Chinese have a reputation as imitators of western innovations but they are actually highly creative people, despite living in a very structured, police-controlled environment. A few examples: many comestible consumer products may be laced with sugar but the packaging is incredibly attractive visually: a weir in a river has been constructed as a series of cascades via about 30 mini pools – a delightful, highly photogenic tourism feature; and a brilliant son e lumiere with a cast of hundreds set on the river Li with a backdrop of ‘karst’ limestone peaks. Jaw-dropingly beautiful. Fabulous Creative Thinking.

Whilst many Chinese cities may be blighted by monotonous blocks of flats, there are plenty of examples of interesting architecture. Shanghai’s towers make London’s few skyscrapers look fairly ordinary in comparison. And the planned 1 Undershaft, an incredibly boring square tower, is just a huge featureless pile of bricks and windows built far too close to others such as the impressive Gherkin.

Opportunities for western exporters

 

Five shortages stood out on this trip: people who understood English, and good biscuits, confectionary, chocolates, and beer.

We were surprised how few Chinese people spoke English. We asked a helpful person at an Enquiries desk in a huge department store in Shanghai where the Pizza Hut restaurant was located in the shop. He simply shook his head and clearly didn’t understand our request. We turned around the corner and the Pizza Hut was right in front of us.

And at an airport restaurant we asked for ‘the menu’. Again, total blank looks. The word for Menu must be one word front-line staff in restaurants should know in all the main languages. We suspect that one of the problems is simply down to the different way some words and letters are pronounced. For example, the Chinese would pronounce the written words Pizza Hut something like Pidsar Hoot (we subsequently realised).

Beer was recently in the news in the UK and China when the Chinese Premier visited England and sampled one of our fine real ales, Greene King IPA. This led to huge demand back in China for the brand apparently enjoyed by the great leader. Oddly, there is very little western beer sold in China, despite the local beers being mediocre. Massive opportunities here for UK beers. Opportunity Thinking required.

 
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The Story

Sept 2015

The great Productivity Puzzle

"Productivity - what affects a Team's Performance, its Productivity?” 

This has been the title of numerous news articles recently in the UK. Despite the economy recovering since the financial crisis, Britain’s productivity (output per head per hour) has remained static. And as a result, so have wages and living standards.

Lack of investment and innovation are two of the obvious causes at macro-level. But, at team level, there are many generic factors that affect any team’s performance, and in turn, team productivity. This story examines some of the key performance factors affecting team productivity at any level from board down, any industry and size of organisation.

We examine the impacts of Team Leadership, Engagement, Trust, Team Balance (of Personality Types, Teamworking Styles, and Thinking Styles), Skills Development, Team Processes, Culture, and Working Environment. Lessons valuable to all organisations, all leaders. But we begin by explaining the concept of a Team.

 

 Analysis and Lessons 

Definition of a ‘Team’ … Synergy … Team Leadership … Shared Vision … Goals … Roles … People Thinking … Empathy Thinking … Customer Thinking … Thinking Styles … Engagement … Interest Thinking … Whole-Brain Thinking … Trust … Team Balance … Personality Types … Team-Role Styles … Natural Thinking Styles … Introverts … Extroverts … Ideas-People … Implementers … Analytical Thinkers … Skills Development … Concepts … Learning … Development … Concept Thinking … Evaluative Thinking … Design Thinking … Team Processes … Thinking Processes … Planning Thinking … Contingency Thinking … Overview Thinking … Descriptive Thinking … Improvement Culture … Creative Thinking … the Innovation Process

Understanding the key concept - What is a Team?

 

A Team is a group of people who are mutually dependent on one another to achieve a common goal. If your ‘team’ doesn’t feel that they share a common goal then they won’t function as a team. Productivity must suffer if all team members are not held mutually responsible for the team’s output. A Team should be more productive than the sum of its individual parts, due to the Synergy effect.

The poor performance of English Premiership football teams in the two European championships is an example. “All of the top teams are less than the sum of their very expensive parts. Manchester City epitomises the problem. Excellent individuals, but they are consistently outwitted by cleverer opponents in Europe” explains The Times. By ‘cleverer’ we can read ‘teamworking’.

Team Leadership – setting Goals, deciding Roles, …

Good team leadership is the top factor affecting the performance and productivity of any team. Good leaders inspire a shared vision; discuss, agree, and set stretching goals; and ensure that each member knows the clear roles of all team members (including that of the leader).

But a major reason why talented people underperform or quit their jobs is because of a poor relationship with their manager. Relationship-building is a key skill for any leader. And this requires good People Thinking skills, Empathy Thinking and Customer Thinking, not the natural Thinking Styles for many people, especially in technical or construction industries.

Engagement – generating and maintaining interest in the work

 

Which comes first – interest or involvement? This is a key question faced by all communicators (eg in advertising) but also in work setting and management. Team leaders need to ask themselves one vital question: Why should anyone be interested in doing that work that needs to be done? What’s interesting about it? If you can’t think of a good answer then you will struggle to get your team’s commitment.

This requires Interest Thinking, a specific Thinking Style within the People Thinking Quartile of Whole-Brain Thinking.

Trust – “How much do I trust my fellow team members or Leader?”

‘Healthy’ competition in a team is usually a good thing. It helps team spirit, engagement, and performance – as long as basic trust is maintained. You need to know that if you get into difficulties that your fellow team members will rally around, not stick the knife in to better themselves at your expense. If a team loses trust, productivity will suffer badly. They will stop functioning as a team.

Team Balance – the perfect team

Most leaders don’t have the luxury of selecting the perfect team based on their member’s respective Personality Types, Team-Role Styles, or their natural Thinking Styles. But it is crucial for leaders to make allowances for an imbalance in any of these performance factors.

A team can have too many Introverts or too many Extroverts. A team can suffer if overloaded with Ideas-People but are short of Implementers. And a team full of Analytical Thinkers can lack creativity or cause upsets (due to poor Empathy Thinking). Making allowances for the shortfalls is critical to productivity.

Understanding the concept of Skills Development – test your knowledge of Learning and Development

Most people have plenty of scope for improvement, even those ‘plateaued’ managers – if they get development opportunities and are encouraged to develop.

The problem is that many managers, even in HR departments, fail to really understand the twin concepts of Learning and Development. Try asking your colleagues this simple question: “What is Learning; what is Development: and what’s the difference between them?”

We guarantee that you will get a whole range of vague responses. The reason? Because everybody believes that they know what these terms mean. However, most people will have not given these deceptively-complex concepts sufficient thought to be able to fully understand them and articulate them. Most people do not focus their minds by deliberately engaging Concept Thinking. In fact, even many professionals struggle to explain the meaning of the word Concept.

The result is vague approaches to both Learning and Development in many organisations (due to blinkered, short-term thinking) which in turn limits productivity. All managers should be assessed for their performance in developing the skills of their staff.

NOTE: when learning and development initiatives fail or underperform the chief cause is poor or imprecise evaluation, caused in turn by poor Evaluative Thinking - which starts at the design stage (Design Thinking).

 

Team Processes – eg how teams make decisions, solve problems

Setting Goals, making decisions, resolving problems, etc are, or should be, stage-wise Thinking Processes that require team contribution. And each of these Thinking Processes will need different ways of thinking (Thinking Styles) at each stage. Productivity can suffer badly if the wrong goals are pursued, or prove difficult to achieve (eg poor Planning Thinking or Contingency Thinking), or if a problem is incorrectly diagnosed (poor Overview Thinking, Descriptive Thinking, or Analytical Thinking).

Improvement Culture

Productivity can improve dramatically if there is a strong culture of continuous improvement. Teams need to be encouraged to develop an innovation mindset (Creative Thinking, the Innovation Process) – always looking for a better way of doing something. After several years of stagnation, the once-mighty Sony Corporation has now re-established its improvement culture.

Working Environment

A whole raft of factors affect how people feel when they are at work, which in turn impact on productivity. Their immediate surroundings, the right temperature and fresh air, space to move, freedom of action, a work atmosphere that is positive, friendly, supportive, energising, creative, risk-tolerant, and occasionally challenging. A dull, never-changing, coercive work environment stultifies productivity. As a leader, the choice is yours. YOU can have a major impact on your team’s environment.

 
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The Story

Apr 2015

Four Examples that demonstrate the huge impact of Leadership

"Leadership and Motivation - four similar businesses compared” 

This story is relevant to businesses of all types and size. The industry is Premier League football, where success or failure is brutally obvious. These examples of good and poor leadership illustrate basic principles that apply to any organisation.

We compare three Premier League clubs and one Championship club and the contrasting impacts their managers and owners have had on their teams’ results this season: Newcastle United, Manchester United, Chelsea, and Bournemouth.

We examine the impact of Leadership, Motivation, Inspiration, Vision, Teamwork, Talent Management, Brand Value, and Business Thinking. Lessons valuable to all organisations.

 

 Analysis and Lessons 

Leadership Thinking … Business Thinking … Leadership Roles … Inspiring a shared vision … Motivation … Talent Management … Opportunity Thinking … Concept Thinking … Strategic Thinking … Brand Value … Logical Thinking … Resilience … Emotions Thinking … Teamwork … Detail Thinking … Evaluative Thinking … Visionary Thinking … Empathy Thinking … Imagination Thinking … Creative Thinking

Zero Leadership – Newcastle United

At Newcastle there is a total lack of Leadership – nobody who inspires a shared vision, one of the key Roles of a Leader. It is difficult for outsiders to see what owner Mike Ashley’s vision is, apart from maintaining a presence in the Premier League, making a reasonable profit (£34 million), and using the club as free advertising for his retail business.

Heavily constrained Manager Alan Pardew jumped ship as soon as a decent offer came along. His role did not include talent recruitment. The inevitable result has been a totally demoralised football team that lost an unprecedented eight games in succession and sank to the relegation zone.

Whatever limited motivation the players had before, it plumbed the depths when the manager left. There was no leader in the club that could inspire the players to motivate them beyond the level of just ‘doing their job’. Tellingly, Pardew’s new club, Crystal Palace, radically improved their results from his first game in charge.

The net effect of this zero leadership and ambitionless vision is that the club has, and will continue to have, great difficulty attracting talented players and a new manager. Even a ‘second-division’ manager has declined their advances. The club now has just one quality player, who, like previous players of value, will probably be sold - at a profit of course. Despite spending some cash on low-cost young players Newcastle have no dedicated goal-scorers of any real skill or value. You can’t win many games without goal-scorers. Appalling talent management.

Poor, and excellent, Business Thinking

Newcastle United have the third highest attendances in the Premier League, over 50,000 every home game, and are in the top 10 in Europe for local support. In theory, this support income should represent a huge business opportunity and the club should be vying for a top position every season. Yet Mr Ashley seems unable to grasp this opportunity (poor Business Thinking, poor Opportunity Thinking).

Compare this with Manchester United’s owners, the American Glazer family, who really understand the concepts of Business and Strategy (Concept Thinking, Strategic Thinking). Through immense chutzpah, they purchased the club with virtually the club’s own money, using massive debt finance. And when performance began to decline after manager Sir Alex Ferguson retired, the owners spent £150 million on new players last summer. They also plan a similar ‘investment’ this summer.

The Glazers are pushing the Manchester United brand hard and plan to open new megastores worldwide to take full advantage of their numerous sponsorships. They have the second-highest income of any football club, £433 million, beaten only by Real Madrid. Successful teams breed successful businesses. Mediocrity kills brand value. It is hard to see the logic in Ashley’s thinking (poor Logical Thinking).

Chelsea: successful EQ in Leadership

 

Chelsea’s dominant leader, both on and off the pitch, is Jose Mourinho. He has an ‘obsessive desire to win’. Mourinho’s controlled passion and disciplined organisation has become the culture of his teams. Even when his team performs poorly they have the ‘gift’ of grinding out wins.

But Resilience is no ‘gift’. In comes from developing Emotions Control (EQ) – a Mourinho speciality. Many teams crumble, emotionally, when faced with apparent defeat. Think of Brazil in the last World Cup – the team fell apart mentally after shipping early goals against Germany. Teams with high levels of Emotions Thinking (EQ) are able to keep mental control and go back to basics. And Mourinho’s talent management skills made sure his team had good basic skills – and excellent teamworking skills. Television pundits regularly show how Mourinho’s teams work hard and constantly support each other.

Bournemouth – inspiring Leadership – a sporting fairytale

In 2008 the club was minutes away from liquidation, 91st out of 92 league clubs. Then Eddie Howe, a local manager, took charge and the success story began. Next season they will join the illustrious Premier League, despite having a ground capacity of only 12,000. This phenomenal rise through four ‘divisions’ has been mainly due to the inspirational leadership of one man, Eddie Howe.

“He’s always showing us inspirational videos”, captain Tommy Elphic said. But also key is Howe’s attention to detail (Detail Thinking), the logs of each training session (Evaluative Thinking), the inspirational quotes on the walls, and his ability to make his players feel part of a story. Howe has also a strong vision of how the team should play (skilful, possession football), and he constantly communicates this vision to the team.

Howe’s talent management is also a key skill – his squad cost a mere £8.3 million, peanuts compared to Manchester United’s £400 million. The key to motivating talent is inspiration – after setting the direction, the key role of a leader is to inspire his/her team to improve their performance. This, in turn, requires Visionary Thinking, Empathy Thinking, Imagination Thinking, and Creative Thinking - Thinking Skills not usually taught on Leadership Development programmes.

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The Story

Mch 2015

Air travel safety: something else to worry about - suicidal pilots

"Alps air crash - lessons in thinking about Risk ” 

This is a story about Risk Thinking: thinking about, and designing for, the risks involved in doing something. In this case, it is the airline industry thinking about, and designing mitigations for, commercial airplane pilots who decide to crash your plane.

The apparently deliberate Lufthansa/Germanwings Airbus crash in the Alps has caused a rethink of the airline industry’s last safety rethinking after the 9-11 events. We examine the faults in that last rethink, and look at possible Thinking Intelligence solutions aimed at winning back passenger trust.

 

 Analysis and Lessons 

Risk Thinking … Thinking Intelligence … Imagination Thinking … Analytical Thinking … Design Thinking … Evaluative Thinking … Controls Thinking … Thought Processes … Thinking Actions … Thinking Processes … Irrational Thinking … Decision-Making Process … Thinking Styles … Emotions Thinking … Right Balance of Thinking Styles focus

What went wrong? Several things.

After 9-11 it was realised that the airline industry had failed to imagine (poor Imagination Thinking) that terrorists could (and would) learn how fly an airliner, then break into a cockpit, take over the flight, and accurately hit a skyscraper at the critical point to maximise damage – whilst committing suicide.

Imagination Thinking is a key element in Risk Thinking. So the safety experts decided to make it difficult for anybody unauthorised to get into the cockpit. One safety device allowed the pilots to lock the cockpit door from the inside. Unfortunately, they failed to imagine, or deal with, a pilot who has decided to kill himself and all other passengers by locking out the other pilot after he’d gone to the loo.

Only one pilot in the cockpit?

Strange how crazy this thinking is now, in hindsight. The Americans thought of this risk after 9-11 and ruled that two people (which could be one pilot and a cabin crew member) should always be in the cockpit during flight. Europe has only now, post Alps, thought this a good idea and will follow suit.

The writer has experience of designing safety systems, for oil & gas processing plant. We are astounded that it has taken so long for the airline industry – with its focus on safety – to wake up to the risks of having just one pilot in the cockpit during flight. Key safety devices should always have a back-up device in case something goes wrong with the first.

What else went wrong?

 

Commercial airplane travel is the safest method of transport, one death in 5million journeys. But when a pilot decides to commit suicide mid-flight the magnitude of the risk is enormous. It will cost Lufthansa about £300million just in compensation payments. But 150 lives were lost, and decreased passenger trust will affect all airline profits, especially Lufthansa’s.

The chances of a pilot deliberately crashing your plane are tiny. It has happened just 5 times in 40 years. But the risk exists, and needs to be mitigated against. Clearly something went wrong in assessing the sanity of co-pilot Andreas Lubitz. Poor Analytical Thinking, Design Thinking, and poor Evaluative Thinking. And poor Controls Thinking – Lufthansa apparently had been sent an email advising them that Lubitz had had mental problems during his training to be a pilot. A key element of performance controls, (presumably communications) broke down, undetected.

 Possible solutions?

Ready for Pilotless Planes?

Though most air crashes are due to pilot error these days it will take a lot of work to get people to accept pilotless planes, despite the technology being available. Let's look at pilot assessment first.

Patient confidentiality stopped Lubitz’s doctor informing Lufthansa of the sick note that should have stopped the pilot from flying. Doctors are held back from contacting employers by the threat of litigation for breaking patient confidentiality. If pilots had to consult only a doctor working for the employer it could affect pilot’s willingness to complain of any problems that could affect their career.

One solution could be to improve the effectiveness of the regular pilot-assessment process. Currently, the emphasis appears to be more on physical health rather than mental. One expert has indicated that checking of a pilot’s thought processes could indicate suicidal tendencies. But this, currently, has not been sufficiently worked out or standardised.

Checking Thought Processes

Wikipedia has a long list of Thought Processes. Unfortunately, this list mixes up individual thinking actions (such as Attitude, Concept, and Logic) with stage-wise Thinking Processes (such as Project Planning, Problem Solving, and Decision Making).

Firstly, psychiatrists would need to determine and agree which ‘thought processes’ equate to aggressive suicidal tendencies (harming others as well as themselves). Then psychometric assessors could design thought-process tests which would indicate those tendencies, as is commonly done in personality type profiling such as Myers-Briggs.

A highly relevant Thought Process example

Moral-dilemma tests (eg “Would you save person A or B in an emergency?”) could reveal irrational thinking that is not obvious from normal behaviour. The Thinking Process required here is the Decision-Making process, which needs a sequence of individual thinking actions. Each stage may require different ways of thinking (Thinking Styles). This particular application will demand switching between Analytical Thinking and Emotions Thinking to find the right balance of Thinking Styles focus – a key aspect of Thinking Intelligence.

Two people in the cockpit at all times

 

We consider this essential. It could even be argued that there should be three pilots. Two pilots on a recent Air India flight were discovered to have been fighting before take off. The pair have now been suspended, but that flight should never have been allowed to continue. And in 2012 Qantas Airways suffered a similar situation prior to their 747 taking off at a Dallas airport.

Other ideas include devising a door locking system that would allow authorised personnel access to the cockpit – allowing the pilot to lock the doors is clearly too risky. One other idea is to build cockpits with direct access to a toilet (en-suite) without leaving the cockpit – as long as the toilet door isn’t lockable from outside the loo! But all of these ideas will require significantly more Evaluative Thinking than the previous ‘rethink’.

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The Story

Feb 2015

Three related examples of poor Concept Thinking

"Tax Avoidance; Leadership Roles; Accountability - clear thinking on some vague concepts” 

Concept Thinking means thinking about, understanding, and developing concepts – either new or existing concepts. It is being clear about what something is, the meaning of words used. Hence, it is fundamental to all learning, understanding, and communication.

Tax Avoidance, Leadership Roles (the roles of a Leader), and Accountability are all well-known concepts. But news stories about them this month have shown that many people, even at senior level, are rather vague about the meaning of these ‘simple’ concepts.

Britain’s biggest bank, HSBC, has been pummelled in the media and Parliament because news came out about “Tax dodging” being allowed at its Swiss wealth-management branch. The bank’s senior leaders, naturally, deny all knowledge of £5million “bricks of cash” being withdrawn “in suitcases” by wealthy individuals allegedly seeking to avoid, possibly evade, tax. We examine the concepts of Tax Avoidance and also two key aspects of Leadership: the Roles of Leadership (particularly the task of controlling organisational performance), and Accountability.

