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Top 5 HBR Breakthrough Ideas 2010

Tuesday, January 19th, 2010

Each year we’ve narrowed down the Harvard Business Review list of 20 Breakthrough Ideas to a manageable five. For 2010, the magazine has done half our work for us; in the Jan-Feb issue, they present only 10 ideas. Here are the best of them:

1. “What Really Motivates Workers,” Theresa Amabile & Steven Kramer. Amabile & Kramer continue their fascinating diary study (see this earlier post discussing Amabile & Kramer’s work on creativity) & discover a key hidden link to worker motiyvation: the desire to see & understand their own progress toward a goal. Perhaps feedback (see this related post, and be sure to read the comments) is important after all? (There’s a similar sentiment behind one of last year’s breakthrough ideas, “The Gamer Disposition” – gamers need to know where they stand in relation to their goal.)

2. “The Technology That Can Revolutionize Heath Care,” Ronald Dixon. Electronic Medical Records are fine, but how about enabling more virtual contact between doctor & patient? Increasing such contacts can reduce expensive office visits & nip potentially-serious problems in the bud.

3. “What The Financial Sector Should Borrow,” Lawrence Candell. The government employs nonprofit research centers like Lincoln Labs & MITRE to provide guidance on military innovations. A parallel effort focused on the financial market would yield better insight & decisionmaking when it comes to regulating markets & financial instruments.

4. “A Market Solution For Achieving ‘Green,’” Jack Hidary. Municipalities can tap the power of the bond markets to finance environmental building retrofits. Borrowers are assessed increased property taxes to pay off their loans. Developers & municipalities win: property values rise & reduced utility costs exceed the tax increases immediately.

5. “Hacking Work,” Bill Jensen & Josh Klein. Seek out the “benevolent” rule-breakers in your company, & instead of crucifying them, study what they do & determine whether their workarounds can improve your business. [I haven't worked with a company yet that is ready to take this one on.]

(Disclosure: Jack Hidary invested in a customer of my former employer and I met him once. I’d be stunned if he had any recollection of that meeting.)

Tags: development, environment, health care, investment, leadership, learning, organizational development
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The myth of the “SuperCorp”

Tuesday, December 22nd, 2009

I had lunch with a friend and fellow consultant last week. I was mentioning some impressive recent reading on innovation that I thought his clients might be interested in. He said this:

That Harvard Business Review stuff is great. I used to read it a lot. But you need a certain corporate culture to be able to do these types of things. You need to have basic management stuff nailed down, you need a clear mission and vision and have that communicated and understood across the company. You have to be good at collaborating.

The places I work with don’t have that. They couldn’t do these innovation processes even if they wanted to.

My friend works with medium-sized local businesses. But I remember my big company days, and the picture wasn’t much different. They couldn’t pull off big management initiatives either (I remember failed attempts at creating a Learning Organization and embedding Value-Based Selling).

I have to admit, I love to read stuff like Rosabeth Moss Kanter’s writings around her book SuperCorp. Kanter writes that companies like Procter & Gamble, IBM, etc., are implementing “management 2.0″ – doing well by doing good, adopting socially-conscious principles and through them are gaining profits and positioning themselves for the future. But in my heart, I’m skeptical.

Here’s some recent writing of hers:

…keeping people employed in good jobs – is a goal of the vanguard companies I describe in my new book, SuperCorp. Companies such as Procter & Gamble, IBM, and others are trying to create innovation and profits through values and principles that enable them to have a positive social impact. They are thinking their way out of twentieth-century assumptions (e.g., that a job must be performed in a facility at specific times and assigned by a boss who observes performance) to create twenty-first century dynamic workplaces.

The Super-corporations want to be employers of choice. Their leaders prefer not to talk about insecurity but instead invoke flexibility. That semantic distinction might be scorned by the uneasily employed, but it conveys a new reality that can have positive as well as negative consequences.

Flexibility shows up in family-friendly policies. Vanguard companies are likely to offer family leave for care-taking, reassign husbands and wives so they can work from the same city, and provide lounges for breast-feeding new babies. They also give employees opportunities for community service, to help them express their values and make a difference to causes they care about, as part of their employment, which is an effort make work meaningful even for those in jobs with a high drudgery quotient.

These companies’ leaders say that the challenges of global change require a shift of responsibility from employer to employee. Employers must give people opportunities and tools to succeed, but individuals must keep themselves ready for the future.

