Thursday 24 August 2023

Why business coaching is doomed

A while ago I wrote a blog ("What ChatGPT Tells Us about Human Soup") that was relatively upbeat about the future of coaching - that is, relatively downbeat about how much of business coaching could be done by AI.

Since then I have spent more time using it, pretending to be a business owner with the kind of problems I help them address (scalability, systemisation, delegation, structure and so on).  It is safe to say that my views are evolving (although not, presumably, as fast as AI is evolving).

Note:  I have been using Chat-GPT 3.5, which is not the latest version and may not represent what other AI systems can now do.

The quality of the answers really depends on the quality of the questions, and a willingness to develop a conversation.  Typically the first answer will be 10-12 short paragraphs, factually correct but too much information to be useful in a coaching sense to the questioner.  You can drill down by picking up on one of the items and saying, perhaps, "I have already done that" or "I don't understand that" and the machine will respond accordingly (but again, with a large splurge of information).

You can limit the flow of information by saying, perhaps, "I feel overwhelmed by all these answers and don't know which to do first".  This will elicit something that looks like empathy ("Understood. Let's narrow it down to....") and a more limited answer, perhaps with a homily about focus or prioritisation ("Dealing with these issues can be overwhelming, but remember, you don't have to fix everything at once...").

What I have been unable to do is to prompt any sort of questioning ("listening"?) to help with the supposed problem.  Asking it "How do you know this is addressing my real problem?" or even "Why don't you ask me some questions to help me find out my real problem?" just produces the usual 10-12 bullet points of possible causes but this time couched as questions.  A response to any one of these results in....10-12 short paragaraphs about possible causes/actions.

A coach given a problem statement would generally ask the client to expand on it, or give an example, or ask a question to check their understanding, rather than reeling off 12 possible causes.  Often the real problem or cause is hidden and questioning helps the client gain insight.

Neither is there any sense of a sustained conversation, or referring back or identifying themes (different outcrops of the same issue), although the software does have a history of all the "chats".

However, the speed and comprehensiveness of the answers remains impressive, and these bits that I am suggesting are missing from a coaching perspective should be relatively easy to programme (or perhaps teach) in some sort of front-end application (such as this one).  Emotion and mood-sensing algorithms are already in use and will only get more capable.

I thnk that within perhaps two years it will be possible to access an AI business coaching service that is indistiguishable from a human coach (apart, perhaps, from its abilty to use Zoom Whiteboards properly and the absence of a loud tie).

Shortly after that, any small business will be able to have the equivalent of the world's best business coach as a virtual but permanent part of the management team, rather then doled out in coaching sessions.

What will be left for coaches?  No doubt there will be a long tail of people who want to deal with a human, supported perhaps by some sort of Campaign for Real Business Advisors (CaRBA©) or preservation societies.  There will also be a short-lived opportunity to provide coaching input to the development of the aforementioned front-end applications.

After that...?  Well, as someone once wrote, probably about a coaching industry:

"Round the decay of that colossal Wreck, boundless and bare the lone and level sands stretch far away."

If you'd like to get some advice from a human business coach while we still exist then you might want to attend one of these events.

Monday 24 July 2023

Cheese and the four-day week

Between unexpectedly parting company with my school and joining the Merchant Navy I spent some months working in a cheese distribution centre.  I am reminded of that experience by the current interest in the four-day week.

I worked with two ladies of indeterminate age called Flo and Madge.  Our job was to assemble pallets of cheese in accordance with customer orders, the cheese being picked as required from supplier pallets.

I was young and keen and it soon became apparent to me that we could complete each day's orders in about half a day.  My efforts to prove this did not go down well with Flo and Madge, who made it clear to me that this was not something they would tolerate.  Neither did it seem to be welcomed by the foreman, a placid man in a brown coat who had an artificial foot as a souvenir of the war.

Even at that age I had sense enough to know that being disliked by your colleagues and boss makes for an unpleasant working environment and I quickly fell into line.

