Congratulations to Michael Bolanos Davis, winner of Eli's 7th Riddle!
Please keep reading below the riddle for Eli's Analysis and the winning answer, as well as the rest of the submitted answers!
The Leak - a riddle by Eli Schragenheim
Richard Clark, the CEO of ValueTechnology, was furious to
read a detailed article about one of the most secretive technological ideas the
company has. The article was published
in The Technology Corner, a well-known magazine that is very popular in the
high-tech circles. The irony was that the article was enthusiastic of the idea
and its business potential; however this specific project, which was in its
initial state, had been frozen since the CCPM implementation in ValueTechnology
more than two years ago.
The nephew of Richard, Sammy, is an economic private
investigator, and he made, following Richard’s request, an inquiry. His findings were that a disk-on-key containing
a detailed analysis of the idea, done by the Business Development department,
had been given to Jonah Cramer, the top journalist of The Technology
Corner. Sammy succeeded to pull out of
Jonah the information that the transfer of the disk-on-key took place at The
Intellect Coffee House, just at the corner where ValueTechnogy headquarters
reside. The coffee house is always full
with ValueTechnology’s people and many of their direct competitors.
"How come that whoever leaked the file has chosen a public
place to make that transfer?” wondered Richard. "Was not the person afraid to
be seen talking to such a known figure in the industry?”
Richard and Sammy made a list of the immediate
suspects. Ian Fountain was at the top of
the list. Ian resigned from
ValueTechnology six months ago after a furious discussion with Richard and
Betty, the VP of Business Development, about their reluctance to defreeze the
project. Ian had contributed many new
ideas to ValueTechnology, and three of them were in active development at the
time, but he somehow claimed that ValueTechnology has lost its way to
prosperity. Ian’s resignation had made a
lot of hype within the company and in the industry, as he was a very known and
respected innovative engineer.
Sammy called Ian, who seemed to be fully prepared for the
conversation, and asked him bluntly whether he gave Jonah the file. Ian
denied he did such a move, but also
stated that he was happy someone else did it.
He was not bothered by the threat that ValueTechnology would file a suit
against him. "ValueTechnology has much
to lose if I open my mouth than what it could do to me. After all the
company killed the idea. What is the value of a dead idea?” he
The situation got even worse when Richard got a call from Jonah
asking him to participate in a panel dealing with the potential of the idea in
The Technology Corner Show, a TV program that is popular in the specific market
segments of engineers and technology freaks.
When Richard tried to ask Jonah questions about the identity of the leak
he responded with:
"Come on Richard, you
know I’m the one who asks questions. Isn’t this an opportunity for you to send
the message that ValueTechnology is dealing with much more important
ideas? Do you lose anything from the
Richard hanged up and went into deep thoughts. What to do next? Should ValueTechnology start now to develop
the idea? The article has raised some
interesting points about the potential value of the idea, but now some
competitors may also develop it, which reduces the expected value. Also, what really the company should do about
Ian? Doing nothing could radiate that
one can get away with leaking the company’s secrets.
Can you give Richard an advice, an insight or a
direction where to go from here?
Eli's Answer & Analysis: The Leak –
The urgent choopchics and what’s truly important
I have to admit that writing this riddle has been targeted to
get your attention to the "Learning from Experience” methodology that I’ve
developed with Dr. Avner Passal. I’ve submitted
a white paper about it on the TOCICO site, on May 11, 2013, I plan to deliver a
white webinar on the topic and present a master class at the TOCICO 2013 annual
When a person is faced with a big surprise there are two
1. How to
respond. These are the urgent actions
that one might (or not) need to take.
2. What can be learned
from the event? When you are surprised
this is a signal that one, or more, of your paradigms, and probably of other
people in your organization, are not in line with reality.
In this particular case, I claim that the urgency is
artificial and pointless. As there is no
evidence, that is beyond reasonable doubt, that Ian has leaked the information
to Jonah – there is no legal case against him.
There is quite a subtle difference between what is considered a valid
assumption for management and what can be used in court. As a manager I feel safe enough to assume
that Ian has been involved in this leak.
