Harvard Business Review 5 years 2004 – 2009
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| The corporate leaders we interviewed indeed produced an extensive list of qualities they desired in future recruits, but almost none involved functional or technical knowledge. Rather, virtually all their requirements could be summed up as follows: the need for more thoughtful, more aware, more sensitive, more flexible, more adaptive managers, capable of being moulded and developed into global executives. In terms of its usefulness in their careers, alumni valued the learning environment of their university above the curriculum itself. They ranked learning that took place outside the business school classroom, and more broadly in the university, as the most useful.
Key is to recognize that integration is not taught but learned. It takes place in the minds of students rather than in the content of program modules. The student themselves link the various elements of the program. Thus it is vital that business schools understand themselves primarily as learning environments, where individuals develop attributes, rather than as teaching environments, where students are presented with a body of functional and technical content. It follows from this that effective business education cannot be delivered online, because online delivery is a technical mechanism, not a learning environment. Business education and business schools should be a life-long learning partner and not a one stop certification shop. We should not be surprised that an academic grading system cannot reliably predict managerial ability. Assessment of these softer areas is problematic in two respects: It is difficult and thus perhaps arbitrary, and it risks being counterproductive because it can damage a learning environment, in which the myth is maintained that the best future business leaders will score the highest grades, dysfunctional behaviour inevitably results. Why learn collaboratively if doing so helps your competitor score higher grades? Why develop attributes of leadership, of interpersonal impact, if you are graded on individual performance in functional subjects? Why immerse yourself in the learning environment if you can get better grades by immersing yourself in a text book? How can business schools embrace the diversity of candidates’ prior experiences and learning opportunities f everything comes down to performance under a homogenized grading system. Business schools are not professional schools – they are incubators for business leaders. Drawing the line between strategy and execution almost guarantees failure by Roger L Martin The idea that execution is distinct from strategy has become firmly ensconced in management thinking over the past decade. This enhances the division we think – you do. You don’t have to think, we don’t have to do. To best enable individual decisions, choice makers upstream should set the general context for those downstream. From there, employees need to use good judgment to make the best decisions possible. When workers are made to feel empowered, the whole organization wins. Stop Trying To Delight Your Customers. To really win their loyalty, forget the bells and whistles and just solve their problems. By Matthew Dixon, Karen Freeman and Nicholas Toman Service organizations must focus on mitigating disloyalty by reducing customer effort. Singapore Airlines balancing Act by Loizos Heracleous and Jochen Wirtz How Singapore Airlines combines being best on service and a cost leader. Powerlessness Corrupts by Rosabeth Moss Kanter Power corrupts but so does powerlessness. Going to Extremes for Customers. By Tony Hsieh Most of our growth over the last few years is due to focusing on: Customer service, Company culture and Employee training and development Power Play by Jeffrey Pfeffer Any new strategy worth implementing has some controversy surrounding it and someone with a counter agenda fighting it. When push comes to shove you need more than logic to carry the day. You need power. We Had to Own Our Own Mistakes interview of Starbucks CEO Howard Shultz. Key is to make sure people realize the deep level of respect we have for the work they do and how they act. This rather than getting bigger or more profitable is the key. Notes by frank@olsson.co.nz 7th August 2010 Harvard Business Review June 2010 C K Prahalad in memoriam – Leadership is about self awareness, recognizing your failings, and developing modesty, humility, and humanity. Turning doctors into leaders by Thomas H Lee. Healing comes from patients being heard and understood. Listening to a patient makes much of the expense associated with medicine unnecessary. Leadership is about taking people to a place that they would not go on their own. The More People Want Something, the Less They’ll Like It by Uzma Khan. Is the assumption that we want what we like and we like what we want flawed? When a product is hard to obtain, do we lust after it more but like it less once we get it? A strong desire for something builds up expectations which often cannot be met. Why Is It So Hard to Tackle the Obvious by C K Prahalad. To change systems faster than their rivals can create new modes of competition, enterprises must: Articulate the emerging competitive reality and its implications for the bottom line; Identify gaps in skills and fill them quickly; Change IT systems because they usually represent old business models. During the corporate transformation, the forgetting curve is sometimes more important than the learning curve. You Are What You Measure by Dan Ariely. To change CEO behaviour we need to change the numbers we measure. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you will get. Stock value metrics that focus on the long term are a start, but even more important are new numbers that direct leaders’ attention to the real drivers of sustainable success. It is not very useful to measure that which is easy to measure rather than that which is relevant. How to Start an Entrepreneurial Revolution by Daniel J Isenberg. Nine prescriptions for creating and Entrepreneurship Ecosystem. 1 Stop emulating Silicon Valley; 2 Shape the eco system around local conditions; 3 Engage private sector from the start; 4 Favour the high potentials; 5 Get a big win on the board; Tackle cultural change head on.; 7 Stress the roots; 8 Don’t over engineer clusters – help them grow organically; 9 Reform legal, bureaucratic, and regulatory frameworks. Strategies for a Changing World. The new normal means constant change. Companies must reinvent themselves if they want to survive. The decision driven organization – forget the org chart – the secret is to focus on decisions, not structure by Marcia Blanko, Michael Mankins and Paul Rogers. A study showed that less than one third of reorganizations produced any meaningful improvement in performance. An army’s success depends at least as much on the quality of the decisions of its officers and soldiers make and execute on the ground as it does on the actual fighting power. If you can align your organization’s structure with its decisions, then the structure will work better, and your company’s performance will improve. Ultimately a company’s value is no more (and no less) than the sum of the decisions it makes and executes. Its assets, capabilities and structure are useless unless executives and managers throughout the organization make the essential decisions, and get those decisions right more often than not. In reorganizations, the focus should be decisions rather than structure. The Productivity Paradox – how Sony Pictures Gets More Out of people by Demanding Less by Tony Schwartz. (I have long believed that ‘crop rotation’ is not only useful in agriculture but also for human beings and the human brain. Doing similar things for a long period of time makes you exhausted and lessens creativity. Therefore it is useful to take a short break every hour and a longer brake after a few hours and a couple of days off after a prolonged period of extraordinary commitment. This prevents monotony, boredom and exhaustion and fosters sustainability.) People perform at their peak when they alternate between periods of intense focus and intermittent renewal. If companies allow and encourage employees to create rituals that prevent boredom and exhaustion they will be rewarded with a more engaged and focused work force.
