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Archive for January, 2012

Ducks in a Row: Culture is Critical

Tuesday, January 31st, 2012

4266001311_8916dfd9cc_mShawn Parr, whose company works with large corporations, such as Starbucks and MTV, on innovation wrote a meaty post called Culture Eats Strategy For Lunch.

It reminded me of something I wrote back in 2008, because the title is from a quote by Dick Clark, CEO of Merk and after rereading it I decided it’s worth reposting, so here it is.

Culture Trumps All

A post on Dave Brock’s blog led me to an article at IMD’s site called “An Unpopular Corporate Culture” and, as Dave said, it’s a must read for anyone who still thinks that corporate culture is some ephemeral concept with no real impact that consultants use to sell their services.

And a double-must for those who talk about culture’s importance, but don’t walk very well when it comes to creating a great corporate culture.

For those who prefer to put their faith in plans and strategy, hear the words of Dick Clark when he took over as CEO of Merck in 2005 and was asked about his strategy for restoring the pharmaceutical company to its former glory. “His strategy, he said, was to put strategy second and focus on changing the company’s insular, academic culture.” The fact is, culture eats strategy for lunch,” Clark explained. “You can have a good strategy in place, but if you don’t have the culture and the enabling systems that allow you to successfully implement it… the culture of the organization will defeat the strategy.””

If you’re looking for a best practice corporate culture silver bullet forget it—one size doesn’t fit all.

Rex Tillerson, CEO of ExxonMobil, describes that company’s top-down command and control culture of consistency and discipline as “the source of our competitive advantage,” and has made it a priority to reinforce it.

Meanwhile, Robert Iger and Steve Jobs, in their discussions about the acquisition of Pixar by Disney, have been concerned with avoiding an Exxon style command and control culture. Jobs says that, “Most of the time that Bob and I have spent talking about this hasn’t been about economics, it’s been about preserving the Pixar culture because we all know that’s the thing that’s going to determine the success here in the long run.””

It took Lou Gerstner a decade to remake IBM.

The key lesson Gerstner learned in his time with IBM, as he later reflected, was the importance of culture.”Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success—along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.”

The article is more than just additional proof for my favorite hobby horse.

The analysis of the role of employee complaints/negativity play in culture and the importance of what to keep when setting out to change a culture as opposed to what to jettison will give you new insight on your own company’s culture.

In case you still doubt the power and value of culture I hope that Dick Clark, Rex Tillerson, Robert Iger, Steve Jobs and Lou Gerstner combined with the articles in Fast Company and IMD have finally changed your mind.

Flickr image credit: Bengt Nyman


Risk, Innovation and… Esquire?

Monday, January 30th, 2012

An “expert blogger” at Fast Company wrote a post about what large companies can learn from startups (next month she’s writing the flip side, i.e., what startups can learn from large companies.)

Here is her advice in a nutshell,

  1. Startups are flatter; if you can’t flatten, delegate and empower.
  2. Startups have tighter timelines; a mandatory deadline is a pretty good way to shut up any last-minute hesitations.
  3. Startups value disruption; when a company is setting out to define their corporate culture “risk” should make an appearance right between “honesty” and “respect.”

All well and good, but not exactly new information.

At Davos, John Kao, who advises corporations and governments on innovation, said that training and discipline and improvised creativity are the yin and the yang of innovation and used Google and Apple as examples of the two approaches.

Useful information and stuff you can put to work in your organization, but not particularly electrifying.

One problem is that so much of the talk about innovation cites either startups or technology companies as examples of risk and creativity.

A more interesting example is the turnaround that’s happening at Barnes & Noble, although it’s still a work in progress.

But if you want an electrifying example of risk, creativity, innovation and success consider Esquire.

Yes, Esquire; a print magazine in an industry that most experts have written off as dead.

In 2011, a year when the magazine industry was flat to down a bit, Esquire was up 13.5 percent in ad pages from the previous year.

To put that in perspective, consider that in 2009 it lost 24.3% advertising pages as compared with 2008 and the brand was predicted to disappear in 2010.

What happened?

