Once upon a time, my pet lion (who lived in the attic) started practicing customer-driven innovation. But then he began to challenge his assumptions and now he won’t listen to anything I say.
My 8-year old daughter told me this story last night before she fell asleep. I’ve really got to start going down to the office when I take those work calls…
When I started my own consulting company back in 2004, my wife and I gradually realized that we didn’t have to keep sitting in Houston for the rest of our lives. We decided that we would travel as a family, visit the places we wanted to learn about, and spend some time in each of these places – learning about the history, geography, literature, culture and, of course, the people. Instead of teaching high school and college kids, my wife would now teach us.
We became globeschoolers: homeschooling on the road. Now we’re in our fifth year of travel. Our base-camp is still Texas, but we get to work, travel, and learn as we go about this country and the world.
My wife’s just started her globeschooling blog, which will explain what we’ve been doing. Really what she’s been doing to educate the kids (and us). I just tag along and learn a few things despite myself!
I’ve been bothering her to get blogging for a while, but apparently it took the Obamas and Earth Wind and Fire, to get her started…
Gary Hamel‘s at it again.
This time he’s got 25 moonshots for management:
1. Ensure that management’s work serves a higher purpose. Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.
2. Fully embed the ideas of community and citizenship in management systems. There’s a need for processes and practices that reflect the interdependence of all stakeholder groups.
3. Reconstruct management’s philosophical foundations. To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology and theology, and from such concepts as democracies and markets.
4. Eliminate the pathologies of formal hierarchy. There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.
5. Reduce fear and increase trust. Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow’s management systems.
6. Reinvent the means of control. To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within rather than constraints from without.
7. Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration.
8. Expand and exploit diversity. We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.
9. Reinvent strategy-making as an emergent process. In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.
10. De-structure and disaggregate the organization. To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.
11. Dramatically reduce the pull of the past. Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.
12. Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process where share of voice is a function of insight, not power.
13. Develop holistic performance measures. Existing performance metrics must be recast, since they give inadequate attention to the critical human capabilities that drive success in the creative economy.
14. Stretch executive time frames and perspectives. Discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.
15. Create a democracy of information. Companies need holographic information systems that equip every employee to act in the interests of the entire enterprise.
16. Empower the renegades and disarm the reactionaries. Management systems must give more power to employees whose emotional equity is invested in the future rather than in the past.
17. Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.
18. Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies’ resource allocation processes need to reflect this fact.
19. Depoliticize decision-making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization.
20. Better optimize trade-offs. Management systems tend to force either-or choices. What’s needed are hybrid systems that subtly optimize key trade-offs.
21. Further unleash human imagination. Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.
22. Enable communities of passion. To maximize employee engagement, management systems must facilitate the formation of self-defining communities of passion.
23. Retool management for an open world. Value-creating networks often transcend the company’s boundaries and render traditional power-based management tools ineffective. New management tools are needed for building complex ecosystems.
24. Humanize the language and practice of business. Tomorrow’s management systems must give as much credence to such timeless human ideals as beauty, justice and community as they do to the traditional goals of efficiency, advantage, and profit.
25. Retrain managerial minds. Managers’ traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills.
Fine. I think I get it. The real question is how many of our bail-out CEOs will get this Capitalism 2.0?
The Tao that can be blogged is not the eternal Tao. Or is it?
The great thing about working for myself is that I get to work with people (and companies) I like. In this case, I’ve been asked by Penguin Press to promote Stephen Mitchell‘s latest work: The Second Book of the Tao.
Stephen Mitchell is a quiet soul. The last gentleman. He’s definitely not the self-promoting type. So it was with some difficulty that we got him to talk about his first Tao (Tao Te Ching) and his newest masterpiece – The Second Book of the Tao.
The results are on YouTube!
Here Stephen talks about how The Second Book of The Tao came into being:
And here’s an excerpt; Chapter 14 from The Second Book of The Tao:
Here’s a little more about the book, adapted from the Penguin press release: The Second Book of The Tao is a twenty-first-century form of ancient wisdom, bringing a sequel of the Tao Te Ching into the modern world. Alongside each translated passage, Stephen adds his own insights for contemporary readers.
