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The Leak - a riddle by Eli Schragenheim
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 laughed.
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 public exposure?”
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 conference.

When a person is faced with a big surprise there are two different issues:

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 future.

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 take?

2.  What features should be included in the project?

3.  How to manage the project?

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 an opportunity.

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 engagement.

The rest of the submitted answers are listed below, in alphabetical order by LAST name.

1. 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 the case.

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.

5. David 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.

7. Robin 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. ……  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.