Gabriel’s scarcity rent - it’s management stupid!

I’ve just arrived from Delhi. In fact it has been 24 hours but, in the meantime, my mind kept wandering inbetween all kinds of different landscapes, smells and tastes until it settled back again. So many different faces, so many different paces: our hectic effort of preparing a presentation on the club lounge of a five-star hotel, the five-year-old child making his frenzied small monkey shout and dance to attract our attention and a few coins, the slow-moving cow trying to take a nap in the middle of the street and the agitated drivers trying to pass as close as possible. Definitely distances are measured differently in this huge place.

The billion cattle estimated to be alive today are more less one sixth of the estimated human population on Earth. The lucky ones live here, where they are revered and spoiled, where they can live tranquil and blissful lives, where they can thrive and be loved. It’s a wonder that there is no cow immigration process to this beautifully colored lands. If the other cows knew!

Humanity. This word takes new meaning here. So many people. We Europeans have tended to grow aseptic, almost inhumans. We hide within huge buildings of concrete, glass and steel, like the new terminal I’ve nurtured along with my peers, and we become insignificant below our not-so-functional monuments. We want them to serve as a rule to measure our cities and civilisation, instead of ourselves, our little selves.

In India you see so many people, so many happy -and not so happy- faces. The wonder is that it’s not easy to infer which faces will be happy and which won’t. Usually you won’t see that in the colours -or cost- of the robes. Humans… sometimes so happy owning nothing but conceiving nice thoughts… you never know.

This column, blog, page -whatever this is- wouldn’t be complete without the management reflection. And today it comes from Professor Geert Hofstede, of Maastricht University: “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.”

Are they? I’m personally a cock-eyed optimist and I tend to see the positive side to it. If we kept narrow mindedly to our own culture and background, the learning process would surely be impaired. Nonetheless cultural divergences must be managed.

As a reference, it is very interesting to examine Hofstede’s cultural dimensions, built from a handful of parameters:

• Power distance or the degree of acceptance of the less favoured members of one society of the inequalities they are subjected to.
• Individualism versus collectivism, or the degree to which the members of a society are integrated into groups.
• Masculinity versus femininity, or the degree of distribution of roles between genders.
• Uncertainty avoidance or degree of tolerance to uncertainty or ambiguity.
• Long-term orientation versus short-termism.

As an example, the former dimensions applied to the Indian, Spanish and British cultural dimensions, according to the available data by Hofstede. Of course generalisations are unfair, and the Spanish profile was never actually completed, but the exercise is still interesting.

Star Trek is not the encyclopedia of life. Even though it contains so many interesting ideas about leadership and management, with different styles depending on the series, that is worth knowing about.

One of the scenarios that is a reference in the Star Trek world is the Kobayashi Maru scenario, which is a “lose-lose” or “no-win” scenario. Regardless of what you do, you’re doomed. We can see this kind of scenarios in everyday life: from organisations that have a couple of conflicting objectives to pursue at all costs, pyrrhic victories or military victories that are so costly to win that are not worth-it (ring a bell?), or the kinked curve of demand for oligopolies, that can only begin competing between itselves bearing huge losses. Even the Spanish Inquisition’s confessions were like that: torture until pleaded guilty and then executed: every move made it worse.

The original Kobayashi Maru scenario was a test for Star Trek commanders. In the simulator they received a distress call: a ship had been stranded on the other side of the border. They were subsequently faced with the decision of whether or not entering into enemy zone, underpowered, to try to rescue the crew of the Kobayashi Maru.

There was no escape, the only option was not to try the rescue.

One briskly student devised a  solution: cheating. Cadet Kirk did in his third attempt. Strangely enough, tweaking the simulator was considered original thinking. Probably that was only because it had not been attempted before. In time Cadet Kirk became the infamous Captain Kirk.

Sometimes, regardless of what you do, defeat is unavoidable.

Yes, I’m exagerating a little, but this has been a hell of a Kobashi Maru week. And to you all there that have Kobayashi Maru weeks once in a while, there’s still a message of hope. The Kobayashi Maru scenario had a meaning and purpose.

Because it wasn’t an intelligence or ability test. It was a character test. How do we face odds and specifically unsurmuntable odds? After all managing death is a way to learn to manage life.

Paraphrasing another Star Trek classic, Mr. Spock, “fear is the mind killer”. Sometimes the worst might simply happen, and what’s important then is how to handle the situation, how to keep your own control and integrity under adverse or inauspicious circumstances.

