Are You a Giver or a Taker?
But here's the thing, givers also land at the top of the ladder with takers and matchers in the middle. Adam Grant explores in Give and Take, what separates givers at the bottom and top. And the difference is not competence, but the kinds of strategies givers use and the choices they make.
Grant notes that in "purely zero-sum situations and win-lose interactions, giving rarely pays off…. But most of life isn't zero-sum."
The giver advantage is often hard to see in the short term because the "giver advantage grows over time." Chip Conley, founder of Joie de Vivre Hotels, explains, "Being a giver is not good for a 100-yard dash, but it's valuable in a marathon."
The Strength of Weak Ties
Givers connect with the people they know casually--their acquaintances. Although it is harder to ask them for help, they are the faster route to new leads and ideas. "The dormant ties provided more novel information than the current contacts. Over the past few years, while they were out of touch, they had been exposed to new ideas and perspectives."
The Five-Minute Favor: "You should be willing to do something that will take you five minutes or less for anybody."
Givers create a ripple effect around themselves. "Giving, especially when it's distinctive and consistent, establishes a pattern that shifts other people's reciprocity styles within a group." Givers take on the tasks that are in the best interests of the group.
As leaders, givers don't look for talent first, they focus on motivation. "Because they tend to be trusting and optimistic about other people's intentions, in their roles as leaders, managers, and mentors, givers are inclined to see the potential in everyone."
Takers have a general distrust of others. "Even when takers are impressed by another person's capabilities or motivation, they're more likely to see this person as a threat, which means they're less willing to support and develop him or her." Takers desire to be the smartest person in the room.
"The matcher's mistake lies in waiting for signs of high potential. Since matchers tend to play it safe, they often wait to offer support until they've seen evidence of promise."
Givers that end up on top are otherish. "Being otherish means being willing to give more than you receive, but still keeping your own interests in sight, using them as a guide for choosing when, where, how, and to whom you give." Giving energizes and is meaningful when it is done out of choice rather than duty or obligation—and otherish givers give more than totally selfless givers.
To avoid being taken, it is important to distinguish between givers and takers and those that pretend to be givers. Givers become matchers when they are dealing with takers.
Grant provides a lot of fresh examples—people from all walks of life. What he finds most magnetic about successful givers: "they get to the top without cutting others down, finding ways of expanding the pie that benefits themselves and the people around them. Whereas success is zero-sum in a group of takers, in groups of givers, it may be true that the whole is greater than the sum of the parts."
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Nice Companies Finish FirstNice Companies Finish First by Peter Shankman: "Being a selfish bastard who doesn't believe the rules apply to you simply won't get you very far."
Shankman cites a study where 700 people from a variety of industries reported on the treatment they received from their managers:
31% reported that their supervisor gave them the "silent treatment" during the year.
37% said that their supervisor failed to give credit when due.
39% noted that their supervisor didn't keep promises.
27% reported that their supervisor spoke negatively about them behind their back.
And it goes on. Not surprisingly, this kind of abusive behavior results in a work force that "experienced more exhaustion, job tension, nervousness, depressed mood and mistrust."
Shankman says your manager might be a jerk if they: are a know-it-all dictator, are uninterested in feedback, take sides unfairly and openly, are wasteful of resources, are a Desert Island boss (non-existent), a builder of empires, are a talker and not a doer, think adversaries work better than teams, or are in a constant cycle of crisis.
The Nine "Nice" Characteristics
Shankman then identifies nine "nice" characteristics that will eradicate "jerk" behavior beginning with "enlightened self-interest" since it underpins all of the others. A leader with enlightened self-interest will think in terms of the transactional benefits of everything they do. To be sure there are times when a leader must make unpopular decisions, but, says Shankman, "you can make beneficial decisions and lead your company to greatness without resorting to third-grade schoolyard tactics."
An enlightened leader is accountable, invests in others, consults with those affected by decisions, seeks counsel, expects the truth, reacts mindfully and positively to any situation.
The other traits he describes are:
Accessibility (Inaccessible, aloof CEOs can run successful businesses for a while, but in the long run, they make bad leaders.),
Strategic Listening (leadership is "a lot less about convincing people and more about benefiting from complex information and getting the best out of the people you work with. Listening for comprehension helps get you that information, of course, but it's more than that; it's also the greatest sign of respect you can give someone."),
Good Stewardship (Good stewardship is about responsible management and ethical standards that are in sync with the concerns of all of the constituents who are important to your business, including shareholders, stakeholders, investors, neighbors, and communities.),
Loyalty (360 Loyalty–loyal to what works for the whole company and for all good employees.),
Glass-Half Full POV (Seeing the difference between "Everything's OK!" and "Everything will be OK if we do the following things."),
Customer Service-Centric ("Makes it easy for people to become and stay customers in every way possible." Serving first selling second.),
Merit-Based Competitor (Compete by differentiation. It's OK to be nice to your competition. Kill them with kindness.), and
Gives a Damn ("Turning down the easy buck to instead do the right thing is one of the hardest choices we have to make.").
You can't fake being nice. "As communication becomes more fluid, leaders will be more exposed. We won't be able to hide anything anymore."
In order give more people a chance to benefit from this book, we are going to give away 5 copies free. To get a chance at getting one, you must take the following two actions:
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Fred 2.0 – Leadership in ActionYou are no doubt familiar with Fred, first introduced to us in The Fred Factor by Mark Sanborn. Fred exemplified an attitude of exceptional service delivered consistently with creativity and passion in a way that values other people.
Fred 2.0 brings us fresh insights, deeper understanding and wider application of the Fred Principles—and an update on the life of the real Fred Shea.
Fred 2.0 is about a specific way of approaching life and business. It’s an attitude that extends far beyond customer service. It comes from within and says I will do extraordinary things because that’s who I am. It’s not a feeling—it’s who you are. It is not dependent on the performance of anyone else.
Why Would You Live this Way?
Sanborn says it’s because being a Fred enriches others, expands you, puts more life into your living, breaks the bonds of self-absorption, makes you more employable, offers you a better way to live, creates a positive influence, and is more fun.
“Creativity is an essential ingredient in delivering extraordinary results,” writes Sanborn. Being creative is doing something different that adds value. More often than not, it’s the little things we notice that can be done better. This applies not only to the “things” we do, but also to our relationships; how we respond and interact to those around us.
Sanborn shows very specifically how to build better relationships, elevate the experience for those we come into contact with, how to build a team of Freds and how to instill the Fred approach in your kids philosophy of life.
The Fred Philosophy is Good Leadership
The Fred philosophy is ultimately what good leadership is all about. It’s a battle against mediocrity says Sanborn.
The first job of leadership is to help people see their significance. Leaders recognize that those who feel insignificant rarely make significant contributions. An effective leader is able to show people that they are significant in ways they may not realize.The Fred philosophy means:
• Leading by example
• Starting with what’s right instead of what’s wrong
• Encouraging people to try
• Asking for and sharing good ideas
• Removing barriers and obstacles
• Being a champion of those around you
• Giving people the freedom they need
• Teaching the Fred philosophy consistently
• Recognizing and rewarding
• Make the process enjoyable
“It’s our choice whether we’ll use our time, effort, and talents to turn ordinary work into something extraordinary.” writes Sanborn. It begins as always, with integrity. If you value it, those around you will too.
Fred 2.0 will show you the thinking behind extraordinary leadership and apply it in every area of your life. “When you know what is important to you in your life and work, you should apportion your talents and efforts so you can give the best you have to those things.” Love what you do and love the people you do it with.
SPECIAL OFFER: Visit Mark Sanborn's Fred 2.0 web site now to learn more and gain instant access to a Fred 2.0 “EXTRAordinary Results” Resource Kit, free with purchase of Fred 2.0.
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Rebooting Work: How to Make Work— Work for YouRebooting Work by Silicon Valley legend Maynard Webb and Carlye Adler is a sensible look at the changing nature of the workplace and how you can use emerging technologies to take charge of your career. To become a CEO of your own destiny.
Less than half of Americans (47 percent) are satisfied with their work. Companies are changing too. They can no longer provide the safety nets that were expected in the last century. Employees must become more self-reliant. That of course means a workplace that rewards people for their performance rather than their time in. An organization that supports entitlement over results, writes Webb, “can limit growth and opportunity.”
Giving someone a leg-up is one thing, entitlement has a permanence to it that both hinders employees and harms companies and neither performs up to their maximum potential.
Webb believes that technology presents us with an opportunity. It has the power to enable people to do something about their dissatisfaction with work and move on to careers that can provide both fulfillment and financial security. “Understanding and embracing today’s technological trends is the fastest way to travel to the career of your dreams.”
Webb presents us with four ways of looking at work. We may move from frame to frame but we tend to operate in one. They are Company Man or Woman, CEO of Your Own Destiny, Disenchanted Employee, and Aspiring Entrepreneur. Where we should all be headed, states Webb, is to the mindset of the CEO of Your Own Destiny. We are living in the age of the entrepreneur.
Prior to the Civil War, most Americans worked in agriculture or as small merchants or tradesmen. Success was the result of self-direction, self-motivation, and self determination. In a way, everyone was self-made.Today personal and professional development is on the employee. It “requires you to be relevant every day and to be voted on to the team you want to play with.” But with this freedom come accountability. In an entrepreneurial age it is more important than ever that you think like a leader—no matter where or at what level you work.
As research indicates, many people find themselves in the Disenchanted Employee frame: you are waiting to be discovered or recognized, you don’t understand why others don’t see how good you really are, your career isn’t going as expected, and you believe your circumstances are someone else’s fault.
This kind of thinking is not just unproductive, it feeds on itself and keeps you just where you don’t want to be. One of the most important things you can do is to get a mentor; someone to help you see the reality of your situation and offer constructive advice to get you moving again. Webb also offers these ideas:
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Antifragile or How We Become FragileAntifragile, Nassim Nicholas Taleb reports on things that are fragile and things that are antifragile and how they became that way.
Taleb says antifragile isn’t resilience given his narrow definition of it. It’s more. Resilience survives. Things that are antifragile don’t just survive, they get better with random event and shocks. The opposite is fragile. Though often unintentionally, we tend to make things fragile.
We have been fragilizing the economy, our health, political life, education, almost everything … by suppressing randomness and volatility. … Complex systems are weakened, even killed, when deprived of stressors. Much of our modern, structured, world has been harming us with top-down policies and contraptions which do precisely this: an insult to the anitifragility of systems.By trying to make things simple and linear we run the risk of underestimating randomness and its role in everything. And more importantly, we fail then to benefit from them. Thus while we may be resilient or robust, we are not antifragile. “You only get a measure of order and control when you embrace randomness,” says Taleb.
Our character should be antifragile. Random events should serve to make you better than before. Rules are fragile. Principles are resilient. Virtue is antifragile. Classroom learning is fragile. Real life and experiential knowledge are resilient. Real life and a library are antifragile.
Success actually makes us fragile. We need to be antifragile to survive it.
“When you are fragile, you depend on things following the exact planned course, with as little deviation as possible—for deviations are more harmful than helpful.” Mistakes and successes—especially those of others—give us a lot of information. If we can learn from them, they can make us antifragile. Taleb writes:
My characterization of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on. These types often consider themselves the “victims” of some large plot, a bad boss, or bad weather.Randomness is not a bad thing. We make our organizations fragile when we are overprotective; when we try to iron out all of the variations and wrinkles that are a part of life. The longer we go without randomness, without variations, without setbacks, the worse the consequences when the unpredictable occurs. “Preventing noise makes the problem worse in the long run.” Yet we still think we benefit from protecting people and organizations from volatility—from life. It’s a practice with unintended yet harmful side effects. A fact of life: “no stability without volatility.” A little confusion can lead to teachable moments, growth and stability.
Antifragile is an interesting and at times entertaining read. Taleb borrows from all disciplines to explain “how to live in a world we don’t understand or, rather, how not to be afraid to work with things we patently don’t understand, and, more principally, in what manner we should work with these.”
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Do Leaders Really Matter?Indispensible. To be sure, Lincoln and Churchill have mattered, but does every leader matter?
Of course, every leader matters to someone. But here Mukunda is talking about leaders who matter on a larger scale—those that matter to all of us. What would have happened if someone else had filled the same role. “Leader impact can best be thought of as the marginal difference between what actually happened and what would have happened if the most likely alternative leader had come to power….Will he or she make significantly different choices than the other plausible candidates.”
It gets down to how we choose our leaders and how we advance people through an organization. This process, Mukunda calls the Leader Filtration Process (LFP). A given LFP will filter candidates through a process designed to find those who conform to a specific value system—a Modal or standard leader. Occasionally an Extreme candidate will slip through. Many organizations weed out potential Extremes. The military’s promotion system is an example of a tight filtration process. At the other extreme, entrepreneurship is a very loose process—you become an entrepreneur just by deciding to do it.
A leader that has bypassed an LFP is likely to be an Extreme. Charisma helps leaders bypass filtration. “Family connections, personal wealth, and celebrity, for example, all smooth the path to power without subjecting candidates to the risk of being Filtered out by the LFP.”
Modal leaders can be highly successful under normal conditions. They are good at maintaining the status quo. I would associate management with Modal leaders. Extremes, on the other hand, are all about innovation. “Extreme leaders will be much more likely to change the goals their organization or state is pursuing and to adopt means to achieve those goals that other leaders would not—that’s why they have such marked impact compared with other Modals.”
If you are stuck, an Extreme leader may be just what you need. But while Extremes deviate—and that may be a good thing—they are “far more likely than Modals to have dramatic successes and failures.”
“Filtration is supposed to prevent leaders with undesirable characteristics from gaining power.” This is quite understandable. However, “many of those undesirable traits aren’t purely negative—in the right situation, they can be a huge asset.”
What helps make an Extreme great is when they couple their decisions with humility. “The Extreme leader does what others would not do, even when others advise him or her against it. To make this sort of choice when the stakes are high takes enormous confidence. Sometimes, however, the Extreme’s advisers will be right. When that is true, the great Extreme leader will have the humility to defer to their judgment. It is this almost paradoxical combination of self-confidence and humility that marks the transcendentaly great leader.”
Mukunda’s Leader Filtration Theory has implications as to how and when we choose certain types of leaders to lead us. He recommends that if you are a Filtered leader that you bring a few Extremes into your inner circle.
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quickpoint: The Long Tail of TalentThe labor markets are changing. With the Internet proximity is not an issue. Chris Anderson describes it this way in Makers: The New Industrial Revolution:
"The Web allows people to show what they can do, regardless of their education and credentials. It allows groups to form and work together easily outside of a company context, whether this involves “jobs” or not. And these more informal organizations are much less constrained by geography; talented people can live anywhere and shouldn’t have to move to contribute."
What does this mean? “The new era will not mark the end of the blockbuster, but the end of the monopoly of the blockbuster. So, too, for manufacturing. What we will see is simply more. More innovation, in more places, from more people, focused on more narrow niches. Collectively, all these new producers will reinvent the industrial economy, often with just a few units at a time—but exactly the right products for an increasingly discriminating consumer.”
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Leading Apple With Steve JobsLeading Apple with Steve Jobs, he writes that “Isaacson’s Steve is not the Steve I knew.” He believes that there has been too much focus on the negative aspects of how Jobs dealt with people and not enough on the positive. “I think,” he writes, “most people who worked for him, including me, would say they did the best work of their lives for him and don’t regret the experience a bit.” While his stories regarding his time with Jobs don’t do much to polish his image, he does bring out aspects of his thinking that undoubtedly have given people the opportunity to feel that in spite of the negative aspects of Jobs' behavior, Apple is where they wanted to be.
When analyzing anything, it always a challenge to pull out the important lesson and learn how to integrate the good without the bad. We are all a complex mix of motivations and behaviors and everything we do seems like an indispensable part of achieving our success (or not). But we can always improve—diminish the negative and emphasize the positive.
It is not unusual for any of us to find ourselves in a position where our intention is admirable but we lack the skill to implement it in the most beneficial way. Frequently, we can find ourselves stuck without alternatives to our own patterns of behavior. As leaders we have to constantly be learning—by reflection and reading about the lives of others—to discover where we could expand our thinking and therefore our options.
Not only does Elliot help us understand why Jobs was the way he was, he does a good job of explaining the development of and reasoning behind much of the Apple mystic that is worth implementing.
Jobs said that “It’s not my job to pull things together from different parts of the company and clear the ways to get resources for the key projects. It’s my job to push the team and make them even better, coming up with more aggressive visions of how it could be.” Jobs believed that accountability, attention to detail, perfectionism, simplicity, and secrecy, would sustain innovative leadership at Apple.
Getting the right people was as important to Jobs as creating a new product. “When you’re in a startup, the first ten people will determine whether the company succeeds or not.” Elliot says that he learned from Jobs the value of “knowing your own values so well that you can instinctively recognize someone who shares those values.” It would be good to reflect on our own values from this standpoint. Another way of thinking about this would be to consider: if you don’t know why you do what you do, why would anyone want to follow you?
The right people make the difference. “A leader in the Steve Jobs model needs to have a set of lieutenants who can translate his goals and vision into detailed action plans. The success of Apple through the years has largely been due to Steve’s talent for surrounding himself with people who could bear the heat when he wasn’t satisfied, were strong enough to stand up to him when he was wrong, and were able to relay not just his instructions but his commitment, drive, and vision to the crew.”
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Rebel Entrepreneurs Avoid Conventional Wisdom
This is a guest post by Jonathan Moules author of The Rebel Entrepreneur. Moules shares lessons learned from hundreds of companies that point to a rebellious entrepreneurial approach. He describes lessons like don’t rely on others to fund your idea, imitate creatively, keep value higher than price, pivot often, and why they typically don’t get loans from big banks.
There is a dirty little secret that most famous entrepreneurs and those that back the start-up culture prefer not to tell you—success in business is a minority sport.
In most developed countries, the overwhelming majority of all privately held enterprises are small – about 95 per cent, according to the OECD, the economic body that measures such things. The vast majority of these are sole traders. There is also an incredibly high failure fate among new ventures. About 8 out of every 10 of the companies started each year do not make it to their fifth birthday. Only a small percentage of those businesses that manage to struggle on beyond infancy then go on to create the real growth drivers of an economy.
However, it is these companies that are so important to the success of economies, providing new products and services as well as improvements in productivity that raise the standards of living of a society, and, perhaps most importantly, the lion’s share of new private sector jobs. Just 7 per cent of businesses are responsible for more than half the new employment created in the UK economy, the British think tank Nesta recently calculated. This figure is about the same across developed nations, according to the OECD. Nesta went further than this in its analysis, however, concluding that the job creation is actually only happening among very young fast-growing companies. Successful entrepreneurship, it seems, is a very exclusive club indeed.
What is it that sets these companies apart? One way to define them and their leadership is as rule breakers. That is what my book, The Rebel Entrepreneur, is all about. I am not saying that founders can only succeed by engaging in illegal behaviour. Sadly, there have been too many examples of this in recent years, but these people are criminals not wealth creators. No, the true rebel entrepreneur knows that the best way to get ahead is to avoid being sucked in by conventional wisdom.
Take pricing strategies, for instance. In hard times, conventional wisdom may say cut your prices to preserve customer numbers and therefore sales. However, as many successful companies have shown, the best policy is often to raise your prices. Look at Apple, the world’s most successful technology business, which insists on raising the prices of its products even as the western world struggles to recover from recession. Does this put off the customers? Not a bit of it. In fact, the high price appears to act as a guarantee of quality. More than this, by maintaining the high price, Apple is able to continue to increase revenue and profit even if sales dip.
Rebel entrepreneurship can be found in most areas of business building if you are prepared to look. Just be prepared to resist following the crowd.
Enterprise Editor for The Financial Times, where he has profiled hundreds of companies and their owners. He has written extensively on successful entrepreneurs. Moules spent 5 years in the FT's New York office, where he held numerous positions, including technology, media and telecoms news editor. He wrote specifically about the US mobile phone industry and new media businesses, and he covered the dotcom bubble and its aftermath.
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The Strategy Book
There are a number of ways to get the answers to these questions. Max McKeown has created a strategy reference work – The Strategy Book – to guide you to the answers.
Each chapter defines the objective, the context and the challenge—and then what success looks like and the pitfalls you might encounter. Well thought out and helpful.
Part of thinking like a strategist is learning to recognize unplanned opportunities and reacting. In fact, says McKeown, unplanned opportunities may be your best chance of creating a great strategy. The problem is following a plan so closely without responding to events that you will “lead the company efficiently in the wrong direction.”
In a sense, strategy creates risk. “Strategy involves completion of goals, and the risk is the difference between those goals and the ability of the organization to achieve them.” Because “uncertainty can only be reduced by committed decisions and actions,” you can choose to create a “certainty of purpose and direction.”
The Strategy Toolkit at the end of the book is not just another nice add-on. It is worth as much as the rest of the book. It contains concise explanations (without all the jargon) of some of the most popular strategy tools and how to use them. In his own words: “First, there are the most popular tools—those that are used most often in the workplace. Second, there are some of the most influential tools from the field of strategy and management. Third, there are tools that I have found valuable in my work with some of the most successful organisations in the world."
The tools include: SWOT analysis, Porter's 5 forces of competition, McKinsey's 7-S framework, BCG’s product portfolio matrix, Kim and Mauborgne's blue ocean, Kaplan and Norton's balanced scorecard, Mintzberg’s deliberate and emergent, Prahalad's bottom of the pyramid and twenty-one more.
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Adaptability: The Art of Winning In An Age of UncertaintyMax McKeown accurately argues in Unshrink that our beliefs have shrunk us. They have limited our responses. And it profoundly affects our ability to adapt.
Adaptability is a book about how people adapt. It is about how to win more often. “In the future,” writes author Max McKeown, “you can try to maintain what you already have, or you can attempt to transcend the constraints of your situation.”
Of course, to begin, you have to recognize the need to adapt. That’s not always as easy as it sounds mainly because we have to admit that something isn’t right. You have to understand what’s going on. Enthusiastic ignorance often rules the day. And so as, McKeown points out, “stupid survives until smart succeeds.” Knowing the rules and when to break them is essential to successful adaptability.
If you find a system failing, then you have also found a system that is failing to adapt. You need to discover, first, what adaptations are needed for the system to succeed. Second, you should understand what has stopped the system from adapting successfully. And third, you should find out how to free the people in the system to make the necessary adaptations.Once you recognize the need to adapt, you need to understand what adaptation is required. In times of great uncertainty, we need the knowledge creators, the radical and the rebels. “When times are easy, almost anyone can look effective….When choices seem obvious, unimaginative leaders may be rewarded for making the obvious choices even when they know they’re the wrong choices.”
Leaders too, need to release its stranglehold on what is considered acceptable and unacceptable thought. Effective adaptation will not happen when there is a dominance of a couple of people over the way everyone else is allowed to think and act.
It is important to not only identify what needs to be done, but to keep on learning until you get it right. Something to think about:
Most people lock on to a particular course of action, they make their minds up early and fail to adapt to evidence that their choices are wrong. As a result, only a small portion of most people’s experiences lead to new learning.Finally, you need to actually make the changes necessary to adapt. “The most successfully adaptive companies are those that never grow up.” It is rare to find leaders that are comfortable with “learning what is necessary from the people who do the work and know the answers.” McKeown rightly observes that being all knowing is not a human quality.
When attempting to adapt, “it is very tempting to try to remake a new situation to match an old situation.” We tend to continue to do what we already know.
“In adaptive terms, if you are still in the game, then it’s always the beginning.” This is a critical mindset for successful adaptation. “You can imaginatively rethink your actions so that wherever you are becomes the best place to start.”
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The Main Thing: How to Keep Organizations Centered on What Matters Most
This is a guest post by George H. Labovitz and Victor Rosansky, authors of Rapid Realignment: How to Quickly Integrate People, Processes, and Strategy for Unbeatable Performance. They say that the first challenge of alignment is to get everyone on the same page by understanding the organization in the same way. That means getting to the unifying concept of the organization to which everyone can contribute.
"The main thing is to keep the Main Thing the main thing!"
We loved that expression when we first heard it from Jim Barksdale, then the COO of FedEx. That single sentence captures the greatest challenge that executives and managers face today: keeping their people and their organizations centered on what matters most.
Every organization needs a Main Thing—a single, powerful expression of what it hopes to accomplish. Without it, it's not possible to align the four elements that produce organizational efficiency and effectiveness: strategy, people, customers, and processes.
Does your organization have a Main Thing? Do your people understand it? Are they guided by it?
Fred Smith, the Founder and CEO of FedEx, once described to us his understanding of The Main Thing—which he refers to as the "theory of the business."
Every successful business has, at its heart, a theory of the business—an underlying set of supporting objectives and a corporate philosophy that gives people a foundation on which to operate. Working inside that framework, they've got an idea of what we want them to do—to prioritize. We [at FedEx] have a very clear business mission and a business theory which is understood certainly by every member of the management team, and probably by 90 percent of the work force."The Main Thing is critically important. It is the end that strategy and human effort serve. We cannot achieve and maintain alignment without consensus and conviction about The Main Thing. Yet we are always amazed by how few people can articulate their organization's main thing. When we ask participants in workshops, "What's your Main Thing?" we see people digging into their wallets for the latest mission statement. Others look questioningly to the person sitting next to them. We wonder how these people can formulate a strategy or know how well they are doing if they cannot even state—or agree on—the ultimate purpose of their work.
Some people, however, can articulate their Main Thing without hesitation. Here are a few examples:
What is The Main Thing for your organization? Can you articulate it clearly and concisely? Can your subordinates? In many organizations, people have no clear answer, or will offer a confusing list of lofty goals. Others will describe their strategy. But a strategy is not The Main Thing; it is merely its servant. In some cases senior management defines The Main Thing one way and the people in the trenches define it in another. In these cases people and policies work at cross-purpose; one person is pulling when the other guy is pushing.
As you formulate a Main Thing for your organization, keep these guidelines in mind:
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If It's Important, Be ThereIn Contented Cows Still Give Better Milk, authors Bill Catlette and Richard Hadden make the point that organizations with contented employees understand that one of the most fundamental precepts in the whole workplace arena is that “the person who started for them this morning is as close to a ‘model employee’ as they’re ever going to get.” So the best companies do something about it. They are fanatical about training people not only with skills they need, but they also carefully train them in the organization’s traditions, values, and philosophies.
But this is the part (too) many leaders just don’t get:
“People want to know that the training course they’re taking the time to sit through is as important to senior management as it is supposed to be to them.” How do you communicate that? “This often requires senior management to ride along with them—not in their own condensed mini-versions, but alongside everyone else.”
Catlette and Hadden go on to say, “There should be no executive parking spaces when it comes to training. Managers must participate enthusiastically and, more important, be able to demonstrate the skills they expect everyone else to learn.”
The message is clear. If it’s important to you, it will be important to them. It’s quite common to hear, “If this is so important, where are they?” Without the visible support of the leadership, commitment to the training is compromised. Leaders need to visibly communicate: “This is important—so important that I went through it before you did. I’m using it, and now I want and expect you to do the same. That’s why I’m here."
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Having an Informed FaithWhether developing an organization or (especially) an individual, having an informed faith is essential. We value seeing things as they are—seeing reality. But potential is as much as part of reality as cold hard facts. Being able to see where an organization or an individual could go is vital for any leader.
The authors of Higher Ambition put it this way: it’s the “ability to envision and believe in a company’s potential and to understand, within an environment often characterized by confusion, crisis, and underperformance, the real possibilities of success.”
This is even harder to do when applying this idea to developing people. It’s easier to give up on people than to take the time to help them over their hurdles.
To see what is and to see what could be. The combination is essential for leadership. They add, “On the one hand, these executives see the reality with clarity. This keeps them from being easily deluded or distracted, builds the confidence and trust of those around them that they ‘get it,’ and motivates them to make difficult decisions about which activities to pursue and which to jettison, as well as which people to retain and which to encourage into other endeavors. But they also see the potential with real excitement and enthusiasm.
