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A random walk through management theory with the occasional intercultural critique.

Friday, July 4, 2014

Twelve Absolutes of Leadership

There have been many books written on leadership (including mine), but there is one book that seems to have everything covered. Whilst it is not a simple “two step” approach, by virtue of listing twelve “absolutes” it is nothing if not complete! Gary Burnison is the CEO of Korn Ferry International and with his experience as such (delivering leadership “solutions” to many clients) he published “The Twelve Absolutes of Leadership” (2012, McGraw Hill). For anyone who wants a “definitive” overview of what a corporate leader should do, there are few guides that are better.
Here’s the twelve absolutes followed by further considerations (“et alors”):
Twelve Absolutes of Leadership
The first “absolute” (of all “absolutes”) is “lead” itself, after which there are six “elements” – purpose, strategy, people, measure, empower and reward. Then there are five “links” (“activities in which a leader must be constantly engaged”) – anticipate, navigate, communicate, listen and learn.
Leadership is about “self-discipline, distinguishing between the urgent and the important so that you can rise above the immediate.” It is not just about reacting – if problems are encountered they should be converted into opportunities shifting from “I to we…”
“Purpose creates change, inspires possibility, and raises the altitude of the organisation.” With long-term vision, “purpose is the constant through all the upsets and setbacks…” Inspired by purpose “others will become more and achieve more as they give more…”
“Strategy, rooted in values and purpose, gives encouragement through times of ambiguity and uncertainty. Strategy without purpose and values is a short-term plan that is directed toward shallow goals.”
“Leaders are facilitators on the sidelines, but they are never removed from the front line. The leader can’t be the star player, scoring all the points. Rather, the leader must be committed to helping others to do their best.”
“Never confuse measurements with data.” The real added value is knowing what the results mean. Besides the insight, action is also needed to be an effective leader. “Measuring, monitoring and metrics matter”, but in the right way…
“Be behind your people in success and in front of them in defeat.” “Empowerment means enabling and equipping others to make decisions. It means delegating authority so that hundreds of people can make thousands of decisions that are directionally in line with your vision.”
“Employees work harder for leaders who demonstrate respect for their work.” “A leader can build his reputation with employees by using purposeful praise – spending a significant amount of time praising workers’ specific efforts and actions, and noticing what they are accomplishing.”
“As a leader, you must always have your focus on the horizon.” Looking to the outside (economy, market, industry, competitors) you need to anticipate you plan of action and countermoves. Defining the present, you ground the reality and look forward (using both your intellect and intuition).
“As a leader, although you do not have a complete view of the future, you must define it through navigation and action – in other words, through decision making. Navigation happens in the moment with adjustments in speed, altitude, and direction as needed.”
“Communication is not merely telling people what you think and what you know. It is a process in which you seek first to understand what others think.” Messages need to be inspiring and “without ownership, your words – whether written or spoken – will have little impact.”
“It is gravitational for communication to cascade down, but it is far harder for it to bubble up. As a leader you must create freedom of speech through an information-sharing culture.” The “tone at the top” has to be one of listening for this to happen.
“To be an effective leader, you must have and demonstrate learning agility – the ability to learn from experience and to apply that learning to new or first-time situations.” “Distinguish your leadership not only by what you know, but also by your open and curious mind… Learning never ends!”
Et alors
Here we are talking about “corporate” leadership and however “asset-based”, “long-term” or “certain” the business, actually the whole “play” is in a dynamic which can be very suddenly impacted by changes in customer and competitor behaviors, the economy, the market, the industry, technology etc, etc. In other words, the “play” is in a permanent dynamic and change is inevitable. My vote for the most important “absolute” of leadership is therefore “learning”; moreover, Korn Ferry themselves say that this is the greatest predictor of success for any potential leader! Keep learning!

