Harvard Business Review 5 years 2004 – 2009
Yüklə 0,9 Mb.
|
|
Harvard Business Review May 2006 This issue spends a lot of space and time on the bird flue and how to plan for avoiding the effects of it. To me it seems a bit esoteric and so many million man years goes towards planning for unlikely events and my own view is that it is better to train agility and flexibility so the capability to deal with the unforeseen is there rather than have a special program and policy for each unlikely scenario. The five messages Leaders must manage by John Hamm. The real job of leadership is to inspire the organization to take responsibility for creating a better future. Effective communication is a leader’s single most critical management tool for making this happen. When leaders take time to explain what they mean, both explicitly by carefully defining their vision, intentions and directions) and implicitly (through their behaviour), they assert much-needed influence over the vague but powerful notions that otherwise run away with employees’ imaginations. By clarifying amorphous terms and commanding and managing the corporate vocabulary, leaders effectively align precious employee energy and commitment within their organizations. When leaders take it for granted that everyone in their organization shares their assumptions or knows their mental models regarding key result areas, they lose their grip on the managerial levers. Leaders must try to separate their egos from their jobs. The power of clear communication is really the game of leverage. Winning in the aftermarket by Morris A. Cohen, Narendra Agrawal, and Vipul Agrawal. This article points out that the importance and profitability of the aftermarket is grossly underrated. Up to 45 % of all profit can be derived from the aftermarket. There is a direct correlation to stock price and companies’ abilities to capitalize on the after market. Most organizations squander their potential in this area. Notes by frank@olsson.co.nz 11th June 2006 Harvard Business Review April 2006 For change to be deep and lasting the interaction between people – at all levels – need to focus on the right outcomes and consistently produce the right conversation and decisions. Neither leadership nor tools nor incentives are sufficient to get you there. You must find a way to manage culture directly. “A Chairman of a board of directors who simultaneously holds executive functions cannot independently exercise the task of ultimate supervision of the persons entrusted with management,” asserted the Ethos Group in a 2005 proposal to Nestle shareholders. Home Depot’s Blueprint for Culture Change by Ram Charana Home Depot is one of the business success stories of the past quarter century. Founded in 1978 in Atlanta, the company grew to more than 1100 big box stores by the end of 2000; it reached the $ 40 billion revenue mark faster than any retailer in history. The company’s success stemmed from several distinctive characteristics, including the warehouse feel of its orange stores, complete with low lighting, cluttered isles, and sparse signage; a “stack-it-high, watch-it-fly” philosophy that reflected primary focus on sales growth; and extraordinary store manager autonomy, aimed at spurring innovation and allowing managers to act quickly when they sensed a change in local market conditions. We wanted to build on the best aspects of the existing culture, particularly people’s unusually passionate commitment to the customer and the company. But we wanted them to rely primarily on data, not on intuition, to assess business and marketplace conditions. And we wanted people to coordinate their efforts, anathema to many in Home Depot’s entrepreneurial environment. We wanted people to be accountable for meeting companywide financial and other targets, not contemptuous of them. We wanted people to deliver not just sakes growth but also other components of business performance that drive profitability. One of the hardest things for a leader to do is to look somebody in the eye and be honest with them about their performance. Metrics were used to promote a savvier understanding of the business. For example, with standardized, detailed business data, people could see the relationship among revenue, margins, inventory turns, cash flow, and other measures from store to store and region to region. Getting managers throughout the company to look beyond sales as the sole business goal spurred them to make better decisions. Employee surveys showed a rise in various aspects of job satisfaction from one point below industry averages to eight points above. The composite measure includes engagement in the business, enjoyment of the employee’s existing role, support for the leadership, and confidence in the company’s future. We are running a business today. If someone has a great idea we want to hear about it today. In the game of change, velocity is your friend. When someone suggested they should pace the change being proposed, the CEO was quick to respond: good idea – I will call our competitors and ask them to slow down for us!” When Should a Leader Apologize? by Barbara Kellerman This is a reasonable article – albeit a little too formal and scientific for my taste - about apologizing. My own view is that most people are too slow to apologize and to not do so for reasons of legal positioning is generally wrong and may well prove to be very costly in terms of lost good will. Corporate Leadership for Energy Efficiency / special advertising section. We’ve known for some time that we’re living in the twilight of the age of cheap energy. In the late 1990s the falling price of oil led some to think we’d been given a reprieve. But trends and events over the past two years – including developing countries accelerating demand for oil, the war in Iraq, and the disruption to the oil production and refining supply chain caused by hurricane Katrina and Rita – have swept away the last issue of denial. GE’s and China’s announcement signify that black gold has given away to green gold; the search for cleaner, resource conserving energy is now a necessity. Cradle-to-cradle thinking does not just focus on minimizing toxic pollution and reducing natural resources waste. It goes a big step further, demanding that companies redesign industrial processes so that they don’t generate pollution and waste in the first place. The typical building is scandalously inefficient. Two-thirds of the energy used to heat goes up the chimney. Moreover, buildings are responsible for 41 percent of energy consumption in the USA and 43 % of the nations carbon dioxide output. In green building designs, the goal is to create structures that produce more energy than they consume, store solar energy, and purify their own waste water, releasing it slowly back to the environment. The US internal combustion/ electric hybrid vehicle market has grown from two models and fewer than 10,000 vehicles in 2000 to 11 models and 212,000 vehicles last year. This represents slightly more than 1 pct of the total car market, but for an unconventional technology, it’s a good start. Toyota, the market leader, sold 110,000 Priuses in the USA and Canada in 2005, double the volume from 2004. By the end of this year all six of the top-selling car companies in the US will offer a range of hybrid cars and trucks. Although conservation and all the other initiatives are to be applauded, the only technology ready to fill the gap and stop carbon dioxide loading of the atmosphere is nuclear power. Although still an anathema in many places, for some countries nuclear is seen as a key solution to their increasing demand for energy. The smaller, new-generation reactors are high yield, use low-cost fuel, and their pebble-bed design makes them virtually meltdown proof. They offer the best avenue to a ‘hydrogen economy,’ combining high energy and high heat in one place for optimal hydrogen generation. The Unexpected benefits of Sarbanes-Oxley by Stephen Wagner and Lee Dittmar This article essentially argues that the disciplines brought in by the SOX act should be welcomed as being good and useful to most companies. Good governance is a mixture of the enforceable and the intangible. Organizations with strong governance provide discipline and structure; instil ethical values in employees and train them in the proper procedures; and exhibit behaviour at the board and executive levels that the rest of the organization will want to emulate. In our presentations at business seminars and conferences, we are often asked why we emphasize the control environment so heavily. Our questioners seem to believe that good internal control is predicated on the controls themselves – the cross-checking, the reconciliations, the data verification. We reply that without a strong control environment helps ensure that the controls themselves are the second and third lines of defence, not the first. Employees who have been made to understand that it’s not all right to strike side deals with customers, to recognize revenue prematurely, to conceal possible conflicts of interest, or to look the other way when these types of activities are going on won’t be busy circumventing the control system at every turn. Some executives feel they need to tie every action back to the bottom line. To them we say: most investor rating services include an assessment of the control environment as part of their overall evaluation of the company. Scores from these services can have a significant impact – either positive or negative – on investor sentiment and the company’s cost of capital. Controls fall into two broad categories. Preventive controls designed to eliminate lapses either intentional or inadvertent, and Detective controls designed to identify errors. Clearly defining who’s responsible for which business process is a key element of an internal control program and facilitates training, oversight, and performance evaluation. A lot of steps we assumed were being taken – account reconciliations and