Harvard Business Review 5 years 2004 – 2009

Entrepreneurial Japan: Japan’s rebound is being fuelled by emerging companies in knowledge-intensive industries – companies led by entrepreneurs in their twenties and thirties. A newly entrepreneurial Japan, something that once would have seemed oxymoronic, may ultimately overshadow the much touted start-up cultures in China and India.

Young Japanese workers today have no expectation of lifetime employment or career advancement based on seniority; they focus on furthering their careers through switching jobs or acquiring advanced degrees.

From 2001 – 2005, 747 Japanese companies went public (compared to 617 in USA). 96 % of these opened their first day trading above offering price. Chinese and Korean companies are increasingly looking at floating their shares in the Japanese market.

The Japanese market is still the second largest in the world, representing more than half of the entire Asian economy.

The Leader from Hope: What is hope? Something more than wishful thinking but short of expectation. A rejection of cynicism and dispiritedness. And a state, we believe, quite central to the work of a leader. Most business leaders, we’ve discovered in our three year’s worth of interviews on the subject, shy away from the word. Perhaps talk of hope comes uncomfortably close to faith and spirituality – or perhaps declaring that one’s organization needs home feels defeatist. “If I set out to instil hope,” one might wonder, “am I admitting that our situation is next to hopeless?”

Yet work connected to the positive-psychology movement has made hope discussable in new ways. Hope has been shown to be the key ingredient of resilience in survivors of traumas ranging from prison camps to natural disasters. Many studies have shown that people who score higher on measures of hope also better cope with injuries, diseases, and physical pain; perform better in school; and prove more competitive in sports. Our contribution has been to outline the elements of hope – possibility, agency, worth, openness, and connection – in a way that guides efforts to nurture it in the workplace.

The first two are central to the definition of hope: People must see that change is possible and how they can engage personally in that change. The remaining elements have to do with how hope is cultivated in organizations: Hopeful work groups are most often composed of individuals whose worth to the organization has been affirmed, who perceive an openness on the part of management, and who enjoy an authentic sense of connection with their colleagues and with the organization’s mission. Even so briefly described, these elements suggest why hope can be an energetic force for positive change to a degree that, say, optimism alone could never be.

Our study of effective executives has uncovered many ways in which their decisions, words and actions make the people they lead more hopeful. Collectively, these practices are the basis of a leadership tool kit for building and sustaining hope. But the most important changes come when a leader is simply more mindful of this vital part of her or his mission. Much can be accomplished in a reflective pause to ask:”Is what I am about to do or say likely to be destructive or accretive of hope?” It is useful to notice how people express a sense that things might change for the better: they often say of some key actor, “He gives me hope” or “Se gives me hope.” If you are an executive trying to lead an organization through change, know that hope can be a potent force in your favour. And it is yours to give.

My note: I have always thought in relation to my staff that any directive, statement or utterance must be tested for: Is this motivational or de-motivational. If as a manager you are told to issue certain /harsh or negative/ instructions that are not motivational, don’t do it – go back to the instructor and argue it must be changed or repackaged lest staff be alienated and precious good will and loyalty be lost. If you are conveying ideas you don’t believe in as gospel your credibility is lost.

User-Centered Innovation: 70 – 80 % of new product developments that fails do so because of a failure to understand users’ needs. The emergence of user-centered innovation clearly shows that the near exclusive focus on technological advance is misplaced.

The Folly of Accountabalism: We have been lured by the myth of precision. Because accountability suggests there is a right and a wrong answer to every question, it flourishes where we can measure results exactly. It spreads to schools – where it is eating our young – as a result of our recent irrational exuberance about testing, which forces education to become something that can be measured precisely. Social systems are incapable of anything close to perfection, so if something goes wrong in one, that may not mean that the system is broken. Accountabalism bureaucratizes and atomizes responsibility. While claiming to increase individual responsibility, it drives out human judgment. When a sign-off is required for every step in the work flow, those closest to a process lack the leeway to optimize or rectify it. Accontabalism tries to squeeze centuries of thought about how to entice people toward good behaviour and dissuade them from bad into simple rules by which individuals can be measured and disciplined. It would react to a car crash by putting stop signs at every corner. Bureaucratizing morality or mechanizing complex organizations gives us the sense that we can exert close control. But grown-ups prefer clarity and realism to superstition.

In Praise of the Incomplete Leader by Deborah Ancona, Thomas Malone, Wanda Orlikowski and Peter Senge.