However, there is no benefit from taking any action against him. There could be huge value in learning the
lesson from this case.
One additional point about the leak: leaking to a magazine
is quite different than leaking to a competitor. Certainly the motivations of doing so are
different. Leaking to a magazine is not about money. It is about sending a
message! Note also that the disk-on-key
has been handed to Jonah at a coffee house near the company HQ. It seems the one who delivered the disk has
not been too concerned about his safety.
Can you stop people who act by fury and frustration by implementing stricter
discipline? People who are capable of
developing innovative products at ValueTechnology have to be smart enough to
know how to trick the system – if they really want to.
Appearing on the TV show could be nice, but the direct value
is low indeed. Richard participating in
the TV show could deliver a nice message. But that message would be delivered
to people who are not going to do anything based on that message. I also don’t see the big damage of not
appearing in the show. Eventually the
decision "to appear or not to appear” is a choopchic.
What seem to me truly important are TWO different surprises
that could point to flawed policies and paradigms of ValueTechnology that cause
a lot of damage.
One surprise: How
come that a magazine is able to come up with interesting points about the
potential value of an idea of a project, which has been frozen for last two
years? How come the management of
ValueTechnology, including Richard and Betty, did not consider those points
during those two years?
Second surprise, which has happened six months ago (!): How come that a key figure in
ValueTechnology, who contributed several ideas that have been accepted by VT,
is resigning due to huge frustration? This had to be a painful move to Ian, and it
should have been a painful move to the company.
Is such a level of frustration a normal behavior? Shouldn’t the company do a little more
digging to find out what misunderstanding has led to this reaction? If you just let such an incident go without
asking yourself some hard questions, then you might get more surprises in the
I’m glad several answers made a point to analyze the
processes the company uses to decide upon what projects should be developed?
What should not? What ideas to freeze for some time (and for how long?).
Deciding what project to go on is NOT a part of CCPM. Goldratt made it clear that in multi-project
environments there are three problematic areas and CCPM answers only the third
one. The three are:
1. What project to
2. What features
should be included in the project?
3. How to manage the
I believe that the six questions on the value of new
technology, developed by Eli Goldratt, are key to the first two questions. ValueTechnology should definitely analyze
this direction as part of its learning-from-experience investigation –
targeting a superior ways to analyze the business case for technological ideas.
I also believe VT should learn the lesson from losing
Ian. Maybe they need to update their
understanding of frustration as an important motivator of people with very high
potential. Goldratt claimed he was never
impacted by frustration, because he always tried to analyze his failures and
come up with new insights from each of them.
This is what Richard has to do: learn from unfortunate events and use it as
Learning from experience is not easy – it is simply
important. So is, to my mind, the
effective use of the six questions.
I’m happy that the more experienced TOC people, who answered
the riddle, have spotted the opportunity to learn the right lessons, notably
the need to check the way projects are chosen.
At least two answers mentioned also the issue of learning the
motivational aspects: David Peterson and Michael Bolanos Davis. My hard choice between the two tends towards
Michael Bolanos Davis because he is focused on what truly matters and suggests
to Richard not to pursue any charges against Ian.
I recommend you all to read both answers and also
those by Prof. Charlene Budd and by Skip Reed.
Each of them has its own way of shredding light on this case.
Michael B. Davis's answer (winner):
The information is out and that is no longer the key issue. If the
project had been frozen for over two years, it is because Value
Technology has limitations in their multi-project capabilities and that
project doesn't seem to have had enough priority to be included. The
key issue is why Ian had to resign just because a sensitive project was
not a priority. There seems to be a systemic problem in the criteria
used to decide which projects are fed into the pipeline and which ones
are not, without proper engagement of the people affected by those
decisions. Leaking sensitive information to the public becomes an
internal issue that Value Technology must resolve. People involved will
only abstain from doing so if each is clear on when their ideas will
have priority to be implemented without losing benefits for doing so.
