Will Happy Leaders Excite Chipotle’s Success?*

Gene Morton

If the news reports are accurate, the Chipotle Mexican Grill business is a case worth watching by those of us interested in reorganizations, leader development, organization effectiveness, and leader succession. For over a year this company has been in a sad, downward spiral. Meanwhile, they still capture the imagination of investors and customers with their unique nutritional offerings. How can an organization with such huge potential and garnering so much praise fall so quickly? The answer lies in their outmoded leadership structure and its pivot point–individual accountability.

Anna Lena Schiller – Own work, CC BY-SA 3.0 (http://annalenaschiller.com) 

As with almost every food service business, the leaders’ goal is sustainability, with any luck into the next few generations. This is true for almost any food service business. But when its leaders are not aware of or are unable to fulfill their accountability for delivering reliable and high-quality food, customer loyalty is reduced, leaders lose their enthusiasm, and long-term growth is not likely. The leaders have not…created Clarity, Focus, Accountability, and Commitment among themselves.

Has Chipotle designed and implemented a new leadership structure to support the survival and prosperity of their company? After their business disasters, it would seem to be a logical action. Unfortunately, with no evidence to the contrary, it appears they have ignored their leadership structure and left it in disarray.

• They reduced their leaders’ clarity by adopting a dual, co-CEO, leadership arrangement. This can increase misunderstanding and confusion all up and down the line. That’s why co-CEO partnerships are discouraged as a leadership structure. It is a most difficult working relationship to coordinate.
• There is no evidence that they have defined their business outcomes. Without these definitions, it is more difficult for everyone to focus on what’s most important to their customers.
• There are no signs anyone negotiated the distribution of accountability at the top to make sure someone was on constant alert to deliver every business outcome.
• Is anyone negotiating for the leaders’ commitment to take responsibility, improve their operations, and fulfill their accountabilities?

Shareholders’ Wake-up Call

Frustrated Chipotle shareholders filed a claim against their executives. Then some of the top managers even fell under criminal investigation. Shareholders claim the leaders are liable for the loss of share value due to costly management mistakes. In a Denver Post article, shareholders claim Chipotle leaders allowed unsafe food handling practices to continue even after people became ill. Is it clear even today who is accountable for food handling?

Will any legal action truly compensate shareholders, and the victims of foodborne illness, for their losses of health, time and money? Why is Chipotle risking more lawsuits before reorganizing their leaders? Why not reorganize the leaders now so that the company’s offerings are positioned to attract new customers? It could save the company and create jobs.

Learning Creates Winners

If the leaders, participants, and observers of Chipotle’s case learn how to manage accountability—how to locate it and how to spot those able to fulfill it—everyone could win in this company turnaround: customers, investors, suppliers, and employees.

Some might ask, “How would they start to improve the effectiveness of their leadership structure?” They can start by answering questions like these.

1. What arrangements in your current leadership structure make it possible for your executives, time after time, to fail to correct for repeated outbreaks of foodborne illness?
2. Why are customers put at risk and headlined in the news media before their serious illnesses are acknowledged?
3. How are your Chipotle managers applying accountability? Do they understand what it is and what it means?
4. How is the accountability for food safety and quality spelled out? Are you still confused about the accountability for delivering outcomes?
5. Who has accepted accountability for food quality and safety? Is a leader identified by name? Does this leader agree to accept it?
6. What fail-safe mechanisms are in place to ensure food is well prepared every time and at all times? If so, have they been tested to make sure that if they fail they will fail safe?

Are Chipotle’s Individual Accountabilities Clear—Defined, Accepted, and Integrated Among the Leaders?

While such arrangements are often taken for granted or deemed too basic for the attention of those in the Chief suites they are the bedrock of a leadership structure. Accountabilities are bedrock. When leaders have not spelled out the expectations about accountabilities and roles, they are likely to confuse everyone. Without clarity the stress on the top of the company ladder increases. Executives can find themselves running all day to keep up with unexpected emerging issues. They are overwhelmed. What is worse, though, is how this void gets filled with power grabs, internal competition, lack of initiative, and chronic conflict among the executives and managers. These are leading indicators of confusion over accountability. If you have these problems in your organization, accountabilities are probably not clear.

Everyone wishes for a fair and just verdict for Chipotle and its injured shareholders and customers. Meanwhile, as they make their recovery, let’s pay attention to how this Chipotle dispute unfolds. We might learn from their painful experiences and ask ourselves what errors and omissions in leadership structure are present in our own companies? Here are some questions for us all.

1. Have we defined our own critical outcomes and negotiated the accountability for each? This helps to ensure product and service quality and safety might never become a customer’s problem. Why? Because we have identified what leaders we can count on to make sure customers only receive top quality products and services.
2. Have we identified our product or service delivery team members? Have we assured they have the expertise, input, and experience needed to deliver our most critical business outcomes?
3. Have we clarified roles and responsibilities among our team members? What about the roles of those who must support accountable leaders as they work to deliver a customer trusted outcome, for example, a satisfying, nutritious, and safe meal?
4. Finally, have we set in place the internal feedback triggers we need to make sure business killing mistakes are corrected inside, here and now, before our process problems become customer problems?

