Saturday, May 10, 2008

Minerva's Owl 2 :: Corporate version

Twilight moonIn hindsight, what have we learned? What would we have done differently?

Between support meetings, we've all been debating what happened. Our emerging consensus is that there are five expectations that parent companies have for their distant divisions. Some are more important than others, all are necessary.

  • Return on Investment.

Success here ("Making the numbers") will make up for lots of other problems. Revenue and Income are both important, along with subsidiary numbers like margin and year-over-year top-line growth. 90% of expectation may be a "gentleman's miss", but less is failure: miss this, and everything else needs to go right.

  • Quality

Put out a product that works well and satisfies customers, avoiding surprises and recalls. It also means that you don't tarnish your own brand or the parent's reputation with customers or regulators.

  • Market Penetration

Pick your targets and hit them, executing strategies that lead to absolute and share growth. This also picks up elements like opening new geographies and obtaining reimbursement.

  • Build the Business

This picks up the organizational aspects of acquiring talent, making everyone productive, establishing business processes, managing cash flow, and meeting timely reporting standards.

  • Communicate

Set realistic expectations, build relationships, establish trust, and avoid surprises.

I think we know which ones we hit and which ones we missed and most of the subsequent debate revolved around what changes would have turned around perceptions of our value.

Conversely, could Corporate have been a better parent?

I read an interview with Pankaj Ghemawat, author of Redefining Global Strategy, who emphasized that many US companies see the world as flat, without significant regional differences that affect their overseas divisions. In this state of "semiglobalization", companies must recognizes and manage differences among countries:

The range of barriers that companies face in their global efforts are called "distances", and come in four basic types: Cultural, Administrative, Geographic, and Economic (CAGE). To make any global strategy actionable, you have to go down to the industry level and thing about which distances matter the most and address these through a tailored combination of adaptation, aggregation, and arbitrage.

'sounds like business-speak, but he makes a number of really good points that reflect my own experiences.

Friday, May 9, 2008

The owl flies at dusk

"The owl of Minerva spreads its wings only with the falling of the dusk." -- Hegel

DSC06875

Its a beautiful summer evening: clear sky, Dutch light at sunset, trees in full flower, 'just a breath of breeze. A month ago, I was celebrating the start of another year and a half of varied and delightful times like this -- how things change.

E-mails are arriving from friends across the company as the RIF proceeds: this could continue for weeks. The tea leaves aren't good. Experienced people are leaving this time around, and high-flyers are not getting called to their next assignments.

There is certainly a chance that I, too, could get swept out before this is over.

Tonight, though, I relax on the porch in the gathering twilight, listening to the neighbor's soft laughter drifting up from the garden, the distant swish of the fountains turned on in the park yesterday. It's been too long since I enjoyed the lovely peace of a late spring evening: could life get any better?

Could it? What if...not?

What if you knew for certain that life would never be better than it is at this moment? What would you do?

Robert Bloch explored this premise in That Hell-Bound Train, about a man given the power to stop time, once and forever, at life's peak moment. He always believed life could get better, and never twisted the watch stem until the end.

If it did all end, next month, how different would life be? What would I miss?

I laugh at the adolescent things that pop to mind: expat perks and office comforts with no parallel in the US. Most things, thank goodness, are more substantive: people, perspectives, travel, ideas, projects. Overall, I'd miss having the very good fortune to be able to live a life that is stimulating and consequential.

It's probably true for most people who seek out an expatriate immersion in an unfamiliar language and culture.

And, of course, these aren't things that I need to give up. A recall would trigger a decision, certainly short-term hardship and disruption. But it's still my decision, within my ability to choose among many possibilities.

Hegel believed that we learn the lessons of life's experiences only at their end. The trick now is to apply the learning to create even better new beginnings.

Thursday, May 8, 2008

Both sides of Dutch directness

Knobby treesIt's been a very tough week: everyone has struggled to come to terms with the announcement and to start to think about their changed futures. On balance, I think that the Dutch do much better than Americans in comparable circumstances.

I think that it connects back to their "directness":

Despite being reserved, the Dutch have a manner of speaking that may startle you: they tend to come to the point quickly. This directness is, in fact, seen by the Dutch as a positive personality trait. Tilburg University

Probably because of my research background, I've always appreciated the clarity. People say what's on their mind, good or bad, and have a thoughtful discussion if there's an issue. I've learned to take time to stop, have a sit, listen, engage: it's a very social and open process. I've only gotten into trouble is when I don't *really* engage or when I try to 'table' a discussion by implying that it doesn't interest the entire group.

Since Tuesday, our days have filled with all sorts of large and small group meetings to give people a chance to talk things out. The GM held an all company meeting today that was wonderful. He simply took questions, speaking conversationally from his heart to the roomful of people. Nobody got tense unless he was evasive: questions focused on why this happened and about what comes next. They had suggestions for the head of the Worker's Council, and observations on what they'd read in the papers. They were openly complementary when they heard honest truth. It was in total, marked contrast to the adversarial challenges and grumbling I've heard in similar US meetings.