It is time to end the myth of the complete leader: the flawless person at the top who’s got it all figured out. The sooner leaders stop trying to be all tings to all people, the better off the organization will be. In today’s world the executive’s job is no longer to command and control but to cultivate and coordinate actions of others at al levels of the organization. Only when leaders see themselves as incomplete – as having both strengths and weaknesses – will they be able to make up for their missing skills by relying on others. No one person could possibly stay on top of everything. But the myth of the complete leader (and the attendant fear of appearing incompetent) makes many executives try to do just that, exhausting themselves, and damaging their organizations in the process.

Incomplete leaders differ from incompetent leaders in that they understand what they are good at and what they’re not and have good judgment about how they can work with others to build on their strengths and offset their limitations.

Engage in sense making: 1. Get data from multiple sources: customers, suppliers, employees, competitors, other departments and investors. 2. Involve others in your sense making. Say what you think you are seeing, and check with people who have different perspectives from yours. 3. Use early observations to shape small experiments in order to test your conclusions. Look for new ways to articulate alternatives and better ways to understand options. 4. Do not apply existing frameworks but instead be open to new possibilities. Try not to describe the world in stereotypical ways, such as good guys and bad guys, victims and oppressors, or marketers and engineers.

Herb Kelleher, the former CEO of Southwest Airlines excels at relating. He said: We’re not afraid to tell staff, “We love you.” “Because we do!” “With this emotional connection comes equitable compensation and profit sharing.”

Once leaders diagnose their own capabilities, identifying their unique set of strengths and weaknesses, they must search for others who can provide the things they are missing. Leaders who choose only people who mirror themselves are likely to find their organizations tilting in one direction, missing one or more essential capabilities needed to survive in a changing world.

Even the most talented leaders require the input and leadership of others, constructively solicited and creatively applied. It is time to celebrate the incomplete – that is, the human – leader.

Dialogue is the basic unit of work in an organization. The quality of the dialogue determines how people gather and process information, how they make decisions, and how they feel about one another and about the outcome of these decisions.

Reputation and its Risks by Robert Eccles, Scott Newquist and Roland Scatz: Executives know the importance of their companies’ reputations. Firms with strong positive reputations attract better people. They are perceived as providing more value, which often allows them to charge a premium. Their customers are more loyal and buy broader ranges of products and services. Because the market believes that such companies will deliver sustainable earnings and future growth, they have higher price-earnings multiples and market values and lower cost of capital. In an economy where 70 – 80 % of market value comes from hard-to-assess intangible assets such as brand equity, intellectual capital, and good will, organizations are especially vulnerable to anything that damages their reputations.

Three things determine the extent to which a company is exposed to reputational risk. The first is whether its reputation exceeds its true character. The second is how much external beliefs and expectations change, which can widen or narrow this gap. The third is the quality of internal co-ordination, which also can affect the gap.

Understanding Customer Experience by Christopher Meyer and Andre Schwager. Customer dis-satisfaction is widespread and, because of customer empowerment, increasingly dangerous. Although companies know a lot about customer buying habits, incomes, and other characteristics used to classify them, they know little about the thoughts, emotions and states of mind that customers’ interaction with products, services, and brands induce. Yet unless companies know about these subjective experiences and the role every function plays in shaping them, customer satisfaction is more a slogan than an attainable goal.

Discovering Your Authentic Leadership by Bill George, Peter Sims, Andrew McLean and Diana Mayer.

No one can be authentic by trying to imitate someone else. You can learn from other’s experiences, but there is no way you can be successful by trying to be like them. People trust you when you are genuine and authentic, not a replica of someone else.

When the 75 members of Stanford Graduate School of Business’s Advisory Council were asked to recommend the most important capability for leaders to develop, their answer was nearly unanimously: self-awareness. Yes many leaders, especially those early in their careers, are trying so hard to establish themselves in the world that they leave little time for self exploration.

Authentic leaders realize that they have to be willing to listen to feed back – especially the kind that they don’t want to hear. “I have had enough success in life to have that foundation of self respect, so I can take the criticisms and not deny it. I have finally learned to tolerate my failures and disappointments and not beat myself up.

Leadership principles are values translated into action. A value such as ‘concern for others’ might be translated into a leadership principle such as ‘create a work environment where people are respected for their contributions, provided job security, and allowed to fulfil their potential.

The only way to avoid getting caught up in materialism is to understand where you find happiness and fulfilment.

Authentic leaders build extraordinary support teams to help them stay on course.

