Harvard Business Review 5 years 2004 – 2009

Start networking right away, even if you hate it by W C Byham. Many executives spend about an hour a week maintaining their networks, but greater effort yields greater payoff. One marketing manger claims he spends two hours a day at it. (I think I spent that amount of time all thru my career as well – including networking with your own team. What comes through loud and clear in so many articles is that the winners are those that are able to enlist help and support from people outside of the immediate team – through the internet that outside can reach to all the corners of the world – there is so much knowledge out there and so many people willing to help just for the sake of making a contribution)

Picking the right transition strategy by M D Watkins. What worked for you in the past may not be suitable in your new position. Moving into new roles necessitates understanding the situation at hand and adapting to it. Five common situations, requiring different approaches are discussed: start-up, turnaround, accelerated growth, realignment, and sustaining success.

The Quick Wins Paradox by M E van Buren and T Saffersone. The essence of this article is that when you come in as a new leader somewhere, the best you can do is to make the group or team look good, not making yourself personally look good. The power of collective quick wins: Make people believers, not bystanders; Understand uncertainty; Show humility; Learn about your team. The five traps to avoid are: Focusing too heavily on details; Reacting negatively to criticism; Intimidating others; Jumping to conclusions and Micromanaging. Build transition capability, not just position capability.

Women and the vision thing by H Ibarra and O Obodaru. The challenge facing women is to stop dismissing the vision thing and make vision one of the things they are known for. In a senior leadership role, it’s the best use of their time and attention. It’s a set of competencies that can be developed. And of all the leadership dimensions we measured, it is the only thing that holds women back.

How not to Lose the top job by M Goldsmith. The greatest CEOs are the ones who continue to build and maintain support among all their key stakeholders. Practicing this behaviour before you get the job will only help you after you get the job. You should do all these things not because it helps your career but because it is the right thing to do. The effort you make in building relationship will make you a better leader and a better person – and that is good for you and good for the company, whether you become CEO or not.

The Last act of a Great CEO by T J Friel and R S Duboff. This article suggests that exiting CEO’s should be drawn upon much more to ensure a smooth transition. Leaders and organizations know it is imperative that the new executive gets off to a strong start – and that process begins with the transfer of CEO level knowledge.

What can coaches do for you by D Coutu and C Kauffman. An interesting article suggesting that coaching has gone from being something offered problem manager to being offered successful operators in order to secure continued success. Coaching as a business tool continues to gain legitimacy, but the fundamentals of the industry are still very much in flux. In this market, and in so many others today, we have to conclude that the old adage still applies: buyers beware.

How GE Teaches Teams to Lead Change by S Prokesch. In 2006 GE launched its Leadership Innovation and Growth (LIG) program in support of CEO Jeffrey Immelt’s priority of achieving corporate growth primarily by expanding businesses and creating new ones. Immelt: “Keep the company safe and keep building the future.” ‘You’re going to have to make some tougher choices than you had to make in good times, but we have to keep investing in innovation and growth.

Notes by [e-mail] 11 January 2009

Harvard Business Review December 2008

The December issue is a bit thinner than usual but containing some quite interesting and relevant articles. A few notes from the issue:

Staying Calm at the Centre of a Storm - leader

It pays to keep decision making transparent and consultative, even for the big tough calls. Regardless of shifting market sands, all businesses eventually have to reinvent themselves or suffer the consequences.

Inflation plus subsidies = an explosive mix by Ian Bremmer

Ultimately, countries that remove subsidies will help themselves, and the foreign investors in them, by making their economies more efficient. Although it is the poor who take to the streets, it is the rich who take most of the subsidies. According to an IMF study in selected emerging market countries, the richest one-fifth of households receives almost half of subsidies; the poorest fifth receive only 10%.

What best business practice challenges the conventional wisdom about what to do in a downturn?

Try to find advantage in a general recession by reconfiguring customer segment portfolios. /Ian McMillan and Larry Selden /

To help companies preserve and strengthen their strategic programs we developed a new expenditure category – strategic expenditure or StratEx to supplement the traditional capital and operational expenditure categories. These need to be protected from the traditional down turn approach of slash and burn cost regarded as discretionary. /Robert Kaplan and David Norton/

Try to reduce the stress level. The more attention you pay to employees’ lives beyond work, the more you will get out of them at work – especially during times of great stress. / Stewart Friedman/

Use downtime to enhance skills. Employees at all levels can be sent for training to improve their team building, collaboration, process ownership, and other skills – which pays off when economic normalcy returns. These are luxuries you cannot afford not to engage in. /BV Krishnamurthy/

‘Give me the ball!’ is the wrong call. Instead of hogging the ball during a downturn, CEOs ought to tap the ideas and the energy of the entire organization. When times are tough leaders should ask great questions, build trust across the organization and Challenge the status quo. Downturns are no time to tighten control. They are opportunities to inspire your people to become more spontaneous and creative. Pass the ball! /Tamara Erickson/.

Discounts can be dangerous – often the more people pay, the more value they ascribe to a purchase. If you discount prices purely to boost sales, buyers might start to question that value. The goal must be to enhance the iconic value of the brand. If you inadvertently shatter your brand’s mystique, re-establishing the value proposition to consumers may be tougher than you expect. / Jeffry Stibel and Peter Delgrosso /

The best way to predict the future is to invent it. /Alan Kay, computer pioneer/

The freedom to fail gives you the freedom to succeed. A lot of what can be imagined can be invented. / Vinod Khosla /

Fiat’s Extreme Makeover by Sergio Marchionne

Unfortunately our senior management team wasn’t used to taking responsibility, and when you have been working for years in a well defined status quo, it is almost impossible to change. In many cases I had little choice but to lay people off; they had too many of the old habits ingrained in them. The further I got from the centre, the more autonomous management became, and I soon realized that we had plenty of hidden leadership potential.

My engagement with ‘potentials’ is mostly very informal. I am texting them or calling them at odd hours to talk about the business or their careers. They know I care about what happens to them. If the organization can feel that kind of connection with its leadership, you are going to get a pretty sound culture aligned around strongly held common values.

I immerse myself in the business not so that I can make decisions in my corner office but so that I can guide the folks on the ground to make the right decisions.

Fiat was appalling at manufacturing. When you walked around the plant, you could feel the waste. It wasn’t just the mess on the factory floor, it was the way people moved and worked.

I encourage our high potentials to wear several hats at once. I have to wear many hats myself and I shouldn’t be the only one.

I am a conduit for change but it is the people in my organization who actually make the change happen. I derive my greatest satisfaction from seeing them succeed.

Reinventing Your Business Models by Mark W Johnson, Clayton M Christensen, and Henning Kagermann

Apple’s true innovation with its successful iPod was to make downloading digital music easy and convenient. To do that the company built a ground-breaking business model that combined hard-ware, software and service. Over 50 % of executives believe that business model innovation will become even more important for success than product or service innovation.

A business model consists of four interlocking elements that taken together create and deliver value. The most important by far, to get right is the first: Customer value proposition (CPV); Profit formula (we found it most useful to start by setting the price required to deliver the CPV and then look backwards from there to determine what the variable costs and gross margins must be); Key resources; and Key Processes.

The most important attribute of a customer value proposition is its precision; how perfectly it nails the customer job to be done – and nothing else. Don’t offer value propositions that communicate ‘we are all things to all people.’

These questions will help you evaluate whether the challenge of business model innovation will yield acceptable results:

1. 
   Can you nail the job with a focused, compelling customer value proposition?
   
2. 
   Can you devise a model in which all these elements – the CPV, the profit formula, the key resources and the key processes – work together to get the job done in the most efficient way possible?
   
3. 
   Can you create a new business development process unfettered by the negative influences of your core business?
   
4. 
   Will the new business model disrupt competitors?
   

Venture capitalists often fail when backing technology. Where we succeed is where we back new business models. / Bob Higgins of Highland Capital Partners/

Which Kind of Collaboration Is Right for You? By Gary P Pisano and Roberto Verganti

The new leaders in innovation will be those who figure out the best way to leverage a network of outsiders. Collaborative innovation is not a single approach but takes a wide variety of forms. As companies increasingly team up with outsiders to innovate, they confront critical and complex choices about whom to join forces with and how to share powers with them. A simple framework, which can help managers make these decisions, focuses on two questions: How open or closed should membership in your network of collaborators be? How flat or hierarchical should the network’s governance structure be?