Not knowing whether Ian was the one leaking the information to Jonah,
there is not much to gain by making it a bigger deal, which will also
send unwanted signals to competitors. Richard should accept Jonah's
invitation to do as he implies, reduce the importance of the project and
sell Value Technology as having much more important ideas to work on.
So, Richard should accept Jonah's invitation; let Ian go about his
business without making any fuzz about it; and focus on engaging talent
in project selection criteria. A close look at Google's work
environment would help Value Technology understand such talent
The rest of the submitted answers are listed below, in alphabetical order by LAST name.
Manoj Agarwal: Obviously, other projects have higher potential in the
company's assessment and company's managerial bandwidth and/or CCR
capacity are fully exploited already. Therefore the company must do
everything to maintain its focus, and take the minimum necessary
actions to ensure right messaging w.r.t. leaks. My advice to Richard
would be that the company should re-evaluate the potential of the idea
in the new situation. It should continue to follow its prioritization
rules under CCPM. The issue of doing something about Ian can reduce the
focus of the company on its high priority projects as well as open up
further risks. The company should think of other ways to ensure that no
one can get away with leading the company secrets e.g. make the
consequences sterner and make it clearer to everyone that the company
would act decisively.
2. Norbert Bollow: Externally (towards
Jonah), it is sufficient at this stage to state "we do not comment on
rumors about unannounced potential new products". Internally there is
an urgent need to strengthen the shared understanding of the business
benefits of CCPM, including in regard to is particular decision. Since
it was the introduction of CCPM that caused this project to get frozen,
the reason why the idea has not been moved to the state of being
actively developed is probably not a matter of mere office politics, but
some rationally justifiable reason like the company not truly having
the capacity to develop the idea. Apparently Ian is not only a
brilliant technologist but also a bully, who until the introduction of
CCPM was able to exert an undue influence on business decisions which
are really outside his area of expertise. It is important for Richard
Clark to build, within the company, confidence in his competence with
regard to making good business decisions, including with regard to the
need to be realistic about the company's capacity for implementing
ideas. Also Richard needs to urgently form a small team to honestly
assess whether some actions are needed to ensure that the important
informal functions that Ian used to fulfil within the company are still
met, and that everyone in the company has the confidence that this is
3. Charlene Budd: The first thing I would do is examine
for logical flaws the process used to prioritize projects -- both the
original prioritization (two years ago) and the prioritization updating
process that surely must have been used at some point during the past
two years. Obviously, if ValueTechnology's prioritization processes
are solid, the company has many valuable projects that are deemed more
valuable than the frozen project. If the processes are flawed, this is
an excellent opportunity to amend those processes. If the processes are
confirmed, I would proceed to the next step: determining if any new
information has been revealed in The Technology Corner magazine article
requiring a re-prioritization of the frozen project. Because Ian fought
hard to get the project released prior to his leaving the company 6
months ago, it seems unlikely that new information now is available.
However, some environmental change may have occurred that greatly
enhances the value of the stalled project, so the project should be
reevaluated to consider whether its priority now should change. (In
addition, if the frozen project is now unfrozen, the re-prioritization
process may need updating.) Finally, ValueTechnology should continue to
search for the source of the leak of confidential company information
to protect its intellectual property. Unless additional information is
received regarding Ian's involvement in the leak, no further action
should be taken regarding him.
4. Tomotaka Masuda: About whether
start to develop the idea or not, because the disclosed article is a
part of the idea and the detail of the idea is only within the company,
the company has the advantage to its competitors. By starting now
using ccpm, the company will complete the developping earlier than
competitors. But its no use developing what others has developed.
These days, many innovations are openly developped. This is called open
innovation. The more engeneers, the greater innovation. The company
should not develop sololy, but create open community to standardize the
technology. Then, focus on competitive and deeper part of the idea. How
to deal with Ian ? It's not clear he is guilty. To inspect who leaked
the idea will take long time and weaken the focus on new development.
What the company should do is sending a message that disclosing a secret
is never permitted. For example, strengthen the security by exhibiting personal storage, subdivide access privilege of the secret
information so that the leaked information will tell who leaked it.