“As Roger Dickhout, co-founder and CEO of Pineridge Group, put it: ‘It’s believing in the potential of what you want to be, as opposed to describing what you are. That intention attracts opportunities to you.’”
Make potential part of your reality.
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Innovation at Bell Labs
Finding an aspect of modern life that doesn’t incorporate some strand of Bell Labs’ DNA would be difficult. Cellular communications, the laser, digitized and synthesized music, the solar battery cell, the first orbiting communications satellite, and the UNIX operating system, are all products of Bell Labs.
AT&T officially created Bell Telephone Laboratories on January 1, 1925. At its peak in the late 1960s’, Bell Labs employed about twelve-hundred PhDs and produced 13 Nobel Prize winners.
In The Idea Factory, author Jon Gertner brings back to life not only the story of Bell Telephone Laboratories through the people that worked there, but the story of innovation—how it happens, why it happens, and who makes it happen. It is a well told and fascinating story.
(My first encounter with Bells Labs was like many school aged kids in the sixties, through their series of science films—Hemo the Magnificent, Our Mr. Sun, Gateways to the Mind and others. A great way to spend an hour in science class.)
John Pierce is one of the brilliant and interesting people we are introduced to in Gertner’s story. It was Pierce that suggested calling the new device of 1947 a transistor. Peirce was what Gertner calls an instigator. “An instigator is different from a genius, but just as uncommon. An instigator is different, too, from the most skillful manager, some able to wrest excellence out of people who might otherwise fall short.” Pierces real talent was “in getting people interested in something that hadn’t really occurred to them before.”
Humans all suffer from a terrible habit of shoving new ideas into old paradigms. “Everyone faces the future with their eyes firmly on the past and they don’t see what’s going to happen next,” observed John Pierce.
For creativity to flourish, it needs both freedom and structure. When pierce first came to Bell Labs “he was given free rein to pursue any ideas he might have. He considered the experience equivalent to being cast adrift without a compass. ‘Too much freedom is horrible,’ he would say in describing his first few months at the Labs. Indeed he eventually came to believe that freedom in research was similar to food; it was necessary, but moderation was usually preferable to excess.”
Gertner writes, “We usually imagine that invention occurs in a flash, with a eureka moment that leads a lone inventor toward a startling epiphany. In truth, large leaps forward in technology rarely have a precise point of origin. At the start, forces that precede an invention merely begin to align, often imperceptibly, as a group of people and ideas converge, until over the course of months or years (or decades) they gain clarity and momentum and the help of additional ideas and actors. Luck seems to matter, and so does timing, for it tends to be the case that the right answers, the right people, the right place—perhaps all three—require a serendipitous encounter with the right problem. And then—sometimes—a lead. Only in retrospect do such leaps look obvious. When Niels Bohr—along with Einstein, the world’s greatest physicist—heard in 1938 that splitting a uranium atom could yield a tremendous burst of energy, he slapped his head and said, ‘Oh, what idiots we have all been.’”
Today there is nothing quite like the Bell Labs of AT&T and Western Electric to produce the creative technology that they did. Bell Labs laser scientist Herwig Kogelnik describes the magic of Bell Labs well: “It’s the interaction between fundamental science and applied science, and the interface between many disciplines, that creates new ideas.”
The first transistor created in 1947 was a quarter of the size of an American penny. Now a computer-processor chip the size of a postage stamp contains 2 billion transistors. Intel alone, makes 10 billion transistors every second. Time marches on. “I am afraid that there will be little tangible left in a later age,” Pierce wrote of his world at Bell Labs, “to remind our heirs that we were men, rather than cogs in a machine.”
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What Matters NowWhat Matters Now by Gary Hamel is probably one of the most important books you could read this year. It is an invitation to rethink the fundamental assumptions we have about capitalism, management, institutions, and life at work. It is, as Hamel describes it, “a blueprint for creating organizations that are fit for the future and fit for human beings.”
The book is divided into five fundamental, make-or-break issues that will determine whether your organization thrives or dives in the years ahead: values, innovation, adaptability, passion and ideology. Here are some of his thoughts that become more powerful as they sink in:
Values Matter Now.
• What matters now is that managers embrace the responsibilities of stewardship.
• Every institution rests on moral footings, and there is no force that can erode those foundations more rapidly than a cataract of self-interest.
• I think corporate life is so manifestly profane, so mechanical, mundane, and materialistic, that any attempt to inject a spiritual note feels wildly out of place—the workplace equivalent of reading the Bible in a brothel.
Innovation Matters Now.
• Post these simple questions on your company’s idea wiki: First, what are the thoughtless little ways we irritate customers and what can we do to change that? And second, what are the small, unexpected delights we could deliver to our customers at virtually no additional cost?
• Whenever you identify a convergent belief, ask, does this rest on some inviolable law of physics, or is it simply an artifact of our devotion to precedent? By working systematically to surface these invisible dogmas, you can turn reactionaries into rebels.
• To innovate, you need to see your organization and the world around it as a portfolio of skills and assets than can be endlessly recombined into new products and businesses.
Adaptability Matters Now.
• To thrive in turbulent times, organizations must become a bit more disorganized and unmanaged—less structured, less hierarchical, and less routinized.
• There are only two things, I think, that can throw our habits into sharp relief: a crisis that brutally exposes our collective myopia, or a mission so compelling and preposterous that it forces us to rethink our time-worn practices.
• To put it bluntly, the conversation about “where we go next” should be dominated by individuals who have their emotional equity invested in the future rather than the past. It needs to be led by individuals who don’t feel the need to defend decisions that were taken ten or twenty years ago.
Passion Matters Now.
• It’s impossible to unleash human capabilities without first expanding the scope of employee autonomy. People need the freedom to challenge precedent, to “waste” time, to go outside of channels, to experiment, to take risks, and to follow their passions.
• How, many policies in your company exist only to preserve that fiction that the higher-ups really are in control? How many rules enforce standardization at the expense of initiative and passion, while delivering few if any performance benefits?
Ideology Matters Now.
• The creed of control reigns supreme. If you doubt this, ask yourself: Is your organization any less rules-driven than it was ten or twenty years ago? Do people on the front lines feel any less controlled? Are their freedoms any less abridged? And are little cogs any less obsesses with becoming big cogs?
• Give someone monarch-like authority, and sooner or later there will be a royal screw-up.
• We don’t have to content ourselves with an organizational model that was designed to serve the interests of ancient military commanders and smokestack-era CEOs.
It’s time to re-invent our leadership. This book will help in that process.
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Restoring Your Ability to ChooseWe all like to think we are in charge of our choices. But the fact is that most of the time we are reacting, not choosing. Most of what we label choice is habit. We’re really on automatic. It can even lead us to think that we have no choice. Only when we pause—slow-down to think and reflect—are we exercising our ability to choose.
The Power of Pause that a pause is “any space between an action and your reaction.” And it’s vitally important:
Today you need the ability to discern what lies beneath people’s words, their reactions, or their silence. If you don’t build the neuropathways in your brain to pause, to momentarily disengage your automatic reactions, you can trigger a chain reaction that derails your best intentions and strategies.Guilmartin lists seven cues that a pause is in your best interest. It’s time to pause if you are thinking, feeling, or saying:
Professional Effectiveness and Personal Fulfillment
Not surprisingly, the equation references an all-important addend, humility. Humility should fuel your curiosity and drive the need to pause. Guilmartin explains that “in situations where you think you know enough, pausing to wonder what you don’t know is a vital, even game-changing leadership skill.”
The twelve practices are:
Of Related Interest:
Consider: Harnessing the Power of Reflective Thinking in Your Organization
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All In: It’s Culture that Drives ResultsIn the New York Times, Stephen I. Sadove, chairman and chief executive of Saks Inc., explains that it is culture that drives results:
It starts with leadership at the top, which drives a culture. Culture drives innovation and whatever else you’re trying to drive within a company — innovation, execution, whatever it’s going to be. And that then drives results.While we know that our most important resource is our people, it’s not so easy to get people “all in”—convincing people to “truly buy into their ideas and the strategy they’ve put forward, to give that extra push that leads to outstanding results.”
All In by Adrian Gostick and Chester Elton explains why some managers are able to get their employees to commit wholeheartedly to their culture and give that extra push that leads to outstanding results and how managers at any level, can build and sustain a profitable, vibrant work-group culture of their own. All In takes the principles found in their previous books—The Orange Revolution and The Carrot Principle—and expands on them and places them in a wider context.
They begin by explaining that it all rests on the “belief factor.” People want to believe, but given the fact that “failure could cost them their future security why shouldn’t they be at least a little dubious about your initiatives?” But belief is key. “As leaders we must first allow people on our teams to feel like valuable individuals, respecting their views and opening up to their ideas and inputs, even while sharing a better way forward. It’s a balancing act that requires some wisdom.”
To have a culture of belief employees must feel not only engaged, but enabled and energized. What’s more, “each element of E+E+E can be held hostage by an imbalance in the other two.”
The authors have created a 7 step guide to develop a culture where people buy-in:
Define your burning platform. “Your ability to identify and define the key “burning” issue you face and separate it from the routine challenges of the day is the first step in galvanizing your employees to believe in you and in your vision and strategy.”
Create a customer focus. “Your organization must evolve into one that not only rewards employees who spot customer trends or problems, but one that finds such challenges invigorating, one that empowers people at all levels to respond with alacrity and creativity.”
Develop agility. “Employees are more insistent than ever that their managers see into the future and do a decent job of addressing the coming challenges and capitalizing on new opportunities.”
Share everything. “When we aren’t sure what’s happening around us, we become distrustful….In a dark work environment, where information is withheld or not communicated properly, employees tend to suspect the worst and rumors take the place of facts. It is openness that drives out the gray and helps employees regain trust in culture.”
Partner with your talent. “Your people have more energy and creativity to give. There are employees now in your organization walking around with brilliant ideas in their pocket. Some will never share them because they don’t have the platform to launch those ideas on their own. Most, however, will never reveal them because they don’t feel like a partner in the organization.”
Root for each other. “Our research shows incontrovertible evidence that employees respond best when they are recognized for things they are good at and for those actions where they had to stretch. It is this reinforcement that makes people want to grow to their full shape and stature.”
Establish clear accountability. “To grow a great culture, you need to cultivate a place where people have to do more than show up and fog a mirror; they have to fulfill promises—not only collectively but individually.” And this has to be a positive idea.
Gostick and Elton explain that the “modern leader provides the why, keeps an ear close to those they serve, is agile and open, treats their people with deference, and creates a place where every step forward is noted and applauded.”
The authors skillfully examine high-performing cultures and present the elements that produce them. A leader at any level can implement these ideas to drive results. A great learning tool.
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The Power of HabitHabits will always be with us. Some good. Some bad. But how do you replace bad habits with good habits? More importantly, how often do we ask ourselves if what we are doing is really just a habit? We are less intentional than we think we are.
The Power of Habit. After reading it you will understand how habits are formed and what you can do about it. You will also look at habits in a new way. Habits infiltrate our organizations and become invisible forces to contend with that we never realized were there. Learning to spot them is key to our success. Consider the following story:
As a newspaper reporter in Baghdad, Duhigg heard about an officer conducting an impromptu habit modification program in Kufa, a small city ninety miles south of the capital.
He was an army major who had analyzed videotapes of recent riots and had identified a pattern: Violence was usually preceded by a crowd of Iraqis gathering in a plaza or other open space and, over the course of several hours, growing in size. Food vendors would show up, as well as spectators. Then, someone would throw a rock or bottle and all hell would break loose.In a sense, a community—your organization—is a giant collection of habits. Later, when Duhigg talked to the major, he said, “Understanding habits is the most important thing I’ve learned in the army.” “Once you see everything as a bunch of habits,” says Duhigg, “it’s like someone gave you a flashlight and a crowbar and you can get to work.”
A habit is the brain’s way of saving effort. Duhigg has broken the formation of habits into a three-step loop: the cue (“a trigger that tells your brain to go into automatic mode and which habit to use), the routine (“which can be physical, or mental or emotional”), and finally there is the reward (which helps your brain figure out if this particular loop is worth remembering for the future).
The key to remember here says Duhigg is that “When a habit emerges, the brain stops fully participating in decision making. It stops working so hard, or diverts focus to other tasks. So unless you deliberately fight a habit—unless you find new routines—the pattern will unfold automatically.”
Breaking habits down in this way makes them easier to deal with. If we can learn to identify the cues and rewards, we can change the routines. We can live life a bit more intentionally.
Duhigg shows how habits played a part in the success of Olympic swimmer Michael Phelps, Starbucks CEO Howard Schultz, and civil-rights hero Martin Luther King, Jr. He goes behind the scenes at Procter & Gamble, Target superstores, Rick Warren’s Saddleback Church, and NFL locker rooms. He explains how improving a single habit rippled out to improve an entire organization—Alcoa. Fascinating material to think about on many levels.
How much of what you do is on autopilot?
How much of what your organization does is on autopilot?
Of Related Interest:
Breaking Old Habits
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YESability: Driving Growth with Yes
In Business at the Speed of Now, author John Bernard says that there must also be a shift in the way we manage our organizations. “Centralized innovation and decision-making, the mainstays of the Mass Production era, simply cannot get results in a world where unlimited choice demands real-time response.” What is required is leadership at all levels—“one that enables employees at all levels to solve problems and seize opportunities autonomously and instantaneously.”
To navigate this shift from mass production to mass customization people need the freedom to sieve every opportunity to solve problems quickly and efficiently. This requires a move from what Bernard calls “then” thinking to “now” thinking. “Then relies heavily on centralized control and specialization, whereas now relies heavily on decentralized autonomous action.” It requires a YES mindset. It means “ensuring that the people who first encounter customer problems possess the tools, skills, information, and authority they need to say yes now—YESability.
YESability doesn’t mean anarchy. Bernard explains, “Replacing no with yes does not mean that from now on you give everyone permission to do whatever they want. You draw clear boundaries to establish order, and you provide language and methods people can use to solve problems. You become an enabler of action rather than an unwitting obstacle to performance.”
Every employee must be provided with five crucial elements:
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The Four Disciplines of Organizational HealthPatrick Lencioni believes that the single greatest advantage any company can achieve is organizational health. Unfortunately most leaders prefer to deal with the data-driven world of organizational intelligence. The problem is, without good organizational health, organizational intelligence is attenuated.
In The Advantage, Lencioni explains that “an organization is healthy when it’s whole, consistent and complete, when its management, operations, strategy and culture fit together and make sense. You know you have it when you have minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.” Additionally, the value of a healthy organization has a ripple effect that affects all who come into contact with it or its employees.
What does an organization have to do to become healthy? Creating a healthy organization is a rigorous endeavor. Lencioni has created a four disciplines model:
Discipline 1: Build a Cohesive Leadership Team
An organization simply cannot be healthy if the people who are chartered with running it are not behaviorally cohesive. In any kind of organization, from a corporation to a department within that corporation, from a small, entrepreneurial company to a church or a school, dysfunction at the top inevitably leads to a lack of health throughout.
Discipline 2: Create Clarity
In addition to being behaviorally cohesive, the leadership team of a healthy organization must be intellectually aligned and committed to the same answers to six simple by critical questions:
Discipline 3: Over-communicate Clarity
Once a leadership team has established behavioral cohesion and created clarity around the answers to those questions, it must then communicate those answers to employees clearly, repeatedly, enthusiastically and repeatedly (that’s not a typo). When it comes to reinforcing clarity, there is no such thing as too much communication.
As tempting as it may be, leaders must not abdicate or delegate responsibility for community and reinforcement of clarity. Instead, they have to play the tireless role of ensuring that employees throughout the organization are continually and repeatedly reminded about what is important.Discipline 4: Reinforce Clarity
Finally, in order for an organization to remain healthy over time, its leaders must establish a few critical, non-bureaucratic systems to reinforce clarity in every process—hiring, managing performance, rewards and recognition, employee dismissal—that involves people.
These disciplines may sound idealistic—and they are—but health is a matter of degrees. Any improvement will reap benefits. There will always be those that use "idealism" as an excuse to not make the effort; to find this all too remarkable to actually implement. Not surprisingly, the key is leadership. But it is a sacrifice.
If an organization is to get healthy, it must have the “genuine and active involvement of the person in charge. For a company, that’s the CEO. For a small business, it’s the owner. For the school, it’s the principal. For the church, it’s the pastor. For a department within a company, it’s the department head….The leader must be out front, not as a cheerleader or a figurehead, but as an active, tenacious driver.” Without the leader's commitment, this model will be sabotaged or seen as “career suicide.” The leader must support it and reward it.
Of Related Interest:
Being Smart is Not Enough
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Being Smart is Not EnoughThe Advantage:
In this world of ubiquitous information and nanosecond technology exchange, it’s harder than it has ever been in history to maintain a competitive advantage based on intelligence or knowledge…..I have become absolutely convinced that the seminal difference between successful companies and mediocre or unsuccessful ones has little to do with what they know or how smart they are; it has everything to do with how healthy they are.He reasons that healthy organizations can get smart over time as they are quick to learn from experience and each other, but smart organizations don’t necessarily get healthier by virtue of their intelligence. In fact, it often stands in their way as they are not as open to learning. “The key ingredient for improvement and success,” writes Lencioni, “is not access to knowledge or resources, as helpful as those things may be. It’s really about the health of the environment.”
Healthy organizations are able to tap into more of their collective knowledge and use it. “Most organizations exploit only a fraction of the knowledge, experience, and intellectual capital that is available to them. But the healthy ones tap into almost all of it.”
In short, what Lencioni is talking about is a component of humility: teachability. Teachability plays a huge role in determining the health and consequently the success of an organization. Unhealthy organizations are hindered by politics, confusion, and low morale, resulting in low productivity and high turnover.
Next time we’ll look at what an organization has to do to become healthy.
Of Related Interest:
The Four Disciplines of Organizational Health
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Grow: Taking Your Purpose to the Next Level
Starbucks must make great coffee, but it must do more if it is to attract people and innovate in ways that make life better for the people they serve both inside and outside the organization. “It’s necessary,” writes Stengel in Grow, “to want to be the best-performing enterprise around, with the highest standards, the best people, and the most satisfied customers. However, this simply doesn’t aim high enough and look far enough ahead. To hit higher targets and stay out in front of the competition requires an ideal.”To that end, Starbucks also exists to create connections for self-discovery and inspiration. It’s what fuels passion and creates meaningful work.
“A brand ideal of improving people’s lives is the only sustainable way to recruit, unite, and inspire all the people a business touches, from employees to customers.” Stengel believes that a higher-order brand ideal must improve people’s lives in one of five fields of fundamental human values:
Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility; create moments of happiness that engage our thoughts and emotions as well as our physical senses. (Coca-Cola, Zappos, Lindt)
Enabling Connection: Enhancing the ability of people to connect with one another and the world in meaningful ways. Key concepts in this field are connect, listen, reach, and community. (Airtel, Fed Ex, Blackberry, Natura)
Inspiring Exploration: Helping people explore new horizons and new experiences. Helps customers learn, gives them powerful tools, and invites them to reinvent themselves and their world. (Apple, Discovery Communications, Pampers, Red Bull)
Evoking Pride: Giving people increased confidence, strength, security, and vitality; supporting self expression and inspiring passion. (Calvin Klein, Heineken, L’Occitane)
Impacting Society: Affecting society broadly, including by challenging the status quo and redefining categories. (Accenture, IBM, Method, Seventh Generation)
Stengel’s bases his conclusions on a ten-year growth study involving 50,000 brands. The study tracked the connection between financial performance and customer engagement, loyalty and advocacy. The result was “The Stengel 50.” In the 2000’s, an investment in these companies would have been 400 percent more profitable than an investment in the S&P 500. “If you’re willing to embrace the same concept and align your business with a fundamental human ideal, you can achieve extraordinary growth in your own business and your own career. My research shows that your growth rate can triple.”
As a side note, whether or not the study suffers from the Halo Effect is beside the point. Stengel’s point is good psychology. Success is more complex than any one factor. More good decisions than bad (intelligent people make dumb mistakes too), timing and luck all play a part too. And then great companies get off track, not because they were doing the wrong thing, but because they stop doing them or failed to adapt appropriately. The ideas presented in Grow are what worked for Stengel for the time he was at Procter & Gamble and properly applied may work for you too. Generally, if it is based on sound principles, it’s always worth consideration. And Sengel’s ideas are.
One implication of the study is interesting. Stengel reports that the “study challenged P&G’s paradigm of moving people around frequently. The companies that were growing the fastest had a different paradigm. In recruiting and hiring they looked for people whose values fit with their brands, and tended to keep people working in the same areas for much longer.”
He categorizes the people that run The Stengel 50 as business artists. “The fastest-growing businesses in the world have a leader whose relationship to the business is not primarily that of an operator, no matter how savvy, but an artist whose primary medium is an ideal.”
The business case for ideals is about playing a role in the lives of both customers and employees at a much more important level than the competition does. It’s about connecting with people holistically: rationally and emotionally, left brain and right brain.Stengel recommends that you continually ask four questions: How well do we understand the people who are most important to our future? What do we and our brand stand for? What do we want to stand for? How are we bringing the answers to these questions to life?
The power is in the answers and executing against them. What is your primary purpose? What do the people you serve care about beyond what they buy from you? Could you benefit from discovering your higher ideal?
Of Related Interest:
Lead With Purpose
Leadership: Artistry Unleashed
5 Leadership Lessons: Artistry Unleashed
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Lead With PurposeWithout a clear sense of purpose, organizations become listless. John Baldoni says in Lead With Purpose that it falls to the leader to make certain that organizational purpose is understood and acted upon. Retired Army colonel, George Reed told Baldoni that the importance of this cannot be underestimated:
I don’t think you can hit purpose enough as a senior leader. It is one of those things that can be undercommunicated by an order of magnitude. You cannot oversell, overpronounce “Here’s why we’re here.”The problem is that leaders think that they have communicated it enough, but the urgencies of the day cause people to forget their original intentions and their passion. It causes leaders to forget too. Repetition is essential. Baldoni states:
How well leaders use purpose to create the vision, mold the mission, and shape the values will serve as a testament to their ability to bring people together for a common cause.It may begin with an explanation of what the organization does, says Baldoni, but it is vital that it be linked to the organizational culture and values. That means having clear-cut, definite goals, putting people first, and importantly, reducing purpose to a simple and memorable statement.
Make purpose a central focus. Organizations that succeed are those that know where they are headed and why. Leaders of purpose tap into the power of narrative to help employees make sense of adversity and have faith in their organization’s ability to not just survive, but continually adapt and thrive.
Instill purpose in others. Prioritize people. People have to know what they are doing and why they are being asked to do it. To cultivate and leverage high-performing people, emphasize mission, values, creation, collaboration, and execution, establish clear expectations for behavior, and embrace the credo: “Honor the workforce.”
Make employees comfortable with ambiguity. Purpose can provide clarity in unsettled times. Leaders who find clarity in chaos, practice the virtues of pragmatism, and teach critical thinking skills will make living with uncertainty easier for their people—and themselves.
Turn good intentions into great results. Even in a tough world and a people-sensitive company, it’s a bottom-line fact: the work still has to get done. Leaders of purpose balance creativity with practicality; keep a firm eye on efficiency, effectiveness, and accountability; and strive to instill ownership in every individual worker.
Make it safe to fail (as well as prevail). Reasonable risk, daring to try something radical while keeping a grip on what works and what doesn’t, is critical to every breakthrough success. Leaders of purpose explore the impetus for change—reason, urgency, action—before leaping; respect their people’s resourcefulness; and handle setback with grace.
Develop the next generation. Few senior business leaders will be in their current jobs five or ten years from now. Leaders of purpose prepare their people for a future beyond them by hiring with care, developing capable, competent employees who are able to rise to challenges and seize opportunities; and enabling others to lead.
Prepare yourself. Purposeful organizations need leaders who know themselves first; have the inner compass that points them in the right direction. Many leaders never take the time to do so. Take time to reflect on what you want to do, why you want to do it, and how you will do it.
Baldoni says to define purpose, you want to ask three questions:
What is our vision? Vision emerges from the sense of purpose. It forms the why, but it also embraces the future as in “to become” the best, the most noted, the highest quality, or the most trusted.
What is our mission? Your mission is the what of an organization; what it does.
What are our values? Neither vision or mission mean much if they are not reinforced by strong values. Values shape the culture. Values enforce the behaviors that employees cherish.
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Managing With a ConscienceWe handicap our potential when we think we have to exploit others to get ahead. Succeeding is not a zero-sum game. We don’t look better when everyone else looks worse.
Managing with a Conscience, that the only sustainable way to succeed is the right way—not cutting corners—emphasizing the intangibles like trust, creativity, focus, speed, flexibility, relationships, loyalty, and employee commitment. While not readily measureable, they can make or break leaders and organizations. Sonnenberg believes that leaders who have a jaded view of intangible assets will never make the commitment required to reap their full potential.
Sonnenberg discusses at length, nine critical success factors that need to be built into the organization:
Employees have the right to approach management. Management should announce an open-door policy. But announcing is not enough. Employees should feel comfortable approaching management. Ask yourself if you’re in your office long enough to be approached. Are you available at convenient times or only at 7:00 a.m.? Has your administrative assistant done everything to screen you from “outsiders” except put barbed wire outside your office? When a concern was brought to your attention, in confidence, did you divulge any part of the information? Do you just go through the motions of listening? It is up to you to take the initiative and get out of your office to meet with employees. Been seen on a regular basis so people don’t think you’re avoiding them.Sonnenberg writes, “If your organization isn’t focused, someone is probably undoing something you just completed.” How true. As he notes, when people don’t know or understand the organizational purpose, they end up going in different directions, often competing with each other. And this is true in the social media environment, too. It is not unusual to see social media participants undoing an organization’s values and beliefs because they simply don’t understand them or can’t live them. They create conflicting messages that undermine the purpose of the organization.
“The costs to society,” writes Sonnenberg, “of everyone acting like random molecules bouncing off one another is just too great. We have no time to think about what is important. We judge someone’s worth by what we see on the outside rather than their inner worth. We envy someone who has achieved success without thinking about what they did to earn it.” We can change that, if we begin with our own example first.
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Doing More With Less
Mark Royal and Tom Agnew of the Hay Group, explain that The Enemy of Engagement is frustration caused by a highly engaged employee’s inability to succeed in a role due to organizational barriers or the inability to bring the bulk of his or her talents, skills, and abilities to the job. Ironically, the more engaged they are, the more frustrated they get because they care more.
“Doing more with less doesn’t mean conjuring higher levels of motivation out of thin air, but rather allowing motivated employees to perform at their best. It’s about harnessing and unleashing the full potential of frustrated employees—those who want to give their best but can’t due to organizational barriers and constraints.”
Typically we associate better engagement with leadership, but what drives it is better management. Fixing engagement means dealing with the frustration of thwarted employees. Specific management practices detailed by the authors include:
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Great by Choice
In Great by Choice, the authors rightfully assert that we have entered an extended period of uncertainty and turbulent disruption that might well characterize the rest of our lives. The question then is, what is required to perform exceptionally well in such a world?
For their study, the authors chose a set of major companies that achieved spectacular results over 15 or more years while operating in unstable environments. They call these companies "10Xers" for providing shareholder returns at least 10 times greater than their industry. Then the authors compared those companies—Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, Stryker—to similar, but less successful, "control" companies: Genentech, Kirschner, AMD, Apple, Safeco, PSA and United States Surgical.
These 10Xers didn’t survive on chaos, they survived in chaos. They achieved spectacular results not because they experienced different circumstances, but because they displayed very different behaviors. 10Xers shared a set of behavioral traits—fanatic discipline, empirical creativity, and productive paranoia—all held together by a central motivating force, Level 5 Ambition—the passion for a cause larger than themselves and infused with the will to do whatever it takes to make good on that cause.
Fanatic Discipline: Extreme consistency of action. Don’t overreact to events.
Empirical Creativity: Bold, creative moves from a sound empirical base.
