How does a business work? In the pre-election days, Romneyites blasted Obama for having no business experience at all. Here’s the former community organizer from Chicago, in the other corner watch the earth shaking CEO. So who’s got business experience? Who can save the economy?
As strong as this narrative sounds, it has a major shortcoming: it’s based upon a perception of business coming straight from the era of the “Mad Men”. Monolithic entities competing in well defined markets. Strong hierachies, wth strong men on top. Who are on top, because they not only are stronger than their underlings, but because they know better (because being on top of the hierarchy, all communications are channeled towards them).
Be it a local grocer or a global behemoth: top down decision making ruled OK. And once upon a time, this might have been a working paradigm. Like any well standing 60 ton cold blooded quasi-reptile had every right to scoff at those pesky mammals, which couldn’t even lay a decent egg.
Top down businesses mimick the dinosaur model: a large body commanded by a tiny head. It’s ruling principle is the vulgar confucianism of the stereotypical kung fu flick: the higher the rank of the guy you have to fight, the better his kung fu. It’s preferred development model is the waterfall process. First define all details, then execute.
The more unstable the environment, the riskier this process model becomes. As daddy already knows best, feedback loops are perceived as a hindrance. Which leads us to the the community organizer model.
Coming from the realm of software development, agile methods are gaining traction in other areas as well. Instead of central planning, those methods are based upon constant iteration based upon the feedback of different stakeholders. It’s somewhat related to community organizing, at least in my understanding.
To be sure, I have not the faintest idea what Obama really did his community organizing days. But let’s first get rid of one misunderstanding. The counter position to Top Down is NOT Bottom Up, at least not in my textbook. Bottom up would be a nicely humming worker’s collective. And just like with top down (AAPL!), there are examples of bottom up entities doing really good (sic). But bottom up and top down share the same problem: both structure are highly inflexible.
Agile methods think in stakeholders. Business owner and customers, marketing and development, production and legal: all those units are made of people, who have to give their constant inputs. It’s all fast iterations, everything’s broken down into easily digestible pieces. It’a a cooperative process with some kind of a community organizer, well, organizing it.
Top down large organization usually do not listen for input. Which sometimes leads to quite fascinating results. In a multinational I once stumbeld into the following situation: as an external consultant I was hired to manage a project. Turns out, there were three different parallel process flows to be aware of. Flow one was the official process as required by headquarter. The second process flow was completely unrelated, not to be mixed up with process flow one, somewhat unofficial, but nevertheless mandatory, as it was the process this formerly separate unit has been following for decades. Process number three was finally the process how the department was handling things, as the other two processes were somewhat decoupled from reality.
Now, back to Obama vs Romney, the community organizer vs the Top Down CEO. Let’s keep in mind: the presidential elections in the US are big business. It’s a $6 billion business, a major stimulus program for local tv stations. And it’s about getting a really large workforce on the ground.
Now, some parts of those makeshift corporations a.k.a. know the campaigns are a fairly well known affair. Buying air time in local tv is a fairly straightforward task, with just two unknowns: will the (outsourced) creative be really compelling? And how to allocate the budget, which is even with the richest of campaigns an important constraint.
But how do you work with the workforce on the ground? Team Obama is a supporter of open source software, the former community organizer defined in 2008 the basics of digital campaigning. So how has the top down CEO been approaching things? Let me give you this purely anecdotal answer: read this example of a worst case, waterfall-like top down process, with no working feedback loops, which might even had some real impact on the outcome of the election.
In a nutshell, the story goes like this: to support volunteers at election day, Team Romney planned a digital tool, which would replace some fairly cumbersome paper processes. @JohnEkdahl, the clearly disgruntled volunteer, gives a good overview on what went wrong. Mostly, it leads back to the problem of not iterating, not listening, of not having working feedback loops. It’s the CEO with the top down business experience at work.
No room to iterate is risk management at its worst: it’s either win or fail. Which looks like an 50:50 bet. But of course not even this is true: you have only one chance to win. But a gazillion odds are against you. It’s betting everything on zero on a roulette wheel with infinite numbers.