Collin's Observation On CEO Succession

In his book How the Mighty Fall... Jim Collins points out that eight of the eleven declining companies when to outside CEO’s while only one of the contrast thriving companies went outside for their CEO. Also in the research for Good to Great, 90% of the CEO’s who led their companies to ‘great’ came from inside the company. Then he says “Now you might be thinking ‘but wouldn’t companies in trouble need to go outside?’”

There are, of course great examples on either side. Collins points out Lou Gerstner who came from outside to turn IBM around. In my book I mention Grant Halverson who came from outside to engineer a spectacular turn around of a company in Australia. And there are plenty of others. Whether or not the board looks inside, or goes outside, is a symptom of trouble, not its cause.

Boards of directors are often poorly mixed together and fail in their primary responsibility. Their principle job is to ensure that the leadership in the company is building an environment of engagement. Highly engaged employees are the ones who drive spectacular results today while developing the engine for tomorrow. That is because, to foster engagement the leadership must empower and trust the workforce. Building and maintaining the corporate culture is the CEO’s foundational responsibility. It is culture that determines the level of trust, empowerment, and thus, engagement.

When this is done well, a company quickly realizes that the ‘right people on the bus’ are the people you already have. When you ask the question of a leader CEO “Is there someone inside the company who could take over if you dropped over dead in five minutes” he or she is likely to laugh and say “I’d prefer to retire, thank you very much!” but then can immediately point to two or three people in the organization who would stretch themselves into the role right now.

When an internal change in leadership happens it is always a stretch. A.G. Lafley at Proctor and Gamble had to stretch himself into that role very quickly. At Texas Instruments, Tom Engibous faced this stretch with no warning when his predecesor keeled over dead while on a business trip. Jack Welsh proudly talks about having to choose a successor from three equally capable internal people in GE.

People come up to or down to the level set for them by their environment. In any environment, leadership sets the fulcrum point for lifting people to their potential. In companies, that environment is the culture and the leader is the CEO. If the fulcrum point is set low people will not perform at their potential because they are unable to. If people are not performing at, or near, their potential, it is not possible to detect what that potential is.

If the existing culture fosters the level of empowerment already exists inside the company then it is much easier to pick an insider to take over the CEO role. That is why Collins found that good companies promote from within.

The Innovator's DNA (HBR article - continued)

In my last blog, I commented on a Harvard Business Review article entitled The Innovator’s DNA and promised I would look next at the ‘five discovery skills’ the authors suggest make up the innovator’s creative intelligence.

These five discover skills are:

• Associating
• Questioning
• Observing
• Experimenting
• Networking

I think they are right that these are all useful skills when it comes to being creative. But some of their explanations of these skills are confused.

For example: the discover skill “Associating” is described as the ability to successfully connect seemingly unrelated questions, problem, or ideas from different fields. “To grasp how association works, it is important to understand how the brain operates.” The authors then describe how the brain stores experiences in such a way that memories can be pulled up that cause new associations when fresh inputs are presented to the brain. This is what we at Superinnovator call synthesis. (And describe in detail in Advantage: Business Competition in the New Normal ) It is a brain function. All brain functions take place in individual brains. There is no such thing as a collective brain. Synthesis is not well understood because we don’t really understand how the brain pulls up memories or makes connections between ideas. We do know that some people are very good at this. And we know how to identify these people.

After telling us that this is a brain function, the authors give the example of associating by talking about Frans Johansson’s Medici effect as bringing together people from a wide range of disciplines and by letting them connect, new ideas will blossom.

This description of the Medici effect accurately describes the fifth discovery skill of Networking. Which is getting ideas by exploring the different perspectives of a diverse set of individuals. It is not “associating” which is a mental ability taking place in the brain. Synthesis is a rich source of new knowledge and the principal source of innovative ideas in the modern world.

We prefer a crisper, more precise and more useful description of innovation skills in terms of the ability to create new knowledge. Synthesis is one of the ways we do this. We also do it through Discovery, stumbling upon something and perceiving its utility and value. The third way we create new knowledge is through Experimentation. Experimentation is trying different things to find a solution that works. The authors of the article give erroneous examples of experimentation such as Steve Jobs taking apart a Walkman, or Jeff Bezos taking apart his crib, or Starbucks’ Shultz visiting Italian coffee shops. First of all, these are not examples of creating knowledge, they are examples of gaining knowledge. Innovation happens when we create knowledge, not when we gain it.

Anyway, enough complaining. The article does end strongly. It rightly points out that you can become a great leader of innovation through practice, practice, practice. We teach that leading innovation organization is a different skill from being innovative, and a successful organization needs great innovation leadership, and skilled innovators.

They also rightly suggest that networking with diverse people will help you gain different perspectives which will help you think in new ways and gain new insights.

They also rightly point out that asking surprising questions stimulates new ideas. They suggest ‘why” and “why not” questions. While these are good questions as long as they don’t invite the devil’s advocate in us to emerge (which “why not” questions are prone to do). We prefer questions that ask “how”. These are questions such as: “how” can we better understand a problem?; “how” can we test a hypothesis?; “how” can we beat the competition? “How” questions are more profitable than “why” or “why not” because they focus on solutions and solutions are what innovators produce.

HBR December 2009 article: The Innovator's DNA

Last month I’d glanced at the Harvard Business Review’s December 2009 article called The Innovator’s DNA, by J.H. Dyer, H.B. Gregersen, and C.M. Christensen and didn’t think to blog on it. Then this week, Chris Broxon pointed the article out again and I reread it. It is a fairly narrow piece, and as Chris was saying on Thursday, often people talk only about the idea generation part of innovation and not the implementation. This article is about people who come up with these ideas.

The thrust of the article is that “Five ‘discovery skills’ separate true innovators from the rest of us.” Strangely the article points to Steve Jobs, Jeff Bezos, eBay's Pierre Omidyar, and A.G. Laffley at P&G asking "how these people come up with groundbreaking new ideas? If it were possible to discover the inner workings of the master's minds, what could the rest of us learn about how innovation really happens?"

The authors go on to say that most top executives facilitate innovation. But “in stark contrast, senior executives of the most innovative companies…don’t delegate creative work. They do it themselves.”

This is a strange statement especially when I think of Steve Jobs or particularly A.G. Laffley. Laffley is famous for expanding innovation at P&G by getting ideas from outside the company. That’s delegating creativity at the extreme.

