Posts Tagged ‘leadership’

Why “Undercover Boss” is dramatic, and why that’s a bad thing for business

Thursday, February 25th, 2010

7-11 undercover bossI finally got a chance to check out “Undercover Boss” this week, after being curious about it since first hearing about it at the Super Bowl. It follows many reality show conventions, including dramatic music, montages and strategic repetition (I heard, “Those items are supposed to be going to charity!” at least three times).

Why, though, is “Undercover Boss” dramatic? In short, it’s based on an assumption that big-company CEOs are completely disconnected from the front lines of their businesses. Only by the CEOs being out of touch can these shows create the surprise and drama they depend on. Seeing Joe DePinto, CEO of 7-11, struggling to make coffee is funny, but it’s also telling. Selling coffee is how 7-11 makes money. According to DePinto, the store he works in serves 2500 cups per day. DePinto spends his days attending meetings and reading reports, not making coffee, and it shows.

I saw a terribly sad example of the “undercover boss” last week while watching “The Hurt Locker.” One of the soldiers meets with a psychologist colonel who is counseling him for his stress-related illness, caused by his daily encounters with IEDs and their carnage. The soldier teases the colonel that he doesn’t know what it’s like out on the streets. The colonel replies that he’s been out on the front lines earlier in his career. One morning, surprisingly, the colonel shows up and offers to accompany the group on their daily missions. The tragic ending of this amazing scene really struck me and pointed up in an extreme way the costs of the out-of-touch boss. How can one lead when he has no idea what it’s like where the rubber meets the road?

Related posts:
Business Book Hall of Fame: War & Peace
Time to start listening to front-line employees
A method for gathering and using insight from front-line staff

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.)

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?

Is everyday management a social threat to employees?

Friday, November 6th, 2009

Management RewiredThere’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.”

your brain at workRock, 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)

Related post:
Considering the mind: mini-reviews of “Buyology,” “Management Rewired,” and “Free Market Madness”

Vendors Are Talking: Grocer is “not going to let someone steal my customer”

Friday, October 16th, 2009

Language, especially spoken language, is very revealing when it comes to someone’s values. This is why corporate executives are subjected to media training to keep them on message while speaking in public – meaning, of course, to appear to say something while not really saying anything.

Sometimes, however, executives defy their training and say what they’re really feeling. Let’s parse this recent statement from Stater Bros. CEO Jack Brown, from an interview as quoted in the Wall Street Journal. The Journal article concerns grocers who had cultivated a premium image, now feeling forced to cut prices to retain customers who are considering trading down to discount grocers:

We are scraping the bottom on prices. I’m not going to let somebody steal my customer, because when this (recession) is all over, I don’t want to go looking for my customer.

Brown’s words are property words. It’s akin to saying: “I’m not going to let someone steal my bike, because when this is all over, I don’t want to go looking for my bike.” Customer = his property. (You can’t get any less VRM than that.)

I’ve been reading the new book “Collaboration” by Morten Hansen, and he writes that executives who successfully collaborate practice what he calls “T-shaped management”: they manage down (their line responsibilities) and across (collaborative projects across the company). This may seem obvious, but, as pointed out in the 2008 book “Senior Leadership Teams,” senior managers are often promoted because of their ability to deliver results from their groups, not for being good at collaboration.

I’m more interested in interactions between companies and customers than within companies. Yet Hansen’s “T-shaped” concept also applies, I think, to succeeding in being a customer-centric company. An executive must understand the needs of the company (the vertical line of the T), and identify with the needs of customers (the horizontal line). She must balance both.

It probably goes without saying that getting angry for people “stealing” your customers, or the inconvenience of “going looking” for them, is focusing completely on the company and not at all on the customer. It’s I-shaped, not T-shaped, practice. And for a grocer, perhaps the ultimate consumer company, it’s reveals some old-school attitudes that won’t work well in the future.

Related posts:

September 2009 Carnival of Trust: Nine ways of looking at trust

Monday, September 14th, 2009

This post is part of Charles Green’s Carnival of Trust, a monthly review of blog entries discussing elements of trust in relationships among people and companies. Thanks to Charlie for inviting me to host this month’s Carnival.

What is trust? Or, more directly, what are the conditions for trust to be present, between a customer and a company or between two companies? This was a theme of several great blog entries this month. To Ron Ashkenas in the Harvard Business Publishing Conversation Starter, simplicity creates trust. He writes: “When you create complicated explanations of products, services, and contracts, customers often feel that you aren’t being truthful about what’s being offered.”

