The False Promise of the Single Metric. Managers and boards are often pushed by investors, fund managers, and analysts to focus intently on a single measure of success, such as shareholder value or profit, and then they do everything they can to maximize it. As a result, they tend to overlook other important measures — for instance, customer satisfaction, employee motivation, and supplier support — and their narrow view of the organization can do long-term damage. Consider “Chainsaw Al” Dunlap, infamous for his profit-at-any-price approach to corporate turnarounds.
He left a trail of failed companies behind him, including the iconic Sunbeam. He’s an extreme example, but one that shows what happens when you lose sight of organizational complexity. Companies should be managed much more holistically. I know firsthand how challenging it can be to take a holistic approach, especially when your organization is in crisis. Certainly, some enlightened CEOs and boards understand this. What VCs Can Teach Executives About What Drives Returns.
Executives tend to turn toward fellow executives for advice. Historically, best practices on hiring, manufacturing, and sales all emerge when talking to someone else who has sat in the trenches. But the ways we do business have changed dramatically over the course of the last decade, and it’s become more necessary to reach outside of your expertise – or industry — to gain perspective on your business and leadership style.
In this era of continuous digital transformation, every manager can benefit from learning a few best practices from the boutique industry of venture capital. Motivating people to take moonshots, predicting changes, and making transformational bets are what the venture industry is predicated on. Returns are defined by home runs, reputations are defined by singles Venture capitalists never expect their work to be repaid evenly. The challenge this creates is the potential for two very different types of employee experiences. The best teammates don’t mind the hard questions.
Being a Business Leader Amid Historical Events. There was an overwhelming torrent of news last week. The two Supreme Court decisions and the response to the tragic church shooting in South Carolina are among the most indelible events of our time and all three will be memorialized in history books and discussed for decades to come. Last week, a CEO friend (Jen Medbery of Kickboard) asked me a series of great questions that I've been thinking about these last few days: How do I address current events within my own company?
Do I bring it up at all? How do I invite dialog with my employees? In the wake of Ferguson, Baltimore, South Carolina, ground-breaking SCOTUS decisions and much more, I imagine she is not the only business leader struggling with these questions and so I thought I would share a few thoughts to address them. Context: Facing History and Ourselves Before addressing these questions, I have to provide a little context. Careful, Your Politics Are Showing More than ever, business leaders are engaging in current events. What Makes FC Barcelona Such a Successful Business. “Blue and claret blowing in the wind. One valiant cry. We’ve got a name that everyone knows: Barça, Barça, Baaarça!” So runs the battle hymn of FC Barcelona (aka Barça), the Catalan soccer club that won the UEFA Champions League — the world’s most prestigious inter-club soccer championship — earlier this month, defeating Italy’s Juventus 3-1.
With 23 Spanish League championships, 27 Copa Del Rey titles, and, after this last victory, as many as five Champions League trophies under its belt, Barca has earned a unique place in the annals of soccer. It’s also a successful business: the team’s net worth, according to Forbes, was $3.16 billion, making it the world’s second most valuable sports team, while its revenues touched $657 million, the fourth highest among soccer clubs (after Real Madrid, Manchester United, and Bayern Munich) in 2014. Identity is different from culture, the values, beliefs, and assumptions that establish behavior. As the guardian of the organization’s ideals. Why Companies Need Novelists. True story: In 2007, the Pakistani writer Mohsin Hamid catapulted into the literary spotlight with his second book, The Reluctant Fundamentalist, an examination of the harsh realities of America's fractured post-9/11 relationship with Muslims.
The book sold over a million copies worldwide, was turned into a Mira Nair-directed feature film, and was short-listed for the prestigious Man Booker Prize. The Guardian called it one of the books that defined the decade. Given that he's one of those rare, respected literary intelligentsia who can actually make a comfortable living from writing novels alone, I was surprised to learn that Hamid has recently started a new chapter: He's now working for the half-century-old creative consultancy Wolff Olins as the company's first chief storytelling officer.
Hamid's job isn't to shill for Wolff Olins or tell its own story, but to help its clients learn how to tell theirs—or find out what their story is to begin with. The Power Of The Internal Story 1. 2. PricewaterhouseCoopers: Global: Insights & Solutions: MoneyTree™ Survey Report. Push Your Team to Think Globally - Video.