Productive Paranoia: Highly attuned to threats and changes especially when things are going well. Fear and worry is channeled into preparation, contingency plans, buffers and margins of safety.
10X Leadership Behaviors
20-Mile March: This is the discipline to stay the course in both good times and bad. This means maintaining a lower bound and an upper bound, a hurdle that you jump over and a ceiling that you will not rise above, the ambition to achieve and the self-control to hold back. A 20-Mile March provides a tangible point of focus that keeps you moving forward.
Fire Bullets, then Cannonballs: 10Xers increase their luck by firing lots of bullets instead of a big un-calibrated cannonball. The underlying principle is, be creative, but validate your creative ideas with empirical experience.
Leading above the Death Line: 10Xers build in buffers because the only mistakes you can learn from are the ones you survive. They zoom-in and zoom out to manage risk and recognize luck.
SMaC: Specific, Methodical and Consistent. Tactics change from situation to situation, whereas SMaC practices can last for decades and apply across a wide range of circumstances. “Steve Jobs didn’t so much revolutionize the company as he returned it to the principles he’d used to launch the company from garage to greatness two decades earlier.” There is always the struggle to find the balance between continuity and change. I find too many are wedded to one ditch or the other.
Certainly luck plays a part. The authors found that the difference between the 10X companies and the comparison companies wasn’t the good or bad luck they got, but what they did with it. Key comment regarding luck: “If the ratio of head to tails tends to even out over time, we need to be skilled, strong, prepared, and resilient to endure the bad luck long enough to eventually get good luck.” Mountain climber “Malcom Daly had to be lucky enough to survive the fall, but he also had to be strong, skilled, and resilient before the 44 hours of peril after his two-hundred-foot fall.”
The organizations they studied were paranoid about chance events and complex forces out of their control, but they focused on what they could do, seeing themselves as ultimately responsible for their choices and accountable for their performance—no matter what the sequence of coin flips.
A thought provoking book that, like Collin’s other work, takes us back to basics. In conclusion they ask:
When the moment comes—when we’re afraid, exhausted, or tempted—what choice do we make? Do we abandon our values? Do we give in? Do we accept average performance because that’s what most everyone else accepts? Do we capitulate to the pressure of the moment? Do we give up on our dreams when we’ve been slammed by brutal facts?
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5 Leadership Lessons: EntreLeadership
Dave Ramsey defines EntreLeadership as “the process of leading to cause a venture to grow and prosper.” Entreleaders know how to blend their entrepreneurial passion with servant-like leadership that motivates employees through persuasion instead of intimidation. EntreLeadership is a book about how business works from a practitioner. His advice, on nearly every facet of running a business, is based on solid principles. Here are just a few of his thoughts on leadership:
The very things you want from a leader are the very things the people you are leading expect from you. You must intentionally become more of each of these every day to grow yourself and your business. And to the extent you’re not doing that, you’re failing as a leader.
You want to know what is holding back your dreams from becoming a reality? Go look in your mirror. The good news is, if you’re the problem, you’re also the solution.
How do you begin to foster and live out this spirit of serving your team with strength? Avoid executive perks and ivory towers. Eat lunch with your team in the company lunchroom every day. Get your own coffee sometimes. No reserved parking spots. Look for the little actions you can take that say to your team that while you are in charge, and while you lead from strength, you are all in this together.
While persuasional leadership takes longer and takes more restraint at the time, it is much more efficient over the long haul. Positional leadership doesn’t take as long in the exchange, but you have to do it over and over and over and over.
Too many people in business have abandoned sight of the fact that their team members are humans, they are people. Too many people in business have become so shallow that they are merely transactional, not relational. The people on your payroll are not units of production, they are people. They have dreams, goals, hurts, and crises. If you trample them or don’t bother to engage them relationally you will forever struggle in your operations.
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Are You Up, Down, or Sideways?There are no guarantees in life. We can be proactive, but there are some things that are completely outside of our control. So if we can’t be proactive on everything, we can, Mark Sanborn suggests, be interactive. We must learn how to interact with the forces in our life that are bigger than we are to create the outcomes we desire. No matter where we are—up, down, or sideways—there are things we can do to mitigate the downs, take advantage of the ups and maximize the sideways times in our life.
Up, Down, or Sideways by Mark Sanborn is a thoughtful book born of experience and based on sound principles. It would be a mistake to think of this as another business book. It is, in fact, a life book that will deeply impact your business.
To be interactive, you first need to define your scorecard for success. Most people don’t live the life they imagined because “they are stuck using a scoring system that doesn’t fit the game they want to play.” Sanborn guides you in developing a scoring system that is meaningful, long-term, and personal.
Besides a clear scoring system, your success also depends on your attitude. You must develop an optimistic attitude. “The way you look at yourself and the world around you affects your success regardless of the circumstances.” We can choose what we focus on.
Another important mindset is that of the lifelong learner. “The more you learn, the more prepared you are for whatever comes your way. And the more you learn, the more you develop behavioral flexibility that provides a distinct advantage over your competition.”
Sanborn offer six methods to succeed when times are Up, Down, or Sideways.
Certainly this is an important book for these times, but this book is meant to help your thrive no matter what life throws your way. You need this book—young people need this book—to prepare for the rest of your life, whether you are Up, Down, or Sideways. Read, reread, and refer.
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5 Leadership Lessons: Good Strategy, Bad Strategy
Richard Rumelt has written an insightful book on developing the ability to identify and develop good strategy. Good Strategy, Bad Strategy is obviously the result of decades of practice developing strategy and the many case studies and classroom interactions made it personal and very readable.
We’ve all been there. The big conference room as the lights dim and the Power Point slides begin. We sit attentively as the leader steps to the podium to tell us something like: “Going forward we will attain global leadership in our markets, increase revenues and profits ten percent, rationalize our supply chain and eat the competition’s lunch by taking huge chunks of market share—all based on one of the world’s most highly talented work forces for whom success is never quitting until you win.”When it comes to strategy, we have gotten off-track into thinking that fluffy platitudes, goals, motivational slogans, and wishful thinking are the same thing as strategy. As a result, we don’t get the intended results. “Bad strategy,” says Rumelt, occurs when there is bad doctrine, when hard choices are avoided, and/or when leaders are unwilling or unable to define and explain the nature of the challenge. Here are some key ideas from this classic on strategy:
A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them. Strategy must contain action. Winging it is not a strategy.
A talented leader identifies the one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action and resources on them.
Organizations experience significant entropy—the continual drift towards disorganization. Much of the useful work of managers and consultants is maintenance—the constant battle against entropy. Strategists must battle this never-ending drift towards disarray within their own organization. And they must try to exploit the disarray of their rivals.
Every organization faces a situation where the full complexity and ambiguity of the situation is daunting. An important duty of any leader is to absorb a large part of that complexity and ambiguity, passing on to the organization a simpler problem—one that is solvable.
A good strategy has, at a minimum, three essential components: a diagnosis of the situation, the choice of an overall guiding policy, and the design of coherent action. Many attempts at strategy lack a good diagnosis. As the star of most consulting engagements, the client wants an appraisal of a particular course of action or wants advice on what to do. I almost always back up and try to create a better diagnosis of the situation before getting into recommendations.
Of Related Interest:
The Four Hallmarks of Bad Strategy
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The Four Hallmarks of Bad StrategyGood Strategy, Bad Strategy, Richard Rumelt says that bad strategy “grows out of specific misconceptions and leadership dysfunctions.” In short it is goals and not action. “It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impracticable. It uses high-sounding words and phrases to hide these failings.”
To detect a bad strategy, Rumelt suggest looking for one or more of its major hallmarks:
Fluff. Fluff is a form of gibberish masquerading as strategic concepts or arguments. It uses “Sunday” words (words that are inflated and unnecessarily abstruse) and apparently esoteric concepts to create the illusion of high-level thinking. Make it simple.
Failure to face the challenge. Bad strategy fails to recognize or define the challenge. When you cannot define the challenge, you cannot evaluate a strategy or improve it. If you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.
Mistaking goals for strategy. Many bad strategies are just statements of desire rather than plans for overcoming obstacles. Bad strategy is long on goals and short on policy or action. Strategic objectives should address a specific process or accomplishment, such as halving the time it takes to respond to a customer, or getting work from several Fortune 500 corporations. An excerpt from Rumelt’s response to a client that had a “strategy” that was long on goals and short on actions, is instructive:
If you continue down the road you are on you will be counting on motivation to move the company forward. I cannot honestly recommend that as a way forward because competition is not just a battle of wills; it is also a competition over insights and competencies. My judgment is that motivation, by itself, will not give this company enough of an edge to achieve your goals.He explained that “when a company makes the kind of jump in performance your plan envisions, there is usually a key strength you are building on or a change in the industry that opens up new opportunities.”
Bad strategic objectives. A strategic objective is set by a leader as a means to an end. Strategic objectives are “bad” when they fail to address critical issues or when they are impracticable. The purpose of good strategy is to offer a potentially achievable way of surmounting a key challenge. If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.
Of Related Interest:
5 Leadership Lessons: Good Strategy, Bad Strategy
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Why Are You on Twitter?Twitter for Good: Change the World, One Tweet at a Time to do just that.
Claire says that Twitter is effective as a tool to coalesce your message, make a difference and create a movement. She has developed a framework—not surprisingly called T.W.E.E.T.—to help you build and effectively promote cause-based campaigns.
Target. Why are you on Twitter? The three most common targets or goals are:, information accounts, personalized accounts, and fundraising accounts. Which one you choose sets the tone of your tweets. Claire recommends choosing a personalized account if “you do not have a dedicated staff member who can devote a set amount of time to finding and culling important information about your cause.”
Write. The important thing is to get going without over editing. Fail fast. Who should write the Tweets? “The audience is savvy, and users who are not authentic are drowned out and their audience stops listening.” How often should I Tweet? Claire says that’s a highly contested answer. She offers a host of answers from Twitter “experts.” You’re sure to find an answer and rational that you can be comfortable with.
Engage. Connect with others so you’re not tweeting in a bubble or you won’t get your organization where you need it to be. “Connecting your Tweets with existing relevant information that people are already viewing on Twitter—or making your own Tweets the relevant information that others are looking for—should be your goal.” Use #hashtags to identify your Tweets as part of a group of like-minded Tweets. Use lists to follow the relevant Tweets of others—even if you are not following them. Retweet but fill your timeline with them. She notes, “If one follower retweets every Tweet your organization writes, their recommendation for you holds less weight.”
Explore. Find new people. Twitter is about relationships.
Track. See how it’s working by tracking your progress. Claire offers a list of over 30 potential points to measure to see if you are getting noticed.
Claire writes, “Learning to use Twitter well is not a science, but an ongoing lesson.” Fail fast and explore.
More information can be found on the web at: hope140.org and Twitter4Good You can find Claire at ClaireDiazOrtiz.com or via @claired on Twitter.
And yes, you can find us (me) on Twitter via @leadershipnow.
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Ownership ThinkingOwnership Thinking is about developing leaders at all levels. “Fundamentally,” writes author Brad Hams, “Ownership Thinking is about moving employees away from the ‘me’ way of thinking and towards concerns of the business and its financial performance.” This is leadership thinking in a business setting.
When people understand the business, their role in it, and are informed of what is going on and take responsibility for the outcomes, then they become better stewards of the company’s resources and help to create wealth. Hams has found that the vast majority of people “want to engage and contribute, and feel much better about themselves when they have the opportunity to do so … and they have the capacity to do so.”
We often frustrate that effort and create cultures of entitlement because, in the words of Judith Bardwick author of Danger in the Comfort Zone, “managers are unwilling to do the work of requiring work.” Hams says his mission in life is to eradicate habits of entitlement in organizations.
People who actually produce things do so primarily for two reasons: (1) They have a strong work ethic. In other words, they have to believe that rewards come only with hard work, and (2) They enjoy producing. It is exciting for them, and the reward for producing is not only the things they are able to afford as a result of it, but the personal growth and sense of worth that come from producing: that is, true self-esteem.A workforce that is helping to create wealth should be able to participate in the wealth they are creating. However, incentive plans should be self-funding and “it is the obligation of ownership and leadership to teach them how to do that and to provide them with them tools and training necessary to accomplish the task.”
Simply put, your employees need to know what’s going on. In a chapter entitled, Your Employees Think You Make Wheelbarrows of Money, Hams relates that when he asks the question: “Your company had 12 million in sales last year, what do you think the profit was?” it is not uncommon to hear 50% from employees of companies where financial information is not shared or business acumen taught. “In the absence of information, people make stuff up.”
Generally speaking, the people with the greatest understanding and expertise in any given area are the people who are actually doing the work, and these people are not necessarily management. For an organization to achieve excellence, it must engage all of its organization members.Ownership Thinking is a how-to book. Hams explains how to create incentive plans that work (plans that clearly align employees’ behavior to the organization’s business and financial objectives), how to teach financial skills (how the company makes money and how they add - or take away – value), creating the right performance indicators, rapid improvement plans and how to implement Ownership Thinking for the long-term. “Practicing Ownership Thinking will allow you, as an owner or leader, to rest easier knowing that your employees are making decisions and taking actions that are aligned with what you would do yourself.”
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Information Overload and What You Can Do About It
Knowledge workers think for a living to varying extents, depending on the job and situation, but there is little time for thought and reflection in the course of a typical day. Instead, information—often in the form of e-mail messages, reports, news, Web sites, RSS feeds, blogs, wikis, instant messages, text messages, Twitter, and video conferencing walls—bombards and dulls our senses.Consider this: A 30-second interruption can result in as much as 5 minutes of recovery time. In total, interruptions plus recovery time consume as much as 28% of the knowledge worker’s day.
Basex, a research firm focusing on issues companies face in the knowledge economy, explains in Overload! why we are in the state we are in and what steps we can begin to take to better manage it.
Even as dry as information tends to be, this is an absorbing book. Spira claims that the changes in how we use and view information that will happen over the next 50 years will not only reshape the globe but turn it inside out. Today, information overload costs the U.S. economy a minimum of $900 billion per year in lowered employee productivity and reduced innovation.
To manage successfully in the knowledge economy, we must recognize key differences in how knowledge workers work. Their tasks can be categorized into six overarching tasks: searching, creating content (sometimes re-creating), thought and reflection, sharing knowledge, and networking. Interestingly, a 2010 Basex study found that of these tasks, knowledge workers only spend only 5% of the day engaged in thought and reflection. The one task that is essential for all the rest we spend so little time performing. We must allow [require] workers more time for thought and reflection if they are to be more productive, efficient, and effective.
Too much information without reflection can stall our productivity. It affects our ability to manage thoughts and ideas, contemplate and even to reason and think. We develop a state of what has been termed, continuous partial attention; to give only partial attention continuously. Science writer Steven Johnson described it this way:
It usually involves skimming the surface of the incoming data, picking out the relevant details, and moving on to the next stream. You’re paying attention, but only partially. That lets you cast a wider net, but it also runs the risk of keeping you from really studying the fish.Researcher Linda Stone adds this:
It is motivated by a desire to be a LIVE node on the network. Another way of saying this is that we want to connect and be connected. We want to effectively scan for opportunity and optimize for the best opportunities, activities, and contacts, in any given moment….It is an always on, anywhere, anytime, any place behavior that involves an artificial sense of constant crisis. We are always on high alert when we pay continuous partial attention.
Although there are tens of thousands of things we could do says Spiria, he offers ten tips that, when observed, will help lower information overload for everyone:
Consider: Harnessing the Power of Reflective Thinking in Your Organization
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5 Leadership Lessons: What Went Wrong? Car Guys vs. Bean Counters
In Car Guys vs. Bean Counters, legendary auto executive Bob Lutz gives an eye-opening account about what went wrong in the U.S. auto industry, with details of behind the scenes activities. He puts “numbers” in perspective. Too often they are used to overrule common sense. “Where,” Lutz asks, “is the business school that preaches, above all, acceptance of the obvious, simplicity, and that uncommon virtue, common sense?” He talks about the things that distracted GM and others from doing what had made them successful and can distract us too.
It really boils down to a matter of focus, priorities, and business philosophy. Leaders who are predominantly motivated by financial reward, who bake that reward into the business plan and then manipulate all other variables to “hit that number,” will usually not hit the number, or, if they do, then only once. But the enterprise that is focused on excellence and on providing superior value will see revenue materialize and grow, and will be rewarded with good profit.
A senior executive who needs a quantified list of objectives to know what he or she should be working on should not be a senior executive in the first place.
One curious cultural characteristic I encountered at GM was an exaggerated respect for authority, with the acceptance of everything uttered by the CEO and other senior leaders as infallible gospel. It is bred into the system. Senior people are seen as being in possession of some superior wisdom, to be revered if not downright feared. The reality is that the company’s most senior executives are just people who happen to get promoted and who daily face the insecurity of wondering if they are doing the right thing. The good leader deals with that insecurity by putting forth his or her ideas, then letting subordinates dissect and critique them.
There were hundreds, maybe thousands of these sacred do’s and don’ts embedded in the engineering culture … a culture that was inwardly focused in pursuit of its own goals, with the customer left out of the equation. [Is there anything that we are doggedly pursuing without regard to the actual impact it is having on our intended audience? If it only makes sense to us, it may not be making sense at all.]
The problem lies, as it so often does, in the deliberate intellectualizing of a very simple task: creating and selling a meaningfully superior product or service to the public. It’s not rocket science…. The business schools should be asking themselves how and why it all went wrong. They have produced generations of number-crunching, alternate-scenario-loving, spreadsheet-addicted idiot-savants. They should be ashamed.
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Fixing the Game: What Capitalism Can Learn from the NFLDean of the Rotman School of Management, Roger Martin, states in Fixing the Game, "We haven’t looked deeper into blameworthy CEO behavior to understand what really caused it. We haven’t examined the broader theories that underpin our economy and that informed all of those ineffective fixes after the last crash. Instead, we’ve looked for a new scapegoat, chosen to operate from the same fundamental theories, and doubled down on the same fixes."
THE STORY BEGINS
In 1976, Harvard finance professor Michael Jensen and Dean William Meekling of the Simon School of Business at the University of Rochester published a paper entitled Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure [PDF]. They had no way of knowing that it would form the prevailing theory regarding the role of the firm and proper compensation in our society today.
The paper argued that the “way to spur executives to best perform their duties in the real market [the world in which factories are built, products are designed and produced and sold, expenses are paid and real dollars of profit show up on the bottom line] was to make their pay significantly dependent on the performance of the company in the expectations market [the world in which shares in companies are traded between investors].” To do this, executives should be compensated with stock and in effect, make them both shareholders and executives. In 1970, in stark contrast to today, stock-based incentives accounted for less than 1 percent of CEO remuneration.
That theory, says Roger Martin, “had the unfortunate effect of tightly tying together two markets: the real market and the expectations market.” In Fixing the Game, Martin notes that something similar happened in the NFL. In the NFL there is the real market when teams take to the field to play a game. Real touchdowns and real field goals are scored. And there is the expectations market: gambling. “Gamblers try to guess who will win a given game on a given Sunday and place bets based on that expectation.” The bets are balanced on either side through the use of a point spread which is similar to stock price in business.
WHAT THE NFL DID
“But unlike American capitalism, the NFL looked thoughtfully at the relationship between the real game and the expectations game and identified a serious danger….They clearly saw that the pressures of the expectations game could do serious damage to the real game…it could destroy the sport….[they] have enforced a strict separation between the real market and the expectations market…exactly the opposite of the way we have managed it in business.”
Martin thinks we could take a lesson from the NFL. We need to quite asking executives to do what they cannot do: beat the expectations forever. “Expectations will get ahead of anything you can actually accomplish” and thus encouraging executives to engage in “point shaving” or “tanking” to cover the spread. “Since 1976, the incidence of large-scale accounting fraud by public companies has increased dramatically. Why? Because executives have millions of reasons to do whatever they can to increase expectations of future earnings.”
To fix the game, Martin says we have to shift the focus of companies back to the customer and away from shareholder value; eliminate stock-based compensation; fundamentally rethink the role and structure of boards; regulate and manage expectation market players more effectively; and executive need to take on a more expansive and positive view of the role of for profit companies in society.
American capitalism has embraced a persuasive but ultimately flawed theory to construct their understanding of the economy, the model of executive compensation and the role of business. Our single-minded focus on the expectations market is driving us from crisis to crisis with ever-increasing volatility. Martin skillfully defines the problem and points out why and how we might begin to fix it.
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7 Guiding Principles for Developing Leadership TalentPeople deliver numbers. If you want the numbers, you need the people. As a leader you need to know how to judge raw human talent. In The Talent Masters, Bill Conaty and Ram Charan explain how to do it.
To develop talent, you need to become intimate with your people; to know the essence of each individual. Talent masters can identify a person’s talent more precisely than most people simply because they excel at observing and listening. And they institutionalize this skill to create their own supply of good judges. It simply must become part of the culture.
Talent development is not an event. It is a process. To make it sustainable it must become part of the culture. And no one needs to understand that more than the CEO. When you have an organization devoted to a person, you have a cult. When you have an organization devoted to a set of principles and values, you have a culture. Developing people simply must be a priority from the top down. That leads us to Conaty and Charan’s first principle of the talent masters:
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4 Lessons from the Toyota Crisis“Crisis response must start by building a strong culture long before the crisis hits,” say Jeffrey Liker and Tim Ogden, authors of Toyota Under Fire.
Turning crisis into opportunity is all about culture. It’s not about PR strategies, or charismatic leadership, or vision, or any specific action by any individual. It’s not about policies or procedures or risk mitigation processes. It’s about the actions that have been programmed into the individuals and teams that make up a company before the crisis starts.The accident in August 2009 that took the lives of four people in a runaway Lexus brought national attention to Toyota. Fueled by innuendo and speculation by Congress and some media, it escalated into something it was not. Toyota Under Fire deals with not only the massive recall of 2009-2010, but also Toyota’s response to the oil crisis and recession. Toyota’s response has not been typical, but it does follow the Toyota Way. It is a reflection of their culture. That way includes what is probably Toyota’s “greatest contribution to the world as a model of real continuous improvement” at and by all levels in the organization. Liker and Ogden describe the Toyota Way as:
Face challenges with a clear head and positive energy. Hold fast to your core values and your vision for the company. Always start with the customer. Understand the problems that you face by analyzing the facts, including your own failings, and understanding the root causes. Thoroughly consider alternative solutions, then pick a path, develop a detailed plan, and execute with discipline and energy.“You do not turn a culture off and on again like a light switch.” Culture—like character—is built over decades of living your values in the real world. And then in a crisis, when you really need it, it is there to carry you through. The authors isolated four lessons for dealing with a crisis:
Lesson 2: A Culture of Responsibility Will Always Beat a Culture of Finger-Pointing. Common sense? Yes, but the question is how far do you go in accepting responsibility? What if the factors were beyond your control? The answer illuminates an important nuance in understanding Toyota’s culture of responsibility and problem solving. “There is no value to the Five Whys [belief that you have to ask why at least five times] if you stop when you find a problem that is outside of your control. There will always be factors outside of your control. When you reach a cause that is outside of your control, the next why is to ask why you didn’t take into account forces outside of your control—either by finding an alternative approach or by building in flexibility to adjust to those forces.”
Lesson 3: Even the Best Culture Develops Weaknesses. The greatest threat to a culture of continuous improvement is success. “To survive the weaknesses that inevitably develop, a corporate culture has to have clear and objective standards, codified in such a way that self-correction is possible. Having a culture that recognizes a loss of direction is absolutely critical to long-term survival.”
Lesson 4: Globalizing Culture Means a Constant Balancing Act. The clarity of Toyota’s culture and values is essential to growing the culture in every employee. And there is a balance to strike—balance between centralized and decentralized, local and global—that is not easy. “There is an inherent demand here that especially the people who are at the margins, at the periphery of the organization, be deeply steeped in the culture, and that they are to be trusted to make decisions because they are at the gemba.” One of the root causes of the crisis they identified was centralized decision making. They will now pursue a regionalization strategy which will require trusting the leaders they have trained to maintain the culture.
Toyota Under Fire is an in-depth look at the value of having a strong culture that can serve you when things go south. The discussions explaining the reasoning behind why Toyota does what it does were very helpful. They demonstrate that the most important decisions are the ones made before the crisis. And then when the crisis hits, return to basics. Go deeper and wider.
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Got Drama?You can’t stop The Drama. There will always be drama.
Stop Workplace Drama. “The amount of time you stay in the drama—and the effort you put toward it—is the problem. Complaints, excuses, and regrets only serve to keep the drama alive.” Your drama—what you add to The Drama—is the problem.
Chism defines drama as “any obstacle to your peace and prosperity.” Drama is the result of not recognizing or taking care of the little signs of bigger problems when they first presented themselves. At the core of drama you will find one of three common elements (if not all three): a lack of clarity, a relationship issue, and/or resistance. So, says Chism, when you experience drama you need to ask yourself three questions:
1. Where am I unclear?
2. What is my relationship issue?
3. What am I resisting?
Chism presents eight principles for dealing with drama, but “lack of clarity” struck me as the most common and excuse-laden trap there is. Too often this is where we get stuck.
When we first set a goal we’re clear. In her terms, “we see the island.” But between here and there the process become difficult and someone on your team becomes unhappy, and, “instead of focusing on the island we are trying to reach, we’re now concentrating on pleasing the one person who is upset. Our focus has shifted because we became confused about our number one priority.” And the fog rolls in.
“Any type of discord, abuse, confusion, or game-playing always boils down to a lack of clarity.” A loss of focus.
Sometimes we create drama because we want something on our terms. We imagine that we can’t do something because we can’t do it the way we think it should be done—our way. Chism relates a clarifying example of this with the recently divorced Joe who is having visitation issues with his ex-wife Patty. She’s not letting him do what he wants in the way that he wants.
Many people get stuck in the drama of what should or shouldn’t be. Yes, you can fight that battle, if winning a battle is what you want. But again, in order to clear the fog and help Joe get clarity, I asked, “If there are two islands you can go to, and one means winning a battle with your wife and the other island is getting to see your kids and be a father to them—then which island would you choose?”This kind of dynamic plays out every day in our business and personal lives. When we are not clear about what we want, what our values are, what we are committed to, it is easy to lose our focus, to drift off course.
Solution: Clear the fog.
Chism has written a good-natured and practical book that will change your thinking and in the process help you to control the drama in both your personal and professional life. As leaders, we have the responsibility to be very clear with ourselves and our team so that we don’t get pulled into negativity, gossip, power plays, resistance and … drama. Chism suggests asking the following questions:
What are my top 10 principle-based values?
What areas of my life or business are in the fog?
What are some of the distractions that take me off course?
Where do I get stuck?
Where can I improve as a leader?
What drama do I see on a daily basis in the workplace?
What drama do I see in my personal life?
Where am I avoiding or procrastinating?
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Landing in the Executive ChairLanding in the Executive Chair. But as you climb the hierarchy in an organization, “the manifestation of those traits and behaviors becomes more complicated.”
No matter where you are in the organization, it’s about people. People will make you successful. However, you will find that as you go up the ladder, the need for understanding yourself and others becomes more acute and more difficult. Primarily this is because your relationship with those around you changes—both in your mind and theirs.
It’s not surprising that Henman writes, “I have found direct ties between self-awareness, self-regulation, motivation, empathy, social skill—and business results.” As Bill George says, “It's EQ, not IQ, that matters most for leaders.”
As a result, Henman has developed a model she calls F² Leadership: Fair but Firm. F² Leaders have a “balanced concern for task accomplishment and people issues.” It’s about balancing dominance (results) and responsiveness (relationships).
F² Leaders should keep in mind:
Fairness is in the eye of the beholder, but “you can take steps to stack the deck in your favor.” Henman describes behaviors that indicate that you are firm but fair, and trustworthy. She covers such areas as decision-making and problem-solving, attracting top talent, strategy, execution, leadership development, and building a culture of change. These are valuable insights for both new leaders and experienced leaders alike.