In a selling situation, a salesperson’s knowledge and insight are essential to creating trust, according to Dave Brock. “If the customer doesn’t know, immediately, that you can contribute to what they are doing, they will be reluctant to engage in any kind of discussion with you.”

Roger Dooley of the Neuromarketing blog writes that fairness and transparency are essential to trusting and effective relationships between partners and that engaging in those behaviors (which are rare indeed in many business dealings) can yield better profits than every-man-for-himself negotiation.

Another dimension of trust is allowing autonomy – the ability to loosen the leash a bit and allow employees to make their own decisions rather than the system deciding for them. For example, deciding what material they need to access, even if it’s outside their everyday needs. Bruce Schneier discusses the ineffectiveness of “role-based access control” and argues for a system that sets employees’ access rights but allows them to override these controls when they decide it’s necessary. These escalations are closely audited and inappropriate accesses are penalized. In a world where companies are logging keystrokes to “ensure” remote workers’ productivity, Schneier’s proposal is welcome indeed.

A warning to companies reinventing themselves: merely acting differently can impact the trust their customers have in them, according to Lewis Green in his post, “Social Strategies Grow Out of the Culture, Not the Tactics.” Writes Green, “When customer service is outsourced overseas and customers perceive a decline in their experience, people conclude that efficiency and cutting costs are more important than customers.”

Being able to balance a corporate strategy with the need and perceptions of customers is necessary for trust, as well. So writes Bob Sutton about the dust-up caused by Wal-Mart creating an imitation Girl Scout cookie for sale in its stores. (I posted earlier on Sutton’s post, here.)

Wally Bock talks about the unique and rare breed of trust between an employee and his/her boss (”How Do I Trust Thee?“). To Bock, a boss must be willing to stand up to his own management and defend/protect the employees who work for him. Without this, trust is nonexistent. This post made me think of my management experiences: how often did I stand up for my employee, and how often did I find it easier to agree with my boss about things the employee should do better?

Indirect means of building trust are necessary when your product is intangible – when you’re “selling the invisible,” writes Jorge Lazaro Diaz. Doctors, for example, can build trust in patients by listening to them, showing care and concern, and running an organized office. Patients see these behaviors as proxies for what they’re really in the market to buy, but what’s hard to measure in advance – curing what ails them.

And to wrap up, remaining on the subject of doctors, Scott Eblin mines a New York Times article about a palliative care specialist for leadership lessons. Dr. Sean O’Mahony talks to patients who are dying. He is honest, clear, caring, and curious about his patients’ feelings. He also keeps a level of detachment, preserving his emotional reserves for other patients and his own needs. In this case, passion does not promote trust, it can damage it.

(Thanks to Ian Welsh for collecting an excellent batch of posts to choose from.)

Customers are talking: Why do companies continue to do such dumb stuff?

Friday, August 14th, 2009

Two blog posts struck a chord with me this week. First, Bob Sutton posted on Wal-Mart’s decision to stock Girl-Scout-cookie knockoffs (the delightfully-named “Thin Mint-y Gate“). Then David Pogue provided an update on “Take Back the Beep,” his campaign to get wireless companies to stop playing lengthy introductory messages to callers trying to leave voice mail. Verizon’s ham-handed response fascinated me–especially considering the more mature and enlightened reponses of VZ’s competitors, and the high profile of Pogue’s campaign. Here’s how AT&T handled it, then Verizon:

Mark Siegel, AT&T’s executive director of media relations, wrote with some very encouraging news:

David: All the messages we got from customers really made us look again at how we handle voice mail, and we are going to make some changes. I commend you for raising the issue.

– First, we really appreciate hearing from the thousands of customers who have contacted us.

– As I know you know, any customer with our Visual Voicemail service does not listen to an upfront voicemail message. Today, our iPhone customers enjoy Visual Voicemail. In the near future, we will make Visual Voice Mail available on other devices.

– In the meantime, we are actively exploring how to shorten the voicemail message on our other handsets.

Verizon’s PR contact, Tom Pica, hasn’t responded to my request for a progress report.

He’s probably still irritated at me. When ABC News interviewed him about this campaign, he told them that customers can already turn off the instructions. Which isn’t true. So that night on Twitter, I said that he was lying.

He called me to let me know that he wasn’t lying—he was misquoted. What he said was that you can turn off *voicemail altogether* if you don’t like the 15-second instructions.

