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Morale is a Velocity Amplifier - Written by Didier Estibals - Blog

Morale is a Velocity Amplifier - Written by Didier Estibals

This article is inspired by : "The LEAN mindset : Ask the right questions.", a book written by Tom and Mary Poppendieck (ISBN 13 : 978-0-321-89690-2). All IPs are therefore acknowledged.

In 1950, as George Merck, the then CEO of the pharmaceutical giant Merck & Co. was retiring, he explained the underlying philosophy that drove its success :

"We try never to forget that medicine is for the patient. It is not for profits. The profit follow; and every time we have remembered this, they have never failed to appear. The better we have remembered it, the larger they have been."1

Despite the particular resonnance these words have in the current pandemic situation, it is mostly important to note that the idea that the purpose of business is to serve customers was widely accepted at the time.

A quarter of a century or so later, in a context of slower economic growth, Michael C. Jensen and William H. Meckling's published a paper ("Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,") in the Journal of Financial Economics . It was the dawn of a new business era: The Share Value Theory. Simply put, it stated that the primary purpose of business should be to maximise shareholder value. The emphasis was no longer on the customer, but rather on shareholders. Although successul to a point, notably at Coca-Cola or GE (General Electric), some of the early supporters of this theory eventually turned into critics, in particular s Roberto Goizueta, the CEO of Coca-Cola from 1981 until his death in 1997 , and Jack Welch, the CEO of General Electric from 1981 to 2001.

Fast forward by another quarter of a century to the year 2000, and succesful business leaders such as Steve Jobs, Mark Zuckeberg or Geff Bezos seem to have rediscovered something that our elders use to know: Purpose is the master, and profit is the servant. Eric Schmidt of Google once said: "Apple proves that if you organise around the consumer, the rest will follow. … Try to figure out how to solve the consumer problem, and then the revenue will show up."2

Along the same lines, Facebook wrote in its IPO document : "Simply put : we don't build services to make money; we make money to build better services." One important thing that people must realise is that product (or service) development is always a team effort. And for a development work system to be efficient, it must be agile and promote communication and cooperation. In their great book "The LEAN mindset : Ask the right questions", Tom and Mary Poppendieck argue that " … reciprocity is the currency of cooperation.". They go on explaining that reciprocity can be either direct (I do something for you so it is reasonable for me to expect you to do the same for me if/when the opportunity arises) or indirect (You asked me to do something for a friend of yours, so it will be OK for me to ask you to do me a favour in return should I ever need one.). In any case, a key factor in increasing reciprocity in organisations is to remove barriers between organisational entities.

Another key factor in increasing cooperation is morale. The book's authors argue that "Morale is a multiplier of velocity.". The recent achievement of Captain Tom Moore, the WW2 RAF veteran who recently managed to raise over 30 millions Pounds for NHS charities at the very respectable age of 100, only a few weeks after getting a double knee replacement operation is a clear illustration of this axiom : when many people where in search of hope and meaningfulness in their lives, he managed to exceed his project goal (raising 1000 £) by several millions percent in only a few weeks, while lifting the spirit of an entire nation. What an achievement !

Finally, communication is the last pillar of a successful product or service development work system, in particular communication of progress and success. And agile techniques are extremely good at demonstrating regular successes, through the use of simple tools such as Kanban boards for example. Once the COVID-19 pandemic is behind us, people will be able to go on with their life again and some form of business normality will (hopefully) resume. Then, if you are a business leader (and project managers are, in a way), seeking to offer your customers good products or service, you may want to remember that product and / or service development necessarily entails a team effort, preferably an agile one. And this effort will be more productive if it uses agile communications (for example a Kanban board) and a high degree of cooperation betwwen stakeholders. Finally cooperation is itself driven by reciprocity and high morale, two important multipliers of velocity.

1 – Jim Collins and Jerry I. Porras, Built to Last : Successful Habits of Visionnary Companies (Harper Business, 2004).

2 – Marc Benioff and Eric schmidt at Dreamforce 2011, 5-Sep-2011, http://www.youtube.com/watch?v=JDl5hb0XbfY 

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Monday, 06 July 2020