A thinkers blog

Open Innovation

For the first time I have come across the concept of Open Innovation while reading the interview of Henry Chesbrough. I must say the concept is quite intuitive as instead of supporting manufacturing over services or visa versa Henry is propagating adoption of services by the manufacturing sector to come out of the commodity trap. The increased flow of knowledge has reduced the product life cycles thereby increased threat of commoditization of the products. He advocates that companies should tear down the wall of it's R&D and ask the question, 'How can I make my product a platform?'. Platform is a place where others can build along or on top i.e. to continuously think how my product can help others to provide their product or services on top of my product or along with my product. He quotes an example of iStore which created the platform for thousands of app developers.
I am quite sure that this concept will catch on sooner than expected. Here is the link - http://www.strategy-business.com/article/11210?pg=all

Emotional Intelligence and Leadership

It is always refreshing to re-read some classics and in business writings Daniel Goleman's original article on What Makes a Leader in HBR is one of the such articles. It was originally published in 1998 and still demands compulsory reading for anyone looking forward to becoming a leader or recruiting one. The author, based on extensive research, points out that the old model of IQ and technical skills heavy requirement of leadership is now replaced with Emotional Intelligence (EI) heavy model where EI has become twice as more important than IQ and technical skills.
In my experience most of the people are aware of the term EI but associate it mostly with empathy or friendliness. Whereas, Daniel has listed five skill sets that combined makes for EI. Three of skills are related with self: self-awareness, self-regulation, and motivation and two are related with others: empathy and social skills.
In my opinion very rightly self-awareness and self-regulation have occupied the slot number one and two respectively but I doubt if they have received the corresponding importance by the hopeful leaders or leadership assessors.
Another very important point that the author brings out is the key characteristics of motivation, as he emphasizes that motivation based on external factors such as salary or status is not what makes effective leaders but in contrast motivation by deeply embedded desire to seek learning and challenges are required for effective leadership.
Empathy is probably well understood, at least intellectually. However, social skills are most often mistaken only for large number of acquaintances. Whereas, according to the author social skill is friendliness with purpose which includes moving people in the direction you desire. And for this one has to be aware of the self, coming to full circle.

Presentation skills

There are many books on presentation skills focusing mainly on the style. Bill Lane, Jack Welch's speechwriter, focused mainly on the substance in his book Jacked Up. He elucidates the importance of presentations in internal communications (whereas, most of the other books are directed towards external communication) of any company. He describes in detail how Jack Welch used this effective tool in changing the internal language of the behemoth GE. Some of the valuable tips apart from the usual ones of being short, prepare thoroughly, do not be a figurehead, tape your presentation - rehearse, should not be boring, use effective anecdotes, are - 

not to convey the impression that you are speaking to an unimportant audience,

appearing nervous is fine as it conveys that you care, 

never make somebody else's presentation, 

you are being judged every moment by everyone in the room, 

season a success story with where you came up short, 

first draft of presentation must be yours, 

when you blow your success devote only a minute and rest nine minutes in explaining why that success occurred, 

and the best of all is - TOTAL CANDOR 'stop bullshitting or get off the stage'. 

I personally loved the last one as now days many presentations are only about blowing own horns and rampant misrepresentation of the facts in the guise of clever talking - 'candor' is usually thrown out of the window. This behavior, if not checked or simply ignored by the decision makers in the room, has the potential of long-term destructive effects in any company. 

At some point Jack Welch filtered the big meetings presentation to following five charts, which are quite useful for any big presentation -

1. Description of your world markets;

2. Moves by competitors over the past three years;

3. Your moves over the past three years;

4. Competitors' moves over the coming two years; and

5. Your plan to counter or leapfrog them over the coming two years.

Learning from recession

There are two ways to study the current recession - either to cast it as an accident, mishap, or misfortune and try to recover from the shock by using all possible therapies available and forget about it following recuperation. Or it can be likened to any natural cataclysmic event, such as storm, earthquake, tsunami, or forest wildfire, which are nature's way of cleansing the system and creating stronger subjects. Werber, global CEO of Saatchi & Saatchi, believes that recessions are like forest wildfires - a rush of destruction that affects everything in their path.

