Harvard Business Review 5 years 2004 – 2009

The Real Leadership of Steve Jobs. Steve’s approach to leadership can be summarized in two words – Think Different! Different means “Drop all your theories and preconceived ideas. Pay attention to the raw reality coming in through your five senses and your mind. This is where you will find insight and wisdom.” /Jonathan Rotenberg/
The Things Customers Can Do Better Than You by Bill Lee. It is time to redefine customers. They’re more than the people who buy your products and services. Customers are more knowledgeable, credible, and persuasive at convincing other customers to actually buy your product than your company’s marketing efforts are. A customer is someone with whom your firm engages in a mutual exchange of value. Customers may not be able to articulate what they want but they may be able to identify what is currently ‘wrong’ – what they are unhappy about.
The New Science of Building Great Teams. Communication more than collective smarts or skill determines a team’s success. How we communicate is even more important than what’s being communicated. An engaged team member will keep in mind the goal of moving the group forward.
Short-Termism: Don’t Blame Investors (or analysts). Executives often complain that investors’ obsession with short term performance forces them to make decisions that hurt long-term returns. But this also works the other way around: Executives with a short term orientation attract investors who are fixated on quarterly numbers. The language a company uses when talking to investors is a meaningful indicator of its orientation – and the investors listening in on calls that emphasize a short term approach are a largely self-selecting group who like what they hear.
Think of Start-ups as shots on goal by Robert E Litan. The more start-ups there are, the more ‘shots on goal’ an economy has to produce great results. Pre GFC some 500,000 – 600,000 new (U.S.) firms were launched and post GFC this plunged to 400,000. Legislation needs to go beyond entrepreneurs’ capital requirements and also facilitate their access to talent and opportunity. We need immigration reform to attract and retain high-skilled immigrants, particularly those who hope to start new businesses right away. Start-ups drive growth!
Why Make Diversity So Hard to Achieve by John Rice. Culture change comes more readily from a critical mass of diverse executives than from a series of diversity and inclusion seminars, or one high-profile minority hire. Apply to diversity the same rigor and results orientation that you apply elsewhere in your operations.
Managing Risks: A New Framework by Robert S Kaplan and Anette Mikes. Despite all the rhetoric and money invested in it, risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that employees follow them. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster such as BP’s Deepwater Horizon, just as it did not prevent the failure of many financial institutions during the 2007-2008 credit crises.

Organizational biases inhibit our ability to discuss risk and failure. In particular, teams facing uncertain conditions often engage in group think – particularly if the group is led by an overbearing or overconfident manager who wants to minimize conflict, delay, or challenges to his or her authority. Risk mitigation is painful, not a natural act for humans to perform. It costs money and slows things down. The risks that companies face fall into three categories: Preventable Risks; Strategy Risks; and External Risks.

A firm’s ability to weather storms depends on how seriously executives take risk management when the sun is shining and no clouds are on the horizon. Active and cost-effective risk management requires managers to think systematically about the multiple categories of risk they face so that they can institute appropriate processes for each. These processes will neutralize their managerial bias of seeing the world as they would like it to be rather than as it actually is or could possibly become.
Leadership Is a Conversation by Boris Groysberg and Michael Slind. The command and control approach to management has become less and less viable. Smart leaders engage with employees in a way that resembles an ordinary person-to-person conversation more than it does a series of commands from on high. Four elements of organizational conversation reflect the essential attributes of interpersonal conversation: intimacy, interactivity, inclusion, and intentionality. Intimacy includes listening to people at all levels of the organization and by learning to speak with employees directly and authentically. For many executives and managers, the temptation to treat every medium at their disposal as if it were a megaphone has proved hard to resist. Create a welcoming space for dialogue.

If you are to reap the benefit of employees acting as brand ambassadors, executives need to cede control over how the company is represented to the world. One-way broadcast messaging is a relic, and slick marketing materials have as little effect on employees as they do on customers.