Anatomy of High Potential; Deliver strong results – credibly; Master new types of expertise; Recognize that behaviour counts. High potentials have: A drive to excel; A catalytic learning capability; An enterprising spirit; and Dynamic sensors. What companies are looking for is a manager who can move from being an acknowledged value creator to being a game changer. The Coherence Premium – Is your company disciplined enough to focus intensely on what it does best? by Paul Leinwand and Cesare Mainardi Most companies fail to pay sufficient attention to capabilities. Cost-cutting for example, is usually an across the board exercise, rather than a considered reallocation of resources. Wall-Mart achieves maximum efficiency by integrating four capabilities: aggressive vendor management, expert point-of-sale data analytics, superior logistics, and rigorous working capital management. Every one of these capabilities supports the others and supports the company’s strategic purpose to deliver ‘everyday low prices’ to consumers. Growing Green – Three smart paths to developing sustainable products by Gregory Unruh and Richard Ettenson. The three paths are; Accentuate existing latent attributes; Acquire someone else’s green brand; or Architect green offerings. Beware that activists will not hesitate to point out green washing when they see it. Companies that ultimately succeed in growing green will be distinguished by their commitment to corporate wide sustainability as well as the performance of their green products. Leap into the future by Vineet Nayar, CEO of HCL. Vineet Nayar got employees to acknowledge the crisis, pioneered a unique ‘employee first’ culture, kindled people’s passions – and danced. Customers didn’t talk much about our products, services or technologies; they spoke about our employees. Turn the job you have into the job you want by Amy Wrzesniewski, Justin Berg and Jane Dutton. Your job comprises a set of building blocks that you can reconfigure to create more engaging and fulfilling experiences at work. To win support for your job crafting, focus on creating value for others, building trust, and identifying the people who will accommodate you. Make sure you are shaping your job, not letting your job shape you. Notes by frank@olsson.co.nz 30 May, 2010 Harvard Business Review May 2010 The HBR May issue seemed a little thinner that its predecessors. Perhaps the key message in this issue is: Sustainability is an emerging business mega-trend, like electrification and mass production, which will profoundly affect companies’ competitiveness and even their survival. Like the IT and quality mega-trends, sustainability will touch every function, every business line, every employee. The options are to embrace and adopt or be left by the wayside. A few notes attached; Study after study has shown that exemplary corporate performance doesn’t last. We all might take a different approach to the work we do at all levels of an organization if we consider that nothing does (or should) last forever. We have a tendency to get so caught up in the excitement and sophistication of business that we overlook one key ingredient: our humanity! Ancient sagas have warned us for millennia of the cyclical nature of human behaviour. We struggle to the top, usually as a result of hard work, discipline, and diligence, only to fall prey to hubris and self-aggrandizement. Companies are only organizations of human beings. Why would their journey be any different? Back to the City by Ania Wieckowski To put it simply, the suburbs have lost their sheen. Young and old want to live in densely packed, mixed-use communities that don’t require cars, i.e. cities or revitalized outskirts in which residences, shops, schools, parks and other amenities exist close together. In the last US census 2/3 of 25 – 34 year old said they first choose a city and then look for a job. Corporates who understand this trend will have an advantage. CEO’s understand that without a vibrant central city, their region becomes less competitive. Need Speed – Slow down! by Jocelyn Davis and Tom Atkinson. Simply increasing the pace of production often leads to decreased value over time. Ultimately strategic speed is a function of leadership. Teams that become comfortable taking time to get things right, rather than plough ahead full bore, are more successful in meeting their business objectives. That kind of assurance must come from the top. Executive Pay: Time for CEOs to Take a Stand by A G Lafley ex Chair Procter and Gamble. It is time for CEOs to speak up about unacceptable and inappropriate amounts and forms of compensation. If we don’t take the lead, Congress and others will, in ways that will be I no one’s best interest. A meaningful portion of equity should be held into retirement. And equity should be the lion portion of a CEO’s retirement package. The Sustainability Imperative – lessons for leaders from previous game-changing mega-trends. By David Lubin and Daniel Esty Business history is marked by periods of relative stability punctuated by fundamental shifts in the competitive landscape that create inescapable threats and game-changing opportunities. Sustainability is an emerging business megatrend, like electrification and mass production, which will profoundly affect companies’ competitiveness and even their survival. Over the past ten years, environmental issues have steadily encroached on businesses’ capacity to create value for customers. Companies that excel in sustainability make shifts in five key areas, moving from tactical, ad hoc, and siloed approaches to strategic, systematic, and integrated ones. Like the IT and quality megatrends, sustainability will touch every function, every business line, every employee. On the way to this future, firms with a clear vision and the execution capabilities to navigate the megatrend will come out ahead. Those that don’t will be left by the wayside. Attaching a price tag to embedded carbon could transform global trade. /Jeffrey Frankel of Harvard’s Kennedy School / How to Keep Your Top Talent by Jean martin and Conrad Smidt If you want to keep your rising stars on track – Don’t just assume they’re engaged – Don’t mistake current high performance for future potential – Don’t delegate talent development to line managers – Don’t shield talent – Don’t keep young leaders in the dark – Don’t fail to recognize achievement. Improving your firm’s ability to give honest, timely and useful feed coaching will benefit employees of all ages. Beating the Odds When You Launch a New Venture by Clark Gilbert and Matthew Eyring New venture formation will always be fraught with risks. Quickly determine what’s right and what’s wrong with key assumptions and then making speedy adjustments often means the difference between failure and success. As entrepreneurial managers learn to do this, they bend the risk-reward curve in their favour and beat the odds. Notes by frank@olsson.co.nz 9th May 2010 Harvard Business Review April 2010 Why Good Spreadsheets Make Bad Strategies by Roger Martin We must consider the possibility that if we can’t measure something, it might be the very most important aspect of the problem. The notion that ‘if you can’t measure it, it doesn’t count’ is flatly false. You can manage through fear and intimidation, role modelling, love, random eccentricities or mantras. None of those require measurement. Education, especially in business schools, has gotten itself tied up in metrics knots. We have lost sight of the language of emotion, motivation, and meaning. What we’ve got instead is a model of humans a rats chasing cheese in a maze, all in the name of measurability. Welcome to the false recovery by Eric Jensen. Make yourselves comfortable. We’re going to be stuck here for a while. Post crisis consumers look for products that retain value – they’ll invest in rather than consumer goods – and make fewer show-off purchases. Increased savings will firstly subsidize the previous boom, which was built on debt. The recovery will come as a series of starts and stops: promising progress, periods of retreat. If the savings rate fails to stay high enough long enough for consumers to pay off debts and save up real spending money, the economy will end up treading water for years. Why Employees Won’t Innovate by Feirong Yuan and Richard W Woodman People whose roles don’t explicitly call for innovation believe that co-workers will think negatively of them if they try to come up with better ways of doing things. In some cases they are even afraid they will provoke anger among those who are happy with the status quo. The key is to create a sense of psychological safety. Imitation is more valuable than Innovation by Oded Shenkar 98 % of the value of innovations goes to imitators. Best Practices Get You Only So Far by C K Prahalad Trying to emulate will never get you into a leading position. Next practices are all about innovation: imagining what the future will look like; identifying mega opportunities that will arise; and building capabilities to capitalize on them. Unilever and Procter and Gamble, for instance, project that by 2020, poor people in the developing world will account for approx 50 % of their revenue. Leadership in the age of Transparency by Christopher Meyer and Julia Kirby Companies have long prospered by ignoring what economists call ‘externalities.’ Now they must learn to embrace them. (To me it is obvious that unless you invest in general good will you are doing your company a disservice – not understanding this is tantamount to narrow mindedness or stupidity) Whatever we do has an impact on global issues including the environment and unless this is factored in you run a great risk of being singled out as bad news or a destroyer of environment and generally acceptable values. Compliance isn’t good enough, you need to demonstrate forward thinking – and if you don’t staff and customers will opt for better alternatives. Any assumption that shortcuts and unethical behaviour will bring advantage is surely misconstrued. As the boundaries between businesses and the non-profit sector erode, adversarial relationships will become cooperative. A consensus will emerge that we are all responsible for our world and must work together to make it better – and we’ll all wonder how we could ever have thought otherwise. Five interesting articles on Health Care /Turning Doctors into Leaders/ Medicine Needs a New Kind of Hero/ Fixing Health Care on the front Lines/ Premium Price, Poor Performance/ Five Reasons Why Costs Are so High and How to Tackle Them. Most hospitals are designed for the nineteenth century. Most doctors don’t know how to share power. Most patients with complicated problems don’t receive coordinated care. It is time for a revolution led from within. Health care delivery is fragmented and chaotic, principally because of an explosion of knowledge and technological advances. Taming this chaos requires a new breed of leaders at every level. Health Care’s new leaders must organize doctors into teams; measure their performance not by how much they do but by how their patients fare. Working in teams does not come easily to physicians, who still often see themselves as heroic lone healers. The Acceleration Trap by Heike Bruch and Jochen Menges. It’s not just individuals that burn out – companies do too. Ideally a company is powered by what we call sustaining energy – a joyful urgency among employees that never burns out. But don’t demand the same level of urgency every day or the energy may fizzle and performance sink, despite employees’ heroics. Don’t drive your company constantly to its limits. Relentless acceleration leads to loss of focus, an uncontrolled flood of activities, organizational fatigue, and burnout. Is It Too Late to Enter China? By Edward Tse Yes it is a difficult market but you cannot afford not to be there. Of the fortune 500 companies 480 are already in China – and have to battle for survival. Asia may be the source of 50% of global GDP by 2030. By 2020 60 % of China’s population will live in cities compared to 40 % today. This will transform markets afresh. Building a Company Without Borders by Bart Becht Conflict is good. We don’t care about consensus. Not having it doesn’t slow us down and doesn’t mean that people aren’t aligned. We make decisions fast and then all stand behind them. Get 80% alignment and 100% agreement to implement. And move quickly. Notes by frank@olsson.co.nz 4 April 2010 Harvard Business Review March 2010 Another interesting HBR issue with a few new ideas… Women in management – Delusions of progress. By Nancy Carter and Christine Silva. New Research show we are a lot further from achieving parity than we thought. What went wrong? Among graduates of elite MBA programs around the world, women continue to lag men at every single career stage, right from their first professional job. On average women earned $ 4,600 less as starting salary which was compounded over time. Men reported higher career satisfaction than women. We need renewed efforts to combat systemic gender inequity. Not soon but now. Engaging people by Katie Truss and Emma Soane. Five principles for increasing employee engagement: Keep people informed, listen, set clear objectives, match the person to the job and create meaningful work. Also try to tailor engagement programs to reach different types of workers. This enhances performance. The Mere Thought of Money Makes You Feel Less Pain by Kathleen D. Vohs. People who counted cash before dipping their hands in extremely hot water rated their pain two levels lower (on a scale from 1 – 9) than those who counted slips of paper. Cash gives people an inner strength and can reduce their physical and emotional pain. In fact, simply the idea of cash has this effect. We found that money makes us want to work alone and not ask for help. But we also found that people became more self-sufficient because of money. The marketing implications are huge. If a flight is delayed – give them cash and not vouchers. And for bonuses cash is more impressive than direct deposit. Think Outside the Building, not only outside the box by Rosabeth Moss Kanter The greatest future breakthroughs will come from leaders who encourage thinking outside a whole building full of boxes. The new P&G CEO’s strategy is ‘purpose-inspired growth’ finding growth opportunities by identifying more needs of more people in more places more completely. To foster innovation and transformation, leaders should focus on impact, not inputs. They should identify unresolved problems, map the wider system influencing results, and determine weak links to strengthen or gaps to fill. But to do all that effectively, they must first jump out of the box and leave the building. Who Do These Bankers Think They Are? Joseph E Stiglitz Had our bankers been serious about designing an efficient incentive system, pay would have been linked to relative performance, not to the vagaries of the stock market. The predatory lending and deceptive credit card practices cast and even darker shadow. In the end the financial system failed to perform its key roles: managing risk, allocating capital, and keeping transaction costs low. Instead it created risk, mismanaged capital, and generated huge transaction cost. There was too a misallocation of human capital, as many of Americas most talented people succumbed to the lure of the money. In some cases these were brilliant minds that in another era might have improved society with genuine discoveries or innovations. Funding Eureka by Nathan Myhrvold. An Industry dedicated to financing inventors and monetizing their creations could transform the world. The world needs a capital market for invention like the venture capital market for start-ups and the private equity market for revitalizing inefficient companies. A functioning invention capital market and industry can enable inventors around the globe to create hundreds of thousands more inventions each year than are being made today. Many will go nowhere but the top 1 % will make our lives vastly richer and better. Roaring Out of Recession by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen Even when things go well, top executives must constantly inject urgency into the organization – but not by running around setting and putting out fires. They must do so by attracting a steady flow of people hungry to prove themselves; setting objectives that are almost, but not quite, impossible to achieve; giving middle managers latitude to exercise judgment and creativity in hitting those targets; and ultimately, aligning the efforts of employees throughout the organization on what really matters. Leadership Lessons from India by Peter Cappelli, Harbir Singh, Jitendra V Singh and Michael Useem. Although India’s competitive environment is relatively new, company leaders have brought to it long standing tradition of business largess – a commitment to social goals fuelled by enlightened self-interest. Unlike the feel-good statements that Western companies make about, say, improving customers’ lives, the social mission of Indian companies are integral to their strategy and often the route to profits. Western leaders would do well to understand the managerial approaches that have fuelled the rise of India’s largest companies, and mindfully adopt them. My view has long been that ‘Philosophy’ should be part of a business education and the Indian understanding and commitment to spiritual values would be a valuable component in any business organization. By establishing and emphasizing a deeper sense of purpose and relationship between people who interact, new valuable energy can be harnessed and the risk of mistakes and wrongdoing be reduced. One must question if the US Capitalist model hasn’t lost its moral compass by overemphasizing personal gain and short term returns with little concern for alignment with the well being of the general public. There is an interesting article on how BMW is trying to adjust jobs to an aging workforce. Spending time and energy on aligning tasks to the ability of the work force makes sense. Giving up the CEO Seat – an article encouraging stepping aside when you think someone else can do it better. Few people can stay at the front in the same position more than five years. And yet it takes clear-voyance and courage to move over. MBA and Executive Education by Karen Edelman. If there was ever need for proof, this recession offered unequivocal evidence that we are all connected – technologically, economically, and personally Courses focusing on the global business landscape, Asia, and building cross-cultural acumen continue to grow. More and more leaders are being asked to work with heads of non-profits and government leaders to tackle some of the bigger societal issues, such as sustainability. Executive education programs are growing to build these critical cross cultural leadership and project management skills. frank@olsson.co.nz 12th March 2010 Harvard Business Review January/ February 2010 Quite a rich issue of HBR, the January 2010 one! Even if not too much new came out of it, there still are some pertinent points so quite good value all the same. Beware that the surging volume of