In a forest fire, destruction leads trees to adapt better for future fires by developing characteristics like self-pruning, thicker barks, and deeper roots. Similarly, companies need to look at a recession as an opportunity to lose all the flab, find its true purpose, and develop staff to engage them in the purpose of the company. Companies also need to understand that the playing ground post-destruction will be different. Consumers demand will not be the same. The companies which can foresee the changed scenario will be better placed than their rivals. Pepsico, the world's leading soda-producer, shifted its focus to healthy products - Quaker Oatmeal, Tropicana juice - from its soda based products, sensing the changing consumer preferences.

Thus, recession makes companies aware of their inefficiencies, teaches them to be better prepared and makes them change proactively. And the result of this recession will not only be destruction, but a leaner and more efficient group of survivors.

Metaphors and Stories

John Baldoni writes that leaders can use 'stories' to inform, to involve, and to inspire people. Jim Rohn, the business philosopher, uses the term 'story-teller' to quote from the Bible, signifying the age-old importance of connection with stories. My four-year old developed fascination with the stories before he could speak. We are apparently hard wired for connecting with stories, the reason for Stalin's (or Erich's) quotation, 'the death of one man is a tragedy, the death of millions is a statistic' to ring true.

Similarly, the other tool leaders can utilize is 'metaphors' - an appropriate and correctly timed metaphor can convey the message much faster and more effectively. Leonard Sayles, in Managerial Behavior: Administration in Complex Organizations, used a metaphor of the 'orchestra conductor' to describe a leader / manager and stated,

"The manager is like a symphony orchestra conductor, endeavoring to maintain a melodious performance in which the contributions of the various instruments are coordinated and sequenced, patterned and paced, while the orchestra members are having various personal difficulties, stage hands are moving music stands, alternating excessive heat and cold are creating audience and instrumental problems, and the sponsor of the concert is insisting on irrational changes in the program."

A sense of urgency

Probably, the most important ingredient of any 'change management' is a sense of urgency. Author John P. Kotter in his book A Sense of Urgency details experience of some managers and his solution to generate that urgency. In any book, applicability of author's suggestion depends on the reader's corresponding situation. I liked that Mr. Kotter very aptly distinguished between the 'urgency' (read fire fighting) and 'true urgency'. It is very similar to what Mr. Covey had propagated years ago. Out of the tactics suggested by Mr. Kotter, I liked linking internal and external focus, the example of use of video where customer's complain was communicated to production people through video recorded message, behaving with urgency but not with anxiety or sheer speed, looking for opportunities in crisis (nothing new about this), and getting rid of NoNos.

These tactics can be applied not only at the time of change, but I would suggest to apply it anticipating change as by the time change / crisis strikes it is already too late. Being externally focused and linking it with internal capabilities need not wait for any change - being proactive never hurts, which if combined with a sense of urgency can put brakes to several advancing crisis situation. 

Mark Cuban and Leadership Styles

Mark Cuban, on 18th Aug, answered few questions posted by his readers. I am not a fan of Mark's views but the answers to these questions got me thinking. First question was on income disparity -

"What does he think about the growing income disparity in the U.S.?  Does he dispute the notion of a disappearing middle class?"

His answer was classic: 

"Just because Usain Bolt sets a world record every time he runs doesn’t make the other runners slow. It makes them slower than the best. The middle class can continue to move forward when those who earn the most out perform. "

In companies, a high performer such as Usain Bolt should only enable to raise the performance of others, just as he compelled Tyson Gay to beat his personal best and clock 9.71. However, in many companies in the guise of 'equality', average performance is the order-of-the-day (very well exemplified in the movie Hot Fuzz, where the outlier is made an outcast). Leaders should not accept this and instead celebrate the outliers. 

His second point ...

 
"Our government doesn’t know the difference between an investor and a speculator or trader.  If we did, we would understand that we should tax the trader/speculator more heavily than the investor.

The investor allows entrepreneurs access to capital and allows them to work with it and build businesses, which in turn build employment and do great things for the economy. The trader/speculator pushes companies to make more money now rather than invest in doing the right thing for the company."

This started me thinking on management styles. Some companies manage employees in speculative ways i.e. give them short-term quick-hitting unreasonable goals and throw them out when they are not met.

And some companies manage in 'investing' style i.e. invest in the employees based on what they can become and not what they are today. They invest in training and development, give them enough room to spread their creative wings. The risk taking is based on the larger vision of the person and the company.

It is worthwhile to monitor if the leadership style is speculative or investing. 

Mark mentioned - "Believe it or not, there are shareholders who are fine with companies not beating their numbers if the company is making progress towards a clearly defined goal."

'clearly defined goals' is the key here.