Posts Tagged ‘leadership’

Move over, CSR. It’s time for New Capitalism

Tuesday, January 25th, 2011

There’s been something new happening around what is called “corporate social responsibility,” a term that emphasized how distant caring about its social impact was from a company’s core mission. The new thinking is this: is it possible to integrate positive social impact (or, at least, much-reduced negative impact) into the very fabric of a profit-making business?

Examples are popping up more frequently. Wal-mart has received attention for its initiatives promoting compact-fluorescent lighting and its recent effort to improve the nutrition of the food it sells.

Already in 2011, two important works have emerged in this area of thought. First, Umair Haque’s book “The New Capitalist Manifesto,” and, in the Jan-Feb Harvard Business Review, “Creating Shared Value,” by Michael Porter and Mark Kramer. Of the two, “Manifesto” is more brightly written and attention-grabbing, while “Shared Value” is solider, with more salient examples.

Haque in particular has a way with a metaphor. For example,

Imagine two worlds: The first is a big world of abundant resources and raw materials, an empty world where demand is infrequent and easily satiated, and a stable world where disasters are infrequent and weak. The second is a tiny world, emptying of raw resources, a crowded world where demand is always hungry, and a fragile world, where contagion of every kind can flow across the globe in a matter of minutes, days, or weeks. A big, empty stable world is like a vast, placid, untouched game reserve.

But a tiny, crowded, and fragile world is like an ark. Industrial-era capitalism was built for a big, empty, stable world.

But at the dawn of the twenty-first century, the world is more like an ark – tiny, fragile, and crowded.

Consuming, borrowing, and utilizing are the engines of prosperity in a big, empty, stable world, but the engines of crisis in a tiny, fragile, and crowded one.

Porter and Kramer traffic in more ground-level thinking, but with the same aim in mind:

The traditional playbook calls for companies to commoditize and exert maximum bargaining power on suppliers to drive down prices – even when purchasing from small businesses or subsistence-level farmers.

[By contrast,] Nestle worked intensively with its [coffee] growers, providing advice on farming practices, guaranteeing bank loans, and helping secure inputs such as plant stock, pesticides and fertilizers. Nestle established local facilities to measure the quality of the coffee at point of purchase, which allowed it to pay a premium for better beans directly to the growers and thus improve their incentives. Greater yield…and higher production quality increased growers’ incomes, and the environmental impact of farms shrank. Meanwhile, Nestle’s reliable supply of good coffee grew significantly. Shared value was created.

This is the key thread connecting “Manifesto” and “Shared Value.” Neither is proposing offsetting bad actions with some related or unrelated good actions. Rather they both advocate creating profits and benefiting the planet through “ark management.” Recognizing and capitalizing on the interdependence of people/resources/governments; regaining a focus on the welfare of the communities in which a company does business; and planning, not just for the next quarter, but decades into the future.

David Brent (”The Office”) on training

Tuesday, January 18th, 2011

Well, after his much-commented-on stint hosting the Golden Globe Awards last Sunday, Ricky Gervais perhaps is not the best role model I could have chosen for today’s post. Yet, let us hearken back to a time when Ricky, in addition to being a “slightly chubby but very kind comedian,” made fun of himself at least as much as the people around him.

I fell in love with the original version of “The Office” years ago. Gervais’ character, David Brent, was all our bad management practices and insecurities in one package, which made for hilarious yet uncomfortable viewing by any manager.

One episode that made me cringe out of self-recognition was “Training.” In this one, David hires a trainer to teach the company about customer service but undermines him by jumping up at every opportunity to (try to) demonstrate that he knows more about customer service than anyone at the company–more, even, than the trainer. While watching this, I had flashbacks to all the times I had jumped up to interrupt a trainer during a class or to demonstrate how much I knew about the subject at hand.

This is a smart-person problem. It was important to me to show I knew a lot. Or, perhaps, a “I think I’m smart but not sure I’m smart enough, so I have to demonstrate my smartness” problem. Or, if you’re David Brent, it’s a “I think I’m brilliant but I’m actually quite dumb,” in which case you have a comedy show.