Delivering on the Promise of Nonprofits by Jeffrey L Bradach, Thomas J Tierney and Nan Stone

Nonprofits need to rigorously answer several interdependent questions, suggested by the authors as a framework for change: Which results will we hold ourselves accountable for? How will we achieve them? What will our results really cost, and how can we fund them? How do we build the organizations we need to deliver results?

Notes by [e-mail] 7^th December 2008

Harvard Business Review November 2008

This issue was a little thinner than previous issues. A few notes attached:

See The Future First – Leader. Successful employers depend on a sterling reputation, an idealistic mission, and accelerated career opportunities.

Failing to plan is planning to fail.

Time to rethink capitalism? by Michael Yaziji. Those who take the greatest risk should be the controlling owners and receive the residual profits for reasons of both ethics and competitiveness. Today the big risk takers are labour and not capital. The same logic of ethics and competitiveness that once supported shareholders value maximization now leads to the conclusion that firms should focus on maximizing returns for labour.

Interestingly, competitive algorism theory also aligns with the mainstream strategic thinking that says that only firms with unique and valuable resources or capabilities will gain and maintain competitive advantage.

The Visa Crisis by Ian Macdonald. The US will find it far more difficult to maintain its competitive edge over the next 50 years if it excludes those (foreigners seeking to move to the US) who are able and willing to compete.

The Best advice I ever got by Maureen Chique. To lead effectively and achieve real business results as the head of any enterprise you have to listen. You’ve got to constantly ask questions and seek out diverse opinions, and remain humble enough to change your mind – whether about a product or a person.

Supervisor work/ life training gets results. By Ellen Kossek and Leslie Hammer. Teaching managers to be more supportive of their direct reports’ work/life issues can be a simple and effective route to improving employee health and satisfaction, according to our multiyear study of hundreds of front line workers and supervisors. (This is rather obvious and something I have practiced all my career)

A Framework for attracting and retaining talent:

Purpose: Guiding mission and Values/ Global Citizenship/ Committed to the region

Culture: Authenticity / Meritocracy / Connection/ Talent centricity

Opportunity: Challenging work/ Accelerated career track/ Continual training/ Competitive pay.

Brand: Known for excellence/ leading global company/ Inspirational leadership

Teaming up to crack Innovation and Enterprise Integration by James Cash, Michael Earl, and Robert Morison

Scouting for ideas with potential for the company

Constantly scanning the external environment for emerging technologies and their application.

Facilitating participation – the online marketplace for problem solving.

Act as a centre of innovation and expertise advising of innovation initiatives

Publicize promising innovations and their progress sparking creativity by example.

Create a home for developing pilots or prototypes of promising innovations.

How to become an authentic speaker by Nick Morgan

If your spoken message and your body language are mismatched, audiences will respond t the non-verbal message every time.

Authenticity requires four different aims: to be open, to connect, to be passionate and to listen

Focus not on what you want to say but on why you are giving the speech and how you feel about that. Let the underlying emotion come out.

In listening to audiences, pay attention both to their body language and their words.

Notes by [e-mail] 16^th November 2008

Harvard Business Review October 2008

Another HBR with some interesting ideas! Particularly two key ideas stuck with me from reading this issue.

One idea is to open up your organization to better incorporate all the knowledge that is out there with your customers and suppliers and also the general public. There is a huge potential to draw on knowledge and curiosity (and benevolence) from people not on the payroll but who would see it meaningful to help out for a multitude of reasons. The ability to capture this force may well be the difference between winners and losers.

The other idea is that ‘return to shareholders’ as the sole and overriding idea for corporate purpose is hopelessly out of date. One article argues that managers should be professionals like doctors or lawyers with explicit commitment to professional standards such as honesty and integrity and acting in the interest of all stake holders. (My comment: It has perhaps become especially obvious in these times that this should apply to banks as they operate under license from society and time and again have we seen how taxpayers need to provide crucial support to banks that they be able to stay in business. Thus the requirements that corporates need to act in the greater interest of society and display good citizenship will grow much stronger subsequent to the current crisis. And so it should.)

A few notes from this month’s issue:

The difference between Russian and Chinese entrepreneurs by At Batjargal.

Don’t try to be more Chinese than the Chinese or ore Russian than the Russians. You will always be perceived as a foreigner and expected to be different. Trying too hard may undermine the trust you are trying to build.

(I thought this piece of advice useful for dealing with foreign countrymen. Often it is made into something very difficult which it is not. Just be courteous, open-minded, interested, personable and kind and you have the characteristics for building strong relationships)

The Contribution Revolution – Letting Volunteers Build your Business by Scott Cook

We spent time with the executives to come up with ways that people outside the company could volunteer their time, energy and expertise to make life better for our customers. If you are not conducting an exercise like that, you risk missing the boat on a sea change that’s transforming business.

You need to build a contribution system – i.e. a method for aggregating and leveraging people’s contributions or behaviours in ways that are useful to other people.

The challenge for executives is twofold. First you must learn how to spot opportunities for creating value from user contributions. Second – and here’s the difficult part – in acting on these opportunities, you must overcome natural organizational resistance to the idea of relinquishing significant control to people outside the company.

The potential gains include: Cost advantage, Scalability advantage, and competitive advantage.

Where can Contributory Systems help your company? In Customer Service, marketing, Employee support, capital resources, Design and development, and Production.

Why do Contributors Contribute? Your habits provide intelligence for the company’s future; to suggest practical solutions, to be part of a community (social rewards), reputation and public recognition, self-expression, and altruism.

Since our initial meeting the activity of teams working on user contribution has increased from a tide to a torrent around the company. And this is just the beginning.

It’s time to make management a True Profession by Rakesh Khurana and Nitin Nohria.

A rigorous code of ethics will make you a better manager and society will benefit too. On balance we believe that a profession, with well functioning institutions of discipline, will curb misconduct because moral behaviour is an integral part of the identity of professionals – a self-image most are motivated to maintain.

The claim that managers are professionals does not withstand scrutiny when you compare managers with true professionals such as doctors and lawyers. Unlike in medicine and law, managers don’t need a formal education, let alone a license, to practice. Nor do they adhere to a universal and enforceable code of conduct.

The harm to society that untrained managers could cause – particularly in a more complex, globalized world – cannot be underestimated.

It is best for managers to have a higher-order purpose – viewing society as their ultimate client and society’s interest in vibrant, sustainable, value creating enterprises as their foremost objective.

Who would argue with the requirement that managers provide fair opportunity to all, free from bias, as a measure of their respect for the basic equality of all human beings. Freedom of opportunity is not only emblematic of a just society; it is also at the heart of an economic vibrant society. Managers must wield their power with humility and respect – ensuring that the interest of those who do not have power are protected and the voices of those who may not enjoy decision rights are heard.

The article suggests a Hippocratic Oath for managers;

I recognize that any enterprise is at the nexus of many different constituencies, whose interest can sometimes diverge. While balancing and reconciling these interests, I will seek a course that enhances the value my enterprise can create for society over the long term. This may not always mean growing or preserving the enterprise and may include such painful actions as its restructuring, discontinuation, or sale, if these actions preserve or increase value.

I pledge that considerations of personal benefit will never supersede the interests of the enterprise I am entrusted to manage. The pursuit of self-interest is the vital engine of the capitalist economy, but unbridled greed can be just as harmful. Therefore, I will guard against decisions and behaviour that advance my own narrow ambitions but harm the enterprise I manage and the societies it serves.

I promise to understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct, that of my enterprise, and that of the societies in which it operates. My personal behaviour will be an example of integrity, consistent with the values I publicly espouse. I will be equally vigilant in ensuring the integrity of others around me and bring to attention the actions of others that represent violations of this shared professional code.

I vow to represent my enterprise’s performance accurately and transparently to all relevant parties, ensuring that investors, consumers, and the public at large can make well- informed decisions. I will aim to help people understand how decisions that affect them are made, so that choices do not appear arbitrary and biased.

I will not permit consideration of race, gender, sexual orientation, religion, nationality, party politics, or social status to influence my choices. I will endeavour to protect the interests of those who may not have power, but whose well-being is contingent on my decisions.

I will manage my enterprise by diligently, mindfully and conscientiously applying judgment based on the best knowledge available. I will consult colleagues and others who can help inform my judgment and will continually invest in staying abreast of the evolving knowledge in the field, always remaining open to innovation. I will do my utmost to develop myself and the next generation of managers so the profession can continue to grow and contribute to the well-being of society.

I recognize that my stature and privileges as a professional stem from the honour and trust that the profession as a whole enjoys, and I accept my responsibility for embodying, protecting, and developing the standards of the management profession, so as to enhance respect and honour.