“His meditations and provocative re-imagining of the original texts comprise a book that is both a companion volume and an anti-manual to the Tao Te Ching. Mitchell renders these ancient teachings at once modern, relevant, and timeless.”
Agreed. Learn to govern your mind, and the universe will govern itself.
Or, as Funkadelic might say, “Free Your Mind…And Your -ss Will Follow.” (That wasn’t in the Penguin press release)
To appreciate Mitchell’s mind, see StephenMitchellBooks.com >>
And here are some stories about Stephen as told by his wife Byron Katie: here, here and here >>
The Economist is having a fun debate over the future of the United States.
My opinion: a three word cliche: Yes We Can! Obama is, in so many ways, more than just a symbol of our rebirth. I’d say he has brought 80% of the country together and the world as well. Heck, even Pat Robertson sees the light (for a few seconds at least).
In trying times, executive behavior and more importantly, executive compensation becomes a public issue. Here’s an example of what to expect in the weeks and months ahead – warongreed.org has targeted Goldman Sachs for the “reckless” bonuses they handed out to their financial staff – after receiving a $6.5 billion bailout from taxpayers.
Apparently, if Goldman Sachs had shared its bailout billions with their rank-and-file workers at Burger King, they’d have handed out $18,000 to each employee. I must say I’m getting a strong French Revolution 2.0 vibe:
There’s a line of reasoning being echoed in the Obama administration that if we cap CEO pay for bailed-out companies in the financial markets, the best and brightest will leave, seeking greener pastures with foreign companies which don’t have similar restrictions.
This is false reasoning.
Executive pay must be tied to long-term performance if anything is going to change. Here’s some thinking on the issue from Stephen F. O’Byrne and S. David Young in HBR: The justification for maintaining pay competitiveness is that it reduces the risk of losing good managers, who could be costly to replace. Corporate boards could also argue that it minimizes the risk of seriously overpaying managers as a consequence of large, windfall gains from surging share prices. In short, the claim is that competitive pay policies not only help lower retention risk but also impose limits on shareholder cost. This is false logic. By causing companies to overpay underperforming managers and underpay star performers, a competitive pay policy will actually increase retention risk. The poor performers stay on and the good ones go. What’s more, it ignores the potential wealth-creating effects of strong financial incentives.
Despite their commitment to competitive pay policies, compensation committees sometimes do act to strengthen incentives by increasing option grant shares after a year of strong stock-price performance or decreasing them after a bad year. On the surface, this appears to be good news. But such moves have little overall impact because directors tend to reverse their actions in the following year. In other words, an option grant that rewards good performance or penalizes poor performance is followed, almost half the time, by a grant that penalizes good performance or rewards poor performance. On balance, therefore, ad hoc adjustments by boards contribute almost nothing to wealth leverage. If companies are serious about rewarding performance and retaining star performers, they will first have to wean themselves off competitive pay. They should give managers fixed-share interests in stock appreciation and economic profit improvement, thereby increasing the impact of future pay on executive wealth. Perhaps most important, they need to review vesting and holding requirements to prevent managers from unilaterally cashing out share-based pay, which also reduces the sensitivity of their wealth to company value.
Secondly, we know the financial sector is grossly overpaid. Even the Chinese will tell you this. I blogged earlier about China’s Gao Xiqing, president of the China Investment Corporation:
– “If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.
– “I have to say it: you have to do something about pay in the financial system. People in this field have way too much money. And this is not right.”
He’s not mincing words, and neither is the Economist >>
I say let them go. It’s time these executives we came back to Earth. If they want to risk their own money great, but why should we subsidize irresponsible management practices?
I’m with Warren Buffet when he says in this letter:
“CEO perks at one company are quickly copied elsewhere. “All the other kids have one” may seem a thought too juvenile to use as a rationale in the boardroom. But consultants employ precisely this argument, phrased more elegantly of course, when they make recommendations to comp committees.
Irrational and excessive comp practices will not be materially changed by disclosure or by “independent” comp committee members. Indeed, I think it’s likely that the reason I was rejected for service on so many comp committees was that I was regarded as too independent. Compensation reform will only occur if the largest institutional shareholders – it would only take a few – demand a fresh look at the whole system. The consultants’ present drill of deftly selecting “peer” companies to compare with their clients will only perpetuate present excesses.”
