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Difficult Conversations: How to Address What Matters Most
In this interview, negotiations expert and author Doug Stone describes the ways in which difficult conversations threaten our identity. We all view ourselves a certain way, he says: 'I'm a hard worker' or 'I'm a caring boss' -- and the conversations that feel the most difficult for us are the ones that have the potential to threaten that self image. He shows that we make some systematic thinking errors when we are deciding whether to avoid or raise an issue with someone: we tend to focus on the costs of raising the issue and the benefits of avoiding it, but we don't think about the benefits of raising it and the costs of avoiding it. He goes on to describe how to reap these benefits via 'learning conversations', provides tools for dealing with difficult conversations, and advises on the best way to deliver difficult messages. -
Silenced by Fear: The Nature and Consequences of Fear at Work
Fear has shaped human behaviour for a very long time, and it continues to do so today. However, attention to fear in organizational life - how and why it is experienced, and to what effects - has received little attention. The authors argue that the most significant result of fear at work is silence on the part of employees. They describe four types of silence that affect productivity and innovation across industries: Non-Deliberative Defensive Silence, Schema-Driven Defensive Silence, Deliberative Defensive Silence and introduce a new one, Habituated Silence. In addition, they describe the concept of 'voice efficacy', and show how to develop it in oneself and in others in an effort to mitigate the debilitating effects of silence. -
Counterproductive Work Behaviour 101
Counterproductive Work Behaviour (CWB) is an umbrella term that refers to intentional behaviour by employees that harms or intends to harm an organization or the people in it, including employees and customers. It can run the gamut from nasty interpersonal behaviour (insulting or yelling at someone) to behaviour directed toward inanimate objects (sabotage and theft) to purposely doing work incorrectly or withdrawing from an organization via absence or lateness. The authors describe the individual and environmental factors that increase the likelihood of 'CWB', which include interpersonal conflict amongst employees; job insecurity; and perceptions of organizational injustice. In the end, the authors show that careful selection processes are not a sufficient solution to the problem of CWB: steps must also be taken to reduce triggers as much as possible by reducing unnecessary stressors, treating employees fairly, and mediating disputes between coworkers. -
Blind Spots: The Roots of Unethical Behaviour in Life and Work
People are often surprised to hear that most of us overestimate our ethicality at some point. Significant research indicates that we are unaware of the gap between how ethical we think we are and how ethical we truly are. The authors describe the related concepts of bounded awareness and bounded ethicality and discuss the implications of these states for organizations. They then provide three tools for improving our individual ethicality and outline several aspects of organizational life that must be examined more closely to reduce unethical behaviour on a group level, including addressing 'hidden but powerful informal values' and 'ethical sinkholes'. -
Encouraging Leaps of Faith: Taking Fear Out of the Risk Equation
Microsoft Canada CEO Eric Gales talks to Roger Martin, Dean of the Rotman School of Management, University of Toronto, about the need for more companies to take a leap of faith with respect to innovation. The two discuss why Canadian companies lag their peers in innovation; the perils of the status quo for companies in any industry; the role of IT in innovation; how the Canadian capital markets discourage innovation; and the importance of having senior leaders who are willing to 'stick their necks out' for the sake of innovation. Martin ends by explaining why 'Prove it' is the most dangerous phrase in the English language when it comes to innovation. -
The CEO of Duke Energy on Learning to Work with Green Activists
Rogers was a freshly minted CEO trying to lead Public Service Indiana back from the brink of bankruptcy when the results of a 10-year federal study on acid rain were released. He became convinced that legislation to curb sulfur dioxide emissions was inevitable-and that his industry should have a seat at the negotiating table. Though his peers were opposed to any government action, cap and trade looked to him like a smart and creative compromise that would enable utilities to modernize their plants and meet aggressive emissions targets without sending electricity prices skyrocketing. In 1990 Rogers testified before Congress in support of cap and trade, which was established by the Clean Air Act Amendments that year. A relatively high number of allowances gave PSI time to make a deliberate and sustainable transition to cleaner generation. Within three years the company's market capitalization had increased by more than 65%, while its price to customers had dropped. By 1995 its sulfur dioxide emissions were down by 30%. PSI acquired a national reputation; it merged with Cincinnati Gas & Electric to create Cinergy, which in 2006 merged with Duke Energy. Together with 21 other companies and five leading environmental organizations, Duke created the U.S. Climate Action Partnership to lobby for strong federal legislation to reduce greenhouse gas emissions. -