(Although I am not sure this is the solution, I think the article is onto a very urgent and significant problem, that of suboptimal incentive systems that don’t recognize the value of ethics and what is beneficial for the general public – if our business is run contrary to these two issues we must are on a trajectory of failure)

Creativity and the Role of the Leader by Teresa M Amabile and Mukti Khaire

One cannot manage creativity. One can manage for creativity. Even in today’s networked world, organizations fail to take full advantage of internet technologies to tap into the creativity of many smart people working on the same problem. Superstars in any organization should be defined as those who help others succeed. In larger organizations you have to ask, how do you get lift from adding layers, instead of weight? One suggestion is investment in infrastructure that makes collaboration easier.

Beware of efficiency trying to avoid duplication – in creative work you need to have people approaching a problem from different angles.

A manager’s guide to increasing innovation:

• 
  Remember that you are not the sole fount of ideas
  
• 
  Enable collaboration
  
• 
  Enhance diversity
  
• 
  Map the stages of creativity and tend to their different needs.
  
• 
  Accept the inevitability and utility of failure
  
• 
  Motivate with intellectual challenge
  

Management must create an environment of psychological safety, convincing people that they will not be humiliated, much less punished, if they speak up with ideas, questions or concerns, or make mistakes. Providing the setting for good work means work that is technically excellent, meaningful and engaging to the worker, and carried out in an ethical way.

The Incumbent’s Advantage by Ian C Macmillan and Larry Selden

Most companies are sitting on a gold mine of unrealized potential in their current customer base. Why should you start prospecting in unchartered areas while leaving the gold on your own territory for other to mine?

If you are a large company with major market share, you probably already have customers from practically every relevant segment. Not to know them, not to understand them, not to understand their unmet needs, and not to invest resources based on those needs is to cede one of your most important assets to potential challengers. Failing to capitalize on incumbent advantage is to invite, sooner or later, almost certain competitive disruption.

Notes by [e-mail] 12 October 2008

Harvard Business Review September 2008

This issue was full of very interesting articles. I just couldn’t put it down before I had read most of it.

New Thinking for a New Financial Order by Diana Farrell

Clearly risk management has lagged behind innovation in the financial system, requiring regulatory frameworks to be updated. Success depends on updating our thinking, not just our rules.

Lessons from the Oxford Cambridge Boat Race by Mark Rond

The eight strongest are unlikely to make the fastest combination. They need to be put thru seat racing, i.e. co-row with all to see where the strongest team performance appears. This also means they need to co-operate with someone who was previously their competitor.

The Best Advice I ever Got by Linda Mason

Your passions don’t have to be extracurricular. They can be central to your life. Unleash them, and you’ll help other people unleash theirs. Put your passions first and try to back them up with good financial numbers. When you put passion first, you attract the right people, who all naturally head in the right direction. Purpose first, returns will follow.

Emphasize meaning first and functionality second; remember that people simultaneously want to feel like individuals and be part o something bigger than themselves; and understand that successful brands often build a mass audience by cobbling together smaller ones.

Winners and Losers in a Carbon-Constrained World

Know your carbon exposure; take action; influence policy and check if you have the right players with the required skills. You are only as green as your supply chain.

Collective Creativity by Ed Catmull

The initial idea for a movie – what people in the movie business call ‘the high concept’ – is merely one step in a long, arduous process that takes four to five years.

The director and other creative leaders of a production do not come up with all the ideas on their own; rather every single member of the 200- 250 production group makes suggestions. Creativity must be present on every level of every artistic and technical part of the organization. If you want to be original you have to accept uncertainty even when it’s uncomfortable, and have the capability to recover when your organization takes big risks and fails. The key to being able to recover is talented people. What is equally tough is to get talented people to work effectively with each other. If we get teamwork right, the results is a vibrant community, where talented people are loyal to each other and their collective work.

If you give a great idea to a mediocre team they will screw up, and if you give a mediocre idea to talented people, they will either fix it or throw it away and come up with something that does work.

People’s overwhelming desire to make sure their work is good before they show it to others increases the possibility that their finished version won’t be what the directors want.

Strong leadership is essential ensuring people don’t pay lip service to the values, tune out the communications, game the processes, and automatically discount new comers’ observations and suggestions.

Ask each group to list five things they would do again and five things they wouldn’t do. That takes the stigma out of talking about what went wrong.

Social Intelligence and the Biology of Leadership by Daniel Goleman and Richard Boyatis

Leading effectively is less about mastering situations – or even mastering social skills sets – than about developing a genuine interest in and talent for fostering positive feelings in the people whose cooperation and support you need.

Leaders should continue to be demanding but in ways that foster a positive mood in their teams. Top performing leaders elicited laughter from their subordinates three times as often, on average, as did mid performing leaders. Being in a good mood helps people take in information effectively and respond nimbly and creatively. Laughter is serious business.

7 Ways to Fail Big by Paul B Carroll and Chunka Mui

Of the 750 biggest US business failures in the past quarter century, nearly half could have been avoided. These are the seven most common ‘blunders’. The synergy mirage / faulty financial engineering / Stubbornly staying the course / Pseudo-adjacencies / Bets on the wrong technology / Rushing to consolidate / Roll-ups of almost any kind /

Focus on strategy, not the process. Reviewers should ask for a written description of the strategy – not spreadsheets or slides. The latter make it easy to gloss over the details and leave much to reader interpretation. It is amazing how many elements of a deal that seemed clear in PowerPoint can fall apart when they’re subjected t prose. A memorandum demands clarity about who exactly is cross-selling to whom – and how and why. The purpose of the review is not to suggest alternative approaches.

Whereas the vast majority of business research focuses on successful companies, companies that failed can provide equally important information.

Harvard Business Review July 2008

Leaders in Denial by Richard s Tedlow.

Every product or service has two components: the core (the product’s primary purpose) and the augmented (additional functions and features). In every industry the border between the two inevitably shifts over time.

Managing Yourself by Robert S Kaplan.

Career Counsel: managing your own career is 100% your responsibility and you need to act accordingly. Be wary of conventional wisdom. Have faith that, although justice may not prevail at any given point in time, it should generally prevail over time.

Otherwise confident executives sometimes overestimate the career risk of speaking up and meaningfully underestimate risk of staying silent.

The Competitive Imperative of Learning by Amy C Edmondson

A focus on getting things done, and done right, crowds out the experimentation and reflection vital to sustainable success.

The best organizations have figured out how to learn quickly while maintaining high quality standards.

Fostering an atmosphere in which trust and respect thrive, and flexibility and innovation flourish, pays off in most settings, even the most deadline driven. When managers empower, rather than control; when they ask the right questions, rather than provide the right answers; and when they focus on flexibility, rather than insist of adherence, they move to a higher form of execution. And when people know their ideas are welcome, they will offer innovative ways to lower costs and improve quality – thus laying a more solid foundation for their organizations success.

Employee Motivation – A Powerful New Model – I was not impressed with this article. (When presented in HBR an article looks so sophisticated and sensible even when it is not) I see motivation as driven by functionality, friendliness and fun – i.e. you need to engage in something that works and makes a difference (adds value to somebody) and the relationship and offering need to have strong characteristics of friendliness and /or fun (trust and/or delight). This is motivational for customers and staff alike and promotes staff retention and customer loyalty. (Money can only be a means and not a goal)

Harvard Business Review June 2008

When new products are concerned, design thinking begins not at the drawing board but with an anthropological devotion to what customers do and want to do. It is about crafting every interaction between a company and its customers in a way that gives them the experience the company intends. Every strategy is the residue of design. / Thomas A Stewart, editor/

Stopping the exodus of women in science by Sylvia Ann Hewlett, Carolyn Buck Luce, and Lisa J Servon

Why do women leave science, engineering and technology careers? First and foremost the hostility of the workplace culture drives them out. Second is the dispiriting sense of isolation that comes when the woman is the only female on her team or at her rank – a problem exacerbated for others when she in turn leaves. Third there is a strong disconnect between women’s preferred working rhythms and the risky ‘diving catch’ and ‘fire fighting’ behaviour that is recognized and rewarded in these male dominated fields.

Extreme jobs with long work weeks and punishing travel schedules are particularly relevant in science, engineering and technology companies. Women tend to find themselves shunted into roles as executors or helpers while men occupy the more illustrious creator and producer roles.

Cisco decided to develop a game changer that within 18 months will come to represent 25% of the senior management team, designed to create critical mass of senior women in one swoop.