Defining the six to 12 critical outcomes for the survival of a business is imperative in achieving a sustainability. Focusing and acting to deliver these outcomes will only occur in the presence of accountability, modeled by the leadership team.

Leaders and Coaches Invited! Accountability Tool and Podcasts

We have created a simple tool for those who wish to measure the clarity of accountability within organizations. Simply send a request to info@genemorton.com and provide your best e-mail address to receive a copy of this tool.

For more on outcome accountability, see our podcast episodes 5 and 6 at Lucrative Leadership Conversations.

*Note: The intention of this article is to provoke thoughtful conversation about how leaders can better lead together. Although originally written in August 2016, the release of this article was postponed as Chipotle worked through some complex top management choices. With the appointment of, Steve Ells, as the single CEO, and the involvement of activist shareholder, Bill Ackman, the questions posed in this article have become even more relevant.

*Many thanks to Susan Hasty and Matt McCarrick for comments on earlier versions of this article.

Organize Your Leader Development: Capture Your Strategic Talent

If you want some serious insights into leader development, this article is for you.

Authorities Beverly A. Dugan and Patrick Gavan O’Shea, both of Human Resources Research Organization (HumRRO), explain:

1. The connection between development design and a company mission and strategy.
2. How this link can clarify goals and competencies.
3. Enhancing leader learning with special assignments, projects and other experiences.
4. What to think about when you want to choose the people to develop.
5. How to conduct meaningful evaluations of leader development programs.

Click on the link below see the article.

Click to access SHRM-SIOP_Leader_Development.pdf

 

 

VA Headlines Show First Step to Cure Leadership Problems

VA Secretary Sloan Gibson

The VA leadership structure needs a redesign starting right at the top. Then they can roll out the new leadership structure design process to leaders of the other divisions and major locations around the United States.

What is a leadership structure? It is defining the critical outcomes, granting the accountability, and integrating the roles needed to support a new strategic vision. It is a leadership process where leaders become organized to stay organized.

How do I know leader structure needs redesign? The VA’s two assessment reports say so. That is, (a) the Army Corps of Engineers assessment report and (b) the report of a consortium of three of the most prestigious consulting firms of our nation. Just as telling are the headlines and stories about the VA from the last four weeks. They are listed after the following report overviews. There are consistent themes reported throughout: the VA leadership deficiencies are disrupting construction projects and healthcare centers across the nation. Here are excerpts.

Report A: The Army Corps of Engineers Spots Construction Deficiencies

The VA construction division suffers from conflicts in their lines of authority, priorities, expectations, and standards for accountability.

When these elements of a leadership structure are not aligned with an up-to-date mission and vision, they become large obstacles to progress. On the other hand, when they are all in sync everyone is better able to deliver critical outcomes and fulfill the Veterans Affairs vision.

Report B: The Consortium Report of Rand, McKinsey, and MITRE

After looking at the VA health care system, this group criticizes the wait times and facility costs, oppression of anyone who would speak up about a problem; the lacks of innovation, sharing best practice, and collaboration; and the inability of the VA to carry a standard clinical case load.

Sample of Headlines Expose Outmoded VA Leadership Structure

In addition to these assessments, headlines about the VA’s troubles show their struggle to get by with their current outmoded leadership structure. The headlines, from across the country, along with the above mentioned assessment reports, show how the VA’s outmoded structure and lack of new vision is turning this organization into an operational nightmare for veterans as well as for the people who deliver their care.

Some VA Headlines: Previous Four Weeks, August – September, 2015

1. “Senate passes short-term bill to continue construction at VA hospital” (this is the first of several votes required to fund the completion of Aurora, CO, VA hospital but funding will still not cure the underlying problems with leadership structure that created these problems in the first place)
2. “Whistleblowers: VA inspector general a ‘joke'” (retaliation against whistle-blowers and lack of accountability )
3. “VA Needs ‘System-wide Reworking,’ Independent Report Finds: Congressionally mandated independent review of Veterans Affairs health-care system identifies widespread problems” (WSJ reports “unsustainable costs” and a flawed bureaucracy with leadership and budget problems)
4. “Report blasts Veterans Affairs for wait times, facility costs” (report of Rand, McKinsey, and MITRE engaged by the VA for this assessment)
5. “Colorado Springs VA clinic’s wait times among nation’s worst” (12^th worst out of 240 veterans clinics and hospitals)
6. “Poor planning, bungled engineering and delays send costs soaring for VA hospitals, report says.” (the Army Corps of Engineers claims VA construction is victim of multiple design changes, conflicting lines of authority, slapdash planning and undisciplined VA leadership)
7. “Legionnaires disease bacteria found in Phoenix VA hospital water system” (what else could go wrong?)
8. “Wisconsin veterans hospital’s former director no longer on VA payroll” (improper prescription practices)
9. “Medical errors are up at VA hospitals, but they’re actually doing less to figure out why”
10. “Memphis VA Hospital: Allegations of Neglect” (patient care rule violations)
11. “Watchdog Report Critical of St. Cloud VA Was Quietly Shelved” (hospital administrator claims the deficiencies have been corrected)
12. “Pressure Increases on VA to Let Others Handle Construction” (U.S. Rep. Coffman and others say VA is not capable to handling construction projects)
13. “VA has fundamentally mismanaged hospital construction” (VA allowed several building projects to spiral out of control)
14. “SA Whistle-blower says VA Hospital Exposed Workers to Asbestos“
15. “‘We’re left to the wolves’: Videos allegedly show Memphis VA leaving disabled vets unattended” (veterans left unattended during staff meetings)
16. “Thousands of vacant VA jobs costing taxpayers billions” (forcing veterans to find private care)
17. “Bush calls Aurora VA hospital a ‘disaster,’ but argues for completion” (candidate Jeb still supports building it)
18. “Report: 1 in 6 positions vacant at Wichita VA Hospital” (low staffing levels leave some veterans to wait)
19. “The Disturbing Thing That Happens Every Day at a VA Hospital That Treats Quadriplegic Veterans” (video by man in motorized wheel chair to point out staff go missing for 30 minutes every day).
20. “‘VA is lying. Veterans are dying!’ billboard appears across from VA Hospital” (various locations across the country)