Leadership Development In The Age of The Algorithm by Marcus Buckingham. Even a decade after leadership training began to recognize different styles and strengths, and even in organizations that have made cultivating high-potential talent a priority, the content served up is generic. Your leadership program tells you that you are part of your organization’s future, but it displays little understanding of you. Companies should assess all developing leaders and feed each one customized tips – tips drawn only from outstanding leaders who have similar strengths.

Pricing To Create Shared Value by Marco Bertini and John T Gourville. A firm’s brand communication may say, “We value you as a person,” but its pricing practices often say, “We value you as a wallet.” /that is why I always protested the concept ‘share-of-wallet’/ Any company who is not evaluating its pricing through a shared value lens should think again.
Four Ways to Fix Banks by Sallie Krawcheck. Bank boards need simple ways to cut through complexity; pay top executives with bank debt as well as stock and stock options, to make them more sensitive to risk; pay dividends as a percentage of earnings rather than as a set amount, to preserve capital in downturns; ignore net interest income in judging bank performance, and pay much more attention to customer satisfaction metrics; focus not on the most troubled business segments but on those that are using the most capital. Income driven by satisfied customers is worth much more long term than those achieved by trading, expense cuts and net interest numbers.

Captain Planet – an interview with Unisys CEO Paul Polman. “Why don’t we develop a business model aimed at contributing to society and the environment instead of taking from them?” We think that businesses that are responsible and actually make contributions to society a part of their business model will be successful. For proper long-term planning you’ve got to take your externalities into account, in order to be close to society. We abolished quarterly reporting to allow more focus on the longer term. We also changed our compensation system with the longer term in mind. I would recommend every company to get rid of quarterly reporting.
We have to realize that our job isn’t just creating shareholder wealth. A myopic view of driving shareholder wealth at the expense of everything else will not create a company that’s built to last. We need to attract a shareholder base that supports our strategy – not the other way around. The financial crisis has made a lot of people think differently about how society needs to function. We need to fine-tune the system and the way to do that is through socially responsible investment. It is unsustainable to have 15 % of the world’s population using up 50% of its resources. Companies that don’t want to be part of finding a solution to this risk being isolated by society. Milton-freedman type thinking has brought us to where we are and we need something more constructive.
Unfortunately politicians have become too short term in their thinking as well. Most lack any courage and just want to get reelected. In the US in particular, politicians seem to have a limited understanding of, and interest in, how the world functions.

Any compensation system where a few people get enormous benefits but the costs and risks have to be borne by society is unacceptable. The answer to executive pay is transparency.

There is so much ambiguity and change so your company needs to be agile – and you have to make sure your company is a learning organization.

There are things I wish I had done sooner. I wish I had spent more time on diversity of the work force. We are nowhere near where we need to be for tomorrow’s world.

Learning Charisma by John Antonakis, Marika Fenley, and Sue Liechti. Charisma is rooted in values and feelings. To persuade others you must use powerful and reasoned rhetoric, establish personal and moral credibility, and then rouse followers’ emotions and passions. If a leader can do these three things well, he or she can than tap into the hopes and ideals of followers, give them a sense of purpose, and inspire them to achieve great things.
Research suggests a dozen key CLTs (charismatic leadership tactics). Nine of them are verbal: metaphors, smiles and analogies; stories and anecdotes; contrasts; rhetorical questions; three-part lists; expressions of moral conviction; reflection of the group’s sentiments; the setting of high goals; and conveying confidence that they can be achieved. Three tactics are non-verbal: animated voice; facial expressions, and gestures. The word Charisma in Greek means special gift. Anyone can improve his/her leadership skills! /I believe empathy is also important – to tune into the mood of whoever you are talking to/

Notes by [e-mail] June 17 2012

Harvard Business Review May 2012

The theme for the May issue is Innovation. Although perhaps not revolutionary in its articles, there are still some interesting observations. “The goal is to manage total innovation across the organization, rather than rely on ad hoc, stand alone initiatives to somehow take a company productively forward.” Please find some comments from the issue below.

