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Sweat the Small Stuff
The "broken windows" theory of crime prevention--pay attention to the details--pertains to companies, too. -
Beauty of an Open Calendar: James Goodnight on Meetings
Companies want to be flexible, but they're not flexible about people's time. -
Seven Transformations of Leadership
Most developmental psychologists agree that what differentiates one leader from another is not so much philosophy of leadership, personality, or style of management. Rather, it's internal "action logic"--how a leader interprets the surroundings and reacts when his or her power or safety is challenged. Relatively few leaders, however, try to understand their action logic, and fewer still have explored the possibility of changing it. They should, because leaders who undertake this voyage of personal understanding and development can transform not only their own capabilities but also those of their companies. The authors draw on 25 years of consulting experience and collaboration with psychologist Susanne Cook-Greuter to present a typology of leadership based on the way managers personally make sense of the world around them. David Rooke and William Torbert classify leaders into seven distinct action-logic categories: Opportunists, Diplomats, Experts, Achievers, Individualists, Strategists, and Alchemists--the first three associated with below-average performance, the latter four with medium to high performance. These leadership styles are not fixed, the authors say, and executives who are willing to work at developing themselves and becoming more self-aware can almost certainly move toward one of the more effective action logics. A Diplomat, for instance, can succeed through hard work and self-reflection at transforming himself into a Strategist. Corporations that help their executives and leadership teams to examine their action logics can reap rich rewards. -
Dark Side of Close Relationships
This is an MIT Sloan Management Review article. Forming close relationships with suppliers or customers is a popular business strategy, but such partnerships can be problematic. Many close business relationships--whether joint ventures or loose alliances--fail. Describes a phenomenon called the "dark side" of close relationships and maintains that close relationships that seem quite stable can, in fact, be vulnerable to decline and destruction. Draws on surveys of business relationships and other examples. The same factors that strengthen a partnership can also open the door to relationship problems. For example, when an automaker and a supplier built up personal relationships between employees at the two firms to facilitate their alliance and just-in-time manufacturing process, the trust and personal relationships also enabled the supplier more easily to cut corners in the production process. Discusses strategies to prevent the dark side from taking over a business relationship--for example, to ensure that both parties in the relationship make investments in it, in effect swapping "mutual hostages." In cases where damage to the relationship already exists, possible strategies include rotating in new personnel, reconfiguring the relationship, or terminating it. -
Strategic Communication Imperative
This is an MIT Sloan Management Review article. A number of factors, both external and internal, are increasingly demanding a strategic approach to corporate communications. Yet, despite regulatory imperatives, organizational complexities, and a growing need for companies to increase their credibility with their constituencies, many companies still take a tactical, short-term approach to communication that is not only nonstrategic but may, in fact, be inconsistent with their corporate strategy or even impede it. The authors conducted more than 50 interviews with CEOs, CFOs, and heads of corporate communications and investor relations at companies that represent the state of the art in corporate communications, companies that have faced and survived major crises, and some that are great corporate communicators but not usually recognized for their efforts. Offers best practice lessons and a framework to enable executives to think carefully about their organization's objectives for each specific communication, determine which constituencies are critical to meeting that objective, and understand what kinds of messages to deliver through which channel. -
Vignette: Waiting for a CEO
A venture capitalist must decide how to respond to an e-mail from his long-time troubleshooter now installed as interim CEO at a struggling contract manufacturing exchange for the custom car business. The investors have been seeking a full-time CEO but have made little progress. Does the investor switch search firms, push for the company to be acquired, or continue as they've been doing? Each strategy imposes its own set of costs, whether in time, reduced return on investment, or increased compensation to the interim CEO and continued floundering at the company, in addition to possible strains in investor relations. -
Richard Grasso and the NYSE, Inc. (B)
Supplements the (A) case. -
Anne Mulcahy: Leading Xerox Through the Perfect Storm (B)
Supplements the (A) case. -
Leadership, Alignment, and Performance at Guidant Corp.: An Interview with Ronald W. Dollens
Ronald W. Dollens recently retired from the positions of CEO and president of Guidant Corp., an Indianapolis-based medical technology manufacturer. Dollens was appointed CEO and president of Guidant when the company was formed as a split-off of Eli Lilly and Co. in 1994. During his 10 years of leadership at Guidant, the firm grew at an average of 18% per year, from just under $900 million in sales in 1994 to $3.7 billion in 2003. Today, Guidant employs more than 12,000 and is an industry leader in cardiovascular technology. -
Oprah!