What Congress Wants Is Not Necessarily What Is Best

Some news reports say Congress members are demanding the VA Secretary fire any executives responsible for the cost overruns at the Aurora, Colorado, VA hospital construction. Of course, this will not fix the VA leadership structure. It only punishes the people who made the mistakes. It doesn’t give any direction to those who stay and have to clean up the mess. Without redesigning the overall leadership structure, any positive effects of firing leaders in the construction functions will probably be short-lived.

As you can see, there are many arrows pointing to the need for a leadership structure redesign. How long should veterans have to stand in line and wait for the services they need? Where should the redesign start?

The top needs to start first and soon because if the central VA leaders find out they cannot get their act together, there is probably no reason to expect much improvement anywhere else.

 

 

3 Bold Steps to Meet Veterans Immediate Care Needs Today

RE: (Olinger, D. and Migoya, D. in VA officials were warned about Aurora project before work began, The Denver Post, posted on May 7, 2015)

According to news accounts, the new VA hospital construction in Aurora, Colorado, has turned into a disaster of over budget designs, threats to close the project midstream for a second time, and disputes among many of the involved parties.

VA Leadership Problems Provoke Concern for Veterans’ Healthcare

Hospital Operating Room

Articles reporting on the Aurora VA hospital construction project shine light on leadership shortcomings in many areas. There are many discouraging and self-limiting viewpoints about VA leadership practices. For example, news articles have reported…

• There is no leadership among the VA’s top managers.
• Top VA managers were bullying staffs and contractors.
• VA construction management leaders have acted outside the law.
• Elected officials are threatening to hold some VA officials accountable.

These news reports give Colorado veterans and their families front row seats to a chaotic healthcare drama going on in the VA. Out of this bedlam, can veterans feel confident about the quality of their healthcare? Especially when news stories accuse former and new VA leaders of so many other transgressions.

• Unnecessary and expensive redesigns, delays, and waste.
• Illegal activities and unsafe working conditions.
• Antagonized relationships among owners, subcontractors, designers, and builders.
• Violating change order procedures.

News media report these leader problems have driven total construction costs up from about $600 million in 2012 to over $1.7 billion today. But there are few reports on unexpected costs this mêlée could have on veterans’ quality of care.

• Will this disorganization and conflict diminish veterans’ care?
• Can our veterans trust the VA system to meet their needs?
• Recently congress agreed to meet veteran’s immediate needs by receiving care from private providers. Who knows for sure what the consequences of exercising this option will be on those veterans who may choose it?

Why resort to public bickering when leaders can take steps take to calm themselves and enhance our veterans’ care?

What if these outspoken leaders—including elected officials—changed their tune? What actions could they take to assure veterans that they will receive high quality care starting today?

The leaders could take the first step below. Some will find it most difficult. At the same time, it is most critical because it signals the veterans of a shift to a more constructive attitude.

Accept Responsibility and Give Constructive Progress Reports

• It is best if leaders to stop blaming others for their problems. It is time they step up en masse and accept responsibility for the mistakes made. After all, it is their directions and lack of direction which allowed many of these problems to occur in the first place.
• Waste not one minute of project time looking for someone to punish. News reports say certain elected officials are on the hunt for someone to “hold accountable.” Concerning veteran’s health care needs, does meting out punishments add any value? If there are offenders, remove them from the project to make sure they will not disrupt its progress any further. Administer retribution for any true liability through a separate process and away from project work.
• It is time for the leaders in all roles to admit to a lack of oversight and to the neglect of the facilities and processes providing care to our veterans. They set no firm limits to stop a ramp up of construction costs from $300 to $600 to $800 million and now $1.73 billion. They allowed many changes in the hospital facility’s design without consulting the construction contractor about the consequential added costs. The leaders—including elected officials—failed to monitor how this project was implemented after legislation was passed and management directives were issued.
• Most important, apologize to veterans.  Do not apologize for how others fouled up. Apologize for allowing a disruption to our veterans’ quality of care.