internal calculations and data integrity checks – actually weren’t. Standardization is also a bottom line issue. Having a lot of ad hoc procedures for the same entries is very cost inefficient. Further benefits accrue when internal and external auditors come knocking, since standardized processes can be evaluated more quickly and cheaply. Asking most auditors what is the weakest point of internal controls and they will tell you – “manual processes.” The human beings charged with carrying them out may be fatigued, distracted, stressed, malicious, or absent. Automated controls, if properly designed and implemented aren’t susceptible to such pitfalls. Yet, in our experience most controls are still manual. Notes by frank@olsson.co.nz 9th April Harvard Business Review March 2006 This month’s issue has several interesting and well written articles. Please find a few notes below. The Greening of the balance Sheet by Anthony White Clearly investors are becoming aware how greenhouse gas emissions – or at least the impact of regulations designed to curb them – can affect value. And so should CEO’s if they want to hold on to their jobs. Leadership in Literature, a conversation with Business Ethicist J. L. Badaracco, Jr. MBA students perhaps need a little less in the way of quantitative tools and a little more in the way of good judgment and self-knowledge, as well as a deeper understanding of human nature. Ceaseless efforts to meet other’s standards and success, deadens one’s emotional life and moral instincts. How can men and women pursue success and achievement without being pulled into powerful, dangerous currents that overwhelm them? One answer lies in the peculiar idea that we have serious moral obligations not just to others but to ourselves. The best reflection involves dialogue with others. Solitary, self-designated geniuses are a prescription for disaster. Connect and Develop by Larry Huston and Nabil Sakkab By identifying promising ideas throughout the world and applying its own capabilities to them, Procter and Gamble realized it could create better and cheaper products faster. Now the company collaborates with suppliers, competitors, scientists, entrepreneurs, and others (that’s the connect part), systematically sourcing the world for proven technologies, packages and products that P & G can improve, scale up, and market (in other words develop), either on its own or in partnership with other companies. Connect and Develop strategy is far superior to incremental development. Companies that fail to adapt to this model won’t survive the competition. Inside the Chinese Consumer by William McEwen, Xiaoguang Fang, Chuanping Zhang and Richard Burkholder. Consumer survey in China shows changing attitudes. In surveys conducted 1994 and 2004 responses changed as follows: Work hard and get rich 68% vs 53 %; I don’t think of money or fame but try to live a life that suits my own taste 10% vs 26 %. Instead of worrying about the taste or availability of the next meal, the increasingly affluent Chinese worker is thinking about the taste of life itself. The 2004 survey found that 68 % don’t feel engaged; that is they don’t approach their work with passion or feel a personal connection to their jobs. These employees have essentially checked out; they are sleepwalking through their work days. And a further 20 % of employees hate their jobs to the point of active disengagement. They may well act out their unhappiness, undermining what their engaged co-workers accomplish. The survey also suggests that the larger the organization, the less employees feel personally connected to the work place. Households with DVD players rose from 7 % in 1997 to 52 % in 2004. The number of households with computers grew from 2 % in 1994 to 13 % in 2004 and mobile phones from 10 % to 48% in 2004. What does all this mean for a company planning to do business in China? First, it is clear that aspirations are growing, that desire is outstripping ability, and that the traditional bellwethers of modernization don’t necessarily apply. Chinese consumers want more than just function. This is one reason why Nokia, which has emphasized fashion over function, has seen its cell phone sales in China rocket past those of Motorola and Ericsson. If a company wants sell vacuum cleaners or washing machines in China it had better pay attention to emotional needs as well as physical ones. And if it is selling microwave ovens, air conditioners, and TVs, it should be sure those products are as fashionable as they are reliable. Despite the many thousands of years of Chinese history, China’s longest journey in some ways has just begun. We are not only witnessing a new millennium there but a new era in which the emotions, attitudes, and perceptions of the man and woman on the street, in the home, and in the factory increasingly matter. Managing Middlesence by Robert Morison, Tamara Erickson, and Ken Dychtwald According to a 2005 Conference Board survey, the largest decline in job satisfaction over the past ten years occurred among workers between the ages of 35 and 44, and the second largest decline was among those aged 45 – 54. In short, far too many mid-career employees are working more, enjoying it less, and looking for alternatives. We have become convinced that the problem of burned-out, turned-off employees who stay is even more threatening to corporate productivity than the problem of turnover. Making current work more enjoyable and enriching and reengaging employees can be very profitable. Sources of frustration include: Career bottleneck, Work/life tension, Lengthening horizon (having to work more years), Skills obsolescence, Disillusionment with employer, Burnout, Career disappointment. You’ve got to have passion for the job to add value every day. If you find yourself just going through the motions, do something different. We all have strengths; find yours and play to them. It is true that the responsibility for career moves belongs primarily to the individual. But the fact is, organizations create the conditions under which career initiatives flourish or fade. It is in the enlightened self-interest of the organization to remove the institutional barriers to individual fulfilment and ambition, to pay the attention and devote the resources needed to keep new possibilities open and revitalize careers. This isn’t paternalism – or a return to employment practices of yesterday. It is good management. The actions we recommend are largely a matter of paying closer attention to the often silent majority – the mid-career employees who form the heart and backbone of your work force. Customer Value Propositions in Business Markets by James C Anderson, James A Narus, and Wouter van Rossum. ‘Why should our firm purchase your offering instead of your competitors?’ Is a more pertinent question than ‘Why should our firm purchase your offering?’ Without a detailed understanding of the customer’s requirements and preferences, and what it is worth to fulfil them, suppliers may stress points of difference that deliver relatively little value to the target customer. To make customer value propositions persuasive, suppliers must be able to demonstrate and document them. Each value proposition must be: distinctive, measurable and sustainable Customer value propositions can be a beacon as well as a cornerstone for superior performance. Diversity Now: Real Results, New Opportunities by Michael Wheeler Diversity makes dollars and sense. Diversity profoundly affects your company’s profitability, efficiency, and its ability to innovate, achieve cost reductions and gain market share. Diversity has a direct impact on product development, business strategy and even shareholder value. As profit-generating and cost-saving opportunities occur quite literally at every human interaction, diversity influences every single business transaction, process, goal and objective. People should be held accountable for diversity results. Diversity is not an obligation but an opportunity. To make a difference a company must keep its eyes open to different ways of thinking. Why It’s So hard to Be Fair by Joel Brockner Everyone knows that being fair costs little and pays off handsomely. Then why do so few executives manage to behave fairly, even though most want to? Some managers wrongly believe that tangible resources are always more meaningful to employees than being treated decently. Doctors often refrain from apologizing for mistakes for because they fear that admitting them will anger their patients, who will them be more likely to file malpractice suits. In fact the opposite is true. It is not enough for executives to be fair. They also need to be seen to be fair.
Dear Sirs, I thought this a well written article and I liked the content. However I think it is not so much a matter of being fair as it is to care. Unless managers and employees alike care, how are they ever going to convince customers that they are important. Showing care goes beyond being fair. Whereas being fair means not mistreating anyone, showing care goes further. Who wants to be around people who don't care? What kind of response does that invite? When someone is about to be exited all colleagues 'die a little’ with her (or him). We are all potential firees and we all take cue from how such process is handled. At some future date it may well be me.
I have recently worked for two major Australian banks and both had a company policy to not allow reference letters. Someone may have worked for your company for many years and now needs to look for another job, and you won't provide a letter of reference? How caring is that? What kind of response and attitude does such non-caring invite? As a general manager I complained about this rule and frequently broke it, thinking the rule inhuman and not in the best interest of the employer. Later I got smarter and wrote a 'Letter of Appreciation' to the employee with the same content as a reference letter and achieved the same thing without breaking the rule.