Esquire’s editor in chief, David Granger did lay off 20% of his staff and substantially reduce editorial pages, but what he did not do was fire the big name talent in favor of younger, i.e., cheaper, staffers.

He did not, as they say, throw the baby out with the bathwater.

And the staff responded with an outpouring of creativity.

For its 75th anniversary issue in 2008, right about the time magazines were heading off a cliff, he and his designers put together an “E-Ink” cover that flashed, right there on the newsstand. (See video below.)

On almost any given day there are dozens of articles on how to juice innovation and creativity, but I think the Esquire article stands out.

Not because it gives you a list of what is wrong or spells out what to do, but because it proves that just because the “experts” say that not just you, but also your industry, are dead doesn’t mean they are.

What truly innovative companies have in common is a culture that embraces a willingness to live or die by risking failure.

YouTube image credit: shusummit

Quotable Quotes: Of Dreams and Dreamers

Sunday, January 29th, 2012

I dream; you dream; everybody dreams—without dreams there would be no reason to get out of bed in the morning, let alone do anything else.

Robert Kennedy summed up the human attitude towards dreams when he said, “There are those who look at things the way they are, and ask why… I dream of things that never were, and ask why not?”

Why not, indeed?

Walt Disney tells us, “All our dreams can come true, if we have the courage to pursue them.”

And Jesse Owens elaborated on that when he said, “We all have dreams. But in order to make dreams come into reality, it takes an awful lot of determination, dedication, self-discipline, and effort.”

But if you find yourself dreaming more than doing Baltasar Gracian’s advice should help, “Dreams will get you nowhere, a good kick in the pants will take you a long way.”

Entrepreneurs are dreamers big-time and entrepreneurism is truly a global force; Jack Kerouac understood not only the universal appeal of dreams, but also its universal effect, “All human beings are also dream beings. Dreaming ties all mankind together.”

Entrepreneurs looking to hire would do well to remember the words of Johann Wolfgang von Goethe and make them their mantra, Dream no small dreams for they have no power to move the hearts of men.”

When times are darkest and your dream seems unlikely to reach fruition you will find the words of Christopher Reeve inspiring, “So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable.”

Are you ever too old to dream? John Barrymore has a great answer to that, “A man is not old until regrets take the place of dreams.”

Finally, you can do a lot worse than let the words of Malcolm Forbes be the driving force in your world, “When you cease to dream you cease to live.”

Image credit: Melody Campbell

Expand Your Mind: Stuff You Should Know

Saturday, January 28th, 2012

Today is a varied bag of stuff you should know—or at least know about.

Our first entry shouldn’t come as a surprise. Trust in business leaders is at an all-time low; it still ranks above trust in government leaders—but not by much.

In today’s multi-tasking, wired, always connected, omg-I-might-miss-something world here’s help on training yourself and others to focus.

“Unmentionables” has a whole new meaning and it can damage or even destroy your organization; once again, the problem and the solution are found in your culture.

Now for the fun stuff.

Millions of people base their buying decisions on peer reviews, AKA, the “wisdom of crowds,” but how wise is it when the “wisdom” is for sale?

Heads up! This is a rant. In today’s world of ‘citizen journalists’ I may wince at the misused words, but given our educational system I’m not surprised. However, when I see them in major online media sites such as Vator.tv I get really annoyed, as I did yesterday at this sentence, “Zynga is not loosing steam when it comes to entering 2012 with a whole new lineup of games for its users to get addicted to.’ I’m not referring to the fact that the sentence ends in a preposition, that’s way too common to cause a reaction. But if Zynga does start ‘loosing steam’ I at least hope the water isn’t too polluted.

This final entry should probably be called something like ‘when disparate things converge’. If you happen to have abundant disposable income and require a hospital stay shop around; you may be surprised at what’s available.

Flickr image credit: pedroelcarvalho

If the Shoe Fits: Cheap Talk

Friday, January 27th, 2012

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mI seem to write too many stories about bosses who don’t walk their talk, which, I realize, is an overused, hackneyed expression.

But that doesn’t mean it’s not an accurate one.

Here’s the background and I have to admit it really floored me.