Update the Leadership Structure

• Robert McDonald, new VA secretary, could acknowledge the VA managers were severely limited in the exercise of their knowledge and expertise. They worked in blind compliance to a miserably inadequate leadership structure. For example, threatening a whistleblower to force him to clam up is in part evidence of this out-of-date leadership structure. Why? Because in an effective structure, people are encouraged to report problems so their damage can be minimized. In addition, there are other symptoms of structural weakness: blaming, disavowing responsibility, finger-pointing, and a lack of clear accountability are some of the most obvious.
• Secretary McDonald, start a redesign of the VA’s leadership structure. Work with your top managers to design one tailored to fit veteran’s current needs. Name leaders who are capable of accepting and fulfilling their accountability for our VA’s most critical outcomes.
• To get out in front of this construction project, to be ready to serve on day one, redesign the leadership structure of the Aurora, Colorado, hospital. Media have reported little about those who are expected to lead in this new healthcare service center. Provide the local leaders with resources to redesign their leadership structure as the hospital is constructed. To show competence the first day their new facilities open, now is the time for them to organize themselves. Demonstrated competence on day one goes a long way toward reassuring veterans about the quality of their care.

Lead Together

• Instead of bullying, VA leaders along with the elected leaders could collaborate with their manager colleagues at all levels. They could join one another to recover from, and in some instances roll back, the misinformed leader practices and early excesses in the designs of the Aurora hospital.
• They could reach out and become reconciled with their beleaguered construction partner(s), Kiewit-Turner and others. Through partnering conversations they could get ready for the upcoming choice points in the roll out of this massive project. Once identified on these choice points, they can agree in advance about how they will communicate, manage conflict, and make sound decisions when each phase occurs.
• They could set limits, without waiting for congress to do it for them, on the scope and allowed cost of this construction.

Finally, VA leaders—including elected officials—can assure veterans their healthcare needs will be met today. They can streamline the use of existing VA and private healthcare systems, both national and local, and fulfill our veterans’ unique healthcare needs.

 

 

Leadership Wizardry Begins with Structure

Too often leaders want sustained growth, as well as performance improvement, but do not realize the best starting point is to (re)design their structure of leadership. Leadership structure refers to those organizational arrangements which can unify or defeat how leaders perform, alone and together.

Leadership Structure Goes Beyond Charts: Vroom and Yetton Leader Styles

Bolman and Deal[1], two outstanding experts in organization behavior, give four conditions which call for the redesign of a structure.

-Changes in an organization’s external environment, such as the start in 2007 of the trip down to a recession and then long, slow trip back to recovery by 2015.

-Changes in technology such as from scientific breakthroughs and the greater use of advanced cloud-based computing, to safer ways for individual staff members to lift a heavy load.

-Organization expansion, growth, and decline; many companies experienced it in the last seven years. In addition, looking just over the horizon, some expect massive growth when the U.S. Congress acknowledges the need to replace our deteriorating national infrastructure. Finely, recent news reports show the Department Veterans Affairs is undergoing labor pains as the demand for their service increase.

-Changes in leadership: replacing a new leader, such as the hiring of Secretary McDonald to head the VA; a need to set new strategic priorities; or restructuring leadership to improve operating performance and corporate culture.

When considering these changes, leaders benefit by answering two questions about their organizations.

1. What does current evidence show about how well we cope with these conditions?
2. How prepared are we ready for the changes coming just over the horizon?

Regardless of how they answer these questions, many leaders will still find themselves redesigning their structure out of an absolute necessity to survive. For example, to respond to more customer demands leaders will rely less on top down management and more on lateral, local coordination across functions. The implication for leaders is they will need well designed leadership structure in the near future.

Leaders Motivated to Lead Together

An effective leadership structure motivates leaders. With it they become inspired to contribute their best. It enables them to deliver their company’s critical outcomes together, without undermining one another’s efforts. Their satisfaction grows as they discover how much more they can accomplished when working as a cordial team. Using a well-tuned structure, a group of leaders can even become transformed into a business advantage, but it won’t happen if they are stuck with an obsolete or irrelevant structure.

How does an ineffective leadership structure stymie the best intentions of its leaders?

Six Ways Outmoded Leadership Structure Blocks Efforts to Grow and Innovate

When leaders are trying to do their best with an out-of-date leadership structure, they tend to act in one or more of the following ways.

• Desperate for some coherent direction, they focus on self-serving, short-term activities and results. They justify their actions by telling themselves that, “At least this way I can get something done.”
• When leaders are clueless about their company’s survival outcomes, their results become hit or miss, satisfying some customers and angering others.
• Gaps, conflicts, and overlaps in accountability and roles lowers trust between leaders, increases political disputes and causes them to work at cross-purposes.
• Leaders tend to become caught up in a web of political intrigue causing uncoordinated communication and decision-making snafus.
• Leaders are cut off from their customers’ needs and lose sight of how to make their strategic vision come true.
• They feel there is little means or incentive to sustain any hard-won improvements they might push forward. In short, they assume it is a waste the time and effort to try to enhance their organization.