If we look at Jobs, one of the earliest things Apple Macintosh had before Microsoft was the windows interface. But that wasn’t invented by Jobs, it was done first by Xerox at PARC. Likewise, Jobs didn’t come up with the idea for the iPod. The digital audio player was invented by Kane Kramer of England, who is credited with inventing the device in 1979. For iPod's software, Apple also went outside and used 3rd party PortalPlayer's platform. To top off the theme, the name ‘iPod’ came from outside of Apple, created by Vinnie Chieco, a freelance copywriter.

Even the icon of the great innovator, Thomas Edison was hardly the sole inventor the mythology portrays. He worked closely with folks in his Menlo Park lab. Charles Batchelor was the fellow he worked most closely with. In fact, why would the ‘sole inventor’ Edison split all patent royalties 50-50 with Batchelor. Because Edison was not the sole inventor! One of the lab assistants once said “Edison is in reality a collective noun and means the work of many men.”1 Thomas Edison was an amazing front man, the salesman/showman dealing with clients and investors.

Likewise, that’s what Jobs, Bezos, Omidyar, and Laffley are. They are salesmen and leaders first. What makes their companies successful is their openness to other people’s invention. They are networkers. Today the key to innovation progress is found in the way companies exploit the internal network structures and connect them to the outside world. And that is not new, it’s what Edison and Henry Ford did so well.

Next time we’ll look at the authors’ five 'discovery skills'.

[1] Andrew Hargadon Focus vol. VIII/1 pp 32-35 2004

Dichotomy of Mind

Dichotomy of Mind

In doing research for my just completed book on innovation (available as an audio book at http://store.payloadz.com/go?id=770643 ) I looked into a number of interesting studies of what is going on in the brain, to gain insight into how it is we created knowledge and solve problems. One thing that struck me is that the field of Psychology has lock-in.

Aristotle postulated a view of psychology that describes two minds. One is the logical mind where reasoning takes place. The other is the alogical or emotional mind where feelings and desires reside. Much of psychology still subscribes to this view. The next big leap in psychology and neuroscience may well come from abandoning this view. We’ve evidence to suggest that the functions we describe as reasoning and those that we describe as emotions have the same foundations.

In the field there seems to be a competition between cognitive psychology and neuroscience to describe what’s at work in the human mind. The methods used represent the difference, that one observes behavior and looks for environmental causes and emotional triggers for understanding the behavior. The other looks into the mechanics of the brain to describe what is going on in terms of functions and electro-chemical interactions.

Perhaps neurology offers the best of both. “Neurology is an essential part of the enterprise because it provides both important behavioral data on human subjects and hypothesizes connections between specific brain structures and behavior.”

It's the Economy!!

I attended a Harvard breakfast meeting this morning. Bill Hass and Shep Pryor, who are co-authors with Arthur Laffer on the book The Private Equity Edge. The talk was very interesting and I immediately drove to Borders in Deerfield and picked up an autographed copy.

I ran into trouble right away. In the preface the authors say:

“Our interdisciplinary value-based study and perspective on corporate strategy, corporate profits, political leadership, and the macroeconomic factors over the last 50 years should be of great interest to all. Political leaders can especially benefit from the perspective of corporate decision makers on the impact of government intervention and their unintended consequences on the wealth and risk of the nation.

For example, we have recently learned a lesson on the importance of using the right goals and metrics in managing the monetary base of the U.S. monetary system. While the Fed was attempting to keep inflation under control it failed to maintain the monetary base needed to keep the global economy growing. Although there is plenty of blame to go around, the Fed mismanaged the monetary base and promoted a credit crunch that led to a major economic crisis.”

This is an interesting take on the cause of the economic crisis. You don’t often hear people say the cause was a credit crunch. Rather, the cause is often attributed to just the opposite, a credit glut that cause financial institutions to create very risky loans.

They included this graph to show the drop in monetary supply when Ben Bernanke succeeded Alan Greenspan on February 1^st 2006.

The rate of growth in the money supply is considered to be a leading economic indicator because the Fed tends to increase the money supply in an attempt to counteract an anticipated slowing of economic growth. The interesting thing here is that during the years 1999-2006 the fed under Greenspan grew the monetary base by an average annual rate of 6.6%. During those same years real GDP grew at only 2.7%. This is a big sustained gap. Where did all that excess money go? Into riskier and riskier loans, and riskier and riskier derivative financial instruments.

It seems to me that the suggestion that Bernanke caused the financial crisis is a bit disingenuous. Allowing bad credits to soak up the excess money supply under Greenspan was as much to blame, and probably more so. After Bernanke took over the two rates tracked each other very closely. The problem was already in place. Continuing the old monetary policy would have just delayed the inevitable.

Black Swans

Black Swans

I was in Starbucks doing a little work this morning when I ran into a well read and very bright friend who has great insights into economic issues, and dabbles in philosophy. In the course of our conversation somehow the Black Swan Events came up and he says, “What do you mean it’s nonsense!!!! Its brilliant!” and he was serious.

The Black Swan Events or theory was created by Nassim Taleb. When I read about it I just assumed Taleb was having fun, it was all a big practical joke. After all, the idea of a Black Swan really has no tangible definition. It’s an event, that has a big consequence that some observers didn’t predict. It can be anything that in your opinion has a big consequence.

I think Taleb continues to have fun. In an interview less than a year ago, he says “my definition of randomness is as follows: incomplete understanding or incomplete information.” Come-on, how can you not see the joke there. Some people hold the philosophical argument that nothing is random (ie there is a cause for everything even if you don’t know the cause at the moment). Then, in a disingenuous twist, say that when they use the word random to describe an event, they mean they don’t know it’s cause. It is taking an ontological concept and pretending its epistimological. It's amateur philosophy. It is funny, sloppy almost circular thinking that Taleb is having fun with.

He also says things like “Consider Freakonomics one of the few works in empirical economics that is robust to consequential observation errors.” It’s wonderful, you get the illusion that something meaningful is being said, when it isn’t. He’s having fun because people actually take the nonsense seriously.

Zebras

I have been using Zebra Steel G-301 pens for several months. They are great, inexpensive pens that write really well and feel great in your hands. One of my business partners also uses the pens and when we discovered this we both held up our pens giving each other that conspiratorial look that says we both understand what a great writing instrument it is. That same thing has happened in coffee houses where occasionally someone across the room will notice and hold up their Zebra as well.

A few weeks ago I was looking for one of my Zebra Pens and my wife asked what I was searching for. I said. “Just a pen.” She says, “Oh, I found the coolest pen the other day.” and produced my missing Zebra.

