The management team introduced a "cultural revolution" to support the new innovation process, followed by an innovation workflow involving project portfolio planning and road mapping, as well as involvement of marketing and production. Learning objectives: Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).
The new innovation process has been accepted and begun to produce results, but is not yet entirely satisfactory. Learning objectives: Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).
When Birnbaum joined SodaStream, in 2007, it was a sleepy company whose managers liked to boast that they had an 85% share of the "home carbonation business." He and his all-new management team brought enthusiasm and vision--and shortly began talking about a new cola war to grow SodaStream's share of the $260 billion global soda business. The ad they created for the 2013 Super Bowl reached more than 100 million viewers--but in an unexpected twist, an ad that never even got on the air garnered more attention. The original spot (called "Game Changer"), which took a direct shot at Coke and Pepsi, was rejected by CBS. The legal wrangling that followed generated headlines around the globe--newspapers in countries that don't even air the Super Bowl began doing stories on it. And the controversial ad has been viewed more than 5 million times on YouTube. From a marketing standpoint, it was a great investment.
Since the financial crisis of 2008, there has been widespread agreement on the need for public companies to build value for the long term. Nonetheless, because of pressure from financial markets, a detrimental focus on short-term performance persists. Reversing this trend, the authors say, depends on the leadership of major asset owners such as pension funds, insurance firms, and mutual funds. They should act by taking four practical, proven steps: 1 Define long-term objectives and risk appetite, and invest accordingly. Major asset owners should set a multiyear time frame for creating value, decide how much underperformance they can tolerate in the short term, and then align their investments with this agenda. 2 Practice engagement and active ownership. Big investors should cultivate ongoing relationships with the companies they invest in, collaborating with management to optimize corporate strategy and governance. 3 Demand long-term metrics from companies to improve investment decision making. Rather than focusing on quarterly financial statements, investors should seek to obtain and analyze data that indicate a company's long-term health. 4 Structure institutional governance to support a long-term approach. Big investors must have competent board members committed to investing for the long term, as well as policies and mechanisms to translate this philosophy into action.
Leaders can do few things more important than encouraging helping behavior within their organizations. In the highest-performing companies, it is a norm that colleagues support one another's efforts to do the best work they can. That has always been true for efficiency reasons, but collaborative helping becomes even more vital in an era of knowledge work, when positive business outcomes depend on high creativity in often very complex projects. A help-friendly organization has to be actively nurtured, however, because helpfulness among colleagues does not arise automatically: Competition, pride, or distrust may get in the way. The trickiness of this management challenge-to increase a discretionary behavior that by definition must be inspired-makes all the more impressive what the design firm IDEO has already achieved. Its help-seeking and help-giving culture is behind the firm's success. But how has IDEO managed to make helping the norm? To answer this question, the authors spent two years observing, interviewing people, and conducting surveys at one office of the firm. They discovered four keys to building a help-friendly organization that leaders of other organizations could learn and apply to similar effect.
When most of the world's financial services giants were stumbling and retrenching in the aftermath of the 2008 recession, the asset management firm BlackRock was busy charting a course for growth. Its revenues, profits, and stock price all performed consistently through this tumultuous period. The authors looked at BlackRock and other game-changing companies-the Mumbai-based global conglomerate Tata Group, and Envision, an entrepreneurial alternative energy company based in China-and found significant commonalities. These three companies demonstrate the essential attributes of a game-changing organization: They are driven by purpose, oriented toward performance, and guided by principles. In the process of conducting interviews with these companies, the authors discovered a fourth thread that weaves them even more tightly together: Each is supported by a game-changing talent strategy. But, they write, the path to such a strategy seems rife with complexity and ambiguity. How can both strategy and execution be consistently superior? How can they support a collective culture yet enable high potentials to thrive as individuals? How can the strategy be global and local at the same time? And how can its policies endure yet be agile and constantly open to revitalization? BlackRock's approach provides the answers.
When Netflix executives wrote a PowerPoint deck about the organization's talent management strategies, the document went viral-it's been viewed more than 5 million times on the web. Now one of those executives, the company's longtime chief talent officer, goes beyond the bullet points to paint a detailed picture of how Netflix attracts, retains, and manages stellar employees. The firm draws on five key tenets: Hire, reward, and tolerate only fully formed adults. Ask workers to rely on logic and common sense instead of formal policies, whether the issue is communication, time off, or expenses. Tell the truth about performance. Scrap formal reviews in favor of informal conversations. Offer generous severance rather than holding on to workers whose skills no longer fit your needs. Managers must build great teams. This is their most important task. Don't rate them on whether they are good mentors or fill out paperwork on time. Leaders own the job of creating the company culture. You've got to actually model and encourage the behavior you talk up. Talent managers should think like businesspeople and innovators first, and like HR people last. Forget throwing parties and handing out T‑shirts; make sure every employee understands what the company needs most and exactly what's meant by "high performance."