Every small group meeting, whether staff or floor-level department session, begins with a 'round the circle' sharing that allows each person to talk briefly about how they feel about the events. Many people share personal difficulties or concerns, doubts about what they've heard, or perspectives on what comes next. There was little discussion, people just listened.

This same emotional directness carried into casual hallway interactions. When I asked "How's it going?", people always stopped to say "not too well", to talk about it, to ask questions about how I'm doing, what plans I might have. They still have a disquieting insight about what might be a concern, asking questions about the impact on my family and how long I might be allowed to stay.

I talked to an HR rep, who confirmed that in times of trouble the Dutch prefer to put things on the table, to support one another generously, and to be publicly open about their concerns. "How else could you work things through?" It's much different than I'm used to. They have a quieter process, one that leaves few behind or alone. And it's led created a spreading consensus about why this all happened and where their loyalties lie.

I don't think that the American VP who arrived to talk from index cards about "operational leverage" really understood his audience at all: they were confused and a bit insulted by how it all was presented. The team had to, in effect, back up and do it again today, in their own way, as a group. I was really impressed by the compassion and respect between the managers and the team, and the give and take as everyone sorted things out.

I took a long drive out around Meerkerk this evening, just to have a think about it all. It's a beautiful evening, sunset over the broad fields and reflecting off the silvery canals. A good evening to reflect on all of life's lessons that have to be learned at these times.

Wednesday, May 7, 2008

Keeping personal integrity

DSC06863Do you lie to the people who work for you?

My student intern from Cambridge asked this question during a discussion of how I conduct group communications through e-mails, reports, and meetings.

The short answer is 'no', shaded with a couple of lightly textured exceptions.

I have a legal obligation to keep some information confidential: involvement in due diligence, notice of pending press announcements, and detailed budget numbers prior to announcement.

I try to avoid feeding speculation: if several possible scenarios are being considered, then the ball is still in play and I say that "Nothing has been decided".

But the question is still relevant in extreme cases like the circumstances leading up to the announcement of the shutdown. Where is the line; did I stay on the right side of it?

One relates to how much information to give when situations are uncertain. We've been aware that this was one of a wide range of possible outcomes since February, and have been working as hard as we could towards a more favorable resolution. There was every reason to expect that the worst would not happen, right up to the end. As you might expect, there were meetings, analyses, flights back for consultations, and closed door discussions. People worry and ask questions; I tell them nothing is decided yet. What is the right thing to say, and why?

The more difficult problem came when I heard about people are making life decisions: to buy a house, to relocate, or to turn down an outside job offer. I really wrestled with whether to advise people to wait until the outcome was known. But if I told one person, my moral obligation would be to tell everyone. Or, if a better scenario had happened, they would have lost their opportunity because I was worrying at shadows. I hold my peace. What is the right thing to do, and why?

Now, the worst has happened, and it hurts everyone. Did I stay on the right side of the line?

The acid test came quickly, as the question was raised in an employee meeting with support people here. In the discussion, we openly discussed the events of the past months. I could honestly say I did my best for the group and didn't mislead people. In the end, nobody benefited at the expense of others, and nobody has a parachute.

And, in the evening, I could call my intern to share the full story with him, and have a good open talk about why this whole question of personal integrity is so important to get right.

Tuesday, May 6, 2008

The breaking storm

Calm_Before

Our parent firm, Medtronic, announced today that, as part of a worldwide re-organization, they will transfer all product responsibilities back to Minneapolis, closing our facility in the Netherlands.

Our product, the Reveal monitor, has done well in the market this year, with new product introductions increasing sales 70% worldwide and bringing us close to profitability in our second year of operations. However, the strong euro and the logistical distance to the Netherlands has increased our costs, and US senior management believes that their investment in the product will be more efficient if managed locally. We told everyone here in Arnhem today (just over 200 people); it's a very difficult thing to have to do and a great disappointment to everyone who worked hard on the business.

I'm also proud of our team's accomplishments over the past 14 months: we succeeded in defining a significant new business, completed a design prototype, and established technical feasibility. Our core project team achieved a solid entrepreneurial success, moving from concept through to clinical trials in a remarkably short period. More generally, living in the Netherlands has been a great opportunity for me personally: as all the Flickr pictures and blog postings show, I've had fun exploring the country, learning Dutch, and becoming part of the local community.

For the moment, my focus is for people here: since the decision was handed down only last Friday, a lot of planning remains to be done. I'll continue working with the rest of the management team here as we begin to wind things down. Beyond that, I'll move on to a new opportunity, hopefully in the Netherlands or Europe.

I'll regularly let you know how things progress over the coming months.

Sunday, May 4, 2008

A luminous day in Arnhem

DSC06854 Stitch

I had to interrupt my trip to the US for a business recall back to the Netherlands.  Not a great situation, but when I step off the train into a day like this, how can I hold a grudge?