Then Yesterday ,I was in Staples picking up a few supplies including a couple of Zebras. The girl at the checkout counter saw the pens and immediately produced her own. “Want to try it before you buy one? They’re terrific.”

Mountain Trivia

Question: What does the second highest mountain in Canada have in common with the second highest mountain in the United States?

Answer: Pretty much everything.

Competitive Initiatives

During the past couple of decades many companies have created competitive advantage by focussing on techniques to boost productivity. These include outsourcing, reengineering, automation, and getting incrementally better at doing the same thing over and over again through six sigma like programs. The trouble with competitive advantage created in this way is that it erodes easily since the competition can easily match it. For the most part, these productivity gains were around routine, non-complex jobs.

Now several leading companies are focussing on making their talented, highly paid, most valuable decision makers more productive. These are employees whose decision making role, or their direct relationships with customer or suppliers gives them particular leverage to take actions that boost competitive advantage. This is less about productivity in the traditional sense, (e.g. make more, better, faster decisions) than it is about performance that generates that competitive advantage. The tasks targeted for improvement are complex interactions.

Whatever this amounts to, I think it is not the optimum approach to creating competitive advantage. We create competitive advantage by solving the customer’s problem better than the competition. To sustain competitive advantage you must continually solve the customer’s problem (need, want, desire) better than the competition. Great companies know that the best ideas for solving customer problems can come from the most unlikely places. Why? Because we are all problem solvers and you never know who in the company is going to have that flash of insight that comes up with the new and better way. That is why great companies put in place environments that foster problem solving and employee engagement for every employee.

New CEO of Largest Automaker Apologizes

The other day, the recently installed new CEO of the worlds largest automaker made a public apology for his company’s performance.

Astonished reporters heard him apologize for the company being shamefully unprepared for the global economic crisis; apologize for billions in losses both last year and again this year; apologize for a manufacturing fault which caused the death of a California highway patrol officer and three family members; and apologize for the unfortunate closing of the company’s joint venture assembly plant in Fremont California.

Who was this CEO? Well it wasn’t GM’s new CEO, Frederick Henderson. No, it was Akio Toyoda, the new CEO of Toyota.

Korean Electric Car

At the Korean Products Show in Chicago this week CT&T showed off their ezone electric cars.





They are ‘in town’ cars with a maximum speed of 35 mph and will travel up to 80 miles on a single charge. According to the show, these cars cost about $12,000- $13,000 but are eligible for a $5,000 Federal Income Tax Credit.
They looked pretty slick for tiny two seaters. Not surprisingly, the company makes golf carts too!

The New Normal - Financial Leverage

The new normal

In March this year the McKinsey Quarterly published an article entitled The New Normal. In it they said:

“

Obviously, there will be significantly less financial leverage in the
system. But it is important to realize that the rise in leverage leading up to
the crisis had two sources. The first was a legitimate increase in debt due
to financial innovation—new instruments and ways of doing business that reduced risk and added value to the economy. The second was a credit bubble
fueled by misaligned incentives, irresponsible risk taking, lax oversight, and
fraud. … it is clear that the future will reveal significantly lower levels of
leverage

…”

I think this prognosis is overly influenced by unusual factors impacting the correction we are currently experiencing. A big part of the problem rests with the impact on bank capital from the losses around credit default swaps and their related mortgage backed securities. The banks’ capital determines how much leverage they can put into the market. But that capital will get rebuilt pretty quickly.

Certainly there will be less foolish lending once credit becomes available. On the consumer side, I think we will return to a fairly highly leveraged economy. And from a business perspective, I think we will once again see ample credit available where credit is needed.

The McKinsey article is at:http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/The_new_normal_2326?gp=1

Cloud Computing

At the Thursday PDMA breakfast meeting on September 3rd, 2009 we discussed the notion of cloud computing. The fundamental concept is that businesses today own a level of capacity that ensures a cushion at peak demand. This is excess capacity. When it’s added together across many businesses it amounts to substantial waste, especially because peak usually tends to be an infrequent event for most businesses.

For example, the credit card industry maintains capability to handle volume for the day after Thanksgiving shopping deluge. If this capacity were pooled together with other industries then the total capacity needed at any one point in time would shrink. As a result, the cost should be lower in that pooled environment.

Fundamentally, Cloud Computing is similar to other utilities like the telephone, water, and electricity. It should be universally available, reliable and affordable.

Proponents of Cloud Computing also suggest that with the plethora of software solutions, there is a lot of duplication of effort. This too can be pooled to leverage established solutions across multiple users instead of customized solutions for each user.

The benefits are:
· Lower Cost – more efficient use of capacity drives lower costs.
· Greater Accessibility – Users have access to a greater library of solutions 7/24.
· Safety – 7/24 staff to handle any problems anytime.
· Automatic secure backup of data.
· Unlimited capacity from the perspective of any individual user.
· Ease of use.
The costs are:
· Network capacity is not really there yet.
· The cost of capacity may not actually go down, especially in the long run.
· The cloud likely will not be as reliable as desired, at least initially.
· Security is a concern where a third party is responsible. It is usually an internal person who breaches security.

The conclusion was that for many small and medium sized businesses, cloud computing makes sense. Where it is less likely to be beneficial is where IT is a core component of competitive advantage for the business.

Values Based Decision Making

True story: One day a manager came into the office of a VP in his corporation. The manager said they’d run into a problem with a deal in Latin America selling equipment to a local government department. It was a big deal and represented about 10% of annual sales, and because lots of overhead had already been covered by other sales, the deal represented 25% of annual profit. This was important to the performance results of the corporation.

The manager reported that he’d run into an unacceptable situation and while they would not contemplate acquiescing to the demands, he wanted the VP’s thoughts on the issue. The deal was priced at $10 million. It had been agreed to and contracts were drawn up. Then the local representative announced that they needed to re-price the deal up to $11 million, and pretend costs had gone up. Then the local representative would make sure that the extra million was ‘distributed’ appropriately. The local representative indicated that this was how all deals were done with the government in his country, it was ‘normal’.

The manager said that obviously they would not pay the additional $1 million in bribes. and thus they would not re-price the deal and would stick with the original offer. However the VP said ‘No, I think we cannot do that. Clearly everyone who does business with this government must know that on deals this big, you’re expected to distribute this additional money to grease the wheels. We know competitors who’ve landed contracts, and we also know competitors who were unsuccessful in landing deals. Both these groups must know about the payola. As a result, we must completely withdraw the offer. Moreover, we must let it be known that we will not be bidding on any future business with this government.