No one is saying we should stop paying for performance. What we’re saying is let’s stop rewarding unsustainable business practices and outright fraud.
Where are we going to find low-cost, competent CEOs? That’s a business GE should look into. A CEO-for-Hire profit center. Training grounds? India and China, of course.
When executives want to boost profitability, their first target is often their “most valuable asset” (ha!) – people. But a better way to find value is to bring increased discipline to the capital budgeting process for small items.
Check out Tom Copeland‘s 2000 article in HBR – Cutting Costs Without Drawing Blood.
Here’s what he says: … a company can almost always create far more sustainable value by sensibly reducing its capital expenditures. How? Not by postponing or eliminating big spending projects, which are usually less than 20% of the budget anyway, but by conducting a rigorous, disciplined evaluation of the small-ticket items that usually get rubber-stamped. Those “little” requests often prove to be unnecessary—in some cases they duplicate other requests—or gold plated. But few managers have the time, energy, or inclination to ask about them. They should.
and: You get more bang for the buck—or perhaps more buck for the bang—by cutting capex dollars than by cutting payroll. According to my estimates, the increased market valuation that resulted from Kodak’s $400 million payroll cuts could have been achieved by a $280 million reduction in capital spending. The reason for the difference, of course, is that a company has to make severance payments—$600 million in Kodak’s case—to people it has laid off. (There is no severance pay for capital.) The table compares recent payroll savings at Kodak and several other corporations with my estimated value-equivalent capex cuts.
Something to think about very, very carefully.
Rosabeth Moss Kanter is one of my favorite business gurus, the “female Peter Drucker,” as I tell people when I recommend they read her book Confidence: How Winning Streaks and Losing Streaks Begin and End.
In her latest blog post at HBR, she tells us that the next big trend is simple: to simplify.
Among her observations:
“Companies sow the seeds of their own decline in adding too many things — product variations, business units, independent subsidiaries — without integrating them. They create complexity, which makes costs increase faster than the potential gains from the new parts.
“Just why did General Motors need 47 brands of cars? Was that responsible for its top-heavy load of managers? Or for cannibalization within the company?”
and this brilliant line:
“When everyone else suffers from over-complexity, there is a market for products and services that simplify life.”
More here >>
I wrote once on another blog, that no one has time to read Harvard Business Review, or listen to an entire music CD, or watch the whole movie.
Our attention span is somewhere between 3 to 5 minutes. And that’s the size your idea-bite has to be if you’re going get heard at all. See Twitter, YouTube, CNN, et. al. We’re getting dumber second by second by second.
How do you build a business model for short attention spans? I think this is the key challenge for online publications – from newspapers, to blogs, to forums. Perhaps the key is enticing readers to return over and over – let’s say twenty times a day! So online journals must be updated very often (compare HuffPost with the NYTimes) with corresponding micro-blogging on the same topics.
And the revenue will come not for selling ads, but selling products and services. And sometimes, you may just sell them the longer version of your story.
India Today gives us a cardio-pulmonary view of the political pulse of India.
I suppose it is pretty stressful being a politician in India and all…
The article also mentions the inevitability of “Rahul Gandhi happening.”
Good luck, Rahul. I hope you’re ready to “happen!”
The points raised by Anil Gupta and Haiyan Wang in their book – Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage are echoed in this BusinessWeekarticle by Gunjan Bagla and Atul Goel.
So are things slowing down with the global recession? Here’s what they say: We believe there may be a temporary hiccup in R&D globalization, caused primarily by companies freezing in their tracks as they reassess the new financial realities. But as soon as they rebuild their product road maps, nimble companies will actually accelerate their globalization efforts, pushed harder by tight budgets and the realization that the old ways can be disastrous.
Next up: What’s up with Dubai?
The one thing we all know as branding professionals is the axiomatic statement: “your brand is your promise.” When you start breaking that promise, you lose brand equity.
That’s been the story for so many brands, from Sears to the Republicans.
So what can you do in these turbulent times?
Step one: don’t lie. To yourself, your employees, and most of all to your customers.