It is not only being fair but more about care. Respect and Humility need to go with it. From Plato's Phaedo I quote this line by Socrates: "If you are still doubtful about the argument, do not hesitate to say exactly what you think, and let us have anything better which you can suggest; and if I am likely to be of any use, allow me to help you." If you as a CEO or senior manager have the courage and courtesy to tell your staff - this is the situation we are facing, this is what I think we need to do and I have thought long and hard about it, please tell me if you see it differently? - then you may or may not get another bright idea, but what you will always get is respect.
Sincerely, Frank Olsson Harvard Business Review February 2006 This issue has a few interesting articles. Particularly it asks to what extent being a ‘nice person’ is good or bad on CEO level. The obvious answer is that too stern and too nice are equally ineffective and the trick is to strike the right balance. But perhaps a little tougher and harsher than we like to think is better for progress and value creation. Perhaps it also suggests that there is no ‘one set fits all’ formula but that different situations and staged require different approaches. From school days we have all, I think, experienced teachers who were harsh and demanding to the benefit of our learning, but also those who so loved their subject and art that they encouraged more and better learning. Perhaps the least leaders are those who inspire neither fear nor love. The Why, What, and How of Management Innovation by Gary Hamel. Why has it taken America’s automobile manufacturers so long to narrow their efficiency gap with Toyota? In large part because it took Detroit more than 20 years to ferret out the radical management principle at the heart of Toyota’s capacity for relentless improvement! Unlike its Western rivals, Toyota has long believed that first-line employees can be more than cogs in a soulless manufacturing machine; they can be problem solvers, innovators and change agents. While American companies relied on staff experts to come up with process improvements, Toyota gave every employee the skill, the tools, and the permission to solve problems as they arose and to head off new problems before they occurred. The result: Year after year, Toyota has been able to get more out of its people than its competitors have been able to get out of theirs. Such is the power of management orthodoxy that it was only after the American car makers had exhausted every other explanation for Toyota’s success – an undervalued yen, a docile work force, Japanese culture, superior automation – that they were finally able to admit that Toyota’s real advantage was its ability to harness the intellect of ‘ordinary’ employees. ‘Whole Food’s’ very successful CEO says his goal was to create an organization based on love instead of fear by creating a ‘community of people working together to create value for other people. At Whole Foods the basic organizational unit is not the store but small teams that manage departments such as fresh produce, prepared foods, and sea food. Managers consult teams on and all store-level decisions and grant them a degree of autonomy that is nearly unprecedented in retailing. Each team decides what to stock and can do new hires. Bonuses are paid to teams, not to individuals, and team members have access to comprehensive financial data including the details of every co-worker’s compensation. Believing that 100:1 salary differentials are incompatible with the ethos of the community, the company has set a salary cap that limits any executive’s compensation to 14 times company average. 94 % of company stock options have been granted to non-executive level. Rivals can do little more than shake their heads and wonder. When De Hock and his team built Visa they spent months coming up with a set of principles to guide their work: Power and function in the system must be distributed to the maximum degree possible. The system must be self organizing. Governance must be distributed. The system must seamlessly blend both collaboration and competition. The system must be infinitely malleable, yet extremely durable. The system must be owned co-operatively and equitably. The quest for greater standardization often leads to unhealthy affection for conformance; the new and the wacky are seen as dangerous deviations from the norm. Elaborate planning and control systems lull executives into believing the environment is more predictable than it is. A disproportionate emphasis on monetary rewards leads managers to discount the power of volunteerism and self-organization as mechanisms for aligning individual effort. To beat back the forces of commoditization a company must be able to deliver the kind of unique customer value that can only be created by employees who bring a full measure of their initiative, imagination, and zeal to work every day. The problem is there is little room in bureaucratic organizations for passion ingenuity and self-direction. The machinery of bureaucracy was invented in an age when human beings were seen as little more than semi-programmable robots. Bureaucracy puts an upper limit on what individuals are allowed to bring to their jobs. If you want to build an organization that unshackles the human spirit, you’re going to need some decidedly un-bureaucratic management principles. Passionate organizations are more like a community than a hierarchy. People are drawn to a community by a sense of shared purpose, not by economic need. In a community, the opportunity to contribute isn’t bounded by narrow job descriptions. Control is more peer based than boss based. Emotional satisfaction, rather than financial gain, drives commitment. For all those reasons, communities are amplifiers of human capability. Is there any reason to believe we can challenge the well entrenched orthodoxy? Sure. Look at Google. Its top team doesn’t spend a lot of time trying to cook up grand strategies. Instead, it works to create an environment that spawns a lot of ‘Googlettes’: small grassroots projects that may one day grow into valuable new products and services. Google looks for recruits who have off-the-wall hobbies and unconventional interests – people who aren’t afraid to defy conventional wisdom – and, after it hires them, encourages them to spend up to 20 % of their time working on whatever they feel will benefit Google’s users and advertisers. Key questions for reviewing each relevant management process: Who owns the process? Who has the power to change it? What are its objectives? What are the success metrics? Who are the customers of this process? Who gets to participate? What are the data or information inputs for this process? What analytical tools are used? What events and milestones drive this process? What kind of decisions does this process generate? What are the decision-making criteria? How are decision communicated and to whom? How does this process ling to other management systems? You may find that your company’s strategic process is too elitist in that it gives a disproportionate share of voice to senior executives at the expense of new ideas from people on the front lines. This severely limits the variety of strategic options your company considers. Perhaps the hiring process over-weights technical competence and industry experience compared with lateral thinking and creativity. Other human resource processes may be too focused on ensuring compliance and not focused enough on emancipating employee initiative. The results? Your company is earning a paltry return on its investments in human capital. A deep and systematic review of your firm’s management processes will reveal opportunities to reinvent them in ways that further your bold objectives. Although we sometimes affix the dinosaur label to chronically underperforming companies, the truth is that every organization has more than a bit of dinosaur DNA lurking in its management processes and practices. The Great Intimidators by Roderick M Kramer This article suggests that intimidators often make good leaders. Another article in the edition disagrees. At the end of the day it may be a matter of degree and depend on circumstances. A little bit of fear and apprehension may sharpen the focus. Key is that intimidators not cross the line between demanding and abusive. But the article also points out that because intimidators may be so adept to bending others to their will, that they win even arguments that they should lose. Often wrong, never in doubt people often said of Carly Fiorina Harvard Business Review January 2006 The January issue is largely on decision making. One article stood out from the rest. The contest between rationality and gut instinct pervades the research on decision making. Good decision making depends foremost on accountability. Whose decision is it? And every decision has an ethical dimension. Evidence based management by Jeffrey Pfeffer and Robert I. Sutton If you want to have an operation, ask a surgeon if you need one. People tend to recommend what they are good at. It is important to remember that if you only copy what other people or companies do, the best you can be is a perfect imitation. So the most you can hope to have is practices as good as, but no better than, those of top performers – and by the time you mimic them, they’ve moved on. This isn’t necessarily a bad thing, as you can save time and money by learning from the experience of others inside and outside your industry. The players of successful sports teams will tell you that the most important factor in their success was the communication, mutual understanding and respect, and ability to work together, that made the difference. Performance suffers when there is a big spread between the worst- and the best-paid people – even though giving the lion’s share of rewards to top performers is the hallmark of forced ranking systems. The greater the gap between top management’s pay and that of other employees, the lower the product quality! Forced ranking results in lower productivity, inequity, scepticism, decreased employee engagement, reduced collaboration, damage to morale, and mistrust in leadership. Players in teams with greater dispersion in pay had lower winning percentages, gate receipts, and media income. Over 15 years research of the auto industry shows that lean or flexible production systems – with their emphasis on teams, training and job rotation, and their de-emphasis on status differences among employees – built higher-quality cars at lower cost. Companies that want to promote more evidence based management should get in the habit of running trial programs, pilot studies, and small experiments, and thinking about the inferences that can be drawn from them. It is better to put something out there and see the reaction and fix it on the fly after getting feedback. At least since Plato’s time, people have appreciated that true wisdom does not come from the sheer accumulation of knowledge, but from a healthy respect for and curiosity about the vast realms of knowledge still unconquered. An experiment at the University of Missouri compared decision making groups that stood up during the 10-20 minutes meeting with groups that sat down. Those that stood up took 34 % less time to make decisions. frank@olsson.co.nz Harvard Business Review December 2005 The December issue of HBR had several great articles that attracted my interest. Please find below a few notes from five of them. If you have any interest in the area covered by these articles I strongly recommend reading the full article. Self Management – Heartless Bosses by Travis Bradberry and Jean Greaves How could it be that the very people who need emotional intelligence the most seem to have it the least? It appears that companies are still promoting executives principally on the basis of what they know or how long they have served the company rather than on their ability to lead. Yet, for every job we’ve studied, emotional intelligence is a better predictor of performance than technical skills, experience, or intellect. If you are in the rarefied ranks of corporate suite executives, your subordinates are probably more emotionally intelligent than you are. That’s not good for you or your company. A decade of research shows that emotional intelligence can be honed – that’s the good news – but first you have to recognize the need. Strategy and Your Stronger Hand – by Geoffrey A. Moore There are two ways of doing business, and any given company is as adroit at the one as it is awkward at the other. Understanding your own organization’s ‘handedness’ will guide you to the right strategic moves. Oscar Wild once wrote, ‘Men marry because they are tired; women because they are curious. Both are disappointed.’ We can repurpose that statement to shed light on the business of strategic acquisitions. There are two distinct business models – the complex-systems model and the one that competes on volume operations. Both as they grow and are successful are tempted to expand into the more volume-oriented business on the one hand or more up-market complex-systems area on the other, depending on the starting point. The article explains why this so often fails. In Research for example, the complex business system model has a qualitative bias because each customer constitutes a market reality unto itself. By contrast, the volume -operations model is all about the uniformity and scalability of transactions. With complex systems no one member of the value chain can provide all the products and services end to end. The focus on marketing, therefore, is on aligning properly with partners and allies, not to mention the various customer constituencies that must collaborate in order to bring complex systems into fruition. The most valuable marketing asset a company has in this context is the relationships it can create that give it permission to lead and make others want to align with its efforts. In a volume-operations model the entire offer is inside a package, the entire value chain is pre-assembled and the only variable to mage is consumer choice. Such differences are also in the areas of Design, Source, Manufacture, Selling and Service as described in the article. In general, communications between the two models are difficult. In complex-systems models customer intimacy connoted deep domain expertise and developed relationships with decision-making executives in key accounts. In volume operations, the same term refers to the kind of pseudo-intimacy you get from you’re my Yahoo portal or Amazon.com’s book recommendations. Organizations that attempt to be ambidextrous create points of contention wherever a handoff crosses the boundaries of the value-creation platform. At each of these junctions, the interfacing processes must stretch to accommodate the values of the other. No wonder strategic acquisitions often prove so disappointing. When you pair opposite-handed organizations, the hand of the acquiring company normally dominates the merger, putting the other hand at a huge disadvantage. The result is that the acquired party, already on probation by virtue of its being on the block, sees its performance deteriorate further because it is being asked to meet standards that are inappropriate to its design. Failing to meet the standards causes the acquiring management team to intervene, leading to further deconstruction of the very processes and values that made the company worth acquiring in the first place. The end result is a complete mess because neither management team ever really understands the other. Rather than try to solve this problem, the smart move is to avoid it altogether. That’s why companies planning strategic acquisitions should think in terms of shaking hands – merging right-handed with right, or left handed with left – rather than holding hands – merging right-handed with left-handed. A typical failure happens when the enterprise’s dominant hand dictates inappropriate behaviours to the other hand and then complains about that group’s inability to meet standards. The problem, of course, is that the standards are biased toward the dominant hand. Recognition that organizations have a ‘handedness’ – a deep-rooted predilection for either volume operations or complex systems – can help us manage more effectively. A better understanding of these issues may help management teams pull together. Marketing Malpractice by Clayton M. Christensen, Scott Cook and Taddy Hall To build brands that mean something to customers you need to attach them to products that mean something to customers. And to do that you need to segment markets in ways that reflect how customers actually live their lives. People don’t want to by a quarter inch drill. They want a quarter inch hole. / Theodore Levitt / Marketers often solve the wrong problems improving their products in ways that are irrelevant to their customers’ needs. The problem is that customers don’t conform their desires to match those of the average consumer in their demographic segment. The prevailing methods of marketing make new product innovation a gamble with horrifyingly low odds of winning. If a marketer can understand the job, design a product and associated experiences in purchase and use to do that job, and deliver it in a way that reinforces its intended use, then when the customers find themselves needing to get that job done, they will hire that product. Making it easier and cheaper for customers to do things they are not trying to do rarely lead to success. With few exceptions, every job people need or want to do has a social, a functional, and an emotional dimension. If marketers understand each of these dimensions, then they can design a product that’s precisely targeted to the job. When surveys of individual customers are averaged with those of other customers in the targeted demographic segment – it leads to one-size-fits-none product. Marketers who are stuck in the mental trap that equates market size with product categories don’t understand whom they are competing against from the customer’s point of view. Notice that knowing how to improve the product did not come from understanding the ‘typical’ customer. It came from understanding the job. This should trigger an action item on every marketer’s to-do-list. Turn off the computer, get out of the office and observe. Marketers who brake with the broken past will be rewarded not only with successful brands but with profitably growing businesses as well. Managing Authenticity by Rob Goffee and Gareth Jones Try to lead like someone else and you will fail. Employees will not follow a CEO who invests little of himself in his leadership behaviours. Too much conformity can render leaders ineffective; too little can isolate them. To influence others, authentic leaders must first gain at least minimal acceptance as members of their organizations. Does Your Company’s Conduct Meet World-Class Standards? by Lynn Paine, Rohit Deshpande, Joshua D. Margolis and Kim Eric Bettcher This article discusses and sets out guidelines for Global Business Standards Codex based on eight principles; Fiduciary principle, Property Principle, Reliability Principle, Transparency Principle, Dignity Principle, Fairness principle, Citizenship principle and Responsiveness Principle. By adopting its own code, a company can clarify for all parties, internal and external, the standards that govern its conduct and can thereby convey its commitment to responsible practice wherever it operates. Company codes have a myriad of other practical purposes. A code can help employees from diverse backgrounds work more effectively across geographic and cultural boundaries. It can also serve as a reference point for decision making, enabling companies to operate with fewer layers of supervision and to respond quickly and cohesively in times of crisis. It can even aid in recruitment, helping attract individuals who want to work for a business that embraces world-class standards. It can also help a company manage risk by reducing the likelihood of damaging misconduct. And as part of managing their own brands, some companies examine the codes of their potential suppliers and partners. Given all the legal, organizational, reputational, and strategic considerations, few companies will want to be without a code. Regarding employees, the codes consistently mandate that companies protect workers from injury and illness in the work place, avoid discrimination, provide equal employment opportunity, and respect their dignity and human rights. Provisions forbidding retaliation against employees who report misconduct are also widespread. Various codes mention open communication, responsiveness to suggestions and complaints, fair and reasonable compensation, and assistance in developing skills. Citizenship includes a willingness to deal with public authorities in good faith and may even imply some additional contribution by way of charity, civic support, or help in addressing broad societal problems. The modern corporation is a relatively recent invention, and the idea that business should observe a set of ethical standards is even more recent. We urge business leaders to heed the rising chorus and take steps now to ensure that their companies’ practices are, in fact, up to code. We offer the codex not as a minimum code but as a reference that companies can use to assess their current code or to craft a new one. frank@olsson.co.nz 11 December 2005 Harvard Business Review November 2005 Are you working too hard? A conversation with Mind/ Body Researcher Herbert Benson Essentially this article demonstrates scientifically the usefulness and need to divert energy and thinking completely, particularly in times of pressure and stress, to avoid exhaustion and overload. I think this has been well known for a long time. Taking a brake, physical exercise, yoga often make a significant difference and enhances well being and performance. Another example of where real life experiences can get substantiated by research. (experience preceding the idea – it is more common that people will act their way into new thinking than think their way into new acting). Smart employers and employees make sure such thinking is understood and adhered to. 40 % of all workers feel over worked. 60% of doctors’ visits relate to stress. Stress is good up to a point beyond which it decreases productivity. You can tell when you have neared the top of the curve when you stop feeling productive and start feeling stressed.