Size is no protection against failure if you are not able to fill each employee with vitality / Zhang Ruimin /

This statement reminds me of what Tolstoy says in War and Peace before the major battle against napoleon outside Moscow: Koutouzow (the Russian commander) knew that it was neither the plans of the commander, nor the placing of the troops, nor the number of guns, nor the amount of slain which decide the victory, but that imponderable force called the Spirit of the Army, which he tried to control and guide as far as possible.
Notes by [e-mail] 11^th Feb 2007

Harvard Business Review January 2007

Moments of Truth – by global executives.

Nokia president Olli-Pekka Kallasvuo. Humility is a vital quality in a leader, just as it is for a company. Nokia, if it is to continue to prosper has to be externally oriented. It must have the kind of humility that makes it listen to customers and seek ideas from the outside. It has to be humble in the face of complexity. Especially today, as the convergence of mobility and the Internet has everyone guessing, Nokia can’t be so overconfident as to believe its predictions are the best. Instead, we need to perceive changes as they occur and react the fastest. In a management team, that responsiveness is a product of diversity – managers must humbly accept that their own perspectives need to be broadened by others. Having humility does not mean that you are quiet or that you lack the courage to say what you think. Courage and humility are more complementary than contradictory. People who have been humbled by being down and out can have more courage when things get tough. They have been there already, and they understand that things are not always easy. But having humility does mean that you put your own contribution in perspective. It means that you know that as CEO your role is really to serve the company.

Blackwater USA president Gary Jackson To keep the spirit entrepreneurial we run 100-day projects. Anyone at any level in the company who has an idea for making or saving money is given free rein to pursue it, so long as the pay off can be realized within 100 days.

Rolf Group owner Sergey Petrow When you see that something is wrong you have a choice. Either you convince yourself that everything is all right and become a moral invalid, or you resist. It is difficult for most people to see the system they are part of for what it is, and perhaps that is one test for a leader. The same lack of perspective often keeps people from seeing how their own mentality might be a constraint. We need to have our perspectives challenged.

Firing Back – How great leaders rebound after career disasters.

In every culture, the ability to transcend life’s adversity is an essential feature of becoming a great leader. In an acclaimed study, Stanford University’s mark Granovetter discovered that those individuals who landed jobs through personal contacts, only 16.7 % found them through people they saw at least twice a week; 55.6 % found positions through acquaintances seen at least once a year. But 27.8 of job candidates found work through distant acquaintances, whom they saw less than once a year – old college friends, former work mates, or people known through professional associations. In other words, more job contacts will come from people you see less than once a year than from those you see twice a week. That’s because close friends share the same network as you do, whereas acquaintances are more likely to introduce you to new people and contacts.

How you build relationships has a huge impact on your prospects for career recovery. The capacity to bounce back from adversity to prove your inner strength once more by overcoming your shattered confidence – is critical to success.

This article caused me to send a …..Letter to the editor, Harvard Business Review Re: 'Firing Back, How Great leaders rebound After Career Disaster' In the January 2007 Issue.

 Dear Sirs, I read with interest the article 'firing back'. Although well written and interesting I am surprised over the one-sided assumption that someone who has done well and earned a lot of money should want to continue doing the same things at 70 - 80 hrs a week just to be a 'hero'. Wouldn't it be better to look for alternative 'careers' such as charitable purposes like music, arts, travel or education to enrich life? Is it a sign of health or mental deficiency to always want to be cherished as a hero? Why doesn't the article also show some who stepped out of their hero status and became a little more human?

 Quite another issue is that on all levels people will experience set backs and disappointments and developing an ability to work through such situations and come back will always be useful. That is more a matter of retaining harmony and sanity than always looking for 'hero' status.

Frank Olsson

What to ask the person in the mirror by Robert Kaplan

A key characteristic of highly successful leaders is not that they figure out how to always stay on course, but that they develop techniques to help them recognize a deteriorating situation and get back on track as soon as possible. The best way to do this is to step back regularly – say every six months – and honestly ask yourself some questions about how you are doing and what you may need to do differently.

It is surprising how often business leaders fail to ask themselves: How frequently do I communicate a vision and priorities for my business? Would my employees, if asked, be able to articulate the vision and priorities?

(In my case I have interviewed (all) staff regularly and asked them – Do you feel that Communication, meets your expectations here – and if not what changes would you like to see? Quite often something more will be suggested – but also this does to some extent bring about a shared responsibility for the quality of communication in the sense that active participation and feed back is sought – it is not consistent with good ethics to say you are happy with things and then later complain to others that you are not – I have found this works rather well)

Failing to communicate your vision and priorities has direct costs in terms of time and business effectiveness.