(my comment – when men (traditionally) say that whoever comes on the board must be qualified, I think – who is to judge and what does qualified mean? If qualified means looking like existing male directors, then I think this is a big cop-out. If there are no women on the board, almost anyone who is introduced to represent 52 % of mankind not previously represented would add value to the existing constellation. Too many boards have too many similar directors who are likely to see things dangerously similarly)

The fatal flaw in pay for performance by Ben W Heineman Jr.

Pay for performance is seriously inadequate unless it is pay for performance with integrity. If the values and ethics side is not entered into the equation it is dangerously flawed. The company’s top ranks need to be filled with managers who live the principles and practices of performance with integrity – and thus help the company avoid debilitating risks and secure the trust that is vital to doing business.

The most important CEO job is to be custodian of talent / Anna Pringle /

Good article on the benefits of Microfinance by Vikram Akula founder of SKS Micro finance.

The Contradictions that drive Toyota’s success by Hirotake Takeuchi, Emi Osono, and Norihiko Shimizu

This was the best article I have read in HBR for a long time in the sense that it describes one of the best companies in the world, and deflates so much of conventional wisdom (malpractice). Recommended read!

Toyota succeeds we believe because it creates contradictions and paradoxes in many aspects of organizational life. Employees have to operate in a culture where they constantly grapple with challenges and problems and must come up with fresh ideas. That’s why Toyota constantly gets better. The hard and the soft innovations work in tandem.

Toyota heavily invests in people and organizational capabilities, and it garners ideas from everyone and everywhere: the shop floor, the office, the field.

The company’s roots are in a rural suburb of Nagoya called Mikawa, and they run deep, accounting for its managers’ humility and strong work ethic. By any standards the company pays executives very little. In 2005, Toyota’s top executives earned only one-tenth as much as Ford’s and lower than their counterparts at the ten largest car companies save Honda.

Despite the enviable performance, senior executives constantly hammer home messages such as ‘never be satisfied’ and ‘there’s got to be a better way’ and ‘reform business when business is good.’

Toyota has a strict hierarchy but it gives employees freedom to push back – ‘pick a friendly fight’

Toyota prevents rigidity from creeping in by forcing employees to think about how to reach new customers, new segments, and new geographic areas and how to tackle the challenges of competitors, new ideas and new practices.

Paint goals with broad strokes – that allows freedom to researchers to open new avenues of exploration; procurement to look for new and unknown suppliers who possesses needed technology; and sales to consider the next steps needed to sell their products.

The fact that the original Prius would be an interim solution didn’t deter Toyota. They believed the project was worth the investment because Toyota would learn a lot in the process.

The original Toyota values include the mindset of continuous improvement (kaizen); respect for people and their capabilities, teamwork; humility; putting the customer first; and the importance of seeing things first hand (genchi genbutsu).

Four simple believes have kept the company from losing its way: Tomorrow will be better than today. Everybody should win. Genchi genbutsu. Customers first, dealers second – and manufacturers last. Every single person is the main actor on the stage. Each individual in Toyota is expected to act according to what he or she thinks is right.

My comment: Toyota is arguably the world’s most successful auto maker and company. Humility and respect for all involved in the process are cornerstones. Also their obsession with customer satisfaction and customer value as opposed to executive bonuses or shareholder return! Toyota puts its soul into what they offer and financial results come from doing the right thing. Detroit auto manufacturers (like many major American firms) seem to be obsessed by returns rather than by giving customers exceptional value. The results of these different approaches speak for themselves. One going from strength to strength and the other approach leading to huge losses and questions about survival.

Harvard Business Review June 2008

I didn’t find very much in this issue. However there is an interesting book review;

Why Women Mean Business. Understanding the Emergence of Our Next Economic Revolution by Avivah Wittenberg-Cox and Alison Maitland

Gender is – along with the internet and the environment – one of the key issues business leaders will face in the decades to come. Companies that understand women will be better led and closer to their customers.

What is especially valuable with this book is the authors’ analysis of where companies go wrong in managing women. In a lot of countries, particularly the United States, the advancement of women in society has taken place in the legal and political framework of equal rights. Many of the landmarks of women’s rights are court victories over companies and public bodies that discriminate against women. This emphasis on discrimination, the authors argue, has encouraged companies to focus their gender strategies on empowerment, to help women surmount the barriers raised by history and take their places next to the men who already hold positions of power.

That approach forces women to compete in an environment created by and for men. The women who get ahead tend to be those who exhibit stereotypically male leadership traits and behaviours, such as pushing for promotions by over selling their abilities. The immediate result is that companies fail to advance many talented women who do not display those characteristics, which may explain why some companies(consulting firms are and example) lose most of their women after just a few years on the job. Firms with successful gender strategies, the authors argue, don’t make this mistake. Rather than trying to help women succeed in a man’s world, they encourage men to learn about women.

Allowing men to see through women’s eyes is what the book does – not by offering a tool-kit for implementing a gender strategy – but rather by presenting statistics and testimony. Companies might benefit if male executives recognize women’s “more modest and relationship oriented” way of interacting as a valid communications style. Reading the book will make male executives smarter about the women they manage, report to, sell to, and buy from.

My comment:

Our customers are 50: 50 men/ women

Our headcount is 50: 50 men/ women

Our owners are 50: 50 men/ women

Our potential customers are 50: 50 men/ women

Our politicians are approaching 50: 50 men/ women

Our graduates are 50: 50 men/ women

Business leadership and board composition: 95: 5 men/ women

Spot the anomaly!?
I have often heard directors say that it is difficult to find competent women. This is less and less true. Competent doesn’t mean looking like the existing or average director as we have come to know them. Competent is more about bringing a fresh and different view and not only capturing upside but also limiting downside by staying on course. Defined like this I would like to think there are as many qualified women as men, particularly after the tremendous growth in number of tertiary educated women.

/ [e-mail] 19.07.08 /

Harvard Business Review April 2008

I found this issue a bit average although I know that sometimes for whatever reason I am less receptive to management articles than at other times. Sometimes the articles are too different from your own background and expertise to be appealing, sometimes they are too similar. Thus I am sure that two people can have a very different view of the value of a set of articles.

The tourism time bomb by Paul F Nunes and Mark Spelman

Tourist visits are expected to double from 800 million in 2008 to 1.6 billion in 2016. The skyrocketing demand for ravel will lead to a ‘scarcity of place’ causing escalating prices in popular spots, waiting lists and expansion of destinations. Although Europe will continue to be the biggest taker of international tourists, Asia and the Pacific will show the greatest growth.

Can You Say What Your Strategy Is? By David Collis and Michael Rukstad

It is a dirty little secret that most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else.

MISSION –why we exist; VALUES – what we believe in and how we will behave; VISION – what we want to be; STRATEGY – our competitive game plan with objective/ ends, scope/domain and advantage/means; BALANCED SCORECARD – how we will monitor and implement that plan.

The strategic sweet spot of a company is where it meets customer’s needs in a way that rivals can’t, given the context in which it competes.

The value of rhetoric should not be underestimated. A 35-word statement can have a substantial impact on a company’s success. Words can lead to action. Spending the time to develop the few words that truly capture your strategy and that will energize and empower your people will raise the long-term financial performance of your organization.

The Right Way to Manage Unprofitable Customers by Vikas Mittal, Matthew Sarkees, and Feisal Murshed

Has the company misunderstood or mishandled customers, regardless of their profitability – REASSESS THE RELATIONSHIP

Are the customers inclined to understand the company’s position – EDUCATE THE CUSTOMER

Can the customers and the company find new ways to reap value from each other – RENEGOTIATE THE VALUE PROPOSITION?

Might the customer be profitable for subsidiaries or other providers – MIGRATE THE CUSTOMER?

Is the value incompatibility between the customers and the company truly beyond repair – TERMINATE THE RELATIONSHIP?

The complex ever-evolving relationship between a company and its customers requires active management. Customers are not commodities that can be acquired or disposed of at will. They deserve better than a simplistic decision by management to either retain or reject them. Compromise options abound, and our framework is a logical one for exploring them. Customer divestment is a viable strategic option, but it must be exercised sparingly, mindfully, and cautiously. Your customer base, even if unprofitable, is not a resource your business can afford to squander.

Be a Better leader, have a Richer Life by Stewart D Friedman.

People try the Total Leadership program for a variety of reasons. Some feel unfulfilled because they are not doing what they love. Some don’t feel genuine because they’re not acting according to their values. Others feel disconnected, isolated from people who matter to them. They crave stronger relationships, built on trust, and yearn for enriched social networks. Still others are just in a rut. They want to tap into their creative energy but don’t know how (and sometimes lack the courage) to do so. They feel out of control and unable to fit in all that’s important to them.