What is too much of a good thing? The article basically says keep things as simple as possible. Excessive complexity can hinder growth and raise cost. Leadership in your midst by Sylvia Ann Hewlett, Carolyn Buck Luce, and Cornel West Minority professionals often hold leadership roles outside work, serving as pillars of their communities and churches and doing more than their share of mentoring. It’s time their employers took notice of these invisible lives and saw them as sources of strength. It might well be transformative – of individuals, of companies, and of society. Lehman Brothers has a sizeable diversity bonus pool – an incentive that recognizes individual managers and teams for their innovative diversity initiatives, prompting investment bankers to take diversity seriously. At Time Warner there is a policy that for any hire at the vice-president level or above, the slate of candidates must be diverse. Hiring for Smarts by Justin Menkes It is all very well to be kind, compassionate, and charismatic. But the most crucial predictor of executive success has nothing to do with personality or style. It’s brainpower. The Skills that make up Executive Intelligence: Regarding Tasks: intelligent leaders…..
Regarding People: intelligent leaders….
Regarding Themselves: intelligent leaders…
It is not the strongest of the species who survive, nor the most intelligent, but the ones most responsive to change. / Charles Darwin. / frank@olsson.co.nz 18th Nov 2005 Harvard Business Review October 2005 Not too much of interest in this issue / Frank Harvard Business Review September 2005 An issue rather thin on nutrients. One interesting article is called A Stake in The Business by Chris T. Sullivan, which tells the story of the success of the Outback Steakhouse restaurants. I have extracted a few lines and thoughts from the article. Almost all of their managers have come up through the ranks; they have done every front-of-the-house and back-of-the-house job there is. They have taught those jobs to others, and they have instilled in them our ‘principles and beliefs’ (P&B). Of the categories Customers, employees and the Community we decided that none would take precedence over the others, not even customers. Our analysis revealed that for those strongly committed to our beliefs, five times as many customers (of these people) were likely to return. And the strongly agreeing group’s restaurants had 8.9% higher revenue, 26% higher cash flow, and pre tax profit was 48% higher. Our managing partners (branch managers) must invest $ 25,000 of their own money – not because Outback needs the money but because their financial contribution makes them committed investors in the business they’ll be running. They must also sign a five year contract, and they are granted 1,000 shares of restricted stock, which vests only at the end of the contracts. In return, managing partners can keep 10 % of the cash flow their restaurants generate each year. The restaurant is only open for dinner in order to create focus and not drag out working hours too much for staff. Lunch is in different districts and dinner is more of an experience. Key is to look after staff to achieve low staff turnover. Look after your staff the way you would like to be looked after – a simple application of the golden rule. In addition to this article I found the letters to the editor regarding the need to change business schools interesting. They point to the challenge to get the right mix between research, academia and practical application and experience. The conclusion is perhaps that schools need to constantly review the programs and methods to seek to stay relevant and there is no one-size-fits-all model. frank@olsson.co.nz 24th September 2005 Harvard Business Review July/ August 2005 I find the HBR issues quite different. Sometimes they are full of useful comments and sometimes rather bare. This issue was rather thin I felt, in spite of being a two months’ issue. A few notes I made….. Happy companies are all alike; each unhappy company is unhappy in its own way. (This is the lead in sentence by the editor-in-chief and it reminds me of the first line of Anna Karenina to which the editor leaves no reference: “All happy families are alike; each unhappy family is unhappy in its own way.” Personally I think the last sentence of Anna Karenina even more important: ‘My life now, my whole life, regardless of what might happen to me, every minute of it, is not only not meaningless, as it was before, but has the unquestionable meaning of the good which it is in my power to put into it.”) Toward a theory of High Performance by Julia Kirby In order to be a high performance company it is necessary to create a collective state of mindfulness. Three building blocks need balancing, aligning and renewing: market focus and position, resulting in better decisions; Distinctive capabilities, resulting in better practices; High performance anatomy, resulting in better mindsets. Turning Great Strategy into Great performance by Michael C. Mankins and Richard Steele. Seven rules for achieving great performance: Keep it simple, make it concrete; Debate assumptions, not forecasts; Use a rigorous framework, speak a common language; Discuss resource deployment early; Clearly identify priorities; Continuously monitor performance; Reward and develop execution capabilities. Moments of Greatness, Entering the Fundamental State of Leadership by Robert E. Quinn. These four qualities – being results centered, internally directed, other focused, and externally open – are at the heart of positive human influence, which is generative and attractive. A person without these four characteristics can also be highly influential, but his or hr influence tends to be predicated on some form of control force, which does not usually give rise to committed followers. By entering the fundamental state of leadership, we increase the likelihood of attracting others to an elevated level of community, a high performance state that may continue even when we are not present. We must move from being comfort centered to being results centered. This may be a painful process but one with great potential to make a positive impact on our own lives and on the people around us. Manage your Human Sigma by John H. Fleming, Curt Coffman, and James K. Harter. The employee-customer encounter is the factory floor of sales and services. If organizations are going to achieve meaningful operational improvements, the employee-customer encounter must be managed with great care. It is important not to think like an economist or an engineer when you’re assessing the employee-customer interaction. Emotions, it turns out, inform both sides’ judgment and behaviour even more powerfully than rationality does. The employee-customer encounter must be measured and managed locally, because there are enormous variations in quality at the work group and individual levels. It’s possible to arrive at a single measure of effectiveness for the employee-customer encounter; this measure has a high correlation with financial performance. To improve the quality of the employee-customer interaction, organizations must conduct both short-term, transactional interventions (such as coaching) and long term, transformational ones (such as changing the process for hiring and promotion.) In addition, the company’s organizational structure often must be adjusted so that the employee-customer encounter can be managed holistically. Recent work suggests that emotion may play a larger role than analysis. Our research suggests that for all kinds of companies, fully engaged customers – those who score in roughly the upper 15 – 20% on our measure – deliver a 23% premium over the average customer in terms of share of wallet, profitability, revenue, and relationship growth. Actively disengaged customers – those who score in the bottom 20% - 30 % - represent a 13% discount on the same measures. Ask any chief executive to list his or her most pressing business challenges, and you will no doubt hear concerns about customer and employee retention, authentic and sustainable growth, eroding margins, and cost efficiencies. Clearly, there is no single solution to those challenges. But we are confident that measuring and managing two simple factors – employees and customer engagement – can lead to breakthrough improvements in all aspects of your business. Managing for Creativity by Richard Florida and Jim Goodnight. Artists are inspired by the desire to create beauty. Salespeople respond to the thrill of the hunt and the challenge of making their quotas. After eight hours you are probably just adding bugs. Creative people can be relied upon to manage their own work loads; their inner drive to achieve, not to mention accountability among colleagues, compels a high level of productivity. Strategic Intent by G Hamel and CK Prahalad The goal of the strategic hierarchy remains valid – to ensure consistency up and down the organization. But this consistency is better derived from a clearly articulated strategic intent, than from inflexibly applied top-down plans. Notes by frank@olsson.co.nz 4th Sept 2005 Harvard Business Review June 2005 Asking the Right Questions by Thomas A. Stewart Many managers partly and intuitively understand that controls they have might not be right for their business. For example, they know it’s not especially meaningful to measure the return on assets for a company like Microsoft which has relatively few assets (apart from cash). They understand that economies of scale are a big deal in the automobile industry but that scale effects are markedly smaller in advertising, law, or hotel management. They know that some familiar levers seem irrelevant; they may complain, “The stock market doesn’t understand us.” They are less clear