Surprised, the manager asked if that wasn’t a bit extreme. But the VP said “Here is the issue. Everyone knows of this practice. If we go back and win the deal with the original $10 million price tag, everyone will just assume we paid the bribe. Our reputation would be tarnished. Likewise, if we ever did business with this government people would just assume we paid off the necessary officials. Our reputation would be damaged. Thus, we can never do business with this government.

Who was this VP. It was Robert Galvin, who later took the helm of that company, Motorola, and steered it with full wind powering it sails for 30 years. It was a decade after Galvin left the company that it ran aground.

Stockholders and Gamblers

At the PDMA breakfast this week we had a brief discussion around what drives management styles in companies. In the course of this conversation we talked about the difference between stockholders and speculators.

Speculator s buy a stock because they have a feeling that the stock will rise in price in the short run. Stockholders buy a stock because they believe that over the long term they’ll earn dividends and see a reasonable lift in the value of the stock over time.

I have always wondered why the leadership in companies feel compelled to give quarterly guidance, when that really focuses on the interests of speculators. I suppose it has something to do with institutional investors who can buy and sell large blocks of stock, and use their voting power to, influence CEO’s. But catering to them is weird since speculators are just going to sell as soon as the price reaches the threshold, and then they’re no longer investors. At any rate, the behavior focuses management on the short term, when it is better for the health of the company to be more focused on the long term.

We decided at the PDMA that the whole thing needs an overhaul. The voting rights that go along with stocks should be withheld until the stock has been held by the same owner for a longer period of time – say two years. That way speculators can go along for the ride, without compromising the long term viability of the company, and management can focus on the whole future of the company, not preoccupied with the quarterly results.

Perhaps it should go further and hold dividends in escrow for stocks that have been held less than a year. In order to earn the dividends and then enjoy subsequent dividends, you have to hold the stock for one year. Otherwise you forfeit the dividend and it goes into retained earnings.

It is still not too late to innovate

At the Product Development and Management Association (PDMA) breakfast meeting this morning we talked about how this recession might impact how we measure R&D investments.

One of the attendees pointed out that we pull out of a recession when innovative new products incite people to start buying again. The impact on companies is that if you are not coming to market with innovative products soon, you may be bypassed by new competitors as we go into recovery.

Research suggests that in prior recessions the vast majority of companies who fail to prepare innovations during the latter part of the recession, disappear within a few years of the recovery. Their products lose their ability to attract customers and market share disappears.

But this recession is a little different from prior recessions. Because banks are the cause of the recession, the breadth of this recession is unusually broad. Job creation is what economists tell us will pull us out of this recession.

That could cause the innovation bubble to be pushed further into the future. It will still happen, but perhaps later than in prior recoveries.
That is good news for companies who’ve done nothing but hunker-down over the past few months. There is still time to get organized to innovate.

Listening to what customers don’t tell you.

Successful innovation hinges on getting the problem accurately defined. Lots of marketing experts will tell you to ‘listen to customers’. The trouble is, sometimes what customers say and what is the truth are not the same.

Getting to the truth some other way is sometimes the best solution. This morning we were talking about how companies are using the Web and this topic came up.

An online brokerage firm offered different investment alternatives to its clients from time to time. As part of registering a client on the site, they ask the client to describe his or her risk profile – conservative, moderate risk taker, or adventurous.

But the brokerage does not rely on that answer. Instead they serve up three investment alternatives at a time – one conservative, one moderate, and one higher risk. Then, then over time, they track which ones the client clicks on to eventually determine what the client’s real appetite for risk is. What they found is that often clients either don’t really know what kind of risk appetite they have, or they lie about it.

Once they have the clients real risk appetite pinpointed, then they can offer more appropriate and appealing investment alternatives.

Finding ways to listen to customers without listening to what they say can sometimes provide the competitive insight that gives you the edge. Be ingenious.

Hey, What Are We Anyway – Automatons?

Yesterday I was listening to a BusinessWeek podcast when the guest said:

“Too often we hire people to solve our problems, when we’re supposed to be hiring them to carry out our solutions.”

Do I agree? Well, Perhaps. That is, if you’re mowing lawns for a living and have just one truck.

The rest of us have to ask ourselves: ‘What business am I in”? And there’s really just one answer – as pointed out by Craig Stull, Phil Myers, and David Meerman Scott in their book Tuned In:

‘We’re in the business of continuous problem solving for our market’.”

If you’re really just hiring people to ‘carry out your solution’ then you’re going out of business. Markets move quickly these days. If , like chimpanzees brachiating through the tree tops, you’re not moving from solution to solution, you’ll be overtaken by competition.

As a business leader, you are very susceptible to mindset that endorses the current solution. You need problem solvers at every level of your business to keep the pool full of new ideas. And don’t expect you’ll know a good idea when you first hear it. Chances are, that at first, you will think the best idea you hear this year is utterly stupid. You’ll be in the company of famous leaders who’ve done the same thing – Thomas Edison, Henry Ford, Thomas Watson of IBM, Ken Olson of Digital Equipment, William McKnight the legendary Chairman and CEO of 3M, and many others.

Success = Hire problem solvers and give them space to work.

Bruce Nussbaum @ 2009 Innovation Summit

At the 2009 Innovation Summit: Design + Innovation = Sustainability I met Bruce Nussbaum who I've heard a number of times on BusinessWeek podcasts. He is the Assistant Managing Editor at Business Week. Bruce is also the Professor of Innovation and Design, at Parsons the New School of Design in New York.

I had the chance to spend a few minutes with him during a break. I mentioned that I'd heard him on BusinessWeek podcasts which I download from iTunes to my Blackberry. That led into a conversation about how different generations approach technology. I then brought up the issue of the entrance of Generation Y into the workforce and how that might reshape the workplace to the benefit of everyone.

Greg Woodard calls Gen Y the 'entitlement generation' who get rewarded just for showing up. "Here's your trophy from the 8 team soccer tournament, congratulations on good play and eighth place!" Stephanie Armour, adds to this in an article a while back in USA TODAY. She quotes Bruce Tulgan, a founder of New Haven, Conn.-based RainmakerThinking, which studies the lives of young people.
"Gen Y has been pampered, nurtured ...with a slew of activities ... meaning they are both high-performance and high-maintenance."