Making the most out of it. That’s how you learn to be better, and how to bounce back and subdue the next possibly conquerable odd. Don’t let circumstances drag you down, because you need to keep fit for the next, possibly unforseeable, challenge. And it may well be one you can cope with.

One of the things that happen to often in program management is that contractors, specifically their project managers, want to be too nice. Yes, of course they must be nice, but not that nice.

I’m not talking of nice presents or sumptuous dinners. I’m talking of making too much promises. Well, it’s understandable when you don’t have the contract but, once you have it, it’s a most annoying practice.

Reality is stubborn, bull-headed, disobedient, especially to the wishes of a project manager. It’s not her but her team who is really doing the hard work and, as they try to please her, they will tell her whatever she wants to hear… until the milestones get closer and the completion gets -or should get- nearer.

Then, nervousness gives way to hysteria and the hidden truth arises and comes out of the closet. The project is not going well. Guess what? Now hard decisions must be made, there’s almost no time and they (we) all go crazy.

Follow my advice: it’s all about managing expectations correctly. Too eager to please, sometimes we are too optimistic and make our projections forgetting risk management, inefficiencies, overheads, limited budgets, mistakes or that people are simply people.

If you are realistic in your predictions, and still take out a small bite allowing for some slack, you’ll be able to actually achieve what you have promised. Even, on the eyes of your benevolent customer, the under-promise might become an overachievement. You won’t lose your face but keep your credibility and increase your perceived efficiency.

Even in the worst case, it’s better to know the truth. Maybe the customer decides not to go ahead with the contract, but that will be better for you because there is no glory in projects that are doomed beforehand. Or maybe you and your customer can discover a better way of doing things, put some safeguards in place or simply make some drastic measures that might increase the probability of success. In any case, honesty is always a good advice.

I’ve tried to describe all this in the following expectations model:

It’s all about aligning expectations and results. The credibility zone is along that line but also tending to the overachievement. In short, people might expect you to do things better as they thought you would, but they won’t forgive if you do worse.

When you go down the credibility zone, there’s only danger: dissatisfied customers are your worst enemy: they may spread the word of a poor job.

Still there’s another danger zone in the upper left hand: giving too high achievements when you’ve managed poor expectations. In this case the problem is the bottom-line: probably you’ve spent more resources than were necessary and your customer would have been satisfied with less. It seems to me you should make a better use of your resources, or handle a few of them back to your organisation: after all they have a cost, although you might not perceive it. But with less capital employed, the profitability grows higher.

Remember: don’t be the one to put the rope around your own neck but do your best to keep it healthy instead. You might have much more leverage than the one you think you have.

The exam was really stressful. More than three hours writing like crazy. At the end I was rather confused, not really sure of what to expect. Fortunately, it was over.

I sat the exam at Barcelona’s British Council. I thought it would be a better experience than taking a plane and driving to Henley. It was a good idea. The place is just ten minutes from home.

On the other hand it was rather weird to be the only one taking the exam. The invigilator was there only for me. At least he was nice and had a thick book to read so he didn’t spend three hours glancing at me in suspicion. That would have been awkward.

Half full or half empty, who knows. I hope I pass. In the meantime I just need some time to relax. And that’s what I did on the weekend. The garden needed my attention so I just focused on trimming the bushes and getting tired. Oh my, my arms got so bruised!

The view from home is rather relaxing. The weather wasn’t perfect. It was the fourth rainy weekend after the most severe draught that I can recall. From scarcity to the most rainy May in 25 years. Our water reserves have tripled and reservoirs have reached 60% capacity. It looks like we’ll have enough water for the time being.

I like it when the beach is almost empty, and the showers scare the tourists. The calm seems to envelope everything, the air is fresher, the plants greener. This spring the plants are blooming like never before. Let’s forget about the price of oil, the high interest rates, the lack of liquidity and the forthcoming stagflation. It’s time to enjoy… at least for a while…

The garden this year is full of Mediterranean roses. The plants grow by the hour. A good omen? I hope so.

Yes, I admit it: I am nervous. Been there before, but I still feel the anxiety to sit an exam. Maybe I shouldn’t. I am supposed to be wiser, older (that’s for sure), more mature and self assured than before. But still I insist into getting myself into the verge of anxiousness again, clouded by emotions, cluttered by several contradicting feelings.

Because the whole spectrum of learning comes down to this, the whole personal development rhetoric melts and, what is left, is hard bone again, the same measurable and accountable bottom-line: exams.

Sadly, the whole learning experience converges and funnels to an exam. It all revolves around being tested, thoroughly or not, with a closed set of rules that deprecate initiative and enforce strict followership of rules.