 

 Analysis and Lessons 

Concept Thinking … Flawed Concepts … Tax Avoidance … Too big to manage … Leadership … Leadership Roles … Responsibility … Accountability … Organisational Culture … Controls Thinking … Thinking Process … Strategic Thinking … Imagination Thinking … Creative Thinking … Design Thinking

Tax Avoidance. We’re all at it.

Tax avoidance, tax planning, tax management. We all do it, don’t we, in some form or other. The extent might depend on how much money we can spend on advisers and of course how much tax liability we need to ‘manage’. Tax avoidance is legal; tax evasion (failing to pay tax where it is due, which is criminal) is not.

Aggressive Tax Avoidance – a thinking error or clever election gimmick?

17,000 pages of Tax Rules may appear to have been designed to be confusing but the Government has muddied the waters even further by introducing developed concepts such as “Aggressive Tax Avoidance” and “Diverted Profits Tax” (so-called Google tax) and “Tax Abuse” (tax avoidance that cannot reasonably be considered to be reasonable – all clear?). Basically, if it is now clear to the average man or woman that you intentionally went out of your way to minimise a tax liability by some lesser-known method or scheme that parliament never intended, then the taxman will come after you.

Flawed Concepts

 

The main political parties see tax avoidance as a big electoral issue. The flaw with this thinking is that these developed concepts of Aggressive Tax Avoidance and Diverted Profits Tax are purely moral issues. In law, at present, these concepts are perfectly legal. They comply with current tax laws. This means that the taxman is highly unlikely to win a case in the criminal courts. Only one of the hundreds of suspects in the HSBC Swiss ‘tax dodging scandal’ has been successfully prosecuted.

The tax avoidance clamour is purely political posturing and applied moral pressure. These developed concepts are examples of Flawed Concepts, concepts that don’t hold up under scrutiny (such as The Big Society). However, they may be very successful as an election gimmick.

Leadership Roles

Leaders have several different roles in their organisation. They define the ‘job’ of Leader. The most obvious role being to “Set the direction”. Another is “Model the way”, acting as a role model for the organisational culture. But this story relates to the critical role of “Controlling organisational performance”. And this is where HSBC has disappointed its investors, regulators, government, and even its ‘tax-dodging’ customers whose data was leaked.

Are some organisations too big to manage?

Responsibility and Accountability

The top leaders at HSBC bank professed to have had no knowledge of the dodgy goings-on at shop-floor level. They accept responsibility but, they claim, they can’t be held accountable for everything that can go wrong. The chairman of the HSBC’s internal audit committee has made a similar statement, denying all knowledge of the Swiss business’s mal-practices – the blame lies with middle managers and those naughty customers, apparently.

Up to a point, of course, this is perfectly understandable. There can be undetected rogue workers and managers in any organisation. The writer of this story was made redundant in his early years after a co-worker burned down the main premises. No staff members had any inkling of the perpetrator’s disturbed state of mind prior to the arson.

But most management thinkers, philosophers, and investors would take the opposite view. The Oxford English dictionary lists responsible and accountable as synonymous. The Routledge Encyclopaedia of Philosophy says “to be responsible for something is to be answerable for it, ie held accountable if it is within your control.” Leaders are not in control of rogue staff, but they are responsible, and thereby accountable, for the Performance Controls System … and the culture that impacts it, either positively or negatively.

Controlling Organisational Performance - Controls Thinking, Crisis Avoidance

This hugely damaging PR issue could have been avoided had the bank’s leaders focused their minds by engaging the Controls Thinking Style. Controls Thinking means thinking what could go wrong in an operation, and then designing, constructing, maintaining, and monitoring optimal controls systems to cope with performance fluctuations and mishaps. It is the responsibility of the Leader to ensure that this Thinking Process is adhered to by all involved, and that appropriate Controls Systems are set up and are working.

Imagination Thinking, Creative Thinking, and Design Thinking

 

Controls Thinking (like Strategic Thinking) is both a specific way of thinking (Thinking Style) and a stage-wise Thinking Process. Thinking about, then designing and planning a Controls System, requires a number of thinking actions, performed in a sequence (a Thinking Process).

One of the first stages in this Process is thinking about what could fluctuate or go wrong. In these tax avoidance cases it doesn’t take much imagination (Imagination Thinking) to figure out what human beings, even at middle-management level, are capable of doing ‘wrong’.

The trick to effective Controls Thinking is in the design and planning stages which require Creative Thinking and Design Thinking to ensure that performance ‘fluctuations’ are quickly identified and dealt with. Control System designs must allow for the basic human desire to bend the rules.

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The Story

Jan 2015

Two examples of the lack of Agile Thinking ... being slow to react ... with costly consequences

"Agile Thinking - was it lacking at McDonald's and the Bank of England?” 

Agile Thinking has two, interrelated, meanings. One refers to a method of project design and planning, especially IT projects, to minimise time and maximise results. The other meaning is flexing your thinking across a range of different ways of thinking, so you don’t get stuck in one mindset. The latter meaning is a fundamental part of Thinking Intelligence™, a skill which can positively influence the results of all your thinking challenges.

McDonald's same-store sales suffered their first annual fall in in a dozen years in 2014 and have under-performed the Dow Jones by 13% over the last year. The recently-published Bank of England minutes at start of the credit crisis demonstrate a rigid mental state virtually unprepared for the pending disaster in 2007.

We examine what Agile Thinking means in practice, what went wrong at McDonald’s and the Bank, and how Thinking Intelligence™ could have helped their teams in both cases.

 

 Analysis and Lessons 

Agile Thinking … Thinking Intelligence™ … Agile Project Planning … Contingency Thinking … Precision Thinking … Evaluative Thinking … Whole-Brain Thinking … Thinking Styles … not thinking clearly … rigid thinking … Strategic Thinking … Opportunity Thinking … Decision Making … Slowness to Change … Controls Thinking … Future Thinking … Imagination Thinking … Consequence Thinking … Design Thinking … Overview Thinking

Agile Project Planning

One of the reasons projects are late and underperform, especially in IT, is the inherent uncertainty of outcomes in producing something new. Contingency Thinking is essential: asking “What could possibly go wrong?” etc.

But one way of reducing the uncertainty is by using the trial & error approach, getting to a form of end-point as soon as possible then making adjustments. This is Agile Project Planning, which requires constant switching between different ways of thinking. For example, between Precision Thinking (“What exactly is required here?”) and Evaluative Thinking (“Is this anywhere near what we want?”).

Agile Thinking across Whole-Brain thinking – Thinking Intelligence

Thinking Intelligence is being aware of how you are thinking, and how you should be thinking in any situation. It requires the ability to switch between up to 30 different ways of thinking (Thinking Styles) as you work through a Thinking Challenge. It also demands checking for the many subconscious Thinking Traps we are all prey too, especially teams.

Ideas, plans, projects, decisions, innovations, and communications go wrong so frequently because people, especially teams, get stuck in one way of thinking, or think in the wrong way. This happens because most people don’t consciously think about HOW they are thinking. They may be completely unaware that they are not thinking clearly until something goes wrong. As the two cases below demonstrate.

McDonald’s rigid thinking

McDonald’s restaurants is the biggest chain in the world. A Tremendous success story. But suddenly things are starting to go wrong. Store sales are falling due to a shift in consumer tastes and the rise of rivals. Consumers are looking for food they perceive as healthier and a bit ‘different’ from Big Macs.

Slightly more up-market or ‘different’ rivals such as Shake Shack, Five Guys, In-N-Out Burger, and Mexican food Chipotle, are stealing market share by promoting higher quality ingredients, better working conditions, and more interesting menus. We are even seeing the emergence of up-market kebab restaurants. McDonald’s tried to up their game by expanding their menu but this just confused customers and delayed service.

Opportunity missed – poor Decision-Making?

Mexican food restaurant Chipotle has expanded at terrific pace. Surprisingly, McDonald's had invested in this start-up since 1998 but began selling its 91% stake in 2006. One commentator described this sell-off as one of the worst business decisions ever made. Since 2006 Chipotle's shares have risen a massive 1000% compared to 100% for McDonald's. Poor Strategic Thinking, Opportunity Thinking, and Decision-Making.

McDonald’s world-wide woes and slowness to change

Here are a few headlines. US: left behind by shifts in dining habits. China: food safety concerns … India: legal dispute … Japan: consumer backlash (disgruntled with service and food) … Russia: caught up in geopolitics … Latin America: revenues hit …Europe: hit by downturn, and increased choice of fast food outlets.

One thing is common – McDonald’s has been slow to cope with change, due to a lack of Agile Thinking.

The Bank of England and the Financial Crisis

Minutes of the BoE’s Court (board) meetings from mid 2007 (just published) show a frightening lack of Agile Thinking at that time. Headlines such as “King (BoE’s governor) kept Board in the dark at height of crisis” … “Bank caught off-guard” … “Bank chaos as financial crisis hit” ... all indicate that the Bank was behind events and slow to respond.

Poor Controls Thinking. No rapid-response system to deal with major deviations from the norm. And poor Contingency Thinking, Future Thinking and Imagination Thinking when thinking what could go wrong.

The Bank had identified months earlier than Northern Rock’s collapse that it could not prevent a flight of money from such a failing lender. Even the day before Northern Rock’s shock announcement the Bank had stated that regulators should not step in with cheap funds to support it. They were soon forced to change their position. Again, poor Consequence Thinking.

Causes of Rigid Thinking

 

One of the key causes of this out-of-control thinking was the organisational structure of the controls system. The now disbanded tripartite structure of the Bank, the Financial Services Authority, and the Treasury was declared (afterwards) as dysfunctional, and hindered Agile Thinking. Poor Design Thinking of the controls system.

Nor did it help that the BoE Board was not kept fully informed, or that the governor, Mervyn King, was quoted as having been ‘out of touch with the City’. Poor Overview Thinking.

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The Story

Nov-Dec 2014

Two examples of Strategic Thinking with major consequences

"Strategic Thinking on a grand scale - Saudi Arabia's oil price influencing - dumping Nimrod” 

1. Saudi Arabia made the momentous strategic decision to stop its practice of being the world's oil price controller and let the market determine the price. The consequences are a 50% dive in the oil price and massive disruption to share prices, especially those of the oil companies and services contractors.

2. The frightening consequences of the strategic decision to scrap Britain’s fleet of maritime patrol aircraft, Nimrod, have suddenly risen to the surface. Now, we will have no way of knowing when enemy submarines are camped outside our UK base for Trident-carrying Vanguard subs.

Via a SWOT analysis, we explore the Strategic Thinking and Consequence Thinking behind each decision to see what lessons can be learnt for all leaders.

 

 Analysis and Lessons 

Strategic Thinking … Consequence Thinking … SWOT Analysis … Opportunity Thinking … Game Theory … Overview Thinking … Emotions Thinking … Risk Thinking … Evaluative Thinking

Saudi Arabia’s Strategic Thinking

The price of anything is strongly influenced by supply and demand. We can expect the price of chocolate to increase due to a world shortage of cocoa beans, primarily due to crop disease.

Up to now, the Opec cartel, and particularly Saudi Arabia, has tried to steady the world price of oil above $100 or so by increasing or cutting back on production to match demand. Everybody in the oil world was happy with this arrangement. It allowed a measure of assurance in planning capital expenditure on new production facilities.

SWOT analysis: emergence of a new Strategic Threat

America’s sudden good fortune in developing shale oil and gas has transformed the market. It has significantly upset the supply and demand balance. To Saudi Arabia, shale represents a major new Threat to its Strategic Thinking and market share. It felt action was required to deal with this threat.

Saudi’s Strategic Strengths

Cash. Lots of it. Over $350bn. And enormous oil reserves. And cheap production costs. And supply muscle, both within Opec and world-market share. Its close allies in Opec, the other Middle East states, also have relatively cheap production costs. Some other Opec members (such as Venezuela) are less fortunate. They have high production costs, are heavily dependent on their oil for export earnings, and have little influence.

Saudi’s strategic Opportunity Thinking

The other big oil supplier, Russia, is outside the Opec cartel but is under immense economic pressure due to the sanctions imposed on it, stemming from its Crimea and Ukraine incursions. Oil and gas are Russia’s main export earners. But because it needs cash Mr Putin’s Strategic Thinking is limited. This has provided the opportunity for Saudi Arabia to put pressure on its other major rival.

In fact Russia has a huge dilemma – does it produce all the oil it can despite the low price, or does it cut back production to bring the oil price back up? Does it take the role previously occupied by Saudi Arabia, as a price controller? The maths appears simple, but obviously other factors are at play. Game theory.

Saudi’s Weaknesses and Threats

Saudi Arabia has few weaknesses with the possible exception of succession power-struggles as ‘Saudi princes jockey to seize the throne’ (as one newspaper put it). But there are several significant threats. Isis on its borders; home-grown jihadists launching attacks inside the country; calls for reform by young Saudi dissenters and from human rights campaigners abroad; America’s improving relations with rival Iran; limited water supplies; not to mention lower demand for oil caused by climate change issues. These threats are real and could have major impact, for Saudi Arabia and its oil customers world-wide.

Consequence Thinking – what could happen next?

Shale production is relatively costly, and drilling activity has slowed in the US. However, ‘Fracking’ wells are short-lived and it is fairly easy to hold off capital expenditure until the oil price rises again. But many of the big cap-ex projects by the oil majors have been put on ice.

There is also the issue of storage. Producers can’t continue producing more oil than can be used or stored. At some point soon, the lack of buyers and storage facilities will force the weakest to cut back production.

Demand has already fallen due to cut-backs in the growth of China and emerging markets. There are no signs of market recovery at the moment.

Overview Thinking – let’s take a step back

 

Oil price hikes and slumps have happened before. In April 2009 one headline said “Time to bet on oil again”. Oil had fallen from about $150 to less than $50 a barrel. But following cut-backs in Opec production, postponement of projects, and increased demand from China, the oil price rose again.

The net effect this time will be similar, but less pronounced and will take longer. And the production cut-backs will be more wide-spread, not just by Saudi Arabia. But it really is a matter of who blinks first in this poker game. The Saudis are dictating events; that is the only certainty.

 Scrapping Nimrod – Consequence Thinking (lack of?)

In 2010 the UK government made the strategic decision to scrap the Nimrod MRA4 programme that had cost £4bn to develop to save £200m per year operating costs. The maritime patrol aircraft had been planned as a replacement for its aging predecessor, the MR2, which had been taken out of service.

The thinking at the time was that with the end of the Cold War there was no need for such kit. And budget cuts needed to be found from somewhere.

The realistic potential consequences

We now know that both Russia and China are building up their submarine capabilities and numbers. The UK is one of the few countries in the world with long coastlines that do not have coastal surveillance.

The result is that enemy submarines could hang out just outside the Faslane base for Britain’s nuclear deterrent, Trident, housed in Vanguard subs. This means that the UK’s main strategic military threat would be capable of being detected and tracked. Once detected, a submarine is relatively easy to follow.

What went wrong?

Consequence Thinking starts by asking the question: “What could possibly go wrong, and what could be the consequences if it did?” We can only assume that the teams that made this crucial decision back in 2010 had not given this question sufficient thought and were heavily pressured by politicians looking for cost savings.

Had the teams been more aware of this emotional pressure (by engaging Emotions Thinking) and switched into Risk Thinking and Evaluative Thinking, they would most probably have kept Nimrod in some form.

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The Story

Oct 2014

Four Customer Feedback test results

… alarming disparities 

"Customer Feedback systems compared, and how businesses miss opportunities” 

As genuine customers we recently had the opportunity to test the effectiveness and Customer Focus of the customer feedback systems of four companies, two large, one mid-size, and one SME.

The results showed alarming variations and explain why some organisations struggle to keep up with shifting customer behaviours or have no idea why their sales are falling - poor Customer Thinking.

We examine what goes wrong with customer feedback systems - as seen from the customers' perspective - and how  organisations of all sizes seem totally unaware of the problems ... and the opportunities they are missing.

 

 Analysis and Lessons 

Customer Feedback Systems … Customer Thinking … Customer Focus … Contact Us … Customer Annoyance … No Pre-Tests of Website or Exhibition Showguide … Not interested in negative feedback … Automated, Mechanical responses … Brilliant Customer Focus

Testing four companies’ Customer Feedback systems

… a good measure of their Customer Thinking

Customer Thinking means thinking about customers, but also thinking like customers. It is the starting point for Customer Focus. This month, as customers, we had occasion to complain about four companies’ products or services. A top multinational car rental firm, a trade exhibition organiser, a major supermarket chain, and a cooked-chill food manufacturer.

Three of the four show significant scope for improvement, both in their attitudes and processes, whilst one was an exemplar for Customer Focus. On this evidence (and our customer experiences in general) it comes as no surprise to us that companies often have no idea why their sales fall, despite apparently conducting extensive market research.

The car rental company

We had complained to this company before about a few small dissatisfactions on a trip to California but had gotten a poor response. This time, after a trip to Corsica, we had a very bad experience with their Corsican branch and wrote a letter at the end of September to the UK General Manager to complain. The Corsican staff were very brusque and at one point drove off in our hired car with all our bags and valuables. We were forced to run after the car which went out of our sight. Appalling behaviour. In the letter, we also reiterated our complaints about our previous hire in California, made from the UK.

About a week later we received a reply from Customer Services which offered apologies but merely said that they would pass on our complaint to their operation in Corsica. No mention was made of our California complaint. We responded saying that we looked forward to hearing further about our Corsica complaint and reminding them about our California trip concerns.

At the same time we looked at their website and tried to find a feedback procedure and senior management contacts at their Headquarters. We posed questions via their sales-oriented Contact Us process, even asking how to locate their feedback system. We got an instant automated message saying that we would receive a reply within 10 working days! Three weeks later, we are still waiting for a response to our queries.

Action, at last

On the 24th of October we got a response from another Customer Services executive apologising for the delay and offering small reimbursements for our poor customer experiences in both Corsica and California, via credits to our credit cards. There was no mention of the subjects of our complaints except to state that it was not their policy to inform customers of internal communications.

Whilst appreciating the partial reimbursements, we were left feeling that our complaints had been buried. We have no idea that anything would change, so there is a strong feeling of annoyance and that we had wasted our time. In addition, at the time of writing, we are still waiting for the promised reimbursements and have had to send a reminder. All in all an extremely poor customer feedback system.

The trade exhibition organiser

This is a Business-to-Business technology show at London’s Olympia. As visitors, we had had a few problems with the show’s website and we decided to voice our concerns to the organisers when we visited the exhibition. The website did not have the usual list of exhibitors and we mentioned this fact. Unfortunately, the Marketing Manager in the organisers office took this feedback as ‘criticism’ and insisted that all exhibitors were listed (as small boxed entries) and “all” customers had to do was work through about 10 web pages to see them all.

We told him that most customers wouldn’t bother to do this, especially as the entries were not in alphabetical order. But our feedback fell on deaf ears. The Marketing Manager said he wasn’t interested in negative feedback.

With this attitude it is not surprising that the number of exhibitors and visitors at this exhibition has been falling steadily every year.

No pre-testing?

It would appear that the organisers are not pre-testing the effectiveness of their website or their showguide. After the show we looked at the catalogue and found that the telephone numbers were missing from the exhibitors’ entries. This places an unnecessary sales barrier in the way of potential customers contacting exhibitors.

The supermarket chain

We purchased an own-label cooked-chill fish meal for two and served it with potatoes and vegetables. Unfortunately we realised too late that the package already contained large quantities of potato and some veg. When we looked at the packaging we found that the portion of fish was actually less than that of potatoes and was about one third of what we normally buy per person.