Oprah Winfrey believed in sharing the experiences that shaped her development and enabled her to become the wealthiest women in the entertainment industry and first African American billionaire. Traces her childhood and entertainment career, drawing connections in Winfrey's own words between passages in her turbulent childhood, both beneficial and traumatic, that became keynote lessons for her talk-shop audience and later guided her business and philanthropic activities. Raises questions about the motivations behind a business career, the value of authenticity in leadership, and the origins of unique abilities. -
David Neeleman on the Origins of JetBlue's Culture: Lessons from the Slums of Brazil
JetBlue's David Neeleman talks about how his unexpected lessons from working with the poor have informed his company's egalitarian culture. -
Want Collaboration? Accept--and Actively Manage--Conflict
Companies try all kinds of ways to improve collaboration among different parts of the organization: cross-unit incentive systems, organizational restructuring, teamwork training. Although these initiatives produce occasional success stories, most have only a limited impact on dismantling organizational silos and fostering collaboration. The problem? Most companies focus on the symptoms ("Sales and delivery do not work together as closely as they should") rather than on the root cause of failures in cooperation: conflict. The fact is, you can't improve collaboration until you've addressed the issue of conflict. The authors offer six strategies for effectively managing conflict: Devise and implement a common method for resolving conflict; provide people with criteria for making trade-offs; use the escalation of conflict as an opportunity for coaching; establish and enforce a requirement of joint escalation; ensure that managers resolve escalated conflicts directly with their counterparts; and make the process for escalated conflict-resolution transparent. The first three strategies focus on the point of conflict; the second three focus on escalation of conflict up the management chain. Together they constitute a framework for effectively managing discord, one that integrates conflict resolution into day-to-day decision-making processes, thereby removing a barrier to cross-organizational collaboration. -
Execution Without Excuses: The HBR Interview
The success of Dell--it provides extraordinary rewards to shareholders, it can turn on a dime, and it has demonstrated impeccable timing in entering new markets--is based on more than its famous business model. High expectations and disciplined, consistent execution are embedded in the company's DNA. "We don't tolerate businesses that don't make money," founder Michael Dell tells HBR. "We used to hear all sorts of excuses for why a business didn't make money, but to us they all sounded like 'The dog ate my homework.' We just don't accept that." To double its revenues in a five-year period, the company had to adapt its execution-obsessed culture to new demands. In fact, Michael Dell and CEO Kevin Rollins realized they had a crisis on their hands. "We had a very visible group of employees who'd gotten rich from stock options," Rollins says. "You can't build a great company on employees who say, 'If you pay me enough, I'll stay.'" Dell and Rollins knew they had to reignite the spirit of the company. They implemented an employee survey, whose results led to the creation of the Winning Culture initiative, now a top operating priority at Dell. They also defined the Soul of Dell: Focus on the customer, be open and direct in communications, be a good global citizen, have fun in winning. It turned out to be a huge motivator. And they increased the focus on developing people within the company. "We've changed as individuals and as an organization," Rollins says. "We want the world to see not just a great financial record and operational performance but a great company. We want to have leaders that other companies covet. We want a culture that makes people stick around for reasons other than money." -
Practical Guide to Social Networks
Saying that networks are important is stating the obvious. But harnessing the power of these seemingly invisible groups to achieve organizational goals is an elusive undertaking. Most efforts to promote collaboration are haphazard and built on the implicit philosophy that more connectivity is better. In truth, networks create relational demands that sap people's time and energy and can bog down entire organizations. It's crucial for executives to learn how to promote connectivity only where it benefits an organization or individual and to decrease unnecessary connections. In this article, the authors introduce three types of social networks, each of which delivers unique value. The customized response network excels at framing the ambiguous problems involved in innovation. Strategy consulting firms and new-product development groups rely on this format. By contrast, surgical teams and law firms rely mostly on the modular response network, which works best when components of the problem are known but the sequence of those components