It’s possible that big companies have changed since the years I spent working for them. But to me it’s likely that Kanter’s thesis is valid when you talk to the CEO, but completely invalid at ground level. A big company I used to work for was recently acquired by an even bigger one. And the people I still know there are scared to death, worried about when the ax is coming down next. They’re working hard, but working scared, and that’s not a good environment to get important work done. IBM and Procter & Gamble live in the same world as this other big company. I would be surprised if down deep their employees don’t share the same insecurities and fears (and compensating unproductive behaviors) as my former colleagues.

If the CEO lives in one reality, and the customer-service reps live in another, what difference does it make? It comes down to where the value is added in a business. At large companies, the vast majority of value creation happens at the ground level – the hundred thousand people on the ground floor, or the five thousand first-line managers who support them. Not at the executive level.

And at ground level, I’d bet that many employees of Procter & Gamble and IBM don’t view their company as a SuperCorp. They probably see it much like the clients of my consultant friend – a company with plusses and minuses and a lot of basic things that aren’t fixed yet. No matter what the CEO thinks.

Thoughts?

Tags: consulting, gurus, leadership, management
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The tyranny of the dashboard

Wednesday, December 2nd, 2009

I frankly am beginning to feel that I’m shouting into a void here. Companies are spending more time and money equipping the CEO and team with information, while starving the thousands of ground-level employees who, frankly, can have more impact on the company’s success simply through their day-to-day actions.

One ray of hope: an article in the December Harvard Business Review (co-authored by Fred Reichheld, the creator of the Net Promoter Score – a simple metric that somehow captures the complexity of customer perception) entitled, “Closing The Customer Feedback Loop.”

As opposed to the conventional wisdom of gathering masses of data and trying to detect high-level patterns in them, Reichheld and his coauthors talk about getting more granular – gathering information at the customer transaction level, creating small rollups of the data, and sharing them where they can do the most good – with the front-line employees and first-level management who directly impact the customer experience.

I agree with their prescriptions, but it still leaves the problem of what to tell upper management. Is there anything wrong with high-level management dashboards? Well, yes. Something of the danger in this is described in today’s WSJ article on Simpson’s Paradox (”When Combined Data Reveal the Flaw of Averages“). The first example cited: while today’s overall unemployment rate is lower than the 1982 level, unemployment at each educational level is higher. (The overall rate is lower because there are more people at higher educational levels, which have lower unemployment, than there were in 1982.) The article states: “Compared with a similarly educated worker in 1983, ‘the worker today has higher unemployment at every educational level.’”

There’s always something lost in summarization. In the case of Simpson’s Paradox, the result of the loss is a flawed conclusion, or at minimum missing a greater point of the story. Overall unemployment today is lower than 1982, but people today have been hit harder than their 1982 counterparts.

Dashboards distort reality as well. Executives rely on machines crunching millions or billions of numbers to present them an easily readable story of what is happening in their businesses. Yet the farther the statistics are distanced from the on-the-ground reality, the more likely they are to lie.

What can be done? Let’s get back to “Closing the Customer Feedback Loop.” On-the-ground data gathering and interpretation by those close to it makes all the sense in the world. But in communicating with upper management, there needs to be less sharing of numbers, and more sharing of individual stories. You can’t get any more granular than that. You can read a vibrant story in a minute or two. And stories fall into patterns–something more subtle and nuanced than statistics–that help senior management understand what’s going on. And human experiences are more understandable than the simplest dashboard.

There are tools to do help you gather and use stories. Rakontu, an open-source story-sharing platform, is one. Enterprise 2.0 tools such as blogs would also work for this purpose. So what’s stopping us? Or am I still shouting into the void?

(Photo by awegedebe via stock.xchng)

Tags: blogging, customer relationships, customer service, knowledge, knowledge management, learning, narrative, social media
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Is everyday management a social threat to employees?

Friday, November 6th, 2009

There’s a neat article by Reuters discussing how workers’ brains and management practices often work at cross-purposes. They cite, among others, Charles Jacobs, author of the book “Management Rewired,” recently reviewed here. An excerpt of the Reuters piece:

“One of the things organizations need to do is respect the deeply social nature of the brain. People are not rational, they are social,” David Rock, author of “Your Brain at Work” (HarperBusiness), told Reuters in an interview. “The social brain is such that we are really driven to increase social rewards, and we are really driven to minimize social threats.”

Rock, the founder of a company that applies the insights of brain science to leadership coaching, lists five areas in which our brain’s threat mechanisms are easily triggered at work: status, certainty, autonomy, relatedness and fairness.