Americas Challenge /Interactive /

The state of the world can be remedied in one of two ways: 1) revolution, or 2) if principled leadership has the strength to give up much of its power, and empower levels below. Helping business leaders understand that preserving and enhancing people’s well-being – not any of our business culture’s current range of drivers – should be the fundamental purpose of our organizations.

Rethinking School / Interactive/

We don’t need to send kids to school to have a curriculum delivered to them. Instead we should be focused on helping kids become adept learners who, given the access they have on the internet to the sum of human knowledge, will be asked to create their own education rather than receive one parceled out in classrooms that in no way resemble the world.

What Makes a Great Tweet by Paul Andre’, Michael Bernstein and Kurt Luther.

At last count, Twitter had half a billion registered users who together generate some 175 million tweets a day. New accounts are being added at a rate of 11 per second. Ratings provide some useful tips for keeping your followers engaged. Be clear, not cryptic or insider. Don’t overuse hash-tags, and don’t re-tweet one-on-one conversations. 25 % of tweets are not worth reading, 36% are and 39% of tweets are just ok.

The wisdom of your in-house crowd. By Thomas Devonport

Lives may not be at stake in the decisions most of us are party to, but similar capabilities are being cultivated by enterprises, large and small. Gradually we are learning not to rely on the personal judgment of only human leaders and to tap into the superior judgment of organizations. / The book ‘The Wisdom of Crowds’ refers, my comment /

Capitalizing on our Intellectual Capital by Iqal Quadir. This article makes the point that education is a great export product and lever of future business growth. MIT graduates’ start ups generate two trillion dollar annual revenue. Amazing!

The Best Executive and Professional Jobs May no longer be Full-Time Gigs by Jody Miller and Matt Miller

In a global business climate that’s perpetually ambiguous – and that puts a premium on companies’ ability to test new ideas and change course on a dime – knowing how best to engage this low-risk, flexible and faster talent model (high powered temps) can be a source of competitive advantage. In Europe, due to onerous labor laws, temporary work is even better established than in the US. Talented people are going independent because they can choose what to work on and with whom to work. Roger works 80% of former hours and earns 80% of former pay and is very happy with that.

The advantage of being an independent consultant is to come in and work for 6-9 months and then take a breather. The people that work full time never get it. So it really prevents burn out. A lot of full time work is like running a marathon and never taking a break or a day off. Without the need to build teams they can tackle bigger assignments. And no one tells an independent what to so they must be self-starters. Muster the courage to set things up the way you want it!
Managing Your Innovation Portfolio by Bansi Nagji and Geoff Tuff.

This article argues there are three levels of innovation; Core-optimizing existing products for existing customers; Adjacent- expanding from existing business into ‘new to the company’ business; and Transformational-developing breakthroughs and inventing things for markets that don’t yet exist.

Firms that outperform their peers tend to allocate their investments in a certain ratio: 70% to safe bets in the core, 20% in the adjacent space and 10% in the transformational. As it happens an inverse ratio applies to the returns. Although never the dominant activity, transformational initiatives are vital to a company’s ongoing health, and firms must recognize that they demand unique management approaches.
A study by the Corporate Strategy Board shows that mature companies fail as often as 99% of the time. This reflects the hard truth that to achieve transformation – to do different things – an organization usually has to do things differently. It needs different people, different motivational factors, and different support systems.

Transformational innovation tends to benefit when the people involved are separated from the core business – financially, organizationally, and sometimes physically. Without the distance they can’t escape the gravitational pull of the companies’ norms and expectations, all of which reinforce an emphasis on sustaining the core.

In the early stages noneconomic and internal metrics are more important than economic – just going down an exciting learning path may justify continuation.

The imperative is to identify and accelerate the most promising ideas and kill off the rest.