More fundamental cause is that the executives of the company didn't
prioritize projects. They should make prioritize new technologies by the
impact to business and probability to development.
Peterson: I think there are three main questions to answer: - Should
he pick up the idea again? - Should he pursue and take legal action
against Ian? - Can he learn anything from this incident? I'll start
with some possible things to learn from... - Ian's resignation and
bitterness towards the company. Maybe in retrospect the heat could have
been taken out of the "furious discussion" by addressing the subject
more calmly and logically. E.g. clearly explaining the reservations,
conflicts and assumptions. Maybe there was a way forward Ian could have
agreed to, such as conducting an experiment, or spinning-off a company
with him at the helm, or parking the idea but with clear conditions
under which it would be revisited. - Loss of secrets. Perhaps security
can be strengthened? However, there is always a limit. Secrets are hard
to keep safe even without disgruntled employees. Computers can be
hacked or stolen. People can be manipulated into giving out information.
Perhaps the company should invest in heavier-weight legal protection
for its critical designs. E.g. if the company had patented the idea,
competitors may be disuaded from developing it or may approach the
company to license it - potentially generating a win/win in that
ValueTechnology could earn from the intellectual property without having
to incur the development costs and risks. - Thinking about revisiting
the idea. The article has clearly stirred up some fresh thoughts in
Richard's mind about the idea. But can he remember why he froze the
project in the first place? Is it documented somewhere? If not, perhaps
that's something to learn to do in future. So, to answer the other
questions: should we pick up the idea again? I think it's impossible to
say from the data presented in the article, but it sounds like it might
be worth building a financial model and testing its critical
assumptions, while also trying to recall exactly why the idea was
shelved before - Betty might remember. Should we take legal action
against Ian? Again, it depends. If he has committed a criminal offense,
it may be worth talking to a lawyer and sending a letter to the
publication and to Ian, or even taking the matter to the police, to send
a message that you take this kind of thing seriously. Probably though
it's not worth the time, effort and bad feeling for everyone to pursue
it very hard. As Ian said, since you weren't using the idea, and weren't
planning to, it hasn't really changed anything much for you. However,
there are potentially some good lessons to learn.
6. Skip Reedy:
The obvious: In our high tech world, 2+ years is an eternity. If the
idea hadn't been given out, someone else would have also thought of
it. Being frozen that long means the company thinks little of it in
relation to what it's working on and will never get to it. Attacking
an ex-employee, for possibly releasing a company secret, is a waste of
time. If the company succeeds in some way, they look vindictive. If they
don't, they look foolish. There is nothing to gain. The panel
discussion is an opportunity to show that they are way beyond that idea
and pushing the technology envelop. That was one of their ideas and
wasn't good enough to pursue. That will cause others to reconsider
pursuing it themselves. The real concern: If the idea is really viable,
why is it still frozen? If the CCPM implementation was going well,
their pipeline of projects should have been thinned out and running very
fast. That would open up capacity to work on good frozen ideas.
Something is dramatically wrong with the way they are doing CCPM. They
need to bring in someone to evaluate their implementation. There is a
huge challenge implementing CCPM in a large pipeline of projects. The
first CCPM project competes with existing projects for scarce resources.
The existing projects usually are struggling to be on time, while the
new CCPM project has a large buffer of time that is hardly used.
Therefore the CCPM project may not get the resources it needs when it
needs them. The transition drags on slowly and goes sour. This period
of time is very difficult and thought of as the expected (or overlooked)
chaos of transition. What is needed is a temporary metric that
compares traditional and CCPM projects objectively. This metric levels
the playing field until CCPM is well established.