The food packaging contained no information on a feedback system so we had to go to the company’s website and make our complaint via a complicated, sales-oriented Contact Us process.

Automated response system

 

The response email was clearly an automated system and ignored our actual complaint. It apologised for this ‘quality’ problem and promised to review their procedures. It also asked for information, much of which was already supplied in our original web message.

The next email promised an e-gift voucher which never arrived. We had to complain about this and they said they would send a voucher by post, ignoring our question about how they checked if e-gift vouchers were issued or not.

We are still waiting. In every communication we have had from this company we have felt that their system was ‘mechanical’ and failing to deal with the issue we originally complained about. Again, a very poor customer feedback system.

 The winner by far. Charlie Bigham’s

Waitrose, and probably some other supermarkets, sell a range of cooked chill meals made by the Charlie Bigham’s brand. We tried their “2 STEAK & ALE PIES”, which was thoroughly enjoyable apart from the small quantity of meat in the pies.

On looking at the smart packaging we discovered a telephone number for feedback. We called the number and spoke to an agent and explained our complaint. He was instantly apologetic, tried to explain that all their food was hand-made and mistakes occasionally occur. He promised to look into that batch preparation and we would receive a complete refund voucher.

First class Customer Thinking

The very next day we received a personalised letter, posted first class, again apologising for our inconvenience and dissatisfaction and enclosing a full-price voucher against another meal. The letter was signed by the agent, his job title as “Charlie’s Assistant”, and the concluding paragraph is a gem: “Thank you again for contacting us. Your feedback, positive or negative, is extremely important to us and it’s essential we know something has gone wrong as it was here.” Brilliant customer focus.

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The Story

Aug-Sept 2014

Key points

Why Projects go wrong – especially IT projects – especially Government IT projects

How did BP agree to pay out false claims?

"Teams mess up 'simple' £bn projects, yet can chase a comet for 4bn miles” 

The media has covered a wide range of projects recently, many of which have suffered costly overruns and/or long delays. Whilst one highly ambitious project has been tremendously successful to date – aiming to land a research probe on a speeding comet – there have been many disasters, especially with Government IT projects.

We investigate why projects go wrong and suggest lessons that all organisations can learn from. How did BP, highly experienced Project Managers, be found guilty of “reckless” “gross negligence” in causing the Gulf of Mexico oil disaster? And how did they agree a contract to pay out claims to people who had suffered no damages from the oil spill?

Despite the National Audit Office producing about 60 Value for Money reports every year, how do so many Government projects go wrong? For example: eBorders – launched in 2003, delivery still in doubt; HMRC Aspire – budget rocketed from £1bn 1994 to over £10bn in 2017; Universal Credit – delays due to “botched implementation” and now there are concerns that the new system could end up costing more to run than the old one.

 

 Analysis and Lessons 

Emotional Pressure … Emotions Thinking … Risk Thinking … Safety Thinking … Evaluative Thinking … What were BP’s Lawyers thinking? … AdQA - Communications Quality Assurance … Mental Powers … Agile Project Management … Agile Thinking … Agile Leadership … Agile Teams

First, a success story - Rosetta

The Rosetta probe is finally nearing its objective of landing a research probe on a comet speeding through space at 34,000 miles per hour at a distance of 275 million miles from Earth. The spacecraft has chased the 67P comet for 10 years via Mars and is just 60 miles of its target. An amazing feat which has engaged the minds and hearts of some 2000 people on this incredibly ambitious project. A magnificent technological and planning achievement.

The bad news examples

… starting with BP

There are two aspects to this story. First, how did BP and their partners-in-crime produce a chain of errors and “profit-driven decisions” (according to the judge) that led to the blow-out and explosion on the Macondo drilling rig? The simple answer is Pressure. Emotional Pressure caused by the teams being weeks behind schedule and $60million over budget. Crucial tests were not carried out that would have prevented the uncontrolled escape of highly flammable hydrocarbons.

We believe that the disaster could have been avoided had the three sets of teams been thinking in the right ways according to the situation. This particular situation required the teams to be aware of the pressure to complete the job but also to be fully cognisant of the risks involved in short-circuiting safety procedures. This required training in Emotions Thinking and Risk Thinking and Safety Thinking, all different ways of thinking (Thinking Styles).

It also requires Evaluative Thinking, to balance the costs of project delay against the costs of something going wrong. In hindsight, it seems amazing that the teams could risk £40bn plus of potential costs of mistakes (and 11 lives) against a few £million caused by a short delay. But it happened.

What were BP’s Lawyers thinking?

BP signed a contract that tied them to paying out $bn’s worth of claims following the oil spill where class-action claimants were not required to prove actual damages caused by the spill. Investors, quite rightly, are asking how this could have happened.

We can only guess, but two reasons spring to mind. First, BP’s management felt emotionally obliged to deal with all claims – basic ethics. But the fault must lie with their legal advice – which failed to restrict claims purely to genuine claimants. The American judge in effect said “Look, you signed this contract to pay people regardless of whether they suffered loss or not – my hands are tied. You’ve gotta pay up, Suckers.”

We suspect that BP’s lawyers simply forgot to pose the crucial Communications Quality Assurance question: “How could this be interpreted? What are the possible meanings of these words?” Basic AdQA Tests – AdQA, standing for Advertising Quality Assurance, is our service for testing and improving the effectiveness of any form of communications.

Why do so many projects go wrong

… especially Government IT projects?

There are many causes of project failure or delays or cost overruns. Here are just a few:

  • changes to objectives and scope mid-project
  • poor estimates at the planning stage, eg of costs and time requirements
  • poor project planning, especially in identifying what could go wrong or planning for contingencies
  • insufficient resources: poor budgeting, poor manpower planning
  • poor contract design, with vague deliverables and obligations/responsibilities/guarantees
  • being overambitious, overoptimistic
  • leaving evaluation of performance until the end of the project

The Root Causes

We look at a few Government projects as examples of the underlying reasons why projects go wrong.

  1. Failure to learn from past mistakes

This is endemic in both Government and Whitehall civil service. The NAO, National Audit Office, produces 60 Reports per year on major projects. But when we asked them what went wrong they could only reply that their work went unheeded. There are too many changes of Ministers and Whitehall Department heads to be able to learn from previous project cock-ups.

  1. Insufficient Project Management skills 

Again, caused by too many changes of staff, but also insufficient training in Procurement. Professional Contract Project Managers such as Amec are trained and experienced in getting the best deals from both clients and suppliers. Most people, especially in Whitehall, are not so street-wise in contract management – it is a particular way of thinking that most public-sector officials find almost alien.

 3. Political reasons

Changes in Government, changes in Ministers, changes in policies – all contribute to uncertainty and changes in objectives and delivery requirements and schedules. Thankfully, Whitehall is now undergoing a training programme to equip 300 managers with the mental powers to confront Ministers with the ramifications of indiscriminate changes to requirements. “Two aircraft carriers or one, Minister – we’ve given our advice, now you make your mind up and you take the blame.”

  1. Rigid Thinking. Lack of Agile Thinking

 The concept of Agile Project Management has been around for about 15 years yet projects continue to go wrong. The idea is simple: instead of waiting until the end of a project to see how you have performed, you organise the work in stages so that you can measure performance as you go along.

However, what many projects lack is Agile Thinking by team members and overall project Leaders/clients. It requires a degree of flexibility of thinking, and focus, to be able to break down a project challenge into manageable chunks in order to experiment with achievable quick objectives that ultimately lead to the desired goal in an iterative fashion.

The government’s troubled HMRC Aspire project is a case in point. They are now planning to split the project up into 100 separate contracts. A good idea in theory, breaking it down to smaller chunks. But we wonder if any Government department has the skills or manpower to manage such a huge number of different, albeit much smaller, contracts. Agile Leadership, and Agile Teams, are essential here.

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The Story

July 2014

Key points

Malaysian Airlines’ MH17 disaster and other Risk/Safety news stories

"Risk and Safety - how people and organisations have difficulty thinking clearly about these two key issues” 

MH17 being shot out of the skies shocked the world and brought the issues of Risk and Safety of flight-paths sharply into people’s minds. Suddenly we became more aware of the importance in life and business of the need to focus minds on these two related ‘ways of thinking’ (Thinking Styles).

By chance there were several other news items recently on this same subject, Risk and Safety.

Driverless cars, tax-avoidance schemes unravelling, the benefits and risks of daily aspirin, the deadly Ebola outbreak, bank-failure risks. And a host of personal stories including a hedge-fund manager risking his career by rail fare-dodging, a father taking his young children climbing Mont Blanc, and what happened when an airline pilot’s prosthetic arm fell off as he was about to land his plane, on manual control.

We examine how people and organisations think (or don’t) about Risk and Safety. We explain these two Thinking Styles, Risk Thinking and Safety Thinking, and people’s attitudes. What is Risk exactly? What does Safe mean? Sitting comfortably?

How safe is air travel in a world full of risky situations?

Are Malaysian Airlines are just unlucky or were they, and several other airlines chancing fate flying over a war zone? Certainly they were unlucky to have had two airline disasters within a short time span, MH17 over Ukraine and MH370 simply disappearing.

But the airline companies’ minds, and those of their passengers, have now turned to think about the safety of other routes over war areas, notably Iraq.

Will driverless cars be safe? Should I take aspirin? And what about banks …?

Several recent News items have demonstrated that even the cleverest of people and organisations fall into the mental trap of assuming things are safe when in reality they are high-risk. And even where risks have been identified, we are six years after the start of the financial crisis and the banking regulators and the banks have yet to agree a solution. Some ‘experts’ are even warning of a new financial crisis.

 

 Analysis and Lessons 

Risk Thinking … Safety Thinking … Risk Analysis … Airline route safety … The Shark and the Coconut … People’s illogical attitudes to risk … the Banks’ attitudes to risk … Customer Thinking … Thinking Traps

What is Risk? What is Risk Thinking?

Risk is a state of uncertainty where some of the possibilities involve a loss, catastrophe, or some other undesirable outcome. Risk Thinking is thinking about, identifying, evaluating, and mitigating against the risks involved in a situation, product, process, or plan.

Broadly speaking, Risk Analysis (ie determining the overall risk) is multiplying the probability of an undesirable event by the magnitude of the risk consequences. We look at this analysis in connection with airline safety below.

What is Safe?
What is Safety Thinking?

The bad news - Safe is an abstract concept. Nothing in life is Safe. There are only degrees or levels of Safety. Nothing is 100% safe. Even when you leave this mortal coil your dead body is not safe from worms et al. In fact nature is designed (or has evolved) to perform this task.

Safety Thinking is imagining, predicting, identifying, and measuring the risk of danger and then deciding on the acceptable and manageable level of risk undertaken. The latter part, deciding on the level of acceptable risk, may be a personal choice or a decision made by an organisation’s management. This becomes a cost-benefit analysis – do the benefits outweigh the risks?

Which is safer – a shark or a coconut?

Which is more likely to cause you harm, a shark or a coconut? Most people would automatically select the shark to be the most dangerous of the two options. But in fact, you are far more likely to die or receive injury from relaxing beneath a palm tree on a beach than by being attacked by a hungry shark. The reason is simple – the probability of the occurrence of being hit on the head by a coconut falling from a palm tree is much greater than encountering a shark whilst swimming. It is the odds of occurrence that determines the risk here, not the hazard. 

 MH17 and airline route safety

Safety of airline routes is left to the individual airlines to decide. Not exactly the ideal solution. Airlines have vested interests in minimising costs. Whilst they all would maintain that safety is their prime concern we know that the reality is determined by economics – achieving the right balance between safety and costs/profitability.

Before MH17 (and possibly MH370) travelling by air has been recognised as the safest transportation method. But this was in relative peace-time. We now have significant war zones, unpredictable fighters, and a proliferation of high-tech armoury in the hands of those fighters (often provided initially by the West).

Difficult Risk Analyses

The airlines have a tough decision to make: to keep costs down by flying over war zones or to maximise safety by flying around them. Some airlines had considered West Ukraine to be ‘safe’, until MH17 informed their thinking. Iraq is yet another calculation, as is Afghanistan, both important air routes.

The key is that multiplication of probability and magnitude. The probability calculation is highly nebulous and very difficult to put a figure to. But the magnitude of the risk subject is known, and is of huge cost/value – massive loss of lives, an airplane, and reputation. Malaysian Airlines were in a perilous financial state before these two disasters. Now, many people consider the airline to be jinxed (no matter how irrational the thinking) and won’t use them.

The probability calculation has changed. The probability of missile attacks from fighters in war zones, whether by accident or deliberate, is now significantly higher than thought previously.

People’s illogical attitudes to Risk and Safety

Everybody is different but some people seem to have a much greater tolerance of risk than average. A City hedge fund manager has risked his entire career by dodging paying his rail fare for several years. An American father risked his two young children by climbing Mont Blanc in an attempt to get them in the Guinness World Records – they luckily survived an avalanche. And hundreds of people have been hit by the taxman after they assumed (wrongly), without checking claims, that a pension scheme had been ‘registered’ with HMRC as being non-taxable. A classic example of a subconscious Thinking Trap – Assumptions.

The Banks’ attitude to risk

 

One major bank has complained that in order to comply with the financial regulators' request for a 'safe' bank they need 10% of their staff to be working in compliance, a huge cost to the bank. And staff are now suffering from 'risk-aversion', the bank claims.

It is hardly surprising that these complaints are falling on deaf ears, considering the banks’ part in the financial crisis, the PPI mis-selling scandals, the Libor-manipulation scandal, money-laundering scandal, etc etc. As one Financial Times comment put it, the solution is obvious – Banks need to become simpler. Banks need to win our trust. They certainly need to engage Risk Thinking from other people’s perspectives (Customer Thinking).

Aspirin, Ebola, and that pilot’s loose arm

Aspirin: research now shows that the overall incidence of fatal side-effects from daily aspirin is about one-eighth the number of lives saved through cancer prevention. All you need to do is work out how you wish to go. Interestingly, since research publication, aspirin sales have tripled.

Ebola: desperate situations need desperate solutions – this is one of the rare cases where experimental drugs have been allowed to be given to sufferers. Where there is no alternative the choice is simple.

The Pilot’s Arms: interesting name for a pub. The good news is that, despite his artificial arm falling off, the pilot managed to land the airplane with just a few heavy bounces. The bad news is that most people were probably not aware that this situation can arise. Due to equal opportunities laws airlines can employ pilots with reduced physical abilities. But don’t worry, it’s all perfectly ‘safe’.

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The Story

May-June 2014

Key points

People’s Emotions in the News, and their major consequences

"Heart versus Mind - newsworthy examples of a difficult balancing act” 

The News recently has been awash with cases in which people’s emotions have led to dramatic consequences, usually negative. We look at cases where emotions have influenced a £60 million High Court trial, a major European political situation, and several international sporting events.

We examine how the mind and heart work together and the need to find the right balance between these two key functions of the brain, which are often in conflict with each other. Thinking and Feeling.

How the heart and mind work together … the essential role of Emotions

Several years ago neuroscientist Antonio Damasio studied a group of people whose brains had suffered damage to the areas that process emotions. These unfortunate people usually behaved perfectly normally except for one significant difference. They all had difficulty in making decisions, no matter how logically they thought about something. This research highlighted one essential role that our emotions play in our lives – decision-making. We examine how this works.

Emotions Management, or the lack of it 

Several News items related to the consequences of peoples’, or teams’, emotions in pressure situations. We look at how these events unfolded and how the numerous painful consequences might have been avoided had those people (and teams) developed their Thinking Intelligence.

 

 Analysis and Lessons 

Managing emotions (Emotions Thinking) … Thinking Intelligence … Decision-Making … Want … Negotiation Skills … Emotions Management … Emotions Control Error … Thinking Mind … Primal Behaviour … Thinking about your Emotions

A. The role of Emotions in Decision-making … four key aspects

There are four important areas where emotions play a major role in decision-making. Emotions are necessary to help us:

1. make a decision where the logical pro’s and con’s appear to us as being equal.
2. decide which options we want to consider (note the word ‘want’, which itself is an emotion)
3. decide on the criteria for making decisions (eg we must have ‘this’, whereas ‘that’ is nice-to-have but not essential)
4. put a weighting, or level of importance, to individual criteria features. Even determining what is Attractive/Appealing requires emotional input, by definition.

B. News items where Emotions played a major role

The High Court, high Politics, and high sporting moments - all affected by emotions - are described and analysed in the following recent News items.

 The £60 million High Court case

The News of The World hacking trial ended with Rebecca Brooks being found innocent whereas Andy Coulson was deemed guilty. Emotions can strongly influence a jury’s decision. It is perfectly possible that one of the reasons why Rebecca Brooks was declared innocent, and Andy Coulson guilty, was due to their ‘looks’. The phrase “He looks guilty to me” has some psychological basis.

In pictures we have seen of Ms Brooks she ‘looks’ (to us, and possibly many others) ‘homely’ and innocent. The opposite could be true for Mr Coulson. His ‘looks’ could be perceived as very clever, and sharp. These attributes appealed to Prime Minister David Cameron when he hired him for No 10, but in this court case they may have worked against him.

Cameron and Juncker a lose-lose situation

David Cameron’s campaign to prevent Jean-Claude Juncker being elected President of the European Commission has been declared a ‘blunder’ by some parts of the media. The result is greater isolation for Britain in Europe and doubts about the Prime Minister’s negotiation skills. The polls boost that his rebellious stance gained the Conservatives has now melted away.

Emotions abound in this case, involving those of all the players. The other heads of EU countries feel annoyed; Mr Juncker will carry a lasting grievance; and the British electorate will have lost confidence in Mr Cameron’s ability to judge the emotions of (and therefore influence) his EU peers. Nobody won.

Emotions in sport: Tennis

Last-year’s hero Andy Murray put in a pitiful performance at the final stages of Wimbledon and everybody wants to know “What happened?” A moan about being informed about something just five minutes before going on court seems a red herring. The sad truth could well be that previous coach Ivan Lendl managed Andy’s emotions better than he could himself. Without Lendl, or a character as strong as Lendl’s, Andy resorted to his natural state – emotional. This meant that it was easy to fall into a negative mood, which probably caused his poor performance.

The Brazil World Cup

 

One ‘stupid’ costly mistake. Portugal’s Pepe did a ‘Pardew’ head-butt on a kneeling Germany opponent right in front of the referee and got sent off. The result was a 4-0 win for Germany which led to Portugal being kicked out in the first round. One simple emotions-control error that totally blocked Pepe’s thinking mind. He can’t have been thinking at all.

Suarez’s primal emotions. Uruguay’s Luis Suarez, one of the world’s best footballers, bit an opponent, again, and got a nine-match ban from international football. The third time in his professional career. “Almost primal behaviour said one media article, “He needs help”. This highly emotional act did Uruguay’s chances no favours. Very poor emotions management, despite the support he had received from Liverpool FC.

His rather formal ‘apology’ was clearly forced on him (probably by Barcelona, his intended new club) and must have been written by someone in PR. It did not give the impression that he had learnt from the experience and would be better able to control his emotions in future. The absolute start point in emotions management is thinking about the situation, thinking about your emotions (both positive and negative), what triggers them, and thinking about how to manage them to achieve the desired results. Just one part of Thinking Intelligence.

Brazil 1, Germany 7. !!!!

A mind-blowingly incredible result. There are two Emotions points here. One is the Germany team’s ruthless pursuit of more goals, right to the end of the game – clinical control of what must have been highly-elated emotions. The other is the absolute panic that spread through the Brazil team after conceding two early goals – they let in three more within five minutes.

Both these contrasting emotions have their separate causes/origins. The Germany team thinks about emotions, Brazil’s team just has them. The game score, 7-1, says it all.