The Trillion-Dollar R&D Fix by Anne Marie Knott

Traditional measures of R&D productivity are only loosely linked to profits and market value. That makes it difficult for executives to know whether they’re spending as much (or as little) as they should, let alone make improvements in the way they spend. A new measure RQ or research quotient, derived from classic regression analysis, allows managers to make these judgment calls. It also enables managers to estimate the optimal amount they should spend. Getting this right has enormous potential.

Six Myths Of Product Development by Stefan Thomke and Donald Reinertsen

Incorrectly assuming that product development is like manufacturing, many companies try to apply zero-defect, efficiency-focused techniques to product development processes. This mindset and other management misperceptions have given rise to six fallacies that undermine product development. Six Fallacies: High Utilization will improve performance; Processing work in large batches improves economics of the process; Our plan is great, we just need to stick to it; The sooner the project is started, the sooner it will be finished; The more features we put into a product, the more customers will like it; We will be more successful if we get it right the first time. Demanding that teams ‘get it right the first time’ just biases them to focus on the least risky solutions.

Creating an Organic Growth Machine by Ken Favaro, David Meer, and Samrat Sharma

Corporate leaders can kick start their companies’ internal growth engines by following four rules. Keep and eye on the big picture; Help operating units fight short-term business cycle pressures; Create a language for growth!

To Keep Your Customers, Keep it Simple by Patrick Spenner and Karen Freeman

For many consumers, the rising volume of marketing messages is overwhelming. Rather than pulling customers into the fold, companies are pushing them away with relentless and ill-conceived efforts to engage. Simplify and personalize!

Make Your Enemies Your Allies by Brian Uzzi and Shannon Dunlap

How do you best handle a situation where someone is hostile to you when you arrive at your work place? This problem is very common, and the article suggests a way forward leaning on the three Rs – redirection, reciprocity and rationality. And having the insight that rivalries help no one. Redirect your rival’s energy away from you, Reciprocity – do something nice for the other person, rationality – try to agree a sensible way of co-operating.

Notes by [e-mail] May 12, 2012
Harvard Business Review April 2012

This issue is themed around Great Teams and how to build them with a lot of interesting ideas to improve the way we work together. Please find below a few notes from the issue.

Good Data Won’t Guarantee Good Decisions by Svetank Shah, Andrew Horne and Jamie Capella. Most companies have too few analytics-savvy workers. Here’s how to help them. Analytical skills are concentrated in too few employees. IT needs to spend more time on the “I” and less on the “T”. Reliable information exists but it is hard to locate. Business executives don’t manage information as well as they manage talent, capital, and brand. To overcome the insight deficit, Big Data – no matter how comprehensive or well analyzed – needs to be complemented by Big Judgment.
Why His Merit raise is Bigger Than Hers by Stephen Benard. Managers in explicit meritocracies consistently give women lesser amounts than men. Research shows that wide-spread stereotypes – for example the notion that women are less productive than men – often shape behavior unconsciously, even in people who disagree with them.
“Good” Companies launch More New Products by Xueming Lou and Shuili Du. Companies in the top third in terms of CSR (corporate social responsibility) brought out on average 47 new products a year, while companies in the bottom third brought out only 12. In an era of open innovation and rapidly diversifying knowledge, companies can no longer rely solely on internal resources; they must find ways to bring external ideas into the firm. CSR can be a powerful catalyst for doing that.
What Keeps Global Leaders Up at Night. Most Urgent Risks in Each Category: Economic – Chronic fiscal deficits; Environmental – Rising Greenhouse gas emissions; Geopolitical – Terrorism; Societal – Water supply issues; Technological – Cyber attacks. /It is interesting that in countries like Sweden, Germany and Japan, terrorism wouldn’t even feature as a worry – is terrorism the mirror image of some kind of oppression, real or perceived? my comment/

Top Global Risks in Terms of Likelihood - Severe income disparity; / Japan and Sweden best in class – my comment/