on why this is so and what they can do about it. The Surprising Economics of a “People Business” by Felix Barber and Rainer Strack People – intensive companies and business units ought to be managed and measured in ways that reflect their unique economics. Some standard practices can lead you dangerously astray. In order to identify where and how value is being created – or squandered – people-intensive business need performance metrics that are as financially rigorous as economic profit but that highlight the productivity of people rather than of capital. The distinct but generally unappreciated economics of people-intensive business call not only for different metrics but also for different management practices. For instance, because even slight changes in employee productivity have a significant impact on shareholder returns, “human resource management” is no longer a support function but a core process for managers. Companies mistakenly focus on capital productivity rather than employee productivity and rely on capital-oriented metrics, such as return on assets and return on equity. These aren’t much help in assessing a people business, as they tend to mask weak performance or indicate volatility where it doesn’t exist. The critical resource of most businesses is no longer capital – that is, assets that a company owns and utilizes at as high a level as possible. Rather, the critical resources are employees whom a company hires and must motivate and retain. The fact that companies don’t own their employees, as they do their capital assets, is why methods for valuing “human capital” on balance sheets are so tortuous. Because employees represent both the major cost and the major driver of value creation, people management moves that lead to even small changes in operational performance can have a major impact on returns. Given the high financial stakes, people management needs to be a core operational process and not solely a support function run by the human resource department. Line managers have a vital role to play in improving employee productivity. Employee satisfaction and engagement are more likely to be destroyed by conflicts at work than by conflicts between work and life. Companies with strong performance typically pay their employees better than their competitors. Large people businesses don’t necessarily have cost advantages over smaller competitors – indeed quite often the reverse. Competent Jerks, Lovable Fools, and the Formation of Social Networks by Tizana Casciaro and Miguel Sousa Lobo Personal feelings played a more important role in forming work relationships – not friendships at work but job-oriented relationships – than commonly acknowledged. If someone is strongly disliked, it is almost irrelevant whether or not she is competent; people won’t work with her anyway. By contrast, if someone is liked his colleagues will seek out every little bit of competence he has to offer. A little extra likeability goes a longer way than a little extra competence in making someone desirable to work with. We like people who are similar to us; people we are familiar with; people who have reciprocal positive feelings about us; and people who are inherently attractive, either in their appearance or their personality – that is, they are considerate, cheerful, generous and so on. Physical proximity strongly affects the degree to which people like each other. Leverage the likable by capitalizing on their personal qualities and have them play the role of ‘affective hubs’ bridging gaps between diverse groups that might not otherwise interact. It is easy to be mistakenly dazzled by a high performer, even if his expertise is never tapped or shared because people don’t want to work with him. And too many managers fail to appreciate the benefits that a likable person can offer an organization, particularly if those benefits come at the expense of some measure of performance. Building an environment in which people like each other – whether by creating situations that making liking people easy, by fostering those likable people who can play the role of affective hub, or by improving the behaviour of competent jerks – can help all employees work more happily and productively and encourage formation of strong and smoothly functioning social networks. The Madness of Individuals by Laurence Prusak If the collective decisions are often demonstrably better than individual ones, why do we embrace the single-person, rational-actor model? I think the answer lies in evolutionary psychology. An instinctive faith in the reliability of hierarchical leadership is baked into our genes. It’s time to acknowledge that it’s impossible for any individual to make fully informed decisions about running vast entities like large firms and nations. Leaders do, of course, have a role to play – inspiring the troops, building teams, representing the organization. But when it comes to organizational decision making, maybe America’s national motto, E Pluribus Unum, can be used to new effect. From many voices, one better decision. Little Decisions Add Up by Frank Rohde How well rank-and-file employees make thousands of small decisions influence everything from profitability to reputation. Harvard Business Review May 2005 How Business Schools Lost Their Way by James O'Toole When applied to business - essentially a human activity in which judgements are made with messy, incomplete, and incoherent data - statistical and methodological wizardry can blind rather than illuminate. Most business issues facing leaders are, in the final analysis, questions of judgment. What looks like a straightforward financial decision - say to cut costs by relocating a service centre - often has implications for marketing, sales, manufacturing, and morale that can't be shoehorned into an equation. In business research, the things routinely ignored by academics on the ground that they cannot be measured - most human factors and all matters relating to judgment, ethics and morality - are exactly what make the difference between good business decisions and bad ones.
Business management is a profession and professions have at least four key elements: an accepted body of knowledge, a system for certifying that individuals have mastered that body of knowledge before they are allowed to practice, a commitment to the public good, and an enforceable code of ethics.
Bridging the gap between what is happening and what is possible is what change is all about. The traditional process for creating organisational change involves digging deep to uncover the root causes of problems, hiring experts or importing best-of-breed practices, and assigning a strong role to leaders to champion change. There is a better method, one that looks for indigenous sources of change. There are people in your company or group who are already doing things in a radically better way. Seek to bring the isolated success strategies of these positive deviants into the mainstream.
Step 1 - Make the group the guru. Learn from the people, plan with the people. "When the task is accomplished, the people all remarked we have done it ourselves." - Lao Tsu. Step 2 Reframe through facts. Enlist the people by agreeing what needs to be done. Step 3 - Make it safe to learn. Some problems can be solved only by those in the trenches. Step 4 - Make the problem concrete. Step 5 Leverage social proof. Step 6 Confound the immune defence response. The positive deviance approach requires a role reversal in which experts become learners, teachers become students, and leaders become followers. Leaders must relinquish to the community the job of chief discoverer. Instead of being CEO - Chief Expert Officer - the leader becomes CFO - chief facilitation officer - whose job it is to guide the positive deviance process as it unfolds.
Practice makes perfect Old line companies should set up business laboratories, running many small experiments to discover and incubate new ideas and business models. Start with what works in practice, build a hypothesis about why it works, and then test the hypothesis. Culture matters most by Gregory T Carrott. Changing a company's culture is best achieved by continually hiring people who represent the direction in which you are headed. Creating a living brand by Venkat Bendapudi Wawa and QT (convenience stores) demonstrate the power - even in minimum-wage businesses, of investment in employees to create a positive customer experience. QT insists on hiring 'nice people' who like people, because that's a tough quality to teach; it is either present or not. Other key qualities for QT hires include the ability to work in teams, the humility to learn from others, and an appreciation for diversity. Wawa and QT get more from their people because they expect more. One way they communicate expectations is through training. Investments in people go well beyond the initial hire. Wawa encourages its people to pursue degrees in a field of study - philosophy, biology, history - and reimburses tuition at three colleagues with which it has relationships. The emphasis on learning helps Wawa be an employer of choice even though its pay is only on par with other companies in its market. Depending on tenure, employees receive ten to 25 days of vacation, plus ten days of sick pay, and they can purchase an extra two weeks of vacation. "The people who work at the stores seem to be glad to be there, and they seem to like one another." Both companies have strong commitments to local charity causes. At first glance. the investment that Wawa and QT make in their living brands may seem excessive. Executives are quick to agree that both organisations spend more than their competitors. "How can they afford to do that?" The leaders of these two companies wood reply: "How can you afford not to?"