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The Story

March-April 2014

 

Key points

The value of managing your team’s Emotions Thinking – and Thinking Flexibility

"Think your way to success - how Liverpool Football Club massively improved their performance” 

Liverpool Football Club were seventh in the league last season. Now they are likely to come second after narrowly missing (probably) the excellent chance to be league champions. There are two major reasons for this transformation – manager Brendan Rodgers, and sports psychologist Dr Steven Peters. Both are deep thinkers and have, in different ways, made huge impacts on how the team thinks, and performs. 

Dr Peters’ mind-coaching has developed the players’ Emotions Thinking skills, resulting in vastly improved motivation and resilience that rivals couldn’t match. Unfortunately, Emotions Thinking is only one aspect of Thinking Intelligence and the team relinquished the top spot (probably) simply because they were unable to switch into other ‘ways of thinking’ (Thinking Styles) when the situation demanded.

Dr Peters will also ply his mental coaching skills on the England football team during the World Cup in Brazil this summer. This should at least improve England’s woeful record in penalty shoot-outs.

Comparisons can be fruitful, eg v Man Utd, Man City, Chelsea, Newcastle Utd

Whilst Liverpool progressed smoothly until the final games (10 wins in a row), rivals faltered, no more so than Manchester United. Under new team manager David Moyes (now sacked), Man Utd suffered their worst performance in decades. Manchester City, despite massive spending on players, have been worryingly inconsistent. Chelsea also have had ‘mixed’ results, especially against lesser teams.

And Newcastle Utd have sunk from 6th position on Boxing Day to “floundering, at their lowest ebb”, with 12 defeats in 17 games. We explain the reasons for these wide variations in performance. It’s all down to how they think.

 

 Analysis and Lessons 

Managing emotions (Emotions Thinking) … Thinking Intelligence … Leadership Thinking … Visionary Thinking … Team Thinking … Flexible Thinking … Overview Thinking … Analytical Thinking …Risk Thinking ... Tactical Thinking … Inflexible Thinking … Natural Thinking Styles … Business Thinking … Strategic Thinking … Controls Thinking … Opportunity Thinking … Customer Thinking  

Managing emotions, the Emotions Thinking aspect of Thinking Intelligence

Dr Steven Peters is a sports psychologist hired by Liverpool since November 2012 to help team members to manage their emotions, positively. Emotions play a huge part in any person’s performance and their effects can frequently be observed, especially on a football pitch. Especially when taking penalties.

It is easy to see when a player, indeed a whole team, is driving forward purposefully or just going through the motions, totally disengaged, demotivated. Players, and teams, can be sublimely confident or frozen by nerves.

Dr Peters’ coaching involves teaching players to be aware of their emotions at any time, to deal with those feelings which have a negative impact and nurture the positive emotions (Emotions Thinking). The results have been dramatic, and consistently dramatic (until the final games). Liverpool play with determination, a fighting spirit, heightened confidence, and constant drive.

To quote the captain, Steven Gerrard before the key game against rivals ManchesterCity, “I look at the players so relaxed. They are so confident. There are no nerves. We are just excited by it”. Liverpool went on to win the ‘game-of-the-season’ 3-2.

The Leadership impact

Brendan Rodgers had a vision of how he wanted his team to play and he has now realised that vision (Visionary Thinking). He wanted his team to be constantly attacking, fast movers and fast thinkers. Above all, to think as a team (Team Thinking). This has resulted in his team scoring the highest number of goals in the league, by swiftly turning defence into attack. A team of “wonderful invention, creativity, courage, and arrogance on the ball” (arrogance here being a positive result of confidence).

The leader on the field, captain Steven Gerrard, leads by inspiration and modelling the way he wants his team to play - a constant driving force with good technical ability and calmness under pressure. He was also able to adapt his own game-play when asked to move back to a more controlling position (Flexible Thinking in a non-pressure situation).

 The dangers of Inflexible Thinking in pressure situations

Liverpool (probably) failed to become champions simply because the team got stuck in one way of thinking at crucial times. The top-spot was in their own hands (and minds) with just three games remaining. Then came Chelsea and CrystalPalace. In both matches Liverpool controlled the game, having the bulk of possession. Unfortunately, against both teams they continually tried to attack and were caught out by sucker-punch counter attacks.

Against Chelsea (at that stage) a draw would have sufficed (they lost 2-0). Against CrystalPalace they needed to win to retain a chance of the No. 1 position but threw away a three-goal lead (to end 3-3). In both cases they failed to step back and take an overview (Overview Thinking) of the situation. The team, and their manager, failed to analyse (Analytical Thinking) the situation and identify and manage the risks involved (Risk Thinking).

Chelsea had “parked two buses” in front of their goal (total defence, clever Mourinho Tactical Thinking). But they possessed the league’s fastest sprinters (up to 21 miles per hour). The risk of a Chelsea counter attack should have been obvious, had the Liverpool team thought in that way. All it took was one slip, literally, by captain Steven Gerrard of all people.

Against CrystalPalace, Liverpool were totally absorbed in trying to match the 11-goal difference (minimum) between them and rivals ManchesterCity – an impossible task. This attack-mindset (again) prevented them from switching into Risk Thinking and playing defensively when Palace began their last-10-minutes scoring spree. Inflexible Thinking.

Manchester City – inconsistent brilliance

Billionaire Arab owners have spent about £600 million on new high-quality players and pay record salaries. Yet even with the most enviable squad of players in the league the team suffers from puzzling  fluctuating performance. They switch between “devastating” 6-0 wins and “sluggish impotence” when losing to teams in the lower reaches. A “flaw in the collective chemistry that affects consistency”. This points to a lack of Team Thinking and poor Emotions Thinking (Liverpool’s core strengths).

Manchester United – wrong man for the leadership job

Man Utd were league champions last season. This season, under new Manager, David Moyes, hand-picked by Sir Alex Ferguson, the team has been described as lethargic, plodding, meek, turgid, forlorn, with a predictable style of football.

Their two key forwards, Rooney and Van Persie, “rarely operate on the same wavelength”. The team suffers from “desperation and clumsiness” in defence, “lethargy” in midfield, and a “complete lack of chemistry” between the forwards. Again, a fatal combination of poor Team Thinking and poor Emotions Thinking.

David Moyes’ sacking was inevitable – a total mismatch of natural Thinking Styles that somehow eluded Sir Alex Ferguson when he chose Moyes as his successor. Man Utd’s natural Thinking Style is risk-taking, creative attacking flair, with a resilient never-say-die attitude, fighting to the last minute. Under Moyes, the team played with the mindset of David Moyes: caution and reticence (his natural Thinking Style). They also lacked resilience and the will to fight. Of 16 league games in which they trailed this term they have recovered to win only four of them.

Chelsea – a critical analysis

 

Chelsea have a good team but have a peculiar lack of consistency. They have won almost all their games against their main rivals but dropped points against many of the lower teams. This indicates a flaw in their motivation – poor Emotions Thinking. But manager Mourinho can’t have helped the situation by publicly criticising several of his forwards for not scoring goals or of ‘laziness’ - poor Leadership Thinking. Motivation is a key aspect of Leadership.

Newcastle United – a crying need for Change, from the top down

Newcastle Utd seem stuck in a cavernous rut. Their billionaire owner, Mike Ashley, is a highly competent businessman (good Business Thinking) when running sports equipment stores. However, his Strategic Thinking about running a football club is a total mystery. He appears to focus more on controlling costs (Controls Thinking) than thinking about opportunities (Opportunity Thinking) or the needs or feelings of the club’s 52,000-plus ultra-loyal supporters (Customer Thinking).

Net investment in new players has been the lowest in the league over the past five years. Mike Ashley appears to be ignoring the business opportunity provided by Newcastle Utd having the third-largest attendances in the Premier League (after Man Utd and Arsenal).

After a good performance at the start of the season a feeling of despair now abounds at the club, seemingly with no ideas for solutions. They sold their best player at Christmas and have failed to recruit permanent players. The one-remaining goal-scorer is on loan from another club and will leave at the end of the season. The team’s downward spiral and the club’s perceived lack of vision, direction, and leadership will make it even more difficult to attract much-needed new quality footballers.

 Total lack of Emotions Thinking and Leadership Thinking

 Newcastle's team performance was not helped by manager Alan Pardew losing his temper and head-butting a Hull player. His six-match suspension from the pitch side left his already-demotivated team totally leaderless. Poor Emotions Thinking and poor Leadership Thinking. He has certainly lost the support of the club’s supporters. They booed him back into his seat when he tried to stand by the pitch side. “Ashley out. Pardew out.” - the supporters’ banners provided clear customer feedback.

 
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The Story

February 2014

 Defining the problem is half the problem 

"Wishy-washy thinking on the UK Floods problem 

The devastating storms and floods of this winter has caused a lot of thinking as well as grief in the UK. Thinking about causes, effects, blame, and possible solutions and plans. However, the country, and especially the authorities in charge, seem no clearer about defining the problem, never mind analysing the causes and creating ideas for solutions.

We examine the clarity of thinking and range of opinions on Defining the Problem, Analysing the Causes, and Creating ideas for Solutions in the multi-stage Problem-Solving Process.

Key points

What’s the Problem?

Water, rain and seawater, and wind. Unusually excessive amounts of all of them, especially in southern England and Wales. 7000 properties flooded, many of high value. Coastal defences breached, even causing main railway lines to hang unsupported. This is the observable manifestation of the problem, the effects.

The causes?  

Why did we have excessive storms and rainfall? Or is this just part of 100 year normal weather distribution? The climate change argument is still up for debate.

What caused the sea defences to be breached and the flooding of homes and businesses? This has a much clearer answer – our sea/flood management systems couldn’t cope. So we need to dig deeper and ask why, and what should be done about it.

Lack of infrastructure spending is surely partly to blame but we need to take the broader perspective to see the priorities, the bigger picture. For example, should we look again at the spending on dubious big projects such as £70 billion High Speed 2 whilst money for sea/flood defences and even pothole repairs is so obviously needed?

The solutions?

IF global warming is the prime cause of the weather problem then we need to ask if we can influence the situation, and also what we can and should do if we can’t.

As for coping with floods and coastal erosion many ideas have been suggested, as discussed below. Sandbags, the first thing people think of, are not the solution to a problem of this magnitude. There are now grave doubts about their effectiveness anyway. 

 

 Analysis and Lessons 

The Problem Solving Process … Effects … Bigger Picture … Define the Problem … Overview Thinking … Risk Thinking … Value-for-money … Sunk-cost fallacy Thinking Trap … Rational justification … Decision making … Emotions Thinking … Facts Thinking … Logical Thinking … Precision Thinking … Evaluative Thinking

Defining the Problem, or Problems

There are two major problems, one causing the other. The excessive storms and rainfall caused the breach of our sea defences and inland flood defences. For problem-solving purposes we need to tackle both, separately, as far as we can. But we certainly need to deal urgently with the problem of sea and flood defences because we can’t do anything about the weather near term.

Taking an Overview – Overview Thinking

1. The Weather Problem

The key question here is:“Is our current UK weather ‘normal’ or are we suffering the effects of Global Warming?” With all the weather-modelling systems and records available to us the answer to this question should be clear. But, apparently, there is still some doubt. The only answer our ‘experts’ will provide is that there is a high probability that climate change is the cause.

This raises a second question: “Is this problem solvable?” Rationally, using Risk Thinking, we should proceed on the basis that we need to deal with the effects of climate change. The probability of the negative effects occurring, and the cost of not doing anything, are too high to ignore.

We must also take into account the simple fact that the UK cannot control world weather, such as the droughts in Australia and California. Our recent weather problems originated somewhere in the Pacific. Even if the world’s politicians can ever agree to a solution it is likely to get a lot worse before meaningful action is taken.

 Overview Thinking
2. Sea and flood defences

It is now accepted that the spending on these defences over the last five years or so has been well below requirements. What is much less clear is how much money is required now and on what exactly should the money be spent.

One big question has arisen:“Should we be spending money only in areas of the UK where the benefits outweigh the cost by more than eight to one?” This is the Value-for-money ratio that the Treasury has insisted on so far, apparently.

 High-value areas such as London and the expensive properties near the Thames river are easy to compute in terms of value-for-money calculations. However the Somerset Levels is predominantly farmland which is valued as such. So the argument for letting nature take its course in these near-sea-level areas has some merit. The ‘Levels’ have a history of flooding.

What should we spend money on?
How does HS2 spending compare?

Big question number two is: “How much should we be spending on sea/flood defences in relation to all infrastructure spending?” This is where the comparison with HS2 comes in.

The government seems committed to HS2, despite the cost probably exceeding £70 billion. Yet there is an estimated £500 million shortfall in budget allocation for sea/flood defences. And a measly £200 million has been allocated for potholes in roads, when £10.5 billion is needed, according to motoring organisations.

HS2 Decision-making and the Sunk-Cost Fallacy Thinking Trap

We believe the government has fallen into the Sunk-Cost fallacy Thinking Trap. This is when you have sunk so much money or emotion into a project that you carry on with it despite doubts emerging. One telling aspect of the reports we have seen on HS2 is that the claimed benefits, and therefore business case, appear to be constantly changing. The government is scrabbling to find a rational justification for a decision made by emotions – a typical Thinking Error in Decision-making. They are not analysing their emotions – an essential aspect of Emotions Thinking

First there was the supposed benefit of increased work time from the shorter journey times. Then this idea was quashed by the realisation that, in these technological times, most people work on trains anyway (poor Facts Thinking). The latest (newly-found) benefit is the belief that the North of England will develop in the same way as Canary Wharf did when the Jubilee Line extension was built.

Errors in Reasoning Thinking and Value-for-Money calculations?

 

This Jubilee analogy is false reasoning. You can’t compare a short, inexpensive tube journey with a long-distance, expensive train journey. There is no logical connection. And this not even taking into account the disparity in value of the destinations. CanaryWharf is a top financial centre.

HS2 value-for-money calculations are not only highly nebulous in terms of calculating the value of the benefits. Even the most optimistic purported cost-benefit ratio of 1:2 doesn’t match the minimum of 1:8 set by the Treasury for sea/flood defences. The thinking appears illogical here. Or imprecise (Precision Thinking) – are they using the same parameters for the calculations?

The Solutions

Too early to say. The problem is still being clarified. But three solutions being worked on are worth comment. One is the idea of building a huge tidal lagoon on the coast near the Somerset Levels. Fine in theory but the cost-benefit ratio would probably rule it out.

Another other idea is that houses on flood-prone areas would only get flood insurance if they were made flood-proof. This means making the ground floors concrete, moving electric sockets to waist-high level, making doors flood-proof, and installing plastic kitchens. This idea is certainly practical but will take some digesting in terms of appeal (Evaluative Thinking).

But the most contentious issue is the idea of a pecking order of who gets flooded first and last, depending on the relative ‘value/importance’ of property and who lives in them. Residents in flooded areas claim that this has already happened.

 
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The Story

December 2013

 Different cultures, different leadership styles, their effects on performance

"Profitable Customer Focus - easyJet shows Ryanair how to do it 

Ryanair and rival easyJet have announced highly contrasting financial results recently, driven largely by two key performance factors – Leadership and Profitable Customer Focus. Ryanair has issued two profits warnings in two months whilst easyJet unveiled ‘sparkling’ results with profits up by 50%. Shares have followed suit, with easyJet shares up by a massive 240% over three years compared to just 75% for Ryanair.

We examine both of these performance factors (leadership and culture) and their huge impacts on business performance which all organisations can learn from. This story also shows that people who flex their ways of thinking are likely to be more successful.

Key points

Leadership Roles and Styles

Ryanair’s CEO Michael O’Leary is very direct and combative. He is highly focused, driven, and very much in control. He is an entrepreneur-accountant and takes great pleasure in spotting opportunities to cut costs and grow profits. He cares little for his image and reputation for being customer-unfriendly. He is (or was until recently) convinced that customers will buy from you if you offer them what they perceive to be the cheapest price, regardless of how badly you treat them. 

Carolyn McCall, easyJet’s chief for the past three years, comes from a media background (having run Guardian Media Group). As such she is much more aware of image, of herself and her company. She is a communicator, especially to her employees. She is a change driver. We examine how these very different Leadership Roles and Styles can impact on business performance.

The impact of Culture, especially Customer Focus

Once a culture is embedded it is very hard to change it. Whilst Ryanair’s customer-unfriendly culture had little impact on growth for many years the business environment has shifted. EasyJet recognised this change and has been transforming itself, to have a profitable customer-focused culture, with tremendous business performance impact. We examine below how these two companies are changing – or in Ryanair’s case, perhaps not.

 

 Analysis and Lessons 

Leadership Roles and Styles … Culture Change … Profitable Customer Focus … Business Performance … Opportunity Thinking … Strategic Thinking … Concept Thinking … Creative Thinking … Business Thinking … Customer Thinking

Those Ryanair ‘horror stories’

One recent report of Ryanair’s attitudes to customers was about a customer complaining about been ripped off by being charged £4.20 for a cheese-and-cracker snack. The flight attendant retorted that these prices allowed passengers to get cheap flights, and then added a few swearwords such as “F*** you” at no extra charge. 

Other stories over the years included Ryanair staff making no effort to help an elderly lady in a wheelchair onto the plane. Her daughter and a fellow passenger had to carry her up the stairs onto the plane whilst staff ignored them.

Then there was the surgeon whose family had just died in a fire. Ryanair charged him 188 Euros to change his flight after the tragedy despite been informed of the distressing cause of the flight change.

EasyJet spots a Strategic Opportunity

The remarkable thing about Ryanair’s outstanding growth is that its scandalous reputation had very little impact on business performance – until Carolyn McCall took over at easyJet. Ms McCall spotted an opportunity (good Opportunity Thinking) to differentiate easyJet from its low-cost rivals such as Ryanair (good Strategic Thinking).

She saw that the time was ripe for taking advantage of consumers’ distrust of many big businesses, especially in the finance and energy industries. Ryanair provided that golden opportunity. Ms McCall reckoned that if she could change the culture at easyJet to be more customer-focused then customers would flock to their planes. And this is what happened. Even business customers have appreciated the change, which has also improved easyJet’s profitability.

 Changing Culture to be more customer-focused

An old Irish request-for-directions joke has the punch-line, “Oh, I wouldn’t start from here”. This is Ryanair’s biggest problem. It has an awfully long way to go to change its culture from being openly customer-hating to being customer-friendly in attitude and behaviour.

Mr O’Leary has stated that Ryanair will catch up in less than six months. But since their starting point is the delusional “We’ve always had good service on board”, it could take many years to effect and embed change. This is a view shared by many City analysts, hence the poor share performance. EasyJet began its transformation more than two years ago.

Ryanair has a long way to go

A strong indication of how long Ryanair’s journey will be to change its culture was provided by Mr O’Leary himself. His recent reported words: “We should try and eliminate things that unnecessarily piss people off” can be interpreted as meaning “It’s fine if we make money by pissing people off, but if we don’t then try not to do it if you can”.

And a press advertisement saying “Thank you … from Ryanair”, which was intended to show the company’s new customer-loving nature, made no mention of a change in attitude. It even highlighted the problem by promising “quiet flights” in early morning and late evening, implying that customers on flights at other times would continue to suffer irritating announcements.

How easyJet jumped on the opportunity, Opportunity Thinking

The start point for seeing opportunities is getting into the right frame of mind, the right way of thinking, being ready to spot opportunities when they come along. Ms McCall was in that Thinking Style when she saw the opportunity to give passengers allocated seating, at a small charge. Customers lapped it up. This is a prime example of the Concept of Profitable Customer Focus – finding ways of improving customer satisfaction whilst also improving profitability. A way of thinking which requires Concept Thinking, Creative Thinking, Business Thinking, and Customer Thinking.