When we feel threatened in any of these spheres — a superior displays power over us, rumors circulate about the future of our job, our work is micro-managed, we are excluded from colleagues’ conversations, or our work is unjustly overlooked — our brains focus our attention on the threat.

Jacobs, in his book, writes about the deeply illogical outcomes of giving and receiving feedback: oftentimes, rewards often undermine continuing what we are doing well, while negative feedback reinforces the undesirable behavior. Writes Jacobs: “A landmark study at General Electric found that the company’s performance appraisal system not only didn’t work, it produced results that were virtually the opposite of what was intended…. GE found that a manager’s praise had no effect on performance one way or the other, while the areas that a manager criticized showed the least improvement.”

What are your experiences with performance reviews, management encounters, etc.? Have they felt like threats to you?

(Hat tip to Felix Salmon)

Tags: leadership, management, neuroscience, performance
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My reading journal: Morten Hansen’s “Collaboration”

Monday, November 2nd, 2009

I’ve finished a few books recently but am a bit behind on reviewing them. My kids have started documenting their books in reading journals that help them with reading comprehension. To add a bit of variety (and to make sure I’m not getting lazy), I’m going to use the reading journal format for this week’s reviews.

“Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results,” by Morten Hansen. 2009: Harvard Business Press, 231pp.

When did you read it? September-October 2009.

Subject: A study of collaboration in business; when it is and when it is not appropriate, and best practices for successful collaboration.

Did you like it? How many stars would you give it (1-5)? 4 (thankfully I don’t have assigned reading… I won’t be writing about any 1-star books here!)

Summary: Hansen has spent his academic career studying how corporate groups collaborate, effectively and ineffectively. This book sums up a number of studies he has worked on with various companies over the past 15 years. First, Hansen discusses obstacles to collaboration – including the warning that not all collaboration is good collaboration. In other words, when the costs of collaboration (communication, coordination, negotiation, etc.) outweigh the benefits. This frequently happens when businesses lacking key synergies are combined via merger.

The bulk of the book is devoted to discussing what Hansen calls “disciplined collaboration.” He discusses four collaboration barriers – not invented here, hoarding, search (inability to find the insight you need), and transfer (inability to put others’ knowledge to use), and three “levers” to promote collaboration: “unify people, practice T-shaped management, and build nimble networks.”

These are practical suggestions and, on their own, not revolutionary. But to me seeing these three levers together as requirements for successful collaboration was distinctive and valuable.

Favorite quote: “Paradoxically, the emphasis on performance management over the past decade has created what Harvard Professor Leslie Perlow calls a ‘time famine’ at work. As people are pressured to perform, they feel that they don’t have the time to help others; reasonable requests for help are seen as burdens that put them behind in their own work. So people are faced with a trade-off – to do their own work (but not help others), or to help others (but get less work done).” p.55

Was it similar to anything you have read before? There are echoes of the recent book “Senior Leadership Teams” which takes up the question of how to get groups of senior executives, who naturally work to drive results from their own groups, to collaborate – another application of the “T-shaped management” approach.

Will this book end up on your bookshelf or in the library donation pile? The bookshelf. Collaboration is an important subject and I don’t have any books that deal with that as a main topic. Plus it’s good.

Related posts:
On “Senior Leadership Teams”

Tags: collaboration, communication, management, social networking
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A company’s online, sharable, living window to the outside world

Wednesday, September 2nd, 2009

I interned for IBM in the summer of 1983. It was the best summer job imaginable–fun work, smart people, good pay, and of course better resume fodder than my prior work experience (the hardware store).

My first month, though, I didn’t have much to do. Everyone was busy, and it was hard to ask busy people to find me an assignment (this problem got solved, but that’s another story). So I read a lot. In particular, every week or so a packet of information came through the interoffice mail, consisting of pages and pages of photocopied newspaper and magazine articles relating to IBM and its business.

I looked forward to each packet and read every article. I may have been the only one in the office to do so. But I was really curious about the business and it was great to have all that information in one place. I kept that curiosity, about the company I worked for, its markets and the macro environment, after that, and that may be why I later gravitated to outward-facing roles like marketing, sales and strategy.

At any rate, it’s 25 years later, and there’s more information about a company, its markets, and the outside world than in 1,000,000 article packs available at the click of a mouse. Yet companies continue to act as if they have no idea what’s going on outside their walls.

Harvard Business School’s John Kotter, in his great 2008 book “A Sense of Urgency,” blames an insulated culture for companies’ inability to sustain their change initiatives–he urges companies to “bring the outside in.”