available information doesn’t adversely affect personal well being, decision making and productivity. However, rightly used information will be crucial. You and you alone decide where to place your attention. It all depends on the quality of your habits. / Francis Wade, president Framework Consulting / Success Gets into Your Head – and Changes It. By Scott Berinato If you get a reward, the brain remembers what it did right. Failure has no impact. A Map to Healthy – and Ailing – Markets by Grail Research The economic crisis will influence business long into recovery. As strategists target global investments, they need to understand the effects of bailout and stimulus programs. Calculating these interventions as percentages of GDP helps identify which economies will be stressed and which will have the resources to bounce back. Combined effect of bailouts and stimulus were highest in Iceland 76 %, Ireland 48 %, China 47 %, USA 42 %, Russia 21 %, and UK 20 %, and rest of Europe less than 5 %, Japan 14 % and Australia 8 % - all percentages of GDP. The article suggests that high number countries will take longer to recover than others. We Can Measure the Power of Charisma by Alex Pentland The more successful people are more energetic. They talk more but they also listen more. They spend more face-to-face time with others. They pick up cues from others, draw people out, and get them to be more outgoing. It is not just what they project that makes them charismatic; it is what they elicit. The more of these energetic, positive people you put on a team, the better the teams’ performance. Researchers knew that attitude and positivity mattered but didn’t want to deal with them because it was squashy, feel good stuff. But now we can quantify it. Now it is science. We think face time with colleagues is vital, as much as 2.5 times as important as additional access to information. We think we can increase productivity by 10 % at no cost just by arranging the environment to promote more employee interaction. The Responsible Manager by C K Prahalad Managers must remember that they are the custodians of society’s most powerful institutions. They must therefore hold themselves to a higher standard. Key values to incorporate and understand are;
The Long-Term Effects of Short-Term Emotions by Dan Ariely. Avoid making decisions in the heat of the moment. Wait until you have cooled off. Sleep on it. What Really Motivates Workers by Teresa Amabile and Steven Kramer Top motivator for performance is progress. On days when workers feel they are making headway in their jobs, their emotions are most positive and their drive to succeed is at its peak. So managers should celebrate progress, even the incremental sort. The Technology That Can Revolutionize Health Care by Ronald Dixon. The number of hospital or doctor visits can be reduced by up to 60 % by a smart remote communications system – email, telephone, etc. Hacking Work – Learn to love the rule breakers by Bill Jensen and Josh Klein Many in the work force are coming to the conclusion that they need to take matters into their own hands in order to get the job done. The illusion of corporate control is being shattered in the name of increased personal efficiency. Spotting Bubbles on the Rise by Sendil Mullainathan Will Rogers had sage advice on investing: “Buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” The guidance we get today regarding economic bubbles is just about as helpful: If it bursts, it was a bubble. Bubbles can through behavioural finance research be identified as they form. We can’t prevent earthquakes or hurricanes, but there are ways to minimize their damage. The Age of Consumer Capitalism by Roger Martin It is time to discard the popular belief that corporations must focus first and foremost on maximizing value for shareholders. The idea is inherently and tragically flawed. A better idea is to make customer value the top priority. This proves a better way to generate returns than shareholder value maximization. Shareholders get overly excited about good prospects and overly despondent about bad prospects. Most executives understand that shareholder value creation and destruction are cyclical and, more important, not under their control. They can push shareholder value up in short bursts, but in due course, prices will fall again. So executives invest in short term strategies, hoping to get out before the inevitable crash, and often later criticize their successor for failing to avoid preordained declines. Because they can’t win the game they are asked to play, CEO’s translate the rules into a game that they can win. Accelerating Corporate Transformation by Robert Miles Transformation launches must be bald and rapid to succeed. Yet, imbedded in most organizations are six kinds of speed brakes that can slow things down to a grinding pace. During business-as-usual periods, these brakes may be benign, but in transition they may be able to cause derailment. The six are Cautious management culture/ Business-as-usual management process / Initiative gridlock / Recalcitrant executives / Disengaged employees and Loss of focus during execution. As the excitement wears off, some executives may lobby for old, familiar methods that are more to their liking.
In an age when nothing is constant, strategy should be defined by narrative – plots, subplots, and character – rather than by maps, graphs, and numbers. Words are more powerful than numbers because they allow a company to focus on the underlying causes of change, enable it to update strategy constantly, and alert it to the idea that it can change the business. Characteristics of good play scripts. Imaginative – play scripts should explore all the opportunities that exist, whether within or beyond the sector / Outward facing – they should focus on the links a company has with other entities, the way it connects with them, and how others perceive it in the market / Robust – They should not depend on too many assumptions about other actors’ behaviour, but instead focus on the actions that lead to the creation and capture of value / Plausible – Companies should consider why they, rather than some other player, would be able to make a play script succeed. How to Bounce Back from adversity by Joshua Margolis and Paul Stoltz Three types of questions will help shift the focus from the cause of the impasse to the active thinking about how best to respond. Specifying questions help identify ways to intervene; Visualizing questions help shift attention from the adversity to a more positive outcome and Collaborative questions help in reaching out to others for joint problem solving. Rethinking Marketing by R T Rust, C Moorman and G Bhalla Because companies can now interact directly with customers, they must radically reorganize to put cultivating relationships ahead of building brands. The new approach looks at customer profitability, customer lifetime value, customer equity and customer equity share. Being customer centric will soon be the only competitive way to serve customers. Managing alliances with the balanced score card by R S Kaplan, D P Norton and B Rugelsjoen For cross-entity collaboration to yield the highest rewards, the partners must agree on strategy and then design metrics to determine how well the strategy is being implemented. They must communicate a common vision and offer incentives that motivate all employees to improve collaboration and deliver results. They also need a process that allows them to talk candidly about difficulties, resolve disputes, share information, and continually adapt the strategy to evolving external conditions as well as to newly created capabilities. The balanced scorecard management system provides a frame work for partners to work collaboratively and productively to achieve benefits that neither could accomplish on its own. Five ways to bungle a job change by Boris Groysberg and Robin Abrahams The average baby boomer will switch jobs ten times, according to the US Bureau of labour statistics. The most common missteps – Not doing enough research / Leaving for money / Going from rather than to / Overestimating yourself / Thinking short term / Time pressure. Perhaps the best protection against career- management mistakes is self awareness. Notes by frank@olsson.co.nz 17 January 2010 Harvard Business Review December 2009 To Be a Better Leader, Give Up Authority by A D Amar, Carsten Hentrich, and Vlatka Hlupic Companies reliant on knowledge and innovation must abandon the traditional structure in which decisions are reserved for people at the top. Leadership is not really about delegating tasks and monitoring results; it is about imbuing the entire work force with a sense of responsibility for the business. All companies can benefit from having employees who feel more empowered and engaged. If abdication of authority is to yield value, individuals need to be self motivated. Leaders shouldn’t dictate vision or strategy; instead they should enable employees to create a common vision through, for examples, off-sites for discussion of strategic issues and regular feedback and education. Meeting Sustainability Goals, conversation with Herman Miller CEO, Brian Walker by Josette Akresh-Gonzales Business people often want to believe that answers in strategy can be looked up in a book and you can write them down and add them up and they equal something. It is not like that. Often you simply start with a belief or maybe just an inkling and if you are lucky, the evidence starts to pile up that you were right. In hindsight people outside the company think you had a great business