Strategy making forces executives to confront a future they can only guess at. It's not surprising, then, that they try to make the task less daunting by preparing a comprehensive plan for how the company will achieve its goal. But good strategy is not the product of endless research and modeling; it's the result of a simple process of thinking through how to hit a target and whether it's realistic to try. Discomfort is part of the process. If you are entirely comfortable, you're probably stuck in one or more of the following traps. (1) Strategic planning. Planning arguably makes for more thorough budgets, but it must not be confused with strategy. (2) Cost-based thinking. Costs lend themselves wonderfully to planning, because the company controls them. But for revenue, customers are in charge. Planning can't make revenue magically appear. (3) Self-referential strategy frameworks. Even managers who avoid the first two traps may end up using a framework that leads them to design a strategy entirely around what the company controls. A company can avoid those traps by focusing on customers, recognizing that strategy is about making bets, and articulating the logic behind strategic choices.
The search for new business ideas--and models--is hit-or-miss at most firms. Tackling the problem systematically, of course, will improve your odds of success. Traditional ways of framing this search examine competencies, customer needs, and shifts in the landscape. This article proposes adding a new IT-based framework. It involves asking, How can data and analytic tools be used to create new value? The authors have explored that question with many clients. In their work, they've seen IT create new value in five patterns: using data from sensors in objects to improve offerings (think smart energy meters); digitizing physical assets (such as health records); combining data within and across industries (to, say, coordinate supply chains); trading data (as mobile providers do with information on users' whereabouts); and codifying best-in-class capabilities (such as online expense management) as services. Drawing on examples from their own experience and their clients', the authors walk readers through each of the five patterns and how to apply them. They also provide advice and questions that will help executives get started on their own searches.
Traditional methods of managing supply chain risk require estimations of how likely a disruption is to occur. For fairly common risks--poor supplier performance, forecast errors, transportation breakdowns--the traditional methods work quite well. But it's a different story for rare, high-impact events such as megadisasters, pandemics, and political upheavals. These risks are hard to quantify using traditional models, and as a result, many companies do not adequately prepare for them, which can have calamitous consequences when catastrophes do strike. A new model allows managers to quantify the "impact" of a supply chain disruption on a company's operational and financial performance, rather than focusing on the "cause" or "likelihood" of the disruption. This type of analysis obviates the need to determine the probability of any specific risk's occurring--a valid approach since the mitigation strategies are equally effective regardless of what caused the disruption. In this article, the authors describe how companies can use the model to reduce their exposure to all types of supply chain risk.
Until 2008 going global seemed to make sense for just about every company in the world. Since then, we've entered a different phase, one of "guarded globalization." Governments of developing nations have become wary of opening more industries to multinational companies. They are defining national security more broadly and perceiving more and more sectors to be of strategic importance, taking active steps to deter foreign companies from entering them and promoting domestic, often state-owned enterprises. Indeed, the rise of state capitalism in some of the world's most important emerging markets has altered the playing field. To factor globalization's new risks into strategy, executives must consider their industry's strategic importance to the host government and their home government. They can then choose among various approaches: strike alliances with local players, look for new ways to add value abroad, enter multiple sectors, or stay home.
Feedback is crucial--but almost everyone, from new hires to C-suite executives, struggles with receiving it. The authors, who have spent 20 years working with managers on difficult conversations, outline six steps that can help you turn feedback into an important, and unthreatening, tool. (1) Know your tendencies. Look for patterns in how you respond. (Do you defend yourself? Do you lash out?) Once you understand your standard operating procedure, you can make better choices about where to go from there. (2) Separate the "what" from the "who." Your feelings about the messenger might be short-circuiting your ability to learn from the message. (3) Sort toward coaching. Work to hear feedback as well-meant advice, not as an indictment. (4) Unpack the feedback. Resist snap judgments; explore where suggestions are coming from and where they're going. (5) Request and direct feedback. Don't wait for a formal review; ask for bite-size pieces of coaching. (6) Experiment. Try following a piece of advice and seeing what happens. Criticism is never easy to take--but learning to pull value from it is essential to your development and success.
Parivar, an IT services firm with a long history of attracting talented people with its family-like culture suddenly faces a spate of resignations among rank-and-file employees. As the vice president of HR tries to figure out what's behind the exodus, the CEO wants to create a brand-new function charged with reinforcing the company's culture. As Parivar prepares for global expansion, is emphasizing the family-like atmosphere the key to retaining employees, or has the company's approach started to become a liability? David A. Garvin, of Harvard Business School, lays out the fictionalized case. Expert commentary comes from Ganesh Natarajan, the vice chairman and CEO of Zensar Technologies (on which the case is loosely based), and from Daisy Dowling, the head of talent development at Blackstone Group.
Parivar, an IT services firm with a long history of attracting talented people with its family-like culture suddenly faces a spate of resignations among rank-and-file employees. As the vice president of HR tries to figure out what's behind the exodus, the CEO wants to create a brand-new function charged with reinforcing the company's culture. As Parivar prepares for global expansion, is emphasizing the family-like atmosphere the key to retaining employees, or has the company's approach started to become a liability? David A. Garvin, of Harvard Business School, lays out the fictionalized case. Expert commentary comes from Ganesh Natarajan, the vice chairman and CEO of Zensar Technologies (on which the case is loosely based), and from Daisy Dowling, the head of talent development at Blackstone Group.