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Bill Roedy: From West Point to MTV
Bill Roedy, former Chairman and CEO of MTV Networks International, began working for HBO in 1979 when it was broadcasting only nine hours a day. There he learned that distribution was everything. It was to be his mantra at MTV—aggressive, creative, relentless distribution.
Roedy shares his experiences and lessons in What Makes Business Rock. From virtually nothing, he built MTV International into the largest media network in the world. For anyone involved doing business internationally, it is essential reading.
As manager of HBO’s national accounts, he learned that “In life as well as in business, the ability to sell is the foundation upon which success is built.” Some people don’t understand that he says, but even in Vietnam, although he had the formal authority to force troops obey my orders, I found that if people didn’t believe in the mission, I never got a total effort from them.” Leaders are always selling.
Although reluctant to leave HBO and move to London, in 1989 he became managing director of MTV Europe. What he inherited wasn’t working. He had to quickly create a better product, get more distribution and generate revenue. Getting the right people in place was crucial to creating an entrepreneurial organization. “Never take ‘No’ for an answer.” “Take chances.” “Break all the rules.”
Their objective was to be the most visually engaging channel in the history of European television. To make sure viewers always knew they were watching MTV, they put their logo in the corner of the screen and left it there. No one had done that before. (Now everyone does.)
Here is a lesson every leader could bear to keep in mind: as a leader, your opinion matters—maybe more than you know. But it can actually be having a negative impact. The MTV playlist is extremely important to its viewers and giving them what they want to hear is essential to MTV’s survival. Roedy says that in the beginning he attended those meetings if only to be the voice of reason and a subtle reminder that they were running a business. “But after attending half a dozen of these meetings I realized I was making a huge mistake. I was much older than our demographic and my musical tastes were very different. I was skewing the choices older.” So he stopped attending those meetings. “As much as I enjoyed being part of that process, I had to remind myself that I was a manager, and I had to delegate decision-making authority to those people I trusted.” How many leaders, for all kinds of well-intentioned reasons feel they have to leave their fingerprint on everything, while they are in-fact stifling their people and skewing the results?
Roedy’s success at MTV can be attributed to the fact that he was always reinventing. “The longer you stay with the same strategy, the more vulnerable you become to your competitors.”
His most important contribution was the idea, “Think global, act local.” MTV was already local to Europe, but it had to be broken down to the national level, country by country. “Learn the local culture and reflect it in every decision we make,” was their business strategy. He created a structure similar to what he learned in the military: small operating units in the field fighting the competition. “My belief was that the local people would best reflect the needs, tastes, and desires of the local audience, and because their jobs would depend on the bottom line, they were much less likely to make risky or destructive financial decisions. In Vietnam, I had seen over and over the benefits of dealing directly with the loyal population on their own terms, rather than trying to impose our beliefs on them.” Because of the complexities of operating an international business, you need be there on the ground to really feel it.
On MTV Arabia for example, they broadcast the call to prayer on the channel five times every day. For Ramadan they produced an animated film explaining the meaning of that important religious holiday to young people in a creative way and refrained for a month from showing any music videos.
Throughout the book there are stories of music celebrities—singing karaoke with Bono and Bob Geldof dressed as a nurse in Tokyo at 4a.m.—and others like Sumner Redstone, Robert Maxwell, Jeff Bewkes, Nelson Mandela, Jiang Zemin, Fidel Castro, Tony Blair, and the Dalai Lama. They add color to the book and make it all the more interesting. But read it for the insights into global business.
More lessons from Bill Roedy can be found on the LeadershipNow Facebook page.
What Makes Business Rock
What Makes Business RockWhat Makes Business Rock by Bill Roedy, I have developed an appreciation for what it took to build MTV Networks International into what it is today. Former Chairman and CEO, Bill Roedy, has had a remarkable career.
Due to financial constraints, he followed his Dad into West Point. Not his first choice. He became a member of the “Century Club” collecting more than a hundred hours of punishment duty. But he did learn the “difference between fighting the system and finessing it.” He also learned many of the skills that would enable him to succeed in business, including “discipline, time management, the value of teamwork, and the importance of physical endurance.”
He learned how to prioritize. Survival depended on it. “Too often,” writes Roedy, “I have seen people focusing on the wrong things—things that are not going to directly or immediately affect their business….Leaders need to learn to cut through the chaff to determine priorities and to identify the real target.”
After West Point he served in Vietnam in various command positions. “I learned the importance of making quick and firm decisions, communicating those decisions clearly to my troops, and then doing anything and everything necessary to implement them. I learned the importance of building morale, camaraderie, and a team spirit. I learned how to deal with the chain of command and how to get around it when necessary.”
From Vietnam he went to Northern Italy where he spent four years in command of three NATO nuclear missile bases. A good place to learn how to deal with pressure and stress. “There are few situations more stressful than commanding a nuclear missile site and trying to determine in 30 seconds whether the aircraft approaching the base was a friend or foe. There was no margin for error. We had to be perfect every day.”
Wanting to go into business, he resigned the military after 11 years and went to Harvard to get an MBA. As a child, Bill was so enthralled by the power of television that he would memorize the TV Guide and recite the schedule back to his mother. He knew he wanted to work in television so instead of the typical corporate route followed by his classmates, he took a job at a small start-up cable network called HBO.
Roedy’s background doesn’t make him the likely candidate to build MTV International, but it certainly prepared him for it. More on that tomorrow.
Manage Through Ego and Conflict
It was called the “Miracle on Ice.” On February 22, 1980 the U.S. Olympic hockey team did the unthinkable. They beat the unbeatable Russian team. But team goalie Jim Craig says is was not a miracle. It was the result of hard work and one of the “best demonstrations of team chemistry in sports history.” In Gold Medal Strategies, Craig illustrates that the principles that got them there in 1980 can be applied to any team.
Here Craig talks about an issue every team has to deal with—ego:
We weren’t big shots. We weren’t stars. If we were going to do something great we needed each other and had to do it together. We couldn’t afford to wallow in our differences to get laid low by towing egos.
We needed to manage through ego and conflict.
More great efforts have been undone by ego left unchecked and conflict not resolved than can ever be imagined. This negative energy brings down sports teams, companies, political campaigns, armies, and even societies and nations.
Managed and controlled, ego and conflict are energy and a source of winning ideas and inspiration. Not managed and controlled, they cause people to fight each other, not the competition—and that is a formula for losing.
Craig offers several strategies for managing ego and conflict like, finding a buffer or go-between, respect the role that each team member plays, respectfully agree to disagree, and be prepared to sacrifice for the good of the team.
Onward: You Are There with Howard SchultzOnward tells the story of a company suffering from the side effects of its own success made worse by the recent financial fiasco and what its returning CEO did about it. It’s a story of a company’s return to the why.
Howard Schultz realized that by 2007, Starbucks had begun to fail itself. It was obsessed with growth and lost sight of what made it “Starbucks” in the first place—the essence of what they set out to do 40 years earlier—to inspire the human spirit. Starbucks had lost its “point of view.” He writes, “No single bad decision or tactic or person was to blame. The damage was slow and quiet, incremental, like a single loose thread that unravels a sweater inch by inch.” This is usually how we experience derailment. We wake up one day and find ourselves somewhere other than where we had planned on being. Tangents are like that.
With sales and passion already slipping, the economic meltdown at the end of 2008 only made matters worse. In an inspiring and detailed narrative, Schultz tells from his perspective, how he got the company back on track and innovated around core values. It’s a sometimes emotional look at the thinking behind what worked and what didn’t. And it is told with dignity.
Onward is a valuable resource for leaders and is for that reason alone, worth re-reading. It was interesting to watch Schultz’s leadership evolve through the process and instructive to observe how he handled the board, personalities, tough choices, frustrations, progress and setbacks.
Here are some of his thoughts:
There are moments in our lives when we summon the courage to make choices that go against reason, against common sense and against the wise counsel of people we trust. But we lean forward nonetheless because, despite all the risks and rational argument, we believe that the path we are choosing is the right and best thing to do. We refuse to be bystanders, even if we do not know exactly where our actions will lead.
5 Leadership Lessons: The Velocity Manifesto
In today’s high-velocity environment, Scott Klososky believes you need to understand how to guide your organization in the implementation and usage of technology—in short, how your organization “does” technology.
[As a leader], you—not the IT department, nor the VP of IT, nor the chief information officer (CIO)—must understand, drive and be accountable for how technology is structured in order to reach the strategic goals of the operation….Technology enables velocity—the speed of getting products to market, the speed of delivery, the speed of analytics, and the list goes on. Speed is our friend in almost every case. An organization’s digital plumbing is what facilitates this speed, and it has become the single most important variable for success in many organizations.The Velocity Manifesto details key actions you must take to gain an advantage in the digital age. He covers three areas: Digital Plumbing (technology infrastructure), High-Beam Strategy (trendspotting), and creating a High-Velocity Culture (integrating different types of skills and lifestyles). Here are five insights from Klososky’s Manifesto:
We have an amazing ability as a species to solve problems and make improvements. One way to enhance your vision precision is to understand that we will solve the issues in all industries. We will find efficiencies and knock out things that don’t work the way we would like them to. So all you have to do is look at the industry you are in and identify all the things that are wrong with it….Next, you must begin to study how the solution to that problem will impact you, and find out whether you have any ability to solve it on your own.
The thing you want to be these days is a “fast follower.” The concept here is that you have a better chance of making a good investment in a trend or idea if you are not the very first—but also not the fifth, sixth, or seventh—into the market. Instead, you want to quickly follow the first movers who are trying to capitalize on a blossoming trend.
In order to play a high-speed game, you need team members who can work at a fast pace—and you also need a team that can work without friction. … Your job as a leader is to create a culture that generates as little friction as possible by leveraging your employee’s strengths and minimizing their differences.
We have four very different generations in the workforce right now, and another on the way. We have leaders from one generation who can’t relate to the technology sophisticated younger generations, and young people who have a somewhat warped view of what the organization owes them….Younger generations will not operate like the current generation of leaders….If you want to hire and retain A players, you will have to provide a vibrant culture for Generation Y and the rest of the generations to come.
Our inventory of technologies is more like a palette of art supplies—it must be formed into technological systems by true artists….By viewing technology construction as an artistic endeavor rather than a mechanical one, we are freed to not only build applications that have a stronger ROI, but also to do a better job of managing IT people. Software engineers, developers, and programmers must be viewed as the artists of this generation.
Deep Factors Shaping the Global EconomyOutrageous Fortunes is a book about what in economic terms, could be. It is a provocative guide to global trends. Instead of focusing on moment–by-moment market predictions, author Daniel Altman, looks at deeper, underlying economic factors that we frequently overlook in the short-term view. Fundamentally, he states that “over long periods of time, countries with similar deep factors tend to reach similar limits of growth and prosperity.”
And it is the deep factors matter the most says Altman. “They will determine whether entire generations—hundreds of millions of people—live better or worse than their predecessors. The deep factors’ origins lie in geography, climate, culture, politics, and historical accident.
As a result, he speculates that China’s moment in economic history "will be impressive, but brief.” With corruption, lack of a first-rate technology infrastructure, resistance to start-up businesses, and an aging population, average incomes in China will grow at lower rates than in the U.S.
He asserts that American’s will find new sources of work in their “selling power.” He isn’t ignoring the fact that we are losing jobs to the Internet or that people do sell all over the world, but his point is that American culture has made Americans uniquely suited to sell products and services over a more diverse (global) population. The primary attribute of the American way of selling, says Altman, is the ability to “transcend cultural differences by isolating the lowest common denominator.”
As this is the long view, Altman says that means that there is room to maneuver. Over a period of 20 to 30 years, it is possible to make the necessary changes needed to alter our economic futures. But it will take will and political continuity. “The people and leaders need to perceive the risks, grasp the opportunities, and commit to maintaining the same posture even as the parties in power change.” This is not easy for it requires one generation sacrificing for the next and long-term political thinking that is so rare these days. To solve our global issues, “countries will have to work together.” “Yet,” he fears, “the political institutions that provide the framework for global problem-solving may not be up to the task.”
He gives a couple of reasons why the gaps developing from the forces of economic integration and rapid globalization will threaten the cooperation necessary to solve our problems. “First, when people live very different lives, it becomes harder for them to understand or even be aware of one another’s problems….Second, it’s hard for two very different countries to negotiate on equal terms, even with a supposed level playing field.” The negotiations can take on a “coercive quality.”
Whether his predictions come true or not, there is plenty here to think about as we look ahead. And as I’ve written before, the challenge isn’t leading a tribe, it’s leading across tribes. That requires a very different mindset and approach to people and ideas.
Hay Group's 2010 Best Companies for Leadership
Hay Group, a global management consulting firm, released its 2010 Best Companies for Leadership Study and Top 20 list. The study ranks the best companies for leadership around the globe and examines how those companies develop current and future leaders.
According to Hay Group’s study, all of the Top 20 companies report that everyone at every level of the organization has the opportunity to develop and practice the capabilities needed to lead others, compared to less than 70 percent of all other companies in the study. In addition, 90 percent of the Top 20 companies report that people are expected to lead regardless of whether they have a formal position of authority, compared to only 59 percent of other companies.
“The Top 20 Best Companies for Leadership are at the forefront of a significant shift away from hierarchical organizational operating models,” said Rick Lash, Director in Hay Group's Leadership and Talent Practice and co-leader of the Best Companies for Leadership Study. “Leadership in the twenty-first century is about leading at all levels; not restricting it to title. As organizations become flatter, the best leaders are learning they must check their egos at the door and become increasingly sensitive to diversity, generational and geographical issues.”
See the complete PDF summary.
They found that the best companies are moving more quickly and completely than other companies to flatten their structures and prepare their managers to lead effectively within it. Specifically they drive collaboration and cross-functional leadership and innovation, actively seek greater cultural diversity in their leaders and workforces, and they show a strong focus on developing leaders within their organizations. In the process, they are gaining important competitive advantages.
2009 Report: What Organizations Value in Leaders
How to Use Social Media to Drive Social ChangeSocial Media. Nobody really understands it, but we know it’s important. How can we use it to influence others? How can we use it to do some good? The Dragonfly Effect by Jennifer Aaker and Andy Smith, is a playbook on how to use social media to achieve a single, focused, concrete goal.
They use the metaphor of the dragonfly—“the only insect able to propel itself in any direction—with tremendous speed and force—when its four wings are working in concert.” The Dragonfly Effect relies on four distinct wings that when working together, achieve remarkable results. They are:
Focus: Identify a single concrete and measurable goal. Goals must be humanistic or based on an understanding of your audience, actionable, testable, clear and meaningful.
Striking the right balance between visionary and realistic goals is key to maintaining focus….To achieve balance, break the goal down into parts: a single long-term macro goal and a number of short-term process goals, or micro goals.Grab Attention: Make someone look. Cut through the noise of social media with something personal, unexpected, visceral, and visual.
What is the most important message you want to leave your audience with—and why should they care?Engage: Create a personal connection, accessing higher emotions through deep empathy, authenticity, and telling a story. Engaging is about empowering the audience to care enough to want to do something themselves.
Engage is arguably the most challenging of the four wings, because love occurs infrequently, and engaging others is more of an art than a science….If you can’t engage them emotionally, they won’t be swayed.Take Action: Enable and empower others to take action. To make action easy, you must prototype, deploy, and continuously tweak tools, templates, and programs designed to move audience members from being customers to becoming team members—in other words, furthering the cause and the change beyond themselves. What you’re asking people to do must be easy, fun, tailored and open.
What you are asking of people must be highly focused, absolutely specific, and oriented to action, so as to avoid overwhelming your audience.The Dragonfly Effect is a good model to show how technology can support real world missions. The Dragonfly Effect shouldn’t be thought of as just a social media framework; the specific and practical principles behind the model will not only help you make an impact through social media, but in the real world too.
The Dragonfly Effect Model Review:
The Secret of the Great WorkplaceWhat leader wouldn’t want to lead a “great workplace?” I’ve never run across anyone that wouldn’t. So why aren’t we able to point to more of them?
I suspect that, in the main, it’s because many of those leaders that don’t lead great workplaces, don’t know they aren’t. They have never taken the time to ask. From their point of view it’s hard to imagine what they could be doing differently. But, it is those you lead that determine whether or not working with you constitutes a great workplace.
Even of you are not the CEO, you can create a great workplace around you. To begin, you need to ask, “What is it like being lead by me?” You make the difference.
The Great Workplace, authors Michael Burchell and Jennifer Robin write, “you need to do your job realizing that how you do what you do makes a world of difference to employees.” The secret of great workplaces is relationships. Relationships between employees and their leaders, between employees and their jobs, and between employees and each other are the three indicators of a great place to work. “If leaders implemented practices and created programs and policies that contributed to these three relationships, employees had a great workplace experience.” The important part is that whatever they did, it had to be done in a way that strengthened relationships.
When the authors asked, “Why is your organization a great place to work?” a consistent model emerged. (See below.) The employees said “they believe their leaders to be credible, respectful, and fair—they trust them. They also take pride in what they do, and they share a sense of camaraderie with their coworkers.”
Because the relationships you create matter, you're the critical difference between a very good company and a very great company. In the best companies, leaders at all levels have a strong commitment to creating strong ties between the employee and the organization. Indeed, enhancing trust, pride, and camaraderie in the workplace is the central task of effective leadership in today’s organizations.They suggest that what holds leaders back from doing something about this is not having the faith that there are bottom line results from doing the right thing. Another excuse is no time. Lack of situational awareness and the belief that they should just be focusing on the business also keep leaders from focusing on the relationships that really underlie everything they do.
After building a rational business case for the need to create great workplaces, the authors get into detailing each aspect of the model. It is thorough enough to give you a clear way forward in creating a great workplace in your own situation. With anecdotes, best practices, and quotes from employees working at the best workplaces in the U.S., they give the great workplace a tangible shape.
At Analytical Graphics, the president compiles a weekly log of individual, team, and organizational accomplishments he hears about, witnesses, or comes across during the week, and he shares those every Friday at the weekly company lunch (yes, all 275+ employees come together for lunch and a short meeting). Whether it is an item he pulled from the local newspaper about an employee’s efforts in the community, or a milestone that a team passed in developing a product, or how teammates pulled together to help one another out on a particular issue, he makes this a consistent practice. And employees feed off this energy. “Friday afternoon,” one employee commented to us, “is always a high. What a great way to start the weekend, and make me excited to come back on Monday morning.”Does your feedback make your people want to come back and do it again? Do you even give timely feedback?
They encourage leaders not to create something completely new and different, but instead to improve upon what you are already doing. Best practices referred to in the book serve to illustrate ways trust, pride and camaraderie might be built in your own situation, but they are culture specific.
Things get in the way of letting people be human. Particularly quarterly reports and business schools. I think what we try to do is make it very clear that what’s important is doing the right thing. And if we do the right thing, all the other things take care of themselves.”The Great Place to Work Institute has found that great workplaces exist regardless of size, industry, or location because the Model is based on universal “needs and values—trust of the people you work for, pride in what you do, and enjoyment of the people you work with.”
Both the web site for the Institute and the book are worth a visit for additional resources and information.
Overconnected: The Promise and Threat of the InternetThe Internet is a technology and like any technology it can be a blessing or a curse depending on what you are doing with it. The Internet amplifies. This can be good or bad. Amplification means more connections and that means more crowd behavior. So what we are amplifying becomes an important question. To be used well, the Internet requires self-regulation—maturity. Unfortunately, we are not always good at that, so things can easily get out of control. The Internet is new and with most things new, maturity is not part of the equation.
Overconnected, Bill Davidow says that while the Internet didn’t cause the global economic crisis, it did act “as an accelerant, spreading information very quickly. It was gasoline on the flames. A crisis of this dimension would not have been possible without a very efficient, fast, cheap, and reliable information transportation system. Across the worldwide digital sprawl, things go viral at lightning speed. And people were carried away in competitive, greedy fervor of their own creation.” The Internet encourages extreme events.
And of course the Internet affects us in other ways that really haven’t had time to process yet. We are not yet aware of how all of this is “affecting our institutions, our emotions, our judgment, and our levels of trust.”
Overconnected has all the drama you’d expect from a book about the Internet—it’s a page turner—but without the giddiness that makes so many of them so annoying. Davidow explains the dynamics of the Internet in clear terminology and great analogies. When a system cannot adjust to a certain threshold of connectivity, it becomes overconnected and unstable. In this state either the environment or the institutions in it are unable to cope with the changes and become overwhelmed by cultural lag. Cultural lag means some element of the culture isn’t keeping up with all the changes around it creating the potential for confusion at best. For example, “in a highly connected environment, an investment bank can start conducting business differently and prosper as a result, then outrun the regulatory environment and spin out of control. If enough financial institutions do the same thing, the economy finds itself in an overconnected state, and chaos follows.”
Davidow explains the key part of the overconnectivity issue: positive feedback. Not positive as in “good” but as in “give me more of the same.” So while a thermostat is an example of negative feedback as it regulates the temperature by saying “that heat was good, but we’ve had enough,” a malfunctioning thermostat would say, “Love the heat, just keep it coming” until it becomes extreme. The Internet has elements of both. Negative feedback creates transparency, but positive feedback drives overconnectivity. Positive feedback can create vulnerabilities.
Davidow warns that we can expect more accidents and contagions. The compression of time that the Internet enables, allows for even more powerful positive feedback loops, “making predictions difficult and behavior fickle, while increasing the possibility of unexpected interactions.” In addition, “When accidents happen they can frequently trigger contagions, which in turn require high levels of connectivity to sustain themselves.”
The solution, says Davidow, is to reduce the amount of positive feedback in the system, by weakening or even breaking interconnections. While he acknowledges that we have to get better at adapting to a world of our own making, he suggests that regulation and taxation of financial transactions, designing better systems with less positive feedback and thereby building more slack into the system, would help. Overconnectivity helps to frame the issues cause you to think more deeply about the implications of the Internet. “This new environment,” he concludes, “is filled with opportunity, but whether we seize it or let it hold us hostage is our decision.”
Bury My Heart at Conference Room BBury My Heart at Conference Room B, Stan Slap cuts through a lot of the dancing around that occurs in many leadership discussions.
It should go without saying that emotional commitment improves organizational performance. If in doubt, Slap spells it out in the first third of the book. The way to get that emotional commitment, says Slap, is for you to live your own deepest values in your work environment. While any organization should encourage this, most often they don’t. “What companies want most from their managers is what they most stop their managers from giving. What managers want most from their jobs is what they most stop themselves from doing.” So, it’s up to you. The process of managing this tension what Bury My Heart is all about. The underlying problem is this:
Companies can’t get emotional commitment from their managers because the company believes it needs to be the dominant organism in the relationship, which causes managers to have to repress their own values—and so causes them to detach emotionally from their jobs.Fear drives this tension: Are we going to survive as an organization if we are not in control? Slap says the only sustainable solution is leadership. “Leaders are people who live their deepest personal values without compromise” and because they do, “they’re essentially self-medicated—the pressure’s off the company to provide the deepest motivational fulfillment.” Slap insists that this isn’t licensing chaos but insuring control. Paradoxically, “there is no more reliable way for the company to become the cause than by not always insisting on being the cause.” Allow people to live their values at work.
This isn’t a self-indulgent free-for-all. “Freedom to pursue your values come with responsibility to protect the company’s values.” It becomes an issue of trust between the organization and the individual. “Your job as a manager requires achieving results through others. Leadership is the single best method to do that. As long as your vision doesn’t violate the basic objectives and principles of your organization, those results will be hard for anyone to argue with.”
Your leadership begins by understanding your own values—what is important to you—so you can sell those values to others. Beyond envisioning a “Better Place” of your creation, the people you lead have to see it too. What does life look like for them in this Better Place? Help them to get what they want as they head toward the Better Place. Slap writes:
= Live better.
If they believe it, they’ll do it. Of course, not everyone you lead will have the same values as you, but if you have communicated them well, “they’ll support yours if yours have positive impact for them.”
Leadership happens to you as soon as you understand your own values and understand how to enroll others in supporting them. Instead of waiting for a leader you can believe in, try this: Become a leader you can believe in.
The Bed of ProcrustesThe Bed of Procrustes: Philosophical and Practical Aphorisms is rich in intellectually satisfying and considered thoughts from the meditations of Nassim Nicholas Taleb. The title, based on the Procrustes of Greek mythology that stretched or chopped off the legs of guests to make them fit his bed, is analogous of his observation of the human tendency to try to make fit that which we understand and lop off that which we don’t. “We humans,” he writes, “facing limits of knowledge, and things we do not observe, the unseen and the unknown, resolve the tension by squeezing life and the world into crisp commoditized ideas, reductive categories, specific vocabularies, and prepackaged narratives, which, on the occasion, has explosive consequences.”
His thoughts are mostly insightful, prophetic, humbling, disarming, or instructive and only occasionally sound like justifications. All are worth reading and ruminating over. They help us to face a world we frequently don’t understand. Here are a baker's dozen to get you started:
It’s a Jungle in ThereRainforest Café, knows it's a treat. Created by Steven Schussler, the Rainforest Café holds the record as one of the top-grossing restaurant chains in the world and was the first restaurant concept to be featured at every Disney theme park worldwide. Schussler shares in It’s a Jungle in There, what it takes to make it happen and the lessons he learned that can be applied to your dream.
Schussler embodies the five Ps of successful entrepreneurship—Personality, Product, Persistence, People, and Philanthropy—that he teaches in the book. He writes, “As a leadership quality, one’s own passion is what galvanizes others into action.” Passion and persistence has played a big part in everything Schussler has done. It’s “not going through the motions but going through with the emotions.”
Schussler says that he’s always wanted to create a rainforest themed restaurant but the problem was getting investors interested in the idea. To get their attention he turned his home into a tropical rainforest. “Over a period of a few years, my standard split-level home was transformed into a jungle dwelling complete with rock outcroppings, waterfalls, rivers, layers of fog, mist that rose from the ground, a thatched hut covered with vines on the roof, tiki torches, a twelve-foot neon ‘paradise’ sign, and a full-size replica of an elephant near the front door.”
“In the bedroom, my bed was constructed to look like it was suspended in a tree….Birds and animals moved freely through the area during showings of the house….Every room, every closet, every hallway of my house was a ‘scene’: an attempt to present my idea of what a rainforest restaurant would look like in actual operation….No venture capitalists were going to invest their money in my far-out concept without actually seeing it, so I transformed my house into my vision of what a rainforest restaurant would look like in order to make them believe in my dream.”
Naturally, this would catch the attention of your neighbors (and law enforcement) too. There were problems of all sorts as you can imagine. And Schussler writes, “Being passionate doesn’t totally shield you from moments of doubt.” But his passion finally won out.
How far are you willing to go to see your dream realized?
In short, high-content chapters, he explains his guiding philosophy and backs them with concrete experiences. He has two quotes framed on the wall over his desk: “When you’re out of quality, you’re out of business” and “The noblest search is the search for excellence.”
He talks about looking for “enhancement gaps.” Those gaps between “what you are seeing and what you could create to make what you are seeing better by providing some product or service.”
He asks, “Are you willing to help other people succeed even when it’s not a requirement of your job to be of assistance?”
Self-control: “What you don’t want to do is say things and/or act in a manner that will create negative impressions and the unwanted consequences that are certain to follow.” You must know your audience.
Burning Bridges/Writing People Off: Don’t do it. “What I learned that day reconfirmed my belief that ego can be a killer, especially an unchecked ego. Most entrepreneurs need to have a healthy ego, but you also have to be realistic. That’s a very delicate balance—the kind of balance you need to cross a bridge you tumbled off the first time around.”
Anyone would benefit by reading and integrating the lessons offered here.
Harvey Mackay on Managing Your Career
• Be prepared
Regardless of the economy, there is nowhere you can hide that's guaranteed earthquake-proof against your own personal recession. The day can come when you step into your boss's or banker's office some Friday afternoon and hear, "I'm sorry to have to tell you this, but..." It's not going to be easy, no matter how well prepared you are. But it's going to be a lot harder if you're like the 90 percent of us who aren't prepared when the bomb falls. And it can happen to anyone, anytime.