Friday, June 20, 2014

Reducing Complexity

The Boston Consulting Group (BCG) created an “index of complicatedness,” based on surveys of more than 100 U.S. and European listed companies. Measuring this over the past 15 years showed the amount of “procedures, vertical layers, interface structures, coordination bodies, and decision approvals needed in each of those firms has increased by anywhere from 50% to 350%.” This according to Yves Morieux as published in his TED talk and “5 Rules for CEOs to Simplify Their Job,” in CEO Briefing Newsletter on ChiefExecutive.net (17.3.2014).
According to BCG analysis over a longer time horizon, “complicatedness” has increased by an average of 6.7% a year over the past five decades. In such complexity, apparently managers spend 40% of their time writing reports and 30% - 60% of it in meetings. With little time for teamwork, employees are often misdirected and end up being disengaged and dissatisfied. Such low levels of engagement lead to less productivity. Complexity appears to be a problem, so how can leaders help reduce it and/or reduce the effects of complexity?
Here’s how to reduce complexity followed by further considerations (“et alors”)
Reducing Complexity
Referring to “smart simplicity” the author proposes five rules to reduce complexity, increase engagement and hence productivity:
Understand what others do
Understanding what others do can have far-reaching implications for the organization. The author cites the example of engineers building machines that are subsequently hard to maintain; whereas it would be better during the build to understand what the maintenance people might need to do...
Reinforce integrators
“Integrators are existing managers that you as a leader must reinforce so that they have power and motivation to make others cooperate.” It is not more rules and procedures, but delegation that makes an organization more effective. Unless you empower people, they will withdraw.
Create feedback loops
The consequences of peoples’ actions are often invisible in a large organization. To improve, the author cites the example of a car manufacturer which rotates the design engineers to become maintenance engineers 3 years after the launch of the car: they become part of a very effective feedback loop.
Increase reciprocity
Reciprocity leads to cooperation: reward those who do and blame those who don’t. Lego Group CEO says “blame is not for failure, it is for failing to help or ask for help.” This makes it in everyone’s interest to be transparent and ask for help before a potential problem becomes an actual problem.
Human Resources
The author’s fifth point is to actually apply the first four points to HR management! It is not creating more complexity, it applying the simplicity of the above four points to all HR processes. In a sense, it is embedding the principles in everything the organization does.
Et alors
The above can be distilled into one key word: “leadership.” Without it, complexity tends to “take over” in large organizations… Leadership is the counterweight, the balance to level out the complexity. Even senior executives in large companies can sometimes “withdraw” to management: organizing, controlling, checking details, and reviewing (or even blaming). Essentially, “management” from such a senior level can exacerbate the complexity in the organization. What is needed is leadership: setting strategies rather than just organizing; communicating visions and missions rather than just controlling; constantly reviewing the big picture rather than checking details; and rewarding rather than just reviewing.

Friday, June 13, 2014

Potential versus Performance

Approximately only one in five companies uses an empirically validated model for assessing the potential of its participants on executive courses. How therefore, are future leaders being selected in 80% of the cases: answer – mainly on past performance. Unfortunately however, the key to success in a new leadership role is usually highly dependent on the individual’s potential – the ability to learn and adapt; rather than the individual’s experience and competencies. This is according to Claudio Fernandez-Araoz in the June 2014 HBR article “21st Century Talent Spotting: why potential now trumps brains, experience and ‘competencies.’” On the assumption that 1/ you are a manger who wants to develop potential; and 2/ you work in one of the 80% of companies that don’t have empirical ways of assessing potential, how might you detect and assess potential?
Here’s what to look for in terms of potential along with further considerations (“et alors”)
Potential versus Performance
According to the author, performance factors such as intelligence, experience, surpassing objectives and specific competencies “particularly the ones related to leadership” should not be overlooked when hiring or promoting “talent”; however the key to getting the right people into challenging positions is to seek potential. Here’s what to look for:
“A fierce commitment to excel in the pursuit of unselfish goals.” Ambitions should be big and collective but expressed with “deep personal” humility with a desire to continually develop.
A “penchant” for seeking out new experiences, knowledge and candid feedback. This should be along with an openness to learning and change.
The ability to gather and make sense of information in order to suggest new possibilities. It is not just research or analysis but a “what could be done” perspective.
A “knack” for using emotion and logic to communicate a persuasive vision.  The key is to engage others and “connect with people.”
The wherewithal to fight for difficult goals despite challenges and bounce back from adversity. With the drive to succeed many things can be made to happen…
Et alors
Not many companies ask managers to assess the potential of their staff and yet at the same time they might have a myriad of executive education courses targeted at “high potentials”. If the company does go some way to formalizing its high-potential detection process, the system inevitably falls back on detecting high performance. The only way to break out of this cycle is to educate managers on the detection of potential: it’s not just if the junior manager appears to be “one of us”, or has done a good presentation, or works long hours, or is “correct”; rather it is all about motivation, curiosity, insight, engagement and determination. Above all, it is learning agility that makes the talent have the “best chance of success.”