The four way wins – work/home/community and self – are there for the taking. You have to know how to look for them and then find the support and the zeal to pursue them. No matter what your career stage or current position, you can be a better leader and have a richer life – if you are ready and willing to rise to the challenge. The article provides a blue print helping people pursue a better balance.

Notes by [e-mail] 25^th April 2008

Harvard Business Review March 2008

I found this issue a bit thin on interesting articles but made a few notes and reflections.

In the leader Thomas A Stewart says: ‘A company stops growing if it stops dreaming’, and ‘no company can grow without enough of the right people learning and doing the right things’.
Mega regions: The Importance of Place by Richard Florida

Nations have long been considered the fundamental economic units of the world, but that distinction no longer holds true. Today the natural units – and engines – are mega regions, cities and suburbs in powerful conurbations, at times spanning natural borders, forming vast swaths of trade, transport, innovation and talent.

I have long thought that national thinking and focus often is too narrow. The three small countries where I have lived for longer periods are Sweden, Singapore and New Zealand. With Swedish and New Zealand agencies I have been involved with working groups focused on ‘How can we promote Swedish or New Zealand issues?’ and I have often reflected that this question is misleading. The customer centric way of looking at trade with China for example is: How can we help China succeed and thrive? What is it we can do that will help them take big strides towards their development and success? Admittedly this is just the other side of the same coin in terms of how can we promote Swedish or New Zealand interests but it is a very important and subtle difference to focus on what you can add rather than what you can extract. The same issues are realities for corporates. Detroit car makers seem to focus on ‘how can we make more money’ whereas the more successful Toyota (and others) focus on how can we deliver a better product and improve customer satisfaction. In this context countries are irrelevant – coming up with a good idea for partnering in mutually successful endeavours is the real issue. Singapore, perhaps naturally, is better at this. Because of the small geographical size of Singapore, it is much easier to grasp how irrelevant it is as a country, allowing for more focus on things that make a difference.
In E-commerce More is More by Andreas B Eisingerich and Tobias Kretschmer

The article asks the question ‘What engages online shoppers most?’ and the answer is:

First: Information on related products and services, second: in depth information on product or service, and third: personalized shopping, and fourth: clear categorization, and fifth: order tracking.

I feel that similarly to the first article commented on, this is a ‘think outside the box’ issue. The trick is to try to understand what goes on in the customer’s mind. Just because I am in banking or travel doesn’t mean that the customer is 100% banking or travel when he sees me. He or she is still 1/3 family, 1/3 work/career and 1/3 other issues and availing understanding and /or enhancements in several or all of these three will tie the customer closer to me. In my case I am much more likely to transact with people I like than people I don’t like and often it comes down to having similar values or outlooks on areas seemingly irrelevant to the transaction at hand. If all you are trying to do is sell something to me I will be suspicious. If you look happy and generous and look like you have a concern for my happiness and well being, then I am more likely to listen, engage, and do repeat business with you.
The Best advice I ever got by Kris Gopalakrishnan

I constantly seek ways to get my love for this business across. When I display enthusiasm, employees are more likely to listen to what I say and draw extra energy from mine. Second, in talking with employees, I seldom focus on numbers but instead on big ideas and their role. I don’t think that talking about revenue targets or market share projections will get people inspired. I try to get people to focus on the future in which their unique contribution has an impact. The essence of my job is: to motivate one individual at a time.

I agree with these lines. I think the intrinsic ‘spiritual’ motivation is grossly underestimated. We all know it is there, but many, if not most, companies seem to only incent by money or other financial means. This fails to enlist the ultimate contribution and also tends to increase risk as my success may pay me a significant bonus but the cost of my total failure is borne by the organization/ employer. ‘Heads I win – tails you lose’ is a very risky formula.

[e-mail] 21 03 08
Harvard Business Review February 2008

I found this issue quite interesting, a few interesting passages cited below.

To help readers navigate the future there is HBRgreen.org where a 12 weeks discussion on the most important environmental issues facing business leaders. This is to help readers embrace the opportunities and manage the risks associated with a carbon-constrained world.
Tasks, Not Time: Profile of a Gen Y job by Tamara J. Erikson

At Best Buy’s headquarters more than 60 % of the 4,000 staff are now judged only on tasks or results. Salaried people put in as much time as it takes to do their work. Hourly employees in the program work a set number of hours to comply with federal labour regulations, but they get to choose when. Those employees report better relationships with family and friends, more company loyalty, and more focus and energy. Productivity has increased by 35 %, and voluntary turnover is down 3.2 %. Employees say they don’t know whether they work fewer hours – they’ve stopped counting. Perhaps more important, they’re finding new ways to become efficient: “Do we really need this meeting?” Going forward we can devise a better model of how define work: think task – not time.

• 
  Articulate the results you expect – and tie accountability to getting the job done.
  
• 
  Make physical attendance in the office, including meetings, optional
  
• 
  Gauge performance on the quality of the work performed
  
• 
  Help managers and employees learn to measure dedication other than by face time
  
• 
  Use today’s networking capabilities to allow employees to work from anywhere
  
• 
  Support the changes by creating drop in centres, team spaces, and open work areas
  

Shift your definition of work from a place your employees go for a specific period of time to something they do – anytime anywhere, Task, not time – a model that dominated employment until a century ago – is a powerful way to draw the newest crop of workers.
Food For Thought by John J. Medina

You learn 20 % faster immediately after exercise than after sitting still. An active life style reduces the risk for Alzheimer’s disease, dementia, anxiety, and depression – and for hospital visits. It doesn’t take a brain scientist to see the inverse relationship between exercise and health care cost. Study participants jog for 30 minutes two or three times per week for 12 weeks improve their cognitive performance. When they stop the exercise regimen, the cognitive benefits evaporate.

How Star Women Build Portable Skills by Boris Groysberg

When star performers change firms, both the star and the new firm usually loose out. The exception is when women stars change jobs. The explanation is that the female (analysts) appear to have built their franchises on portable, external relationships with clients and the companies they covered, rather than on relationships within their firms. By contrasts, male analysts built up greater firm and team specific human capital, investing more in internal networks and unique capabilities and resources of the firms were they worked. Second, women took greater care in assessing a prospective employer.

Most female analysts who become stars have had mentors; in fact the most conspicuous difference between star and non-star women in equity research is access to a supportive mentor. But star women reported difficulty forging such relationships. They were less likely than their male counterparts to have mentors, and those who did have mentors received less support from them than male stars did.
Midlife Change by Carlo Strenger and Arie Ruttenberg

Roll up your sleeves – midlife is your best and last chance to become the real you.

As a physician once told us: “If you are 50 and nothing hurts, you’re most likely dead!”
The notion that possibilities slip away with age is built on a false premise. By midlife for most people the pressures have lost most of their urgency. No longer riddled with the anxiety that they may not be good at anything or by the need to prove that they are good at everything, they have the freedom that only self-knowledge can impart. They are also generally in less of a hurry. Most executives who consider a career change do not need to act immediately. They have the time to listen to themselves, map their possibilities in the world, and create their new lives with care. The journey can take odd twists and turns before they end up in a satisfying place.
Without dreams we are unlikely to make any changes, but getting lost in fantasies is not only a waste of energy but can also become an impediment to actual change. Companies should help executives prepare for a second life as a matter of policy. Everyone over 45 should have periodic meetings with coaches or consultants to help plan their second careers. The business world must collaborate with institutions of higher education to develop programs and courses geared towards that end.

Self-actualization is a work of art. It must be achieved through effort, stamina and skill.

The Biosphere Rules by Gregory C. Unruh

Nature employs production processes that are surprisingly efficient, environmentally sound – and widely imitable.

Companies can emulate three of the rules governing the natural operating system. First, instead of relying on industry’s infinite supply of synthetic materials, they can make recycling easy by striving to use as few raw materials as possible. Second they can practice up-cycling – planning beyond the end of the product’s life cycle for its incarnation as a new product. Finally, they can leverage general purpose platforms, such as Microsoft leverages Windows. 
In following these three rules, companies can free themselves from the vagaries of raw material markets, shrink their vendor count, lower costs, foster profitable returns on products that appeal to ecology- oriented customers, and ensure the environmental sustainability of their products.
Astonishingly, of more than 100 elements, nature chose to use just four, carbon, hydrogen, oxygen, and nitrogen – to produce all living tings. Add a little sulphur and phosphorus, and you can account for 99% of the weight of everything on the planet. The more perfect nature is, the fewer means it requires for its operation – Less is More!
There is one overriding reason to emulate nature’s parsimony: It makes recycling easy. Nature suggests that the potential for inventive uses of easily recycled materials is huge.