• If you reach for the stars, at least you'll get off the ground
Most important of all, you will survive. Trends have occurred that make some aspects of the economic situation better, not worse for employees and job seekers. Here are a few:
(Adapted from Sharkproof: Get the Job You Want, Keep the Job You Love...in Today's Frenzied Job Market by Harvey Mackay)
Other Books of Interest:
Your Job Survival Guide: A Manual for Thriving in Change
Where the Jobs Are Now: The Fastest-Growing Industries and How to Break Into Them
New Job, New You: A Guide to Reinventing Yourself in a Bright New Career
Rebound: A Proven Plan for Starting Over After Job Loss
In an environment filled with noise, actions speak louder than words, Instead of staking out a fixed position on the organizational chart, you need skills in designing and participating on ad hoc teams. And you need a certain kind of leadership and followership, to succeed. You live and work in a different world. You need new thinking and skills to succeed.
Thomas Hall was, for most of his career, an advertising man. He has spent a lot of time helping clients grow. From accounts of great business and his own firsthand experience, he and co-author Wally Bock have extracted, in Ruthless Focus, lessons for business success based on a ruthless focus on the why—the core strategy that drives everything you do—and a ruthless focus on business basics that create the possibility for growth. A ruthless focus insures that every action, every day, moves you and the business forward.
You need a clearly defined core business strategy. The authors explain and illustrate five basic strategies to use as models in your own situation:
As they point out and their examples illustrate, you can use many strategies, but to be successful you need a single core strategy and focus ruthlessly on achieving it. “Your core strategy is the way to achieve long term competitive advantage and profitability.”
Ruthless focus makes good sense, but the problem is we are always tempted to try something new. There are times when game-changing technologies or market conditions necessitate a change in strategy, but not as often as you would think. “When you’ve got something that’s working well, it rarely gets better if you try to change it fundamentally. The successful companies we studied are ruthless about staying with their basic strategy until it doesn’t work for them anymore. One reason may be that they think of strategy differently than most companies.” They add:
Wal-Mart, Toyota, Enterprise, and Publix have all been in business for more than 50 years with the same strategy. They’ve all been through the ups and downs in the economy. Laws and regulations have changed. Successful companies have adjusted, but the adjustments were tactical or operational, not strategic.Your core strategy—your reason for existence—rarely, if ever, changes. Keep a ruthless focus.
5 Leadership Lessons: Lessons From Warren Buffett’s Top Business Leaders
In Behind the Berkshire Hathaway Curtain, Ron Chan has interviewed a number of CEOs and executives who have contributed to Berkshire’s Success. Here are some of the insights, philosophies an mindsets from people at the top of their fields:
Cathy Baron-Tamraz, President and CEO of Business Wire: “I think a liberal arts education is invaluable in preparing one for the working world. I look at the people I have hired these past 30 years, and to be candid, most of them have had a more general background than a strictly business background.” The whole idea of college is to learn about general principles by taking a variety of courses.
Randy Watson, President and CEO of Justin Brands: “I learned that to run a company and be a leader, it is not about the individual, but how the team of people work together to accomplish something for the greater good. It is about working in unison. My job is to make sure that I have the right people in the right place, and then I stay out of their way.”
Stanford Lipsey, Publisher of the Buffalo News: “As an advertising executive, I learned to be observant and flexible. I learned to pick up information from my clients so that I could prepare data to attract them. As the saying goes, ‘persistence succeeds when all else fails!’ I just kept trying and trying.”
Brad Kinstler, President and CEO of See’s Candies: “Spotting talent is more of an art than a science. You’ll never know whether you have an eye for it until you put your managers out in the playing field and observe the way they perform. What I realized is that there is no right or wrong when it comes to picking talent. In fact, you can’t even tell who will be the next leader until he or she becomes one. Leaders come in different shapes and sizes, and it is often during a crisis or other extraordinary situation that their true ability emerges.”
David Sokol, Chairman of the Board of MidAmerican Energy Holdings Company: “When I was a 27-year-pld project manager, I had to lead some older and more experienced managers. The reality was that some of them were uncomfortable working with me. The only thing I could do was to keep my head down, check my ego at the door, and work extremely hard to prove that I was capable of leading. I didn’t try to convince them of anything other than the need to accomplish everything as a team.
“My father taught me that it is difficult to control others’ perceptions, but I can always control my own actions, and these actions can, over time, alter those perceptions. I constantly show my colleagues that I am an active listener, and I make sure to explain my rationale for every decision and to consider their opinions. That is all I can do, because the reality is that it will soon become clear whether or not I am capable.”
Why Amish Businesses ThriveSuccess Made Simple a number of transferable lessons on operating a business. I think it is a critical insight to their success that they don’t get the cart before the horse. Wesner writes, “Amish tend to keep in mind that business is first a means to realize core values, ones which don’t usually come to mind when thinking ‘business prosperity.’”
Jonas Lapp (not his real name) is an Amish home-builder. Wesner says that “Jonas loves what he does. But you can see that it’s less the actual construction of homes or the financial payoff that drive him. Instead, it’s the chance to be a father figure to an employee who never had one, to form a friendship with a ‘customer’ who in the end never even does business with him, to do his small part to strengthen ties in his community.”
In the beginning when he first started his business, Jonas struggled with fear; the fear of it not working out; of failure. The problem with fear Jonas told Wesner, is that when you are operating out of fear, “you’re not establishing relationships. You’re in it for what you can grab today. You’re after as much as you can get.”
Not surprisingly, what grounds Jonas is his faith, operating from the premise that God will take care of him. “Amish lean on faith,” writes Wesner. “It’s a seemingly bottomless source of strength and security. Faith helps them see hope when tragedy strikes. Faith fosters gratitude in the fortunate. It’s a basic element of Amish life and, by extension, their approach to business.” It changes his perception of his role in the business and how it all relates to his life in general.
Jonas neutralizes fear by shifting his focus. “If you’re a servant-leader, that means other people are gonna come first,” he explains. “People have to be very important to you. You’re not in it for the dollar anymore … you’re in it to help people. And the profits? They come.” Wesner adds, "He executes in the day-to-day, while the far-horizon focus frames each decision."
A big part of Amish business thinking that come through in everything is their family oriented approach. “Amish business thinking reflects community….In Amish America, the familial aspect comes preinstalled.” Employees are often regarded as extended family. “The Amish remember that their employee is usually a spouse to someone, and often a parent to a hefty handful—before being a worker.” Jonas Lapp says:
If they’re married … or he has a fiancée or a girlfriend, if that fellow’s important in your business, let their helpmate know, that your husband is doing a wonderful job, and he’s very important in my business.Humility is practiced and demonstrated in their respect for others. If your goals are important enough for you to pitch in on the unpleasant tasks, then perhaps those goals will be important to your employees too. Again Lapp says, “I think a good boss won’t just stand there and say, ‘Hey, your piece belongs over there’; he’ll say, ‘I’ll help you put it there.’ I think people learn faster if you help them with their part.” Success Made Simple will help you rethink your approach toward business and people. It will encourage you to clarify your values and methodically apply them to everything you do.
Gratitude. Family focus. Looking out for the other guy. When it comes to business, the Amish haven’t reinvented the wheel. One thing Amish excel at is applying certain time-honored principles—hard work, treating people fairly, providing quality goods and services—consistently.
There’s No Such Thing As Mature CompaniesWe have all been told that businesses have a life cycle. It’s usually broken down as start-up, growth, maturity and decline. But in terms of agility and sustainability, that’s not a helpful way to look at it. If you intend to lead people for the long-term, you need to consider a different outlook.
London Business School professor Don Sull says that the secret to the fountain of youth is: “companies do not pass through life cycles, opportunities do. Most firms, particularly large organizations, oversee a diverse portfolio of opportunities that exist at different stages of the life cycle.”
Even one-hit-wonders can find hidden opportunities if they look hard enough. To view what you are doing through the lens of the business life cycle, tends to make you myopic and limits your thinking. A perspective that emphasizes the opportunity life cycle encourages agility and openness in your thinking.
Sull writes in The Upside of Turbulence, “There are no mature companies, only portfolios overloaded with mature opportunities. Organizations can avoid a corporate midlife crisis through portfolio agility—the ability to quickly and effectively shift resources, including cash, talent, and managerial attention, out of less promising units and into more attractive ones.”
“To achieve portfolio agility,” writes Sull, “leaders should view their organization as an array of opportunities at various stages in the life cycle, paying attention to promising opportunities. The trick then is to keep your opportunities in balance. To that end the following questions are helpful:
Do Your Goals Look Like a Variation of What You’ve Always Done?
SMART goals seem to say, he contends, “Don’t push beyond our resources; don’t bite off more than you can chew; play it safe and stay within your limitations.” Maybe if we weren’t so focused on making sure our SMART goals were written correctly on our goal-setting forms, we might ask, “Is this goal fundamentally wimpy?”
“Most organizations are pretty good at filling out forms correctly” says Murphy. “What we’re less adept at is making sure the content on those forms is gutsy and challenging enough to result in something great.” Perhaps our SMART goals are beginning to look like more of the same. There is the ever-present pull to keep doing things the way we have been doing them. There’s a feeling of safety there. We like to stick to what’s known. The result is that our goals can look like a variation of what we’ve always done. To be outstanding, to rise above the noise, we need challenging, we need inspiring, we need essential.
To overcome inertia, Murphy recommends we set HARD goals. In Hundred Percenters he describes HARD goals as: Heartfelt, Animated, Required and Difficult. “Every business plan we write represents an opportunity. Every sales presentation, every customer interaction, every budget request, and every financial approval is a chance for us to push ourselves and our employees toward untold greatness.”
HARD goals are:
Heartfelt. Working for something bigger than oneself. “If you want to build a heartfelt higher purpose into your goals … make your goals NOBLE.” (Name a party Other than ourselves who will Benefit from this goal Like customers or End users.)
Animated. One critical reason people don’t get excited about their goals is that “our goals typically sound sterile. When’s the last time you got so jazzed about the thought of hitting your budget target that you actually fantasized about the exact moment you would present the results to the team.” Help people to experience your goal.
Imagine if Martin Luther King, Jr. had stood on the steps of the Lincoln Memorial and said, “Our goal should be that within the next 30 years, the incidents of hate crimes will be reduced by 63% and that the percentage of minorities living below the poverty line will be no higher than the percentage for any other racial group.” Those would be aspirational goals, to be sure. But inspirational? Not so much.Required. HARD goals do “more than paint a picture of something in the future. It also solves a deep-seated pain. HARD goals aren’t just nice to do, they’re necessary to do.” If you’re going to set a HARD goal, you need to let people know why it is required.
Difficult. It is possible to set a goal that is so difficult that it is demotivating, but that is rarely the issue. How difficult is difficult? Murphy asks two questions: What new skills (if any) will you have to learn to achieve these goals? And Do you think you can accomplish these goals. “If they aren’t learning all sorts of new skills, then your goals are probably not heard enough.…Hard goals are scary and force us to question our abilities. So if your employees knew they could accomplish the goals before they even started, try making [them harder].”
When you announce your HARD goals, you’re going to see visible signs of perspiration and palpitations as folks listen…. Your employees may walk out of the meeting or put down your memo feeling like they just heard a very loud alarm clock. But you can bet every mind is already hard a t work coming up with ideas that meet the challenges ahead.
7 Signs You Might Be In Denial
Nothing is easier than self-deception. For what each man wishes, that he also believes to be true.Denial examples of CEOs who have made mistakes that could and should have been avoided and those that did it right and why. The lessons Tedlow uncovers in these examples provide us with insight into our own flirtation with denial and how we might battle it.
You might be in denial if you think you have all of the information you need. “Power deranges. Powerful people are routinely surrounded by yes-men, but that is not the real problem because they are relatively easy to spot. The real problem is the courtier who is sufficiently clever not to be detected.” Powerful people, Tedlow continues, “don’t really know as much as they may think about their own organization because people stop telling them the truth.”
You might be in denial if you don’t make a point to listen. If people think they won’t be heard they will not speak up. You need to create an open environment where it is safe to say what’s on your mind. Tedlow offers a quick test of your environment: “are the private conversations that follow meetings usually more frank and honest then the public discussions in the meetings themselves?” If so, it’s because everybody is talking about what didn’t (couldn’t) get said.
You might be in denial if you think short-term. You are sticking your head in the sand. Trying to put a Band-Aid on a much larger problem only delays your response to the inevitable. Deal with it now and completely. “Denial is all about you—and how you view the world. Your view does not change the world, the realities of which you will inevitably have to face sooner or later.”
You might be in denial if you talk trash about competitors and individuals. Anna Freud called it “defense by means of ridicule and scorn.” Tedlow writes, “If you find yourself trash-talking your competition take a moment to think about what you’re doing. What am I using this derision to hide—perhaps from myself?”
You might be in denial if you relabel actions rather than changing them. When you don’t like reality, you just change its name. The result as George Orwell said is to “perform the important service of partially concealing your meaning even from yourself.” “Troubled assets aren’t ‘troubled assets.’ They are worthless pieces of junk.”
You might be in denial if you don’t tell the truth. “Denial occurs when we push aside hard truths in favor of more palatable or convenient narratives.” This works two ways: the lies we tell and the lies others tell us. Don’t participate in either.
You might be in denial if you don’t think denial is a problem you face. That of itself is denial. Tedlow cautions, “It can never be completely defeated because we can’t fully know or face the truth about ourselves. It is impossible to be both subject and object.” You need to develop a self-awareness about it. “Denial-avoidance is a life’s work, not an agenda item….If one could simply resolve to wake up tomorrow and unflinchingly confront reality, denial would hardly be the problem that it is….You can’t avoid blind spots when you drive. However, good drivers know those blind spots exist and take them into account when they get behind the wheel. So it should be with denial.”
Some people deny less than others. How can you be one of them?
12 Leadership Guidelines for Leading through Learning in Turbulent TimesIn January 2009, founder and chairman of India’s Satyam Computer Services—the “largest publically traded company you’ve never heard of”—Ramalinga Raju confesses to massive accounting fraud and resigns. In a five-page letter to the board, he described the problem saying, “It was like riding a tiger, not knowing how to get off without being eaten.” In an instant, he left behind him, chaos, distrust, and plummeting moral among his more than 53,000 employees. But Riding the Tiger is not about how the Enron-like tragedy occurred, but how a leading through learning strategy calmed the chaos and helped the company recover and rebuild.
Nelson and Cohen write, “Learning is critical for stabilizing the organization, providing guidance to leaders, communicating with employees, and keeping the business open.” Communication is critical. “The leaders who lead out loud—those who maintain transparency, approachability, and integrity—are the ones with whom people want to work, in good times and bad.”
Venkatesh Roddam, Director of VenSat Tech India was the CEO at Satyam BPO (a Satyam subsidiary), reflects on the resilience at Satyam, “To be faced with a crisis the magnitude of what Satyam dealt with and then one year later to be reborn and vibrant in a new avatar speak volumes about the value of a strong leadership culture. This resilience is the result of years of painstakingly implemented leadership strategies.” The authors stress the need for developing leadership guidelines in order to leverage learning and to assist leaders with the complicated people and relationship dimensions of the business. You can use these 12 guidelines as a basis for coaching conversations:
The Face Game at ZapposBuilding Happiness, that while some of the things they do have grown organically, there are a few things that have been more purposeful and planned. One way to help build community is an internal game they call, The Face Game. He writes:
In most companies, logging in to the computer systems requires a login and a password. At Zappos, an additional step is required: a photo of a randomly selected employee is displayed, and the user is given a multiple-choice test to name that employee. Afterward, the profile and bio of that employee are shown, so that everyone can learn more about each other. Although there is no penalty for giving the wrong answer, we do keep a record of everyone’s score.
We’re always on the lookout for ways to improve our company culture, no matter how unconventional or counterintuitive the approach may be.
Leading Outside the Lines: Mobilizing the Informal OrganizationLeading Outside the Lines, the informal organization is poorly understood, poorly managed, and often disregarded because it is too hard to think about.
The formal organization has its own way of attracting, selecting, developing, and rewarding people—but it rarely has the power to affect promotion or compensation. Therefore, those who rise to influential positions in the hierarchy are more likely to be more comfortable with and skilled at using the formal organization than the informal….Informal leaders rarely have the kind of explicit qualifications that can be easily documented or communicated, much less evaluated.The informal organization lies in the human side of the enterprise and as most things that reside there, it is hard. Unlike the formal side with its top-down, rational approach, the informal is fuzzy, constantly changing and hard to measure. So it is understandable that we would like to somehow ignore it or work around it. But, “if you want your entire organization to improvise frequently and energetically in response to fast-moving change, formal management techniques alone won’t get you there. You need help from the informal side as well. Mobilizing the informal organization helps support formal management mechanisms, increasing their chances of success and deepening their long-lasting impact on the organization.”
For leaders, the challenge is to find the balance between the formal and the informal elements of the organization in their particular situation, to achieve concrete, measureable results.
When trying to make a change, our default tactic is to explain “in excruciating detail why the new plan is important.” We think if they get the logic of it, they will get behind it. But they often don’t. People need an emotional connection. Simply formalizing a new set of rules, programs, and structures will not pull the company's culture along. “To that end, leaders need to be able to translate vision, targets, and strategies into personal purpose, accomplishments, and choices that each one of their people can understand and feel good about pursuing.”
The authors make the distinction that while the formal organization is best when dealing with predictable and repeatable work that needs to be done efficiently and without variance, the informal organization is best suited to unpredictable events—surprises that need to be sensed and solved. They add that in many cases, when activity in the informal organization starts to repeat itself, it “is a signal for broader changes that need to be made to the formal organization.” To move beyond “best practices” and the status quo—to get to “best performance”—a leader needs to learn to mobilize the power and plasticity of the informal.
What You Can Do Now
The Little BIG ThingsThe Little Big Things by Tom Peters, is all about.
Some of what you will read in TLBT has been presented on the Tom Peters blog over the years. But for this book, the posts have been edited, revised, organized and conveniently packaged. It’s a compilation of 163 behaviors you can put into practice to achieve excellence in any endeavor. As such, it is not meant to be read straight through. Jump in anywhere it looks interesting. The process here is: read—consider—implement—repeat.
Tom, as we’ve said here before, is good at boiling things down to basics. You’ll find opportunities to pursue excellence in basic insights that produce big results.
Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.Sometimes the little-big-things can seem too “soft” or beneath the demands of business. Tom explains: “Ideas like conscientiously showing appreciation are matchless signs of humanity—and the practice thereof, in my opinion, doubtless makes you a better person, a person behaving decently in a hurried and harried world….Acts of appreciation, to stick with my theme of the moment, are masterful, even peerless, ways of enthusing staff and partner and client alike, and, hence, greasing the way to rapid implementation of damn near anything. That is, ‘Soft is hard’ is wholly pragmatic—and more often than not, effectively implemented, makes the bottom line blossom!”
Excellence has to be challenged into existence. The Little Big Things does just that.
Get to the Why by Starting at the EpicenterWhen beginning or introducing anything—an idea, a project, or a new venture—you need to start with asking yourself why. In Rework, authors Jason Fried and David Heinemeier Hansson write candidly about where to begin:
When you start anything new, there are forces pulling you in a variety of directions. There’s stuff you could do, the stuff you want to do, and the stuff you have to do. The stuff you have to do is where you should begin. Start at the epicenter.They suggest you begin by asking, “If I took this away, would what I’m selling still exist?” It’s easy to get bogged down in the details and get off on tangents. And while details are important, they can distract you, pulling you in the wrong direction or even derail your idea. They caution: “Getting infatuated with details too early leads to disagreement, meetings, and delays. You get lost in things that don’t really matter. You waste time on decisions that are going to change anyway. So ignore the details—for a while. Nail the basics first and worry about the specifics later.”
The Purpose of Business is to Win Respect
5 Global Trends Unfolding Over the Next DecadeIn an address by Muhtar Kent, President and CEO, The Coca-Cola Co., he described five global forces that will unfold over the next decade. Although he is focusing on the beverage industry, these are trends that will impact many industries.
The Right FightThe Right Fight.
The book is based on a counterintuitive premise: In an environment where alignment is the only goal, alignment robs us of necessary dissent, of the checks and balances that mitigate risk, and of the tensions that create innovation and sustainable value. In short, you need to systematically orchestrate the right fights but … you need to fight them right.
The Right Fight principle is based on the idea that you learn and grow by the right amount of friction and stress. “A certain amount of healthy struggle is good for organizations and for individuals. Indeed, people and organizations perform optimally when they are under the right kinds and amounts of stress.” They add, “With alignment and properly managed tension, organizations hit a sweet spot and start realizing their potential.”
Citing a studies by Theresa Wellbourne of eePulse, the single greatest predictor of poor performance is when employees are happy or complacent and thus unmotivated to change. The second greatest predictor is when employees are overwhelmed. Both groups exhibit a low level of energy. They conclude that, “Tension in the right measure creates the emotional energy people need to change.” The trick for leaders is to avoid these extremes. “Knowing where and when to use tension is critical. Knowing how to work through the tension is equally important.”
They lay out three principles that identify right fights and three more principles that clarify the rules of engagement. The first three Right Fight Principles will help you in identifying and eliminating destructive tensions:
Right Fight Principle #1: Make it Worth Fighting About. Make it Material. “A right fight has to create significant value, require integration of multiple perspectives, and change the way work gets done in an organization. In short, a material fight is worth the trouble.”
Right Fight Principle #2: Focus in the Future, Not the Past. “Obsession with past performance, or intense interest in decisions made months or even years before, is a dead giveaway that your organization is stuck in a wrong fight.”
Right Fight Principle #3: Pursue a Noble Purpose. “Right fights connect people with a sense of purpose that goes beyond their own self-interest, unleashing profound collective abilities to create in ways they didn’t think possible.”
The final Right Fight Principles guide you in fighting right fights right:
Right Fight Principle #4: Make it Sport, Not War. “Right fights, like sports, have to have rules. One of the key tasks for leadership in a right fight is to define the parameters so everyone involved understands how to participate and what it takes to win.”
Right Fight Principle #5: Structure Formally but Work Informally. “You need to structure right fights through the ‘formal organization,’ but work out the tensions created by those fights through the ‘informal organization.’”
Right Fight Principle #6: Turn Pain into Gain. “There is a fine line between productive tension and destructive distress, and no two people draw that line in exactly the same place. For right fights to be fought right, leaders need to make sure no one is put under unbearable pressure. Turning pain into gain requires leaders to relate to their team members as individuals and to figure out what creates synergy, stretches skills, and honors outcomes for each of them.”
There are case studies to illustrate each of these principles in action. It’s easy to see the negative side of tension: focusing on the past, stigmatizing the losers, fighting over turf. “But without tension, nothing moves.” Tension creates an opportunity for leaders to help their organizations fight the right fight.
Of Related Interest:
Focus on the War, Not the Battle
A Pyrrhic Victory
What Kind of Leadership Will Work in 2010?The Work Foundation, a British think-tank, released a reaffirming report on the principles of outstanding leadership. They concluded that outstanding leaders do three things:
“Not too many leaders can place a tick by all four of these requirements. Cynical or disillusioned leaders will just add that list to the pile of other leadership theories, which have urged them to become “servant leaders”, “coaches”, “player managers”, and so on. Meanwhile, the disillusionment and dissatisfaction of those who are led grows. And we do not seem much nearer to establishing a clearer idea of what sort of leadership will work in the cynical and confused world of 2010.”
He adds this closing anecdote:
During the British general election of 1959, the journalist Geoffrey Goodman spent the campaign following the deputy leader of the Labour party, Aneurin Bevan, around the country. He made a record of Bevan’s many memorable speeches. One quotation in particular stands out. Contemplating the world’s increasingly interlinked problems, and the leadership that was on offer to deal with them, Bevan summed up what he saw in these terms: “Smaller and smaller men, strutting across narrower and narrower stages.”In another highlight from the Work Foundation study, they made this observation about the process of becoming an outstanding leader:
Becoming an outstanding leader is likely to depend a great deal on maturity, self-awareness and self-development within the job. Some of the outstanding leaders featured in the research did not originally have a people-focused approach, but realised the impact they were having on people and therefore adjusted their style accordingly. They arrived at this point through experience, maturity and reflection. They had a very sophisticated understanding of cause and effect and how their actions can dramatically affect outcomes.I would suggest that “maturity, self-awareness and self-development” will help us to adjust our leadership to the context we now find ourselves working within.
Building a Community of High Commitment and High PerformanceHigh commitment, High Performance, “These choices begin with their definition of firm purpose—a desire to make a positive contribution to customers, employees, and society.” If a leader’s “primary goal is to acquire money and power, building an HCHP organization will be beyond their reach.”
To build enduring HCHP organizations, leaders must stick to the firm’s why: purpose and guiding values, strategy, risk profile, and basis for motivating, organizing, and managing people. “In times of crisis, when capital markets may demand expedient decisions that could take the firm off the HCHP path, commitment to principles enables CEOs to go against conventional wisdom in decisions about strategy, debt, growth rate, acquisitions, and layoffs.”
These circumstances often create conflicting demands between people and profits that leaders must learn to integrate. This does not call for heroic leaders—single-minded and single-handed leaders—but leaders who are willing to listen and engage others in a collective action learning process. In a crisis we often look for saviors, but instead, writes Ron Heifetz in Leadership Without Easy Answers, “we should be calling for leadership that will challenge us to face problems for which there are no simple, painless solutions.”
Heroic leadership isn’t about listening or collective learning. “Most important,” writes Beer, “heroic leadership fails to perform the central function of leadership—engaging employees authentically in a process of organizational learning and development from which they as leaders also learn.” Leading the creation of a HCHP organization is “not about aligning the company with the leader’s ideas. It is about enabling leaders and their people to learn together about the problems they face and the actions they must take.”
Surviving and thriving in this crucible of conflicting demands is no easy task. It requires that leaders strengthen and develop their internal resources. They must learn to enter the fundamental state of leadership when faced with challenges—a state that demands that they dig deep into their values and purpose. That fundamental state of leadership requires leaders to move from comfort with activities to focus on results, from self-absorption to commitment to mission and higher purpose, from focus on self to focus on others, from being internally closed to being externally open, and from hiding the truth to embracing the truth.Incidentally, it will not come as a surprise to readers of the Leading Blog, that generally, underperforming companies have not developed leaders throughout their organizations. Beer suggests that this is because “most managers had come up through their home function, business unit, or region, and never acquired the broader general management perspective needed to understand and manage cross-boundary activities….In many of the companies, ineffective senior teams did not spend time developing common values and perspective about what constituted good leadership.” Again, the primary responsibility to learn to lead from where you are lies with you.
Thriving In the New Economy
Lori Ann LaRocco, Senior Talent Producer at CNBC and a producer of the show Squawk Box, was in a position to ask some of the best minds in business today how they are responding this economic environment, how they are defying failure and what opportunities do they see?
As a result, LaRocco has assembled 23 insightful essays in Thriving In the New Economy. In their own words, they shed light on how they view the crisis, what they did as a result, and what they plan to do. It makes for a compelling read to gain a window on these leaders' different but similar viewpoints and approaches.
The essays are divided into five sections: the economy, banking, real estate, autos, and retail. You will read personal accounts from people like economists Larry Lindsey and David Malpass; Wall Street legends Jack Bogle, Bob Doll, Abby Joseph Cohen, Ron Baron and Peter Cohen; bankers Kelly King, and Donald Powell; real estate executives Don Peebles Richard LeFrak, and Ron Peltier; and from the auto and retail industries Jim Lentz and Steve Sadove.
Larry Lindsey, CEO of The Lindsey Group shares this on the function of leadership: “Most institutions prefer managers who will serve the needs of an existing institution—that is, who will follow the wishes of the various constituencies within the institution—rather than managers who will lead the institution to a new place."