plan, but all you had was a belief. Our belief was that sustainability was going to have a growing importance both to us and our customers. The evidence, I’m thankful to say, is piling up. Closing the Customer Feedback Loop by Rob Markey, Fred Reichfeld, and Andreas Dullweber It has never been more important to keep the customers you already have – it is much cheaper than acquiring new ones. But elaborate customer research may be beyond this year’s budget. Many companies have succeeded at retaining customers by asking them for simple feed back – and then empowering front line employees to act swiftly on that feed back. You can’t fix problems you don’t know you have. Each transaction is an opportunity to create a new promoter. How To Pick a Good Fight by Saj-nicole A Joni and Damon Beyer Forget the past and power struggles that are history, and don’t bother apportioning blame. Leaders in viable, vibrant organisations spend most of their time and energy looking at the road ahead, not in the rear view mirror. That’s easier said than done. Our research shows that senior leadership teams around the globe typically devote 85% of their time to the wrong fight. They examine their past numbers, try to figure out what went wrong or dissect what went well, and assign blame or recognition – but they spend virtually no time talking about the future. They waste energy, brainpower, and resources that they could instead be investing in future returns. If business leaders could redirect the conversation so that people spent even half their time talking about the future, companies could see incredible improvements in performance. A good future facing fight has three qualities: It speaks to what is possible, it is compelling, and it involves uncertainty. It also connects people with a sense of purpose beyond self-interest. Good leaders seek ways to push people to the point where they find their energy sweet spot, without subjecting them to unbearable tension. The Innovator’s DNA by Jeffrey H Dyer, Hal B Gregerson, and Clayton M Christenson Five key aspects of Innovation –
Innovative entrepreneurship is not a genetic predisposition, it is an active endeavour. Create Three Distinct Career Paths for Innovators by G C O’Connor, A Corbett and R Pierantozzi Discovery – create and identify opportunities in the marketplace. Explore fit between technological capabilities and marketplace needs. Incubation – Experiment in order to create a new business that delivers breakthrough value to customers and to the firm. Acceleration –Nurture the business until it can stand on its own Let the Response Fit the Scandal by Alice M Tybout and Michelle Roem Assess the incident – Adopt the customers’ point of view rather than management’s perspective Acknowledge the Problem – Avoid premature statements related to the cause, focus on the process of investigation, and prevent further harm Formulate a response – Evaluate the benefits and costs of the response in terms of customer relationships over the long run Implement the response – Align scandal communications with customers’ perception of the brand’s function. A New Philanthropy For a New Economy by Janice Fioravante Learning how to do more with less in the new economy requires a new approach to giving. If they have less to give, they want to make sure it is given well. It has interest in mission-related investing as a way to do good while potentially getting your money back or earning return. The ability to make micro loans to poor entrepreneurs lets givers apply the best elements of the for profit world to maximize social return. Venture philanthropy draws on the lessons of strategic investment management, choosing a cause and making a substantial, long-term commitment to an organization, often using the discipline of private equity to assess a business, looking for social impact and expecting social return. In entrepreneurial philanthropy, the business owner or financier who has taken the risks and been successful wants to get involved and see the impact of their giving. George Soros in allocating $ 1.1 billion to clean energy technology insisted that investments make a real contribution to solving climate change. Many clients want their philanthropy to operate in a more business like way. Many want to roll up their sleeves and be part of solving problems, not just offer support. Negotiation? Auction ? A Deal Maker’s Guide by Guhan Subramanian If you think you can get a sufficient number of the buyers you want to participate, an auction makes sense – unless you expect valuations to vary widely. If the asset has the potential to create a lot of value, or a relationship or service is important, a negotiation usually works better. Don’t Integrate Your Acquisitions, Partner with Them by P Kale, H Singh and A P Raman Bucking conventional wisdom, some emerging multinationals are preserving the identity of companies they’ve taken over. By allowing them operational autonomy, they are reaping rewards. The partnering approach can embody the best of both alliances and acquisitions. Notes by frank@olsson.co.nz Harvard Business Review November 2009 The best guide through rough waters is a clear and meaningful purpose. The continuing relevance of the Drucker perspective, by Rosabeth Moss Kanter Drucker always pointed to the underlying system as the source of problems and solutions rather than assigning managers accountability for challenging the system. He saw the people as assets to be empowered, not machines to be controlled. When things are in a flux, a set of common sense of purpose and a set of common values enable people to work together effectively. If the twentieth century gave rise to knowledge workers with deep expertise, the twenty-first century will require leaders who can foster integrative thinking and collaboration across fields and specialties. Collaboration, not co-ordination, will be the task of management. Drucker was not a passionate advocate of outcomes; he was a teacher of process. Not for profit organizations are necessary ingredients in producing a good society, one in which business can thrive. Civil society works to complement government in meeting human needs. Fair value Accounting for the financial crisis? By Robert C. Pozen This was the most interesting article in this edition. Well worth reading in its entirety. What was the primary cause of the current financial crisis? Subprime mortgages. Credit default swaps, or excessive debt? None of those, says Steve Forbes, Chairman of Forbes Media. In his view, mark-to-market accounting was “the principal reason” that the US financial system melted down in 2008. A battle is raged about which assets should be ‘marked to market’ in quarterly financial statements, as opposed to reported at historical cost. Some executives blame marking to market, which is generally advocated by investors, for the final melt down. Myths are being propagated by both sides in the argument. But it’s not true that historical cost accounting can disregard permanent changes in current market value or that most assets of financial institutions are marked to market. Solutions that serve everyone’s needs are possible. If accounting and capital requirements were substantially unlinked, marking to market would not usually have a negative impact on a bank’s regulatory capital. Income volatility would be better understood if banks published two EPS figures – one with assets recorded at fair value and the other without. And the fair value accounting approach of ‘marking to model’ could gain some credibility with investors if they were given assumptions underlying these models. Fair value accounting did not cause the current financial crises, but the crisis may have been aggravated by common misperceptions about accounting standards. Some investors incorrectly assumed that most bank assets would be valued at market prices, as bond prices were nose diving. Other investors failed to realize that the sharp mark downs of bond available for sale would not put banks in violation of regulatory capital requirements. If we can make these accounting complexities clearer by adopting a multidimensional approach to financial reporting, both companies and investors should be better equipped to respond intelligently when financial markets are next thrown into turmoil. What Every Leader Should know About Real Estate by Mahlon Apgar Idea in brief: Real estate is the largest or second-largest asset on the books for most companies, yet senior managers rarely pay attention to it. They should follow these principles: Think of real estate holdings as a portfolio, not a set of discrete properties. Pay a little extra for a lease or a purchase if it buys flexibility. Collect data to assess the portfolio’s performance. Work with real estate service providers that offer expertise and efficiency. Embrace sustainability; it is here to stay. As business enters a new era of more responsive and responsible capitalism, real estate will become even more central to a company’s global presence, competitive strategy, and availability to retain top talent. The fact is, real estate is never neutral. It can multiply shareholder value or diminish it; help an organization achieve its mission, implement its strategy, and compete effectively; or hinder its market position, organizational development, and long term growth. Real estate compels leaders’ attention – and their mastery of the issue and principles behind their largest assets. Make Better Decisions by Thomas H Davenport In recent years decision makers in both public and private sectors have made an astounding number of poor