Biological obsolescence – otherwise known as death – plays a vital role in the biosphere. The unceremonious process of ushering out the old and ushering in the new allows change; without it the biosphere could not evolve. In the context of biosphere rules, planned obsolescence can become sustainability, leading a company toward environmentally superior designs. To make virtuous recycling work, managers should plan at the beginning of design for the end of their product’s life. The buyer – supplier relationship needs to be rethought.

Reducing the number of materials is fundamental to recycling cost-effectively. Up to 75 % of steel and 50% of Aluminium are recycled because doing so uses a fraction of the energy needed to produce virgin material.
Sustainability is in the end nature’s best secret. By reusing the same material in an ever compounding cycle of evolutionary growth, the biosphere has sustained itself on planet Earth for billions of years. With luck, following the biosphere rules may help sustain business for a billion years or so.

 

And I got this letter to the editor published in the February issue:

Women and the labyrinth of Leadership....

Perhaps the traditional trade-offs that women face, addressed by Eagly and Carli, are not forced but voluntary. The top performers in U.S. industry more often than not lead very unbalanced lives because their work demands an almost inhuman level of commitment: The CEO of a major corporation is on call 24 hours a day, seven days a week. And executives are encouraged to minimize cost relentlessly, even in areas such as payroll and customer service. Does any amount of money justify throwing human concerns overboard to reach a goal? And if so, will ethics and environmental issues be next? With CEO compensation up to 500 times greater than that of workers, achieving team spirit between the boss and the people – perhaps one of the greatest rewards of leadership- - is out of the question. This amounts to a lower quality of life and is sustainable neither for the individual nor for the corporation.

Would the world be better off with leaders who have a more balanced view of life? One wonders whether a female president would have embarked on the costly war in Iraq or if Enron would have met the same scandalous demise with female top management. I believe that female characteristics and qualities are greatly needed in the corporate world. Stereotypical male aggression should not be held up as desirable. / Frank Olsson, NZ /
Harvard Business Review January 2008

The theme for this issue is leadership and strategy. Please find below a few lines from some interesting articles.

Doing well by doing good? Don’t count on it. By Joshua Margolis and Hillary Elfenbein

While doing good doesn’t appear to destroy shareholder value, we found only a small correlation between corporate behaviour and good financial results (the exception being public misdeeds, which had a discernible negative impact).

Doing good is unlikely to cost shareholders. Companies can do good and do well, even if they don’t do well by doing good. None of this is to suggest that companies should not engage in activities that generate social good. However, they should not expect to be handsomely rewarded. Doing good may be its own reward.
Transforming Giants – What kind of company makes its business to make the world a better place? by Rosabeth Moss Kanter

Employees once acted mainly according to rules and decisions handed down to them, but they now draw heavily on their shared understanding of mission and on a set of tools available everywhere at once.

When giants transform themselves from impersonal machines into human communities, they gain the ability to transform the world around them in a very positive way.
Shared values, principles and platforms. To compete effectively, large corporations must respond quickly and creatively to opportunities wherever they arise, and yet have those dispersed activities add up to a unified purpose and accomplishment. The companies that meet this challenge rely in part on clear standards and disciplines, including, at the most basic level, standardized processes.

Getting close at a distance – the payoff for companies that have embedded values and principles in their guidance systems comes in many forms.

Empowerment in the field – Common values and standards also allow people at the front lines to make consistent decisions, even under pressure and in the company’s most culturally and geographically disparate locations.
A stronger basis for partnering – companies that have established strong guidance systems find themselves more effective in selecting and working with external partners – increasingly a necessity for competitive success. A more outward- and forward-looking definition of purpose encourages exploration of partnership opportunities that extend well beyond the formal boundaries of the company. It causes people in the company to think about end-to-end responsibilities to the whole ecosystem, from suppliers’ suppliers to customers’ customers and beyond – to society itself.
Fire in the belly – if values and standards served no other purpose in a company, they would still serve as motivational tools. They offer people a basis for engagement with their work, a sense of membership, and an anchor for stability in the midst of constant change.
Key criteria for the successful operating model is the effect of commonly held values translating into operations through clear standards and processes – values and standards that are embraced by individuals because they allow autonomy, flexibility, and self-expression.

** this reminded me of a passage in Rousseau’s Confessions where he says that he came to work wanting to do well but because of constant mistreatment he got into a habit of stealing and constantly trying to get even by adopting various practices of miss-chief. The golden rule works both in the negative and the positive.

“My master’s tyranny at length made the work, of which I should have been very fond, altogether unbearable, and filled me with vices which I should otherwise have hated, such as lying, idleness and thieving. The recollection of the alteration produced in me by that period of my life has taught me, better than anything else, the difference between filial dependence and abject servitude. Naturally shy and timid, no fault was more foreign to my disposition than impudence; but I had enjoyed an honourable liberty, which hitherto had only been gradually restrained, and at length disappeared altogether. I was bold with my father, unrestrained with M. Lambercier, and modest with my uncle; I became timid with my master, and from that moment I was a lost child. Accustomed to perfect equality in my intercourse with my superiors, knowing no pleasure which was not within my reach, seeing no dish of which I could not have a share, having no desire which I could not have openly expressed, and carrying my heart upon my lips, it is easy to judge what I was bound to become. In a house in which I did not venture to open my mouth, where I was obliged to leave the table before the meal was half over, and the room as soon as I had nothing more to do there. Incessantly fettered to my work, I saw only objects of enjoyment for others and of privation for myself; where the sight of liberty enjoyed by my master and companions increased the weight of my servitude; where in disputes about matters as to which I was best informed, I did not venture to open my mouth; where, in short, everything that I saw became for my heart an object of longing, simply because I was deprived of all. From that time my ease of manner, my gaiety, the happy expression which, in former times, when I had done something wrong, had gained me immunity from punishment – all were gone.
In this manner I learnt to covet in silence, to dissemble, to lie, and lastly, to steal – an idea, which, up to that time, had never even entered my mind, and of which since then I have never been able to cure myself of completely. Covetousness and weakness always lead in that direction. This explains why all servant are rouges, and why all apprentices ought to be; but the latter, in peaceful state of equality, where all that they see is within their reach, lose, as they grow up, this disgraceful propensity. It is nearly always good, but badly directed principles, that make a child take the first step towards evil.”
Working with extended networks of partners across inter- and extra-company boundaries requires large numbers of people to serve as connectors among activities – not as bosses but as brokers, network builders, and facilitators.
When large groups of people are subject to management by values, aspirations, and open boundaries instead of management by traditional controls, their energies and passions are engaged. Social contributions are no longer an afterthought – a luxury enjoyed only by those who are already profitable – but a starting point that helps companies find profitable growth. The interplay of corporate standards and local conditions puts companies in a position to influence the ecosystem around them (especially in emerging markets) and to generate innovation. If these vanguard companies lead others to adopt their way of working, then we will see a new, and I think more promising kind of capitalism. And if it flourishes, not only will that be good for business, it will also be good for the world.
The Five Competitive Forces that Shape Strategy by Michael E. Porter

This article deals with the five competitive forces 1) Rivalry among Existing competitors, 2) Threat of new entrants, 3) Bargaining power of buyers, 4) Bargaining power of suppliers, 5) Threat of substitute products or services.

A well written article that doesn’t really lend itself to meaningful summation.
Innovation Killers – How financial tools destroy your capacity to do new things by Clayton Christensen, Stephen Kaufman and Willy Shih.

The authors point out three financial tools that often stifle innovation: Discounted cash flow and net present value, fixed and sunk-cost conventional wisdom, the emphasis on short term earnings. These are not bad tools and concepts in and of themselves, but the way they are used to evaluate investments creates a systematic bias against successful innovation.

My own reflection is that most measures are focused on tangible value, whereas for most companies the majority of value sits in the intangible value. If 90 % of our measures of performance and staff go into measuring 1/3 of the total value (creation) only 10 % remains to understand, measure and analyse the 2/3 that pertain to intangible (brand) value. I believe there is a huge potential here to better understand what drives sustainable value in corporations and to promote people and practices that build brand value as opposed to those who look good superficially and short term, but are negative or high risk for sustainable value.
Giving Great Advice – Interview of Bruce Wasserstein by Thomas Stewart and Gardiner Morose

How do you develop individual talent? We have and want to attract a network of stars – people who communicate and co-operate but are entrepreneurial and stand out as quality individuals, who are not the cogs in the a corporate machine. Quality people must be managed with customized approaches. The idea is to create a hothouse where young talent is nourished by our culture and people are encouraged to think creatively, think deeply – but above all think. I want them to reflect on what they are doing and why, and then wonder, ‘Can we do better?’ Management’s role is to help them.