What I learned from my first startup | Engage // Innovate's Blog. I joined my first startup in the summer of 2000. Not a good year for tech, but nevertheless a highly ambitious and inspirational group called NST. NST, or Nordic Speech Technology, was developing next generation speech recognition software and human-machine interaction via speech. Today, most know this as Siri. At the time, this was truly groundbreaking stuff. I got hired – while still running through school – to “be a business analyst” . - Lead strategy analysis for emerging technologies in speech technologies Still today, a pretty cool job by itself.
On the very first day of the job, this was early June 2000, I was shown my office. . - “oh, cool”, one of the Industrial economics guys, cried out. My reply at the time, “I haven’t decided yet’’. The honest answer, however, was I had no idea. But, with unlimited confidence in my own ability, I figured, how hard can it be? So, I sat down, opened Google.com and typed “Strategy”. But the tools and the fundamental ideas behind the company were not. Why You Should Take the Blame - Peter Bregman. I was at a party in Greenwich Village in New York City. It was crowded, with about twice as many people as the space comfortably fit. There was a dog in the mix too. But it was a casual event and we all spent a lot of time in the kitchen, cooking and cleaning. I was at the sink washing dishes when I heard the dog yelp behind me. I turned just in time to see a woman curse at the dog as it dashed out of the kitchen.
She had obviously just stepped on his foot or tail. “Watch out!” Really? Actually, a lot of us do. We start blaming others at an early age, usually to escape parental anger and punishment, but also to preserve our own self-esteem and self-image. Sometimes it’s at a departmental level: A struggling sales group blames a poor product, while the product people blame an ineffectual sales team or maybe lax manufacturing.
A few years ago I sat at a table with the leaders of a major stock exchange. I asked them what was getting in the way. “Seriously?” An awkward silence followed.
Great Leaders Know When to Forgive - Rosabeth Moss Kanter. By Rosabeth Moss Kanter | 8:00 AM February 26, 2013 Leaders must be firm and foster accountability, but they also must know when to forgive past wrongs in the service of building a brighter future. One of the most courageous acts of leadership is to forgo the temptation to take revenge on those on the other side of an issue or those who opposed the leader’s rise to power. Instead of settling scores, great leaders make gestures of reconciliation that heal wounds and get on with business. This is essential for turnarounds or to prevent mergers from turning into rebellions against acquirers who act like conquering armies.
Nelson Mandela famously forgave his oppressors. Forgiveness can be costly, like the massive amounts of debt forgiveness toward countries like Greece to help create a stable foundation for restoring growth to Europe. If revenge is not justice, it is not strategy either. Anger and blame are unproductive emotions that tie up energy in destroying rather than creating. A More Productive Way to Think About Opponents - David L. Shields. By David L. Shields | 12:00 PM February 22, 2013 When scandals rock the business world, we all go scurrying to find big causes.
Human greed. Structural economic pressures. Lax regulations. Contesting theory, which my colleagues and I pioneered helps explain the cognitive roots of poor decision-making in competitive situations. Metaphorical interpretation is an unconscious process, but it can have profound implications. For some, “contests” are mentally processed through a contest-is-partnership metaphor.
Through intense competition, the whole of society benefits. Still, contesting in sports can lead to recruitment scandals and aggression, and contesting in the marketplace can lead to insider trading, deceptive advertising, skirted regulations, and a host of other problems. Since “striving with” is replaced by “striving against,” we call it decompetition. So what does this mean practically? Cognitive reframing is the second step.
Cultural Diversity. Giving Feedback Across Cultures - Andy Molinsky. By Andy Molinsky | 8:00 AM February 15, 2013 Although many of us don’t like to do it, we know that critiquing others’ work — ideally in a constructive, polite, empowering manner — is an essential part of our jobs. But does critical feedback work similarly across cultures? Do people in Shanghai provide critical feedback in the same way as people in Stuttgart, Strasbourg, and Stockholm? Nicht, non, and nej. Instead, they confront situations where they do have to adjust their feedback style, and sometimes that’s easier said than done. It turns out that what worked in Germany in terms of tough, critical, to-the-point negative feedback was actually demotivating to Jens’s new Chinese employees, who were used to a far gentler feedback style.
It took quite some time and effort on Jens’s part to recognize this difference and to be willing to adapt his behavior to accommodate the difference, because to Jens such a motivational style felt awkward and unnatural. Tip #1: Learn the new cultural rules.