Friday, June 6, 2014

Change Inspiration

This week I took part in a jury at a business school to assess the overall grade of participants’ “final projects”. As ever, the quality varied: from excellent to poor with a lot in between! For a business plan, besides the basics of market research and analysis, an attractive customer-offer, innovation, robust financing etc., what made a plan really “excellent” was change “leadership” rather than change “management.” Instead of just talking about how to manage a project with the focus on shareholder return, the participants delivering “excellent” plans would strike something a bit bigger: the idea of changing a paradigm, changing the way people do things, or even introducing something completely new to the world…  To achieve that, you have to have “inspiration” to change and it is not that easy to come by. So I thought to share some insights that I found in “Change Management and Reorganization” (March 2014, ICAEW)…
Here’s some thoughts from leaders to inspire change along with further considerations (“et alors”)
Change Inspiration
As a leader, when you are looking for that extra “boost” to lead a change, any of the following insights might be of interest:
A Einstein, Physicist
The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.
W Churchill, Politician
To improve is to change; to be perfect is to change often.
E Land, Polaroid Co-Founder
It’s not that we need new ideas, but we need to stop having old ideas.
GB Shaw, Author
Progress is impossible without change, and those who cannot change their minds cannot change anything.
CS Lewis, Author
It may be hard for an egg to turn into a bird: it would be a jolly sight harder for it to learn to fly while remaining an egg. We are like eggs at present. And you cannot go on indefinitely being just an ordinary, decent egg. We must be hatched or go bad.
Et alors
One could say that the only constant is change itself! And to survive or even flourish in a world that is constantly changing, you have to not only change, but change quicker than the others! Not much more to say on the subject!

Friday, May 30, 2014

Jugaad Innovation

“Deep scarcity, major demographic shifts, rapid technological change and accelerating globalisation are creating the most complex business environment since the Industrial Revolution.”  Meanwhile, Western organizations have been “institutionalizing” innovation (think R&D processes) that has led to a “structured” approach to innovation which has “three clear limitations: it is too expensive and resource consuming, it lacks flexibility and it is elitist and insular.” This from Radjou et al., in their 2012 book “Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth” (Jossey-Bass).
The authors’ proposed solution for Western organizations to innovate “faster, better, cheaper” in the contemporary environment is “Jugaad” innovation. Jugaad is “a Hindi word meaning an innovative fix; an improvised solution born from ingenuity and cleverness; resourceful.” (It can be loosely equated with “D-I-Y” in America and “Système D” in France.)  Based on extensive research both in emerging economies and elsewhere, the authors identified the “universal” principles of Jugaad so that this “improvisional and frugal art of responding to complexity” can be applied anywhere.
Here are the principles of Jugaad innovation followed by further considerations (“et alors”)
Jugaad Innovation
The authors found that “Jugaad can be distilled into six guiding principles, which anchor the six practices of highly effective innovators in complex settings…” The six principles are:
Seek Opportunity in Adversity
If there is a harsh constraint, it can be looked on as an “invitation to innovate.” It is reframing the perspective to redesign, re-engineer or rethink the business model.
Do More with Less
Work with what you have; do not try to work with what you do not yet have. The essence of frugality is to be “highly resourceful in the face of scarcity.” 
Think and Act Flexibly
The mindset required is that of one who “constantly questions the status quo, keeps all options open, and transforms existing products, services and business models.”
Keep it Simple
It isn’t about “seeking sophistication or perfection by over-engineering products, but rather about developing a ‘good enough’ solution that gets the job done.”
Include the Margin
Hitherto, the focus has been on “mainstream” customers; now “jugaad entrepreneurs intentionally seek out marginal, underserved customers…” Solutions have to be affordable by the target.
Follow Your Heart
Knowing your customers and your product intimately, market research and focus groups might not be necessary: the mindset required is that of those who “trust and follow their hearts.”
Et alors
The above is only the headlines; the book then elaborates with many excellent examples of how these principles have been and can be achieved. Principally however, in an organizational context (rather than an environment as large as a market itself) the key drivers appear to be autonomy and delegation. The authors cite Haier whose CEO has made the “organizational structures flat, thus empowering frontline employees to swiftly sense and respond to changes in customer demand…” Most directors of centrally-controlled large Fortune 500 companies would love their staff to do “more with less” and perhaps “seek opportunity in adversity”; but who amongst those in power actually give “space” to others in the organization to just do a ‘good enough’ job, to “think and act flexibly” and to “follow your heart”? If the leaders want their corporation to survive and even flourish in the “most complex business environment since the Industrial Revolution”, it might be prudent to consider more delegation and more autonomy!