Stephanie goes on: "Generation Y is much less likely to respond to the traditional command-and-control type of management still popular in much of today's workforce," says Jordan Kaplan, an associate managerial science professor at Long Island University-Brooklyn in New York. "They've grown up questioning their parents, and now they're questioning their employers. They don't know how to shut up".

I suggested to Bruce that Gen Y's will be less likely to play a subordinate role in workplace relationships. They will expect to be treated as peers-- as adults. This is a good thing because problem solving requires getting to the truth around the customer problem you are trying to solve. If the dialogue is not on an adult-to-adult level then truth suffers. The objective of the conversation has an undertone of positioning and that 'political need', that 'survival need' for the subordinate, takes precedence.

If Gen Y brings more adult-to-adult dialogue into a company, the company has taken a huge step toward Trust, one of the three key elements to being an competitively innovative company.*

Bruce gave the closing speech at the Summit and I was delighted when he referred briefly to our conversation and the impact of Gen Y on the workplace.

*To be a competitive powerhouse a company needs to be great at problem solving and innovation. To be great at both you need the right work environment that fosters truth and action. The foundational elements are TEEˢ ͫ -- Trust, Engagement, Empowermentˢ ͫ.

Emotional Intelligence

Over the past several weeks I have received multiple email solicitations for a conference on Emotional Intelligence. Then today I received a snail mail package for a different conference also on Emotional Intelligence. This must be the latest management fad. I laughed when I got it, wondering what possible mailing list might have made the assumption I might be the right target. This focus on Emotional Intelligence is a dog hunting its own tail.

When I opened it I found this statement:
“Emotional Intelligence is synonymous with good leadership. It consists precisely of those social and emotional skills necessary to motivate and inspire subordinates, to manage with understanding and respect, and to resolve conflicts and ease tensions as they arise.”

Well, those who know me well won’t be surprised that there is not a single sentence in that paragraph which I think is correct.

“Emotional intelligence is synonymous with good leadership”? Everyone has emotional intelligence just as everyone has the other kind of intelligence. I think they might mean high EQ = leadership. But in what way? The mailing suggests it is partially this skill “to resolve conflicts and ease tensions as they arise”? I knew a manager who was very good at resolving conflicts and easing tensions. He couldn’t stop himself. The instant conflict arose he would jump in to mediate. He is probably the most emotional intelligent person I know. But he was a terrible leader.

That’s because conflict isn’t always a bad thing. Particularly when the conflict is around getting to the true nature of a problem. Christopher Morley wrote: “There is no squabbling so violent as that between people who accepted an idea yesterday and those who will accept the same idea tomorrow”.

The ideas Dr Morley refers to are ideas about change. The truth is, it is natural for us, as humans, to react negatively to change. It is how our brains work and it is what allows us to repeat success behaviors. But change is also natural and necessary, and conflict is one way we overcome the natural tendency to resist change. With conflict you do get tension. Great leaders allow conflict and tension to arise. They also give conflict time to resolve itself. You only need to step in when the conflict becomes damaging. A lot of conflict has a personal element to it, but that doesn’t mean it is necessarily damaging.

The mailing states that (high) Emotional intelligence “consists of those social and emotional skills necessary to motivate and inspire subordinates.” The word ‘subordinates’ is telling when used with how people become motivated and inspired. Great leaders do not motivate with fear. Bad managers, however, often do motivate with fear. But fear tends not to be to inspirational. "The beatings will stop when morale impoves!"

Great leaders know there is only one source of motivation that works, and that's self-motivation. But more importantly, great leaders know that almost everyone is capable of being self-motivated. All a leader needs to do is align the individual’s personal sense of self-worth, with the work they do.

A great leader creates an environment where Trust, Engagement, and Empowerment define the workplace. Ideas like “managing with understanding and respect, and … easing tensions” say that we should all play nicely together. These ideas suggest it is most important that if things get a little tense, we nip that in the bud before we move on.

What great companies do, is face the truth, the hard truth, head on. Truth seeking is messy. Misunderstandings and tensions are part of that. But in environments of Trust, Engagement, and Empowerment, these misunderstandings and tensions resolve themselves, and they are not important.

Emotional Intelligence is not synonymous with leadership.

Made to Stick Story

In Made to Stick, Dan and Chip Heath talk about making a message stick with your audience. They say it should be a story that is crafted to have an unexpected ending, with a concrete message that is credible, emotional and simple (S.U.C.C.E.S.).

Ed Baker, who is a terrific help to any business owner when they find themselves is a tight spot relative to human resources, recently had a S.U.C.C.E.S. home-run with an interesting twist. Ed sent a newsletter to his network which contained a questionnaire on one side, and the answers on the other. The questionnaire was about regulatory requirements around aspects of Human Resources.

The ‘story’ is one that came back to Ed when a business owner called him up. The owner told Ed that he tested himself with the questions and when he turned the paper over, was very surprised when he failed to get half the questions right.

Wondering how his own experts would do, he made several copies of the front of the questionnaire. He called in his HR team and gave it to them as a test. You’ve probable guess that they had an unexpected result. The HR team also failed the test.

You can imagine how the owner felt. He’d turned Ed’s newsletter into a concrete example of his company’s need -- and he realized that Ed offered a credible opportunity to add value to the company. Ed had conveyed his value in a very simple way that turned into a S.U.C.C.E.S. story.

If you’d like a copy of his questionnaire, send an email to Ed at HRMLTD@ameritech.net

Bonehead PayPal

PayPal’s website states that “the purpose of PayPal is:

1. Your sensitive financial information is securely stored on our servers.
2. When you use PayPal to pay online, you provide only your PayPal email address.
3. The merchants/retailers receive payment from PayPal without ever seeing your financial information.”

Now I have received the following:
“We've updated your PayPal account.

Now you can pay without tapping in to your PayPal balance.
Hello Customer,

We're always looking for ways to improve and perfect PayPal to make sure you have the best possible experience. So from June 8, 2009 'til June 8, 2010, we're giving some of our members - including you! - some new payment options, and we'd love to hear what you think.

Up til now, if you had a balance in your PayPal account, that balance was automatically applied towards any purchase you made.

But from June 8, 2009 through June 8, 2010, your default payment source will be automatically set to your credit card instead of your balance*. So, even if you have money in your PayPal account, you can leave your balance for future use. And if you have more than one credit card on file with PayPal, just log in to verify which card is set as your default.

Don't want to pay with your credit card? No problem. Just click "Change" under "Payment method" when you're reviewing your purchase during checkout.

We'll check in with you after you've had a chance to try out your new options-any feedback you give us would be truly appreciated. You could help shape the future of PayPal!

