Efficient Communication at Lean Companies
Over the years I spent managing people for my own businesses and as a hired manager I constantly faced numerous manifestations of the well-known truth: information is king. And all of us are just its humble servants. But how can we serve our master properly?
I was always keen to learn from the Nature. By analysing different natural phenomena I constantly notice that observed algorithms, rules and laws can be pretty accurately extrapolated to various social and technical aspects of our life. Those analogies often help me to understand underlying processes and motives as well as predict results of one or another action. Apart from that I simply enjoy the process, since it’s truly amazing and infinitely entertaining to observe how closely different aspects of our existence correlate with each other.
To showcase that, I suggest discussing a role of information for company operations through a comparison of any organisation (legally called entity, by the way) to a living body. I’d argue that information streams play a role of blood vessels in this model and thus, having the analogy in mind, we can derive some pretty obvious dependencies. For instance, we can easily tell what happens to a part of any organisation that has a limited influx of “fresh” information: it stagnates and eventually dies. We can also suggest what will happen if the supplied information is of a low quality: the part gets infected soon. Office rumours, micromanagement, depressive working environment aren’t they similar to infections?
Top-Down vs Bottom-Up
The vital importance of sound information streams for company well-being is pretty obvious, but how can we ensure the health of information streams? In management literature information flows are usually distinguished to top-down and bottom-up. Numerous discussions and theories compare the importance of former or later considering peculiar specifics of different business models or established industry practices, but I would argue that this separation has become highly obsolete nowadays.
First, both directions are equally important. I can see where different opinions are coming from, but I cannot stress it enough that managerial theories relevant for industrial society are not always applicable in the post-industrial information age. A lot of things have changed, and many limitations (technical, social, institutional) were overcome. It used to be hard to govern a large amount of information and managers had to prioritise processes in order to stay efficient or at least operative, but we have improved on that drastically. Moreover, the changes affected not only our technical capabilities but also our cognitive competencies: a hundred years ago, an average person met around 100 people in their entire life, nowadays one can easily talk to hundreds over the course of a day.
Second, due to digitalisation in many industries, information ceased to be a valuable asset and transformed into a full-fledged productive property. Every successful manager knows that their main purpose is not to govern, but to serve. I also strongly believe that the primary purpose of any manager is to create a safe, favourable and conducive working environment for subordinates to facilitate their work and efforts for the sake of the company. Access to means of production is one manifestation of those duties. By restricting employees’ access to the key production tool many companies shoot their own foot hampering innovations and productivity. Yet again, think how efficient a numb limb is after one pinches the vines and limits the blood flow.
Third, the growing amount of information paired with its increased accessibility gives managers a big power, but also imposes even bigger responsibility. As mentioned, this responsibility isn’t new, yet its focus has changed: intrinsic motivation plays a way more significant role in post-industrial society where people have satisfied their basic needs and learned to value purpose and meaning more than money. There is a proven correlation between employees’ engagement, mental health and productivity every of which is highly dependent on healthy information environment. Similar to a living body, every part, every member of an organisation is closely connected to others. It might sound counterintuitive due to the widespread stereotype, but any single employee directly influences the organisation. Think of it as an intercellular exchange: all cell secrets and decay products enter blood vessels and are delivered to the most distant parts of the body, that permanently responds through various mechanisms using blood as a communication system. To formalise the response and deliver it to any single cell body uses mediators, called hormones. This mediation looks to me very similar to the job usually done by managers of all kinds and levels. Both hormones and managers regulate the reaction of the entire body/organisation from the one side as well as conduct its responses and commands to every unit and member. The analogy gets even fancier when we compare different types of managers to different classes of hormones: some create anger and stress, others euphoria and joy, not mentioning the multitude of other effects in between.
Information is the main business asset
Having derived the essence of management in a post-industrial company–mediation, we can speculate on how it is related to information control. Managers are not supposed to restrict or limit the information (also because their ability do this successfully in the current abundance of information channels is highly questionable), rather they have to interpret it (often using a domain-specific language), organise it to be consumable by target audience, and deliver it to interested parties in the most efficient way. Core managerial skill-set has always presumed above-average abilities in information collection, processing, and perception, but nowadays significance of those qualities is raised ernormorously, as well as changed the emphasis of their application.
Let’s put aside discussion on the most straightforward utilisation of information as a business asset, it is business specific anyway, and concentrate on some generic problems any company faces every day.
Formulation of the problem–the key and probably the most essential part of any minimally creative task. As Charles “Boss” Kettering, the famous Head of Research at GM, used to say “A problem well stated is a problem half solved”. Understanding of a more-or-less complex technical problem is impossible without the context. Task description is usually a dry formalised part, whereas context provides clarity to details and helps to decide between implementation alternatives. Being heavily involved in software development I can name dozens of examples when lack of context caused dramatic misinterpretation of tasks that resulted in a wide spectrum of consequences starting from throw-away code and ending with heavy financial losses due to introduced bugs. Such failures are usually caused by different factors and their combination, but all of them reflect a way the information is distributed inside the company. Just to name some offhand:
- Lack of interest and engagement among executors;
- Poor communication of task and context by managers;
- Poor formalisation of task which impedes context’s relevance;
- Restricted access to context;
- Enormous load on executors, which reduced their ability to understand or apply the disclosed context;
- Managers being a bottleneck in information flow (for various reasons), limiting quality of task descriptions and/or availability of contextual information.