“Our political process is dominated by leaders who tell us what they think we want to hear, thereby effectively following the polls and the media and not necessarily leading the country…. But that type of leadership by itself can actually be a handicap for a society dealing with a financial or economic catastrophe. To be precise, financial crises throughout history have developed when excesses went unchecked. Like the over-leveraging of risk in our capital system. All these manias, panics, and bubbles have the same characteristic: the absence of real leadership that takes a contrarian perspective.”
At Forbes, Steve Forbes says, “Essentially, we learned that in a down economy you have to both tighten your belt and plant seeds for the future, which is tough to do.”
Peter Cohen founder of the $7.5 billion alternative asset management company Ramius, says you have to remain open and pay attention. “What I do know,” Cohen writes, “is you have to show up every day at work; you have to be there every day to find opportunity. You have to be constantly alert to what the possibilities are. Good ideas are all around all the time, if you’re paying attention.” He continues:
I’ll take information wherever I get it and run it down. Winning is all about showing up. I know a lot of people who say they don’t want to go to work and claim to have nothing to do there. That’s not true. There is always something to do at work—always. That is a philosophy that I follow, and that we follow. And while I think we’re in for a really difficult time ahead, I’m really excited that there’ll be some great opportunities that will come out of it.Luck must play a part in all of this too. Thriving in the New Economy has no chapter 11. LaRocco says that when she began to assign chapters in the book, a lot of the authors asked her not to put them in “Chapter 11.”
You can read (PDF) the contribution by Wilbur Ross on how he analyzes a crisis and how he chooses to invest.
Business Reputation Isn’t Just About Business
The corporate landscape has changed. Corporations don’t exist in a social vacuum. In Crisis in Character, Firestein writes, “the individuals who run significant companies hold much more than the companies themselves in their hands. Their influence extends to where the children of their employees can go to college, and whether the communities that surround them survive.”
People look to corporations as they look to their politicians. They want corporations to reflect their own values. As a consequence, the question arises: Why should the conduct expected of corporations and individuals differ from each other? Why should we not hold both to the same standards? A corporation’s strong social identity can cast its light across products and services, and onto the attitudes of investors, legislators, regulators, and prospective business partners.All of this adds up to a greater reputation risk. Reputation goes deeper than a corporate press release. It’s embodied in the system and the people who run it. To help companies achieve a balance between their internal realities and the demands of investors and society, Firestein developed a set of seven strategies that are of immediate use:
The CEO must foster a company whose characteristics are such that its influencers assume both its good intentions and its fundamental ethics in all circumstances. Should a crisis occur, that company receives the benefit of the doubt during the crucial time it takes to investigate the oil spill, the factory explosion, or the defective product. It will already have earned the chance to tell its story before the adverse event takes place. That’s the most important characteristic of a good reputation. The history of corporate failings is laden with tales of companies that have arrived completely unprepared at moments of crisis.
When did Noah build the ark?
Before the rain.
The One Question You Should Ask NowWhy?
WHY gets to the cause of things. The answer is your purpose or belief. It explains why you get up in the morning, why should I follow you, why should I buy from you.
Your why is what inspires people. It gives clarity. Everything you do—your HOWs and WHATs—flows from your WHY.
Why is vital to leaders. It inspires action through inspiration instead of manipulation. Simon Sinek, author of Start With Why, says, “To lead requires those who willingly follow. It requires those who believe in something bigger than a single issue.” He distinguishes between leaders in name and those who actually lead. The difference is the why. It is possible to motivate people by external factors like a tempting promotion or fear. General Motors, for the last 70 years, has been the leader in their industry, but for the most part, did not lead. Sinek explains:
Great leaders, in contrast, are able to inspire people to act. Those who are able to inspire give people a sense of purpose or belonging that has little to do with any external incentive or benefit to be gained…. Those who are able to inspire will create a following of people—supporters, voters, customers, workers—who act for the good of the whole not because they have to, but because they want to.“People don’t buy WHAT you do, they buy WHY you do it.” The problem says Simon Sinek, “is most businesses today are making decisions based on a set of incomplete or, worse, completely flawed assumptions about what’s driving their business.” They don’t know or have forgotten the why. Whys are hard to communicate. It’s easier to talk about what you do or how you do it. So we focus on the whats and the hows and over time, the why can get lost.
In Start With Why he introduces the Golden Circle to explain loyalty and how to create enough momentum to turn an idea into a social movement. It begins from the inside out. It starts with why.
WHATs are easy to identify. They are your products and services. HOWs are the ways you do what you do. They differentiate you. WHYs tell people why they should care. Most organizations usually communicate from the outside in—the clearest to the fuzziest. “We say WHAT we do, we sometimes say HOW we do it, but we rarely say WHY we do WHAT we do. But not the inspired companies. Not the inspired leaders. Every single one of them, regardless of their size or their industry, thinks, acts and communicates from the inside out.”
"All great leaders have charisma because all great leaders have clarity of WHY; an undying belief in a purpose or cause bigger than themselves."
Begin your year by asking WHY. Then communicate it through everything you do. Let WHY be the inspiration to your Hows and Whats. “Achievement comes,” says Sinek, “when you pursue and attain WHAT you want. Success comes when you are clear in pursuit of WHY you want it.”
Is Business Just About Making Money?
We’ve all heard, “The business of business is making money. If you don't make money, you won't stay in business for long. If you don't have it you can't give it.”
The question for business is: “Can you ever care about anything other than profits?”
How to be profitable and socially responsible is not always self-evident. Daylian Cain, a professor at Yale School of Management who specializes in conflict of interest issues says that “acting on your values in the workplace can be more complex than it seems.”
Alina Dizik interviewed Cain for the WSJ article, Teaching the Golden Rules. Mr. Cain teaches a course called, “Business Ethics Meets Behavioral Economics” at Yale. He says, “Mixing behavioral economics with these kinds of corporate responsibility issues is an emerging trend. We don’t want to merely say lying is wrong; we are not trying to change people’s values from evil to good. Behavioral economics is such a great tool because it shows how people make bad decisions and separate their actions from their values. [Once they see this] we can show students all the ways they will fail even by their own standards.”
Realities of the marketplace often clash with social responsibility. It costs money to do more than look after the bottom line—to do the right thing for employees, the local community and society at large.
As consumers, we demand lower prices. We don’t want to pay any more than we have to. If we can buy a product for half the price of a similar product, we usually do. But what if that behavior drives the socially responsible business out of the marketplace?
Just because we can squeeze out another dollar, should we? By acting in our own "best interest" are we bankrupting socially responsible efforts? Are we willing to pay the price for social responsibility?
Social responsibility is a two way street. Quite often we look to business (and government) to solve our most pressing issues, but the issues we face are bigger than that. If we merely point a finger at business without taking a look at our own responsibilities as consumers, the social and environmental reform we seek will be impossible.
Professor Ray Fisman of Columbia Business School remarked, "There is no shortage of inspiring examples of companies who have made money and done good for the world, but I wouldn't want to frame it as a generalized principle. There are also companies that have made enormous sums of money by not doing good. I think suggesting that good citizenship is always a win-win can be dangerously misleading."
Most businesses and consumers want to do the right thing. But our commitment is really put to the test when it costs us something. Principles consistently applied over time are the ones we really care about. Cain said “A lot of students have mixed feelings about the purpose of business. [They wonder if it’s] really only to make a profit. One of my jobs is to provide a safe space for sharing those views. One of the challenges is not merely to educate about these problems but to try to change behavior.” Social responsibility, he says, “is about doing good because it’s the right thing.”
Social responsibility is more complex than just pointing a finger and saying, “Clean it up.” Although we don’t like it anymore, we have what we wanted. The question is: are we willing to pay the price—in terms of money, time, attitudes, habits and beliefs—to get the kind of world we now seek?
Warren Buffett on BusinessWarren Buffett on Business is a selection Berkshire Hathaway letters written over the last 40 years and the occasional Buffett interview or comment. Conners has categorized these into 18 topics like corporate culture, executive compensation, executive behavior, risk management, mistakes I’ve made, and humor and stories.
Conners, who teaches a course on Warren Buffett at Washington University in St. Louis says Buffett’s “genius is in his character. His integrity is unsurpassed. His patience, discipline, and rationality are extraordinary.” Here are a few business principles in Buffett’s own words:
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
I think we have a very good culture virtually everyplace in Berkshire. I hope it’s everyplace. This is what we are looking for, and it’s more a question of culture than controls. If you have a good culture, I think you can make the rules pretty simple.
An observer might conclude from our hiring practices that Charlie and I were traumatized early in life by an EEOC bulletin on age discrimination. The real explanation, however, is self-interest: It’s difficult to teach a new dog old tricks. The many Berkshire managers who are past 70 hit home runs today at the same pace that long ago gave them reputations as young slugging sensations. Therefore, to get a job with us, just employ the tactic of the 76-year-old who persuaded a dazzling beauty of 25 to marry him. “How did you ever get her to accept?” asked his envious contemporaries. The comeback: “I told her I was 86.”
We cherish cost-consciousness at Berkshire. Our model is the widow who went to the local newspaper to place an obituary notice. Told there was a 25-cent-a-word charge, she requested “Fred Brown died.” She was then informed there was a seven-word minimum. “Okay” the bereaved woman replied, “make it ‘Fred Brown died, golf clubs for sale.’”
I’ve said many times that when a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact. I just wish I hadn’t been so energetic in creating examples. My behavior has matched that admitted by Mae West: “I was Snow White, but I drifted.”
My most surprising discovery: the overwhelming importance in business of an unforeseen force that we might call “the institutional imperative.”… I thought…that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so….For example:
It’s no sin to miss a great opportunity outside one’s area of competence.
I tell students to do work for an organization you admire or an individual you admire, which usually means that most MBAs I meet become self-employed.
Lead Your BossA can-do person himself, Theodore Roosevelt once advised, “Do what you can, with what you have, where you are.”
It means that we must learn the art of leading from the middle—from among rather than from in front. And if we are honest, in most contexts, we find ourselves leading from the middle. (CEOs included) We are trying to influence the people around us, above us and below us. So learning to appropriately and effectively lead in this way, will impact our success in most areas of life.
John Baldoni has written a primer on leading from the middle with Lead Your Boss: The Subtle Art of Managing Up. What I appreciate about his writing is that it is down-to-earth, nuts-and-bolts, and easy to connect with. He is aware of the fact that it is not easy and can be fraught with peril. He writes,
Those who lead from the middle are those who think big picture and can do what it takes to get things done so their bosses and their teams succeed….Those who succeed at leading from the middle also are artful and adept managers.Baldoni says that leading up begins with answering three questions:
1. What does the leader need?
2. What does the team need?
3. What can I do to help the leader and the team succeed?
As he suggests, this is a selfless act that speaks to the heart of leadership. It requires people who can think for themselves and take the initiative to make things happen. Answering the three questions, taking the initiative and making it happen is the trick and is the focus of the rest of the book.
Lead Your Boss walks you through every critical step of leading up. It provides instruction for overcoming those inevitable obstacles and you’ll find tips and strategies for:
Below is a two and a half minute video that provides a good overview of the book by author John Baldoni:
Marc Benioff: How We Went From Idea to Billion Dollar Company
We have achieved success by approaching business in a new way. The new models we have created…have been effectively employed by other companies, and we believe that any company can succeed with our strategies.”
Behind the Cloud is divided into nine playbooks: Start-Up, Marketing, Events, Sales, Technology, Corporate Philanthropy, Global, Finance and Leadership. In these playbooks, 111 plays or lessons arise from the story of how they focused their vision, utilized available resources, overcame obstacles and measured their success that is woven through them.
While the Plays themselves won’t blow you away, the stories behind them often provide great insight as to how they were implemented to build an extraordinary business. You'll find that many of them will resonate with whatever you are doing. Behind the Cloud is a fast, jargon-free read. The style is very open and down-to-earth and represents well the attitude and approach that made salesforce.com what it is today.
Save the World and Still Be Home For DinnerSave the World and Still Be Home For Dinner by Will Marré shows how can we can both live life on our terms and do something that matters for others, how we can both find financial security and live life as a personal adventure, how we can both make radical changes in life and keep the relationships and things we most value. "After all," Marre says, "Isn't that what we all want? To save the world and still be home for dinner?"
interview, Will Marré speaks to Vision about about leadership, organizations, changes in the corporate world, personal contentment, and quality relationships.
“The critical issue of leadership today is moral intent. If we get people who are very effective at being leaders, who don’t have worthwhile moral intent, we get what we got.”
“Self interest is not a sufficient motive to create valued innovation. In other words, big innovation.”
Many large organizations, “become protected around their financial well-being and they start to look at everything in terms of financial risk and so it thwarts true innovation.”
“It all comes down to the quality of intimacy in our relationships. In other words, there’s no success that compensates for a lack of that high quality intimate relationship with at least one other if not several other human beings. We don’t get that without making an effort. We don’t get that by being stupid about relationships.”
“If you imagine the very best thing you can do … and what might be really good is being the best mother you can be this afternoon or the best father you can be tonight. Sometimes the best way to change the world is to change a diaper. In other words, there are moments of truth everyday – many times – and if we step in do the best thing we can imagine doing in those moments of truth, then we will set up a chain of life that is self-reinforcing, self-motivating, self-fulfilling.”
The short 15 minute interview is time well spent.
Why Unemployed College Grads Should Channel Their Inner EntrepreneurUpstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit from Their Success. She offers this perspective:
Last spring, the Bureau of Labor Statistics reported that unemployment among 18 to 25-year-olds was a staggering 16.1%. That was grim news for college grads, plenty of whom headed straight to grad school, or promptly moved their belongings into the family basement. If you are among this army of unemployed or underemployed young people, it's time you considered another option: start your own business.
In the middle of a recession? Absolutely. Lots of great companies were founded in lousy economies: Trader Joe's, Clif Bar, MTV and Wikipedia are among them. Typically there's an uptick in startup activity during recessions. Why? Resources are cheaper, there's an available talent pool, and big companies that are focused on keeping their heads above water often let quality and service go by the wayside. That all spells opportunity for smaller, innovative, and agile players. Besides, what have you got to lose? Probably not much right now. You're young and you probably don't have a mortgage and a family to support. And rumor has it that you don't mind sleeping on futons or eating lots of Ramen. So if you've got an idea percolating, here's how to get started:
IBM's Robert Sampson on Values-Based LeadershipRobert Sampson, general manager of Global Public Sector at IBM, delivered a speech to the Industrial College of the Armed Forces, on the power of values to change the world. He says, “Technologies, no matter how game-changing they are, come and go. What really matters in industry and in government is individual character.”
Sampson relates the story of an IBM computer scientist named Arun Hampapur who was driven to enhance the value derived from surveillance systems, to illustrate the value of creating a culture in which people seek to innovate not just for the sake of innovation, but to apply themselves to the kind of innovation that changes society:
Arun Hampapur began studying the video surveillance systems in New York and Chicago. As Arun saw it, these systems had an inherent problem: They could ingest data, but they could not react to real-world incidents in a timely way. You could only respond to a criminal event once it already happened. That wasn’t good enough for Arun.
Disconnecting HorizontallyIn his excellent analysis of How Rome Fell, historian Adrian Goldsworthy makes some interesting observations about how we tend to disconnect horizontally from anyone or anything outside of our group. We lose our sense of place and this makes any change so much harder. People resist change when they can't see the bigger picture and why it is necessary. The challenge is to cross our self-imposed boundaries into a world not of our own making and connect to the outside both personally and organizationally.
And this on ever expanding bureaucracy:
By their nature bureaucracies tend to grow. This was true in the Roman Empire, let alone with the massively larger government agencies of modern countries. Individuals within a department obviously have to focus on a particular task. It is only natural to believe that with more people they could deal with this more effectively. The larger they grow, then the more distant most members will be from the reality of the overall function of the department, and they will become even more removed in their way of thought to anyone outside. This is not inevitably a bad thing, but it does mean that they will continue to expand unless restrained, since their problem or concern is the only one they will see.
10 Rules For Leading the Turnaround of a Declining Business
I have been involved in turnaround situations at Topco Associates, Kayser-Roth Corporation, and Cordiant. The similarities between these situations were greater than the differences.
In each case, they were companies that had fallen on hard times, but there was a belief that they could rise again like a phoenix from the ashes. Additionally, the fact that the companies were not doing well was by no means a secret to the employees, who were always eager to have the leadership that could bring it all back together and get things moving again.
Here are my ten rules for a successful turnaround:
Rule 1. When formulating goals, start with the answer and work your way back to the solution. Do not get bogged down in the morass of yesterday. Get going toward where you need to be in the immediate future. At Cordiant, we developed a five-year financial forecast within three months of arrival that we used as the basis for refinancing the company. Subsequently, we exceeded every benchmark of that forecast.
Rule 2. Get out in front of people immediately and position yourself as the new leader in the company. Tell them who you are, what you believe in, why you are there, your perspective on the situation, and how you intend to proceed. At Cordiant, I visited all the principal people and major locations in London and New York in my first two days.
Rule 3. Bring an extraordinarily high sense of urgency to what you are doing, but also look before you leap. People are anxious for results, but this is no time for dead ends. Think carefully about everything you do, but keep moving. At Topco, we immediately commenced development of a line of environmentally-friendly products because there was an obvious niche and need in the market for them.
Rule 4. Do not sit around headquarters! Get out to where the work is done—plants and field offices. You need this input, and you need to be a motivating force for people. At Cordiant, I got around to offices accounting for 60% of our revenues in the first six months.
Rule 5. Go out and listen to customers and clients. At Kayser-Roth, one of my first visits was to Wal-Mart. They told me, “Mr. Seelert, we are concerned about the viability of your company as a supplier.” Two years later, we were named their vendor partner of the quarter. If I had not personally gone there to listen and learn, I doubt that this would have happened.
Rule 6. Listen to everybody in the organization who offers an opinion about the business—don’t just hang around with the people who report to you. There are two sides to all coins and stories. You need to understand both. If you can, meet with your competitors or the heads of similar organizations. When I went to Cordiant, I met with the heads of other holding companies, agency networks, consultancies, and service organizations.
Rule 7. Recognize that you cannot get the job done alone. Open communications and clearly assigned accountabilities are essential. Your visits to locations provide the forums for rallying and directing the teams, as well as quickly identifying the true talents across the organization.
Rule 8. Lay out your vision, purpose, values, beliefs, objectives, strategies, and plans for accomplishment as quickly as possible. People cannot really get going until you set the right direction. At Cordiant, I laid out my initial vision on day one: to be the “World’s Best Creative Communications Resource.” I indicated that I would be a good listener and that together, we would drive the vision forward from there.
Rule 9. If you do not have the internal resources to get the jobs at hand done, do not be afraid to use outside resources. At Cordiant, we employed Price Waterhouse Business Turnaround Services. At Kayser- Roth and Topco, we hired Luther & Company.
Rule 10. Develop the short list of critical priorities and stick to it. At Cordiant, it was two things: stabilize clients and staff, and refinance the company. Accomplishing these two goals set the stage for everything else.
BOB'S WISDOM: Turnarounds are intensely difficult 24/7 situations. Follow the ten rules and you will prosper.
Adapted from Start with the Answer: And Other Wisdom for Aspiring Leaders by Bob Seelert.
The Upside of the DownturnWhile we recognize that nothing good can be said about the misery that people are experiencing as a result of the current financial crisis, it is a “rare moment when we all face the greatest possible opportunity to make ourselves winners for a long time to come,” says Geoff Colvin in The Upside of the Downturn.
In his standard brisk, clean and engaging style, Colvin argues that the recession has created a new world in which the U.S. economy will be less consumer driven and consumer focused, social attitudes toward working, saving, spending, and borrowing will shift, the world economy will become less U.S. centric, investors will remain spooked for a long time, and, as you might expect, government will play a much larger role. He contends that the best companies will respond in ten particular ways beginning with resetting your priorities. To borrow from Max DePree, "the first responsibility of a leader is to define reality" and then to understand exactly what that means for you and your organization or as Colvin puts it, “to understand the challenges of what you see, is the first crucial step toward finding opportunities in this recession.” Colvin then advises:
Protect Your Most Valuable Asset. Layoffs are more costly than you think, and are not always the best answer. Toyota’s policy of keeping employees on staff during recessions (and giving them extra training) means that when the economy turns up, those employees are in the plant, ready to go, and far better prepared than the employees of any competitor.
Reexamine Your Strategy and Business Model. Excellent companies are certain of their core, and focus their attention there. Kohl’s actually spent more on marketing in the recessionary 2008 holiday season than it had in 2007, because marketing is an essential part of their core.
Create New Solutions for Customers’ New Problems. Instead of cutting prices, Hyundai offered US consumers a different value proposition that was entirely original – buy one of our cars, and if you can’t make your payments, you can give the car back to us and we’ll cancel the debt. While sales of most carmakers fell, Hyundai’s sales rose by double digits.
Get Fitter Faster. American Express recently made an unusual offer – pay off your outstanding balance and close your account, and we’ll send you a $300 prepaid gift card. They figured it was worth paying people to clear their debts now rather than let those debts go bad, at a much higher expense to Amex later.
In addition, he advises that we engage the outside world, manage for value, price with courage, understand all our risks, and don’t forget to grow ourselves. He says that faced with the fact that the recession pushes us past our current abilities, the question is “how will we respond to being shoved outside our comfort zones.” Now “is the very best time for us to surge, to push ourselves ahead and develop the new skills and abilities that will change us and stay with us forever.” Agreed.
Lead, Sell, or Get Out of the WayLead, Sell, or Get Out of the Way by Ron Karr provides more evidence that leadership isn’t just about a few titled people at the top. It is a choice to think differently. Leadership is a choice to think differently about anything you do. Selling is no exception and is closely linked to the functions of a leader. Leadership is not always about people we “lead” in the conventional sense, but is frequently about people we must influence. Karr writes, “Whether you sell a product, a service, or an idea, you must be able to influence other people as leaders do.”
It begins with being able to and understanding the need to engage others in continuous strategic conversations as part of the normal way of doing things—a process Karr has termed Integrated Dialogue. Integrated dialogue is a conversation of shared purpose that draws people out “to create a powerful relationship, one that identifies whole new zones of mutual opportunity, addresses far-ranging issues, and positions you as an invaluable resource: a leader.”
As with all leaders, sales people too will succeed when they fully appreciate the many relationships inherent in their success. Sales leaders lead a whole cast of people in their own organizations from the customer service, tech people to accounting and senior management. In addition they lead not only their customer or end user but also many points of contact in their customer’s organization that are likely to have some input on the buying decision like operations, accounting, purchasing and senior management. Gone are the days where everything filters through the salesperson. “Your success as a salesperson depends on your ability to build and sustain coalitions both inside and outside your organization. You must create and lead the coalition, no matter what you are selling.” This will resonate with any leader:
Your job is to manage multiple constituencies and alliances, and to use those alliances to identify new and better ways of generating the desired results. Your job is to do what most salespeople don’t do: lead the conversation with your prospects and customers about the results they need, the problems they have, and the obstacles they face.
To make this happen you must possess and develop the belief that you have everything you need and can build on that, the belief that you can improve any area of your life, everything is possible, preparation maximizes your potential, and your customers—the people you need to influence—come first.
After laying the groundwork, Karr defines and explains the seven traits that great sales leaders share:
Whatever Happened to the Rugged Individualist?I Hate People! “The spirit of the individual has played a huge part in forging our nation’s history. Yet the scourge of teamwork pap has made solo efforts in companies seem unwanted, crazy, even dangerous.
“Instead of thinking of yourself as a staffer in a big company, the manager of a division, or a top executive, you begin to define yourself in concrete individualistic terms. You are a brand unto yourself. Brainstormer extraordinaire. Marketing whiz. Charismatic project leader.”
At the same time the soloist is not a loner, a recluse or a maverick. They fit smoothly within a group, playing with it expertly while often leading or accompanying fellow members. I Hate People! Kick Loose from the Overbearing and Underhanded Jerks at Work and Get What You Want Out of Your Job is a guide for navigating through the kinds of people in the workplace that make us all miserable and undermine rugged individualists.
How do you know if you're a Soloist, or at least destined to become one? The easiest sniff test is how many times a day you mutter, shout, or even think to yourself, "I hate people!" But not all People Haters are necessarily Soloists.
Littman and Hershon have created the Am I a Soloist Quiz to help you determine the depth of your Soloist leanings. The higher your score, the more Soloist blood in your veins.
A. The portion of the day I prefer working by myself is . . .
On the author's I Hate People web site, you will find a blog, free I Hate People! Do Not Disturb signs, videos and more.
Creating a Sustainable Business EnvironmentCharles Handy writes that to repair the damage to the image of business, leaders of those businesses should bind themselves to a form of the Hippocratic Oath, “Above all, do no harm.” It means doing more than being legal. It means being ethical. It means taking the lead in creating sustainable environments for both individuals and the world they live in.
Lee Cockerell, former executive vice president of operations for Walt Disney World Resort, says that “the organization of the future will pay as much attention to people and leadership strategies as it does to products and services.” He adds that “good leaders are environmentalists: their responsibility is to create a sustainable business environment—that is, one that is calm, clear, crisp, and clean, with no pollution, no toxins, and no waste—in which everyone flourishes.”
To that end, leaders must create an inclusive workplace where every employee can contribute to the best of their ability. In The Organization of the Future 2, he suggests ten goals you can set for yourself where you can impact your organization’s culture:
The 14 Questions Every Board Member Needs to AskOwning Up—world-renowned adviser Ram Charan says the economic downturn is a wake-up call to corporate boards. “Boards need to own up to their own accountability for the performance of the corporation.”
Increasingly, "governance now means leadership, not just over-the-shoulder monitoring and passive approvals. Boards must fiercely guard their companies against the threats of rapid decline and sudden demise, while at the same time helping management seize the opportunities that tumultuous change presents but are hard to see in the daily fray of running the business. The board that does both turns governance into a competitive advantage." And all of this without micromanaging. It’s quite a balancing act. [Charan: “Asking questions of an operating nature is not in itself micromanaging, as long as the questions lead to insights about issues like strategy, performance, major investment decisions, key personnel, the choice of goals, or risk assessment.” Why and how is key.]
Charan offers fourteen questions that “get to the heart of the unique issues that boards are facing now.” I think the questions are as insightful and provide as much food for thought as the answers they might evoke:
Question 1: Is the Composition of the Board Right for the Challenge?
Question 2: How Are We Addressing the Risks that Could Put Our Company over the Cliff?
Question 3: Are We Prepared to Do Our Job Well When a Crisis Erupts?
Question 4: Are We Well Enough Prepared to Name Our Next CEO?
Question 5: How Well Does the Board Own the Strategy?
Question 6: How Can We Get the Information We Need to Govern Well?
Question 7: How Can Our Board Get CEO Compensation Right?
Question 8: Why Do We Need a Lead Director Anyway?
Question 9: Is Our governance committee Best of Breed?
Question 10: How Do We Get the Most Value out of Our Limited Time?
Question 11: How Can Executive Sessions Improve the Ownership Function of the Board?
Question 12: How Can Our Board Self-Evaluation Improve Our Functioning and Our Output?
Question 13: How Do We Stop from Micromanaging?
Question 14: How Well Prepared Are We to Work with Activist Shareholders and Their Proxies?
In good times, not enough consideration has been given to question one. Does the board have enough depth of knowledge or experience to ensure the organization stays on track? “Directors as a group must have the specific skills and perspectives needed to carry out their responsibilities.” And these skills must evolve with the times. “If the composition of the board is not appropriate, it is the failure if the [governance] committee. The board must empower the committee to actively shape the board composition.” Bad directors drive out good directors. It’s time for a check-up. Charan’s questions help boards do just that.
Additionally, while squarely aimed at directors, Charan’s questions serve a wider audience of leader’s as well. The questions speak to any leader of the need to “own up” to the responsibilities found in their own context? Are we up to the challenge in the area we have chosen to lead? Are we dealing with the issues? Are we trying to identify the issues early and get ahead of them? Are we learning so that we are better able to perform? Are we aware of our impact? All of these questions speak to the need for personal accountability. Addressing Charan’s questions is the way forward.