“Mark” is a thirty-something engineer and was the third person to join 23 year old “Jim’s” startup early in 2011.

Out of several offers he chose Jim’s. He’d read and heard a lot about the values that Millennials demanded and Jim’s description of his values and the culture he was building based on them closely matched Marks own.

Things were going well and they had grown to 6 people when they landed on the radar of a major corporation.

Near the end of the year Mark heard a rumor that the company was being acquired.

When he asked Jim if it was true he said it was and that they hoped to keep the staff.

Mark was flabbergasted; not because Jim was selling, but because the acquiring company’s culture was known to be diametrically opposed to almost all of Mark’s stated values.

When Mark said as much Jim said that it was an amazing offer and that he would be a fool to turn it down. Although they could easily raise an investment round, his holdings were far more valuable with the acquisition than if they were diluted by new investors.

Mark asked Jim if he had meant anything he said during the interview or if it was all just BS.

Jim’s response really blew me away.

Mark said he shrugged and said “that was then and this is now.”

What do you think? Was Jim justified? What would you do?

Entrepreneurs: Lean Eric Ries

Thursday, January 26th, 2012

Several people I’ve talked with recently have quoted from Eric Ries’s The Lean Start Up with almost the same religious fervor people espouse Guy Kawasaki or Steve Jobs.

I haven’t read it yet, but after reading a brief column in WSJ’s About Tech Europe and watching the video I realized that Ries probably doesn’t appreciate that kind of blind devotion any more than Kawasaki or Jobs and is quick to say so.

Much of what he says is common sense,

“If 10 people in a row hate my product is that statistically significant? It is not conclusive evidence, but it is certainly telling you something.”

If you have 100 customers you can already say what percentage are paying. If it is zero then I can already start to be a bit worried about the model.”

which is often the easiest to rationalize or ignore.

Of course, you ignore it at your peril.

If you have read The Lean Startup please share your thoughts below; I’ll share mine after I’ve read it.

Image credit: Wall Street Journal

Sam Palmisano and IBM

Wednesday, January 25th, 2012

I’ve read a lot about Sam Palmisano and previously written about him.

That said, I still found Wharton management professor Michael Useem’s interview with Palmisano covering his 40 years at IBM, including the last decade as CEO, interesting and informative.

It’s a long interview and, if you prefer, you can use the link to read it or download an audio version.

Most importantly, be sure to read the comments, most by IBMers, which, by and large, are anything but flattering.

Do you agree that his focus on the company screwed the employees or did he get it right?

How does a CEO balance the legacy needs of employees against the needs of the company to survive in a different world?

What would you have done differently to achieve the same success?

YouTube image credit: KnowledgeAtWharton

Ducks in a Row: Winners and Losers

Tuesday, January 24th, 2012

4266001311_8916dfd9cc_mA McKinsey study on the value of corporate social responsibility found “…highly innovative Fortune 1000 companies derive greater financial returns from their corporate-responsibility activities than their less innovative counterparts do,” and suggested three actions to improve CSR ROI,

  • Don’t hide market motives.
  • Serve stakeholders’ true needs
  • Test your progress.

DuPont’s success suggests a more far-reaching approach, i.e., embed sustainability deep within your corporate culture and that an “energy culture” is a great place to start.

“Upwards of 40 percent of industry’s energy efficiency improvement opportunities can be realized through low or no-cost projects rooted in corporate culture change”

They must know something since dollar savings to date are not millions, or even hundreds of millions, but billions.

“The key to this model is the formation of multi-disciplinary, cross-functional site teams, with insight from operators, maintenance, mechanics, core process experts, energy experts, engineers and management.”

These are initial steps that follow Richard Branson’s “doing well by doing good” approach.

Two of the biggest stumbling blocks on this path are Wall Street, with its short-term, i.e., quarterly, focus and the current definition of “stakeholder.”

Typically, stakeholders are viewed as investors, management, customers and workers; progressive companies have added the local communities where they do business and a few have tiptoed further.

Whereas Richard Branson points out in Screw Business As Usual every living thing and the planet itself are stakeholders.

Sadly, rather than being in the lead, the majority of US corporations are staying focused on short-term results and narrow definition of stakeholder.