After all that disquisition around soft and hard people management models, after all that rambling around the balanced scorecard, after acknowledging uncertainty and complexity, all the roads end here again, in a cold, specific and simple figure, the mark.

I wouldn’t want to practice the cynic or sceptic here. It’s simply that I am nervous. There must be a better way to assess people than the one I have experienced this year. I simply don’t feel it’s fair. A friend of mine just advised me not too read too much about the case: it could be counterproductive. Excuse me? Counterproductive trying to learn more? Since when? Yet I fear he’s right.

If I had to change one thing about the MBA it would be its assessments. I can’t agree with certain doctor at Henley that decided to judge me by her obscure set of rules instead of listening to me and being fair. But not being British has this things, and you learn to live with a cultural gap. Where would be the international experience if everything was just like at home?

Yet another day less in this countdown to Wednesday…

As the average reader of this blog knows, and wordpress knows such individuals exist to my amazement (THANK-YOU), I do several things in my job, one of them is the integration of the baggagge system in the Terminal South (or Terminal D) in Barcelona’s airport.

Well, it used to be one of them… but it has been growing and growing, absorbing my time and effort, sometimes with complex things, of course, but very often with little and silly things, sometimes simply to overcome the lack of communications between parts in a huge project, sometimes just repeating the same things again and again.

Organisations prepare themselves to manage projects. They start shyly with one and, if they are able to envisage an strategy, they include project management into their capabilities. There are models to describe how project management competencies are integrated into organisational capabilities. Different organisations are at different levels, and thus are able not only to manage projects but also to increasingly learn from them.

But, at the end of the day, panic happens. That’s when they forget everything and start to triple-check everything based on the gut feelings of people, high enough in the ladder, that don’t really know about the systems to be implemented. Trivial things get inflated and strategic things suddenly obviated.

That’s what has happened to me with the Terminal 5 syndrome (to know more about Heathrow’s Terminal 5 click here). It will take some time to settle. In the meantime some issues have been enshrined as the most relevant by the organisation and are draining a lot of resources. Yes, organisations are able to learn a lot about project management but, when panic starts, they sort of regress to a previous state, top level managers want to micromanage what they still don’t know anything about, and reality gets distorted to adapt to the top management expectations.

A hard critique? Fortunately the tide is just a tide and we will be able to focus the existing energies on the real issues… having top management’s attention is very helpful as long you can manage it in the right direction, and to help you instead of interfering.

When you think of building a terminal you always think of huge construction works. And yes, that’s the bulk of the budget, and sometimes the most spectacular part. But in a 80/20 rule fashion, that 20% ends up entailing 80% of the work. As I like to say, the devil is in the details.

For example, in Barcelona’s airport, we started 2006 doing something like this:

The horizontal axis is roughly equivalent to one mile. The South Terminal was beginning to take shape. It was still divided into several parts instead of being a single building. That’s the way it was decided in the tendering process: there should be a few smaller cakes instead of a big one. A dilemma between having to co-ordinate or letting more companies participate. It was decided towards the latter… no wonder co-ordinating has been one of the main issues here.

But three years later, with the building almost done, we are focusing on a lot of different and much smaller things. Things like the following:

The white structure you see is inserted to the glass block. The purpose of the structure is to hold a couple of flat screens to be able to inform the passengers for the boarding process. It is thus provided by a different company than the one that is building the green glass block, the one that is providing the energy, the one that is providing the communications (that the screen will surely need in order to work), and the one that is providing things such as the air bridge or the cooling systems.

Yes, it’s all about interference again. In this case, as we get closer to the endgame, the different paths start to converge into one set of critical paths, all interrelated with each other. There’s no more unique critical path, but every single path becomes dependent on the others’ every delay: a web of interdependencies, a critical network instead of a path. 

My impression is that this part is much trickier than the other one. Finishing something is much more difficult than just going along with it. Slack has been consumed: the endpoint is not far anymore, pressure is increasing, hysteria is hovering, and we have to go down to every detail.

And studying for the final exam doesn’t help. In fact I sometimes arrive so tired that I don’t have the will to do anything. Still I have to. I strive to find some free time whenever, sometimes eating a quick sandwich and hurrying to imitate the waiting passengers in any available coach. The only difference is that they are waiting for something, just passing the time. I, on the other hand, I’m trying to use it. My macbook comes with me wherever I go, preview -for PDFs- and powerpoint to take notes always ready.

It’s funny how the process here is the other way around. When I studied the people, processes and financial modules, it was a matter of going into detail, of submerging into a wealth of information and trying to find the details, the reflections, the hidden wisdom, sometimes simply the stories behind, the assumptions, the reasoning. In fact that was a mistake because my teachers didn’t want me to prove that in the assignments: they just wanted to test that I knew the basic models. And I paid a price for going too far.