I'm pretty sure that the reasons for this poor productivity, or the consequences for the firm concerned or, by extension, the country, did not at the time cross my mind.  Reflecting on it now it seems clear that:

  1. The employees concerned allowed the work to expand to fill the time available in order to protect their jobs
  2. There was no benefit to them in working harder
  3. They saw the rate at which they worked, established by custom and practice, as "fair" - an unwritten contract between them and the firm
  4. The supervisor (and presumably the managers above him) accepted this state of affairs in order to preserve the peace and maintain relationahips.
The four-day week discussion really addresses point 2 and, implicitly, point 3.  It does not improve productivity in terms of output over cost, although it may have some benefit in terms of asset utilisation and (transiently) recruitment and retention.  It requires management to say:
  • By moving to a four-day week we both accept that you are producing at least 25% less than you could.
  • We are rewarding this poor performance by giving you a 25% pay rise.
  • We are doing this because a) it's much too difficult to improve actual productivity and b) we are in a dog-fight for staff
What will happen to actual output from the four days over time?  I think there is zero chance it will actually increase beyone what used to be produced in five days and quite a high chance that it will gradually decline to (a wild guess) about where it was before ie about the same output per day and about 80% of the previous overall output.  This is after all seen as the "fair" amount of effort.

To be clear, I can see no inherent logic other than the status quo for any particular work pattern, be it four-day, five day, six day or two-day week and the decision should be left to the organisation concerned.  Clearly a zero day week would have economic consequences and a seven-day week (although not unknown now) would have social consequences.  My concern is that this change is gaining in popularity because as business owners, managers, voters, tax-payers and politicians we are too craven to face up to the real causes of piss-poor productivity in the UK.

BTW, if you would like to learn more about productivity improvement in your business then you should register for one of these events.

Wednesday 14 June 2023

Yer actual psychology

The psychology of small business ownership seems to be an area of growing interest for researchers (1,2,3).  As a business coach and consultant who has spent many years trying to improve my performance in those roles by understanding business owners better, I am naturally interested in this sort of stuff.

By way of a disclaimer:  a) I have no psychology qualifications b) my own meta-research into publications in this area has been limited to reading papers that catch my eye - not really what you might call exhaustive.  Even so, I feel a sense of disappointment with the premise and the results of much of this research.  Not sufficient you understand for me to attempt my own doctoral thesis, but sufficient for a short blog.

Most of the research seems to take the following form:  First, choose a set of personality traits for which there exist accepted tests.  Second, choose some easily-measured business success criteria, such as turnover growth, profitability and so on.  Thirdly, put these things into a questionnaire and get a couple of hundred business owners to complete it.  Finally, use a spreadsheet or stats package to look for correlation and publish your results.

My misgivings are:

  1. This approach pretty much ignores market factors.  You'd have to use a sample from the same market sector across a complete business cycle, or sample so many owners over that cycle that you could segment by sector, to eliminate this major determinant of success from the equation.
  2. The preponderance of "entrepreneurs" in the samples.  Cynically I might suggest that business schools have a ready supply of these retiring creatures to hand, whereas the majority of "real" business owners a) are too busy to take part in surveys and b) have ended up runnimg a business for much more prosaic reasons, and probably wouldn't call themeselves entrepreneurs.
  3. The assumption, evident in the use of general personality tests, that business owners are a representative sample of the population who just happened to end up running a business.  In my experience the act of starting a business is often as much a response to a psychological imperative as an economic one, and this foundation has a significant impact on the resulting business performance.
  4. The dismal view that business success is down to some inherent combination of personality type and natural aptitude.  You will be wasting your time trying to change either of these things, and if research does not provide a basis for action what on earth is it for?  (Apart from getting your PhD or MBA, I mean).

The last point is the one that troubles me most.  Survey and trait-based research doesn't really shed any light on the complex problems I try to help with.  There will be some flashes of the blindingly obvious (founders who set clear goals fare better than those who don't, for instance) but these don't usually go beyond basic management concepts.

What about the business owner who hires incompetents and spends her time undermining them and then complaining about how much work she has to do (because, my premise is, this gives her a sense of control and worth missing from every other part of her life)?  Her business could be great (it has worldwide sales for its niche specialism) but the problem is so deeply rooted in the owner that almost all attempts to help her make changes to the business or the way she runs it are seen as threatening.  This owner has had psychological support for some years, by the way.  Its main effect seems to be to make her swearier.