in the solution is unknown. And the routine response network is best suited for organizations like call centers, where the problems and solutions are fairly predictable but collaboration is still needed. Executives shouldn't simply hope that collaboration will spontaneously occur in the right places at the right times in their organizations. They need to develop a strategic, nuanced view of collaboration, and they must take steps to ensure that their companies support the types of social networks that best fit their goals. Drawing on examples from Novartis, the FAA, and Sallie Mae, the authors offer managers the tools they need to determine which network delivers the best results for their organizations and which strategic investments nurture the right degree of connectivity. -
Phase Zero: Introducing New Services at IDEO (A)
Focuses on whether world-renowned product design firm IDEO's new customer service fits with the firm's strategic position and organization capabilities. Over the course of IDEO's 13-year history, an increasing share of revenues are a result of "Phase 0" projects--preliminary strategic explorations of future product possibilities for various client firms. Describes a specific Phase 0 project in order to explore the challenge of managing these strategic, intangible services in the context of IDEO's successful history of generating award-winning tangible product designs. A team at IDEO's Boston office worked with mattress manufacturer Simmons to discover unmet customer needs and identify new product line opportunities. Describes the challenges and questions facing the Simmons project team as well as critical and operational questions facing IDEO. Examines these issues through the eyes of the head of the Boston office, who wonders how to evaluate Phase 0 projects. -
Learning Teams: Shrinking to Fit (A)
Teams often collapse over personality issues. This case explores such a collapse, in the context of an MBA student learning team. Students can explore personality differences, analytical strategy, gender, ethnicity, and race issues. Joann Moyer, an MBA student facing her first year exams, is anxious and conflicted at what she perceives as personality conflicts among her team members. In the (A) case, she prepares to confront the other people in her group. The (B) case reveals that the team actually has process issues around their learning frameworks and that many of the team's problems revolve around that and not personalities. The business world requires people to work together successfully, and good learning teams learn to cultivate the skills necessary to do so. -
The P&G Acquisition of Gillette
Raises issues about the role of boards of directors in compensating CEOs and, specifically, the rewards granted to CEOs for arranging a change-of-control for their companies. -
Umpqua Bank: Managing the Culture and Implementing the Brand
Umpqua Bank is an Oregon-based business that is attempting to revolutionize the banking industry with a creatively nontraditional culture and a radically retail mindset ("stores" not "branches"), supported by an highly innovative environmental design. Umpqua has grown rapidly and faces critical issues, including: (1) How can an organization strengthen and maintain its culture while undergoing rapid growth by merger and acquisition? Specifically, how can this service organization, a quirky bank with a distinctive culture, incorporate and retrain hundreds of new employees from traditional banks? And (2) What role does the design of the total environment ("experience design") play in nurturing and maintaining an organization's culture and its brand expression, and how much should it invest in this form of brand expression? Presents two examples and asks how this bank should deal with the issue of cost vs. value of design in each of them. -
Richard Grasso and the NYSE, Inc. (A)
In 2003, the New York Stock Exchange faces heated controversy over the pay of Chairman Richard Grasso. Traces Grasso's development and his success serving stakeholders while transforming operations at the world's largest exchange. Describes how Grasso's compensation and the NYSE's governance structure come under attack. Raises questions in the mind of the deeply split board of directors about stakeholder influence, corporate governance practices, performance and compensation, and retention of a high-performing-turned-controversial chief executive. -
Shinhan Financial Group (A)
Mr. Young Hwi Choi, president and CEO of Shinhan Financial Group, embarked on an unconventional post-merger integration strategy with recently acquired Chohung Bank. The strategy focused on integrating traditional operations while attending to employees' reactions to change, especially the unionized workers at Chohung, an older bank that had recently fallen into decline, compared with the success of younger, more entrepreneurial Shinhan Bank. Once complete, the new bank would make Shinhan Financial Group the second largest bank in South Korea. Managing change involved a period called "dual bank" in which Shinhan and Chohung operated in parallel while undergoing an "emotional integration."