Friday, May 23, 2014

Global Organisations

The Economist recently reported that “companies in developed countries do themselves nothing but harm if they fail to think globally” (Schumpeter, “Bumpkin bosses,” 10 May 2014). The focus of the article was that despite the global credentials of many organisations, the C-Suite executives tend to remain not only local but parochial in perspective; and as a consequence, opportunities are often lost (from emerging markets worth $20 trillion by 2020 according to McKinsey). Citing a study by Bain & Co, Western companies with subsidiaries in emerging markets increased their profits there by an average of 15%; however comparable companies from those emerging markets were increasing their profits in the same period by 23%. So what seems to be the problem?
Only 12% of the CEOs from Fortune 500 companies hail “from a country other than the one in which the company is headquartered.” Those companies that do have a “foreign” CEO tend to have up to 50% of senior managers who are also “foreign”; those that don’t have only 10% equivalent. The relative parochialism can “impose huge costs in terms of reduced creativity, missed opportunities and cultural blundering.” Worse, things look bleak for the future: it is becoming more difficult to recruit high potentials abroad who tend to look at these statistics and hence prefer to work for local companies; and simultaneously the proportion of expats overseas in the biggest multinationals in the biggest emerging markets is reducing (56% to only 12% in the 10 years to 2008). So, what to do?
Here’s what global organisations can do to make sure they really act global, along with further considerations (“et alors”):
Global Organisations
The Economist suggests three things an organisation should do to avoid the “evils” of parochialism:
Move Managerial Functions
By moving location, parochialism can be avoided. Proctor & Gamble relocated its global cosmetics and personal-care unit from Cincinnati to Singapore; General Electric moved its X-Ray business from Wisconsin to Beijing; and Schneider Electric moved its CEO from France to Hong Kong.
Move Managers to Headquarters
By increasing the proportion of “foreign” managers, parochialism can be reduced. The article refers to Bertelsmann as posting “successful local managers” to head office for a few years; and Daimler-Benz has “decreed that half the participants in its programmes for young high-flyers must come from outside Germany.”
Move Managers to Emerging Markets
By getting managers out to emerging markets, managers can become more cosmopolitan which will help the organisation be more multinational in outlook and behaviour. IBM and FedEx are cited as encouraging their executives to provide consulting services to emerging-world subsidiaries. 
Et alors
These are all good ideas and many multinational organisations already do all of the above; yet the corporation still might not be achieving its full global potential. It’s not what you do or where you do it, it’s also how you do it. Many “international” organisations with one principle headquarter tend to be “ethnocentric” in nature, viz: “centred on the culture of origin of the enterprise (head office) which keeps all the principal authority (centre of decisions) and distributes its values to the entirety of Group subsidiaries. Communication is principally by instruction from the head office to the subsidiaries and head-office management occupy key posts in the subsidiaries.” (O. Meier (2008, 3rd ed.), “Management Interculturel. Strategie, Organisation, Performance.”)
Moving managers out from head office to emerging markets can actually maintain the parochialism; as can moving foreign talent to head office and then simply returning them to their country of origin. To defeat parochialism and to truly benefit from being global, managers should not be thinking of a career centred on any one particular head office: instead all talent should be moved in all directions. If your head office is in the USA and there are worldwide subsidiaries including (say) China, the organisation needs to think beyond just sending Americans to China and vice versa; instead the Americans might go to China and then somewhere else – likewise the Chinese might go somewhere else first without passing by head office and or keep on rotating. Only then will the company start to be truly global both in outlook and behaviour!