But the winners in the future will be those companies, large or small, whose thinking is longest and definition is broadest.

I hope you are one of them.

~~~~~~~~~~~~~~~~~~~~~~~~~~

Kung Hei Fat Choy
(Wishing you an abundance of wealth and prosperity!)
Happy Year of the Dragon

 

Flickr image credit: Bengt Nyman

(wish you a lots of wealth and prosperity)

Who Do YOU Ask?

Monday, January 23rd, 2012

An engineer friend sent the following story because he knows I’m an evangelist for KISS** and this is such a great example of it.

A toothpaste factory had a problem: they sometimes shipped empty boxes, without the tube inside. This was due to the way the production line was set up. Small variations in the environment (which can’t be controlled in a cost-effective fashion) mean you must have quality assurance checks smartly distributed across the line; otherwise you will have disgruntled customers at all points.

Understanding how important that was, the CEO of the toothpaste factory got the top people in the company together and they decided to start a new project, in which they would hire an external engineering company to solve their empty boxes problem, as their engineering department was already too stretched to take on any extra effort.

The project followed the usual process: budget and project sponsor allocated, RFP, third-parties selected, and six months (and $8 million) later they had a fantastic solution – on time, on budget, high quality and everyone in the project had a great time. They solved the problem by using high-tech precision scales that would sound a bell and flash lights whenever a toothpaste box would weigh less than it should. The line would stop; someone would walk over and yank the defective box out of it, pressing another button when done to re-start the line.

A few weeks later the CEO checked the ROI of the project: amazing results! No empty boxes shipped out of the factory after the scales were put in place. Very few customer complaints and they were gaining market share. “That’s some money well spent!” he thought, but before closely checking other statistics.

To his consternation, the number of defects picked up by the scales after the first three weeks of production use was zero, where as it should have been picking up at least a dozen a day, so maybe there was something wrong with the report.

He filed a bug report and after investigating the engineers came back saying the report was correct; the scales really weren’t picking up any defects, because all boxes that got to that point in the conveyor belt were filled.

Puzzled, the CEO traveled down to the factory to see for himself the part of the line where the precision scales were installed.

A few feet before the scale there was a $20 desk fan blowing the empty boxes out of the belt and into a bin.

When the CEO asked a production worker about it he got this response, “One of the guys put it there ’cause he was tired of walking over every time the bell rang.”

While I agree that this is a great example of KISS it also highlights another piece of management idiocy.

How many times have you seen a similar story play out not only in manufacturing, but also in development, marketing, finance, sales and especially administrative areas?

How much money is spent every year on expensive consultants and external specialists while the actual workers are never asked for solutions?

Why haven’t more bosses learned that solutions can come from anywhere and listen to all their people?

Of course, workers’ solutions wouldn’t be described in multisyllabic words in bound in custom folders on heavy bond and presented in a darkened room using impressive power point slides by ego-stroking consultants.

Mostly, they would just work.

** (Keep It Simple, Stupid!)

Flickr image credit: L Gnome

Quotable Quotes: Pithyisms

Sunday, January 22nd, 2012

It is always useful to have a pithy way to get a point across, but how many of us can think that fast? So in the interest of making my readers sound both brilliant and cool here are four “pithyisms” to use at your discretion—with attribution, one would hope.

Oscar Wilde said, “Experience is simply the name we give our mistakes.” Try that on your boss the next time you turn left when he says go right.

Have you wondered why VCs and pundits of all stripes keep telling entrepreneurs and managers that attitude is more important than skills? Ralph Marston has the answer, “Excellence is not a skill. It is an attitude.”

It is said that once the genie is out of the bottle he can not be put back; this is especially true of personal growth, or, as Oliver Wendell Holmes, Jr. said, “A mind that is stretched by a new experience can never go back to its old dimensions.”

Personal growth is a wonderful thing, but it does require taking risks. However, risks can be mitigated, even when following Mark Twain’s recommendation, “A man who carries a cat by the tail learns something he can learn in no other way.”

And remember, it’s always a good idea to

Flickr image credit: quinn.anya

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