The lesson I took from this was to see how this behavior looked to others. While I was trying to impress people, they were more interested in learning about the topic at hand. (Some folks probably wished they could have told me to sit down and shut up.) Jumping up to show how much you know is a manifestation of the Hermione Granger syndrome, which I’ll discuss in a future post.

For now, check out David Brent (Ricky) and make sure you don’t do what he does:

Learning from a losing season

Tuesday, November 9th, 2010

Our local high school football team has had a difficult year. After losing many players to graduation, the team finished 1 and 9 and last in their league.

I wondered how the coach, accustomed to winning, could make the season a positive one for the kids, to focus them on getting better and give them confidence that next year they would be a year older and better.

I was thinking about this because my son’s youth soccer team went through a similar situation this fall. Due to a realignment of our club teams, my son’s team was composed of the less-good players from two other teams. Our team also had a brand-new coach and a brand-new assistant.

And we finished the season with 0 wins, 7 losses and 1 tie.

But our record wasn’t the story of the season. Each kid improved week to week, and our team got better and better each game. The second games we played against each team were much closer than the first. And, throughout, our coaches continued to teach. They were able to convey to the kids confidence and pride. The kids played hard throughout the year, and throughout each game. And they had fun. After the last game, when we lost 5-1 after being tied 1-1 at halftime, the kids laughed and hugged and piled onto their coach.

I don’t know at age 9 whether I would have been able to handle adversity like our kids did this year. I was pretty competitive (still am), and hated to lose. I know there were times when if my team lost, I lost it. I really admire our kids, and salute their coaches, and I will always remember this season… fondly. If that makes any sense.

“Good Boss, Bad Boss”: another Sutton winner

Tuesday, September 21st, 2010

good boss, bad bossI wrote in my last post that I’m getting tired of reading business books. It’s more than that–there are so many of them, and most seem to be the authors’ brand statements rather than insightful, fun books that teach me something. And so, I haven’t gotten past chapter one of half a dozen or more books this summer.

But Bob Sutton’s “Good Boss, Bad Boss” is an exception. First of all, its subject is utterly universal. If you work, you have a boss. And many of you also are a boss. Even if you’re CEO (after all, Mark Hurd didn’t fire himself). Second, it’s written in Sutton’s distinctive voice – informal and earthy (no F-bombs, but plenty of s-words and a-hole references). Finally, it contains tons of references to academic research – but he weaves in these references so seamlessly, without jargon, that you read it unaware that you are being educated. This is no mean feat. Have you read an academic paper recently?

According to Sutton, good bosses have grit. They lead people through difficult assignments by chunking the work into small, manageable pieces and focus on completing the next piece. They know that they are role models and act accordingly (he frames this advice by emphasizing its opposite – bad bosses are prone to the “toxic tandem”–acting in ways that highlight their status and separation from their people, and being completely unaware these actions are noticed). They protect their people. And they do the “dirty work” when necessary (e.g., firing people), but compassionately.

Of course, it contains stories, tons of them, but to his credit, Sutton doesn’t begin “Good Boss, Bad Boss,” with a highly dramatic story, a device that’s becoming a cliche in the business book world. “Amy Trent vowed that when she was promoted she’d be a far better boss than overbearing Harold Nunez, so when she got the chance to run her accounts receivable department…” etc., etc.

For bosses, “Good Boss, Bad Boss,” is an important reminder of things you should already know but perhaps never learned or forgot on the way. It focuses on building and managing a team, but less so on how to balance the demands from above with the realities on the ground. In my experience, simultaneously defending your people and doing what the business (and your boss) needs was very difficult. I don’t think I handled that balance particularly well in my last executive role – to the detriment of my team.

Perhaps that’s a subject for the next book, Bob?