Leading by example

 

One of the seven key Roles of Leadership is to act as a role-model for staff attitudes and behaviours. Organisations usually reflect their leaders, so it is hardly surprising that Ryanair staff model the behaviour of their leader, Michael O’Leary.

Carolyn McCall is far more image-savvy. Media shots show her as a friendly person, agreeable, trustworthy. We can’t help feeling that it is proving much easier for her to get easyJet to change its culture to be more customer focused than it will be for Mr O’Leary. And no doubt this is one reason why Mr O’Leary is reported as planning to stop being the public face of the airline.

 
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The Story

October 2013

 

Can Burberry’s new chief flex his thinking from
Design to CEO?

"Burberry, a whole-brained 600% success story - but can Ahrendts’ successor be equally flexible?” 

Angela Ahrendts developed a whole-brained culture at Burberry which, together with her leadership skills, contributed to the company’s outstanding business performance. Shares have risen an amazing 600% in the last five years.

In mid-October Ms Ahrendts announced that she was leaving to join Apple as their stores chief. Burberry’s Chief Creative Officer, Christopher Bailey, would take over the CEO role, in addition to his chief designer role, when Ms Ahrendts leaves. Burberry’s shares immediately plunged 8% on the news and have yet to recover so far (10% below FT-100 performance).

We examine the City’s concerns about Mr Bailey’s ability to flex his thinking skills to embrace the full range of whole-brained thinking required for the CEO role.

Key points

Can specialists make
good CEO’s?

It depends on their thinking range

Many City analysts see the succession as highly risky. CEOs don’t normally have split functions and Mr Bailey is seen as a design expert with little known strategic or business skills. This raises the very important question: do specialists make good CEOs? We discuss the pro’s and con’s of this unusual  succession plan which is actually based on a whole-brain thinking culture (again unusual).

Whole-brained Leadership and Culture

... right across the business, in every department

Under Ms Ahrendts leadership Burberry’s shares have increased 600% in five years, a fantastic performance compared to the FT-100’s 57%. This success is largely due to sound Strategic Thinking, Controls Thinking, and Design Thinking. Like Apple’s Steve Jobs and Sir Jonathan Ive (chief designer) Burberry’s Ahrendts and Bailey are both control freaks. They are also both strong People Thinkers.

But this super-performance is also due to Ms Ahrendts’ driving of a culture that promulgates whole-brained thinking right across the business, in every department.

 

 Analysis and Lessons 

Strategic Thinking … Customer Experience/Thinking … Controls Thinking … Design Thinking … Whole-brained Culture … Business Thinking … Leadership Thinking … Evaluative Thinking … Intuitive Thinking … People Thinking … Creative Thinking … Task Thinking … Organisational Design ... Organised Thinking … Visionary Thinking … Detail Thinking … Future Thinking … Consequence Thinking

Strategic Thinking and Customer Experience

 

Under Ms Ahrendts’ predecessor, Rose Marie Bravo, Burberry had expanded rapidly but had lost control of the brand, the classic check even being worn by football supporters. Ms Ahrendts switched Burberry’s strategy to be much more integrated, taking full control over design, manufacturing, retailing, and pricing. She invested many £millions buying back licenses and regaining brand authority. 

This revised business structure allows far greater control over the brand (Controls Thinking). 68% of Burberry’s sales are made in its own shops, specially designed to create an appealing customer experience. Store architecture is pleasing, staff are customer-friendly, and bands sometimes play to add to the ‘entertainment’ of trying on the products (Customer Thinking).

Whole-brained Ms Ahrendts

 

While Ms Ahrendts’ first passion is design (Design Thinking), she is not a design expert. But she is very strong in Business Thinking with a fine grasp of finance. She has been described as a ‘would-be designer turned businesswoman’. 

On only the second day in the job she ordered all divisions to cut the number of items they produced by 30%. She expanded the brand range into luxury handbags, shoes, sunglasses, and accessories whilst staying true to its iconic “Burberry classic check” pattern.

On People and Leadership Thinking, we quote her saying: “I realised how vital my energy was to connecting and uniting people, and how they fed off my energy, and Christopher’s energy. It’s a huge strategic asset.” “I don’t use a script, it has to come from the heart.”

 Burberry’s ‘balanced’ whole-brained culture

A key part of Burberry’s success is surely due to Ms Ahrendts driving a whole-brained culture. The company tries to achieve a good balance between right-brained creative and left-brained analytical executives, and encourages every manager to flex between these two polar-opposite thinking styles.

However, as a design and marketing-led retail organisation, the company is heavily reliant on Intuitive Thinking first, supported by big data (Evaluative Thinking). One article quotes Ms Ahrendts as saying “Data tells you what happened, it doesn’t give you the foresight of what’s coming”.

Can Mr Nice Guy flex his thinking to be a whole-brained Leader?

One report headlined Mr Bailey as Fashion’s Mr Nice Guy (People Thinking) and questioned his unproven Strategic Thinking skills. This, together with a reported lack of formal business education and his predominance in Creative/Design Thinking skills, are probably the main reasons for the share price collapse on news of the succession.

But other reports mention his ability to talk about units sold and his sound answers to questions on strategy and share price. He has also extended his Design Thinking skills to revamping the company’s structure (Organisational Design) which indicates good Task Thinking ability (Organised Thinking). He is also known as a Control freak, another thinking style within the Task Thinking quartile – the polar opposite quartile to Visionary Thinking.

A lesson from history?

Isambard Kingdom Brunel

Brunel was another design specialist, a Design Engineer. But whilst most of his projects were highly successful designs, he came a proverbial cropper with his final grand design, the huge liner Great Eastern, capable of carrying 4000 passengers. This over-engineered ship, with its double-hull, almost bankrupted the master designer.

Great Visionaries also need Detail Thinking

 

Brunel envisioned the Great Eastern to take a large slice of business in trade with the far east, going non-stop around Cape Horn with the extra coal capacity needed. Unfortunately, he failed to take into account the effects of the soon-to-be-opened Suez Canal (Future Thinking, Consequence Thinking).

The Great Eastern was too big to go through the canal, which meant that its USP (unique selling proposition) was quickly redundant (Detail Thinking). The ship never made money throughout it life, even as a cable-layer. Business-wise, it was a financial disaster. Designers are not always equally skilled in Business Thinking.

 
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The Story

September 2013

Getting people to change when they don't see the need to change 

"A classic Change story - reforming the dysfunctional UK education system” 

Michael Gove, the UK Government Education Secretary, is pushing forward his plans for reforms under a hail of resistance from what he calls the Blob, the educational Establishment. The Blob, which includes the teaching unions, sees no need to change, despite a recent OECD report ranking the UK 22nd in literacy and 21st for numeracy for 16 to 24-year-olds in 24 developed countries.

This Story highlights two opposing views on the purpose of education and how the performance of pupils and teachers should be measured. We examine aspects of the Change Thinking Process and the dire need for more Controls Thinking and Evaluative Thinking for monitoring and controlling performance.

Key points

Steady Decline over a whole generation

The OECD report is just the latest of many studies over many years which have pointed out the declining levels of education in the UK compared to other major countries. Business has long complained that school leavers are not equipped for work. At the same time, we have record levels of pupils achieving record results in exams. Clearly there is a glossed-over mismatch in how performance has been measured stretching back over 25 years or more.

What is the purpose of education?

The Establishment feels that it is wrong and dangerous for children to be subjected to numerous testing and be forced to learn academic basics. In their view, children ought to enjoy school and be free to express themselves and learn by freeform group discussion. Learning by rote stifles their personality development, happiness, and creativity, they claim.

We present some simple but shocking examples of the result of that approach from our own experience of communications with young people when they have joined the world of work.

 Who is in the best position to drive Change?

On the face of it, the only person who appears to be driving the much-needed change is the Education Secretary, Michael Gove. Most of the other stakeholders with any power, ie the teachers, the teacher unions, the universities that teach the teachers, the local authorities, the main Whitehall education department groups, and even the inspectors, Ofsted, seem to be content with the status quo. We examine who can help Mr Gove.    

 

 Analysis and Lessons 

Change Thinking Process … Awareness of need to change … Controls Thinking … Evaluative Thinking … Facts Thinking … Self-Delusion … How do people learn? … Understanding Concepts ... Concept Thinking 

Performance ranked against other countries

The OECD report ranks the UK 22nd in literacy and 21st for numeracy for 16 to 24-year-olds in 24 developed countries. By any definition of performance and purpose of education these statistics are alarming, or should be. Japan comes top in literacy, followed by Finland, Netherlands, and South Korea. Though not listed in the OECD report, it has long been known that Singapore’s pupils come near top of any list in Maths ability.

In addition, the UK is the only country where 55 to 65 year-olds are more literate and more numerate than their grandchildren. This must be proof, if any were needed, that the UK education system is failing to develop its performance, and has actually worsened. No wonder we have lost ground against peer countries.

Performance of young workers
… three shocking examples

Here are three simple, but alarming, examples of the abilities of workers fresh out of education that we have observed personally. No doubt readers can add their own ‘shock’ stories.

At a Waitrose supermarket, on different occasions, we asked young assistants for some slices of ham to be carved ‘on the bone’ and a portion of cheese. Simple tasks, you would think. Unfortunately, the slices of ham came out in a wide variety of thicknesses, one being an incredible half-inch thick. Equally amazing was the fact that this youngster saw nothing wrong with his performance. He clearly had no grasp of the concept of a ‘slice of ham’ or thought about how this food could be eaten.

The assistant on the cheese section had asked us how much of a round flat cheese we wanted. We said “Oh, about 30 degrees please” which left the girl totally confused. It was obvious that, despite being taught basic geometry at school, this youngster could not relate the concept of angles to everyday circular objects. We had to give instructions such as “Move your knife and I’ll tell you when to stop”.

 The long and short of it

The third case came in a photographic shop when we wanted some large size pictures printed. There was a sample on the shop wall and we enquired how much that size would cost. All the young assistant had to do was look at the sample and check it against a range of sizes given in their leaflet.

Unfortunately this task proved beyond her and she got completely befuddled by the concepts of height and width. We could not help exclaiming, “Do you mean that you can’t see that that distance (the width) is bigger than that one” (the height)? Prints are normally in a ratios of about 14:11 or 16:12. Again this is an example of young school-leavers failing to translate whatever maths or language education they received to simple work activities. Worrying.

First stage in the Change Process

The first stage in any Change Process is developing awareness of the need to change. Mr Gove is doing a decent job here helped by the OECD reports and the introduction of free schools. He is getting people talking about poor performance and generating discussion about causes and ideas for solutions. 

The barriers to change are still great. There are too many rigid opinions, entrenched mind-sets, and jobs to protect. Mr Gove’s idea of performance-related pay for teachers is a huge threat to union power despite being successfully deployed in other high-performance countries such as Singapore.

Everybody’s talking about it

The more discussion there is, reported in the media, the more these various resistance groups will need to ‘defend’ their positions, publicly. It will become increasingly more difficult to justify why an underperforming teacher who has no real interest in teaching should be retained in employment. And controversial ideas such as placing cameras in classrooms will give poor performing teachers, and unruly pupils, no scope for avoiding performance measurement.

Facts Thinking, Controls Thinking, and Evaluative Thinking

One other key driver of change is getting the facts out in the open and ensuring that the facts are fully explained and interpreted correctly. The OECD report clearly shows that the method for measuring performance in UK schools, ie by final exam results, is flawed (poor Controls Thinking, Evaluative Thinking). Those ‘fantastic’ exam results do not match up with the OECD’s methods, or anecdotal stories such as those above. The self-delusion has to stop. Mr Gove should get as many facts out in the open as possible.

 How do people learn?
What is ½ divided by a ¼?

This is one of the big issues at stake, with Mr Gove and the Establishment having strongly opposite opinions. But one aspect is clear to us: people learn best, and quickest, by first understanding concepts, Concept Thinking.

As an example, we often ask people, young and old, to do a simple maths calculation. What is ½ divided by a ¼?” The response is surprising. A very high percentage of people get it wrong, even teachers. The reason is that schools in the UK generally do not teach concepts. In this case, the concept of division. As soon as we explain what division means, as a basic concept, everybody instantly gets the correct answer. Schools need Concept Thinking as a priority. Everything else will be easier, and quicker, to learn.

 
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The Story

August 2013

Steve Ballmer’s Leadership Thinking and Roles, and business performance

Does Microsoft need a visionary Leader (like Steve Jobs)? 

Steve Ballmer announced his departure from Microsoft after 13 years as chief executive and the news  sent the group’s shares surging almost 9%. Whilst the business is still highly profitable with $77bn cash, his performance as a leader has generally been criticised by commentators and industry analysts. Phrases such as ‘past his sell-by date’ suggest that he is leading a company that has failed to adapt to the ‘new world order’ of mobile comms.

We examine Mr Ballmer’s Leadership Thinking skills and Leadership Roles capability, and their affect on Microsoft’s performance (based on media reports).

Key points

Performance is relative  

Microsoft is an immensely profitable company – making nearly $27bn operating income in its last financial year. It has developed successful products such as Windows XP, the Office suite, and the Xbox 360. However, it has been described as ‘stable and stagnant’ – a reference to its relatively poor share price performance over the past decade, under Ballmer’s stewardship.

Over the past 5 years, DOW has improved 30%, Google by 100%, Apple by 200%, but Microsoft only 20%. Even Yahoo, previously seen as a basket case, has outperformed Microsoft stock (60%) mainly due to a new leader.

Missed opportunities and not-so-successful products 

Microsoft missed getting to the forefront of the mobile revolution with poor sales of smartphones and tablets. Google developed a massive lead in online search. Despite Bing being a good product, it didn’t arrive until 2009, by which time Google had near monopoly levels of market share.

Vista operating system proved unsuccessful, with users returning to Windows XP. And the latest version, Windows 8, has also had poor reviews with its brave attempt to cater for both desktop pc and mobile users. Cloud-based system, Azure, was slow to launch and take off.

The media effectively describe Microsoft as a bit of a ‘dinosaur’, slow-moving, lumbering, ‘comfortable’, and not agile, nimble, visionary, or creative. All these performance qualities come within the scope and responsibility of the CEO.

 

 Analysis and Lessons

Visionary Thinking … Leadership Thinking … Leadership Roles …Challenging the status quo … Decision-making … Emotions Thinking ... Enthusiasm Transfer … Strategic Thinking… Future Thinking … Evaluative Thinking … Opportunity Thinking … Innovation Culture … Customer Feedback Systems … Customer Thinking … Design Thinking

Poor Visionary Thinking in the top team

Visionary Thinking is one of the four core Thinking Styles. It covers several different, but associated, specific Thinking Styles. It includes ‘seeing’ the future, even seeing how to shape the future. One media comment said Mr Ballmer lacked Steve Job’s intuitive sense of what consumers would want next. Whilst Mr Ballmer is hardly alone there, this does point to a major problem if his top team lacked this core Thinking Style (as results have indicated).

Mr Ballmer had dismissed the competitive threat to Microsoft of the iPhone (he said it had ‘no chance’ in 2007). This turned out to be poor Strategic Thinking, Future Thinking, Evaluative Thinking. The result is that Windows today has less than 4% share in smartphones.

Ballmer’s improved Leadership Thinking and Leadership Roles (came too late)

Reports suggest that a key reason for Mr Ballmer stepping down could be an admission by Microsoft’s board that the company lacks the leadership skills (Thinking and Roles) needed to steer it into the mobile device era. Ironically, Mr Ballmer had recently ‘taken the lead’ (rather belatedly) and restructured the company to be less siloed, more communicative, and more nimble. Major decisions would now be driven by the CEO, as it was by Steve Jobs at Apple.

Challenging the status quo and making key decisions are two of the most important Leadership Roles. Microsoft’s previous structure, based around their core product areas, produced fiefdoms that constantly held back innovation and progress. Innovation Culture was hampered by organisational design – poor Design Thinking.

Emotions Thinking
not being transmitted
to others

Mr Ballmer is famous for his fiery and passionate speeches at company presentations (described in one article as ‘manically leaping and screaming across the stage’). Unfortunately, we have seen little evidence in recent reports that this enthusiasm and ‘love’ for the company is transferred to staff, or customers. Few people queue to buy Microsoft’s products. Again, this is one of the key Leadership Rolesenthusiasm transfer.

Potential Failure of Strategic Thinking, so far

Microsoft’s biggest challenge is to deal with its success in the corporate world (but with diminishing use of desktop pc’s) and develop better, or new, technologies for consumers. Classic SWOT Analysis. Media reports, and share price performance, suggest grave concerns in this vital area of Strategic Thinking.

Poor Customer Feedback Systems

Microsoft is a huge company of over 100,000 employees and several different product areas. Unfortunately, this size has disadvantages when it comes to customers, or potential customers, trying to make contact with the company. In our experience, our only contact with Microsoft is a little window that opens up regularly on our screens asking us if we would like to tell Microsoft that we have had a problem with their software. This is a one-way communication we decline. A telephone number, or simple-to-use responsive email system, would be far more useful to us. Poor Customer Thinking.

Lack of Opportunity Thinking and Design Thinking

In addition to missing out on the vast opportunities presented by mobiles and social networking, Mr Ballmer refused to make Office tools available to non-Microsoft device owners, thereby missing a potentially huge profit-making opportunity as well as a good-will PR opportunity. 

Microsoft could also be missing out on designing Office for mobiles. This has allowed a tiny start-up company to develop a word processor app specially for mobile devices, called Quip. This entrepreneurial company has just raised $15m from investors who do see the opportunity. Quip reformats words and layout to fit perfectly onto a device’s screen, regardless of variations in size. Good Design Thinking and Opportunity Thinking – by the start-up.

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The Story

June-July 2013

 The Problem-Solving Process still stuck
at Stage 1 

“The Problem-Solving Process - a classic example of chaotic thinking: the NHS Problem 

The NHS ‘problem’ is a classic example of failing to identify, and work through, a stage-wise Business Thinking Process. In the case of the NHS, if we assume that we should be working through a Problem-Solving (Thinking) Process, then the reality is that the authorities are still stuck in the initial stages, with occasional stabs at ideas for chaotic solutions.               

In this article we examine the Problem-Solving Thinking Process and apply it to the NHS situation. We will see that whoever is responsible for solving this problem (and it is unclear who this is) appears to be stuck in the initial stages, ie ‘Define the Problem’, without being aware of it. There is clearly a very long way to go.

Key points

Hospital care scandal exposed by whistleblower  

The NHS has been in the news for the past several years with plans for reform, but even more so since a whistleblower opened a can of bad worms at a Mid-Staffs NHS Trust hospital. “Hospital whistleblower hounded out of town” was one headline, after an enquiry exposed hundreds of deaths caused by poor care. Stories of further abuses, problems, enquiries (at least four, all inconclusive), and knee-jerk ideas for solutions have come thick and fast ever since. Poor Strategic Thinking by NHS leadership is emerging, along with several other Thinking Styles.

Who is in charge of patient safety?

The watchdog should be the Care Quality Commission. Unfortunately, this body also hit the headlines when it was revealed that they had suppressed a report into their own failed inspections. So this raises the question, who watches the watchdog? Classic Controls Thinking gone wrong.

“What’s the Problem?”
- the first stage in the Problem-Solving Process

“The health fiasco is becoming contagious”. This was a headline in May 2011 (two years ago). The article included a telling line: “The health secretary has never explained what problem he wanted to solve by handing most of the budget to GP’s, by fragmenting decision-making and encouraging a competitive free-for-all”. This is the essence of this case study, a failure of the thinking process required to Define the Problem, a key thinking  task most professionals find challenging.

