Rabu, 07 November 2012

Does Management Really Work?

Harvard Business Review’s 90th anniversary seems like a good time to back up and ask a basic question: Are organizations more likely to succeed if they adopt good management practices? For a decade we’ve been conducting research to find out. That may seem like a foolish endeavor—isn’t the obvious answer yes? But as classically trained economists, we believe in reexamining long-held assumptions to see whether they stand the test of time.
 
At least since Frederick Winslow Taylor published The Principles of Scientific Management in 1911, businesses have been trying to follow formalized sets of best practices. Academic disciplines such as complexity and contingency theory have sprung up, as have numerous practical innovations, from decentralized budgets to performance reviews to lean manufacturing. To formulate a testable hypothesis for our research effort, we asked whether or not the thousands of organizations we studied adhere to three practices that are generally considered to be the essential elements of good management:

  • Targets: Does the organization support long-term goals with tough but achievable short-term performance benchmarks?

  • Incentives: Does the organization reward high performers with promotions and bonuses while retraining or moving underperformers?

  • Monitoring: Does the organization rigorously collect and analyze performance data to identify opportunities for improvement?
Our teams of researchers asked managers a targeted list of open-ended questions, designed to ferret out details about how their companies were—or were not—implementing these practices. Overall, we learned three things. 

First, according to our criteria, many organizations throughout the world are very badly managed. Well-run companies set stretch targets on productivity and other parameters, base the compensation and promotions they offer on meeting those targets, and constantly measure results—but many firms do none of those things. 

Second, our indicators of better management and superior performance are strongly correlated with measures such as productivity, return on capital employed, and firm survival. Indeed, a one-point increment in a five-point management score that we created—the equivalent of going from the bottom third to the top third of the group—was associated with 23% greater productivity. (See the exhibit “The Return on Good Management.”) 

Third, management makes a difference in shaping national performance. Our analysis shows, for example, that variation in management accounts for nearly a quarter of the roughly 30% productivity gap between the U.S. and Europe.
 
Having established that good management can yield practical improvements, we turned to a tougher question: Can these simple principles be applied to complex worldwide problems, including deficiencies in education and health care? A huge question, obviously. To approach it, we did what we had done with manufacturers: We looked at whether or not schools and hospitals showed a correlation between performance and implementation of the three basic management principles. On the basis of interviews conducted in local managers’ own languages, we found that effective management can indeed improve performance, even beyond the private sector.

Transforming Manufacturers
 
When we began assessing management practices, we focused on medium-sized manufacturers, both independent and multinational-owned companies that had 50 to 5,000 workers. With more than 100 researchers accumulating data since 2004, our sample has come to include more than 8,000 firms in 20 countries in the developed and developing worlds.
 
Examples of bad management were all too easy to find. A manager at a privately held manufacturer in France, with about 500 workers, was hamstrung by his firm’s inability to motivate apathetic employees. Union pressure and labor regulations meant that workers effectively had jobs for life. The only way he could balance his production line was to team up poor employees with star performers, but this practice prevented stars from earning team bonuses and eventually drove them out of the company. 

He said his firm was turning into an asylum for the chronically lazy. At another company, the bonus scheme for managers was so complex that it was nearly useless. There were more than 20 targets—including profit margins, sales growth, inventory turns, and employee turnover—with many measured over different time periods and weighted inconsistently. 

Managers told us that they ignored the targets and felt unmotivated by “seemingly random” annual bonuses.
Using a business-assessment tool we developed with McKinsey partners John Dowdy and Stephen Dorgan, we looked closely at 18 practices that fall into the three broad categories: targets, incentives, and monitoring. (See the sidebar “What to Ask Your Managers.”) After interviewing managers by telephone, we rated each plant’s implementation of each practice on our five-point scale and determined an average overall score for each organization. 

Low management scores abounded. Only 15% of U.S. companies—and fewer than 5% outside the U.S.—scored above a four. More than 30% of U.S. firms and more than 70% in Brazil, China, and India scored a three or lower. These firms fail to collect even the most basic performance data and offer few employee incentives.
 