Working in an outmoded structure, unwitting leaders undercut their own power to get things done. Even well-intentioned leader initiatives can undercut the hard work of the other leaders, leaving bad feelings all around.

Three Elements of an Up-to-Date Leadership Structure

How can leaders inspire themselves to take coordinated and productive action without over reliance on high pressure top-down oversight?

• By organizing themselves, along with their CEO, so they are all focused on the same strategic vision. This means each takes a blood oath they want to improve their teamwork and then immediately move on to define their critical outcomes to shape their strategic vision.
• By learning how to form fruitful work relationships which ensure customers receive the vision specific outcomes they were promised. For this to happen, individual leaders have to accept accountability for each outcome, integrate their roles for the delivery of each, as well as set up and agree on the checkpoints of a coordinated communication processes.
• By redesigning their decision-making processes to encompass the combined efforts of all leaders. This means they design and agree about a strategy-driven hierarchy with regular, relevant and timely performance feedback systems.

Four Ways Leaders Profit from an Effective Leadership Structure

As delivered outcomes begin to satisfy ever more customers and the leaders improve their teamwork, measurable improvements in customer satisfaction and revenues should become possible. From a well-designed structure, leaders stand to gain in other ways, as well.

• They enjoy more freedom to fulfill their organization’s strategic vision.
• Over time, their coordinated responses to emerging opportunities and emergencies make it possible for them to accept more risk. Accepting greater risks comes the opportunity to gain greater payoffs.
• They gain more customer and employee admiration as they learn to expect and not just react to emerging and changing customer needs.
• They gain more repeat business, reducing the time and expenses needed to develop new customer relationships. For example, as a commercial construction company gains a reputation for excellence its can-deliver profile raises its value in the eyes of owner-representatives. Owner reps are looking for reliable and responsive builders, such as these, for their signature projects and on-going small project work.

By the way, with a new performance management system, it becomes easier for leaders to collect data about several of the leading performance indicators mentioned above. These valuable data give clues about whether their company is on track to succeed in the long-term.

Organize Your Leader-Power for Strategic Success

The power of a leadership structure became clear during my twenty-five years as a consultant and coach. Many of our projects involved system-wide organization change and improvement, such as reorganizations, service delivery systems, and changes of culture, as well as mergers, shutdowns, and IT conversions.

Almost as disturbing as a tangle of 18 wheelers in the icy ditches along I-80, our assessments revealed boneyards of failed and mangled leadership initiatives. There were many examples of organization breakdowns due to outmoded and inadequate leadership structures. We saw how five-year old top-level choices had hamstrung their own leader groups, rendering them powerless. Those top-level managers had not imagined how the flaws in their decisions could reverberate for years. And they lacked the checkpoints to give them an advanced warning of their off-track decisions. They had underestimated the power of a strong leadership structure–the power to grow, as well as the power to cripple, their organizations.

Conclusion

Let’s start a conversation about leadership structure: key in your questions or observations in the comment spaces below. Your experience with the dynamics of leadership structure is valuable for all readers.

Are you mulling over a change in culture, a reorganization, or renewal of your organization? Remember to consider how well your leadership structure will fit your business market and strategic vision. Start your organization improvement project by bringing your leadership structure up-to-date.

[1] Bolman, L.G. and Deal, T., Reframing Organizations: Artistry, Choice, and Leadership. 2003, p. 84

What if 100000 Dedicated Readers Saw Your Book’s Message?

Is it possible business book summaries offer a new avenue for making your book’s content available to your target audience? In a word – YES! After I discovered EBSCO, it opened up an entirely new method to get my content in front of leaders and librarians worldwide.

EBSCO Readers are worldwide

What is EBSCO Business Book Summaries (BBS)?

At a recent drop-in meeting for professional organization development consultants, my friend Judy Cole shared her experience as a corporate subscriber to EBSCO BBS. It shook my world.

Every month Judy, one of 100,000 time-starved executive, professional, and leader subscribers, has access to 4-8 page book summaries written by EBSCO’s professional writers. Subscribers like her use EBSCO BBS to keep up with their reading. Their jobs depend on it. These summaries profile books from respected traditional publishers such as Random House, Simon and Schuster, and Harvard Business Review Press, as well as many smaller independent publishers. They include print, e, and audio book formats.

Here’s How EBSCO Business Book Summaries Work

Each month Judy reviews the latest EBSCO list of just released book summaries. She scans the list, sees one that looks interesting, and orders a summary with her company’s subscription. In less than 15 minutes, she has a paper print out or has downloaded to read the summary on her phone. If Judy is intrigued by the summary, she orders the book in her preferred format—print, e, or audio—through Amazon or the author’s website.

Who Is EBSCO?

Ever done any library research? If so, you used their service, even if you never heard of them. Libraries subscribe to their reference databases so you can research the business, scientific, and technical journals and periodicals related to your topic.

EBSCO is a privately owned publisher with about 300 sales staff worldwide. Does this mean a professionally written summary of my book content could be available to 100,000 subscribers WORLDWIDE? The answer is ABSOLUTELY!

Who EBSCO Serves

EBSCO provides content to companies, governments and institutions all over the world, including colleges and universities, public libraries, medical and health libraries and K-12 schools.