 

 Analysis and Lessons

Problem-Solving Thinking Process … Define the Problem … Analyse the Causes … Create ideas for Solutions … Strategic Thinking … Controls Thinking … Patient Feedback System … Big Picture … Concept Thinking … Evaluative Thinking … Process Thinking … Business Thinking … Opportunity Thinking … Facts Thinking … Analytical Thinking … Leadership Thinking 

The crucial first stages of the Problem Solving Process

Problem-solving at its most basic level follows a stage-wise thinking process starting with ‘Define the Problem’ then moving on to ‘Analyse the Causes’, then ‘Create ideas for Solutions’, etc. However, as Albert Einstein one said, “When you are courting a nice girl an hour seems …” [Sorry, wrong quote, - that was his theory of relativity.] He also said: “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions”.

Albert meant that the key to successful problem-solving lay in the initial stages of clarifying or defining the problem, rather than searching for unfocused ideas that may not deal with the real problem. When facilitating live-issue problem-solving events we find that most people have difficulty with these initial Define and Analyse stages, especially in Defining the Problem.

The first stage (Define the Problem) is actually three steps

The NHS has a number of ‘identified’ problems and various groups constantly announce ideas for ‘solutions’ such as “Make patients pay for appointments”, “Let patients rate doctors”, and “Transparency is cure NHS needs”.

The problem with ideas like these is that they deal with particular issues and don’t get down to the real problems or even real causes. And the reason for this is that ‘Define the Problem’ is itself at least a three-step thinking process.

Step 1: State the problem as you see it

For the NHS, this thinking action will bring forth a whole pile of ‘problems’ and faults that most people have experienced. Here are just a sprinkling of headlines: “Surgeon lied to patient that he had removed her brain tumour”. “Cancer victim told to suck ice cubes by GP” [a failed diagnosis]. “A&E told girl with broken leg to go home and keep trying to walk on it”; “Nurses too busy to provide basic care”.

Everybody has a story from their own experiences of GP’s and hospitals. But in fact these negative events are fairly rare and most people probably rate the NHS service reasonably highly. We say ‘probably’ because one major cause of the problem/s is an extremely inefficient and ineffective patient feedback system. Asking patients for their opinions whilst still on the premises where they are easily identified guarantees positive ratings.

Step 2: Take an Overview

This means taking a few steps back from the problem/s and trying to see the ‘big picture’, to see the problem/s in context. For the NHS this will mean taking both a strategic view (long term Strategic Thinking eg “What sort of health service should we have?”, “What are the threats?” etc and Concept Thinking, eg “Does the NHS mean prevention or care?”) and operational (eg Evaluative Thinking, Concept Thinking, and Process Thinking at the very least to be able to understand the problems, where they occur, and how things are connected, etc).

It also requires Facts Thinking, including the interpretation of facts. The whistleblower we mentioned earlier was ‘hounded out of town’ by residents angered by the subsequent closure of their hospital. The compliant community were actually part of the problem.

The UK Government has the highly visionary idea of selling NHS expertise to the rest of the world. This appears sound Business Thinking and Opportunity Thinking (the London Olympics opening ceremony). However, Evaluative Thinking on this idea would need to consider concerns that the NHS system is already overstretched coping with its home needs, especially in A&E. 

Step 3: Re-define the Problem

When the whole ‘big picture’ has been thoroughly observed, described (Description Thinking), and analysed (Analytical Thinking) and your team’s ultimate Goals identified and agreed (Strategic Thinking), you can now start to clarify and define the problem, or problems, that are preventing the achievement of your objective/s. Your team can now prepare ‘Problem Statements’ to take to the next stage (Cause Analysis).

The NHS has clearly not been following this Business Thinking Process. Probably because there is no single Leader driving the process (Leadership Thinking) and there are too many organisations involved, each with their own interests to protect. Next patient please.

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The Story

May 2013

 A great source of Ideas and Innovations 

Ideas from visiting other countries – a trip to California 

Part holiday, partly a creative investigation, we took a two week trip to California and Las Vegas. Travel broadens the mind, and, if receptive, inspires creativity. We examined what ideas we could bring back to the UK. 

San Francisco, Yosemite National Park, Carmel, Big Sur, Hearst Castle, Los Angeles, Death Valley, Las Vegas, and the Grand Canyon all provided food for the mind and a wide variety of experiences. And innovative Customer Experiences (Customer Thinking) feature largely in this report.

Key points

Creativity galore

 

California has inspired a great deal of creativity, from the 60’s music such as Hotel California by the Eagles to the present day entrepreneurial Silicon Valley. 

We found a few negative aspects, such as the hour-long queue at immigration controls at San Francisco airport – the US clearly places very high importance on Homeland security. But there were many interesting ‘ways of doing things’ that the UK and Europe could emulate, from superior service in restaurants, delightful shopping malls, 24 hour pharmacies, to highly effective traffic management systems.

The ultimate customer experience  

The Universal Studios Theme Park in Los Angeles – a brilliant idea our own Pinewood Studios should copy. Wow-factor Plus. Shaken, stirred, exhilarated – great fun. A great experience based on one simple idea.

 

Creative Examples we experienced en-route: Analysis and Lessons

Design Thinking … Customer Experience/Thinking … Business Thinking … Imagination Thinking … Controls Thinking … Creative Thinking … Planning Thinking … Visionary Thinking … Concept Thinking

San Francisco – a hilly city with no handbrake!  

You could have warned us, Hertz. 

Our hired car, a Chevrolet Malibu, was very easy to drive but had one odd quirk – the handbrake was actually a kick-footbrake, with just one control, off or on. Unfortunately, for automatic transmission drivers and police cars chasing criminals, San Francisco has a lot of hills. Hill starts can happen at every junction. The Malibu was clearly not designed for San Francisco (poor Design Thinking?).

After initially rolling backwards almost into the car behind, we improvised by learning how to control the brake with the left foot (very awkward) whilst using the right foot for the accelerator. If there is a better way, Hertz didn’t mention it to us.

Great dining experiences

Wurlitzer juke box - the iconic image of America

Within a short walk of our hotel near Union Square were three excellent restaurant experiences each serving meals from breakfast to dinner. Each had their own distinct character and interest. One was a near-replica of an Italian restaurant shown in The Godfather, one was a classic ‘American Diner’, and the last was a replica French Bistro. All had queues at the door. Excellent optimisation of Business Thinking and Customer Thinking.

The Diner was packed with things to look at, including a shiny old juke-box and a vintage car. We are pleased that a budding entrepreneur has decided to open a series of Diners in London – if they are anything like Lori’s Diner in San Francisco we are sure they will be successful.

And, like most restaurants in the USA, service is excellent because a large part of staff’s income derives from the customary 15-20% tips arrangement.

Great shopping experiences

The Farmer’s Market has an indoor and outdoor set of shops and stalls, all of which impressed with the quality of products. From fantastically tasting freshly-prepared fruit juices to freshly-made smoked salmon sandwiches. “Like to taste our cherries?” – they were so delicious it was impossible to resist buying them. And the musician playing a cello added to the many interesting customer experiences.

The Planetarium – really opened our eyes

... enormous potential

San Francisco has an excellent Science Park with a digital Planetarium. We instantly recognised that this system has huge creative potential. The massive screen and laid-back seating could literally blow your mind and make you feel that you are floating or flying around a huge scenic landscape, or space-scape. All that is needed is the imagination to create a story to match the screen’s vast potential. Imagination Thinking required.

Yosemite National Park 

When you first enter the main valley of this wonderful national park from the south-western entrance the only word you can say is “WOW!” Breathtaking scenery. A huge valley enclosed by steep mountains, one has a 3600 feet vertical face, El Capitan. The Park authorities are to be praised for maintaining the grandeur and wonderful ‘original’ customer experience. Most commercialisation is kept outside the park areas. The one large hotel inside the park, the Ahwahnee, is an absolute gem. Its rustic design is a perfect fit in a park of enormous sequoia trees and mountains. Good Controls Thinking.

Carmel, a toy-town

 

This was our first impression of the quaint small town on the west coast near Monterey. Most buildings are one or two storeys high, as they are in most of the towns we saw in California. But in Carmel, virtually every building in the main streets had its own unusual character – one had a thatched roof with intricate designs! Interesting Design Thinking by the town planners.

 Innovative road signs/directions

 

We first noticed the odd road/direction signs in California when driving to, and in, Carmel. On the main highways the exit direction signs are mainly the names of individual streets, rather than areas or even towns. This system is fine if you have detailed street maps of every town you want to visit.

But is highly confusing if you simply want to know which direction you are going in and which exit to get off the main road to go to, say, Carmel town. In one case we found we had been travelling in the wrong direction because there were no road signs showing the direction we were going in. Some large towns had over six ‘exit’ signs from the main highway. No Centre Ville signs here.

On the plus side, the system of clearly flagging up the name of every street at junctions is extremely useful for drivers. We often find in the UK and Europe that it is very difficult to see street names at junctions. Good Creative Thinking.

 Innovative traffic management

 

 Like many American towns and cities, Carmel is designed as blocks of straight roads with junctions at every cross-connection. But instead of traffic lights which would slow up the traffic, the planners have placed ‘Stop’ signs at the entry points at most junctions. The effect of this is to cause every driver to stop, momentarily, whilst checking whether it is safe to cross the junction. The first driver seen to be ready to move forward took precedence over other drivers just arriving at the junction.

This system worked extremely well, with an almost “After you” driving culture clearly established, even in San Francisco. We were also amazed at the lack of vehicle horn noise. Compare that with many European cities, and especially cities and towns in India where horn-pressing seems obligatory. 

Big Sur – like 60 miles of Cornish coastline 

Called Big Sur, California’s Planners have created one of the world’s longest and most attractive and romantic roads. Skirting the Pacific coast for over 60 miles, drivers encounter a virtually continuous stream of picturesque rocky coast with high cliffs and sandy bays. However, one of the most noticeable features is the lack of commercialisation, and people, which of course adds to its romance and beauty. Brilliant Planning Thinking. Let’s hope nothing changes. 

Hearst Castle – surely every man’s dream! 

Immortalised in the epic movie Citizen Kane, the media tycoon William Randolph Hearst spent over 20 years building his dream home, a ‘castle’ on his ranch on the west coast near Cambria (good Visionary Thinking). His home has been kept as a shrine virtually as he left it, not quite finished, when he died. Again, this is a terrific customer experience, extremely well designed and controlled. It made us want to find out more about his life and how he developed that amazing entrepreneurial spirit and incredible vision for his dream home. He impressed many well-known people and film stars with his welcome, including Winston Churchill. 

Los Angeles – Beverly Hills, Hollywood 

Los Angeles is a huge sprawling conurbation with distinct areas with their own characters, such as two extremes, Beverly Hills and Hollywood (pronounced HOLLYwood, as if to emphasise its commercial roots as the capital of the cinema industry).

Beverley Hills has the largest area of fabulous real estate we have ever seen. If you’re interested in houses, you can spend hours just driving around the dozens of wide streets full of individually-designed small or medium-sized homes. Some avenues are lined with palm trees, some with gorgeous purple-flowering trees. Stupendous Planning and Design Thinking. It is easy to see why so many film stars took up residence here.

Hollywood, on the other hand, is now tacky and not a pleasant place to walk around for tourists. This is poor Planning Thinking by the authorities. It does, however, have one gem – a museum devoted to Hollywood film memorabilia, curiously not well attended. It includes items and the story of Max Factor, the inventor of make-up. Again, a terrific entrepreneurial life story, well told. 

The amazing Universal Studios experience 

We spent a full day visiting a range of experiences based on well-known Hollywood films. A tour of the studios was very popular but well worth the 45 minute queue to get in. This tour included a genuinely scary 3D ‘ride’ through a tunnel where our bus was ‘rocked’ by King Kong fighting dinosaurs; an earthquake in a subway; and a slightly tame-by-comparison encounter with a Jaws-like shark.

Other notable experiences were:

  • JurassicPark - which included a boat ride in a dark tunnel where the boat plummeted 45 feet down a steep slope to land in a pool of water. Great, scary fun.
  • Transformers – a white knuckle ride in a ‘car’ that zoomed forward at 45 mph then reversed at odd angles to avoid scary robotic things.
  • Water World – a brilliant replica of the fort in the sea in the Kevin Costner film, which included a dramatic entrance through flames of a small aeroplane that skimmed across the water and crashed just a few feet from the audience. Another terrific customer experience based on movies. We would love to see Pinewood Studios attempt this concept in the UK.

Death Valley – hottest place in America 

Well worth the trip, the complete opposite experience of ultra-busy LA and Las Vegas. It was about 95 degrees when we visited but, as it rains only 2” of water a year, this heat was strangely pleasurable, a warm caress in a very dry atmosphere. The emptiness and the magnificently-coloured rock landscapes are the prime draw – and the feeling of peace and quiet and open skies, especially on the usual starry nights. Another unforgettable experience. Our hotel had a lush green grass golf course - in the middle of a desert!

Las Vegas – handy for a plane/helicopter trip to the Grand Canyon 

Las Vegas is the conference centre of America – just as well considering the thousands of rooms in each of these enormous hotels. But the interesting thing about Las Vegas is how these hotels have been designed. Most of the big hotels are created around a theme. For example, the Venetian has gondolas being punted around a canal; Paris has an Eifel Tower; Luxor has a pyramid and Egyptian statues.

This concept has no limits. We were instantly tempted to start designing a new hotel or restaurant based on themes. A great idea with huge potential. Good Concept Thinking.

But of course Las Vegas is primarily a casino town and every big hotel is designed around its huge casino. A combination of Business and Design Thinking. An enormously popular concept, with certain people.

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The Story

April 2013

 Most customer feedback systems are poorly designed and operated, especially in big Pharma and the NHS

We have evidence of a potential block-buster drug being missed

“Customer Feedback Systems - how do yours compare with the Pharmaceutical industry and the NHS?” 

The once highly-respected NHS has been lambasted in the media recently as whistleblowers bravely came forward to publicise malpractices and avoidable deaths at many hospitals. The root cause of the problem is the lack of a viable customer feedback system. And this, in turn, has to be the fault of senior management.

The Pharma industry also has a major feedback problem, but to a lesser extent. In this case they also risk missing out on valuable ideas for much-needed new drugs. We quote a potential block-buster being lost – a drug that could prevent the common cold occurring.

But the same problem occurs in many industries and organisations. Feedback systems are generally badly designed and operated, despite being an excellent source of new ideas and improvements. We examine what goes wrong.

Key points

The NHS’s virtually non-existent feedback system

Whistleblowers have come forward to publicise gross malpractices and dilatory patient care at a large number of hospitals. Stories of uncaring nurses and avoidable deaths abound, including calls for resignations at top level. It has become apparent that complaints from patients and their families have been ignored, at least at the local level. Notable by their absence were immediate apologies from NHS senior management and plans for a thorough across-the-organisation investigation.

How do you tell a Pharmaco that you may have discovered a block-buster new drug? 

Most pharmaco’s understandably have a no-name policy to protect their staff from activists. But one significant negative side-effect of this policy is that it is very difficult for customers (patients) to find out who to contact to feed back potentially valuable data. The pharmaco’s don’t help; their customer feedback systems are often difficult to see and navigate. It almost seems that they don’t want to hear anything from their customers; they must be assuming that most communications will be complaints!

 “Where are your customer feedback forms, please?”

We frequently ask this question to customer-facing staff of organisations when we spot potential improvements, which occur regularly. The usual response is “Sorry, what do you mean?”, which instantly tells us that these feedback systems don’t exist or are hidden in a drawer somewhere.

And when we ask telesales staff how customers can give feedback the reply is invariably “Oh, you can give me your feedback” – a pointless exercise as they are usually part of the problem/improvement area we have identified. At best, we mange to extract from staff an “address you can write to”.

 

Analysis and Lessons

Feedback Systems … Overview Thinking … Customer Thinking … Design Thinking … Business Thinking … Concept Thinking … Opportunity Thinking

NHS whistleblower forced to move town 

 

This was the shocking result of one whistleblower who encountered threats and vandalisation after exposing the scandal of neglect and patient abuse in one NHS trust. She was accused of lying and told that there were no unnecessary deaths – despite an enquiry that had validated her claims.

What this means is that the culture of omerta (code of silence) is so deeply entrenched in the NHS that many of its members, even at management level, cannot flex their thinking to see the big picture (Overview Thinking) or the needs of patients (Customer Thinking).

Feedback System designed to fail

 

Who will do something?
Who will take the lead?

 

Once this level of job-protection culture has set in, local feedback systems don’t stand a chance. The vast majority of feedback will be of complaints, which will tend to be filed without action or simply binned. Design Thinking is sorely needed here.

We know of one London hospital where outpatients regularly wait up to three hours to see a consultant despite being given a timed appointment. The so-called waiting room is a corridor, which means patients can’t stretch their legs out because people walk by. Complaints seem to have been totally ignored.

The big unanswered question is ‘How far up the chain of command do patients need to go to find someone willing and able to take action?’ Over to you, Mr Cameron.

“I’ve got an idea for a block-buster new drug – and I’m the proof it works”

Problem is, how do patients tell pharmaco’s about ideas like this? We know someone who has found that he rarely suffers from a common cold since taking one or two medicines long term. It would seem that one of these two medicines, or their combination, has a highly beneficial side-effect. If the ingredient/s responsible for this effect can be identified it is possible that this information could be worth £billions. Currently, there are no drugs on the market for preventing colds. A massive market. 

But this patient has tried and failed to find out how to beneficially feed this information back to the Pharmaco’s concerned. If he simply told his GP he would probably get nothing from it. And the two pharmaco’s themselves, like most of their rivals, have no easy communications channels with patients. Everybody loses out. Poor Business Thinking.

“We don’t have feedback forms, sorry”

Some of the best ideas for new or improved products and services come from customers – they are in a prime position to see and communicate their needs. But most organisations we encounter have highly inefficient or non-visible feedback systems. One exception is Tesco, which has a feedback form entitled “How did we do?” However, on the last occasion we tested this process we found that the form was not visible to customers – the customer services executive had to search in a drawer for it.

It seems to us that most organisations have failed to grasp the concept of feedback – poor Concept Thinking. All feedback is incredibly valuable, whether critical or positive or inventive. Most organisations see it as just complaints that interfere with their business operation. Opportunity Thinking is needed to see the business value of feedback.

Who should receive the feedback?

... and how?

Tesco’s form can be posted to a central feedback department, postage paid. Customers can also give feedback via the company’s website, www.tescocomments.com. What happens to these comments is unknown to us but the process should be a good source of ideas and complaints, provided the right people take action.

Too frequently, however, we find that feedback systems either do not exist, are not obvious, are handled at a ‘local’ level (“You can give me your feedback”), or are too onerous or vague for customers to bother (“You can write to this obscure address”).

To be effective, feedback systems need to be easy for customers and be highly visible. Feedback should go direct to a central department that has the will, and the power, to take action. And the customer needs to feel that action will be taken. Customers need to be encouraged to provide feedback.

Market Research is not enough

We tried giving feedback to one major supermarket but were curtly informed that their market research showed that customers were totally satisfied and our comments were not justified. As one of our comments (as regular customers) was that their fish was distinctly not fresh, we find it difficult to understand how this complaint could have been missed by their research.

Our only conclusion must be that normal customers do not give honest feedback to researchers. Something we have encountered (and witnessed) on numerous occasions.