Parivar, an IT services firm with a long history of attracting talented people with its family-like culture suddenly faces a spate of resignations among rank-and-file employees. As the vice president of HR tries to figure out what's behind the exodus, the CEO wants to create a brand-new function charged with reinforcing the company's culture. As Parivar prepares for global expansion, is emphasizing the family-like atmosphere the key to retaining employees, or has the company's approach started to become a liability? David A. Garvin, of Harvard Business School, lays out the fictionalized case. Expert commentary comes from Ganesh Natarajan, the vice chairman and CEO of Zensar Technologies (on which the case is loosely based), and from Daisy Dowling, the head of talent development at Blackstone Group.
This is an MIT Sloan Management Review article. The surge of interest in big data has led to growing demand for analytics teams. Assembling such teams, however, is difficult. For one thing, many companies lack the in-house knowledge and experience needed to put together a world-class analytics team. What's more, the labor market for analytics professionals has grown increasingly tight. The shortage of analysts -particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics -is driving organizations to consider outsourcing their analytics activities. Analytics is the latest in a string of activities companies are outsourcing to business process organizations (BPOs). It draws heavily on mathematics and statistics knowledge, and many analytics-oriented BPOs have operations in India. Although some companies have world-class analytics capabilities in-house, the authors posed the question: Can an analytically naäve company "buy"world-class analytics functions by hiring outside experts? The authors studied both four multinational companies that used one or more offshore analytics BPOs and four analytics BPOs. Two of the client companies had skills that were judged to be "analytically superior"; the other two were judged to be "analytically challenged."The analytically challenged companies saw analytics BPOs as a way to obtain the resources and training needed to manage and execute their analytics and to gain quick access to important insights. By contrast, the analytically superior companies wanted to expand their internal analytic capabilities, in part because they wanted to preserve their ability to develop and protect intellectual property; they tended to use offshore BPOs to perform low-level analytics.
More than half of this year's survey respondents strongly agree that their organization needs to step up the use of analytics to make better business decisions -and that percentage rises to 87% if respondents who agree "somewhat"are included. This finding -that a majority of survey respondents agree strongly about the need to step up analytics use -holds true across a range of industries. Several forces, the authors argue, are helping spur managers'interest in analytics, including increased market complexity (for example, omnichannel retailing that encompasses both digital and brick-and-mortar channels) and the availability of better analytics tools and data. The authors report that some companies are sharing their data and analytics with business partners in order to meet strategic business objectives. For example, WellPoint, a U.S. health insurer based in Indianapolis, Indiana, is using analytics to help forge a payment model with physicians that rewards providers when they reduce overall health-care costs and enhance quality and health outcomes. Specifically, WellPoint is converting administrative claims and authorization data into useful information about populations of patients and sharing that information with physicians and their care teams. The survey data suggests that companies for which analytics has improved the ability to innovate are more likely to share data with partners and suppliers. Half of this year's survey respondents somewhat or strongly agree that analytics is helping their organization innovate -and 16% believe that strongly. Those survey respondents who strongly agree that analytics is helping their organization innovate are much more likely to say they collaborate with partners and suppliers through the use of analytics than respondents who don't think that analytics is helping their company innovate.
Together, the combination of description and advice provide a good primer for executives seeking a better understanding of this emerging era of sophisticated number-crunching. According to Siegel's estimate, we are adding 2.5 quintillion bytes of data every single day. Words have become data; the physical states of our machinery have become data; our physical locations have become data; and even our interactions with each other have become data. "Data can frequently be collected passively, without much effort or even awareness on the part of those being recorded. And because the cost of storage has fallen so much, it is easier to justify keeping data than discarding it,"observe Mayer-Schänberger and Cukier. Indeed, we are awash in information, but what does it all mean? In their book, Mayer-Schänberger and Cukier explain three new imperatives: 1. Use all the data, not just a sample. In the past, businesses did not have the economical means to capture, store and analyze all the data from their operations, so they had to settle for a sample of it. But now a company like Amazon can economically capture and store data from every single customer transaction. 2. Accept messiness. Inaccuracies in measurements are less harmful than they once were because they can often be smoothed over by the sheer quantity of data. In the authors'words, "more trumps better." 3. Embrace correlation. For many purposes, correlation is sufficient and people don't need to know causality. Quantifying the likelihood that a particular person will do something -whether it is defaulting on a loan, upgrading to a higher level of cable service or seeking another job -is at the heart of Siegel's Predictive Analytics. The author describes how quantitative techniques can be deployed to find valuable patterns in data, enabling companies to predict the likely behavior of customers, employees and others. Even a modest increase in the accuracy of predictions can often result in substantial savings.