Related posts:
On that other book Bob Sutton wrote
Small process innovations by nurses cure medication mistakes

How to escape “The Acceleration Trap”

Tuesday, April 13th, 2010

Yesterday I posted on Heike Bruch’s and Jochen Menges’ article, “The Acceleration Trap,” in the April Harvard Business Review, which examines the effects on companies of a culture of constant change.

I left off before discussing what companies can do to get out of the trap. Before taking that up, I’d like to reflect for a moment on what creates the culture of constant change. As Bruch and Menges discuss, it often follows the success of an initial change program:

Most of the companies in our study landed in the trap after an exhilarating ride. A good example is the European conglomerate ABB. Founded in 1987 in a merger between the Swedish Asea Group and the Swiss Brown Boveri Group, ABB grew rapidly, buying 55 companies in its first two years. After eight years of strong growth, the company began to show signs of excessive acceleration. Acquisitions were no longer well integrated; different parts of the company were competing for the same customers.

I can sense the pressure that ABB’s CEO must have felt after the initial growth. Shareholders, board members, the press, must all have been asking, “Great start! What’s next?” And so the feeling is, not only must we sustain what we’ve started, we must do more. Keep going! Bonuses are at stake, as well as perhaps an even more intense motivation, the needs of the ego.

I’ve sometimes been hard on senior management, but I have to say I can sympathize with the CEO caught in the acceleration trap. And while Bruch and Menges offer prescriptions to help extricate companies from the trap, they don’t provide any easy answers to that harried CEO. Instead, they challenge her to short-circuit employees’ instincts to respond to constant change with frenetic activity and project proliferation:

  1. Stop the action. Ask employees what to stop doing.
  2. Be clear about strategy – especially in terms of what not to do.
  3. Decide how to make decisions – create and adhere to a process to select which projects to do, and which not to do.
  4. Declare the turmoil over – make a pronouncement to employees that the crisis has passed.

Tough medicine? Yes. Try explaining to your board that you have declared a moratorium on new projects for six months so your employees can recharge their batteries. But the alternative may be a culture that has a large list of brilliant initiatives but little in the way of results.

Related posts:
What’s the cost of “change is the only constant”?
Why “Undercover Boss”’s drama is a bad sign for business
Are CEOs powerless to lead?

HBR article points up the downside of “change is the only constant”

Monday, April 12th, 2010

Change is everywhere. Sustainable competitive advantage is obsolete. To thrive, organizations must continually adapt to new marketplaces, regulations, competitors and technologies. With all that, is it possible to have too much change?

Yes, write Heike Bruch and Jochen Menges in “The Acceleration Trap,” in the April Harvard Business Review. Bruch and Menges assert that in many companies the constant desire for change has overwhelmed the human and organizational capability to absorb it:

[Companies] increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems. For a while, they succeed brilliantly, but too often the CEO tries to make this furious pace the new normal. What began as an exceptional burst of achievement becomes chronic overloading, with dire consequences. Not only does the frenetic pace sap employee motivation, but the company’s focus is scattered in various directions, which can confuse customers and threaten the brand.

The authors find three patterns that over-accelerated companies fall into:

  1. overloading
  2. multiloading (assigning too many diverse activities – a diseconomy of scope, perhaps)
  3. the habit of constant change

The third of these is fascinating for how Bruch and Menges describe how employees react to it:

This pattern deprives workers of any hope of retreat for recharging their energy. To compensate, they hold back their efforts whenever they can, even if doing so hampers the company.

This caused me to recall a recent HBR Breakthrough Idea by Teresa Amabile and Steven Kramer, in which they argue that the factor providing the greatest motivation to employees is the simple idea of making progress every day. Amabile and Kramer write:

On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.

One thing I’ve witnessed in “overaccelerated” environments is the frustration of lack of progress. It can mean simply too much to finish (overloading), so many balls in the air that nothing gets done (multiloading), or the despair that accompanies the realization that no matter what happens, there’s another change project around the corner.

Is there a way out of the acceleration trap? Bruch and Menges say yes. But that will have to wait for another post.

Related post:
Top 5 2010 Breakthrough Ideas

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.


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”