calls. For example, the decisions to invade Iraq, not to comply with global warming treaties, to ignore Darfur, are all likely to be recorded as injudicious in history books. And how about the decisions to invest in sub-prime mortgage loans, or to hedge risk with credit default swaps? Those were spread across a number of companies, but single organizations, too, made bad decisions. Tenneco, one a large conglomerate, chose poorly when buying businesses and now consists of only one auto parts business. General Motors made terrible decisions about which cars to bring to market. Time Warner erred in buying AOL, and Yahoo in deciding not to sell itself to Microsoft. Why this decision- making disorder? Firstly, because decisions have generally been viewed as the prerogative of individuals, usually senior executives! The process employed, the information used, the logic relied on, have been left up to them, in something of a black bow. Information goes in, decisions come out – and who knows what happens in between? Secondly, unlike other business processes, decision making has rarely been the focus of systematic analysis inside the firm. Very few organizations have ‘reengineered’ their decisions. Yet there are just as many opportunities to improve decision making as to improve any other process. Smart organizations can help their managers improve decision making in four steps: by identifying and prioritizing the decisions that must be made; examining the factors involved in each; designing roles, processes, systems, and behaviour to improve decisions; and institutionalizing the new approach through training, refined data analysis, and outcome assessment. If you don’t know which of your decisions are most important, you won’t be able to prioritize improvements. If you don’t know how decisions are made in your company, you can’t change the process for making them. If you don’t assess the results of your changes, you’re unlikely to achieve better decisions. The way to begin is simply to give decisions the attention they deserve. Without it, any success your organization achieves in decision making will be largely a matter of luck. frank@olsson.co.nz Harvard Business Review October 2009 The October issue is a bit thinner than the September issue with a focus on Risk. A few choice notes; When individuals don’t matter by Michael J. Mauboussin Ants aren’t smart – ant colonies are. You can’t understand the behaviour of a complex system, let alone manage it, by analyzing a few individuals. Changes in one component of a complex system may have unintended consequences for the whole. There is a tendency to prize a few stand out individuals whilst ignoring how much they draw on their surrounding system for support. The Myth of the Rational Market (book) by Justin Fox The academics by and large argued that the markets very randomness showed just how efficient it really was: The market was so big and open and adaptive that no investor could game it. They developed a growing confidence in its peculiar wisdom and built upon that bedrock, rational models for managing uncertainty. Then, on the basis of nothing more than a plausible assumption, they could erect a superstructure of seemingly scientific conclusions about how companies should invest. That superstructure, not just corrupt and irresponsible mortgage brokers, let to the financial crash. Risk managers are eager for useful models, so they’re likely to jump at any concept that promises to make their lives easier. What appealing but false models might be blinding your risk managers? The Simplest Way to Reboot Your Brain by Robert Stickgold – www.health.hbr.org A few minutes of shut-eye at work could be good for business. How does an organization implement a pro-nap policy? Some companies have nap-rooms; others, like Google, offer nap pods that block out light and sound. Google says its pods are an extension of the company’s flexible schedule policy – people work in ways that best suit them. If that sounds expensive, you can simply announce that it is ok to take quick naps because they make people more productive. Given the millions of dollars spent on trying to improve productivity, this small low cost experiment is worth doing. How GE is Disrupting Itself by Jeffrey R. Immelt, Vijay Govindarajan, and Chris Trimble. This I found to be a very interesting article about Globalization – globalizing by stepping up from a local level success. For decades, GE has sold modified Western products to emerging markets. Now, to pre-empt the emerging giants, it is trying the reverse. The model that GE and other industrial manufacturers have followed for decades – developing high end products at home and adapting them for other markets around the world – won’t suffice as growth slows in rich nations. To tap opportunities in emerging markets and pioneer value segments in wealthy countries, companies must learn reverse innovation: developing products in countries like China and India and then distribute them globally. While multinationals need both approaches, there are deep conflicts between the two. But those conflicts can be overcome. If GE doesn’t master reverse innovation, the emerging giants could destroy the company. GE now has more than a dozen local growth teams in China and India. In the midst of a severe global recession, GE’s business will grow 25 % this year. The big smart solution in the West might be replaced by something smaller and less capable but still highly useful and suitable for improved performance in emerging economies. Such solutions are often best pursued by expertise and manufacturers in the market they are intended to serve. Managing Risk in the New World Robert with S. Kaplan, Anette Mikes, Robert Simons, Peter Tufano, and Michael Hoffman – moderated by HBR David Champion. One of the problems is that shareholder return has been seen as economically and morally justifiable regardless of context. When systemic risk arises, then all the traditional risk-return analysis in the world won’t help. Bank analysts referred to the ‘Greenspan put.’ Whatever risks the banks took on were hedged by society, because the fed would bail them out in order to save the system. Risk correlations change in response to external events making it hard to create solid balanced reward incentives. Lastly, don’t believe it is easy to eliminate risk. When you buy insurance for example all you are doing is moving the risk to a new party. We are seeing a change in how we define a healthy balance sheet. In banks we are talking about conditional capital requirements which will apply in down turns. Regulators traditionally focus on individual firms. The challenge is to connect the dots at the systemic level. Banks should be regulated more like utilities than like entrepreneurial firms. The Six Mistakes Executives Make in Risk Management by Nassim N Taleb, Daniel G Goldstein, and Mark W Spitznagel. We think we can manage risk by predicting extreme events / We are convinced that studying the past will help us manage risk / We don’t listen to advice about what we shouldn’t do / We assume that risk can be measured by standard deviation / We don’t appreciate that what’s mathematically equivalent isn’t psychologically so. / We are taught that efficiency and maximizing shareholder value don’t tolerate redundancy. The biggest risk lies within us. We overestimate our abilities and underestimate what can go wrong. The ancients considered hubris the greatest defect, and the gods punished it mercilessly. Many generals have died for not recognizing their limits. Any corporation that doesn’t recognize its Achilles’ heel is fated to die because of it. frank@olsson.co.nz Harvard Business Review September 2009 The September HBR is a very interesting issue and focuses on a couple of points which I have considered top priority for many years. It is refreshing to see a business magazine take such independent and sound positions, ostensibly free from industry and other perceived specialty interests. Anywhere where the truth is suppressed and not tolerated things can only decline. And conversely we need to identify true trends and call things by their proper names. The two issues are; embrace green trends or pay the consequences (go out of business) and the tremendous power of the feminine half of the world (with bigger spending power than China and India combined) still largely ignored by most companies. A few notes from the September issue: The cover has these headlines – How Green will save us and Why your next business model must be green. The leader says: Companies won’t innovate successfully – and as a result won’t grow – unless they throw themselves whole hog into green initiatives. Smart companies now treat sustainability as innovation’s new frontier. Although women make far more purchase decisions than men do, they feel badly serviced by companies they buy from. The financial service industry is the least attuned to women. / Adi Ignatius / (his name reminds me of reading Ignatius Loyola and finding much profound wisdom – attached at the end) Doing Business in a Post Growth Society by James Gustave Speth Soon, developed countries will begin the move to a post growth world where working life, the natural environment, communities, and the public sector will no longer be sacrificed for the sake of mere GDP growth, and where the illusory promise of ever more expansion will no longer provide an excuse for ignoring compelling social needs. If the market is going to work for the betterment of society, environmental and social costs should be fully incorporated in the price. A great imperative