How I Contacted EBSCO

I found EBSCO Business Book Services, PUBLISHERS & PARTNERS, (http://preview.tinyurl.com/nc7bgna) in my Google search. Note: For your convenience, the hyperlinks are active in the e-versions of this article.

Here is an outline of my experience in submitting my book to EBSCO:

1. I sent a request to EBSCO to consider my book for their summary.
2. They asked for a review copy.
3. EBSCO reviewed my book, and in a few weeks let me know they had accepted it.
4. I received their licensing agreement. My intellectual property attorney reviewed it and explained my rights and what to expect.
5. Based on their schedule, EBSCO will write a summary of my book. They will send me a copy to check for accuracy. Next, they will send the summary to their worldwide subscribers using a proprietary mailing list. For me to create such a list could take centuries—well, if not centuries, at least 10 years—and by then, all the email addresses would have changed.

I cannot wait to see how much interest this will generate about my book.

Take a peek at what they are summarizing; see Leaders First: Six Bold Steps to Sustain Breakthroughs in Construction at www.GeneMorton.com, or www.Amazon.com.

Your Comments Are Invited

What about this idea of book summaries as a channel for your business book? Have you ever had experience with one of the book summary services? What lessons would you pass along to other authors who might be thinking of this as a channel?

Fiction authors: have you found any book summaries that fit your genre? Leave comments below; let’s start the conversation!

Shutdown or Reset: What Will Inoculate the VA Hospital Project Against Scope Creep?

About a week ago, I began this case study on scope creep. But the developments in this case are moving faster than I expected. On December 9, 2014, much to my surprise, news reports announced a third-party U.S. Civilian Board of Contract Appeals decided the Department of Veterans Affairs breached its contract for the Aurora VA hospital. On Wednesday morning, December 10, 2014, the Denver Post reported Kiewit-Turner, the contractor-consortium, halted work on the project.

This article is an informal case study into the signs, pitfalls, and consequences of scope creep. With these new developments in this project, my hope is we gain a deeper understanding of what drives a project off track, and gives project managers nightmares.

In an earlier article, we explored how to inoculate a project or plan against scope creep: Rein in Scope Creep and Create a Successful Project. Now let’s explore how a project might look once it becomes infected. What could an up-to-date and effective leadership structure be able to bring to this project? What other elements will heal the project?

Scope Creep Expanded/Improved

But first, thanks to readers’ suggestions, I revised the definition of scope creep. In fact, it is observable in many business ventures and organization changes.

Scope creep defined: when leaders allow uncontrolled changes, and/or add-ons, to a project’s goals, deliverables, features, and/or requirements. Scope creep occurs, as well, during the implementation of an organization’s mission, strategic vision, goals, and plans.

This definition assumes a project leaders spell out their goals and requirements at the beginning, before the project starts. When they are not, the project is at greater risk of scope creep.

Like fruit flies in a ripe orchard, projects are abuzz with scope creep

 

Question: Why it is so important to spot and control for scope creep?

Answer: It destroys good ideas. It over-burdens innovative plans. It may draw attention and resources away from otherwise robust organization renewal initiatives.

Here’s the reasoning. #IdeasAreNotAssets: the value potential of a great idea is not an asset until leaders have implemented it so its tangible benefits are delivered. This applies to software products, construction designs, OD organization culture changes, or in new ventures such as a hospital’s roll out of a new patient care process.

Question: When does a project, program, or plan become most vulnerable to scope creep?

Answer: During its implementation process.

Outsider interference is often a source of scope creep. They do not understand how to honor the project goal(s), time, and budget. Interruptions and distractions can come from for those inside the project, as well. In combination, these well-intentioned folks are like fruit flies in a ripe orchard. All during project implementation they keep scope creep abuzz at its edges. This requires leaders to keep up a project’s boundaries and limits .

What are some of the openings where scope creep infects a project? To answer this question, let’s review the highlights of the Colorado VA hospital project.

Signs of Scope Creep: Aurora, Colorado VA Hospital Project

The new Veterans Affairs Hospital in Aurora illustrates how scope creep threatens to kill good ideas.

First, scope creep seems to start in 2011. The leaders of the Kiewit-Turner contractor-consortium and VA set the stage. They hand wrote their contract with a few lines on a piece of paper. This friendly but casual action may have opened the project to scope problems. It appears informal and to gloss over many details. The act was like a lapse in infection control.

How?

This act could have set the tone and culture of this project. It forewarns of the casual way the VA later added features to the project design.

The leaders agreed to build a new VA hospital for $604 million without the test of precise contract language. Their mutual understanding of goals, responsibilities and role relationships went unexamined. Their informal agreement looks more like a spur of the moment statement of intent than of a contract. Yet as the project slid further out of control news accounts report the parties referred to this note as though it were a binding agreement.

Second, the contractor claims there were many management problems. They claim massive conflicts, bungled designs, and mismanagement. These short-comings fostered more cost overruns and delays in the project.

Quotes of U.S. Rep. Mike Coffman, R-Aurora, agree with this assessment. According to news accounts, he said the project is more than $470 million over its original budget of $604 million and has experienced many delays.