Or the business owner who has fashioned a business from caring for an autistic son, is driven to help others in the same boat and has grown a viable market and unique solution to do this - but struggles to use a computer, holds everything in her head, distrusts accountants, distrusts the tax man, doesn't want to employ people and so has every worker as a temp.  This again could be a much more successful business but the challenge is to separate the business problem from the individual, to treat the disease without killing the patient.

Don't get me wrong - I have wonderful, easy, rewarding clients as well.  Clients who push me, learn quickly, apply the learning, and whose businesses surge forward as a result.  Should I just focus on them, qualifying out the problem ones?  I don't want to imply that this would offend some saintly sense of mission but it does seem a bit of a cop-out to simply abandon them - and actually, they are often the more interesting clients to work with (even if they are exhausting and not that profitable).

I don't have the knowledge, time or, frankly, the inclination to do it but seems to me that there is scope for some less superficial research that starts with the why - why is it that some people embark on the hazardous career of a business owner, and how does that why affect their success or lack of it.

I don't think these two things can or should be separated.

PS If you'd like to learn more about systemising and scaling your business take a look at these events.

1. The Psychology of Small Business Owners

2. Personality correlates of self-employed small business owners' success

3. An Investigation of Personality Correlates of Small Business Success

Thursday 23 March 2023

What ChatGPT tells us about human soup

I've been using ChatGPT to see how it answers business questions.  From the generic ("Why do business owners feel overworked?") through practical ("Give me a method for systemising my business") to the detailed ("How do I improve my sales process?") the answers have been thorough, concise and correct (if we define correct as meaning answers I would be happy to give).

Does that mean business coaches and consultants like me are out of a job?  I don't think so - not yet.

The information provided by the AI system is already available to business owners, in books and blogs.  The system reduces the effort required to locate and correlate it, but if access to information was all that was required for business owners to improve their business then we (coaches and consultants) would have been out of a job long ago.

So whilst information is a necessary part of helping a business owner improve their business, what other things are needed?  I tried thinking about this in two ways; the process and the capabilities.

Here's a model of the "Business owner improving her business" process (omitting repetitions and feedback):

  1. Recognise the problem
  2. Imagine a solution
  3. Formulate the question
  4. Understand the answer
  5. Plan and organise the change
  6. Successfully execute the change

Here's a list of capabilities our business owner might need in order to make change happen, again, omitting linkages for clarity:

  • Imagination
  • Knowledge
  • Intelligence
  • Leadership
  • Organisation
  • Confidence

You can picture these two lista forming a matrix (or maybe it's only business consultants who think like that).  "Understand the answer" requires strength in, say, intelligence, imagination and knowledge.  "Successfully execute the change" might require strength in leadership, organisation and confidence, and so on.

The coach or consultant has to not only provide the necessary information but also help their client overcome any deficiencies in their ability to follow the change process - to fill the gaps in the matrix.  The coach has to provide support, encouragement and focus whilst their client struggles with the human soup and random happenings that make up business.

I am confident that, if we don't destroy the planet first, true AI that can provide more than information will emerge.  But for now, ChatGPT seems like a) a great way to make my life easier and b) an interesting (for me) insight into where I actually provide value.

If you'd like to get some help with your business (from a real human) then contact me through this website.

Monday 27 February 2023

Better management means better results shock

Research(1) shows that structured management (formalising roles, agreeing targets, measuring results and basing decisions on numbers) results in better business performance.

The impact is about the same as R&D spending and far outweighs that of technology spending.  Hardly surprising when one considers the predictable outcome of combining new technology investment with poor management.

Better management means better results (2) - and yet how much attention do UK business owners devote to improving their management skills?  In my experience, this comes pretty low in the priorities of most business owners and yet holds the key to all the other issues that they spend time on (and probably lie awake worrying about).

Usually, major improvements in performance can be achieved with simple, quick and low-cost interventions.  Clarifying what the business is trying to achieve.  Setting out reporting lines.  Implementing useful (outcome-based) job descriptions.  Standardising processes.  Implementing measurement.  Implementing monthly business reviews.

Creating each of these management artefacts is an opportunity for two-way communication; an opportunty to explain, understand, challenge, improve and involve.   The investment of time required is trivial in comparison to the benefit.  In any case, what else should a leader be spending their time doing?