Stebbins: The scenario seems like a good chance to put the
ValueTechnology CCPM implementation to test. I would advise Richard to
review the logic for freezing the project, and then recalibrate based on
the new condition of public exposure to the project ideas. There seems
to be three possible outcomes that rely on details not revealed in the
riddle. One, exposure could have eroded the project value to the point
it should be retired as an opportunity. Two, the decision to hold the
project freeze could be re-substantiated. Three, the exposure could
have increased the urgency of executing the project in order to capture
the value and pull it ahead of other priorities leading to a decision to
unfreeze the project and start now to develop the idea. Richard needs
to have confidence in CCPM driven decisions. Hopefully the company has
an ethics department that can remind Ian of any confidentiality
agreements in place and monitor public disclosures to seek clues as to
the source of the leak. It appears that the best response could be a
brief company statement denouncing the release of the information and
declining the panel invitation on the grounds that the company does not
want to publicly discuss ongoing development project details. A
shroud of mystery could be the best form of public exposure. I would
advice Richard to handle the leak succinctly and firmly, and not get
distracted from making CCPM based business decisions.
8. Alexis Traktman: In relation to questions of enigma, I noticed at least 3 UDEs, which were developed for the corresponding conflict clouds, from which suggest the direction of the solution. My Answers is: While Ian is openly known to favor the idea, not his intention seems to be causing harm to the company. The argument for this is that if Ian really wants to cause harm can reveal other things the company even more embarrassing. Furthermore, it would be unreasonable to disclose publicly a secret that could benefit him also if used exclusively for it (could develop alone or with the help of another company). Moreover, and not least, its reputation inside and outside the company is excellent. The idea of the project has already escaped from the company and it has already been published in the journal. Ian is out of the business because he resigned six months ago, bringing the risk of theft also exists, with or without assistance panel television program. The idea has already been revealed privately and publicly, so the risk of copying is a fact. "Do not develop the idea" versus "Developing the idea" is a false dilemma. The value of an idea that is developed (if it is a really good idea) will always be greater than that of an idea that is not developed. Also, if the idea is not good then, why bother both take it someone else? The direction of the solution; The first tip is not to sue Ian and be further involved in the team's engineers in formulating CCPM. Given the poor internal climate, if the company sues Ian runs the risk that the decision to promote new and more leaks of classified information. The second tip is to take the opportunity to re-convene IAN to work within the company, putting him in charge of the project. With the previous action, Value Technology (VT) neutralizes the risk that Ian is going to develop the idea with the help runaway competition and put him in charge of the project is a way to ensure close any possibility of further leakage. Do not forget that Ian is well respected and probably the information leakage caused some former teammate affected by bad weather internal Value Technology after the resignation of Ian. The third tip is part of the television program preparing an intervention strategy. Also, if Ian returns to the company, the problem is automatically transformed into a unique opportunity, as the project will have wide distribution in free.
9. Ricky Wang: Firstly Richard should revalue the idea with colleagues ASAP. As the idea is dismissed by the top leaders before, as least it doesn't have more potential value than current projects for the time being. Now, the idea is known by the whole industry, the unique value is reduced. Richard may face a conflict. Well, It is not too much difficult to surface the conflict and make an applicable choice with his colleagues. Secondly, Richard and his team should surface the root of this event and eliminate it as to help this sort of things never happen again. They should learn something and change something from the event. And this is the most important step. How does the leak come out? Why does it happen in ValueTechnology? Richard can use thinking process to dig the cause-and-effect logic. As this event happen only once, tools such as UDE-Cloud-CRT is not a good choice. He can start from CRT to find the root causes, paradigms, or assumptions. Richard can call a meeting to find the root causes using brainstorm with his team. Several potential causes are below: As the project of this idea was frozen by CCPM, so Ian reckoned ValueTechnology under-estimated the potential value of the project. As Richard and Betty dismissed the request of de-freezing the project by Ian, so Ian reckoned the idea had no value for ValueTechnology. Ian was disappointed by the discussion among Ian , Richard and Betty. Ian contributed much to the project but the value was not fully recognized. Ian wants the idea to be developed by others in the industry after his resignation. ValueTechnology did not take additional actions to protect its know-how. Ian reckons ValueTechnology will not file a suit against him. â€¦â€¦ Then Richard and his team can build a CRT with causes listed above and dig it down to the root causes. Finally Richard will get the false paradigm and a new one. And from the paradigm, new behaviors is surfaced as well as plans to change.