countries will face in the years ahead is building a new, sustaining economy. Sustaining people, communities, and nature must henceforth e seen as the core goals of economic activity, not the hoped-for by-products of growth, market success, and modest regulation. The challenge is to reinvent the economy, not just restoring it. What service Customers Really Want – by Dave Dougherty and Ajay Murthy Customers are looking for a satisfying experience. Companies that provide it will win their loyalty. In evaluating service, managers should measure across all channels the percentage of customer problems resolved within the first contact, determine what is the root of problems not settled in one call, and make any necessary changes. Energize Employees with Green Strategy by Andrew Winston In times of high economic stress and lay-offs, it can be difficult to maintain employee morale. Greening your business and involving everyone in the process, can keep people motivated and help your company ride out the storm. They will respond even more enthusiastically if the organization is getting lean and green for the dual purposes of environmental concerns and profit. And here is the best part, given the severity of the downturn: increasing employee excitement and changing behaviour can cost very little. Getting employees excited about new, low cost ways of operating – or about creating products and services that help customers reduce their environmental impacts – will engender extremely loyal work force. “I’ve never seen an issue galvanize people in a company like sustainability.” The Female Economy by Michael S. Silverstein and Kate Sayre Globally they control about $ 20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years. Their $13 trillion in annual earnings could reach $18 trillion in the same period. In aggregate women represent a growth market bigger than India and China combined. Given these numbers it would be foolish to underestimate the female consumer. Despite women’s dominant buying power, many companies continue to market mainly to men and fail to explore how they may meet women’s needs. Companies that can offer tailored products – going beyond making it pink – will be positioned to win when the economy recovers. Women make the decision in the purchase of 94% of home furnishings; 92 % of vacations; 91 % of homes; 60% of automobiles; and 51% of home electronics. “The costliness of clothing was another sore point for the women in our survey. That explains why respondents to Sweden-based H&M. Its stores offer inexpensive, fun, trendy clothes and, with a rapid turnover of stock, an element of surprise each time shoppers visit. Women value the ability to buy a new outfit without breaking the bank. Perhaps contributing to H&M’s success is the fact that nearly 80% of the company’s employees, 77%of store managers, and 44% of country managers are women. So are 7 of 11 board members.” Despite setbacks in the economy, private wealth in the United States is expected to grow from some $ 14 trillion today to$ 22 trillion by 2020, and 50% of it will be in the hands of women. Women are still far more burdened than men by household tasks; according t this survey, about one-third of men don’t help their spouse or partner with chores. In Japan women receive the least support, with 74 % getting little or no help from their spouse. At the other extreme, 71 % of Indian husbands pitch in on household chores. Already women own 40% of business in the USA and their business is growing at twice the rate as business in general. Brands that directly or indirectly promote physical and emotional wellbeing, protect and preserve the environment, provide education or care for the needy, and encounter love and connection will benefit. Understanding and meeting women’s needs will be essential to rebuilding the economy; therein lies the key to breakout growth, loyalty, and market share. Why Sustainability is now the key driver of innovation. By ram Nidumolu, C.K. Prahalad, and M.R. Rangaswami There is no alternative to sustainable development. Even so, many companies are convinced that the more environmentally friendly they become, the more the effort will erode their competitiveness. Our research shows that sustainability is a mother lode of organizational and technological innovations that yield both bottom line returns. Becoming environmental friendly lowers cost because companies end up reducing the inputs they use. In addition, the process generates additional revenues from better products, or enable companies to create new businesses. Smart companies now treat sustainability as innovation’s new frontier. By treating sustainability as a goal today, early mover will develop competencies that rivals will be hard pressed to match. That competitive advantage will stand them in good stead, because sustainability will always be an integral part of development. It is tempting to adhere to the lowest environmental standards for as long as possible. However, it is smarter to comply with the most stringent rules, and to do so before they are enforced. This yields substantial first-mover advantages in terms of fostering innovation. Contrary to popular perception, conforming to the highest standard globally actually saves companies money. When they comply with the lowest standard, managing component sourcing, production and logistics becomes much more complicated. Companies in the vanguard of compliance naturally spot business opportunities first. Companies should ask: What are the milestones on the path to our desired future? What steps can we take today that will enable us to get there? How will we know that we are moving in the right direction? What led to our advanced service economy is that someone asked: Can we create a carriage that moves without horses pulling it? Can we fly like birds? Can we dive like whales? By questioning the status quo, people and companies have changed it. When a company’s top management team decides to focus on the problem, change happens quickly. Recent research suggests that three-fourths of work force entrants in the USA regard social responsibility and environmental commitment as important criteria in selecting employers. People who are happy about their employer’s position on those issues also enjoy working for them. Other articles are: Creating value in an Economic Crisis by Bill Clinton Being a good corporate citizen requires investments in society and the environment How Strategy Shapes Structure – Instead of letting the environment define your strategy, craft a strategy that defines your environment. Death by Information Overload – It takes 24 minutes to get back on task after opening an email Are You having Trouble Keeping Your Operational Focus – growth can dull your operational edge. The Coming Battle Over Executive Pay – the attention will continue but no easy answers. How to manage Your negotiating team – the biggest challenge may lie on your side of the table. Notes by frank@olsson.co.nz 18th Sept 2009 Harvard Business Review July/ August 2009 This summer issue for 2009 is full of interesting articles trying to outline what the future scope looks like. The only thing we know about the future is that it is unknown but once we realize this, a few scenarios can be stimulating for thought and action. The message comes through in many of the articles that business needs to be more than shareholder return and three month focus. In this day and age mature and competent people want to promote something worthwhile in their daily activity. This issue covers two months and it really is twice as deep as a normal issue. Well done HBR! Please find below a few notes from the articles. One that would have the fruit must climb the tree. Heed the Calls for Transparency by Sam Wilkin Rather than hoping that public pressure will go away, banks and asset management firms should embrace transparency. Doing so will help them rebuild their reputations more quickly. The last thing the financial industry needs is politicized legislation made hastily while public anger is at its highest. Just how healthy is your global partner? By Josh Green Routinely ask for your partners sales projections / Request third party validation of the partner’s financial health and its sales or operations history / Ask to see references from other or past partners / Create ongoing processes for tracking trading-partner risks / Develop back up options for each important partner / Prepare to provide more information to partners than ever before / Learn to sell yourselves to potential partners by demonstrating your own stability and long-term strength The New Face of Protectionism by Regina M Abrami Today protectionism isn’t practical; every country depends on imported goods and foreign markets. Free trade agreements allow countries to be ‘preferentialist’ instead of downright protectionist. The challenge is no longer access to foreign markets but figuring out how to access them wisely. Conversation with architect Ellen Dunham-Jones Fewer than a third of US households today have kids. This is projected to reduce to a quarter. The current level of retail space cannot be sustained going forward. Retailers will have to figure out how to reach a mix of workers and residents and integrate discretionary goods with those that meet everyday needs. Retailers and manufacturers alike should emphasize fundamental quality over quantity, focus on weaving retail into community life, and get creative about retooling for the neighbourhood general store of the future. Predicting the Present a conversation with science fiction writer Cory Doctorow.