Here’s how Kotter describes the importance of sharing information that allows employees to experience a broad view of the company and its prospects:

I can still remember a visit I made to a company ten years ago as if it happened last week. The firm had been exceptionally successful in the middle part of the twentieth century. But by the time of my visit, market share had been steadily eroding for twenty years. The company was in a war, badly wounded, some would say bleeding to death. Yet when I opened the door to corporate headquarters, I entered a visual fantasy world.

Nowhere was there a single sign that the company was struggling, had been struggling for two decades, and was continuing to be beaten again and again in the marketplace. Nowhere was there a sign that the technology affecting its products was changing faster, offering it wonderful opportunities to leap ahead of competitors. The huge waiting room was pin-drop quiet and had the air of an antechamber outside the king’s throne room.

In total contrast, I once visited a successful firm that seemed to have its entire outside world hung on the walls of its waiting room. There were pictures of customers, of its own products, of its manufacturing plants, office buildings, competitor products, recent articles from industry publications, and comments (mostly good and some bad) from customers. There were a few prototype sketches of products to come. There were two big charts, one showing margins over the previous two years (which made the firm look good) and one that showed stock price (which made the firm look not so good). The entire effect was somewhat like a teenager’s room, especially the picture of a competing CEO with a mustache drawn on it!

The second company’s waiting room walls provided employees and visitors with a multimedia picture of the outside world every day. It reminds me of the article packs I read during my tenure at IBM.

Imagine the wall, virtualized, visible on every employees computer desktop via the intranet. Imagine that any employee can post items: news articles, blog posts, Tweets, rumors, video clips, etc. Other employees could vote on the items, comment on them, point out patterns.

In other words, a living, breathing, interactive, multimedia, ubiquitous version of those waiting room walls.

The technology to do this is ubiquitous and fairly cheap. Most companies have the basic plumbing to do it already. All they need is the framework, the processes, and, perhaps most challenging of all, the will and courage to do it.

Companies have to decide whether they want to be more like Kotter’s first example–the fantasy world, or the second–immersed in the real world, in all its messiness, complexity and contradiction.

(Photo by stevendamron via Flickr Creative Commons)

Tags: immersion, information management, innovation, learning, marketing, outward-facing, product development, sharing
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Teams may not be all they’re cracked up to be

Monday, May 4th, 2009

Great interview in HBR (“Why Teams Don’t Work” – $$) this month of J. Richard Hackman, a longtime expert on teams (and co-author of one of my favorite books of 2008, “Senior Leadership Teams“).

Hackman spends much of the interview demolishing myths that have developed around the power of teams:

- Teams usually deliver less than the sum of their resources.

- Team makeup should be changed infrequently if you want to develop a strong team.

- Harmonious teams are not necessarily more effective than disagreeable ones.

- Poor team players can still be excellent contributors (just don’t put them on teams!).

There’s much, much more. Every manager must read this before setting up that next team.

Tags: management, organizational behavior, reading list, teams
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“Goals Gone Wild” – a bracing indictment of the business objectives culture

Thursday, February 5th, 2009

“What’s your MBO?”

That was a frequent question at one of my past companies. MBO meant management by objective, and was a way of asking someone what their goals were for that year. It’s funny, thinking back on it, that the goals culture was so strong that we never gave MBOs a second thought. And who doesn’t sit down with her manager at the beginning of each year to set out objectives?

In a new working paper by Max Bazerman, Lisa Ordonez, Maurice Schweitzer, and Adam Galinsky of Harvard Business School (”Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting“), the authors take a fresh look at the goals culture and see that, rather than be a driver of effective performance, “goals gone wild” have caused much damage in the business world. Here are a few examples:

Enron’s growth objectives created an out-of-control culture inspiring market manipulation and outright fraud.

Ford’s goal to build a small car weighing less than 2000 pounds and costing under $2000 by 1970 caused the Pinto to be rushed to market, with safety checks unperformed or ignored. The car’s gas tank was prone to rupture in an accident and, as was learned, the car tended to explode on impact from the rear.

Sears’ goal to increase auto service sales in the early 1990’s to $147/manhour resulted in overcharging and unnecessary repairs.

Bazerman’s work on behavioral effects in negotiation (including one of my favorite books of 2007) and decisionmaking is uniformly excellent and insightful. In this paper, he and his co-authors survey research showing how challenging goals, while creating a powerful incentive, also create significant negative side effects, including:

- focus on short-term results over long-term benefit
- favoring the easy-to-measure over the difficult to measure, independent of importance
- goals creating performance ceilings (e.g., the salesperson who stops selling after reaching her quota)
- reduction in cooperative behavior
- reduction in learning
- unwillingness to experiment and innovate
- decrease in intrinsic motivation (”Show me the money!”)