If you have any questions at all, please visit our Help Center
Thanks,
PayPal”

Aside from the fact that this new ‘option’ steps all over the PayPal stated purpose, and that it is not an ‘option’ at all since I apparently don’t have any choice, it seems clear to me that they are disingenuous when they say they’d “love to hear” what I think. Well perhaps, but not yet. They provide no mechanism for providing that feedback right now, and, obviously, I am ready to respond!

Of course, I don’t need to try this new option, as if I haven’t already had the ability to pay online with credit cards. In fact, since you cannot pay for everything with PayPal, e.g. Amazon, you have to use credit cards. I use PayPal because it is an alternative to credit cards. PayPal must figure it will make more money with credit card transactions. Well, I guess I can always not use PayPal until June 9th 2010.

What a bonehead move PayPal!!!

Innovation Irony

In a prior post I pointed to Nell Minow's preference for people who are precise in their communication. It reminded me that in the past year I have caught myself being less precise in how well I choose words. One phrase I have caught myself using when talking about innovation is "creating an innovation mindset." I use the phase because I have heard so many other people talk about an ‘innovation mindset’. But "mindset" is a bad choice of words; moreover, it's ironic.

According to wikipedia: "A mindset... is described as mental inertia, "groupthink", or a "paradigm", and it is often difficult to counteract its effects upon analysis and decision making processes." "Mindset...refers to a phenomenon of cognitive bias..." It gets in the way of truth.

Mindset is a contributor to what Adam Hartung calls a Lock-in behavior. It leads a company to rigid adherence to a historic success formula, even when it no longer works well.

For companies to be good at innovation, to be good at problem solving, getting to the truth is crucial. Usually the biggest hurdle to overcome is the entrenched mindset among decision makers. A bias gets in the way of being able to see truth.

I think people know what I am trying to say when I utter something about "creating an innovation mindset." But "mindset" is not correct. It is so WRONG that it’s ironic. "Penchant" would be better.

CEO and TEE Leadership

The CEO has the main leadership responsibility to build and maintain employee Trust, Engagement, and Empowerment (eTEEsm). If you are going to run a good problem solving company, you must be good at creating eTEE. Building employee Trust, Engagement, and Empowerment requires leadership, not management.

Great CEO leadership isn’t about being soft. Great CEO’s set high standards. They are tenacious and persistent. The great CEO pays attention to detail and focuses upon efficiency. Such a CEO demands deep thinking and clear-headed analysis. A great leader doesn’t just exhibit these traits. A great leader gets the people he or she leads to set high standards for themselves, to be persistent, to think deeply for themselves, to thoroughly analyze, to pay attention to detail, to be efficient, and to always strive for excellence.

First-rate CEOs see this responsibility as their primary responsibility. Second-rate CEOs spend the bulk of their time managing. They are busy making decisions and evaluating performance. Frequently, second tier CEO’s spend no time at all working their eTEE responsibilities. They are managers. Managers try to get the most out of their employees. Leaders give their colleagues the opportunity to be their best.

Nell Minow's Catching Ideas

This morning my business partner Dan Wallace sent me to a site about management pointing to Nell Minow's insights:

What Nell Minow, co-founder of the Corporate Library looks for when hiring people, “I really look for a kind of a passionate curiosity. I think that is indispensable, no matter what the job is. You want somebody who is just alert and very awake and engaged with the world and wanting to know more … Another thing that’s important to me in hiring somebody is the ability to become very fully engaged with the company, and that is a real challenge when you get past a certain number of people. The fourth person you hire is just a different kind of person than the 25th person you hire … And this is where it starts sounding like I’m looking for someone to date, but I also look for a sense of humor, because that’s really the best indicator of some kind of perspective about the world. And ultimately I won’t hire anybody who can’t write … It’s just tremendously important, their precision, their vocabulary, their sense of appropriateness of communication.”

See more from Ms Minow in the piece 'The Importance Of “We” In Managing People'
http://www.nytimes.com/2009/04/19/business/19corner.html?scp=1&sq=Nell%20Minow&st=cse
Ms Minow points to characteristics which are also very useful if you're looking to build a problem solving team. She recognizes that within that criteria, you can hire very different people. She is not saying you need people with high EQ. High EQ does not equate with engagement. You hire curious people who can think clearly and express those thoughts through precise language. Not everyone uses language with precision.

For example, I downloaded a whitepaper over the weekend partially based on this content claim: "This report will attempt to answer how social media marketing benefits businesses." I am interested in how people utilize social media. How do you use a blog to close a sale? That you claim to use a blog to close a sale is not very interesting without understanding how it is accomplished.


But the report actually was just full of charts and graphs around a survey result. The data only showed 'that' respondents claimed social media marketing benefits businesses, not a word on 'how' the benefits were achieved. It is like saying I am going to show you how you can build a wood house, and then show you a wood house.

The Hard Work of Memory

WIRED magazine reported in their April 2009 issue about something extraordinary.

Jill Price is a woman with an incredible memory. She's been written up in press from the scientific Neurocase, to USA Today, to the Wall Street Journal. She's also run the television circuit -- appearing on NPR, 20/20 with Diane Sawyer, Good Morning America, and Oprah

She can remember virtually every day of her life from 1974 to today.

But, the point of the Wired article, written by Gary Marcus a cognitive psychologist at NYU, is that her memory is not derived from some unique property of her brain. Most of us are just as physically capable as she is to remember such detail, if only we put as much energy and effort into it.

In my upcoming book I talk about how rats learn a maze. If a rat runs a maze fifty times it will remember the maze for about a year. But if it runs the maze 200 times, it will remember the maze for its entire life.

Ms Price does the same thing. She wasn't born with this memory, she works hard at it, perhaps compulsively. She repeats her memories over and over again. She reviews and reviews and reviews her autobiographical experiences until they are deeply grooved into her memory. She thinks about it, writes journals, and collects person memorabilia.

In some ways, what Jill Price does is analogous to Malcolm Gladwell's 10,000 hours rule in his book Outliers. Mr. Gladwell says that to be extraordinarily good at anything, you must put in about 10,000 hours of practice. Jill Price has probably put in many thousands more hours than that, imprinting her personal memories into her brain and that is why she is so good at it.

Gustavo Dudamel: Simón Bolívar Youth Orchestra of Venezuela

On Friday night my son Charlie and I went to see this incredible young conductor and the amazing Simón Bolívar Youth Orchestra. If you have not seen Gustavo conduct you’re in for a treat. Check out this link to see him earlier this year and get a sense of what we experienced.