In a related initiative, we partnered with the World Bank to offer 66 manufacturers in the textile-hub city of Tarapur, India, the opportunity to participate in an experiment involving management practices. Twenty-eight plants (at 17 firms) accepted the invitation, and we randomly assigned them to either an intervention group or a control group. The 14 plants in the intervention group got free, high-quality advice from a consultant who was on site half-time for five months to diagnose problems, teach managers, and implement practices. 

The advice focused on the basics of lean manufacturing—nothing cutting-edge or sophisticated. Essentially, the companies were taught the three aforementioned fundamentals: setting targets, establishing incentives, and monitoring performance. For follow-up, all 28 factories were visited one day each month for more than a year.


When we started, facilities were often dirty and unproductive. Many workers received $5 a day for brutal 12-hour shifts, and accidents were common. At one textile plant, we heard that a worker had broken his leg when a faulty restraining strap allowed a beam to fall off a trolley. With no sick pay, he and his family experienced severe financial hardship. Even though wages were low, the company’s profits were meager. It was common for companies in the area to default on their loans and go out of business.
 
The intervention transformed the plants that had received help. On average, they cut defects by more than 50%, reduced inventory by 20%, and raised output by 10%. They also became far easier for their CEOs to manage, which allowed for the addition of new facilities and the expansion of product lines. Productivity at the factory where the worker had broken his leg increased by almost 20%, and average profits rose by what we estimate to be roughly 30% (profit is often a closely guarded secret at these companies). That company is opening a second factory and hiring 100 more weavers, after attracting them away from rival firms with the promise of 10% higher pay. Safety also improved: For example, daily monitoring of cleanliness at the factory avoided the buildup of oil and cotton waste around weaving machines, thereby preventing life-threatening fires.
 
Beyond the Factory Floor
 
Having seen the effect on manufacturing operations, we expanded our research to other kinds of organizations. So far we have conducted interviews at 1,000 schools in the U.S., UK, Germany, Italy, Sweden, and India, and at 1,300 hospitals in those countries and in France, ranking each of the organizations in much the same way as we ranked the manufacturers.
 
Our management scores showed that, overall, schools and hospitals are even more poorly managed than manufacturing companies. In one illustrative example, a nurse in the UK told us that her hospital didn’t store bed linens on each floor, despite the obvious advantages of such a policy. One evening, when she was overseeing a ward, she went to a different floor to get new linens for a patient; upon returning, she found that another patient had died from a seizure. With no process for monitoring or correcting problems like this, the linens policy persisted two years later.
 
The public sector is also strikingly bad at rewarding good employees and dealing with underperformers. One U.S. high school principal confided to us about a teacher who spoke so quietly that her pupils struggled to hear her. According to the principal, grades were often poor, and parents complained if their kids were seated at the back of the class. The principal had repeatedly offered training to help the teacher, to no avail. Removing the individual was impossible under union rules, so the poor teaching continued year after year.
 
Of course, some educational organizations regularly evaluate pupils and teachers against clear goals and provide appropriate incentives. Similarly, many health care institutions establish targets for various kinds of processes, such as order entry and error reduction, and compensate employees on the basis of rigorous monitoring. Comparing management practices with outcomes, we found that high-scoring schools have better exam results: A one-point improvement in the management score is associated with about a 10% jump in student test performance. Similarly, at hospitals, a one-point management-score increase is associated with a 0.5% lower 30-day mortality rate for heart attack victims who are admitted to emergency rooms.
 
We didn’t conduct interventions in the schools and hospitals we studied, but other researchers have. For example, Harvard’s Roland Fryer ran management experiments in schools in Houston, Texas. In one study, nine schools in the city’s worst-performing district adopted simple techniques such as collecting and analyzing weekly grading data—a surprisingly uncommon practice—so that teachers could rapidly assist underperforming students. Target measures such as math grades, attendance, and graduation rates soared past those of a control group of schools that stuck to their old ways, and the percentage of failing students dropped by more than 70%. Monetary incentives for teachers have been successful at increasing achievement in developing countries such as India and Kenya (results in the U.S. have been more mixed).
 
The example of Virginia Mason Medical Center, in Seattle, illustrates what can happen when a health care organization makes a concerted effort to improve management practices. In 2002 it introduced procedures, such as extensive performance monitoring and weekly team meetings, inspired by the Toyota Production System. These changes dramatically improved patient care. In the breast clinic, for example, the average elapsed time between a patient’s first call and a diagnosis dropped from three weeks to three days. The changes also bolstered employee morale and returned the hospital to profitability after years of losses.