When a project design begins to exceed the mutually agreed budget can we say scope creep is in the house? From my experience, the answer is yes. If not controlled and mutually approved, anything outside a project’s established build budget, schedule and other parameters is a sign of scope creep. But how does a project grow beyond its budget? When one or more of the project leaders make changes without consulting with the implementers about the impact on the budget.

In this project, there exists a change order process where the VA and others suggest and seek approval to add late-blooming innovations. But here is the third sign of scope creep. According to the contractor, the VA has not followed this change order process. The VA has made errant, uncontrolled, and possibly unspecified changes all along the way, according to the contractor, and each of these instances is a sign of more scope creep.

The goal of a change order process is to make sure the project leaders control, approve and manage changes. The process intends to eliminate disruptions and costs. An effective change order process allows approved changes but only after the leaders determine they will not derail the project or add unnecessary costs. Change orders make it possible to add creative ideas or recover from design lapses after a project has already started. These ideas make take advantage of greater efficiencies or create novel solutions that were not obvious at the start of the project.

Can Kiewit-Turner and the VA Recover At This Late Date?

Latest news: The U.S. Civilian Board of Contract Appeals determined the VA created a hospital campus design that would cost $1 billion, not the $604 million promised in the starting contract. Furthermore, the Board found the VA does not have the funds to pay for a $1 billion dollar project.

Does it make sense now to set up special leadership structures to cut out and/or manage further scope creep on this project? Let’s take a look at just how entangled the project is so far.

Reading between the lines of the Kiewit-Turner formal complaint, little evidence of a mutually agreed leadership structure exists for this project.

1. The Kiewit-Turner complaint details miscommunications, unresolved conflicts, violated expectations, confusing accountability, and ill-definition outcomes, all signs of an outmoded leadership structure. Each of these missing elements creates entry points through which scope creep can enter this project.
2. In addition, there is much finger-pointing and blaming by parties on all sides, a common result of an inadequate leadership structure. These activities are most often direct indicators of gaps, overlaps, and confusion in accountability.

Loss of Value

A structure of leadership is one of those important details to put in place up front, before a project even starts. It answers the question, “How can we best lead and work together to deliver our most critical outcomes without disrupting the work of our partners on this project?”

Leadership structures provide an organization able to make sure a project delivers its value.

But as it stands, the potential value of this project is in decline. For over 10 years its cost of implementation has climbed. For those veterans whose special needs this hospital will treat, every delay is a loss of value.

Agree or disagree?

1. At this late juncture, what can rescue this project and turn it into a successful healthcare facility?
2. What can we do as citizens and taxpayers to boost this project toward a healthy conclusion?
3. Will stopping this project and resetting it be enough?

Please share your ideas and suggestions in the comments section below.

 

Postscript

I send all of my best wishes to the VA and Kiewit-Turner. Let’s hope they will be able to transcend these project setbacks soon. My prayer is they will be able to complete a flagship healthcare facility and improve the well-being and lives of veterans for many years to come.

Rein in Scope Creep and Create a Successful Project

Lava Flow Wikimedia commons

Scope creep: when leaders allow uncontrolled changes, add-ons, and embellishments in a project’s goals, deliverables, features, and/or requirements.

When did I first learn the dangers of scope creep?

It was in a project where scope creep was all but eliminated—in advance.

A life insurance company was embarking on a system-wide computer software conversion. It was one of the smartest organization changes I ever saw.

This company’s leaders approached their conversion with caution. They knew many horror stories about how mismanaged IT conversions had destroyed major insurance companies. They learned it was critical to organize all their relationships and resources involved before ever starting their project.

The top leaders kept this project’s scope on a tight rein. They decided—before its start and almost two years before their conversion went live—to set up a unique leadership structure. This structure was to manage the entire software development and roll-out. Their structure incorporated the many roles needed to run their daily insurance company operations while folding in the responsibilities and duties of their IT conversion.

Elements of the Project Leadership Structure

Before the project started, they negotiated across all levels of their company hierarchy, as well as with the corporate headquarters and IT group. They knew their company leaders and the IT professionals did not see eye-to-eye on the implementation details. They negotiated until all agreed on the project goals, requirements, relationships, and project plan arrangements. They planned how everyone would communicate. They set up conflict management protocols.

They made sure the project members surfaced their interpersonal and inter-group conflicts. Where possible, the staff resolved potential conflicts. Where they were not resolved, they at least managed them via the redesign of their project’s work process.

The Rollout

Two years later the insurance company project came in on time and on budget. It achieved its project goals. The new software was tested beside the old software for 12 months. When the switch to a new IT system went live, it was only after the professional staff was certain they had not lost or distorted any data in the transition.

The company’s top leaders did not give the go ahead to this project based upon whether it could benefit the company. They already knew only a successful implementation would make it a good and necessary business idea. For example, this innovative new software package would make their customer data base more valuable. Policyholder databases are a tangible asset in a life insurance company.

When the leaders were certain there would be a timely and complete implementation they gave their go ahead. They knew good ideas become assets only after they are functional.