The Wise Leader
In an era of increasing discontinuity, wise leadership has nearly vanished. Many leaders find it difficult to reinvent their corporations rapidly enough to cope with new technologies, demographic shifts, and consumption trends. They can't develop truly global organizations that operate effortlessly across borders. And they find it tough to ensure that their people adhere to values and ethics. The world needs leaders who pursue the common good by striving to create social as well as economic value and who pair micromanagement with big-picture aspirations about the future. The authors, who have studied, taught, and interviewed executives in some of the world's leading companies, assert that such leaders must acquire practical wisdom, or what Aristotle called phronesis: experiential knowledge that enables people to make ethically sound judgments. Wise leaders demonstrate six abilities. They make decisions on the basis of what is good for the organization and for society. They quickly grasp the essence of a situation and fathom the nature and meaning of people, things, and events. They provide contexts in which executives and employees can interact to create new meaning. Phronetic leaders use metaphors and stories to convert their experience into tacit knowledge that others can use. They exert political power to bring people together and spur them to act. And wise leaders use apprenticeship and mentoring to cultivate practical wisdom in others. -
The Power of Small Wins
What is the best way to motivate employees to do creative work? Help them take a step forward every day. In an analysis of knowledge workers' diaries, the authors found that nothing contributed more to a positive inner work life (the mix of emotions, motivations, and perceptions that is critical to performance) than making progress in meaningful work. If a person is motivated and happy at the end of the workday, it's a good bet that he or she achieved something, however small. If the person drags out of the office disengaged and joyless, a setback is likely to blame. This progress principle suggests that managers have more influence than they may realize over employees' well-being, motivation, and creative output. The key is to learn which actions support progress-such as setting clear goals, providing sufficient time and resources, and offering recognition-and which have the opposite effect. Even small wins can boost inner work life tremendously. On the flip side, small losses or setbacks can have an extremely negative effect. And the work doesn't need to involve curing cancer in order to be meaningful. It simply must matter to the person doing it. The actions that set in motion the positive feedback loop between progress and inner work life may sound like Management 101, but it takes discipline to establish new habits. The authors provide a checklist that managers can use on a daily basis to monitor their progress-enhancing behaviors. -
Being More Productive
Allen, the author of the best seller Getting Things Done, and Schwartz, the author of the best seller Be Excellent at Anything and the CEO of The Energy Project, are two of the world's foremost authorities on increasing personal efficiency. Yet although they agree on much, their ideas on how to maximize the output of knowledge workers are fundamentally different. In this edited conversation with HBR, they discuss their own approaches and what they've learned from each other's work, along with subjects ranging from the distractive pull of e-mail to the benefits of napping in the middle of the workday. Allen has developed a system of time management that encourages workers to regularly make to-do lists-and helps them blast through the items on them. Breaking down big tasks into smaller "next actions" can help people stay focused and productive, he argues, and multitasking is to be avoided at all costs: We have only so many resources and can do only one thing well at a time. Schwartz focuses on workers' attitudes and how organizations can help them achieve a mental state that keeps their energy high. People should work for 90 minutes and then take a break to recover, he says. They should tackle their most important task first thing in the morning. And managers should consider themselves "chief energy officers," inspiring and regularly recharging the people they lead-while remembering to meet their own needs as well. -
The Case for Executive Assistants
As technology has transformed the workplace and organizations have downsized, companies have sharply reduced the ranks of administrative assistants. But many firms have gone too far. In their zeal for cutting administrative expenses, numerous organizations now count on highly paid middle and upper managers to arrange their own travel, file expense reports, and schedule meetings. Some companies may see a type of egalitarianism in this assistant-less structure-believing that when workers see the boss loading paper into the copy machine, it creates a "we're all in this together" spirit. But as a management practice, that approach rarely makes economic sense. Generally speaking, work should be delegated to the lowest-cost employee who can do it well. Yet while companies seem to have embraced that logic by outsourcing work to vendors or to operations abroad, they ignore it back at headquarters. In this article, Duncan, a longtime recruiter of C-suite executive assistants, argues that a good assistant is a crucial productivity booster for a busy executive-one that offers a solid ROI if he or she is deployed correctly. -
The Cosmopolitan Corporation