Step two: think 80/20: focus on the 20% percent of actions which give you 80% of your returns. In other words, work on your effectiveness. Don’t try to do too many things at once. But focus on your best customers and more importantly, your best employees. Fire the deadwood – beginning with deadwood customers – the ones that cost a lot to service and are just not worth it.
Step three: observe your customers’ pains. How can you help them? Can you show them something they might not have known? Can you help them bring in additional revenues? Pitch in and they’ll never forget you.
Step four: invest in the future. Sure, things look bleak. But now there are more opportunities in your market and if you look closely at your adjacent markets, you should be able to see the opportunities.
Step five: service counts. The better your employees do in face-to-face encounters, the better you’ll weather the storm. Where can your service delivery be redesigned to make it even better.
Step six: be true to your brand. Don’t just start accepting anything you need to do to survive. Focus on customer value, not price competition.
Step seven: customer driven innovation. It’s now or never time. Get an innovator’s mindset.
Step eight: use the Internet like your life depends on it. Because it does. I don’t care what industry you’re in, the Internet will help you reduce your costs – marketing costs, operational costs, employee costs, and, most importantly, it can help you grow.
Step nine: test your ideas. Now is the time for smart business experiments.
The sky is not falling, despite what the papers say. Yes, you might lose your job, but you can find another one. This isn’t Europe. So get busy!
Will Newsweek be able to compete against the Economist?
That’s what they’re betting on, apparently.
The goal is to turn Newsweek into an opinion-based “thought leader” with branded journalists like Fareed Zakaria, Christopher Hitchens, and that fossil of a conservative, George Will. So we’ll see lots more trash-talking and provocation.
While this is a step in the right direction, I think they’ll really have to worry about low-cost, online disruptors like HuffPost, DailyKos, and The Week, as well as established institutions like The Atlantic and The New Yorker.
The makeover is supposed to gain them mindshare and, ahem, walletshare. Where have we heard that before?
What they’re missing is a daily view of their ecosystem. I’ll get into that in a separate entry on ecosystemwatch.com. And as I tell my clients, thought-leaders do dominate in ecosystem competition, so the Newsweek strategy does make sense.
What I don’t see any mention of is value-co-creation with its readers. And their revenue model is still based on advertising. Even the Economist knows that to make money you’ve got to sell those country reports, the surveys, books, and conferences.
Finally, I hope they’ve thought about video – online video – as another key ingredient which makes online news attention-worthy.
The lyrics: Blues Dance Raid by Steel Pulse
Muzik a bubble not looking for trouble
Some shekels fe I shenks
Just a burn up de lambs bread
Session rocking ysh!
So dem come so dem drop
From time to time dem been watching
Dem a spy with dem bad eye
(Come a raid I blues dance)
Tipped off by informers
Dem a watch who come out and come in yeh
(Come a raid I blues dance)
Yes they knew when the time would be right
Run come gate crash I party
(Come a raid I blues dance)
Raid blues dance raid I blues
(Come a raid I blues dance)
Kick off door woe I name dem call
I back against de wall a rub a daughter
(Come a raid I blues dance)
Dem a run come kill I vibe interfere with I
The pigs come to destroy Rasta cry blood
Dreadlocks cry blood
Raid blues dance
Out of darkness out of night
People screaming batons wheeling
A lot of bleeding bruised feelings
Search warrant for their outvitation
Walkie talkies reinforcements
From dem pocket dem draw handcuff
Dis yah session it rough
Every step of the way got to retaliate yeh
Fight dem back mash dem down
Vex to death dem a threat
Mek arrest kiss me neck
Raid blues dance raid I blues
A run come a run come who
Run come kill I vibe interfere with I
Pigs come to destroy Rasta cry blood
Dreadlocks cry blood
Come a come a come a come a raid
Come a kick I speaker
Come a mash up I tweeter
Come a grab up I shenks
Come a lick out I window
Come a move out I soft drink
Come a rough up the people
Come a turn off me System
Have fe give you some bitch lick
Come a smash I turntables
Come a scratch up I music
Come a drive up you meat van
Come a come a come a raid.
For me, there’s no contest. Steel Pulse, all the way. But Morgan Heritage is fun as well 🙂