Raising Consciousness
 
At the companies in Tarapur where we conducted interventions, we easily made a convincing case for the value of good management. But the need to spread the word to the thousands of other underperforming companies, schools, and hospitals worldwide is urgent. Awareness is very low: 79% of the organizations in our study claimed to have above-average management practices, yet no correlation existed between our scores and the institutions’ self-scores, either in management practices or in overall performance.
 
Much of the opportunity for improvement is in the hands of local managers. To see how far behind their organizations are, they must rigorously evaluate their own practices and compare themselves with others’. Managers can quickly benchmark themselves by country and industry on our management scoring grid at worldmanagementsurvey.org.
 
Awareness is only the beginning, of course. Having seen where they need to improve, managers should begin working toward slow but steady progress. We’ve seen organizations make a good start by identifying which processes they need to change (for example, is product development too slow?) and then devising metrics for monitoring progress over the short and long terms. Ideally, goals should be visible to everyone—one company we studied posted its goals on the CEO’s door—and should be translated into companywide, group, and individual targets that are tracked frequently and meaningfully. That approach helps companies replace finger-pointing with timely, effective action plans across all organizational functions.
 
But you shouldn’t expect immediate results. GE, McDonald’s, Nike, and Toyota didn’t become top performers overnight. They established well-focused targets and powerful incentives, and they continuously monitored performance for many years, always seeking to improve. Small changes can be very effective in driving larger shifts later. In the Indian textile factories we studied, for example, we typically overcame resistance to lean manufacturing by piloting changes on a few machines in one corner of the factory. The positive results then opened the way for overhauling the whole plant.
 
In many instances, poor management is reinforced by national policies such as production quotas and tariff barriers, which reduce competition. In India, for example, hefty tariffs keep low-cost Chinese textiles out of the market and shelter domestic firms from international competition. Governments can play a positive role by reducing subsidies for certain sectors, eliminating tax breaks for favored companies, and lowering barriers to trade.
 
In education and health care, better management practices usually take especially long to have transformational effects. After Mastery Charter Schools took over three middle schools in Philadelphia, for instance, test scores increased by 50% and violence declined by 80% over three years. And Virginia Mason’s CEO Gary Kaplan and his management team spent several years turning around that health center’s performance. Teams of managers and frontline workers traveled to Japan to study the Toyota Production System; when they returned, they worked with other staff people to transform patient care.

Another question we addressed in our research is why some organizations are motivated to change and others aren’t. We eventually found a pattern: Leaders often initiate transformations in response to extremely challenging conditions. For example, because of its location in a seismically active zone, Virginia Mason had to upgrade its outdated buildings to make them safe against earthquakes. Facing huge costs for this overhaul, the hospital’s leaders realized they needed to turn their losses into profits. That initiative, combined with managers’ desire to improve the hospital’s delivery of health care, led Virginia Mason to embark on the management initiatives that transformed the organization.
 
The recent global recession is just that kind of extreme challenge. It has generated tough conditions that will undoubtedly spur at least some companies, schools, and hospitals to examine and overhaul their management practices. A call for “better management” may sound prosaic, but given the potential effect on incomes, productivity, and delivery of critically needed services worldwide, it’s actually quite radical.

Authors
Nicholas Bloom is a professor of economics at Stanford University. Raffaella Sadun is an assistant professor at Harvard Business School. John Van Reenen is the director of the Centre for Economic Performance at the London School of Economics and Political Science.

Source 
 

Rabu, 13 Juni 2012

Smart Hiring: Are You Doing It Right?

Does your hiring process consist of proven practices or just a hodgepodge of activities that get into gear when someone says, “I need more people” or “Sally has left and we need someone to take her place NOW?”

Smart hiring is more than posting requisitions, screening, interviewing and checking references.  It is a series of specific procedures that can bring in top candidates or create poor hires.  Here are six ways to enhance the entire recruitment process.

1. Select the right sourcing method.
While the typical sourcing channels include in-house recruiters, employee referral programs, executive search firms, advertising, temporary staffing agencies, campus recruiting and, of course, the internet, not all will be appropriate for filling every position. Are you trying to hire dozens of hourly wage jobs or a senior executive? Each will require different hiring methods. One size does not fit all.