It’s not a pretty picture. I doubt after reading this that anyone would be more eager to set goals for their employees. It does a great job in laying out the risks of overreliance on goals. There’s more work needed on how to deploy goals effectively, because that’s the question that we’re left with at the end.

Tags: goals, management, measurement, objectives
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"Sesame Street simple" communication with a story

Wednesday, November 12th, 2008

My first reaction to this Bob Sutton post–”Sesame Street Simple: A.G. Lafley’s Leadership Philosophy“–was a slight recoil. Perhaps because I thought we had tapped out on learning from A.G. Lafley (can’t we let the man run his company in peace?). But also because my natural communication style is not “Sesame Street simple.” Unsure of that? Read this blog for a while.

But, after letting it sit a few weeks, I’m starting to get what Sutton is saying. He’s onto something important about communicating with and influencing large numbers of people:

…although executives who talk about many ideas and complex ideas will be viewed as smarter — wiser and more effective executives pick just a few simple messages and repeat them over and over again until people throughout the organization internalize them and use them to guide action. Constantly changing messages lead to the “flavor of the month problem” where people don’t act on the current message because they have learned that, if they wait a few months (or days) the message will change (managers in such organizations become very skilled at talking as if they are acting on the flavor of the month, but not actually doing the thing that senior executives are pushing at the moment.) And making things overly complicated may make the senior executives seem smart and feel smart , but if a message is too complicated to understand, it is also means that the implications for action are impossible to understand as well.

Managers “talking as if they are acting…but not actually doing” recalls the damaging “false urgency” that inflicts many companies, as John Kotter discusses in his new book.

There’s a way to do “Sesame Street simple” in a way that provides powerful insight and direction. Telling a story. Stories can be understood by everyone. They can be retold and honed for a particular group (”what’s our ‘the consumer is boss‘ story?”). They can convey complex lessons and spawn deep discussions about meaning.

That’s a “Sesame Street simple” approach even I can understand.

(Photo: Hokey Pokey Elmo from Toys R Us)

Tags:
change, innovation, leadership, management, communication, storytelling

Posted in change, communication, innovation, leadership, management, storytelling | Comments

"Blocking and tackling"–the mother of all sports metaphors

Monday, October 6th, 2008

From Merriam-Webster’s Collegiate Dictionary:

block verb – 1e: to interfere usually legitimately with (as an opponent) in various games or sports

tackle verb – 2 a: to seize, take hold of, or grapple with especially with the intention of stopping or subduing b: to seize and throw down or stop (an opposing player with the ball) in football.

Long-time readers of this blog will recognize my affinity with sports analogies and metaphors. So, recently, during the summer lull, I embarked upon a non-scientific study of the frequency of certain sports metaphors in business writing. And one popped up far more often than any other: “blocking and tackling.”

For those unacquainted with American football, blocking and tackling are two of the most basic skills of the game–necessary (but not sufficient) ingredients for winning. Teams that can’t block or tackle are doomed. For executives, blocking and tackling represent work that’s not glamorous but is important.

Here are some examples:

WSJ.com Marketbeat What’ll it take to fix Yahoo isn’t a mystery, and isn’t a magic bullet, Henry Blodget writes at Silicon Alley Insider. “It’s just blocking and tackling. And it will take time.”

Innosight blog Burberry has spent more than $100 million to improve its ability to ensure that the right products get to the right stores at the right time. These challenges of course require a fair amount of blocking and tackling, but there’s also ample room for fresh, innovative thinking.

NeuStar Q2 2008 Earnings conference call (COO Lisa Hook speaking): However, I asked to be on this call as a six month check-in, to assure that I am focused on delivering the basic, blocking and tackling necessary to meet our targets for growth and profitability.

This phrase was a recurring theme in executives’ earnings calls (here, here and here, for example). Of course, given the recent news in the financial markets, perhaps there was better blocking and tackling they could have done.

Other metaphors I looked for that were much rarer: “home run,” “unforced error” (which was popular in political writing), “icing the puck,” “letting off the hook.”

Did I miss any? What favorite sports metaphors do you have?

Related post:
Welcome to Sports Analogy week

Tags:
finance, sports, metaphor, management, leadership

Posted in finance, leadership, management, metaphor, sports | Comments