Good advice is at least as qualitative as it is quantitative. A firm may have people churning out reams of statistics, providing a detailed analysis showing margins of this company versus that company. But are they asking, ‘What’s the point?’
Why Mentoring Matters in a Hypercompetitive world by Thomas DeLong, John Gabarro and Robert Lees.

We found that many formerly modest-size outfits – including law firms, consulting firms, accounting firms, investment banks, marketing agencies, hospitals, money management firms and universities – are becoming ‘corporatized’ as they grow rapidly in size and complexity. Professionals are starting to think that they are merely cogs in a wheel. In order to survive they must revive mentoring, an institution that has been the victim of hyper-competitiveness and rapid growth in these types of firms. 20 years ago new hires were treated as protégés whereas today it is more impersonal and fluid.

At law firms with fewer than 100 professionals, attrition rates are 50 % lower than at larger firms. High attrition comes at a high cost. Firms that lack collegiality and a sense of genuine partnership they had in their early days will struggle to recruit – let alone retain – the talent they need to survive. Deloitte alone predicts that it needs to recruit 50,000 professionals in the next five years just to keep up with the normal demand and attrition. Partners must listen, inquire, and show interest. An e-mail, or a nod of appreciation goes a long way.
Mentoring is not just about promotion – it’s much more about developing your potential as a professional and as a human being. If you want a mentor, start acting like you do.
Seniors need to build time into their schedules to nurture all their associates, not just the ones most like themselves.

Notes by frank@olsson 20^th January 2008

Harvard Business Review November 2007

Leaders do many things: They inspire and motivate; they set strategy; they wield power; they align people; they set an example; they represent the organization to outsiders. More than anything else, however, leaders help the people around them makes sense of the world in which they find themselves. Inspiring, strategizing and acting all depends on sense-making / Thomas Stewart, editor /

To create the company I wanted I had to look into the future and pretend I was already there. I had to stop treating the infrastructure of the company like some necessary evil, invest in it more than I thought possible, and trust the investment would work. /Fred Carl, CEO of Viking Range/

Cognitive Fitness New research in neuroscience shows how to stay sharp by exercising your brain by Roderick Gilkey and Clint Kilts.

Step One – Understand how experience makes the brain grow.

Step Two – work hard at play. Another one of the most effective ways you can promote your cognitive health is t engage in the serious business of play. As the philosopher Henri Bergson wrote, “To exist is to change, to change is to mature, to mature is to go on creating oneself endlessly.” To do this well requires consciously drawing on one of the great legacies of childhood – our ability to play, which lies at the heart of our capacity to imagine and invent.

Joy provides what has been described as “emotional fuel,” which helps the brain develop and expand its synaptic networks. Play is not only a psychological precursor of social and emotional maturity I adulthood; it is a psychological one as well. As you go about the hard work of your career, it is critical to remember to play. Play improves our ability to reason and understand the world. Our most brilliant thinkers and leaders know this. (Einstein ‘Imagination is more important than knowledge’)

Some organizations go out of their way to let people experiment and play. In companies that stifle play, brainpower may decrease as it does in children with failure-to-thrive syndrome, a condition created by experientially deprived or abusive environments.

A big challenge in finding the right environment for your brain to thrive is striking a balance between risk and security. You must have a stake in the game you play if you are to really engage in it; risk alerts the brain and activates capacities for both reason and imagination. If you don’t allow for some risk in your career, you may become like an overprotected child who fails to explore the world with any autonomy and thus never fully achieves his potential. But too great a personal stake in the game can create stress limiting the brain to survival mode.

Step 3 Search for Patterns. The power of pattern recognition, a critical competence of the executive brain, can be seen in the capacity to simplify, without being simplistic.

Avoid filling the team with people who’ve all followed the same path upward. This advice may sound obvious but in many companies one route upward dominates.

Step 4 Seek Novelty and Innovation. The people who remain engaged in life consistently display an attitude of openness to new and unexpected experiences.

Have an open attitude and a willingness to step back from prior knowledge and existing conventions I order to start over and cultivate new options – a challenge that typically activates right-hemisphere cognitions.

We also advocate adopting a protégé. While it is widely known that being a protégé benefits rising executives, an ongoing stream of research reveals that the person who often gets the most value from a mentoring relationship is the mentor, who is exposed to information, queries and ideas from which she may otherwise be too remote.

Solve the Succession Crisis by Growing Inside-Outside Leaders by Joseph L Bowler.

A critical difference between companies that manage succession well and those that don’t is the understanding that succession is a process and not an event.

There is no better way to reverse the long-term destruction of shareholder value than for companies to commit themselves to growing executives from inside the company who are prepared to lead through good times and bad. Simple? No. The right thing to do? Absolutely! Consider the four skills that the new CEO needs to drive a company forward and produce the goo results.

1. 
   Judge where the world and the company markets are headed, and frame a vision of how the company should reposition itself
   
2. 
   Identify (and if needed recruit) the talent that can turn the vision into reality.
   
3. 
   Understand, in the deep and substantive way, the problems the company faces.
   
4. 
   Know, comprehensively, how the company really works – in other words, be plugged into its administrative inheritance and know key players well.
   

We found that the greater proportion off experts a team has, the more likely it is to disintegrate into non-productive conflict or stalemate. / From Ways To Build Collaborative Teams by Lynda Gratton and Tamara J Erickson /

Notes by [e-mail] Nov 11, 2007

Harvard Business Review October 2007

This edition has some great articles about the environment and global warming.

Thomas Stewart, the editor, says in the leader “The bad news is that climate change happens slowly, by degrees, literally – and humankind might sit there, like the frog in the fable, till it’s too late. The good news is that climate change happens slowly, and humankind has time, to get some purchase on the problem and fix it. While doing nothing about climate change put people and populations in great peril, there are fortunes to be saved by those who take steps to prevent and mitigate it.”

“We don’t know precisely how climate change will alter the planet, but two things are certain: Its complex environmental impact will directly affect business, society and ecosystems; and governments will seek to mitigate its effects with far-reaching regulations. Until recently, companies have for the most part freely emitted carbon, but they will increasingly find that those emissions have a steep price, both monetary and social. As a result, businesses that continue to sit on the sidelines will be badly handicapped relative to those that are now devising strategies to reduce risk and find competitive advantage in a warming, carbon-constrained world. There will be winners and losers. Companies that get their strategy right will find vast opportunities to both profit and create social good on a global scale.”

A Strategic Approach to Climate Change by Michael Porter and Forest Reinhardt

While individual managers can disagree how immediate and significant the impact of climate change will be, companies need to take action now. Companies that persist in treating climate change solely as a corporate social issue, rather than as a business problem, will risk the greatest consequences. The effects of climate on companies’ operations are now so tangible and certain that the issue is best addressed with the tools of the strategist, not the philanthropist.

Business leaders need to start to treat carbon emissions as costly, because they are or soon will be, and companies need to assess and reduce their vulnerability to climate related environmental and economic shocks. Every company needs to get those basics right as a matter of operational effectiveness. Implementing best practices in managing climate related costs is the minimum required to remain competitive.

Business leaders need to look “inside out” to understand the impact of the firm’s activities on the climate and “outside in” at how changing climate (in both its physical and its regulatory manifestations) may affect the business environment in which the firm competes.

If new regulations put a price of, say $ 10 a ton on emissions, would that put a significant dent in the profits or even swallow them altogether? A company needs t understand the emissions it causes its business partners to produce, as well as those it generates itself: Both types are important targets for reduction.

Wall-Mart seems to be making a strategic bet that it can reduce its carbon exposure more than competitors can and keep it lower.

While property insurers’ own carbon emissions may be low, for example, carbon exposure may be high for companies that insure or reinsure costal real estate that is threatened by rising sea levels.

Periodically, major new forces dramatically reshape the business world – as globalization and the information technology revolution have been doing for the several past decades. Climate change, in its complexity and potential impact, may rival them both. While many companies may still think of global warming as a corporate social responsibility issue, business leaders need to approach it in the same hard headed manner as any other strategic threat or opportunity.

