What have horses got to do with business value?

You have probably heard the famous phrase: “If I had asked people what they wanted, they would have said: faster horses”. This sentence has been put into Henry Ford’s mouth since the 2000s. It probably didn’t originate from him, but it fits perfectly with his Ford Model T, which triggered a revolution in transport and the manufacturing industry from 1908. This phrase is often used to emphasise that it is better to ask an expert.

I disagree with this for a number of reasons, see more on this later. In this article, I would like to use this example to illustrate the difference between output and outcome. These terms are often used in Lean-Agile courses. Output is the scope of services that, for example, an IT service provider provides according to the contract. Outcome is the proof of effectiveness that the customer must provide in the traditional service view based on the output: the value created.

If you ask people who have no experience with the agile culture after a training course what the difference is between output and outcome, they usually say that it is almost the same thing. Output is the basis, so to speak, and outcome is a kind of stardust on top of it. Yet the two terms are very different in essence.

Back to the year 1908: A traditional service provider asks the customer what he wants as a means of transport (output) and receives the answer “a fast, enduring horse”. The customer’s consultant tries to avoid grinning and then explains what is in his portfolio.

When a consultant for adaptive services asks what outcome the customer wants to achieve with the means of transport and the answer is: “I dream of a fast and enduring horse”. This horse vision is not perfect, but it is an alternative whose value can be determined. With the “fast and enduring horse”, value potentials can be identified. For example, the farmer can offer his products on more distant markets. With the value potential, alternatives can be put together and developed; whether the matter goes in the direction of the T-model is decided by further development.

This is precisely the difference when you traditionally ask for an output and do not encourage a discussion about the outcome. The reasons for this are manifold and can also be internal to the organisation if IT is only seen as a support function and people think they know enough about solutions from other sources. This means you have to live with fast horses.

I know ideas of “fast horses” well. It’s great when people dare to do this. If this turns into a discussion about values and proof of effectiveness, it brings to light a lot more suitable alternatives. This is where innovation can arise.

Kein T-Modell
Not a  T-Modell

Making money is not a vision

When discussing vision or purpose, the comment that the honest answer to the idea of a vision is ‘making money’ is regularly heard from the sidelines. In fact, vision and purpose emphasise the focus on a long-term goal. But if, according to the hecklers, the most honest vision is ‘making money’, let’s take this for a moment as a working hypothesis for a hypothetical case company.

According to their vision, we focus on the financial decisions. Well, let’s put this ‘vision’ into practice. Let’s assume that two sales colleagues have two possible contracts on the hook. Contract number one brings us a large customer, a lot of business with little margin and the prospect of more deals in the coming years. Order number two is smaller, but with a spectacular high margin.

Our small sample company cannot fulfil both orders at the same time. We have to make a decision. Since a vision has a guiding power, let’s take a look at the objective ‘make money’. Lo and behold, our vision says neither ‘make money quickly’ nor ‘make money sustainably’.

Apart from a lack of understanding of the value of a vision, the rallying cry of ‘make money’ could be an allusion to moral issues. Perhaps also to the discrepancy between a global, earth improving vision and the quarterly staff meeting where 90% of the speaking time is spent on pipeline, turnover and other financial performance indicators.

Very few companies pursue a noble corporate goal altruistically. By their very nature, companies want to make money. What kind of business they want to do should be part of their vision. ‘Making money’ is a performance indicator and essential for survival, but it is not the objective and certainly not the vision. It must be possible to derive from the vision how I act, whether I choose the short-term lucrative or the long-term contract.

Years ago, I met a young man who spent his holidays earning money for a social project in which he had been volunteering for a number of years. The aim of this project was to support and mentor young people with social challenges through sport. To finance the project, he advertised gambling and alcohol. It was extremely important to him to raise as much money as possible. He said that if this advertising money ended up going to a good cause, then that was fine with him.