Ten Leadership Skills You Need For An Uncertain World
In Leaders Make the Future, futurist Bob Johansen reports that volatility, uncertainty, complexity and ambiguity will only get worse in the future. “Solvable problems will still abound, but top leaders will deal mostly with dilemmas which have no solutions, yet leaders will have to make decisions anyway.”
Johansen emphasizes ten leadership skills that will help leaders to cope and thrive in the volatile decade ahead. “We need not passively accept the future. Leaders can and must make a better future.” Although it’s “hard to even think about the future if you are overwhelmed by the present … looking to distant possibilities can provide new insight for the present.” The ten skills he lays out move from the instinctual to the complex and build on each other. Here is a summary of Johansen’s work for you to think on:
1. Maker Instinct: The ability to exploit your inner drive to build and grow things, as well as connect with others in the making. Future leaders will need both a can-do and a can-make spirit. The maker instinct is what separates the leaders from the powerless.
2. Clarity: The ability to see through messes and contradictions to a future that others cannot see. Leaders are very clear about what they are making, but very flexible about how it gets made. How can you as a leader, create and communicate with clarity in confusing times – without being simplistic?
3. Dilemma Flipping: The ability to turn dilemmas – which, unlike problems, cannot be solved – into advantages and opportunities. We must be able to nurture the ability to engage with hopelessness, learn how to wade through it to the other side, and flip it in a more positive direction. Think Roger Martin’s concept of the “opposable mind.” How can you remake a situation with no solution?
4. Immersive Learning Ability: The ability to immerse yourself in unfamiliar environments; to learn from them in a first-person way. Immersive learning requires active attention, the ability to listen and filter, and to see patterns while staying centered – even when overwhelmed with stimuli. Leaders can’t absorb everything, so they must filter out extraneous information and learn how to recognize patterns as they are emerging.
5. Bio-Empathy: The ability to see things from nature’s point of view; to understand, respect, and learn from nature’s patterns. It is big-picture thinking that respects all the multiple interrelated parts and nonlinear relationships, as well as cycles of change.
6. Constructive Depolarizing: The ability to calm tense situations where differences dominate and communication has broken down – and bring people from divergent cultures toward constructive engagement. The next decade will be characterized by diversity and polarization. The temptation is to pick sides, but that is rarely a good strategy.
7. Quiet Transparency: The ability to be open and authentic about what matters to you – without advertising yourself. This begins with humility. Leaders who advertise themselves and take credit for their own performances will become targets. Are you self-promoting?
8. Rapid Prototyping: The ability to create quick early versions of innovations, with the expectation that later success will require early failures. Fail early, fail often, and fail cheaply. Accept failures as important ingredients to success and learn from them.
9. Smart Mob Organizing: The ability to create, engage with, and nurture purposeful business or social change networks through intelligent use of electronic and other media. Leaders are what they can organize. Can you organize smart mobs using a range of media?
10. Commons Creating: The ability to seed, nurture, and grow shared assets that can benefit other players – and sometimes allow competition at a higher level. Can you create commons within which both cooperation and competition may occur?
What Games Do You Play?
“A lack of knowledge about games allows them to thrive” say Mauricio Goldstein and Phillip Read in their book, Games At Work: How to Recognize and Reduce Office Politics. “The more you know the better able you’ll be to limit their damage and turn the energy of your people in more productive directions.”
You might have played or been involved in some of these common games they mention:
The authors give managers the tools to “diagnose” the games that people play in their company. Using a three step process entitled AIM—Awareness, Identification, Mitigation—with specific examples from global companies that illustrate both the games and their solutions, Goldstein and Read provide a clear outline for managers to address and end the games people play in organizations. They also present five principles to keep in mind:
To game is human. Your goal is to have fewer and less.
Games flourish during times of high anxiety. Companies need anxiety to fuel performance, however this anxiety and stress needs to be channeled into productive rather than manipulative behaviors.
Your company’s games are not comparable to another company’s games. Different organizations have different game ecologies.
Minimizing game playing starts at home. As soon as you deny that you play or facilitate games, you’ve limited your options for dealing with them. Recognizing this tendency in yourself helps you deal with these issues at a personal level.
Dialogue is a natural antidote to games. Don’t embark on a course of “gamocide” – that is. Don’t create programs and policies to punish game playing. This will serve only to create more games. Speaking openly and honestly discourages game playing.
How to Hit the Ground Running
If you could sit and learn from some of America’s best CEOs, you could discover the right steps to take to insure your success while avoiding many of the pitfalls that come from learning from one’s own experience. In Hit the Ground Running, Jason Jennings has made that possible. He has selected ten CEOs that created more economic value for their companies than all of the other CEOs of America’s top one thousand companies during the study period. They made the decisions that allowed them to achieve great results on issues we can all relate to by adhering to, sometimes counter-intuitive principles. From interviews and observation, Jennings has compiled these principles into ten lessons from each of these CEOs that if applied, will help you to hit the ground running.
Rule 1: Don’t Deceive Yourself—You Will Reap What You Sow Let the Golden Rule guide every decision. Richard Smucker says, “In matters of style, swim with the current but in matters of principle, stand like a rock.”
Rule 2: Gain Belief Leaders gain belief by being authentic and humble, getting rid of regal trappings, proving their worthiness, asking others for belief, and surrounding themselves with others who are also trusted. "I need everyone to respect and support one another and work with each other. Everything else is B.S." says Fred Eppinger of the Hanover Group.
Rule 3: Ask for Help Howard Lance CEO of Harris Corporation “has a keen sense of humor and doesn’t have a problem generating a laugh even at his own expense.” He says, “Sometimes you have to take the veneer and let people see you for who you really are and share a chuckle or two.” To “hit the ground running" requires that you admit that you don’t have all the answers and engaged the assistance of others when assuming new duties.
Rule 4: Find, Keep, and Grow the Right People Ronald Sargent’s strategy at Staples is to promote from within, move people around, identify rising stars, make everyone an owner, communicate with your workers and make diversity your priority. Promoting from within “creates a career culture that encourages people to stay longer and stretch their skills.”
Rule 5: See Through the Fog Pat Hassey, CEO of Allegheny Technologies told Jennings, “It’s the job of the CEO to see through the fog and to be a destination expert. People want to know where the company is headed, what their future holds, the opportunities that exist for them, and what their role is going to be. And they don’t want to wait forever to find those things out.” (See page 97 for Hassey’s well thought out Team Rules that all team members have to agree to part of a Hassey-led team.)
Rule 6: Drive a Stake in the Ground Jennings writes, "Driving stakes into the ground allows a leader to provide a clear vision about what the company is, where it’s headed, and how it’s going to get there so it can hit the ground running. But it isn’t for the faint of heart. Once you’ve driven a stake in the ground you have to talk about it and promote it relentlessly.” Mike McCallister, CEO of Humana says, “The problem with most businesses is that instead of driving a stake in the ground, they stick a toe in the water and when it gets hard or boring they start thinking about it too much, begin questioning their decision and pull their toe out, changing things, and starting all over again.”
Rule 7: Simplify Everything "Oversimplify everything! Sit down and ask, `If I could start with a blank sheet of paper today and create the best answer, what would I do?'" says Jeff Lorberbaum, CEO of Mohawk Industries.
Rule 8: Be Accountable “Setting a personal example of accountability is where many leaders fall short,” writes Jennings. “Instead of starting by being accountable themselves, they use the threat of accountability as a tool to drive others.”
Rule 9: Cultivate a Fierce Sense of Urgency Keith Rattie, CEO of Questar says, “You must have a sense of urgency—if one doesn’t exist, the CEO’s job is to create one. The mind-set needs to be ‘We’re not as good as we know we have to be.’” Rattie adds that it will be time for him to leave when he loses the “sense of urgency and the belief that we have to be better tomorrow than we are today… it’ll be time to get somebody else in the chair who will bring a new pair of eyes and fresh thinking to the job.”
Rule 10: Be a Fish Out of Water The CEOs interviewed don’t fit the typical picture of what a CEO should be. They have been described as “humble, authentic, accessible, highly ethical, compassionate listeners and truly, believable committed to doing the right thing for all stakeholders.”
Jennings skillfully weaves the thoughts from these business leaders into coherent and practical lessons. You will find all kinds of great advice in this book, much of it delivered in an almost off-the-cuff manner that belies its value. But it makes this insightful and crisply written book great reading.
More Useful Quotes from Hit the Ground Running by Jason JenningsThese quotes are from Hit the Ground Running: A Manual for New Leaders by Jason Jennings
Ronald Sargent CEO of Staples warns, “I think a leader has to do something big, new, and different within the first one hundred days and make sure that it’s properly communicated to everyone. If people don’t know what’s going on they’ll assume nothing is going on.”
“The three most important observations I made early on in my career,” says Pat Hassey of ATI, “were that most people are loyal and want to do a good job and be successful, that offering a sincere thank you goes a long way, and that a soft response is always better than a harsh one.” Hassey also remarked, “I promised I’d never let myself get into a position where I’d stop growing. Everybody has a question, an idea, and an opinion, and if you take the time to listen, you’ll end up with a better business. There’s no such thing as a dumb question or idea.”
Mike McCallister, CEO of Humana: "We try to treat all of our people like they are adults, which sounds like straightforward common sense, but it's amazing how many businesses don't."
Goodrich CEO Marshall Larson: “The one thing I did know is that if all leaders in the company thought like me and acted like me, we’d end up with groupthink and make on hell of a big mistake someday and march off the side of the cliff like lemmings.”
Goodrich CEO Marshall Larson: "Any CEO who thinks he can pull all the strings that make things happen is kidding himself.”
The Making of a Leader: Jamie DimonThe House of Dimon by Patricia Crisafulli is full of praise for JPMorgan CEO Jamie Dimon. When the financial crisis hit, Dimon was the only CEO ready to answer the call for help. As the book brings out, this can only come from preparation and his philosophy of “doing the right thing” no matter what the short-term cost.
His success has put him on a pedestal, which is not a comfortable place to be in this day and age. He told CNBC, “The pedestal is a terrible place to be…. I almost want to get knocked off the pedestal so I don’t have to hear this any more.” Too often, when we look at someone on a pedestal we make the mistake of assuming perfection and expect uninterrupted success. This is a mistake as it leaves no room for growth – theirs or ours. People find themselves on pedestals because they live lives of continual growth. When they make a mistake – as they eventually do – we like to discount everything that came before it and go off in search of a make-believe land where everything always comes out right. It doesn’t exist. If we do this we short-change ourselves and miss the appropriate lessons to apply in our own lives.
Dimon has been tried and tested and has succeeded. Fortunately this provides us with ample opportunity to glean valuable lessons in leadership and in running a business. His thinking and methodology has lessons we can all use to make our lives and leadership more effective. Here are some:
The Credit Crisis: “I think you’re going to be writing and learning from this for years: cases and books about different things from SIVs to accounting to the business purpose of CDO-squareds to regulatory rules to globalization to the balkanization of regulation…. Honestly, I think if you made a list today, you probably wouldn’t get half of them. We’re in the thick of it.”
Lessons Learned: “Experience and judgment—I don’t think they’re replaceable. You go to a lot of businesses—they don’t remember how bad things can get. It takes someone who has been there. We will never forget the aftermath of the housing bubble, but 40 years from now, believe me, someone is going to forget again somewhere.”
Dealing with the Downside: “Look where you could be wrong; admit when you’re wrong. To me it’s important to do that because I want everybody to do that, so that we actually make a better decision the next time.”
Buying Bear Stearns: “We weren’t looking to buy Bear Stearns. We wouldn’t have bought it on its own, but we were asked to look at it. We knew the financial system was extremely delicate and Lehman [Brothers bankruptcy] helped prove that.”
The Bear Stearns Negotiations: “The amazing story wasn’t the financial engineering. After I got the call from [Bear Stearns CEO] Alan Schwartz, I called [JPMorgan Investment Bank co-CEOs] Steve Black and Bill Winters, and then we had 50 or 100 people get dressed and come back to work. And by 12 hours later, there were 500 and 1,000 people working on it in every department: bond trading, equity, equity derivatives, all these areas—tax, legal, compliance, systems, ops [operations]—everyone doing their job. And that’s the amazing kind of thing: people acting that way—just trying to figure it out very quickly. That really enabled us to do [the Bear Stearns deal]. And then the comfort that when we bought the company we could actually manage all that.”
Loyalty: “If you walk into my office and say, ‘Jamie, I’m loyal to you,’ it makes me nervous. I want you to say, ‘I’M loyal to the company … or the principles … what we’re trying to build,’ not to the individual, and I think it’s a very important distinction.”
Risk Disclosure: “If you wouldn’t treat your mother that way, don’t treat the client that way. If this piece of paper tells the client how much risk they’re taking and you don’t want to give it to them, they’re probably taking on too much risk. Give them the paper.”
Financial Discipline: “You’ve got to have disciplined reporting and a disciplined review of [what’s] reported. And then it’s got to be widely shared with smart people who also have experience and judgment. You will minimize problems. You’ll still have them, by the way, but they should hopefully be smaller and fewer.”
Being Prepared: “Always have a column called ‘worst ever’ and make sure you can survive under that.”
Life Priorities: “My children, my family—but especially the children I’m responsible for, even though they’re kind of on their own… They’re way up here. Right next to that is humanity. Honestly, we’re not all here just for ourselves.”
Marriage and Children: “I do think that the hardest things to do in life are marriage and kids. They are like complete secrets until you do it. We teach you everything, but we don’t teach you that… You’ve got to work [at] those things.”
10 Survival Tips from Donald TrumpWhat's happened to the economy has been likened to a tsunami as well as an implosion. When the undersea earthquake and subsequent tsunami hit in Indonesia in 2004, the world was stunned by the devastation that took place. It triggered earthquakes around the globe as far away as Alaska. It happened in a very short amount of time. This kind of event takes shape over a period of time and then erupts with incredible force. What happened this past year is similar in that respect -- it'd been brewing for some time. When it hit, it was like a tsunami which caused other economies to start crumbling as well. We are all familiar with that scenario. What we need to do now is deal with it.
The aftermath of a tsunami requires surveying the damage, picking up the pieces and moving on. Some people have bigger losses than others, but everyone has to keep going.
When it comes to implosion, it's more of a cave-in than a wipe-out, but equally potent. We saw the effects of an implosion watching the towers fall on 9/11. It's a domino effect. We won't sink because we can swim, but let's not go the way of dominos. Let's be smart and learn to think for ourselves in positioning ourselves for what comes next. Here are a few survival tips:
Think Like a Champion: Lessons From Donald TrumpTrump University.
Think Like a Champion: An Informal Education In Business and Life is a collection of short essays that illuminate Trump’s thinking and approach to business and life. He is reflective and as usual, candid.
What keeps Trump relevant is his passion for learning. He writes, “It’s important to remain open to new ideas and new information. Being a know-it-all is like shutting the door to great discoveries and opportunities. Keep your door open every day to something new and energizing.” It’s a theme he weaves throughout this book. Here are several lessons from Trump’s Think Like a Champion:
We don’t really create, but we assemble what has been created for us. Be a great assembler—no matter what your interests may be—and you’ll be on your way to inventiveness.
The Bull Inside the Bear - Is You!The Bull Inside the Bear. He puts a perspective on recent events that paves the way for rational thinking. I found his review of the fundamentals of economics in the context of the financial crisis to be most helpful. Here are several excerpts:
"The more educated and empowered you are, the better decisions you will make—not by listening to the talking heads on television or reading the latest bog posting. You will do your own homework and your own research, paying attention to the economic indicators that tell you what’s happening. This is not difficult, and it will put you in the driver’s eat as you make investment decisions based on better rationale than buy-hold-and-forget it or panicking and following the crowd."
Collapse of Distinction: How Do You Get People Thinking About You?Scott McKain speak on a couple of occasions and he is all about customer experience in both content and delivery. His new book Collapse of Distinction, is no different. The collapse of distinction is a cultural phenomenon of not just blandness, but sameness. McKain writes that it has become a “corporate and professional nightmare.”
The current economic environment makes this book all the more important. The problem isn’t just the economy though; it’s that the economy exposes a problem that is more easily ignored in a good economy. To ignore the collapse of distinction now, can be fatal.
Today customers want value more than ever. How will you create that value? Low price isn’t the answer, but without doing the homework, that’s really all you’re left with. McKain writes, “If you cannot find it within yourself to become emotional, committed, engaged, and yes, fervent about differentiation, then you had better be prepared to take your place among that vast throng of the mediocre who are judged by their customers solely on the basis of price. It is the singularly worst place to be in all of business. If you aren't willing to create distinction for yourself in your profession—and for your organization in the marketplace—then prepare to take your seat in the back, with the substantial swarm of the similar, where tedium reigns supreme.”
Three factors conspire to destroy differentiation:
How do you grab attention? How do you get people thinking about you? How do you get the opportunity to use the combination of your expertise and talent?
You can differentiate yourself on product, price, and/or service. For most of us, the only real way we are going to differentiate ourselves is through service. McKain lays out the Four Cornerstones of Distinction and devotes a chapter to each explaining how you apply them in your situation: Clarity, Creativity, Communication and Customer-Focus. Each chapter ends with an executive summary and solid action-points to get the ball rolling.
He says that we have to profitably create experiences that are so compelling to our customers that loyalty is assured. Your organizations survival may depend on the concepts presented in this book. “What is compelling about you, what will create points of distinction about you, and what will establish a connection between us?”
You do not need to change everything about how you do business to create distinction. Start by walking through your list of points of contact with customers, reframing and redefining how you perceive each moment of interaction. From these new perspectives, you can then begin to create specific points of differentiation with your customers. By developing your professional laundry list from the exercise—and recognizing that if these practices are the industry standard, then they will almost always fail to create distinction for you—you are taking an important first step in disciplining yourself as a professional to develop differentiated methods and tactics. Different is not just good, different is better.As an added bonus, this title is part of the publisher’s Nelsonfree program. By purchasing this book, you can also download both the e-book and the audio versions for free. Three for the price of one.
What To Do When Growth StallsIt happens to every company. No one is exempt from the cycles of business. It’s not a question of competence or enthusiasm. It’s normal. “Generating consistent growth is just plain hard, no matter how smart, experienced, or talented you are. As one of the company leaders we interviewed told us, it’s like ‘trying to keep an ice cube from melting.’ It can be done, but only in the right environment.”
Steve McKee has written an insightful analysis of the problem. When Growth Stalls “is about generating growth for your company at a time when growth may be nothing but a glimmer of hope in your mind.”
There are external forces that we all fall victim to: economic upheavals, aggressive competition, and changing industry dynamics. But McKee’s research has identified four internal factors that work against recovery and often paralyze you:
Lack of Consensus. Consensus doesn’t mean management by committee. It means “agreement among an organization’s senior leadership about the nature and purpose of the company and where it’s intended to go.” McKee writes, “Consensus issues are hard to identify and unpleasant to face. But if you have a consensus problem, things can’t get better until you recognize it.” Only then can you work together to uncover the genuine issues you are facing. Everyone needs to be on the same page working from the same playbook.
Loss of Focus. “No matter how big the company, its management team has only a finite amount of resources—money, time, talent, energy—at its disposal. The less focused those resources become, the less muscle management can muster to move the company forward or, if necessary, pull it out of a ditch.”
Loss of Nerve. Probably the most insidious factor. When growth stalls, as McKee points out, it’s confusing. “Great leaders are supposed to be firm, decisive, and sure-footed. When things go wrong, you just fix them. That is, until the problems spin beyond your control.” It’s discouraging. “When the road drops out from under the company, the CEO’s own discouragement can be difficult to hide.” It’s contagious. “It’s one thing to struggle privately…it’s quite another when the discouragement and disillusionment hit you so hard you can’t hide them. When the CEO is worried, everybody’s worried.” It's paralyzing. “You don’t have the luxury to think strategically when things are so desperate.” It’s wearying. As one CEO told him, “I wasn’t so much scared as ticked off and drained. I was tired of pushing the rock up the mountain like Sisyphus.”
When you’re struggling to keep your head above water, taking risks is the last thing you want to do. Ironically, some risk taking is just what is needed. Nobel Prize winner Myron Scholes “believes that companies should outsource as much ‘generalized risk’ as possible and focus on ‘idiosyncratic risk’; that is, risk related directly to a company’s core competency, where the company’s unique knowledge has a chance to produce better-than-expected results.”
Marketing Inconsistency. “The companies with the strongest track records do everything they can to maintain a consistent identity in the marketplace, even as the economy moves up and down, competitors come and go, and consumer tastes shift.”
McKee shows you how to identify and deal productively with these factors. Writing from personal experience, he uses good examples and appropriate metaphors to explain what is happening when growth stalls. This adds to the book’s credibility and the friendly, thoughtful tone of his writing. If your growth has stalled, you need this book to help you get your company back on track.
Newswire: The Cult of Shareholder Value
Shrink to Grow and Other Backward Steps ForwardThe Moneymakers (i.e., long term winners – consistent performers), author Anne-Marie Fink addresses foundational business issues from her experience as one charged with understanding whether businesses were solid, long-term moneymakers – or rotten tomatoes – before investing with them. Fink has spent more than twelve years studying businesses and investments, as a vice president and analyst at JPMorgan Asset and Wealth Management.
Not all of the concepts are new – is there such a thing? – but they are all important, well thought out and presented in a way that will make you stop and reconsider your approach. These concepts are divided up into eleven lessons that she has formulated from observing real-world businesses that work. The eleven lessons are:
Even for the moneymakers, eventually something goes wrong. What distinguishes them is how the handle it. A downturn is an opportunity to step back in order to move forward. She calls it shrink to grow. Here are ways she suggests to make the most of a downturn in business:
• Fess Up Don't massage your numbers. You will only postpone the day of reckoning and make things worse when that day arrives. Don't let the short-term pain of admitting to disappointing numbers determine your execution and your spending. Good managers and partners will stand. If you have a good strategy and execution, earnings will come back and your stock price with it.
• Fish or Cut Bait Don’t let hubris, fear of admitting a mistake, or concern about walking away from a prior investment keep you from exiting a problematic business. Consider the value of your time when considering whether to exit a business. [And I thought this was key:] Exit underperforming operations even if it means opting out of a potentially lucrative long-term trend. The trend may not be “ripe.” By getting gout of the business now, you will be able to retrench and come back later. Look for alternative ways to participate in the trend rather than stubbornly sticking with a losing proposition.
• Shrink to Grow Shrink troubled operations down to their profitable core; if there is no profitable core, either sell or close the operations. Err on the side of cutting too much rather than too late.
• Amputation or Minor Surgery Assess whether a slowdown is cyclical or long term, temporary or permanent, and calibrate your response accordingly. Even as you make cuts to respond to a slowdown, continue to invest to drive growth when the cyclical slowdown ends. Improve the mix of your business.
She adds, “Exceptional leaders take steps backward in troubled times so they can lay a solid foundation for future growth.” Ask:
Are the changes that are causing your operations difficulty rooted in long-term trends or cyclical events, or even a combination of both factors?
Have you considered a “shrink to grow” strategy?
When deciding where to invest during a difficult time, what are the goals of the spending? Will it produce a more efficient way to conduct your business? If so, then spend. Does it provide the next leg of growth when the market returns? If yes, then invest – but somewhat more cautiously, since you do not know when the market will return. Does the investment produce better returns but only at volume levels above currently depressed levels? If so, then perhaps tinker around with the idea, but do not invest serious funds to it.
In times like these, this book is certainly a place to spend some time.
A Downturn Provides the Ideal Opportunity to Force Hard ChoicesLondon Business School professor Donald Sull writes in today’s Financial Times that we need to take advantage of the opportunities that are presented by the economic downturn:
Major change efforts are difficult in the best of times, and many executives worry that a downturn will halt future progress or reverse any gains made to date. Indeed, in a downturn, managers too often scurry from fighting one fire to the next and thereby lose sight of the longer transformation effort.
Step One: Reality CheckReality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition, is a good place to begin.
It would be unfortunate if the book’s heft – 474 pages – made it too intimidating to pick up because it’s full of great insights, clever thought and often provocative ideas that will make you see things in a new way. I don’t recommend reading it from cover to cover. It’s not that kind of book. It’s more of a highly readable, reference tool that you’ll want to refer to again and again. Besides, unless you were born in this century, you’ll need some time to allow your brain to create some new circuitry.
There aren’t any shortcuts given here. Often life and especially entrepreneurship, is about grinding it out; sticking to what you believe in until it works. It’s not about sticking to your competition either. It’s about focusing on what you can do to add value to your customers and the world. Frank Sinatra famously said, “The best revenge is massive success.” What drives your competition crazy is your success.
The 94 chapters are based on his highly regarded blog, How To Change the World. The topics cover everything from the start-up, maintaining, growing your business to communicating your message and surviving what comes your way.
Hitting Your Goals by Knowing What MattersRelevance: Hitting Your Goals By Knowing What Matters. Today, data is cheap so we make more of it. But in generating more of it, we unwittingly complicate our decisions. The problem is in determining what is relevant.
Two tests help to determine the usefulness of any piece of information. First, is its specificity “because you can draw more conclusions from precise outcomes rather than vague ones.” And secondly is its relevance. “Relevance has to do with how well a piece of information tests your expectations.”
Apgar suggests that while we have become used to less relevant data we have developed two bad habits. “Instead of devising a specific strategy to meet a financial goal like a sales or profit target, we’re increasingly tempted to enumerate requirements for meeting the goal…. Requirements are not strategies. An unlike strategies, there’s little to learn when they fail to work.” And then there’s our growing reliance on red herrings. “Red herrings are results that appear to confirm your plans but in reality are merely consistent with them.” We end up chasing after the wrong thing.
It leads to an unintended use of the balanced scorecard. “It’s too easy for organizations to fill out balanced scorecards with lists of obvious requirements for success that resemble ingredients in a cookbook. The trouble isn’t that the ingredients may be wrong; it’s that they run so little risk of being wrong. As a result, they end up saying very little.” The strategy should look more like a recipe than a list of ingredients. There is little chance of the ingredients being wrong. You can execute the ingredients, but the recipe is what needs to be tested.
Apgar offers a quick and efficient way to get the indicators that test strategic assumptions and devising better performance strategies. He writes, “A leader must both promulgate polices clear enough to test and be ready to change them. Clarity and a critical attitude are great virtues when combined. Instead of avoiding leaders with simplistic or nuanced approached to the world, organizations and countries alike need leaders who alternate between them.”
Geoleadership is Culturally Relevant LeadershipKevin Kelly, CEO of Heidrick & Struggles, states in The Secrets of CEOs, “Attracting talent capable of accelerating national and regional businesses has been a tremendous challenge for CEOs for years; there’s a very limited number of top-flight twenty-first-century leaders who are truly global in outlook and can take a global profit-and-loss account to another level. They’re gold dust.”
It is this critical need that Eileen S. Wibbeke addresses in Global Business Leadership. Globalization has placed greater demands on leaders than ever before. In times past, differences in cultures and thinking we have been able to hold at arms length. Today, it is estimated that 70% of global business ventures worldwide fail due to mismanagement of intercultural differences.
The need for leaders who are self-aware is critical for beginning to lead in a new context. Wibbeke writes that in addition to “extraordinary business leadership skills, a leader now needs cultural intelligence.” She adds, “Learning about how other cultures both define and exert leadership is crucial in gaining and maintaining market share. The challenge is how to manage multiple, simultaneous cultural identities.
Wibbeke introduces the Geoleadership Model and considers how the concepts of care, communication, consciousness, change, and capability all vary around the world. Underlying the model is the principle of goodwill and perceiving the world through a perspective other than your own. Through case studies she demonstrates the use of the Geoleadership Model in various situations to develop an understanding and mastery of these vital intercultural competencies.