My greatest fear is that entrenched power will take control over the internet because they fear that a free internet will disrupt their ability to stay in charge. The universal access to all human knowledge is the realization of one the most important dreams of humanity and complaining about it is morally indefensible. Banning copying criminalizes the majority of internet users, because we all copy all the time. Arts is an economically irrational activity. That’s as true in the twenty-first century as it always has been. There’s no question that the internet does a better job than any other system of allowing people to be heard. The majority of people who don’t buy my book are those who haven’t heard about it. The Descent of Finance by Niall Ferguson Bank of America’s leverage ratio was 73.7:1 The federal debt will soar to 146 % of GDP by 2019. In weeks the liquidity crisis became a solvency crisis, claiming Bear Sterns as its first victim. One consequence of the new expenditures will be a huge increase in the federal government’s budget deficit now at 12 % of GDP or 4 % of total outlays. Who will buy $ 1.75 trillion of freshly printed government bonds? Goldman Sachs says Chinas GDP might equal that of USA by 2027 rather than as previously calculated, 2040. The Trends You Have To Watch by Eric Beinhocker, Ian Davies and Lenny Mendonca Resources feeling the strain / Globalization feeling the fire / Trust in Business Running out / A bigger role for government / Management as a science / Shifting Consumption patterns / Asia Rising / Industries taking new shape / Innovation marching on / Price stability n question. Running out of trust - why should this concern strategists? Because a low-trust environment makes everything about doing business more difficult! For an individual company, loss of trust leads to higher transaction costs, lower brand value, and greater difficulty attracting, retaining and developing talent. Ultimately it can mean boycotts, negative publicity, and unwanted regulation. Regaining trust also means dispensing with the view that the only objective of management is to increase shareholder value. Leadership in a (Permanent) Crisis by Ronald Heifetz, Alexander Grashow, and Marty Linsky. To keep yourself from being corralled by the forces that generated the crisis in the first place, you must be able to depart from the default habits of authoritative certainty. Taking care of yourself both physically and emotionally will be crucial to your success. You can achieve none of your leadership aims if you sacrifice yourself to the cause. Give yourself permission to be both optimistic and realistic. Find sanctuaries where you can reflect on events and regain perspective. Reach out to confidants with whom you can debrief your work days and articulate your reasons for taking certain actions. Bring more of your emotional self to the workplace. Don’t lose yourself in your role. (This much aligns with my own thinking. Goals are never really reached, they just provide direction because as you are nearing any goal you already have revised your aims to something bigger and more distant. Therefore, only a fool is determined to find the end of the rainbow. And thriving in the pursuit of improvement is very important in order to ensure that the pursuit is shared and able to be taken up by successors and others.) How Gen Y & Boomers Will Reshape Your Agenda by Sylvia Hewlett, Laura Sherbin, and Karen Sumberg Two large surveys suggest that the oldest and youngest groups in the workplace have in common a desire to contribute to society through their labour, seek flexible working arrangements, value social connections at work and loyalty to a company, and prize other rewards of employment over monetary compensation. This has significant implications on the design of work environments. (Don’t be surprised if you lose talent if you are not catering to staff needs, physical and spiritual – two different approaches 1. This is how we go about things and if you work here you must adjust and 2. We are committed to make every effort to cater for your reasonable individual needs and aspirations – shareholder centric and people centric). The End of Rational Economics by Dan Ariely Your company has been operating on the premise that people – customers, employees, mangers – make logical decisions. It is time to abandon that assumption. By adopting an experimental approach, firms can discover the truth underlying their assumptions about customers, employees, operations, and policies. Once the understanding of irrationality is embedded in the fabric of the organization, a behavioural economics approach can be applied to virtually every area of the business, from governance and employee relations to marketing and customer service. It is probably most useful in the relationships between compensation and performance, risk and reward, loyalty and consumer habits, and pricing and purchasing behaviour. As companies become more willing to question their assumptions, discover something about their stake holders’ predilections, and share the result of their learning, they will no doubt become a great deal wiser. Shareholders First, Not So Fast by Jeffrey Pfeffer. CEOs are rediscovering ‘stakeholder capitalism’- respecting the needs not just of investors but also of customers, employees, and suppliers. In the end shareholder returns are just an outcome of management practices that respect all constituencies. Maybe this time CEOs will get it. If they don’t, we’ll be travelling back to the future once more, with yet more rounds of scandal and recession. Government in Your Business by Robert B Reich (Europe has been criticized for large government sectors and involvement. However, there is a positive side to this. In Sweden (and France and Japan) for example it has long been prestigious to work for the government and on balance lots of talented people are attracted to this sector bringing high levels of competency. Generally there is trust between the two sectors rather than the distrust prevailing in USA and many other countries. It seems a reasonable proposition that with government being responsible for 25 – 50 % of GDP, trust and constructive co-operation will achieve more than popular disdain and disrespect. Often government is seen as regulators in the main, but with a more proactive approach it can be a useful partner for sustainable business operations). The article suggests that we need to break out of the tired ideological debate about whether we want more or less government and focus instead on what we need business and government to achieve together. Understanding the Post-Recession Consumer by Paul Flatters and Michael Willmott. Four key trends are being accelerated by this recession: consumer demand for simplicity, a call for ethical business governance, a desire to economize, and a tendency to flit from one offering to another. Green and ethical consumption are likely to slow but pick up again post recession. Some consumers may return to boom time consumption patterns in the coming decades, but millions of people under age 35 entering this recession may well retain simplicity-seeking, thrifty, green yet mercurial consumers who will hold business to very high standards. Companies would be wise to understand what these consumers want and be prepared to deliver it. Rebuilding Companies as Communities by Henry Mintzberg Beneath the current economic crisis lies another of far greater proportions: the depreciation in companies of community – people’s sense of belonging to and caring for something greater than themselves. Government stimulus programs and the rescue of the biggest and sickest corporations will not alone resolve the problem. Companies need to reengage their people. The practice of both management and leadership needs to be rethought. We are social animals who cannot function effectively without a social system that is larger than ourselves. This is what is meant by “community” - the social glue that binds us together for the greater good. Community means caring for our work, our colleagues, and our place in the world, geographic and otherwise, and in turn being inspired by this caring. ‘Communityship’ is not a word in the English language but it should be – to stand between individual leadership and collective citizenship. Maybe it’s time to wean ourselves from the heroic leader and recognize that usually we need just enough leadership – leadership that intervenes when appropriate while encouraging people in the organization to get on with things. A healthy society balances leadership, communityship, and citizenship. Notes by frank@olsson.co.nz 8th August 2009 Harvard Business Review June 2009 The June issue focuses on the new type of leadership required post the financial melt- down just experienced. It is really quite simple and straightforward. We need leaders who understand that life is bigger than business and family and management at top level is about doing the right thing and serving the community first and making a living off it second. You don’t have to be particularly avant-guard or intelligent to understand this. In some ways it is puzzling that it has taken so long. Business has lived its own isolated life and that just isn’t good enough anymore. It is ok to make money and be profitable but it has to be in ways which align with and harmonize with citizenship and society at large. We all have a mandate – explicit for politicians, and implicit for everyone else, to carry on as long as we are committed to the good of the multitude. If we operate at loggerheads to these criteria we will sooner or later run into trouble and wise investors, staff and customer will stay away. A few lines from the issue…. Yüklə 0,9 Mb. Dostları ilə paylaş:
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