Never mind what you've heard about the world being flat. Today's global landscape is marked by unbalanced growth, protectionism, and ethnic, religious, and linguistic divides. Differences still do matter. The ideal of a truly global, stateless corporation has become popular, but it simply isn't possible to achieve, says the author. Look at Rupert Murdoch's News Corporation. A major player from Australia to the United Kingdom to the United Sates, the company made huge blunders in its move into TV services in Asia, ignoring English-speaking residents' preference for local-language content and touting satellite TV as a threat to totalitarian regimes everywhere (prompting a ban on satellite dishes by the Chinese government). News Corporation had transcended its Australian origins but not its roots in English-speaking democracies. Crafting a global strategy and organization is possible, but you must focus on understanding the differences among people, cultures, and places-not on eliminating them. One tool that can help you get a handle on the most critical differences is a rooted map, which sizes countries according to measures that reflect a particular nation's perspective, such as the amount of industry services they purchase from domestic companies. A cosmopolitan approach may lead firms, at least in the midterm, to concentrate more on adaptation to local markets than on aggregation or arbitrage. It has various other implications as well. Firms will have to think about how to readjust their organizations to better manage external distances, and they must cultivate leaders who know how to bridge cultural and national differences. -
How to Build Risk into Your Business Model
To create value, companies typically focus on revenue, cost structure, and resource velocity. Improving these factors is the main focus of management literature. But all of them are vulnerable to sharp changes in demand and supply. Companies can innovate their business models to reduce the impact of such swings. But they can also create value by adding some risk. For instance, more than 30 years ago Rolls-Royce identified a major pain point in the aircraft industry: maintenance of airplane engines. An engine breakdown grounds the plane, while the airline pays for repair time and materials. So Rolls-Royce offered a service contract whereby the airline would pay for an engine's flight hours rather than for time and materials. The new contract triggered a completely new value creation dynamic, because Rolls-Royce was motivated to improve its own products and maintenance processes. Business model innovations are much cheaper than product and technology innovations, and they can be approached in a systematic way. Furthermore, nearly all the big ones have already been done-so you can simply adapt them to suit your own situation. -
The Frontline Advantage
The managers most responsible for a company's success or failure happen to be the ones with whom the CEO spends the least amount of time: frontline managers, such as shop-floor supervisors, heads of R&D or sales teams, and managers in restaurant chains or call centers. That's a mistake, says Hassan, the CEO who led dramatic turnarounds at Schering-Plough and Pharmacia and who is now a senior adviser at Warburg Pincus. In this article, Hassan makes the case that systematic interactions with individual and small groups of frontline managers are important to executing a company's strategy and represent an all-important feedback loop that allows the CEO to stay abreast of the latest developments in the business. He provides guidelines for how CEOs and other senior managers should structure interactions with this vital, and often overlooked, cadre of managers. -
Cracking the Next Growth Market: Africa
In the 2000s, the African economy finally began to stir. Africa is today the world's third fastest-growing region, and its collective GDP is roughly equal to Brazil's and Russia's. Africans spend nearly $900 billion on goods and services-far more than Indians do. Pent-up consumer demand on the continent is enormous, and so are the opportunities: Consider that telecom companies have added 316 million subscribers-more than the U.S. population-in Africa since 2000. Yet because of political instability and poverty, many companies have reservations about Africa. To help managers assess whether growth will continue there-and if so, where-McKinsey conducted an economic analysis of the continent and studied its consumer markets. The conclusion: Companies can no longer ignore Africa. But they need to manage risks, develop innovative strategies to deal with gaps in infrastructure and training, and recognize that it isn't one market. There are four main types of economies: diversified, oil exporting, transition, and pretransition. Each presents a different set of opportunities and challenges, and executives must develop their strategies accordingly. -
Extreme Productivity
A veteran top executive at two giant mutual fund companies, the author has also been an attorney, a government official, a law school professor, and a business school professor-sometimes simultaneously. Over the years, he has devised a number of principles and practices to maximize his personal productivity without sacrificing his health or family life. In this article he presents six of them. Know your comparative advantage. Focus not on what you do best but on what your organization most needs from you-and don't spend too much time on operational details. It's not the time you spend but the results you produce. Most executives put a huge amount of time into their jobs, assuming that more hours equal more value added. That's too simplistic. Think first, read or write second. Figure out your argument in advance; then jot down your four or five key points and write the concluding paragraph. Prepare your plan, but be ready to change it. Arrive early for a speaking engagement in order to grasp the mood of your audience and tailor your speech accordingly. Let others own their space. Instead of assigning detailed tasks, present general priorities and let your reports decide how to implement them. -