Seems obvious really.

If you'd like to learn how to improve your management skills take a look at these events.

1) What Drives Differences in Management Practices? Nicholas A. BloomErik BrynjolfssonLucia FosterRon JarminMegha PatnaikItay Saporta-EkstenJohn Van Reenen, American Economic Review May2019 Vol. 109 Issue 5 Pages 1648-1683

2) Management, Skills and Productivity, Emile Cammeraat, Lea Samek and Mariagrazia Squicciarini, OECD SCIENCE, TECHNOLOGY AND INDUSTRY POLICY PAPERS February 2021 No. 101

Friday 10 February 2023

Rottweilers as managers

A while ago I was talking to my client in his new office on the second floor of his new factory and HQ.

His business is growing fast and was concerned that he hadn’t had time to “do all the HR things I should do” for the past couple of years.

For a while, business growth was hampered by quality and delivery problems. His staff were avoiding answering the phone because they knew it would be an angry customer. Sales, Design and Operations were at loggerheads. The company did have, however, lots of HR stuff going on. Appraisals, reviews, training and so forth ran like clockwork and my client devoted a lot of his time to HR initiatives.  He felt that this was caring for his people and that it would result in better performance.

We spent a lot of time when I started working with him talking about structure and how to solve the customer service issues. He had an effective project manager (he called him “a Rottweiler”) but was nervouse about putting him in charge of operations “because he won’t look after people”. We agreed that the critical thing was to sort out operations and that the business could tolerate a few ruffled feathers for a year or two to achieve this. This approach was adopted more generally, with managers being asked to focus on their “one number” and far less attention being paid to side activities. Management meetings started to focus on performance and coaching, values and beliefs, strategy and vision.

Now the company (mostly) delivers what the customer wants when they want it. My client is spending his time (mostly) on strategy and growth. Staff attrition has not risen, productivity has. The reduction (elimination, really) of the HR machinery seems to have had no negative impact.

What do I take from this story?

    • Winning teams focus on a single simple goal.
    • Individuals too need to be given a single simple goal – don’t distract them with non-essentials.
    • People are motivated by being part of a winning team, feeling that they contribute something important to that success, that they are good at what they do and that their contribution is recognised.
    • A very caring boss with a failing team will have unhappy employees whilst a boss who balances concern for people with concern for results will have happier employees.
    • Appraisals and formal reviews build on good management, they are not a substitute for it.

    If you'd like to find out more about getting more from your people then register for one of these events.

    Adapted and updated from a previous post on this website.

    Monday 19 December 2022

    Can you be organised and an entrepreneur?

    I recently ran a webinar on making your business scalable through systemisation, during which I addressed issues like processes and organisation.  One of the attendees, who runs a marketing agency, asked me whether this approach was suitable for creative people or whether it would inhibit their creativity and entrepreneurial spirit.

    I answered that of course it was applicable in any industry.  Subsequently I have reflected on the interesting question and its implied link between creativity and entrepreneurship.

    I can divide my clients into three broad camps:  people who are naturally organised and happy to manage others; people who are, frankly, chaotic, and find it difficult to organise others; and people who are in the middle.  The first group take to systemisation quickly – all they really need is to be given some tools and techniques.  The second group are my failures (I do have them) and I will fairly quickly suggest we stop wasting each other’s time.  The third group is the most numerous and will take longer, with more hands-on help and explanation and often many repetitions before light bulbs start to go on and benefits start to accrue.

    The point is, I have worked with entrepreneurs in all three categories and so I don’t believe there is necessarily a correlation, direct or inverse, between organisational ability and entrepreneurship.  I have also worked with entrepreneurs in  many sectors, so I don’t believe there is a correlation between creativity (in a functional sense) and entrepreneurship.  Certainly, creative people need to managed in a way that allows them to be creative but then everyone should be managed as an individual.

    I also believe that, all other things being equal, an organised creative business will out-compete a disorganised creative business.  Processes, measurement and organisation should be designed to give space to creativity where it adds value, and remove it where it adds only cost through the endless reinvention of wheels.

    By the way, if you'd like to learn more about scalability and systemisation then perhaps you should attend one of these events.