Investing in Global Security by Peter Swartz

In the coming decades we can expect to see sea levels rise and more extreme droughts, storms, and flooding. These events become security concerns for businesses when people are forced to flee, infrastructure is destroyed, ecosystems fail, agriculture is disrupted, economic volatility increases, and some regions become uninhabitable.

The most vulnerable will be places where, for example, the state has limited capacity to respond, the local ecosystem is fragile, urbanization is accelerating with few social services, and the water supply is already stretched. Haiti is perhaps the most extreme case, India, the Philippines, and parts of Central America are all at risk. In such a stressed system, a severe prolonged weather event could launch a crisis of interconnected events from which recovery might be impossible.

Multinational firms prepared to take the long view can avoid the worst consequences of climate change and perhaps help business build a stronger reputation as a powerful agent of social well being.

What Stakeholders Demand by Daniel C Esty

Last year more than 50 US investors with a combined total of $ 4 trillion under management called on the US Congress to enact legislation to curb carbon emissions. In a statement, the signatories, including investment funds for labour unions, state pensions, insurance companies, and major asset managers wrote: “In the current unpredictable national climate policy environment, it is exceedingly difficult and risky for businesses to evaluate and justify the large scale, long term capital investments needed to seize existing and emerging opportunities…” Dozens of funds now screen companies for environmental and sustainability factors, including emissions reporting, and exclude poor performers. In July, for example, Citigroup downgraded coal stocks across the board, explaining in an equity research report that coal company productivity/ margins are likely to be structurally impaired by new regulatory mandates applied to a group perceived as landscape-disfiguring global warming bad-guys.

Beyond responding to stakeholder pressures, careful tracking and management of emissions prepares companies to manage climate change challenges systematically. Those who fail to monitor, report, and mitigate emissions face the prospect of mounting competitive disadvantage.

Conversation with Alyson Slater, Global Reporting Initiative’s director of strategy

It is the fiduciary duty of any company to ask, Is this issue important to our stakeholders? Today it is very difficult for a company to say that greenhouse gas emissions are not a subject of material interest to stake holders.

Companies quickly realize that reporting cannot happen without strategy development. As firms start the process of putting a report together – talking to shareholders, examining core businesses – they’ll have to back up and ask, What is our strategy on climate change anyway?

Companies’ natural instinct, which we’ve seen across the board, is to avoid public disclosure on potential risks, whether it is green house gas emissions or something else. But we’ve also seen how reporting creates a communications avenue through which companies can effectively and accurately position themselves with their stake holders – investors, customers, regulators and so on.

It is a primary responsibility of the board and the CEO to determine the implications of their company’s future climate risks and (a) report them and (b) mitigate them. Companies are adept at assessing their financial performance but too many are afraid to look in the mirror and face potential risks that could damage their business.

If You’re not at the table, You’re on the Menu by Andrew J. Hoffman

To shape policy to your advantage, you must start by monitoring pending regulations and understanding how they may affect your business objectives.

Investors hunger for Clean Energy by Theodore Roosevelt IV and John Llewellyn

Investors have been waking up to the opportunities of the new environmental era over the past several years. Institutions were amongst the first to put money into sustainable energy companies. Lately, hedge funds – some of which had already entered this space – have aggressively increased their pursuit of environmental investments. And there has been overwhelming demand from private equity investors and wealthy individuals.

Worldwide investments in sustainable energy (including wind, solar, and water power) more than doubled from 2004 to 2006, to $ 70.9 billion, according to a 2007 report by the United Nations Environment Program and the firm New Energy Finance. Venture capital and private equity investments in sustainable energy increased by 69 % in 2006 to $ 8.6 billion.

If a company can show that it has diversified its energy sources to include those that produce little or no emissions and that it has shrunk its per-employee power use, the capital markets will respond favourably.

The desire for green investments is so intense, and the supply currently so limited, that if investors aren’t disciplined, the excess demand could cause a bubble in the future.

The pricing of greenhouse gas emissions will create an economic transformation of the first order, with the potential to be even larger than globalization. Investors now recognize that the impact on the world and national economies will be enormous. The companies that will be most successful in attracting green capital will be those that share investors’ view of the importance of this change. Investors will not expect all companies to be experts in climatology, but they will expect every company to see and understand a trend of this magnitude and make sure the firm does not get left behind.

Walking the Talk at Swiss Re by Mark Way and Britta Rendlen

Fostering the company’s credibility is crucial because of the central role that trust plays in the business model. By 2003 Swiss Re became the first major financial services provider to pledge to become greenhouse neutral. The company pays for up to 50 % of a number of defined investments that staff can make for the benefit of the environment.

Place Your Bets on the Future You Want by Forest L Reinhardt

The firms that come out ahead when emissions cost money will be those that make bold moves now, refocusing strategy and operations to take advantage of the opportunities and skirt the dangers raised by the prospect of climate change.

For centuries the North Atlantic cod fishery fed millions of people, but there were no property rights controlling access to fish in the sea, so fishermen didn’t treat the resource as scarce. In the early 1990s the fishery collapsed. Governments have since established sensible systems of tradable catch permits that seem likely to prevent the collapse of other species, but it was apparently too late to resurrect the cod fishery. The atmosphere’s ability to absorb emissions is now similarly limited, precisely because we thought that could never happen. A system in which we pretend that carbon emissions cost nothing subsidizes, at our children’s expense, every producer and consumer of energy today. To be efficient, we need to eliminate those subsidies. This means pricing carbon.

Strong business leaders should want a transparent system that prices the right to generate carbon emissions as though it were any other scarce resource and lets firms get on with the business of competing. / notes by [e-mail] 14 October 2007 /

Harvard Business Review September 2007

After a rather full summer issue of HBR I found the post summer one of lesser interest. There was one article on Women and their career struggles but I didn’t think it brought out much new and perhaps I think an important point is omitted as explained below.

A few notes from the September issue:

Performing a Project Pre-mortem by Gary Klein

A pre mortem is the hypothetical opposite to a post-mortem. A post mortem in a medical setting allows health professionals and the family to learn what caused the patient’s death. Everyone benefits except of course the patient. A pre-mortem is a business setting comes at the beginning of a project rather than at the end, so that the project can be improved rather than that autopsied. Unlike a typical critiquing session, in which project team members are asked what might go wrong, the pre-mortem operates on the assumption that the ‘patient’ has died, and so asks what did go wrong. The team members’ task is to generate plausible reasons for the project’s failure.

A typical pre-mortem begins after the team has been briefed on the plan. The leaders start the exercise by informing everyone that the project has failed spectacularly. Over the next few minutes those in the room independently write down every reason they can think of for the failure – especially the kinds of things they ordinarily wouldn’t mention as potential problems, for fear of being impolitic. Next the leader asks each team member, starting with the project manager, to read one reason from his or her list; everyone states a different reason until all have been recorded. After the session is over, the project manager reviews the list, looking for ways to strengthen the plan.

Although many project teams engage in prelaunch risk analysis, the pre-mortem’s prospective hindsight approach offers benefits that other methods don’t. A good pre-mortem may be the best way to avoid a subsequent post mortem.

Women and the Labyrinth of Leadership by Alice H Eagly and Linda L Carli

This article argues that there are still a myriad of little things that hold women back including biases that because of other commitments like children and home they will be less committed than men. This may well be true but trend wise it seems that the problem is reducing as female participation in education and the work force is getting significant and close to the numbers for males.

It may well be that these are not just forced tradeoffs but voluntary tradeoffs. The top performers/ office holders in US industry more often than not lead a very unbalanced type of life where work perhaps demands an unreasonable amount of focus and time commitment. This in itself may lead to a lower quality life and a riskier leadership profile, sustainable neither for the individual nor for the corporation.

This begs the question if the world isn’t better off with more female characteristics leaders with a more balanced view and life experience. One would have to wonder if the hugely costly war in Iraq would have been embarked upon by a female president or if Enron would have experienced the same scandalous demise with female top management. This century holds out good hope that gender and other type of discrimination will diminish and even disappear.

The article has these suggestions to encourage female progression. Work to dispel prejudice towards female leaders; change the long hours norm; reduce the subjectivity of performance reviews, use recruitment agencies for objectivity; ensure there is a critical mass of females in executive positions, not just one; help shore up social capital (networking), prepare women for line management; establish family friendly human resource practices; welcome women back; encourage male participation in family-friendly benefits.

I think many if not all of these can be useful tools to get the desired balance which is not only a matter of idealism but a way to prepare for the future and operate more sustainably.

The article caused me to send this letter to the editor…..