The Quest for Customer Focus. by Ranjay Gulati and James B. Oldroyd RBC (Royal bank of Canada) thought that making banking as convenient as possible was a key customer desire. But a customer survey clearly showed, customers want a bank that demonstrably cares about them. RBC has learned to reorient its focus of its entire organization away from products and distribution towards the real needs of the customer. Customer focused companies consistently embrace three concepts. First they know they can become customer focused only if they learn everything there is to learn about their customers, at the most granular level, creating a comprehensive picture of each customer's needs - past, present and future. Second, they know that this picture is useless if employees cannot or won't share what they learn about customers, either because its inconvenient or because it doesn't serve their interests. Finally they use this insight to guide not only their product and service decisions but their basic strategy and organizational structure as well. Over time these companies enable and enforce coordination between internal units at progressively more sophisticated levels, they find new ways to manage the flow of information, they develop routines for decision making that incorporate customer preferences, and, ultimately, they shift the locus of their customer-focused efforts away from a centralized hub to a more disbursed set of activities that spans the entire enterprise. Harvard Business Review March 2005 Six key points from six good articles!
frank.olsson@asbbank.co.nz Off-Ramps and On-Ramps, by Sylvia Ann Hewlett and Carolyn Buck Luce I have taken an interest in Diversity for some time. I think this article is a very important piece of work. Fostering diversity by making conditions for women to continue their careers has huge potential to contribute to business success. This article and my own observations also suggest that being onto something good – i.e. treating each other well and doing well to customers and to the community and building a strong positive community feeling around the brand will be increasingly important. 37 % of highly qualified women report that they have left work voluntarily at some point in their careers, usually with some reason related to ‘care’ 40 % of women felt that husbands created more work in the home than they performed.
6 % only left because the job was too demanding When women feel hemmed in by rigid policies or a glass ceiling they are much more likely to respond to the pull of a family 32% of women cited the fact that one income was enough for our family to live on as a reason contributing to ‘off-ramp’ 24 % of men ‘off-ramp’ usually for switching careers, obtaining training or to start their own business.
46 % of these cite reasons for wanting to return relating to having their own income Only 74 % of ’off-ramped’ women who want to return to their careers manage to do so. ‘Off-ramps’ are around every curve in the road, but once a woman has taken one, ‘on-ramps’ are far and few between and extremely costly. Two thirds of women find flexible work arrangements very important to them. Like it or not, large numbers of highly qualified women need to take time out. The trick is to help them maintain connections that will allow them to come back from that time without being marginalized for the rest of their careers. 54 % of women looking for an ‘on-ramp’ want to change their careers from corporate sphere to the not-for-profit sphere 58 % of collage graduates are women and nearly half of professional graduates. CEOs are wondering how they will find enough high-calibre talent to drive growth. The winning strategy revolves around the retention and reattachment of highly qualified women. The talent is there. The challenge is to create the circumstances that allow business to take advantage of it over the long run. A practical Guide to Social Networks by Rob Cross, Jeanne Liedtka and Leigh Weiss Executives can do a tremendous amount to create an environment that allows networks and collaboration to emerge in a productive fashion. This is a holistic challenge. Simply introducing a collaborative technology, tweaking incentives, or advocating cultural programs to promote collaboration is usually insufficient. Rather, leaders must also align work management practices, technology, and human resource practices. And beyond organizational architecture, specific cultural values and leadership behaviour can have a striking effect on patterns of collaboration. Execution Without Excuses an interview with Michael Dell and Kevin Rollins. We are pretty complimentary. We’ve learned over the years that each of us is right about 80 % of the time, but if you put us together, our hit rate is much, much higher. We each think about a slightly different set of things, but there’s a lot of overlap. / Dell/ Michael and I also went through a 360-degree feedback process. Our executive team told me that I sometimes acted as though I had all the answers and that I could come across as arrogant an aloof. /Rollins/ They told me I didn’t give enough positive feed back. That was because I’ve never required a lot of personal recognition myself. I’ve already gotten way more than I need. I am actually suspicious when I get positive feed back. /Dell/ This was a blind spot for both of us, because personally we’ve never needed a lot of outside validation. And we created a management team that didn’t need it because we never gave it to them. We thought, “If you need to have someone tell you you’re good, you probably don’t belong at Dell. You’re obviously not strong enough to be here.” /Rollins/ I also learned from the 360-degree reviews that I needed to do a better job of connecting with people – relating to people as human beings who wanted connection and recognition, not mere abstract objects doing work. I’ve always enjoyed business problems and didn’t feel as much need for connection as our team clearly wanted. It took me a while to see how important this quality of relationships is in building loyalty to the company. /Dell/ We just didn’t get it. That was a mistake, because obviously everybody needs positive feedback, even though some of our team tried to pretend they didn’t. /Rollins/ We want to have leaders that other companies covet. We want a culture that makes people stick around for reasons other than money. We ant Dell to be such a great place to work that no one wants to leave. /Rollins/ Want Collaboration – Accept and Manage Conflict by Jeff Weiss and Jonathan Hughes Most companies respond to the challenge of improving collaboration in entirely the wrong way. They focus on the symptoms (“Sales and delivery don’t work together as closely as they should”) rather than on the root cause of failures in cooperation: conflict. The fact is you can’t improve collaboration until you’ve addressed the issue of conflict. Because internal friction is often caused by unaddressed strains within an organization or between an organization and its environment, setting up methods to track conflict and examine its causes can provide an interesting new perspective on a variety of issues. Market Busting, Strategies for Exceptional Business Growth by Rita McGrath and Ian MacMillan Changing your unit of business, or radically changing your key metrics, can be a powerful engine for growth, particularly for early movers. If you can figure out quickly how to help and improve a customer’s core performance the constraints that tied you down in the past can melt away. You can begin to price your products based on their value to your customers, not according to low-margin commodity pricing. You can be more proactive; your business and your incentives will be aligned with what your customers care about. In the best case, you can create new shareholder value for your company because you are expanding the pool of problems that your company can address. More often than not, companies are moving away from selling pure product and toward selling a product-service mix or even a pure service. Identify your unit of business and associated key metrics. It should be easy to determine what your current unit of business is. What do you charge for? When you send customer invoices, what do you bill for? Try to spell it out in the simplest terms possible: “We make money by billing our customers or clients for ________.” Next be critical. Does what you sell really reflect the value you create for customers? If you sell a product, could you redefine it to reflect the benefits or service yielded by that product? If you sell a unit of time, could you instead sell the outcome that the customer wants? A good general guideline is to try to align your unit of business with some performance outcome that is relevant to your customer. What Great managers Do by Marcus Buckingham Great managers discover what is unique about each person and then capitalize on it. Average managers play checkers while great managers play chess. The difference? In checkers all the pieces are uniform and move in the same way; they are interchangeable. They all move at the same pace, on parallel paths. In chess each type of piece moves in a different way, and you can’t play if you don’t know how each piece moves. Great managers know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack. What you need to know about each of your direct reports: What are her strengths? What are the triggers that activate those strengths? What is her learning style? Harvard Business Review February 2005 Springboard to a Swan Dive by Ajit Kambil and Bruce Beebe One of the most important questions before joining a new board is: “Do I have the time to do it justice?” In today’s business world your reputation and prospects are only as bright as the performance of the last board you served on. Board members tend to be judged on their collective actions, regardless of their individual attempts to do the right thing. The decision to join another company’s board is as momentous as the decision to enter into a joint venture with that company. Both can put a person’s and company’s reputation at future risk. Asking questions that management does not want to hear is necessary for being a good director. Even in today’s business environment, directors who put in the time, act in good faith, and have the skills necessary to understand the company’s business incur minimal risk of personal liability. They also realize intangible benefits from their board service, some of which can be quite valuable. Ending the CEO Succession Crisis by Ram Charan In CEO succession it takes a ton of ore to produce an ounce of gold. CEO tenure continues to shrink. Booz Allen Hamilton reports that the global average is now just 7.6 years, down from 9.5 years in 1995. And two out of every five new CEOs fail in the first 18 months. The problem isn’t just that more CEOs are being replaced. The problem is that, in many cases, CEOs are being replaced badly. 