This is the most extreme example of the discrepancy between a social vision and the ways to raise money that I know of. The Vision is a shared dream, his dream was to fund sports equipment for this social project of his. As opposed to ‘making money’, that’s just the way to get there. You can argue morally about the way he did it.

Velmerstot
Velmerstot

Your AI application has no bias

Being a person with a technical background, I am annoyed by statements like the AI is racist, the AI is misogynistic, the AI favours old white men etc. because these attributions distract from the actual perpetrators, the humans.

Usually, the issue is that someone has used a generative AI and the result is simply not suitable. One nice example I found was an experiment by an HR colleague who used generative AI to generate a job advert. The result was a job description for a 50-year-old man with a lot of industrial experience. I found the result quite plausible, as this description seems to be about the average of how these positions are currently filled. So it was the wrong question or the wrong AI that was used.

AI applications are tools, highly complex tools whose decision-making principles are rarely traceable. Tools have no prejudices, people do. It would be like saying I don’t think my hammer likes my screws. If I use nails, everything is fine, but if I hammer screws into the wall, there are always such ugly chipped edges.

By the way, we completely redid the job advertisement without artificial intelligence. We let the current job holders get involved and asked them what they felt appealed to them. What makes their job and their employer special, what are the real benefits that competitors don’t offer. The response to this job advert was many times higher than before. And the position was filled quickly.

Glas

On connection

Thanks to our “Kneipenlesung” podcast, I have learnt to actively discover new perspectives by reading books. I was on this very track in search of new reading nourishment. Whilst doing this search, I read a book by a young author that I couldn’t get into, that for me was hyper-individualised and painted the world in black and white. This prompted me to look further.

The result of my quest is a wonderful statement against hyper-individuality, which is why I would like to recommend it: Kae Tempest is a musician, does spoken word performances and talks about her experiences in her book “On connection”. Kae talks about the difficulty of connecting and resonating with the audience. Her concept of creativity goes far beyond the artistic aspect.

There are several things I have learnt from this book, one of them being that I should make it my responsibility to strive for connection. For example, connection in a virtual team. In situations where someone is disrupting the group’s collaboration, I can try to get creative and involve that person again.

This approach extends far beyond resonance and moderation. This is inspiring to me and a very good antidote to the narcissism that is often found today. I hope that you too can take something from reading this small book and that it connects you. It is not a great literary work, nor is it a manual of methods, but it is a beautiful little essay by a stage artist about being connected.

Verbundensein
Kae Tempest On Connection (German Edition)

The difference with Generation Z

Recently, a young IT entrepreneurtalked about the three biggest challenges for young professionals, i.e. GenZ. They were lifelong learning, the insufficient public pension and a company with a strong purpose.

In my cohort, Generation X, these were lifelong learning, the state pension is not secure and never working for a company, which is dishonest. Depending on your opinion, these were mostly large corporations with corruption problems, defence companies or nuclear companies.

Lifelong learning was a challenge that seemed normal and cool just before graduating from university. I still enjoy learning new things today. Whether you like it or not, in technical professions one or two training courses with certificate exams per year are now normal. Something that surprises the non-technical people in my group of friends, but is becoming increasingly common in more and more professions.

The German Federal Minister for Social Affairs Dr. Norbert Blüm said “Pensions are safe” in 1997 and corporate pensions almost completely disappeared. And there were some scams with private investment schemes that were sold as supplementary pensions. In fact, the state pension has proved to be quite safe. Nevertheless, there is always good reason to build up additional savings.

I am emphatically not saying that nothing has changed in general. But I believe that the demands of Generation Z are primarily the demands of young people, which are not that unusual. I have always found a mixture of young and experienced people to be beneficial. For example, if a status quo has been challenged by motivated employees for 10 years, then it may only take another year and a young woman who is committed to working against it and it will fall.

There are amazing employees in Generation Z and, not to forget, also amazing employees in Generation X (Y, etc.) who are constantly shaking up the status quo and pushing things forward. Just talk to people and listen to whether they fit into the team.

Brunnen