Too Big to Succeed?

Governments continue to ponder the introduction of measures aimed at avoiding a repeat of the “too big to fail” scenario of insolvent financial institutions and It will be challenging to bring any such measure in. Lots of compelling argument will be introduced to oppose it and many vested intersts will lobby to stymie such changes.

The arguments for and against are relatively well rehearsed with the exception of one. What about the idea that in actual fact they are too big to succeed?

Now this might seem rather an odd suggestion given that some of the “too big too fail” banks were on the face of it “big” and big tends to be regarded as successful in a business context. But I have long argued that, in knowledge based industries – and I believe banking and finance is a knowledge based industry - big is not necessarily better. I have also argued on a number of occasions that the financial crisis was a failure of those industries in understanding the nature of knowledge management and knowledge based business generally.

I remember working with a professional services firm that had extremely strong social and trust networks in it. It worked very hard on these bonds with rigorous recruitment practices, unusual reward schemes and extensive reinforcement and encouragement programs to maintain them.

But they had a problem. As they competed in an increasingly global market they had expanded in both headcount and geographical spread and these bonds, this community, was becoming strained and threatened. As a KM engagement we were looking at ways to try to retain that key cultural plank as the company grew. It was a challenge, but it was inspiring to encounter a firm that recognised how important this human relationship model was and is to their success, and believe me this was a successful firm. Scale was a problem.

The advantage that “small” can bring to knowledge based firms by embedding trust and enhancing pooled human cognition is, in my view, enormous. And I am not alone in saying this. Gor-Tex for example apparently try to limit office sizes to 150.

Much of this ties into the so called Dunbar numbers and to try to ignore it would be to fly in the face of many thousands of years of evolution. Of course there are many things that can be done to allow companies to grow, but I do think there is a limit.

Bujt it seems to me that too often as companies in knowledge based industries choose to scale up there is a tendency to try to commoditise what they do and to try to systematise complex decision making away from what is required – i.e. the application of the human brain. They seem to be applying management models of simply analysing and reducing transaction costs that were useful in a previous industrial but are less relevant in a knowledge based value adding environment.

So I say lets chop the banks into bits not only to avoid the “too big to fail” dilemma, but because they will probably perform better.

No Way BA

The right to withdraw labour, or call a strike in its more pejorative description, is, I believe, a right. The current dispute between the UNITE union and BA has drawn attention to this with commentators weighing in on the rights and wrongs of the actual dispute and the stance of the judiciary in ruling on the legality or otherwise of the ballot. I have views on all of these things but I feel that to focus on these issues about the dispute itself is to actually miss the main point.

Now I don’t want to sound like a class warrior here but what I find most interesting is the fact that BA has sought to simply deny the right of the union to call a strike by combing the procedural aspects of the ballot process for any perceived technical breach. So this is not challenging the subject of the dispute and defending their position what it is is simply wrecking tactics to deny, what I see as, a right.

Of course there will be those that say the rules are there to protect union members (they would say that wouldn’t they) but let us be honest here. Gone are the days of open meetings and “shows of hands” and the extent of coercion and deceit that could occur in those circumstances. No this is another ballot which has shown pretty overwhelming support for a call to withdraw labour. If we were to apply such rigorous standards to our parliamentary elections then I think Gordon Brown would still be in power and we would be looking at a re run off of a flawed and unlawful general election.

No this is, IMHO, a CSR issue. Airlines are often taken to task on their green credentials and too often CSR is reduced to an ecological impact issue. As I have often argued CSR is much much broader than that and organisations need to consider their role, responsibilities and impact as part of society in both the short and longer term.

So, in my book, BA you failed the test. You cannot seek to deny people a fundamental right and claim any Social Responsibility.

Are you really doing it right?

I was in a meeting the other day with and the subject of looking at learning from experience in a business context came up. We talked about some of the approaches that are commonly used and someone mentioned After Action Reviews came up. “Oh yes we do all that.” was the response, but I couldn't help feeling that in the way it was said that what he really meant was “Yes we do that but really its a waste of time.” It seemed to me that maybe it just wasn't being done right for that organisation.

One of the most important lessons I have learned is that attempts to cookie cut solutions and jemmy them into every instance where a similar issue appears to be present are almost always doomed to failure. That's not to say it is not a popular approach with some professional service firms that seek to commoditise “knowledge” and churn out templates of work client to client. Its little more than snake oil sales IMHO.

But that is not to say you can't reuse techniques it just means that doing so is usually much harder to do than you imagine, and that every single instance is unique and needs to respond appropriately to each particular circumstance if you are going to get value from it. By taking the harder route the approach evolves and develops richness.

AAR, Learning Review, Lessons Learned, call it what you will, (and you may well have to change the name to make it palatable) is one such technique and it does have a place in the KM canon but it is by no means easy. David Gurteen made me aware of this article by Nancy Dixon that summarises some of the challenges and has some interesting thoughts on how to approach it.