Besides the Schadenfreude factor, these stories are notable because they show how isolated large companies are from the outside world. In other words, they are able to take carefully-considered actions that, once revealed in public, are immediately ridiculed and seem perverse and self-defeating. “What were they thinking?” is the only sane response.

But there’s an explanation. Most large companies are hermetically sealed off from the outside world. Within the walls, these decisions don’t seem perverse. They seem sensible and logical. Verizon responded to Pogue’s campaign as an attack, not as a dialogue. They defended, counterattacked, and discredited. Pogue (who of course has the easier job here) retained his considerable sense of humor and used Verizon’s words against them. One can almost feel the VZ spokesperson’s frustration when he claimed he was misquoted–all his tactics conceived inside the company walls had backfired.

This bunker mentality infects companies when they deal with outside criticism. Wal-Mart has learned volumes of lessons on its responses to the environmental movement, union organizing, community protests, etc., and now much more sensitively deals with these outside critics (even learning from them!). However, Thin Mint-y Gate shows how inside-the-walls corporate strategy, obsessively pursued, can create “what were they thinking?” moments.

Sutton writes in his post:

The brilliance –and the Achilles heel — of Wal-Mart is that they talk and act as if the answer to every problem is to use their scale, bargaining power, and speedy implementation to tackle any problem by driving down the price they pay and pass it along to consumers.

Wal-Mart’s strategy has made them the largest retailer on Earth. So they apply it “to every problem” without enough reflection, questioning or dissent. Inside the walls, mint cookies are just another product, not a national symbol of the Girl Scouts.

Companies have increasingly realized that the outside world matters–whether in questions of sustainability, regulation, trade and economic policies, etc. They have groups that do face outward and deal with these issues. But the Wal-Mart case in particular shows that departmental approaches are insufficient.

It’s not enough to open the curtains in one part of the building to let the world (and all its messy opinions, obstacles and arguments) in, while leaving them closed in other parts. The light, too, must penetrate to the very center of the organizations, where people far from the customer, the press and the government continue to drive decisions that, when presented publicly, make their companies look stupid.

It’s time to bring the outside in, indeed.

Related post:
Why are companies so inwardly focused?

To motivate front-line employees: don’t just thank them, use their insights

Wednesday, August 5th, 2009

Sylvia Ann Hewlett blogged at Harvard Business Review that leaders need to inspire lower-level employees. She writes:

…No one succeeds alone, which is why all leaders must find a way to pollinate the workforce with their values, ideas and enthusiasm. This is what keeps businesses humming, especially during a downturn.

Some leaders inspire the masses via the grand motivational speech. Others via one-on-one conversations. At Time Warner, CEO Jeffrey L. Bewkes held a series of skip-level lunches with ten to twelve high performers that typically had little or no access to him. He spent two unscripted hours talking about his vision and answering their questions. Employees who attended Bewkes’ lunches reported feeling more “confident in the company” and developed a new affinity for their chief.

Whatever vehicle leaders choose to use to reach out and inspire employees at local levels, their talk must have teeth. Don’t spout hyperbole — “Great job” or “we can do it!” Instead, serve up concrete, achievable goals. Listen to people’s problems and offer real solutions. Mentor by sharing your own lessons learned, celebrate teams’ efforts and reward tangible achievements. Even a simple “thanks” goes a long way when delivered from on high.

Each week at furniture designer Knoll, president and COO Lynn Utter emails four senior managers and asks them for the name of one person on their team who has been exemplary. Utter then calls each person to thank and congratulate him or her for a specific accomplishment. Utter is as time-constrained as the rest of us but says that if she cannot make four phone calls a week to acknowledge people’s good work, then she is not doing her job

Hewlett is right–inspiring the troops is an important leadership task, especially in tough times. But my reaction on reading this prescription was, “Ugh, more top-down thinking.” In other words, everything’s up to the leader–that “affinity for the chief” and thanking employees makes a company better.

How about this idea instead? Let’s forget about CEO Bewkes for a moment, and focus on making the work more fun and rewarding for the 87,000 people who work for Time Warner.

Gary Hamel discussed this idea in his recent book “The Future of Management.” In it he pointed out how Toyota is able to leverage the creative thinking of all its 300,000 employees through means like the Toyota Production System. This benefits the company by ensuring a constant stream of innovation, and the employees by making the workplace a more rewarding place to spend time.

I am focused on one particular group of employees–those who interact directly with customers. This includes customer-service reps, retail clerks, bank tellers and account support staff. It is a group with tremendous insight, and a group that’s held in low esteem in companies I’m familiar with. To borrow a phrase from my friend Matthew Achak, “Nobody listens to the reps.”