As mentioned earlier, all those problems have their roots in the company’s culture and information structure, as well as reflect management flaws. Thus it’s a key responsibility of management at any level to identify and eliminate impediments in information flows and to create a healthy and attractive company culture that praises openness and unrestricted bi-directional exchange as the main company value.
Company culture itself is highly reliant on information exchange. Independently of officially declared company values and goals or any formal structure designed to fulfil the desired image, inability to distribute relevant information undermines all efforts to build an attractive working environment. Needless to say, that creation of positive company culture is a very complex undertaking that requires a lot of managerial skills and a great deal of luck as well. There is no proven track or overnight success, but rather a tedious day-to-day work, full of trials and errors that eventually will be oversimplified in some iconic case-study when your company’s name capital joins the FAANG abbreviation.
But there is no alternative to this path. Neither for big corporations nor for startups. I witnessed both highly hierarchical corporations that miserably failed to create a positive working culture despite proclaimed targets, highly paid agile coaches and huge allocated budgets, and startups with declared flat hierarchy and full transparency that were not able to retain talents despite competitive remuneration level and ended up with a huge turnover and chaos in codebase. There were different excuses to that: obsolete information policies, excessive hierarchies and outdated organisational boundaries, huge amount of information to organise, or lack of managerial competencies. But all of them could be simplified to suboptimal data structure and inability (read lack of desire and initiative) to manage data streams efficiently. Instead of creating open company structure and educating their managers to process and share valuable information, those firms spawned more hierarchies, various sophisticated bottlenecks and unwarranted restrictions trying to mitigate inefficiencies guided by principle “the less you know the better you sleep”. Unfortunately, instead of improvements those changes usually manifested themselves in a toxic and repressive working environment that inhibits employee motivation and productivity.
Employee motivation is all about how engaged an employee feels in tandem to the organisation’s goals and how empowered they feel. It is super dependent on fluent and structured articulation of business targets as well as tightly coupled with company culture. Together with customer engagement it constitutes the main reason why managers care about the thing after all. There is a broad discussion what exactly is included in employee motivation and how managers can influence it. Putting aside remuneration and benefits, I would emphasise the more intrinsic factors: sense of purpose, sense of accomplishment, and self-identification with company values as those that affect motivation significantly.
Two things to highlight. First, all three are super subjective, and thus cannot be abstracted to determine a generalised approach. Second, all are dynamic and highly susceptible to the ambient environment, meaning that formerly effectual approaches can easily fail in the future. This holds true, by the way, for any of intrinsic factors, making leadership rather an art of balance than a science.
So, how can we satisfy those covert needs of employees successfully if we can’t formalise or generalise them efficiently? There are plenty of tricky techniques invented, but being an engineer I would insist that the most simple system tends to be the most reliable. I’d argue also that the most straightforward solution to this problem is to provide employees with all relevant information about their work without trying to filter or limit it. And the easiest way to do so is to define open information policy as a cornerstone and twine company culture around it.
But we all know that the devil is in the details. The trick here is not just define, but also devotedly implement this vision at every level of hierarchy (independently how shallow or deep it is). Current level of information processing and competition among tools left no space for excuses like budget constraints or lack of appropriate technology. Besides, the system should not be sophisticated at all. Only three major components are essential: a wiki system that stores and gives access to any relevant information, a feedback loop, and access to outer sources of information. However there is the fourth one, probably the most essential: managerial will and resoluteness to create an effective information structure.
The contemporary amount of information is overwhelming, but most of us have learned how to mitigate this. We learned to filter the information and consume it selectively. We had to learn, because the information now is targeted to us from everywhere. I’m not arguing that managers must throw any raw data to a common sink that will deliver it to every employee. Of course not. Ability to transform and structure information has become probably the most valuable managerial skill. And that’s where a good manager can serve their employees the best: by transforming raw data into structured and actionable information. But not hiding or filtering it. There is no such a thing as protection against information. What about protecting the information itself? Sure, some information contains sensitive data or is classified. But these cases are rather exclusion of the rules. The sensitive information can be anonymised, the classified one, well, should be hidden, but only if there is a real reason to do so. Because we are so different.
How can one decide which piece of information is important for any of their subordinates? Not process-wise, but context-wise. How does one know which part of information can trigger an ideation process of their team member, or opposite, how does they know that if a contextual information is reduced this will not lead to errors? Where is the watershed of essential and non-essential information? Why, for God sake, managers have to spend their highly-paid time and efforts for this filtering, if it is disastrous by default.
It’s hard to overemphasise, the information definitely must be transformed but not truncated or limited. Think again in terms of blood analogy. Blood carries all the elements that are extracted from surrounding, and every part of our body consumes from the blood what it needs. Sometimes the surroundings can be toxic, and those toxins enter into the body, but doing so they also inform the body about the hazard. Or some parts of the body can consume staff that they don’t need and get sick. Will restrictions and limitations help? Probably yes, but they will also cause a starvation of other parts of the body that can easily outweigh any positive effect. Do you still think companies are so different from living bodies?