Forced to Shut Down
In 1999, Mei Zhang quit her lucrative consulting job to launch WildChina, a small travel company in her native China. Nearly four years later, the SARS outbreak hit Asia, battering a travel industry still recovering from the 9/11 terrorist attacks. Faced with this crisis, Zhang opted for drastic measures: WildChina ceased operations, she and the COO suspended their incomes, and all other employees went on vacation at 25% pay. These were prudent moves, but Zhang was still unprepared for the challenges of restarting her company once business picked up again. Employees she had trusted were not committed to the company, and WildChina needed to rebuild its client base. But Zhang revived the company, which is now a leader in its field. Looking back, Zhang sees that her first big move turned her into an entrepreneur, but it was the SARS experience, and the lessons she learned from it, that taught her how to be a CEO. -
Life's Work: Mikhail Baryshnikov
Mikhail Baryshnikov on reinvention, effective mentorship, and teamwork. -
Blockbuster's Former CEO on Sparring with an Activist Shareholder
When John Antioco joined Blockbuster in 1997, outsiders were predicting that the bricks-and-mortar video rental business would be killed off by market shifts and technological advances. But he believed the company could remain relevant. First he needed to revise Blockbuster's business model, which was built on buying individual VHS cassettes at a hefty price and then struggling to rent each one about 30 times to make back the money. Antioco's team persuaded the movie studios to shift to a revenue-sharing system. Then the company jumped into the online business and eliminated its late fees, which had been a major customer irritant. Five years into Antioco's tenure, Blockbuster's revenues had nearly doubled. Enter Carl Icahn, activist shareholder, who had his own ideas about how Blockbuster should be managed and particularly about Antioco's compensation package. Icahn launched a successful proxy fight and secured seats on the board for himself and two others, putting Antioco on the defensive over his strategies for growth. The situation finally came to a head in a boardroom dispute over Antioco's bonus-resolved by his departure six months later. Three years after that, Blockbuster filed for bankruptcy. Icahn's version of events appears in a sidebar to the article. -
Strategies for Learning from Failure
Many executives believe that all failure is bad (although it usually provides lessons)-and that learning from it is pretty straightforward. The author, a professor at Harvard Business School, thinks both beliefs are misguided. In organizational life, she says, some failures are inevitable and some are even good. And successful learning from failure is not simple: It requires context-specific strategies. But first leaders must understand how the blame game gets in the way and must work to create an organizational culture in which employees feel safe admitting or reporting on failure. Failures fall into three categories: preventable ones in predictable operations, which usually involve deviations from spec; unavoidable ones in complex systems, which may arise from unique combinations of needs, people, and problems; and intelligent ones at the frontier, where "good" failures occur quickly and on a small scale, providing the most valuable information. Strong leadership can build a learning culture-one in which failures large and small are consistently reported and deeply analyzed, and opportunities to experiment are proactively sought. Executives commonly and understandably worry that taking an understanding stance on failure will create an "anything goes" work environment. They should instead recognize that failure is inevitable in today's complex work organizations. -
Ethical Breakdowns
Companies are spending a great deal of time and money to install codes of ethics, ethics training, compliance programs, and in-house watchdogs. If these efforts worked, the money would be well spent. But unethical behavior appears to be on the rise. The authors observe that even the best-intentioned executives may be unaware of their own or their employees' unethical behavior. Drawing from extensive research on cognitive biases, they offer five reasons for this blindness and suggest what to do about them: (1) Ill-conceived goals may actually encourage negative behavior. Brainstorm unintended consequences when devising them; (2) Motivated blindness makes us overlook unethical behavior when remaining ignorant is in our interest. Root out conflicts of interest; (3) Indirect blindness softens our assessment of unethical behavior when it's carried out by third parties. Take ownership of the implications when you outsource work; (4) The slippery slope mutes our awareness when unethical behavior develops gradually. Be alert for even trivial infractions and investigate them immediately; and (5) Overvaluing outcomes may lead us to give a pass to unethical behavior. Examine good outcomes to ensure they're not driven by unethical tactics.