Questions for Reflection:

What do you think are some elements of leadership structure that made this life insurance project successful?

In relation to scope creep, what actions have you seen that let you know in advance someone is pulling a project off course?

Watch for the follow-up article on Scope Creep: Good Ideas are not Assets

Can Leaders Structure Decisions to Avoid Shakespeare’s Irrevocable Choices?

Chuck Wilcox, a Shakespearean actor and teacher for over 40 years, helps us understand how William Shakespeare’s plays shed light on fatal leader blind spots.

Watch his video to understand what is Chuck saying about Shakespeare’s tragic leaders.

Irrevocable decisions lead to tragic failures. What is an irrevocable choice?

Like a present day leader who fires the wrong person, Macbeth kills King Duncan and many others who were unfortunate enough to get in his way. But then he cannot reverse this choice later when he realizes the trauma of those murders is driving him mad.

The Earl of Gloucester was an old Lord in King Lear’s court. Blind to the high respect given him by his legitimate son Gloucester realizes his leader blind spot only after others take his own sight, along with his political office, through the hateful schemes of his illegitimate other son. His irrevocable choice begins with fathering an illegitimate son out-of-wedlock. Later he banishes his good son and puts a price on his head. Finally, he promises to leave all of his earthly property to his bad son.

King Lear’s irrevocable choice, sometimes called Lear’s folly, is his decision to disinherit the only one of his children who loved him–his youngest daughter. She loved him but did not heap false praise on him. On the other hand, his oldest daughter flattered him, but actually hated him as he stood in the way of her desire for the pleasures of wealth. His youngest daughter spoke her mind, saying what he needed to hear, not what he wanted to hear, and he punished her for it.

How often has a leader made the mistake of killing off loyal followers who speak a truth the powerful leader does not want to hear?

BP’s Tragic Decision

BP leaders seem to have made an irrevocable choice. In the aftermath of a disastrous crude oil leak at their Deep Water Horizon drilling rig in the Gulf of Mexico, they agreed to pay all claims for damages and business interruptions. The insurance claims contract BP signed left them exposed to many fraudulent claims, so-called “false positives.” Consequently, the cost of their claims settlements spiraled out of sight. But thus far, no court will declare their choice an invalid contract. BP is now embroiled in quite complex litigation to slow down the claims payment process and cut their financial costs. The stockholders were not happy before, and many of them are still not happy now.

Is BP to Suffer With Their Irrevocable Choice?

Despite BP’s good intentions to make amends for a horrible oil spill, they have not been able to stop the unwanted consequences of their decisions. Even after being warned by an in-house claims administrator, BP’s leaders’ approved a wide-open contract. They did not engineer their decisions to put limits on any unexpected consequences. For example, during the first three years of claims payments, they paid many false claims with little provision for claimants to prove legitimate loss before they could receive a settlement. The upshot is the cost of their losses skyrocketed.

How to Engineer Your Choices for Later Revision: Learning from Could-a, Would-a, and Should-a

BP could have engineered their contract to allow for later revision and to reduce fraud. They could have incorporated contract terms placing more burdens for legitimate proof on those who file claims. They could have limited what they would pay for the claims of the Deep Water Horizon disaster. They could have limited the amount of time that they would pay claims.

Leaders in all types of organizations can engineer their decisions and agreements. With such a safeguard in place, they can change them later, if need be. For example, change-order processes are a routine provision in construction, software design, and computer conversion contracts. Leaders in other industries and projects could adapt this practice for their own organizations.

1. Leaders start by contracting with their people for a project, product introduction, and new work process. In this way, the leader can represent the changing needs of their customers in a new initiative.
2. They set up a change order process for anyone who wishes to add or drop work from their project contract’s original terms. The recognized need for unanticipated design changes, for substitutions, to cope with unforeseen conditions, and so on; all can trigger a change order
3. If agreed to, the change order alters the original contract resources, dollar amounts, schedules, and/or completion date. In this way, the leaders do not lose track of costs, or the amount they are investing in a new initiative. They can disapprove of a change before it becomes part of the project contract.
4. Granted, some change orders can drive up total project costs. But what use is a new building, new software, or IT project outcome built to meet the original specifications but at the end will not satisfy the needs of its customers and users? And who is able to foresee all the benefits and features they want to realize from a new project before they start it?
5. Open, above-board, and inclusive change order conversations allow all involved parties to manage their costs, even if it is only to reduce others’ unexpected pain and suffering.

This change order perspective is useful for re-engineering decisions in almost all projects in almost any industry. It is a practice for leaders who want to do what is best and most effective when working through changing conditions and unforeseen obstacles to manage an uncertain future.

In addition, leaders can learn a lot by revisiting and updating their decisions as they discover more about the actual results, compared to the intended results. Revisiting and revising a project’s specifications, goals, and completion requirements is a means for leaders to carry out their decisions so they are able to adapt to new conditions as they occur.

Question for Reflection

• What choices have you made in your life that left you feeling trapped and reduced your ability to innovate; to change your choice later on?
• How have you or your leaders engineered decisions so they will be open to revision as you better understand the consequences?

Leaders First – Now A Goodreads Giveaway

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