The music was fantastic and the two encores were joyful since the kids playing had some fun, jumping up, spinning their instruments and yelling. It was extraordinary and truly wonderful!

I just received notice that the International Journal of Innovation Science Released!!! It contains an article by me entitled “Building new knowledge and the role of synthesis.”



The journal is finally out! The Journal has been launched to develop and promote science and engineering of innovation in order to mature the field of innovation, and improve success of new products for profitable growth. Feel free to recommend the Journal for your office or local library with the link to its publisher.
If you’d like to read my article, let me know. Cardpuzzle21@gmail.com

Stupid Research Conclusions

Fairly often as I research for stuff I am writing I will come across something that makes me hope people are critical in their thinking. Here is an example:

This is a story on sales incentives -- headline, and conclusion reads: “Any Incentive Is Better Than No Incentive at All”

Here is the short version of the study which led to this conclusion:
The 45-person sales organization was divided into three groups of equal size and took part in a sales contest but with a different reward.

Key findings: “The results indicate that the group with the travel/entertainment incentives performed best, followed by the group with the cash incentive and, lastly, by the merchandise incentives. However, say the authors, “Although the merchandise incentive did not produce as large an increase in new clients as the trip/entertainment and cash incentives, it is clear that any incentives are better than nothing at all.”

Really? It may be true that "any incentive is better than nothing at all", but this study certainly did not show that since none of the groups had no incentive. Bad research!!

8000 Free Cars

According to an NPR story I heard the other day there's one perk GM refuses to give up: a company car and company-paid gas for about 8,000 white-collar employees. General Motors spent nearly $12 million on fuel for its staff.

You get to drive a new car every six months. You never have to pay for it. Gasoline is always free."

A GM spokesman defended the program, which has been around for at least 50 years. He said the perk is part of white-collar employees' overall compensation.

It doesn't eliminate all driving impacts for employees. For example, when gas hit $4 per gallon last summer an employee really felt the impact, of course it wasn't the cost, rather he complained that he had to swipe his credit card twice to fill up the tank of his big free SUV.

GM calls the perk the Product Evaluation Program. The company says it's an important tool: employees must make routine reports to an internal Web site and immediately identify problems.

Walter McManus, a former GM economist, worked at General Motors during most of the 1990s: "I'm not aware — when I was in market research or in product planning — of anyone at GM ever using the information for any sort of analysis or any product development decisions," McManus said. "No one that I knew took it seriously."

A company spokesman said killing the program now would be "extremely" disruptive, kind of like the inconvenience of having to fly on a commercial airline to go to Washington DC.

From a problem-solving and innovation perspective this Product Evaluation Program is a bad idea. If GM really thought this kind of feedback was valuable it would make more sense to give the cars to non-employees. But in today's Web 2.0 world such a program is unnecessary. We saw at the MIT EF how effective paying attention to Twitter and other web tools to get immediate feedback from customers, and interacting with them to solve problems.

The real issue with this perk, and every other exclusive perk, is it creates entitlement for a small group while festering disengagement in everyone else. The justification doesn't wash with the other 230,000 GM employees.

If employee feedback is wanted, then randomly select 8,000 employees to get the cars every few weeks. This would make more sense given the stated objective. But because the stated purpose of the perk is untrue, the practice undermines 'truth telling' in the company. 230,000 employees know the management is lying about the value of this perk. What else are they not being genuine about?

The foundation of good problem solving is truth. GM does not operate in an environment of truth -- perhaps that's why they are in trouble. The old management team doesn't get this. They have serious mindset problems.

The best thing for General Motors, and for us as tax-payers is to put in a new leader in the CEO role, who will rotate every direct executive into a significantly new job (see the article on the value of moving managers around). This breaks the mindset and will allow GM to start down the path to build Trust, Engagement, and Empowerment (TEE).

Web 2.0 at the MIT Enterprise Forum

I am not sure the question: “How To Use Web 2.0 to Promote Your Business” got answered at last night’s (March 24th) MIT Enterprise Forum Chicago at K&L Gates (formerly Bell Boyd & Lloyd) Conference Center.

But it didn’t matter. What an entertaining and informative session Bob Brill and his team[1] of volunteers put together! Congrats to all.

Howard Tullman, who runs Flashpoint Academy in the Loop, acted as Moderator. The two panelists couldn’t have been more informed and fun! They were Jason Fried, founder of 37signals.com; and Harper Reed the “amazing CTO for the awesome Threadless.com”.

Whatever Web 2.0 is, they both use it to engage with customers. The teams at both companies constantly watch traffic on the web for key words (like “threadless”) and respond to complaints and compliments alike. At one point during the Q&A they were asked about ‘creating buzz using Web 2.0’. Both Jason and Harper jumped on this. “Web 2.0 isn’t about creating buzz!” they insisted. You focus on doing a great job with your customers, that’s what Web 2.0 is about, it’s real and it works. They came back to this theme over and over again. Pay attention to what they (customers) are telling you.

After the event I buttonholed each of them independently. I asked, “Listening to you guy talk for about an hour, what I got out of it was that Web 2.0 is a set of tools you use to build relationships with customers and employees based on trust, engagement, and empowerment, is that right?” “That’s it exactly.” Said Harper. “But the real key, is trust.” Harper left and I went and found Jason, also about to leave. I asked him the same question. He said “Yes, you could put that way.” He paused. “But it is really about trust, that’s the critical thing, if they trust you, then the engagement and empowerment is easy.”

In my prior blog entry I wrote: “What we at Launchpad Partners have been saying is that if you want to have a great problem solving and innovative company, the leadership must install three key components of culture: Trust, Engagement, and Empowerment (TEE, think golf tee). Trust is king. It includes the passion for truth telling, facing hard problems head on, being honest, and acting with as much openness as the law allows. When a company achieves the full measure of TEE, then it is a problem solving, innovative powerhouse that’s on the path toward taking the leadership role in its industry.

Launchpad Partners help companies through periods of stress. Once the company is through the stress, and once it is eager to become the competitive powerhouse in its industry, we then partner with the CEO and Board to create an environment of Trust, Engagement and Empowerment. We apply certain key tipping points which germinate this environment without disrupting the day to day operation of the humming machinery we’ve just helped install.”

It is interesting that CEO's of small companies get this, while CEO's of large corporations rarely do.