Now I’m going back to the basics. An exam is a place where you have to prove that you understand the basic reasoning, its assumptions, and apply it to some cases. It’s something like the terminal, but backwards, from detail to widely accepted models. That’s what they expect from me, and that’s what I should be giving them… I’ll try to refrain myself from doing otherwise.

I was interviewed by Widget Finn for the Times, and she wrote the following article:

The disastrous debut of Heathrow’s Terminal 5 was a nightmare experience for all involved, but for Gabriel Mesquida it has proved a valuable live case study for his MBA dissertation.

Mesquida is a programme manager for Aena, the Spanish equivalent of British Airports Authority, that is in charge of the expansion of Barcelona’s airport. He is responsible for the coordination of projects in the information systems, communications and security programmes. His dissertation for the distance-learning MBA that he is doing at Henley Management College is on managing airports for the future, so he is watching carefully how the Terminal 5 saga unfolds.

He says: “Our terminal is similar in size to Heathrow, which is considered the plane capital of Europe, and I visited T5 several times when it was under construction. I was impressed, at the time, by how much detail they were going into over safety and they were scrupulous about everything.”

But when the terminal opened it became apparent that there would be other useful lessons to be learnt – including how to manage a meltdown. “An MBA has a foundation of theory but it should be practical, so having a live case study means you can watch events as they unfold and draw conclusions from them.”

The conclusions may be different when the case study is current rather than from a textbook comments Dr Richard Barker, director of MBA programmes at Judge Business School. He says: “One of the benefits is that you don’t know the outcome, which simulates the management situation more effectively. With a five-year-old case study there’s a result to the story which is difficult to escape. You can look at different options that management had at the time but knowing what happened influences your ability to assess the case.”

Mesquida is already putting into practice some principles of leadership from his MBA that were highlighted in the Terminal 5 episode. He says: “Resources are important, but people are far more so and leadership is everything when you have a flock of people wandering around a huge new infrastructure. However carefully you prepare, the unexpected can happen, and that is when your staff should have the flexibility to use their initiative. If the company has a blame culture people will be reluctant to take risks or do anything except cover their own backs.”

Durham University Business School uses live case studies in boardroom simulation exercises where students focus on a real company. Dr Julie Hodges, director of MBA programmes, explains: “They look at the strategic data, where the company is now, what challenges and issues it’s facing, then students come up with recommendations based on the information.” But textbook cases also have their value. “These give an historical perspective so that the issues can be put into context. More data is available and we can identify the medium and long-term lessons.”

Textbooks’ case studies are polished, tried and tested so they are easier from a teaching viewpoint. Barker points out that they are also pigeonholed into subject areas. “They may be labelled a strategy or marketing case, which isn’t always obvious when you’ re trying to deal with something in the boardroom.”

He can predict some of the labels that will be put on Terminal 5. “I see it as an operations management case – make sure your operation works before you start overloading it, or a people management case – train your people properly and handle recovery situations effectively.”

Mesquida agrees that more lessons will emerge from Terminal 5 as time goes by, but together with his MBA learning, it is already shaping his decisions for Barcelona airport. He says: “We need performance indicators and a more systemic approach. Stakeholders and users shouldn’t have the impression that you’re out of control or they’ll feel abandoned. They must be kept fully informed of what’s happening and how you plan to remedy the situation.”

Terminal 5’s launch onto the world stage may have been a fiasco but, clearly as a learning resource for business students, it will run and run.

Thank-you Widget

In these days of reviewing information, I came across a classic (yet again) and I thought I could share it with you, albeit in a summarised form. These are Jeffrey Pfeffer’s thirteen practices that any manager should take into account. Of course they express a certain point of view based in a set of assumptions, but even without their context is quite safe to assume that all of them are sound propositions. The following interpretation is, of course, only my interpretation.

Jeffrey Pfeffer is a professor of organisational behaviour at Stanford Graduate School of Business.