Top 5 Risks in terms of Impact – 1^st Major Systemic Financial Failure; 2^nd Water Supply Crisis; 3^rd Food Shortage Crisis; 4^th Chronic Fiscal Imbalances; 5^th Extreme Volatility in Energy and Agriculture Prices.
Celebrate Innovation No matter Where it Occurs by Nitin Nohira. Companies with superior marketing and distribution capabilities and leaders who quickly recognize opportunities will be the ones that capture value from innovations. In the face of a jobs crisis and a stagnant economy, we as a planet should pray for the appearance of more breakthrough innovations, regardless of where they arise. Ultimately the creation of jobs and wealth has more to do with harvesting the value of innovation than inventing it.
The New Science of Building Great Teams by Alex Sandy Pentland. How we communicate is more important to success than what we communicate. The best predictors of productivity are a team’s energy and engagement outside formal meetings. Together, those two factors explained one-third of the variations in dollar productivity among groups. The patterns of communication are what matter most – more than skill, intelligence, and other factors that go into a team combined.

What managers’ sense as an ineffable buzz or esprit the corps in a good team is actually observable, measurable, and learnable. The most valuable forms of communication are face to face. E-mail and texting are the least valuable. 35% of the variations in a team’s performance can be accounted for simply by the number of face to face exchanges among the team members. We know as well that the ‘right’ number of exchanges in a team is as many as dozens per working hour, but that going beyond the ideal number decreases performance.

Social time turns out to be deeply critical to team performance, often accounting for more than 50% of positive changes in communication patterns, even in a setting as efficiency-focused as a call centre. The best performing and most creative teams seek fresh perspectives constantly from all other groups (and some outside) the organization.
When we spot low energy, unengaged people we dig down into their individual data. Are they trying to contribute and being ignored or cut off? Do they cut others off and not listen, thereby discouraging colleagues from seeking opinions? Do they face other people in meetings or tend to hide from the group physically? Do they speak loudly enough? Perhaps the leader of a team is too dominant; it may be that she is doing most of the talking at meetings and needs to work on encouraging others to participate. Energy and engagement maps can make such problems clear.
The ideal team players, natural leaders or charismatic connectors circulate actively, engaging people in short, high energy conversations. They are democratic with their time- communicating with everyone equally and making sure all team members get a chance to contribute. They are not necessarily extroverts, although they feel comfortable approaching other people. They listen as much as or more than they talk and are very engaged with whomever they’re listening to. Spiritual as good teamwork may seem, it can be rooted in evidence and data.
Teamwork On the Fly by Amy C Edmondson. Teaming is teamwork on the fly: a pick-up basket ball game rather than plays run by a team that that has trained as a unit for years. It is a way to get other experts in temporary groups to solve problems they’re encountering for the first and perhaps only time. When companies need to accomplish something that hasn’t been done before, and might not be done again, traditional team structures aren’t practical. It is just not possible to identify the right skills and knowledge in advance and to trust that circumstances will not change. Under those conditions, a leader’s emphasis has to shift from composing and managing teams to inspiring and enabling teaming. Teaming well can generate important benefits. “Organizations exist to combine people’s efforts.” /James Thompson/
Purpose is fundamentally about shared values; it answers the question why we (this company, this project) exist, which can galvanize even the most diverse, amorphous team. Emphasizing purpose is necessary even when the purpose is obvious. It reduces the risk of egos and meandering.
A useful discipline for leaders is to force moments of reflection, asking themselves and then others, “Is this the only way to see the situation? What might I be missing?” Such exploration – even in the face of deadlines – is critical to successful teaming. Taking the time to do this actually takes less time than allowing conflicts to follow their natural course. Conflict can feel like failure. It can be frustrating not to see eye-to-eye with collaborators, but differences of perspective are a core reason for teamwork in the first place, and resolving them effectively gives rise to new opportunities. People who had worked on teams with greater task novelty and product complexity, more diverse colleagues, and more boundary spanning learned more than people on teams that faced fewer of those challenges.