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The Story

March 2013

 $6.2bn "clerical errors"

"Tempest in a teapot"

BP blames "group decision"

“How highly intelligent teams can make 'stupid' and costly thinking errors - even at board level” 

BP, and the big banks JP Morgan Chase and Standard Chartered, have recently provided classic examples of how experienced, high-intelligence teams can make simple but costly thinking errors, even at board level. We examine how this happens, so often.

Standard Chartered’s faux pas was to pass off money sanctions-breaking with Iran, Libya, etc as “clerical errors” - after already being fined $667m by the regulators. JP Morgan’s Jamie Dimon initially played down the media fuss over his firm’s $6.2bn trading loss as a “tempest in a teapot”. BP claim that one of the main causes of its 2010 Deepwater Horizon disaster was an “unfortunate misinterpretation of test data” … by a “group decision”           

Key points

Standard Chartered top team forced to apologise

The top three executives at Standard Chartered were summoned to Washington to explain to regulators the bank’s recent media statements playing down their breaking of US sanction laws. The Chairman, CEO, and Finance Director were forced to make a public apology to investors and the bank’s 89,000 staff after they had attributed money sanctions violations to “clerical errors” in a press conference, despite earlier coughing up $667m to settle allegations.

JP Morgan’s man at the top could topple

 

JP Morgan’s annual meeting comes up shortly and activist shareholders will be gunning for Jamie Dimon, the Chairman and Chief Executive. They will seek to split his roles after he initially classified the firm’s $6.2bn trading loss (due to a ‘rogue’ trader, the London Whale) as a “tempest in a teapot”. Unfortunately, it escalated into a “maelstrom in a minefield”.

 BP. It wos the team wot done it

 

BP’s Gulf of Mexico disaster could turn even more disastrous financially if the US court wins their case of gross negligence by BP. The oil major’s case may rest on their claim that a critical decision following a key test result was made as a group decision by the teams involved. In effect, their case rests on the fact that any group can (unwittingly) make horrendous thinking errors – something our research has identified many times.

 

Analysis and Lessons

Clerical Errors … Tempest in a Teapot … Group Decision-Making … Emotions Thinking … Logical Thinking … Customer Thinking … Business Thinking … Stupid Mistake … Controls Thinking … Design Thinking … Seven Causes of Thinking Errors … Why Strategies, Plans, Projects, Innovations, and Communications GO WRONG … Decision-Making Thinking Process … Overview Thinking … Facts Thinking … Risk Thinking … Clear Thinking

Standard Chartered’s top team’s thinking laid bare

Standard Chartered’s chairman claimed at a press conference that his bank’s small amount of financial sanctions-busting with countries like Iran was due to “clerical errors”. He clearly felt this to be true. Even the US regulator admitted that the bulk of Standard Chartered’s $250bn dealings with Iran appeared not to have breached sanctions. 

However, the bank agreed to part with $667m as a settlement, so we must assume that sufficient evidence of malpractice existed. And after this action there was no point in trying to pretend otherwise. Unfortunately, the top team’s assertions of innocence simply angered the US regulators again, leading to that humiliating apology.

Emotions Thinking

 

Standard Chartered are a highly respected global company. No doubt the board felt aggrieved by the US regulators’ actions and thought the claims largely unjustified. The emphasis here is feelings. Very strong feelings. Emotions so strong that they presumably clouded the judgement of the top team.

Once the company had agreed to the fine there was no logical point in attempting to deny guilt. But they did, publically, in a press conference. The top team got stuck in Emotions Thinking without even being aware of it. If they had deliberately engaged Logical Thinking they would realised that their plan was flawed.

Customer Thinking

 

As a further check, had the team switched into Customer Thinking they would surely have realised how the US regulators would react to the apparent public denial. Unfortunately, most people in business do not find it easy to switch thinking styles from Business Thinking to Customer Thinking – polar opposite thinking styles. The US regulators need to be thought of as customers - they grant licences to trade in America.

JP Morgan’s “stupid” mistake

Jamie Dimon, chairman and CEO of JP Morgan, has admitted that the $6.2bn botched trading strategy last year was the “stupidest and most embarrassing situation” he has presided over. We are not sure which aspect he was referring to but what the media will remember most is his initial claim that the trading loss was just a “tempest in a teapot”. Again, we suspect that Emotions Thinking got the better of Logical Thinking – the natural desire (emotion) to want to cover up or play down mistakes.

Controls Thinking and Design Thinking

JP Morgan tried to control the trading position but it escalated to a $6.2bn loss. We can only assume that the level of Controls Thinking engaged by senior managers before the trading loss began was inadequate. Controls need to be designed to cope with rogue traders (Design Thinking). Casinos assume that customers and staff at all levels will be tempted to cheat and they design controls accordingly.

BP’s crucial team-decision claim

BP is claiming that the key (fatal) decision following a test on the Macondo well platform was made by a group of people, unwittingly, and therefore the company should not be fined for gross negligence. It was a group decision. We examine below some of the seven causes of thinking errors made by teams or groups that our research into “Why Strategies, Plans, Projects, Innovations, and Communications GO WRONG” has identified.

 Causes of costly Thinking Errors by Teams/Groups

One of the key causes of thinking errors is unstructured thinking – failing to identify a stage-wise thinking process then working through it. In the BP case, this probably involved the Decision-Making Thinking Process by the team or teams working on the platform and remotely. Obviously we can only speculate as to what actually happened and whether the teams worked through a structured process. 

Overview Thinking and Facts Thinking 

A key initial stage in the Decision-Making Process is “Take an Overview and get Facts”. In the BP case, this would have included getting (and analysing) the facts surrounding the tests made on the cementing of the well equipment. These tests were, apparently, misinterpreted by the team/s.

There could be several causes of this misinterpretation (eg false or conflicting results) but focusing purely on the facts – Facts Thinking – requires up to 11 separate thinking actions. For example, check the accuracy of your information; check for potential alternative interpretations; be aware of your emotions. We can only guess the true causes of this misinterpretation but Facts Thinking (or the lack of it) must have played a part.

 Thinking in the wrong way

Teams need to be aware of HOW they are thinking 

Another key cause of group thinking errors is thinking in the wrong way at particular stages in a Thinking Process. In the critical BP decision-making process another key stage would have been: “Assess the ramifications of your options, including possible consequences”. A core Thinking Style needed in this case would have been Risk Thinking: “What are the risks of this option?” As we now know, the risks of getting the decision wrong were huge.

Again, we can only speculate. But we have encountered situations where the natural reaction of team members to assessing the probability of a hazard is “It’ll never happen”. This is their emotions speaking, unwittingly. They don’t want the hassle. They may be under tremendous pressure to ‘get the job done’, to minimise costs.

But to minimise the risk of mistakes, all teams need to be aware of how they are thinking and to deliberately engage sometimes polar-opposite ways of thinking at each stage of any Thinking Process. 

Just inflexible, unclear thinking by teams, not gross negligence

 

BP were unlikely to have been grossly negligent. There team/s just suffered grossly from the problems all teams can suffer from – making costly thinking errors caused by:

- failing to be aware of how they are thinking, and

- not thinking in the right way at each stage of a thinking process.

Basic requirements for Clear Thinking.

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The Story

May 2012

“PastyGate and other Government U-turn thinking calamities” 

Government (flawed) thinking is again in the news. This time it is a series of embarrassing U-turns on the March budget after voters, the media, (and Tory party donors?) forced George Osborne to think again. Mr Osborne’s reputation as the master strategist took a battering, to quote one newspaper. Whilst Number 10 tries to work out what went wrong we examine their flawed thinking about this apparently ‘trivial’ matter.

Key points of the Story

Tax on Pasties, Caravans, and Charities: Trivial Pursuits?

The March Budget put 20% VAT on hot food served in shops and on static caravans. It also removed tax relief on charitable donations over £50,000. All three measures had relatively small impact on Treasury income yet caused such a massive outcry and negative publicity that the Government had to reverse its policy.

The Treasury clearly failed to judge public (and party donor?) reaction to these policies and even stimulated media questions over the meaning of the words ‘bread’ and ‘ambient’. One paper suggested that the rate of VAT on some items could now be determined by the weather!

This is another classic case of failing to think how people could respond to plans (Customer Thinking and Consequence Thinking), or think about the core meaning of words (Concept Thinking).

 

Analysis and Lessons

Customer Thinking ... Consequence Thinking ... Concept Thinking
...
Market Research … Strategic Thinking

What is ‘trivial’ depends on your viewpoint

The Treasury believes that this whole matter is trivial compared to the £billions of cuts needed in the public sector. Absolutely correct, of course, statistically. Unfortunately, it is the customer who decides what is trivial and what is important (Customer Thinking). And in this case, the customers are the voters, the media, the Charities, and the party donors who also donate to charities. None of whom thought the matter trivial.

When hot pasties became hot potatoes

The Budget put 20% VAT on hot, and even warm, foodsold in shops. This meant bakers’ shops such as Greggs had to increase its price of sausage rolls and pasties sold ‘hot’ by 20%, which caused great consternation and almost daily media coverage. Greggs even started asking customers for ideas on how to avoid this ‘unfair’ extra tax.

What does ‘ambient’ mean, and what is bread, actually?

The Budget said that the word ‘hot’ (as in hot food sold in shops) meant being served at a temperature above ambient. This led the media to raise the question of the definition of ‘ambient’. This in turn led to the accusation that the rates of VAT that applied would depend on the weather! Clearly impractical.

The same problem occurred when the Treasury had the idea of taxing bread, and thus having to define ‘bread’. Apparently a Government team was appointed to figure out what constitutes bread from the aspect of taxation. It is hardly surprising that a U-turn was forced on this ‘hot’ issue as the Treasury realised that they were getting into a Concept Thinking mess. Clearly, they had not applied Concept Thinking to their plans, ie “What is ‘hot’?” “What is ‘bread’?” Then, after the event, “What is ‘ambient’?”

These terms, concepts, sound simple but are not that easy to describe/define in simple, clear, concise, precise, practical language. Try it. For example, is a croissant bread? And how will the temperature of a sausage roll be measured?

How could people respond?

Customer Thinking means thinking like a Customer. In this case, the Government’s customers included ‘stakeholders’ as we describe above. The Treasury now admits it spent too little time working out how to sell the policy and engage with people such as the charities to win the argument before the media ripped the policies apart.

Poor Consequence Thinking and Market Research

Tory party donors who contribute to charities are stakeholders (customers) here. Presumably, when the Treasury introduced this charity tax they thought they were clamping down on tax ‘dodgers’ who ‘took advantage’ of the tax relief system. Unfortunately, as a consequence, the charities lost donations from the rich. And, as a further consequence, it irritated charity-giving Tory party donors such as Jon Moulton who went on air (Radio 4) to say “It was a bad decision.”

It is interesting that just one day after Jon Moulton went public that he was withdrawing party funding because of this charity issue the chancellor made the following statement: “It is clear [now, in hindsight] in our conversations with charities that any kind of cap could damage donations …”  The Treasury clearly failed to adequately engage Consequence Thinking when they thought of the idea. Not to mention carrying out basic Market Research to check possible reactions of stakeholders.

Listening to reactions versus Thinking in advance

The Government can credibly claim “We are listening”. However, as one backbencher said: “There is a fine line between being seen as a ‘listening Government’ and an incompetent one. This U-turn [on charity tax], along with caravans and pasties, shows a level of ineptness in thinking and doing. This can be reputationally damaging in the long run.” Something else to think about, Mr Osborne. How will the Government be seen by voters at the next election? (Strategic Thinking).

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The Story

March-April 2012

“Petrol Panic, and How long is three months?
UK Government thinking challenges”
 

Government thinking has taken a battering lately with a string of problems emerging, many self-inflicted, culminating in disastrous local election results. The petrol panic was quickly followed by Theresa May’s debacle over Abu Qatada’s deportation due to a ‘misunderstanding’ about the meaning of “three months”. We examine the thinking behind the thinking.

Key points of the Story

Engineered Panic?

Number 10’s team, led by Tory Cabinet Minister Francis Maude, took evasive action to head off a potentially highly damaging national strike by petrol drivers. One key action was to advise drivers to stock up with fuel, even keeping jerry cans of petrol in the garages. The request not to panic was of course ignored and many petrol stations quickly ran out of supplies. One unfortunate incident hit the headlines – a mother was critically ill in hospital after she suffered 40% burns whilst pouring petrol between containers in her kitchen. The Government was accused of engineering the panic to take the electorate’s mind off other political hot potatoes.

Does May know what day it is?

This was one headline following a Home Office blunder about the deadline of three months for the radical Islamist cleric Abu Qatada to submit an appeal against deportation with the European Court of Human Rights. The ECHR said that the three months ended midnight Tuesday April 17th. The Home Office calculated three months to fall 24 hours earlier. Hence the simple question: How long is three months? Abu Qatada got it right and his appeal went through within the time limit. We look at how such a seemingly absurd thinking error could have occurred.

 

Analysis and Lessons

Customer Thinking ... Political Thinking ... Opportunity Thinking ...
Experience the Change … AdQA Communications Quality Assurance

“Don’t Panic”
said Corp. Jones of Dad’s Army

It could be argued that Francis Maude was guessing that people’s natural reaction was to panic when they heard those two words “Don’t Panic” followed by advice to stock up and fill jerry cans of petrol. The effect was certainly dramatic. Two days later we had to travel over 200 miles from South Bucks to Shropshire and every single petrol station we passed was closed – with one exception. Rather tellingly, that single station was on the sparsely used M6 Toll Motorway. We suspect Francis Maude was spot-on with his Customer Thinking – thinking how people are likely to respond to communications.

Political Thinking and Opportunity Thinking

The diversion opportunity was there and the Government took it (Opportunity Thinking). The net effect was that the strike threat was called off, after negotiations between ACAS and the unions. The Government achieved their dual objectives. This could be considered clever Political Thinking. It brought the issue right to the front of people’s minds and everybody could see the potential damaging consequences to all parties involved if a strike occurred. The union’s case (eg national wage bargaining across all employers) was weakened by the publicity and the public would not have supported it. In addition, public attention was diverted from simmering resentments such as Pastygate (VAT on hot food) etc.

Did the end justify the means?

Experience the Change

Tricky one. Putting people through an experience, even a simulated experience, is an excellent technique in Change Management. We use simulated experiences on our Change Workshops (called Experience The Change) to great effect. See Organisation Development Projects, Teamwork, Change.

The idea was good, and most of the execution worked well. But the message went just too far into the high-risk category when it came to advising the use of jerry cans! This was message over-kill. And it almost did kill someone. And whilst it achieved its immediate objectives it probably didn’t help the Government in their disastrous results in the local elections.

How long is three months?

The European Court of Human Rights in Strasbourghad given Abu Qatada three months to appeal against a deportation order delivered on 9.30am Tuesday 13th January, that is three months from, or after, that date. The Home Office interpreted this deadline as midnight on Monday April 16th. So who is right? Unfortunately, the ECHR decrees that its interpretation is correct.

How did this cringe-making Unclarity happen?

Two reasons. Understanding the meaning of words (the oft-derided semantics), and checking somebody else’s interpretation. One day AFTER Tuesday is Wednesday. One week AFTER Tuesday is the end of the following Tuesday. So three months AFTER Tuesday January 17th would be the end of Tuesday April 17th. And this is exactly how the ECHR worked it out to be. Not the end of Monday 16th April, as the Home Office calculated.

Simple Communications Quality Assurance - check originator’s meaning

In normal communications meaning depends on the recipient’s interpretation of the communication, not that of the originator. However, as far as courts go, we have a Humpty Dumpty situation where “it means what I say it means”. The mistake the Home Office may have made (and this is still unclear) is failing to check the court’s interpretation of Three Months.

This is absolute basic Communications Quality Assurance.
See AdQA, World’s first Comms QA System, our web pages on this subject.

 
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The Story

Jan-Feb 2012

“How safe are cruise ships - after Costa Concordia?” 

On 13th January the Carnival-owned cruise ship Costa Concordia hit rocks and partially sank off the Italian coast with the loss of life of 32 passengers and crew. The Italian captain, Francesco  Schettino, reportedly deviated from the scheduled course and sailed too close to the island of Giglio in a salute to the father of the ship’s head-waiter who lived on the island. A young female tour operator, Domnica Cemortan, reportedly was with the captain on the bridge at the time. We examine reports to extract valuable lessons on the safety of very large cruise ships.

Key points of the Story

Business versus Safety Thinking

Business Thinking on cruise ships appears to translate into ‘the bigger the better’. Bigger ships use less fuel per passenger. And fuel cost is a major factor affecting profitability.

Business Thinking is also about giving customers what they want, profitably. This means designing ships to be like a block of luxury apartments, piled high, packed with restaurants and many other forms of entertainment, all hopefully balanced on top of a weighty base for stability. We’ll also examine this stability aspect below.

Touristic Navigation

So-called Touristic Navigation is the idea that the customer experience is improved if ships cruise close to shore-side attractions, such as a pretty island. We’ll look at the dangers inherent in this aspect of Business Thinking and Customer Experience.

Operational Safety, Leadership, and Officer-team training

The big issue in this tragedy is that the captain apparently decided to change course from a safe route to one on which rocks were indicated on maps, and that his team of officers reportedly did nothing to prevent this hazardous action. We’ll also look at reports of evacuation panic and the collapse of command structure. It turned into an amazing ‘every man for himself’ situation where even the captain left the ship well before many of his passengers.

 

Analysis and Lessons

Business Thinking ... Safety Thinking ... Design Thinking ... Customer Experience ... Balance of Thinking Styles … Leadership Style … Innovation Thinking … Planning Thinking … Contingency Thinking … Decision Making … Logical Thinking … Emotions Thinking … Evaluative Thinking … Risk Thinking … Leaning from mistakes

Business versus Safety Thinking 

Business Thinking means thinking about profits, profits, and profits. How to maximise and grow profits. Perfectly normal, and essential, behaviour. A business won’t last long if it always loses money. Cruise ships are now designed (Design Thinking) as floating holiday resorts to attract customers of all ages with on-board activities and entertainment – to maximise the Customer Experience. This means designing ‘thin’ ships with multiple decks to provide as many cabins with windows as possible. And making ships as big as possible to maximise scale benefits, eg fuel efficiency.

But bigger ships also mean that the risk of instability is increased, eg of capsizing in storms or collisions, or via water ingress following hitting rocks. Safety Thinking gets more complex, especially if we need to include possible amorous distractions of pretty young women on the bridge! And bigger ships cost a lot more to salvage, about 50% of the build-cost in the Concordia case.

Safety Tests

Cruise ships have to undergo rigorous tests for stability, including deliberately causing the ship to list to a certain angle to check that it recovers. However, from what we read in reports, these tests are carried out in controlled conditions without being fully loaded with passengers and crew. Safety Thinking would ask the question: “What would happen in a panic situation where most passengers and crew moved to one side of the ship?”  This could well have occurred in Concordia’s case – they could see the shore as a safe haven. We have experienced this imbalance in a tourist whale-watching boat off Boston USA – “Look, there’s a whale on this side.” The list was quite alarming.

Captain and Officer-Team Training

We must wonder if training is adequate to cope with these situations. Royal Caribbean Cruise Lines, the major rival to Concordia’s owner (Carnival), are building a state-of-the–art simulator to help train officer-teams to deal with emergencies. But this is a first of this level of sophistication, we understand. So we question how officer-teams are currently trained to cope with a Concordia situation.

How did the captain apparently deviate from the set course, and his officer team ignore/miss the alarms designed to warn of route deviations (via GPS) and rocks ahead (via sonar) without some team members raising strong objections – even to the point of arresting the captain? Where were the dissenting voices in the team? Clearly this team did not have a good balance of Thinking Styles. Or was the captain’s Leadership Style too Autocratic?