Thursday, May 15, 2014

Leadership and Psychopaths

A recent study, “Corporate psychopathy: Talking the walk” (2010 Mar-Apr; 28(2):174-93, Behavioral Science the Law journal) by Babiak, Neumann and Hare, found that approximately 3% of those assessed in a “management development program” study “scored in the psychopath range” – well above the incidence of 1% in the general population. (By reference “only” 15% of prison populations are estimated to be psychopathic.)  This confirms much cited anecdotal evidence and was picked up in Forbes magazine last week which ran with an article “The Disturbing Link Between Psychopathy and Leadership.” So what is the link and what can corporations do to make sure psychopaths don’t end up running your company?
Here’s the link between leadership and psychopathic behaviors and what to do about it (followed by further implications “et alors”).
Leadership and Psychopaths
Hare and Babiak also published a book in 2006 called “Snakes in Suits: When Psychopaths Go to Work” in which they described two types of psychopath: either the aggressive “brute” who is unlikely to succeed in the workplace; or the type “who is willing to use their ‘deadly charm’ to con and manipulate others.” Psychopaths can be witty and charming and the latter tend to exhibit three behaviors that might be read as “leadership” skills in the workplace:
1.       Psychopaths “are motivated to, and have a talent for, ‘reading people’ and for sizing them up quickly. They identify a person’s likes and dislikes, motives, needs, weak spots, and vulnerabilities…”
2.       Psychopaths “come across as having excellent oral communication skills. In many cases, these skills are more apparent than real because of their readiness to jump right into a conversation without the social inhibitions that hamper most people…”
3.       Pyschopaths “are masters of impression management; their insight into the psyche of others combined with a superficial – but convincing – verbal fluency allows them to change their situation skillfully as it suits the situation and their game plan.”
Given the real potential for harm, what should an organization do to ensure that psychopaths do not ascend the hierarchy of the organization? According to Forbes, the priorities are:

Internal succession planning

“A well-conceived internal succession program is the best way to protect the organization”, as the study should (presumably) take years rather than just hours to make the promotion.
Focus on verified, tangible results

When recruiting externally, focus on “real substantive accomplishments that can be verified – more than on personal charm and force of personality!
Glean whatever you can about the moral and ethical character of a candidate

Not always easy with a psychopath as “they can manipulate a situation and tell interviewers what he or she believes they want to hear”! Persist and pick up on subtle clues!

Et alors
“The hallmarks of psychopathic behavior are egocentric, grandiose behavior, completely lacking empathy and conscience” said Forbes magazine; many readers will ascribe the same characteristics to someone senior to them in their organization! However whilst at the “surface” level the similarity might look amusing, it is when there are “real” psychopaths that the organization has to be very wary. The good news with the proposed action plans is that they are all preventative controls; however that leaves the question: how do you deal with a psychopath who has already got to a senior position? The chances are they will stay there unless they make an egregious mistake resulting in eviction by persons outside the organization (for example due to criminal charges). For this, there are no readily available solutions: it remains a very difficult situation for anyone working in such an organization!