Wibbeke explains, “Learning how to interact in other cultures takes effort beyond just learning another culture’s language. For the American business leader operating in another culture, interaction requires a deeper cultural understanding about how things are done. When people do not have a common frame of reference – as is found within a culture – misunderstandings, conflict, and productivity problems tend to arise.” It is interesting to note that “task-oriented people tend to have more difficulty adjusting in an unfamiliar culture.” You’ve got to pay attention to the soft-side of leadership too.
For more information go to Dr. Wibbeke's web site.
Hiring the Right Skill Set and Motivating the MillennialsIn raising and schooling our children in the U.S., it appears we have dropped our standards. And it shows. Finding the right people is becoming a more and more difficult proposition. (I enjoyed reading about Linda Zdanowicz's search for a dental assistant on her blog.) Tony Wagner, author of the The Global Achievement Gap has written am important book that should not be ignored by business leaders. It sets a meaningful agenda for a good dialogue between educators and business leaders and concerned parents about our educational system. Wagner has written the following for us:
In an economic downturn, employers need to be even more careful with their hiring decisions. And recent graduates from some of the best schools may not have the skills that matter most in the new global knowledge economy. In researching my book, The Global Achievement Gap: Why Even Our Best Schools Don’t Teach The New Survival Skills Our Children Need -- and What We Can Do About It, I have come to understand that there are "7 Survival Skills" for the New World of Work, and that employers must look beyond applicants' "pedigrees" to carefully assess whether they have the skills that matter most.
Here are the Seven Survival Skills, as described by some of the people whom I interviewed:
• Critical Thinking and Problem Solving
"The idea that a company's senior leaders have all the answers and can solve problems by themselves has gone completely by the wayside . . . The person who's close to the work has to have strong analytic skills. You have to be rigorous: test your assumptions, don't take things at face value, don't go in with preconceived ideas that you're trying to prove."
—Ellen Kumata, consultant to Fortune 200 companies
• Collaboration Across Networks and Leading by Influence
"The biggest problem we have in the company as a whole is finding people capable of exerting leadership across the board . . . Our mantra is that you lead by influence, rather than authority."
—Mark Chandler, Senior Vice President and General Counsel at Cisco
• Agility and Adaptability
"I've been here four years, and we've done fundamental reorganization every year because of changes in the business . . . I can guarantee the job I hire someone to do will change or may not exist in the future, so this is why adaptability and learning skills are more important than technical skills."
—Clay Parker, President of Chemical Management Division of BOC Edwards
• Initiative and Entrepreneurship
"For our production and crafts staff, the hourly workers, we need self-directed people . . . who can find creative solutions to some very tough, challenging problems."
—Mark Maddox, Human Resources Manager at Unilever Foods North America
• Effective Oral and Written Communication
"The biggest skill people are missing is the ability to communicate: both written and oral presentations. It's a huge problem for us."
—Annmarie Neal, Vice President for Talent Management at Cisco Systems
• Accessing and Analyzing Information
"There is so much information available that it is almost too much, and if people aren't prepared to process the information effectively, it almost freezes them in their steps."
—Mike Summers, Vice President for Global Talent Management at Dell
• Curiosity and Imagination
"Our old idea is that work is defined by employers and that employees have to do whatever the employer wants . . . but actually, you would like him to come up with an interpretation that you like -- he's adding something personal -- a creative element."
—Michael Jung, Senior Consultant at McKinsey and Company
Looking Beyond the Degree
The conventional thinking of many who make hiring decisions is that graduates from "name-brand" colleges are likely to be more intelligent and better prepared than students who have gone to second or third tier schools. But, in reality, what the degree may mean is that these students are better at taking tests and figuring out what the professor wants -- skills that won't get them very far in the workplace today. A senior associate from a major consulting firm told me that recent hires from Ivy League business schools were constantly asking what the right answer was -- in order words, how to get an "A" for the job they were doing -- and were not always very adept at asking the right questions, which was the single most important skill senior executives whom I interviewed identified. So what does this mean for the interview process?
First, listen carefully for the kinds of questions the applicant asks. Are they probing? Insightful? Do they suggest that the applicant has really prepared for the interview by trying to understand your business? Do you feel as though you or your company are being interviewed? If so, that's a very good sign.
How a perspective employee asks these questions matters, as well. Does he or she listen carefully and engage you in discussions? Is the potential new hire both interested and interesting? In addition to the ability to ask good questions, senior execs told me that the ability to "look someone in the eye and engage in a thoughtful discussion" is an essential competency for working with colleagues and understanding customers' needs.
Finally, perhaps the most important question you might ask is, "what do you want to learn or how do you want to grow in this job?" This question is essential for two reasons: First, the quality of the answer will tell you how reflective this individual is -- and how intentional he or she may about his or her own development. More than any specific skill, individuals must want to learn, grow, and improve continuously to be successful in today's workplace.
Motivating the Millennials
The second reason why this question is important goes to the heart of the problem of how to motivate new hires to do their best. In asking the question, "how do you want to grow," you are signaling to a prospective employee that you and your company are committed to developing the talents of your workers. Many employers worry that this generation lacks a work ethic. But in my research, I have discovered that this generation is not unmotivated but rather differently motivated to learn and to work. Above all else, they want opportunities to be challenged and to make a difference.
Describing the different work ethic of this generation, Ellen Kumata, who is managing partner at Cambria Associates and consults to senior executives at Fortune 200 companies, told me, "They don't see coming into a company as being a career experience. They don't want to climb the corporate ladder and make more money and please the boss. And so you can't manage them the same way -- you can't just put them into a cubicle and expect them to perform." Tracy Mitrano, who manages the Office of Information Technologies at Cornell University, agreed: "You have to make the work more interesting and allow them to work in different ways. They are prepared to work just as much and just as hard -- but not at a desk 8 hours a day."
Andrew Bruck was finishing a law degree at Stanford when I interviewed him last year. "We want to feel ownership. We have a craving for an opportunity to do something really important," he told me. "People in my generation have been in a constant state of training. Now they're excited to go do something. The more responsibility you give people, the better they produce . . . There are more and more recent law school grads who are willing to take a lower salary in return for an opportunity for more meaningful work."
Ben McNeely, a journalist, described to me the difference between his former employer and his current one. "At the paper where I worked previously, the publisher would kill stories if they portrayed an advertiser in a negative light. At the paper where I work now, I have an opportunity to contribute something in a growing community. I was brought in to cover the new bio-tech research campus under construction nearby, where the Canon towel factory used to be, and to cover health care issues, as well. I have support from the editor and publisher who both have strong journalistic ethics. I like it that the editor pushes Windham, who us to dig deeper."
Carie Windham, who graduated from college in 2005, told me about the best boss she's ever had. "He asked me where I want to be in 10 years. He talked to me about creating the experience I want to have. He understood I wouldn't be there forever . . . Mentoring is a huge motivational tool, someone showing an interest in you and giving you feedback. We want to feel we have a creative, individual role -- that we're not just working on an assembly line. We want to feel like we have ownership of an idea."
Hiring the right talent, then, is only part of the problem employers face today. Equally important is how businesses create challenges and learning opportunities that motivate the Millennials to do their best. Google, which had more than one million applications for 5,000 jobs in 2006, is the number one pick of a place to work for many of the Millennials. Listening to twenty-two year old Matt Kulick talk about his work, one begins to understand how profoundly many companies will have to change in order to attract and retain the best talent: "First, they (Google) share ideals that I believe in -- open source software. And their products are solving important problems for people -- doing good in the world. I believe in what they're doing -- these values are very important to me. I wanted to help out, to make a contribution. The second reason I came to Google is because they give me the resources I need to accomplish major things that will really make a difference in world. The third reason is the responsibility they give you from the day you start. It is a winning combination. It makes me happy to go to work every day."
Fixing the Financial Crisis Once and For AllHoping to sound like leaders, Washington lawmakers want to get to the bottom of this financial crisis and create regulations to keep it from ever happening again. I don’t think is comes as any surprise to anyone that greed—on the part of both borrowers and lenders—is at the bottom of it. You can’t regulate greed out of existence. Regulation just improves creativity. Greed is regulated by character. Character is built at home, in our schools, in our churches, and yes, in our businesses.
No one likes to talk about character because it isn’t a quick fix, it often goes against our inclinations, it’s not immediately measurable, you can’t take credit for it, and it’s a time consuming, never ending process. George Eliot wrote in Middlemarch: “Character is not cut in marble; it is not something solid and unalterable. It is something living and changing.” It’s built in individuals day by day in little, almost imperceptible ways over the course of a lifetime. The problem is that we have only given a patronizing nod to character and politely moved on with the business at hand. How will I get mine if I don’t play it like everyone else? We learn too late, without character, no one gets anything.
Character needs to be part of the very fiber of the organization. It must be a part of its philosophy and vision. I don’t mean a statement of values we hang on the wall, but a statement of behavior beginning with the CEO on down. Tom Peters wrote in Thriving on Chaos that “effective visions are beacons and controls when all else are up for grabs….To turn the vision into a beacon, leaders at all levels must model behavior consistent with the vision at all times.”
In July, Hugo Dixon opined in the Wall Street Journal, “Greed for higher returns entices investors to take risks; fear causes them to avoid excess. When markets are healthy, the two are finely balanced. Problems emerge when that balance is lost.” You will find character behind this balancing act. Character stabilizes both people and markets. Character is inseparable from the culture in which it is formed.
Nothing will fix the financial crisis once and for all, but character will regulate it. Greed is a human issue and it will always be with us. It will always be something we need to train ourselves, our children, and our employees to regulate from within. The consequences can be devastating.
Apparently, Mr. Gekko, greed is not good. Lou Mannheim was right, “The main thing about money, Bud, is that it makes you do things you don't want to do.” Or shouldn’t do.
Ethics: Reinforcing Fixed Points
What Makes Us Human Conference
If you’re going to be in the Los Angeles area at the end of this month, you might want to check out the What Makes Us Human Conference.
Asking what makes human beings unique brings to mind a seemingly endless list of attributes and activities, both positive and negative.
Self-awareness and free moral agency, speech and symbolic cognition, our nimble thumbs, conscience and the capacity to imagine: these are just a few of the traits that distinguish us from other species.
Join some of today's leading thinkers from a broad spectrum of backgrounds, including religion, psychology, biochemistry, social philosophy, humor, art and music, as they present their views on the many faces of humanness at the What Makes Us Human Conference, April 28 - 29, 2008 (Monday/Tuesday).
Two days of panel discussions and question-and-answer opportunities will explore topics ranging from the age-old question of what sets us apart to what the future may hold for humanity.
The conference is jointly sponsored by Vision.org Foundation and the Oxford International Biomedical Centre. Vision.org publishes a superb, thought provoking, high-quality journal. I am an occasional contributor to the Vision Journal and you can get your own free one-year subscription here.
Outsmart Your CompetitionOutsmart!, Jim Champy argues that “in whatever field you’re playing, you must outsmart all your rivals. But luckily, the world is expanding rapidly. Shrewd competitors can stake out new territory, define the boundaries, and even set new rules for the game.” How do you do that?
Champy demonstrates how eight companies have outsmarted the competition by either:
Seeing what others don’t,
Thinking outside the bubble,
Using all you know,
Changing your frame of reference,
Doing everything yourself,
Tapping the success of others,
Creating order out of chaos or by
This adds up to a lot of intriguing lessons in how to. While there are no formulas to be found here, there are principles that certainly can be applied in your situation. In general though, Champy says ambition matters. Look for dramatic growth. Of course this means risk and not getting bogged down in research and analysis. Intuition counts. Risk is just part of doing business and we need to get comfortable with it. He writes, “I believe shortsightedness of shareholders prevents many incumbent companies from doing what the need to do to grow.” Risk and innovation need to become part of the culture. Everyone needs to be engaged in the process.
In talking with people at every level of the smartest companies I know, it’s clear that they all believe they own a piece of the solution. Because these companies look for distinctiveness in almost everything they do, opportunities abound for everyone to get involved, whether it be contributing ideas or executing them. The inclusiveness also nurtures a company’s growth because everyone see himself as a partner in setting strategy, not a minion being imposed upon from on high.This book will leave you with new questions and generate wide-ranging conversations. It’s a great place to start when reorienting your thinking.
The Increasingly Political Role of BusinessRecent articles in Foreign Affairs and The McKinsey Quarterly, promote the idea that businesses have a clear responsibility—increasingly a very political one—to the community beyond its shareholders.
In Foreign Affairs, Klaus Schwab, the Executive Chair of the World Economic Forum, writes, “Above all, a new imperative for business, best described as "global corporate citizenship," must be recognized.
It expresses the conviction that companies not only must be engaged with their stakeholders but are themselves stakeholders alongside governments and civil society. International business leaders must fully commit to sustainable development and address paramount global challenges, including climate change, the provision of public health care, energy conservation, and the management of resources, particularly water. Because these global issues increasingly impact business, not to engage with them can hurt the bottom line. Because global citizenship is in a corporation's enlightened self-interest, it is sustainable. Addressing global issues can be good both for the corporation and for society at a time of increasing globalization and diminishing state influence.”
Schwab writes that state power has shrunk. “At the same time as state power has declined, the influence of corporations on communities, on the lives of citizens, and on the environment has sharply increased. This fundamental shift in the global power equation means that just as communities and citizens look to government for answers and leadership, so now they target corporations with both requests for help and criticism for wrongdoing.”
Similarly, in an interview published in The McKinsey Quarterly, with the head of the Council on Foreign Relations, Richard Haass observes that
“Today, the environment that business leaders operate in is fundamentally different than it was a generation or two ago. It’s far more political. There is a conceit in the business and management literature that businesses face the toughest problems and have a lot to teach the rest of us. But the reality is that the environment business leaders operate in is increasingly political. It is global and it involves tremendous transparency, greater accountability, independent stakeholders, less freedom to maneuver, and an inability to narrowcast messages. That sounds a lot like politics. Businesses actually have a lot to learn.” Businesses should look to government for clues.
Both Haass and Schwab see a wider role for the CEO now than in the past. Haass tells MQ, “There is a slightly hermetic quality to management books that doesn’t quite capture an increasingly political, transparent, and demanding reality. Too much of the business literature operates within the confines of the firm, inside the balance sheet, or inside headquarters. That is important and necessary, but insufficient....The new role involves nothing less than a fundamentally different way of doing business. It is about dealing with a wider and more powerful group of stakeholders and constituencies and being proactive, not reactive, with them.”
Areas where businesses should assume a stronger social role include the lag between globalization and global arrangements, climate change, how best to integrate a rising China and a rising India into that region and the world, and the Middle East, which contains enough issues to keep anyone occupied. Haass adds, “The uncomfortable reality is that there is no shortage of subjects worth thinking and writing and speaking about if your business happens to be assessing political, economic, and strategic risk and suggesting what to do about it.”
Alan Greenspan: The Age of TurbulenceAlan Greenspan begins The Age of Turbulence on the morning of September 11th, 2007, but then leaps back to his childhood, and follows the arc of his remarkable life’s journey through to his more than 18-year tenure as Chairman of the Federal Reserve Board, from 1987 to 2006, during a time of irrational exuberance. It’s a good read, written in clear language on the workings of the economic world (and then some). Here are some of the informed opinions he presents in the book:
“After the Republicans lost control of Congress in the November 2006 election, former House Republican majority leader Dick Armey published a perceptive op-ed piece in the Wall Street Journal….Armey had it exactly right. The Republicans in Congress lost their way. They swapped principle for power. They ended up with neither. They deserved to lose.”
“[Wealth Creation] requires people to take risks. We can’t be sure our actions to acquire food, clothing, and shelter, for example, will succeed. But the greater our trust in the people with whom we trade, the greater the accumulation of wealth.…Reputation and the trust it fosters have always appeared to me to be core required attributes of market capitalism. Laws at best can prescribe only a small fraction of the day-to-day activities in the marketplace. When trust is lost, a nation’s ability to transact business is palpably undermined. In the marketplace, uncertainties created by not always truthful counterparties raise credit risk and thereby increase real interest rates.” Looking toward the U.S. economic future, a 4 to 5 percent inflation rate “is probably not a bad first approximation of what we will face.” He continues, “Yet to keep the inflation rate down to a gold standard level of under 1 percent, or even a less draconian 1 to 2 percent range, the Fed, given my scenario, would have to constrain monetary expansion so drastically that it could temporarily drive up interest rates into the double-digit range not seen since the days of Paul Volker.“
“A simple test for any retirement system is whether it can assure the availability of promised real resources to retirees without overly burdening the working-age population. By that measure, America may be on a collision course with reality….[W]e likely won’t have enough people working, nor will we likely have a sufficient increase in the amount each worker in average can produce, to cover the enormous shortfall from entitlements under current law. It may not even come close.”
“The notion of enlisting representatives of a corporation’s various stakeholders on the board—unions, community representatives, customers, suppliers, and so forth—has a nice democratic ring to it. But it is ill-advised and I strongly suspect it will not work. Today’s highly competitive world needs each corporation to execute plans from a single coach, as it were. A vote by the whole team on each big play is a recipe for defeat. I assume that eventually some of the more abrasive edges of Sarbanes-Oxley, especially Section 404, will be honed down.”
"The shift of manufacturing jobs in steel, autos and textiles, for example, to their more modern equivalents in computers, telecommunications and information technology is a plus, not a minus, to the American standard of living,"
“We should focus on addressing and assuaging the fears induced by the dark side of creative destruction rather than imposing limits on the economic edifice on which worldwide prosperity depends.”
“Venice, I realized, is the antithesis of creative destruction. It exists to conserve and appreciate the past, not create a future. But that, I realized, is exactly the point. The city caters to a deep human need for stability and permanence as well as beauty and romance. Venice’s popularity represents one pole of a conflict in human nature: the struggle between the desire to increase material well-being and the desire to ward off change and its attendant stress.”
Making Your Team Swing
World renown Jazz artist, Wynton Marsalis, has some profound things to say about business and relationships that are worth reviewing. Earlier this year, USA Today's Del Jones interviewed Wynton Marsalis about principles found in both jazz and business.
Marsalis told USA Today, “When you listen to great jazz musicians, you hear the respect they have for each other's abilities. During a performance, most of the musicians' time is spent listening to others. You see the trust they have for each other because they are always making adjustments and improvising based on what someone else does.”
Marsalis acknowledges that trust and listening to others goes hand-in-hand, but he brought up another important point that I think applies to any functioning organization or relationship. He points to the mindset of being aware of what others are doing and making adjustments for them in what you are doing, for the sake of the whole group. It’s not pointing fingers and affixing blame. It’s being so tuned-in to others that you can absorb their mistakes and they can absorb yours without missing a beat. He calls it “swing.” Here is more on that concept:
Swing is a rhythm, an era in American history, and it is a world view. In this world view, there is a belief in the power of a collective ability to absorb mediocre and poor decisions. When a group of people working together trust that all are concerned for the common good, then they continue to be in sync no matter what happens. That is swing. It's the feeling that our way is more important than my way. This philosophy extends to how to treat audiences, consumers, staff or dysfunctional families. This may seem idealistic, but think about how church congregations recite, nearly together and completely unrehearsed. They proceed by feel. Swing is the single objective. It is the core that makes us all want to work together.
Neuroscience in the Workplace PodcastIn this recording, David Rock speaks with John Case, CEO of Electrolux Home Care Products North America about how neuroscience links to the performance strategies implemented in his organization. John first heard David speak in Las Vegas and found that neuroscience helped to explained why his business strategies have worked.
Listen Now / Total time: 36:29 minutes
The Strategy Paradox
The strategy paradox lies in the fact that the characteristics that we typically associate with success are also systematically associated with total failure. That is, the strategies with the greatest possibility of success also have the greatest possibility of failure. Author Michael Raynor, says that resolving this paradox requires a new way of thinking about strategy and uncertainty.
In his research he found that strategies normally associated with success look very much the same as strategies that in fact lead to failure as well. What was interesting is that while successful and failed strategies look the same, strategies that lead to mediocre financial performance look very different from strategies associated with both successful and failed strategies. This leads us to the conclusion that the opposite of success is not failure, but mediocrity. So to assume that we are safe with a compelling vision, commitment and a clear focus—all defining elements of successful strategies—is misguided as these elements are also systematically connected with some of the greatest strategic disasters. The real issue is that these elements must be based on an accurate view of the future, and not surprisingly even the best minds often get this wrong. Naturally, the further out you go the greater the degree of strategic uncertainty.
One of the reasons the future is difficult to predict is because it is random. In other words, the past isn’t always a good indicator of the future. Randomness enters in your analysis because at some point you have to confine it. You have to leave some data out, thus reducing your accuracy. To avoid this “we find ourselves compelled to build a theory of everything in order to predict anything.” Not practical—analysis paralysis.
Another issue is cause and effect. Accurately determining why something happened before—initial conditions—is a judgment call. Even if we are correct, recreating those conditions exactly is not generally doable. (See The Halo Effect.)
What are we to do? Raynor suggests implementing what he calls strategic flexibility and using what he calls requisite uncertainty to allocate responsibility for managing uncertainty vertically through an organization. That is, calibrating the focus of each level of the hierarchy to the uncertainties it faces.
For instance, Board members should be looking ten or more years out and asking, “What is the appropriate level of strategic risk for a firm to take? What resources should be devoted to mitigating risk? What sacrifices in performance are acceptable in exchange for lower strategic risk?” CEOs looking out five to ten years, should ask, “What strategic uncertainties does the company face? What strategic options are needed to cope with those uncertainties? In other words, it falls to the CEO, and the rest of the senior team, to find ways to create the strategic risk profile the board has mandated for the firm.
Moving down the hierarchy, operational divisions dealing a time horizon of two to five years should ask, “What commitments should we make in order to achieve our performance targets? For these folks, it’s no longer about mitigating strategic risks, but making strategic commitments. And then managers with a short term time of horizon of 3 months to a year should ask, “How can we best execute the commitments that have been made in order to achieve our performance targets? There are no strategic choices to make at this level, because the time horizons are too short.
What is useful about this book is that it is not just for CEOs. As just shown, people at all levels in an organization deal with a certain amount of uncertainty. Regardless of the timeframe they are dealing with or looking at, the tools outlined here are valuable for managing that risk.
Five Tests of Obviousness
We’ve received a lot of interest over the last few days in a little book written 90 years ago, due to a Forbes commentary by Jack Trout entitled In Search Of The Obvious. The book is the business classic, Obvious Adams written by Robert Updegraff. Jack Trout calls it his favorite marketing book, although its application is far wider. Why does Jack like it so much?
Well, because the search for any marketing strategy is the search for the obvious. Consider the dictionary definition of the word "obvious": easy to see or understand, plain, evident. With that definition you begin to see why an obvious strategy is so powerful. It's simple, easy to understand and evident. That's why it works so well.
In 1953 Updepgraff added a section where is laid out five tests of obviousness:
Test One: The problem when solved will be simple. The obvious is nearly always simple--so simple that sometimes a whole generation of men and women have looked at it without even seeing it.
Test Two: Does it check with human nature? If you feel comfortable in explaining your idea or plan to your mother, wife, relative, neighbors, your barber and anyone else you know, it's obvious. If you don't feel comfortable, it probably is not obvious.
Test Three: Put it on paper. Write out your idea, plan or project in words of one or two syllables, as though you were explaining it to a child. If you can't do this in two or three short paragraphs and the explanation becomes long, involved or ingenious--then very likely it is not obvious.
Test Four: Does it explode in people's minds? If, when you have presented your plan, project or program, do people say, "Now why didn't we think of that before?" You can feel encouraged. Obvious ideas are very apt to produce this "explosive" mental reaction.
Test Five: Is the time ripe? Many ideas and plans are obvious in themselves, but just as obviously "out of time." Checking time lines is often just as important as checking the idea or plan itself.
Jack adds, “To me, those five principles are worth a thousand books on marketing, mine included.”
Can’t Think For Yourself?Are consultants making us insecure? Are we afraid to make decisions for ourselves? According to a recent article in the Guardian even consultants are saying enough is enough. Guy Clapperton reports: Alastair Clifford-Jones, chief executive of management consultancy Leadent, has identified what he calls "consultancy addiction" - the process by which clients get so hung up on having consultants around that they won't let them go. "You just see that people are using consultants and work alongside them - you go to a meeting and next to them is a consultant," he says. "It's like losing the ability to make a decision."
Indeed, some consultants actually create this dependency by not giving the client the decision making responsibility. Clapperton continues: Simon Rawling, head of project management consultancy PIPC, puts a lot of the onus on the client's stated requirements. "The consultant should help with the business and not run it," he says. "They can put a new IT platform in, put a required change in, but not run the day to day business." People have to recognize the roles of consultants before commissioning them, he says.
Consultants can be of immense value to an organization—and often quite wise—by bringing awareness of another viewpoint or approach. In the end, for successful change to occur, the change needs to become a part of the organizations culture and that only happens by implementing it yourself. You can’t outsource out change. Consultants influence, guide, facilitate and structure change, but the goal is ownership by the organization and not the partnership.
Capperton offers the following five questions as an Addicted to Consultancy Self-Check:
Ask yourself the following questions to find out whether you're over-using consultants:
1. Can you say for certain, or even roughly, when your consultant will be leaving the premises permanently?
2. Do you have a good reason for not taking someone on as staff to fulfill the consultant's role?
3. Do you have a defined objective for the consultancy you've employed?
4. Do you ask your consultant for advice on matters other than the task for which you hired them?
5. Do your employees refer to the consultant as the "owner" of an initiative, as distinct from the internal sponsor?
Answer "yes" to the first three questions and "no" to the last two and you're likely to be using consultants sensibly. "No" to the first three and "yes" to the last two means you're using consultants as a crutch rather than a defined part of your business. Ask them about it - if they're any good they'll probably be pleased to hear it from you rather than having to raise it themselves.
Hiring Teams as the TalentOften overlooked in the rush to find that one person that can make a difference in your organization is the context that that superstar worked in. Rarely is an individual great of and by themselves. It usually requires a team of people working together in a great environment to make something great happen. Taking the superstar out of that context can often lead to less than great performance. Thinking of and hiring the team as the talent may be what we should be looking for when trying to hire-in great performance.
Bob Sutton makes this point in an excellent post on his blog. Commenting on a May 2006 Harvard Business Review article by Boris Groysberg, Andrew McLean and Nitin Nohria entitled, Are Leaders Portable? he writes:
One of the most interesting findings … was that GE executives who brought along 3 or more GE alumni to join their teams had “annualized abnormal returns” of 15.7% above average; while those that hired one or none from GE had -16.7%. Groysberg and his colleagues call this past experience working together “relationship human capital,” horrible language from economics. Other researchers call it “prior joint experience,” which isn’t much better. But whatever you call it, while HR practices turn attention to individual stars, study after study shows when people have experience working together – and have learned who knows what, how to read those little signals that people send off, and can communicate ideas quickly and efficiently – their teams and organizations perform better.
Executive CompensationPrompted by a piece in the New York Times reporting that Ivan Seidenberg, CEO of Verizon, collected $19.6 million in compensation last year, Tom Peters commented on executive compensation. Here’s an excerpt:
In general, there's been a firestorm surrounding executive pay this year. I've generally avoided the topic. I believe in markets—including markets for exec pay. On the other hand, when something looks downright silly ... it may well be downright silly. Seidenberg is but one of many examples of this magnitude of apparent disjunction between pay and performance.
Tom is right on. In general, we give CEO’s too much credit for successes and too much blame for failures. This impairs the performance of both the top management team and the organization as a whole. Robert Sutton, professor of management at Stanford, recently said in an interview that new research is coming out that suggests that the bigger the difference in pay between the CEO and next top three people of that management team, the worse that firm performs. The problem isn’t that they get more. They should. The problem is that is disproportionately more. But, how should that compensation be determined? Perhaps compensation should be linked to defined earnings performance goals? Should a highly qualified CEO get what the market is willing to pay? Should a wise CEO place a self-imposed cap on their compensation for the good of the organization and the market in general?
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