They sometimes are not even allowed internet access.

This is just wrong. These groups occupy a unique position in the company. They hear the unvarnished truth from customers. Their stories, rather than being ignored, should be nurtured and collected. Everyone else in the company should read them and absorb the lessons (especially the leadership). They should be primary inputs to strategy, marketing and product development. The best stories and best storytellers should be acknowledged and promoted.

Companies should focus on something like this, instead of sending their CEOs around on motivational tours or making four calls per week to exemplary employees.

Increasing employees’ sense of meaning and personal value in their work. Now that’s leadership.

Related posts:
Time to start listening to customer-facing employees
On “The Future of Management”

An innovation hero exits

Tuesday, June 9th, 2009

I was surprised to read about P&G replacing AG Lafley as CEO with current COO Robert McDonald. The WSJ article was not explicit as to the reasons, but it appeared that the timing had been accelerated from a planned transition to occur later, perhaps due to lower-than-expected results P&G was expected to announce.

Lafley is one of the few star CEOs this decade who seemed to deserve the status. Remember P&G 10 years ago? Durk Jager was CEO. Lafley led the company through the acquisition of Gillette, an aggressive move into cosmetics, and innumerable product innovations (SpinBrush, Febreze, etc., etc.), and successfully competing with a wave of private-label competitors.

Lafley was perhaps the pre-eminent innovation CEO of his era–focused on the customer and the job she was trying to do, open to collaboration and ideas from the outside, committed to growing in emerging markets.

There are horses for courses, and perhaps the board felt that McDonald was better to lead the company through the tough times ahead. But Lafley’s contributions shouldn’t be forgotten. I, for one, am interested to see what he decides to do next. And if I was on the board of a consumer packaged goods company, I might want to give him a call.

Previous posts about AG Lafley:
Innovation: doing it all yourself is so twentieth-century
Complex business problems need diagnosis, not packaged solutions
The first great business book of 2008
“The consumer is boss”
“Sesame Street simple” – communication with a story

Customers are talking: some good terms to describe business narrative work

Monday, May 18th, 2009

A couple of recent blog posts have featured useful discussions of key elements of business narrative work.

“Sensemaking is what we refer to as intuition”
Idris Mootee, in his blog Innovation Playground (via Futurelab), discussed sensemaking–which in many ways is the secret sauce of the narrative approach to gaining business insight. Here’s what Mootee writes:

Sensemaking is a metacognitive strategy, it is clear that people recognize patterns in the data in ways that they can’t talk about. That kind of inarticulate recognition (meaning that you can’t express it easily) is what we perceive as intuition. We’ve all got it, and good sensemakers have good intuitions about how things go together.

Applying Mootee’s ideas to narrative works except for his statement about “good sensemakers.” For narrative work, a single “good sensemaker” doesn’t exist–instead, the collective intelligence of a group of people reading through and finding patterns in stories is the sensemaker.

Low Tech And On The Ground
I love this expression, coined by Terry Miller, describing story gathering and sensemaking work in his recent post at the Cognitive Edge Guest blog. “On the ground,” is a crucial term. Narrative approaches require seeing things at ground level, not at 35,000 feet. It’s immersing oneself in the moment-to-moment and using collective evaluation to make sense of what is going on. Without this, you could be like the generals in “War & Peace”–making detailed war plans that have no effect on winning or losing.

“Low tech” is also a critical observation. Potential clients recoil from this–we have been brainwashed to believe that applying enough megaflops can solve any problem. And, by contrast, anything handmade and low-tech isn’t “industrial strength” and is to be avoided. But stories require context, and creating context requires human experience and sharing that experience through dialogue. Computers can’t do that, no matter how many megaflops they can process.

Another application of low tech is the interventions that help people deal with what they learn from stories. In my experience, the findings of a narrative project imply two kinds of changes to help address them:

(1) very simple changes that are obvious once the problem is properly understood. In a project of mine, we learned through examining customer service rep stories that fewer than 1/3 of the reps used the best practices that had been designed, and also saw that calls where reps forswore best practice didn’t end as well as the others.

(2) small things to try that may or may not help. Other learnings from narrative projects do not have straightforward solutions. The bad news is that the best course of action takes some time to determine. The good news is that a low-tech, cheap experimental approach can be applied. My favorite example of this type of approach is the solution a Singapore hospital devised to reduce emergency-room wait times.

Related posts:
An important definition of sensemaking
On “War & Peace” and complexity in business
Stop studying the problem, and just try something