Why the World Needs Tri-Sector Leaders - Nick Lovegrove and Matthew Thomas. By Nick Lovegrove and Matthew Thomas | 1:00 PM February 13, 2013 The critical challenges society faces — such as water scarcity, access to education, and the rising cost of healthcare — increasingly require the business, government and nonprofit sectors to work together to create lasting solutions. But this is only possible if the senior executives of our leading institutions are what Dominic Barton, Worldwide Managing Director of McKinsey & Company, refers to as “tri-sector athletes” — leaders able to engage and collaborate across all three sectors. Our research at The InterSector Project shows that these leaders often have prior experiences in each sector and a unique ability to navigate different cultures, align incentives and draw on the particular strengths of a wide range of actors to solve large-scale problems.
Take water scarcity. A potential 40% gap between global freshwater demand and supply by 2030 puts billions of lives — and dollars — at stake. Balanced motivations.
Strategic questions – rethinking winning « doCollaborate. I spent today talking strategy with a guy who lives and breaths it – intent on using it to push through a lasting change to the way his company serves its community. And so a post by Roger Martin on the HBR blog today came at me at a useful time. Roger says that strategy is making of an integrated set of choices – positioning the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns. He encourages people to answer 5 simple questions in a strategy – and he makes a separation between building budgets and delivery plans (which most people confuse as strategy) from the informed clarity of a strategy that sets direction for a period ahead. Rogers questions are familiar – its the ‘Traditional Strategy’ view – about resources and winning – which Nilofer Merchant has declared as dead.
“They didn’t care that they had seen it work in practice becasue they already knew it wouldn’t work in theory” Rogers 5 questions are these: Don't Let Strategy Become Planning - Roger Martin. By Roger Martin | 8:00 AM February 5, 2013 I must have heard the words “we need to create a strategic plan” at least an order of magnitude more times than I have heard “we need to create a strategy.”
This is because most people see strategy as an exercise in producing a planning document. In this conception, strategy is manifested as a long list of initiatives with timeframes associated and resources assigned. Somewhat intriguingly, at least to me, the initiatives are themselves often called “strategies.” But how does a strategic plan of this sort differ from a budget?
To make strategy more interesting — and different from a budget — we need to break free of this obsession with planning. Obviously you can’t execute a strategy without initiatives, investments, and budgeting. That strategy is a singular thing; there is one strategy for a given business — not a set of strategies. This conception of strategy also helps define the length of your strategic plan.
Treat Everything as a Case Study - Robert Plant. By Robert Plant | 10:00 AM January 30, 2013 I was driving past a Volkswagen dealer during a 15-hour drive from Miami to New Orleans when my 9- and 10-year-old kids excitedly pointed out the old Beetle that was parked alongside a row of brand-new models. Ah, yes, I said, a clear case of brand reinforcement through product differentiation: The odd thing stands out. At another point in the trip, their $8 headsets broke at the plug. We analyzed this as a case of defective design, probably the result of poor cost analysis.
The sight of gas pumps whose nozzles were covered with bags was a case of poor demand forecasting within the supply chain. It might be obvious by now that I had been playing HBR podcasts practically nonstop on that journey. You start to question everything, and your questions start to disconcert people, just as Socrates’s questions upset the targets of his inquiries. A colleague was setting up a PowerPoint presentation at work.
Often, the questions lead to debates. Maybe. Sometimes Negative Feedback is Best - Heidi Grant Halvorson. By Heidi Grant Halvorson | 8:00 AM January 28, 2013 If I see one more article or blog post about how you should never be “critical” or “negative” when giving feedback to an employee or colleague (or, for that matter, your children), I think my head will explode. It’s incredibly frustrating. This kind of advice is surely well meant, and it certainly sounds good. After all, you probably don’t relish the thought of having to tell someone else what they are doing wrong — at minimum, it’s a little embarrassing for everyone involved. But avoiding negative feedback is both wrong-headed and dangerous.
Wrong-headed because, when delivered the right way, at the right time, criticism is in fact highly motivating. Hang on, you say. And don’t people need encouragement to feel confident? In many cases, yes. Confusing, isn’t it? It’s important to begin by understanding the function that positive and negative feedback serve. But what about motivation?
Can Companies Both Do Well and Do Good? - Morten T. Hansen, Herminia Ibarra, and Urs Peyer. How to Manage Conflict in Virtual Teams - Keith Ferrazzi. New Research: How Employee Engagement Hits the Bottom Line - Tony Schwartz. Why Minnesota CEOs Said No to Banning Same-Sex Marriage - John G. Taft.