[1] Richard Cross, Tim Courtney, Jack Quill, Avery Cohen, Ted Wallhaus, and Rachel Kaberon

Leadership in Business and Politics

Op-Ed Columnist for the NY Times, Thomas Friedman, wrote a piece called Secrets of a Pollster. In it he talks about the big missteps of political leaders and how they recovered from these problems. The conclusion is that to be a great leader: “You can’t be too honest in describing big problems, too bold in offering big solutions, too humble in dealing with big missteps, too forward in re-telling your story or too gutsy in speaking the previously unspeakable.”

When you think of Jim Collins’ Good to Great, this has a familiar ring. The notion of being open and truthful about problems and showing humility apply to business leaders and politicians alike.

What we at Launchpad Partners have been saying is that if you want to have a great problem solving and innovative company, the leadership must install three key components of culture: Trust, Engagement, and Empowerment (TEE, think golf tee). Trust is king. It includes the passion for truth telling, facing hard problems head on, being honest, and acting with as much openness as the law allows. When a company achieves the full measure of TEE, then it is a problem solving, innovative powerhouse that’s on the path toward taking the leadership role in its industry.
Launchpad Partners help companies through periods of stress. Once the company is through the stress, and once it is eager to become the competitive powerhouse in its industry, we then partner with the CEO and Board to create an environment of Trust, Engagement and Empowerment. We apply certain key tipping points which germinate this environment without disrupting the day to day operation of the humming machinery we’ve just helped install.

2016 Summer Olympics

Last night, the University of Chicago, Booth Graduate School of Business International Roundtable sponsored a talk on the Chicago bid for the 2016 Summer Olympics. John MacAloon led a highly interactive discussion with the people in attendance updating us on the process and progress of this initiative. The International Olympic Committee will be visiting Chicago the first week in April to review the bid proposal. Presenting to the IOC will be the mayor, other local dignitaries, John MacAloon, and Barack Obama.

On October 2nd the IOC will make their selection from among Rio de Janeiro, Tokyo, Madrid, and Chicago.

Several organizations are involved in the Olympic games in addition to the IOC. There is the US National Olympic Committee; the International Federations for each sport (28 of them); and the local organizing committee. (Some entities have their own independent status as a NOC, like Puerto Rico which is why it will never vote to become a mere state in the USA.)

What is very interesting is how our US cultural view of the Olympics, and the view the IOC would like to promote, misaligned they are. In the US, the Olympics are all about medals, advertising and revenues-vs-expenses. Not so elsewhere.
Obviously these are of interests to other countries as well but the primary purpose of the Olympics is to foster the Olympic Movement. “Olympism is a life philosophy which draws together sport, culture and education in the aim of creating a harmonious balance between body, will and mind. Originally promoted by Coubertin, this philosophy is an essential element of the Olympic Movement and the celebration of the Games. For today’s Olympic Movement, Olympism is constructed around three core values :excellence, friendship and respect.”

CEO as leader

At a recent presentation I talked about how you create superior competitive advantage through innovation and the culture that you need to install to enable a company to be truly innovative. The role of the CEO as leader is absolutely critical to building an innovative culture.
An innovative culture is one that gets the best problem solving and innovation from everyone in the company. To do that you need a culture of Trust, Engagement, and Empowerment (TEE). We talked about the steps you need to be willing to take to lead a company into this culture.
While each of the steps are simple, having the will to take them is the principle obstacle facing CEOs. So one member of the audience as the following two question. "Given several CEOs behaviors around the bailout, from flying corporate jets, to taking big bonuses, is it possible that many of the most senior executives in large companies today are the wrong people to really lead a company to put it in place a culture this truly innovative and thus will give the company the best opportunity to be the competitive powerhouse in the industry?" He added "Isn't there a role for the Board of Directors in all this?"
It is a great question. First of all, I think there are a few truly exceptional CEOs who have the ability to be true leaders in their companies. But otherwise, you look at the the perks; the enormous salaries these people seem willing to take; the arrogance and sense of entitlement that is displayed; and some of the other stuff that we've seen in the banking and insurance world lately makes you believe that perhaps many of the individuals in these positions are the wrong people to be leading these companies. It may go much deeper than that. It may be that the Boards of Directors are made up of such people and operate to the benefit of each other rather than to the benefit of the stockholders; and the employees; and the customers and suppliers and the community at large.
Stockholders should be much more critical of boards. But every stockholder has a vote irrespective of how long they've held the stock. Where large blocks of stock are traded by institutional investors who are looking for short-term lifts in stock price, their short term interest will likely conflict with the interests of long-term investors (and employees, customers, suppliers, and the community itself). But they control huge blocks of votes. Perhaps the rules around voting rights should be amended to requires stockholders to hold a stock for two years before being able to exercise a vote.

Dinner at Yoshi’s

Tonight Linda and I had a marvelous dinner with her cousin’s eldest son Josh and his fiancé April. The company was wonderful, the food was spectacular and the Dry Creek Chardonnay was the best Chardonnay we’ve had in a long time.

Dick Durbin showed up at Yoshi’s tonight। He is a good senator and a decent guy. He showed respect for our privacy and didn’t come over to schmooze with us.

Tonight’s dinner was to celebrate Josh and April’s upcoming wedding, which we will likely miss as it is in Steamboat later in the Spring. Linda would like to go, so perhaps we will make it.

Innovation CEO

Here is the slideshow from the Harvard Business School Alumni Breakfast in Chicago North Shore: Innovation CEO

Latin American International

On this Tuesday, I will be speaking at the:Latin American International Business Conference Northeastern Illinois University
Alumni Hall TUESDAY 3-3-09 9:25 - 10:40 am Innovation in Latin America William Burnett
Full Announcement at: http://www.neiu.edu/~bschool/LAIBC09sched.pdf.

Move Managers Around – Recession Strategy for Innovation

The trouble with a strategy of cost cutting is
it creates a huge obstacle for any change
that involves a little investment. It is a very
risk-averse tactic. When the rule of the day
is to cut spending to the bone, it is very
difficult to look at changing the way things
are done if there is any level of risk. Change
means risk. The strategy of moving
managers around can generate great results
only if the objective of the business is
‘improvement’. Finding an opportunity to
trim a cost is just a consequence of that, not
the objective. The reason moving managers
around works is that it overcomes one of the
biggest obstacles to innovation and problem
solving – mindset. It allows latent ideas to
bubble up and deliver results, including cost
cutting results, while preserving both
innovation and long-term profits. See Article at http://www.wburnettllc.com/Part_1Revised4Blog.pdf