Professional development is far more effective when coaching and direct feed back is given to employees throughout the year – well in advance of the annual performance review process.

As a leader you are watched closely. During a crisis your people watch you with a microscope, noting every move you make. Many leaders behave in a very composed and thoughtful manner the great majority of the time. But many when under stress react in ways that set a very negative tone.

A business career is a marathon, not a sprint, and if you aren’t true to yourself, eventually you are going to wear down.

Companies need their leaders to express their strongly held views rather than mimic what they believe to be party line.

A self questioning process conducted on a periodic basis will help you work through leadership challenges and issues that you invariably must tackle over the course of your career.

Notes by [e-mail] Jan 20, 2007
Harvard Business Review December 2006

This issue had one article I found particularly interesting and useful.

Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. By Michael E. Porter and Mark R. Kramer

Many companies have already done much to improve the social and environmental consequences of their activities, yet these efforts have not been nearly as productive as they could be – for two reasons. First, they pit business against society, when clearly the two are interdependent. Second, they pressure companies to think about corporate social responsibility in generic ways instead of in the way most appropriate to each firm’s strategy.

Gro Harlem Bruntland (ex Norwegian PM) defined sustainability as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs.’ The notion of license to operate derives from the fact that every company needs tacit or explicit permission from governments, communities, and numerous stakeholders to do business. Reputation is used by many companies to justify CSR initiatives on the grounds that they will improve a company’s image, strengthen its brand, enliven morale, and even raise the value of its stock.

The principle of sustainability appeals to enlightened self-interest, often invoking the so called triple bottom line of economic, social, and environmental performance. In other words companies should operate in ways that secure long term economic performance by avoiding short-term behaviour that is socially detrimental or environmentally wasteful. The principle works best for issues that coincide with a company’s economic or regulatory interests. DuPont for example saved over $ 2,000 million from reduction in energy use since 1990. Changes to the materials McDonald’s use to wrap its food have reduced its solid waste by 30%. These were smart business decisions entirely apart from their environmental benefits.

Successful corporations need a healthy society. Education, health care, and equal opportunity are essential to a productive workforce. Safe products and working conditions not only attract customers but lower the internal cost of accidents. Efficient utilization of land, water, energy, and other natural resources makes business more productive. Good government, the rule of law, and property rights are essential for efficiency and innovation. Strong regulatory standards protect both consumers and competitive companies from exploitation. Ultimately, a healthy society creates expanding demand for business, as more human needs are met and aspirations grow. Any business that pursues its ends at the expense of the society in which it operates will find success to be illusory and ultimately temporary.

At the same time, a healthy society needs successful companies. No social program can rival the business sector when it comes to creating jobs, wealth, and innovation that improve standards of living and social conditions over time. If governments, NGOs, and other participants in civil society weaken the ability of business to operate productively, they may win battles but will lose the war, as corporate and regional competitiveness fade, wages stagnate, jobs disappear, and the wealth that pays taxes and supports non-profit contributions evaporate.

Choices must benefit both sides. If either a business or a society pursues policies that benefit its interests at the expense of the other, it will find itself on a dangerous path.

The most strategic CSR occurs when a company adds a social dimension to its value proposition, making social impact integral to its overall strategy. Adding a social dimension to the value proposition offers a new frontier in competitive positioning. Integrating business and social needs takes more than good intentions and strong leadership. It requires adjustments in organization, reporting relationships, and incentives. Few companies have engaged operating management in processes that identify and prioritize social issues based on their salience to business operations and their importance to the company’s competitive context. Even fewer have unified their philanthropy with the management of their CSR efforts, much less sought to embed a social dimension into their core value proposition. Doing these things requires a far different approach to both CSR and philanthropy than the one prevalent today. Companies must shift from a fragmented, defensive posture to an integrated, affirmative approach. It is a matter of shifting from corporate social responsibility to corporate social integration.

Comment: A useful article worth reading in its entirety. I believe trying to align corporate activities a little more with the goals of society and the needs of people has the potential to humanize corporations and management methods, increase loyalty and energy among staff and also to appeal to customers and therefore be rewarding for shareholders. It will also typically reduce reputation risk as acting more caringly is encouraged. As unprecedented levels of affluence have been achieved in more and more countries, a one-sided pursuit of further profit growth without due concern for social well being and general quality of life seems downright anti-social and uncivilized.