55% of outside CEOs who departed were forced to resign compared with 34 % of insiders. There is nothing intrinsically wrong with charisma, though some criticize it as the sheep’s clothing in which hubris lurks. But too often directors become so focuses on what candidates are like that they don’t press hard enough to discover what candidates can and cannot do. Directors should personally get to know the company’s rising stars. The choice of the successor belongs not to the CEO but to the board. The key responsibility for boards is CEO succession. Breakthrough Ideas for 2005 Flipping without flopping by Roderick M. Kramer Leaders and the public must recognize that changing one’s mind does not signal an inability to lead. Rather it signals an ability to learn. Changing ones mind is a way of saying I am wiser today than I was yesterday. Everybody into the Gene Pool by Julia Kirby An organization works the way it does mainly due to the interaction of four key elements: structure, decision rights, motivators, and information. Companies can improve through sustained effort. This is what the company must learn to do better: Balance the managerial demands of today and tomorrow; create talent multipliers that amplify people’s contributions to produce a superior return on salary investments; apply technology strategically rather than for incremental productivity gains; focus on a select few (but diverse) aspects of the business that are critical to success; and continuously review the organization’s vitality. Demand –Side Innovation by Jeffrey F. Rayport Demand side innovation is a different animal and companies need to manage it differently. It is not about product features of functions but about how a company orchestrates its customers’ interactions and relationships. Its innovation with respect to how companies go to market, as opposed to what they bring to market. Of course, every manager considers these questions today, but few companies have thought through the implications deeply. As demand side innovation becomes the central innovation process within most companies, managers can no longer relegate it to a secondary role. How companies go to market will determine who wins and loses the game. Seek Validity, Not Reliability by Roger L. Martin Corporations believe that they face problems of ethics and credibility, but the underlying issue may well be a crisis of meaning. CEOs complain that investors only care about quarterly earnings - not about companies' long term health or the broader role they play in society. That's not all. Customers feel disappointed by the lack of warm, human connection with the companies that supply them. Employees, particularly young ones, worry that there's nothing meaningful about their work that it's only about the money. In addition, social activists excoriate businesses, especially transnational corporations, for their lack of conscience. Yet companies pay little attention to the issue of how people find meaning in economic matters. Businesses have only themselves to blame. Corporate processes and systems have created and, in fact, exacerbated the lack of meaning. Six Sigma, CRM, Sarbanes – Oxley, and most other corporate systems have one thing in common: They are reliability – oriented processes. They are intended to produce identical or consistent results under all circumstances, often by analyzing objective data from the past. For instance, a perfectly reliable poll would be able to produce the same result from ten random samples of voters. By contrast, a perfectly valid poll would be able to predict an election’s winner. Companies don’t realize that when they make systems more reliable, they render them less valid or meaningful. In other words, the processes produce consistent outcomes, but the result may be neither accurate nor desirable. That’s because, to make their process more reliable, companies have to reduce the number of variables and standardize measurements. To achieve high validity, however, systems must take into account a large number of variables and subjective measurements. Adding squishy variables and using gut feel allows for outcomes that are more accurate, even if the process may not be able to deliver accurate results consistently. While it would be optimal to achieve both validity and reliability, companies have mostly favoured reliable processes, for two reasons. First, valid systems require the use of subjective or qualitative data, and companies have an aversion to biases. Second, reliable processes result in claims that are provable because they are based on past data; only the future can provide confirmation of a process’s validity. Unfortunately, companies’ obsession with reliability hasn’t prevented them from getting on the wrong side of consumers or being ambushed by new rivals. Indeed, the quest for greater reliability has created corporations that make little effort to consider the purpose or meaning behind the business results that are endlessly crunched out. A company that produces reliable, predictable, but meaningless results is not unlike a well-tuned car that runs full speed off a cliff. To save themselves, corporations will have to figure out how to become more welcoming for people who are comfortable handling fuzzy data, using their judgment, and creating a sense of purpose in the workplace. For instance, CEOs should go out and talk in person to customers, even if the sample size isn’t statistically significant market research. Rather than focusing on managing corporate earnings, CFOs should concentrate on helping managers better understand the economics of their business. Senior executives also need to stop promoting managers based on the consistency of their track records and start promoting them for braking out of the box. Boards must get used to approving plans based on the logic of what might be rather than on regression of what have always been. They need to understand that variability in outcomes is as likely to be sign of creativity as a sign of bad management and that the more they drive out variability, the more they ensconce mediocrity. Finally, stock analysts must realize that when they insist on reliable earnings, they drive out the creativity, innovation, and emotional connection with consumers and employees that together produce long-term growth in those earnings. Wanted: A Continuity Champion by Thomas Stewart On the one hand, leaders who spend too much time midwifing change may neglect traditional core business. On the other hand, the defenders of status quo too often appear to be – and are – knee-jerk naysayers who champion the wrong continuity. It is true that without change a company goes nowhere but down. Also, corporate revolutionaries need all the help they can get, especially in large organizations. For one thing, the employees who are drawn to big companies are likely to value stability. For another, big company processes by their nature slow change to a walking pace. But the role of the champion of continuity is every bit as challenging. The job is to get maximum effectiveness in coping with change, combined with minimum disruption of the business that, after all, got you to where you are today. Define what lies outside the reach of change. It may be a business, like mainframes; it may be a process, like leadership development; it may be a belief, like Johnson and Johnson’s credo. Every business worth working for has something worth fighting for, even in the teeth of tremendous pressure for change. A Taboo on Taboos by Leigh Buchanan The worst thing with elephants in the room is that if you ignore them long enough, they become invisible. That’s what happens when companies avoid subjects because they are politically dangerous, socially unacceptable, or just too dire to contemplate. The result can be failure to anticipate predictable developments and consequent errors in strategy. Toward a New Science of Services by Henry W. Chesbrough Consider than in shifting from products to services, a supplier does more for the customer than it used to and thereby allows the customer to off-load some work and thus do more for his own customer. In a phrase favoured by high-tech executives, the customer moves “up the stack” in the value-added chain. The result is enhanced standard of living and prosperity – an extremely important outcome in an advanced economy. Don’t Believe Everything You Read by Jeffrey Pfeffer Be alert for half-truths – ideas that are partly or sometimes right but also partly or sometimes wrong. Many ideas fall into this category, such as the importance of financial incentives and the notion that work is so distinct from the rest of life that people can’t be themselves on the job. Advice is more likely to be good when it acknowledges its own downsides and suggests ways to cope with them. The risk may be worth taking and the management approach may be useful, but in order to make sensible judgments, you need to know the whole story. Understand cognitive biases. One such bias is the desire to hear (and deliver) good news; another is to prefer ideas we agree with and people who agree with us. Both of these come into play when we work with consultants. However, people benefit most from constructive criticism that actually teaches them to do things better. The best management advice need not be downright painful. But like diet advice, if it doesn’t cause at least a bit of discomfort, it is probably not going to have much impact. Notes by Frank Olsson 19th February 2005 Harvard Business Review January 2005 This is a Leadership / management oriented issue with many interesting articles.
Yüklə 0,9 Mb. Dostları ilə paylaş:
|