1. Employment security because if you want commitment, make sure you’re sending the right signal, otherwise don’t expect people to be loyal to the company while their peers are being laid off. If long-term trust has to grow, it must have a solid basis.
2. Selectivity in recruiting which is not only for the obvious reason that we need good employees, but also because people like to be in a restricted club, to belong into an elite. From high expectations high performance might grow, but not otherwise.
3. High wages are a measure of how the organisation values its people. Given the fact that labour costs have diminished their share of total costs, it may still be possible to pay reasonable wages in many companies that have chosen not to do so. Let’s not forget that wages come in many shapes and sizes, and it’s not only money they entail but also recognition, fair treatment, or that extra help for personal circumstances. Or aren’t we asking the employees for that extra mile?
4. The pay should be related to the company in the way of an incentive pay. It could be tied to benefit, or the economic value added in any unit. That way we have remuneration aligned with strategy and a lot of self correcting processes may happen all along the organisation.
5. Employee ownership of shares is another way to align employees with shareholders, to transmit a long-view perspective throughout the organisation. In this sense it’s important to remark that employees will have a conservative approach with its shares, protecting the company from outsiders or standing in the way of market efficiency, that depends on the point of view applied.
6. Information sharing is also important. Do you want employees to share the company’s concerns while being in the dark at the same time? It doesn’t sound reasonable to me… and probably at the same time our competitors, that also know a great deal about our (and their) business, already have the information.
7. Participation and empowerment is a long forgotten one. We all talk about participation, but we do not actually put the measures in place to enable empowerment. Don’t treat people as dumb followers and then expect them to have initiative, to be entrepreneurs in the face of danger. They won’t.
8. Self-managed teams mean that people will have to actually manage themselves, and thus will have to find the way to co-ordinate and monitor what’s happening. But don’t just leave them alone and blame them in case of danger, exerting even more pressure than what they have, try to help them instead.
9. Training and skill development is also a tricky one. In order to enable workers to use their new abilities, the organisation needs to learn and evolve too. Don’t try to improve the skills of a mouse in a box but give it a nice maze instead. Align responsibilities with the development of the abilities needed, and then make both accountable.
10. Variety can be boosted with cross-utilisation and cross-training, and variety can be another way to reward people and to help them learn. It also gives the company a chance to improve job design and job transitioning, which, if trained, can help easing the company’s pain when losing a talented employee.
11. Symbolic egalitarism is one that could be argued against in many places as it might go against rewarding certain things (eliminating symbols will probably be resisted everywhere), but it also enables the organisation to increase the fluidity of its information: the sense of equality and community unites people, and united people talk more, think together and face the challenges united.
12. Wage compression also relates to egalitarism. While it seems it might be against “high wages” it is not, because it’s referring to reducing the distance between the management elite and the rest of the organisation and will spread the feeling of common purpose. Thus, less energy will be spent to fight for individual privileges and more in the well-being of the whole company.
13. Promotion from within is an additional reward that glues the organisation together and takes trust up to more senior levels of the organisation. People that come from the bottom of the ladder care about what they are managing, as opposite to seeing cold figures. On the other hand it can be argued that the zero based unemotional approach is also useful for an organisation as well as new practices brought by new entrants.

It’s been too long without blogging. Some weeks at an hectic pace. Good things, bum things and a grain of salt. In this learning journey I don’t especially like posting about me. But here I am again, the worst draught we have ever suffered in Barcelona and I am at the beach and it’s raining! A few days ago I was in rainy England reflecting, trying to finish my assignment -dismissed as too reflective by the way-. Can it be that I’ve started to believe my own lies? Do people really expect you to reflect or talking about reflection in personal development is paying lip service to a new god while still worshipping the old one? Who knows.

I don’t want to further bore you with my own ramblings. The thing is that, if you ever face finance, think about the bottom line! There’s absolutely nothing else. No corporate social responsibility, no carbon footprint, just budgets, margins and ratios. The stake-holders are simply unavoidable, and the customers necessary. And if they care about those things, we’ll have to convince them that we care too. Nothing more.

My macbook just took this picture of me. I know I should have moved to avoid the direct light from behind, but I thought I could put something natural and improvised here. And that’s what I did. It’s raining outside. The fireplace is the only heat around, and the air is a bit smoky. Huge waves from the storm are splashing on the beach a few metres from here. Some dogs are howling while mine lay wet on the floor next to me. The recently established neighbouring bees are completely quiet inside their hive: they do not dare to go out. Next picture I’ll try to show you more of this. But not today.

The blog has just surpassed its 30.000 visits. Not bad, huh? Fairly surprising in fact. I’m still amazed that people find these pages floating in this coarse soup that the internet is. Maybe that’s why I decided to show my face and my nonsense, all at once.

What else happened these days? Another workshop, and, seeing the big picture, I’m straightly headed for the final exam. The first year will soon be gone. But first I need to study, I need to pass the exam.  And another year will be gone, one year and a half of blogging, and I will still be here.

Sorry for the babbling. That’s what I felt like doing today. That’s what my 3.5G modem is for. And thanks for reading.