Lack of Innovation Thinking on Evacuation

Cruise ships still rely on 100-year-old technology of life boats slung from wires on the sides of ships. 50% become unusable in listing situations. Offshore oil & gas platforms have far more sophisticated and effective/efficient systems due to the need for rapid evacuation. Perhaps the cruise industry can adapt the oil industry’s methods. Innovation Thinking is badly needed in this area. Especially where the captain takes so long to decide to abandon ship, as in Concordia’s case. This was a prime cause of the tragic loss of life.

Evacuation Management and Training

… lack of

The thinking and planning that allowed passenger evacuation drills to be performed many hours after departure was clearly flawed – this was poor Planning Thinking (what do, when?) and Contingency Thinking (what could go wrong?). But reports also included panic, crew members and officers not being fully trained in evacuation procedures, and even some officers not knowing how to start the engines of lifeboats!

Titanic similarities and Decision-Making

The main cause of the sinking was water ingress through a 50-metre-long gash in the side of the ship that allowed water to bypass too many of the safety doors which are used to seal the ship’s compartments. This was also the main reason why the Titanic sunk. Both ships would probably have stayed afloat had not the captains decided to steer away from their hazards moments before collision.

To steer away from danger is a natural reaction, but the wrong decision in cases like these. Hopefully the new simulators will allow captains to make more Logical, and less Emotional, decisions and Evaluate the Risks more accurately. All ships’ teams can (and should) learn from other’s mistakes.

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The Story

December 2011

“Should Marketing merge with Sales? Hot topic gets Marketers steamed up” 

The Chartered Institute of Marketing (CIM) has suggested that organisations should strongly consider merging their usually separate departments of Marketing and Sales. The idea is that there needs to be much closer alignment between these two functions as customer communications become more fragmented, social, and digital. However, this ‘merger’ will not be easy and may not be well received by either function.

This is a critical organisation design and culture change story ... and a classic customer-focus and teamworking story.

Key points of the Story

Need for greater Alignment

The CIM published a report entitled “Marketing and Sales Fusion” that advocatedthat Marketing should return to its rootsas a Sales function. Over the years this devolved into separate disciplines and most organisations have completely separate departments, with different objectives and different cultures. The problem is that the activities of the two units can easily be out of alignment which can significantly reduce their effectiveness and efficiency.

As communications channels with and between customers get ever more fragmented, and Marketing units follow suit, it becomes increasingly difficult to ensure effective integration of marketing messages. For example, we frequently do customer tests by ringing the number or looking at the website given in an advertisement only to find that the ‘sales’ person who answers the ‘phone knows nothing about the ad, or that the web link has no connection with the ad.

Big Question: Are they one team?

The idea of merging Marketing and Sales functions would seem to be logical, and indeed this has already happened in some companies selling complex high-value products. However, for the majority of  businesses we can see huge barriers to this organisational change/design. These barriers, and potential solutions, are discussed in our Analysis below. We look at the key question: can Marketing and Sales become ONE TEAM?

 

Analysis and Lessons

Definition of a Team ... One Team or two? ... (Un)common Goals & Objectives ...
Who will be Leader? ... Different ways of Thinking ... Team Balance ...
Pull yourselves together ... What affects Team Performance?

What is a Team?

The key to this merger issue may be found in examining the definition of a Team – a group of individuals that are mutually accountable for achieving the success of a common goal. Teams can be self-managed but they are more likely to be successful if they have a leader, ideally one leader.

Two entirely different teams

Our ‘library’ of Thinking Errors contains examples from both Marketing and Sales teams which invariably operate as if they rarely talked to each other. We’ve asked sales people in banks about information on posters on walls, yet frequently they struggle to give clear explanations. “Oh, Marketing put that up” is a typical ‘complaint’ 

We ran a Marketing Strategy team-building workshop for a Marketing team but it was only in the last few minutes of the day-long event that one of the group said “Why weren’t Sales invited?” There was an embarrassed silence until the Marketing Director eventually replied that he wanted ideas from his own team first.

 Different Goals, Objectives, Performance Measures

Marketing is about developing brand awareness, interest, demand, and loyalty. Sales is primarily concerned with converting that demand into actual sales. In most cases, Marketing and Sales will have completely different goals that require different objectives and performance measures.

Differences occur depending on whether a business is Marketing-led or Sales-led. Marketing-led companies, particularly those such as Coca-Cola, are heavily reliant on advertising and image to sell a product that might not come top in blind tests. However, Sales-led businesses rely more on product knowledge, personal contact, and cultivating sound relationships with customers. Rolls-Royce is a good example here, where personal Business Development contact is essential to sell aero-engines costing £millions.

Two Leaders 

Ideally, a team should have just one leader. So merging Marketing and Sales teams will create tremendous tension when deciding which of the two leaders will be King/Queen. Again, ideally, that one leader should have had education and experience in both disciplines. Unfortunately, whilst the Institute of Sales & Marketing Management has Marketing in its title, this organisation is primarily concerned with Sales education. And Marketing people tend to focus on education and job experience in Marketing.

There is little job switching between Marketing and Sales functions, primarily because they are seen as two entirely different disciplines.

Different 'Ways of Thinking'

Marketing and Sales people usually think in different ways. They have different Thinking Style Preferences. Marketing people tend to prefer Reasoning Thinking (Analytical, Facts, Logic). However, a job in selling demands good People Thinking skills (Emotions, Empathy, Relationships). These two core Thinking Styles (Reasoning and People), are virtually complete opposites. So it hardly surprising that the two professions have different teams.

However, this is not an argument for keeping Marketing separate from Sales, as we explain below.

A Balanced Team

The most effective teams contain a good balance of Thinking StylesReasoning, Task, People, and Visionary Thinking. We believe that Marketing and Sales teams should work more closely together, even if organised along functional lines. Their individual Thinking Styles would complement each other. Indeed, the overall Marketing & Sales team would also benefit immensely by recruiting more Creative Thinkers instead of relying on external agencies for ideas.

 Common Goals, Process, and aligned Objectives 

It can only benefit a business if Marketing and Sales share common goals and their objectives are aligned to achieve those goals. These would need to be very carefully developed and agreed by both functions. To the customer, there is only one process – the buying and using process. All the (separate) Marketing and Sales processes need to be carefully aligned with the customer’s buying and using process. Objectives will emerge from studying that process.

Coming together as a Team or Collaboration

We believe there is huge scope for improved teamworking, or at least greater collaboration, between Marketing and Sales teams. However, fundamental to achieving this must be a sound understanding of “What affects Team Performance” – the title of research we conduct on a continuing basis.

Our research (and team-building experience) has identified up to 50 individual factors that affect most team’s performance. These can be classified under six main categories, for example Goals & Objectives, Roles (including Leadership), and  Environment. For Marketing and Sales, two Performance Factors stand out – the (lack of) feeling of being one team, and (poor) communication. But there are many others worth close examination that would significantly improve (both) team(s) performance – and business results.

Change Readiness 

One other key Teamwork Performance Factor is essential in order to ‘fuse’ (or integrate) Marketing and Sales teams – Change Readiness. This means that each team member understands ‘Change’ (including the Change Process) and is willing to adopt new ways of working (and thinking). We believe this is best achieved through expert input (for example, to explain The Change Process, barriers to Change, etc) and going through a ‘change experience’ (an opportunity to experience the required change in thinking).

See Organisation Development Projects, Teamwork, Change  

 
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The Story

November 2011

“What is Design? Who can explain this key, but vague, concept?” 

Design is a word that everybody uses, yet few people – even the design ‘experts’ - can define it or explain what it means. We believe that this vagueness of thinking is one of the key reasons why so many projects, plans, products, and communications go wrong. How else do you account for Prisoner vans being built too large to get through the gates of UK courts (just one of many farcical design errors reported in the media)?

Apple Computers has become the world’s second biggest company by capitalisation and, apart from Steve Job’s leadership, their success has been due to one word – DESIGN. Apple understands what Design means. But this clear thinking, and skill, does not come easy to manyUKcompanies. 

This Unclear Thinking about Design occurs, we believe, mainly because there is no accepted definition of the word (and concept) of Design in the EU. If you can’t define something, how can you expect to think clearly about it? This Story examines what has caused this vagueness, the negative business results of this unclarity, and what can be done to resolve the problem.

Key points of the Story

We asked the 'experts' and they struggled to explain it

This Story began when we were analysing the range of specific Thinking Styles required in business, eg Strategic, Creative, Risk, Customer Thinking etc. We realised Design Thinking was one of the most important Thinking Styles (and skills). So when we saw a Design Council exhibition stand at a trade show we asked the people on the stand the ‘obvious’ question: “What is Design? Can you give me a definition please?” 

The response was an embarrassing silence, followed by flustered comments such as “Well it all depends … it is difficult to explain really … what application do you mean?” It seemed that they knew what Design could be applied to, but couldn’t explain what the word or concept meant.

Has Design been Defined?

That experience started our search for a definition of Design. We found that the official definition of Design given on the Design Council’s website was as follows: “Design is what links creativity and innovation. It shapes ideas to become practical and attractive propositions for users or customers. Design may be described as creativity deployed to a specific end.”  All clear?

We followed this by researching definitions of Design across Europe. An EU report on this subject stated “There is no universally accepted definition of Design”. Each country has produced its own version of vague explanations. The only exception is an agreed Intellectual Property system for protecting designs. It became clear to us that many projects, plans, products, and communications go wrong simply because they are badly designed. And this occurs because most people do not have a clear idea what Design actually means.

 

Analysis and Lessons

Design Thinking Errors … The Titanic … Millennium Dome and Bridge …
Concorde … Causes of Design Errors - even by experts …
A Solution - and request

Famous Design Errors

Our ‘library’ of Thinking Errors contains hundreds of examples of Design Thinking Errors. Here are just a few to illustrate what can go wrong if you don’t think clearly about Design, ie getting your brain to deliberately engage the Design Thinking Style when required.

The Titanic

There were quite a number of design errors that contributed to that terrible disaster, but one stands out. The world’s finest ship at that time was sunk primarily because she wasn’t designed to withstand a side-ways glancing collision by an iceberg. Had she hit the iceberg front-on she would probably have survived. The iceberg tore a long gash in the side of the ship from the bow that allowed seawater to bypass too many bulkheads (with sealable doors) and the ingress could not be stopped. The hapless captain would have done better by steering straight for the berg rather than steering away and causing a glancing blow. It was designed to cope with a head-on hit.

 Millennium Dome

The Dome’s planning was shown on TV. A TV programme actually showed the planning team discussing what things could be built inside the Dome. There were many wild ideas developed and discussed but we saw very little Design Thinking. As a result, the Dome internal ‘product’ was very badly designed. Examples included Zone doors that were smaller than exhibits, and big queues at zones near the entrance because that’s where they incorrectly positioned the most interesting items.

But perhaps the most crucial (and amazing) Design Error was having only one security checkpoint for the hundreds of VIP’s and media editors on the freezing cold opening night. This single Design Thinking Error caused the media and other important opinion-formers to be negative about the Dome right from day one. And that bad feeling continued throughout the (much extended) life of the project until its recent new managers found a commercial use for this ‘white elephant’.

"Wobbly" Millennium Bridge 

This bridge is beautiful to look at. Clearly a lot of thought went into designing its looks – the Form aspect of Design. But it will always be remembered for its sad beginning when it had to be closed because it vibrated when walked over. It is unclear exactly why this Design Error occurred but it appears that the designers didn’t think clearly enough about the well-known problem of soldiers needing to break step when marching over bridges – the Function aspect.

Concorde

Another classic example of half-baked Design Thinking. The Form element (how it looks) was brilliantly conceived - people visited airports just to see the plane. Unfortunately the Function aspect contained major Thinking Errors that ultimately caused its downfall. Quite apart from the noise and cost per passenger which limited its airports served and passenger numbers, there was one Design Error that greatly affected its safety. The fuel tanks were placed too near the wheels and were unprotected against debris from wheel damage. That Design Thinking Error was only discovered after the fatal accident in Paris.

The causes of Design Errors

We strongly believe that these Design Errors, and those we see virtually every day even by design experts, are due to people’s lack of understanding of Design and/or a failure to deliberately engage their brains in a Design Thinking Style. And the root causes of these problems are the lack of a clear definition of the concept of Design. The definition given by theUK’s Design Council (quoted above) is totally inadequate. Even their Design Process (Discover, Define, Develop, Deliver) is not easy to understand.

 Even Experts have problems explaining it, and doing it

 

A major cause of the definition problem is common to many fields of expertise. The expert may not be the best person to explain his/her expertise to others. In design, we have seen a book about design published by two acknowledged experts in Design. Amazingly, it suffers two significant design errors that could affect its sales. Firstly, the Contents page is virtually meaningless (unless you’ve already read the book). But also, the size of the main text in the book is much smaller than normal and would be a strain to read for many people (a really basic Function error).

The same sort of Design Thinking Errors occur in another book on Design, written by ‘America’s Leading Design Firm’. Incredibly, the word Design is absent from the list of Contents (again meaningless) and even the Index!

A Solution to the Problem, and a Request

We have spent some time analysing the Design Thinking Style but it would take a little more work to put together a definition, explanation, and applications of Design. We are possibly one of the few organisations in Europe with the experience and expertise to do this. We have experience of a range of design applications, from designing offshore oil & gas platforms to leadership training courses, even domestic kitchens. But, crucially, we have the Concept Thinking skills to work out what Design is, the Process Thinking skills to identify all the steps in the Design Thinking Process, and also the communications skills and tools to articulate the concept, thinking, and process of Design (both as a noun and a verb).

All we need is a client who wants his/her workforce to understand Design and how to apply that thinking effectively right across the organisation. Any interest? Try explaining what Design is to your colleagues – you’ll soon see a ‘need’.

 
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The Story

August - September 2011

“Hewlett Packard and Netflix get painful lesson in Customer-Focused Strategic Change Communications” 

Both HP and Netflix received similar bruising lessons in understanding how customers and investors could react to a sudden change in business strategy. In HP’s case the 25% collapse in share value was enough to cost the CEO his job. Netflix was a bit more alert and (fairly) quickly announced a u-turn. But not before the DVD rental giant had lost a million subscribers and its shares had plummeted almost 50%.

Both company’s Strategic Thinking had merits, but it was the way they communicated their change of strategy that caused them massive problems. Customer Thinking was clearly lacking.

Key points of the Story

New strategies
shock customers
and stock markets

In August Hewlett Packard announced strategic plans to buy UK technology company Autonomy for about $11 billion, exit its leading position in personal computers (probably via spin-off), and cancel its recently launched tablet product. CEO Leo Apotheker said that HP was going to transform into a software business using Autonomy as the basis. The news caused an instant 20% drop in the share price. Later, the board decided it needed to change its CEO and announced a new incumbent, Meg Whitman, who would have a strategic re-think to try to repair the damage.

Netflix had decided that as DVDs were a declining industry it would move more into online streaming videos which has good growth potential. It offers both these products currently but announced it would separate them into two businesses each having their own website, requiring customers to have two subscriptions, passwords, etc. The DVD rental business was to be rebranded as Quikster. Oh, and it also announced a 60% increase in the price of subscriptions.

Naturally it was deluged with customer complaints and defections. Its shares, already in decline, quickly fell nearly 50%. Luckily, founder Reed Hastings saw the writing on the wall and announced he had made a big mistake and would drop his plans for separate businesses. The pricing issue, however, is still in the air.

Strategic Thinking and the Innovators Dilemma

Both these cases reflect the problem of changing your company’s strategy (perhaps to include a new set of customers) whilst attempting to keep your existing customers happy. This is the basis of the famous book on the subject, “The Innovators Dilemma” by Prof Clayton Christensen. But they both highlight the importance of how you communicate that change in strategy, and the need to understand how people are likely to react to your plans. We will look at these issues in depth below and emphasise the Clear Thinking skills required to avoid disasters a la HP and Netflix.

 

Analysis and Lessons

Strategic Thinking Customer Thinking … Customer Reaction …
Disruptive Innovation … Message explanation … How IBM did it

The Innovator’s Dilemma

Most good innovation is welcomed by customers; everybody likes a beneficial new or improved product. However, in some cases it may be strategic to develop and market a new product that some of your existing customers may not like. The problem is how to keep sufficient numbers of current customers happy whilst finding new customers for the new innovation. The big risk and dilemma is that if you lose your current customers faster than recruiting new ones then you could destroy the business altogether.

Hewlett Packard’s Big Idea

Leo Apotheker had been CEO of SAP, the software business. So it is understandable that he would feel that software was a better strategic option than hardware. Presumably he managed to convince the board that HP could transform itself relatively seamlessly into a software focused business by buying Autonomy and ridding itself of the low margin pc business. Its newly launched touch tablet was not an instant success and it was suddenly felt (one week after launch) that it was not worth competing against Apple’s market lead. So the board decided to get out of the tablet market as well.

 Netflix’s big Change

Netflix had been very successful in the DVD rental market and edged out rival Blockbuster by giving customers what they wanted. They had in 2007 also begun providing videos via online streaming, initially free, and realised that streaming was going to become the more profitable growth area whilst DVDs slowly declined. However, they also realised that competition was increasing and so were the prices they would have to pay the content providers.

The only strategic option, it was felt, was to increase prices and grow the streaming business by separating the two products into two separate websites. Each would function separately and require customers to have separate (increased) subscriptions and passwords, like two different businesses. 

Strategic Thinking versus Customer Thinking 

Both these companies’ Strategic Thinking had some logic. But when it came to thinking “How could people react to the plan?” this critical thinking stage in the planning clearly failed. To think in this way requires a deliberate shift in mindset and get into Customer Thinking mode (Thinking Style). In this case, ‘Customer’ meant actual and potential customers, and investors and analysts.

Customer reaction to HP’s plan

We are HP customers. We use their pc’s. Generally we have been satisfied customers, although the company has always seemed rather distant. Customer Relationship Management (CRM) didn’t exist as far as we were aware. So it should be no surprise that when we heard that HP was going to get rid of its pc business our first reaction was to immediately think “That’s a pity. We’d better start looking for a new supplier.” And no doubt, many other customers would feel likewise.

As far as investors were concerned this change in strategy was just too great a leap. HP was primarily a hardware company. Software would only contribute a tiny portion of sales. Acquisitions are often fraught with difficulties, and so are spin-offs/disposals. Their market-leading pc business could plunge in value in the process, especially if many customers reacted as we did.

HP’s ‘explanation’ message

HP’s response to the negative reaction was to sack their CEO (the third time in seven years) and try to assure customers and the market that everything would be resolved. They would have a re-think. They also placed advertisements in the media to ‘explain’ how their pc customers would get the same “focus” when the pc business was spun off into a separate company as before. Time will tell whether or not customers believe this message. Certainly, Michael Dell was quick to announce that he saw an opportunity to win business from HP.

 Netflix ‘apologises’,
sort of

 

Both cases can be seen as ‘disruptive innovation’ and the reaction of customers and markets shows that careful handling is essential. To Reed Hastings’ credit he announced a reversal of his core plan to have two separate businesses and the name Quikster will be shelved (lampooned as Quakster). He admitted that he had “moved too fast” and customers would continue having just one account, one password, and one easy access to both products.

However, there was no apology for the price increase which looks set to stay. Until this issue is communicated and resolved Netflix could still be in trouble.

Comparisons with IBM

In Louis Gerstner’s days investment bankers had been urging IBM to break itself up to be able to transform the business into software and services. But Mr Gerstner refused and kept the company together whilst developing the software/services side. This was a longer process than logically necessary but it maintained customer loyalty during the transition – good Customer Thinking.

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