Organizational behavior, Consulting and the Energy Industry
BPIR recently added a series of benchmarking presentations to You Tube.
1. A benchmarking example from the health sector (see it here)
2. What is benchmarking? (see it here)
3. Popularity of benchmarking (see it here)
4. Benchmarking is becoming easier due to advances in social media (see it here)
I firmly believe that Evidence-Based Management is one of the soundest approach to management.
A study published by the National Bureau of Economic Research (NBER) shows how HR practices can be studied as empirical hypothesis (and then applied to HR management):
productivity rises by 10 percent when incentive pay and a set of complementary HR practices are introduced. Using data on workers installing windshield in cars, Lazear (2000) shows that productivity increases by 44 percent when piece-rate pay is introduced. Using data on workers picking fruit, Bandiera, Barankay, and Rasul (2005) show that productivity rises by 58 percent when piece-rate pay is introduced.
On July 15, I will be presenting at the Knowledge Worker Meetup, in Toronto. Here is the abstract:
Knowledge Management and the Tribunal of Experience
Benoit Hardy-Vallee, PhD
our statements about the external world face the tribunal of sense experience not individually but only as a corporate body.
- W.V.O. Quine
“Knowledge” is an elusive, abstract concept, yet we use it everyday. I would like first to take the time to discuss this concept, highlight its key dimensions and suggest how knowledge management should be sensitive to a proper theory of knowledge. To do so, I will briefly revisit (at a high level, it’s Wednesday night for Pete’s sake!) the main tenets of contemporary epistemology, i.e., the theory of knowledge. The goal is to make the case for a conception of knowledge that properly differentiates knowledge from information. One of the key differentiators is that knowledge has to be justified, and ultimately it must face what Quine called the “Tribunal of Experience”: empirical evidence.
Having put that in place, I will argue that the framework known as “Evidence-Based Management” (Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management, by Sutton & Pfeffer, 2006, HBS) is the surest bet as to how we should manage knowledge and even that Evidence-Based Management is Evidence-based Knowledge Management. A commitment to fact and evidence, I will suggest, should make us sensitive not only to facts about organizations but also to important facts about the Knowledge Worker: our own cognitive biases are the worst threat to knowledge, hence to its optimal management.
Speaker. Benoit Hardy-Vallee, Phd.
Benoit Hardy-Vallee is a consultant in the Operations Support Services (Utilities & IT practice) of SBR Global. Born in Quebec, he studied Philosophy of science and cognitive science in Montreal, Paris, Waterloo and Toronto. He worked as a project manager, web developer, event organizer, researcher and lecturer before entering management consulting at SBR Global, where he helps organizations reach their goals. His blog, Management Epistemology (http://www.hardyvallee.net), discusses organizational behavior, consulting and the energy industry. His interest for Knowledge Management started during his academic years. It continues to spark his intellectual and professional interest. Benoit also practices karate regularly. Currently at the brown-belt level, he hopes to get his black belt next year.
Additionally, Benoit has been a member of this Meetup group since its inception in January 2009
The Control Objectives for Information and related Technology (COBIT) is a set of best practices (framework) for information technology (IT) management created by the Information Systems Audit and Control Association (ISACA), and the IT Governance Institute (ITGI) in 1992. COBIT provides managers, auditors, and IT users with a set of generally accepted measures, indicators, processes and best practices to assist them in maximizing the benefits derived through the use of information technology and developing appropriate IT governance and control in a company. (WIKIPEDIA)
Many people see COBIT as costly. It requires, after, profound organizational changes. However, in a recent edition of COBIT Focus Gary Hardy (not related) shows how it could in fact be a cost-saving initiative. “As process maturity increases, he writes, risks decrease and quality and efficiency increase.”. See this table for many examples:
COBIT Processes and Cost Savings
Not sure if it causation or correlation, but according to a research report by Service Performance Insight, The Professional Services Maturity Model:
organizations with a high confidence in their leaders delivered over twice as much margin (23.4% compared to 10.4%), higher revenue growth, lower attrition and almost double the number of projects delivered on time.
| Attribute | High Confidence |
Low Confidence |
| Revenue Growth | 15.9% | 11.3% |
| Contribution Margin | 23.4% | 10.4% |
| Attrition | 5.5% | 20.0% |
| Projects on-time delivery | 75.5% | ;44.2% |
Source: email from spiresearch.com.
“The 2009 Professional Services Maturity Model - A Comprehensive Framework to Assess Organizational Efficiency and Effectiveness across the Five Service Performance Pillars” is a 168 page benchmark report developed by Jeanne Urich and R. David Hofferberth, P.E.
At a meetup this week (http://knowledgeworkers.org/) I heard about Social Capital Value Add, which is a “is a management method, designed to link the pioneering intellectual enterprises of social capital and social network analysis to value based management and the priorities of marketers”. Michael Cayley, the author, shares is thoughts on the new economy of social networks in a free ebook:
An interesting discovery: company who see themselves as living organisms tend to outperform those who see them as mechanical systems. Lessons for consultants: let’s try to improve a living organism, not just a process.
Companies That Mimic Life
by Jay Bragdon and Jeanne Veatch-Bragdon
In Reflections, the journal of the Society for Organizational Learning
Companies that mimic living systems have been gaining market share over more traditionally managed firms, which generally model themselves on mechanical systems. These two management styles affect people and nature in very different ways. and this largely explains the differences in their market performance. Firms that mimic living systems have an existential awareness that they are living communities of people, committed to serving other people, and that they all depend on nature for their sustenance. These companies instinctively put a higher value on living assets (people and nature) than they do on non-living (capital) assets because they recognize living assets are the source of capital assets, and the reason for their existence as firms. this fundamental recognition creates spontaneous demands within the firm to live harmo niously and respectfully with the larger living systems on which we all depend (biosphere, society, markets). This desire to affiliate with life is enormously appealing to people. It explains why these companies tend to attract the most committed employees and strategic partners, the most loyal customers and the most patient investors. firms that think of themselves as profit-making machines, by contrast, place a higher value on non-living capital assets than they do on living ones.
Organizations with IT projects usually require some form of methodology. SDLC (Systems Development Life-cycle) frameworks assist teams in project executions. Many public administrations disclose all the details (procedures, templates, etc.) of their SDLC online. The New York State SDLC is definitively the top one on the web. It is almost a project management textbook. Note however that these are mostly sequential, or waterfall SDLC. I will discuss Agile models in another post.
Vision, Strategy, Business Model, and Tactics: all the same?
No !
Look at this chart from harvardbusiness.org
(you can also download the PDF version here)
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| From management-epistemology |
Seeing complexity of trust and trust management by managers as well as understanding its role in everyday business might be the source of the competitive advantage for the pioneers up to the day when similarly to specialization it becomes a standard. These are benefits that come from being first in the space of strategic activities.
(From Trust Management – The New Way in The Information Society in Economics and Organization of Enterprise, Volume 2, Number 2 / 2008, Grudzewski et al.)
On the one hand, trust is part of all human relationsips and institutions: how could markets, corporations, governments function without trust? It seems like it’s a part of human nature. Yet, as this graphic illustrates it now has a more important place in today’s business world: in the post-industrial age, business relationships are primarily based on trust rather than hierarchy or bureaucracy.
We tend to think of trust as a mental state, a psychological acceptation. It should rather be construed as an act: an act by which we give, say, tell something. Trust is not only thought, it is also made. As a good example, see the following video by David Maister. Or the Strategy of Giving. Or Open Source software, wikipedia, etc. You have to give something (to a client, or a community) before earning someone else’s trust.
Benoit Hardy-Vallée, PhD |
| Working in a Management Consulting firm (SBR Global), I blog
about organizations, decision-making and energy. My background includes
cognitive science, economics and philosophy of science.
benoit@hardyvallee.net
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