2. Map, flow-chart or diagram what you do.
First uncover delays and glitches that waste time, interfere with getting the job done right the first time and drive good job seekers away. Then identify areas that can be improved by eliminating, simplifying or combining tasks or that can be streamlined electronically for efficiency.

3. Develop realistic job profiles.
Studies have shown that 25 percent of companies don’t take the crucial step of defining what they’re looking for before they begin the hiring process. If competencies (skills, motivations, and behaviors) are not first identified, you will waste precious interview time asking the wrong questions.  Because jobs change over time, review the profiles periodically to verify they are still valid.

4. Create partnerships between human resources and hiring managers.
Remember that both are on the same team. Both are trying to attract and select the best people. Truly understanding the job to be filled requires good communication and cooperation. Jointly develop the job requirements, decide on the screening factors, plan the interviews, assign follow-up responsibilities, and establish selection criteria to make quality decisions.

5. Develop good metrics to make better use of your resources.
Are you getting the right people from your sourcing methods?  Are you spending your recruitment budget wisely?  To find out you need to evaluate the different sources based on the suitability of the candidates each source provides. Suitability can be measured by the percent of total applicants found to be qualified, the number of qualified applicants relative to the number of available positions, or  the turnover rate of new hires overall.

6. Find out what’s working and what’s not.
Use ‘mystery candidates’ to experience your entire recruitment process and provide feedback. Do a survey of all new hires during orientation and ask them for their moments of impression. Then, reinforce the positive factors and eliminate the negative ones. Finally, use your exit interviews to identify additional improvement areas.

Management Success Tip: The effectiveness of the recruitment process impacts the effectiveness of the organization.  A new hire that does not fit the position will be difficult to develop, will perform poorly and more likely leave resulting in need to repeat the process. Only when recruitment is approached as a specific process with definable steps and measurable results can it be managed to ensure the hiring of quality people.

Marcia Zidle, a certified career strategist and business coach, works with high potential, high impact executives, managers and professionals to advance their careers and grow their leadership capabilities. 

Source

Minggu, 10 Juni 2012

Managing Risks: A New Framework

When Tony Hayward became CEO of BP, in 2007, he vowed to make safety his top priority. Among the new rules he instituted were the requirements that all employees use lids on coffee cups while walking and refrain from texting while driving. 

Three years later, on Hayward’s watch, the Deepwater Horizon oil rig exploded in the Gulf of Mexico, causing one of the worst man-made disasters in history. A U.S. investigation commission attributed the disaster to management failures that crippled “the ability of individuals involved to identify the risks they faced and to properly evaluate, communicate, and address them.” 

Hayward’s story reflects a common problem. Despite all the rhetoric and money invested in it, risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that all employees follow them. 

Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster such as Deepwater Horizon, just as it did not prevent the failure of many financial institutions during the 2007–2008 credit crisis.

In this article, we present a new categorization of risk that allows executives to tell which risks can be managed through a rules-based model and which require alternative approaches. We examine the individual and organizational challenges inherent in generating open, constructive discussions about managing the risks related to strategic choices and argue that companies need to anchor these discussions in their strategy formulation and implementation processes. We conclude by looking at how organizations can identify and prepare for nonpreventable risks that arise externally to their strategy and operations.

Managing Risk: Rules or Dialogue?  
The first step in creating an effective risk-management system is to understand the qualitative distinctions among the types of risks that organizations face. Our field research shows that risks fall into one of three categories. Risk events from any category can be fatal to a company’s strategy and even to its survival.
 
Category I: Preventable risks.These are internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided. Examples are the risks from employees’ and managers’ unauthorized, illegal, unethical, incorrect, or inappropriate actions and the risks from breakdowns in routine operational processes. 

To be sure, companies should have a zone of tolerance for defects or errors that would not cause severe damage to the enterprise and for which achieving complete avoidance would be too costly. But in general, companies should seek to eliminate these risks since they get no strategic benefits from taking them on. A rogue trader or an employee bribing a local official may produce some short-term profits for the firm, but over time such actions will diminish the company’s value.

This risk category is best managed through active prevention: monitoring operational processes and guiding people’s behaviors and decisions toward desired norms. Since considerable literature already exists on the rules-based compliance approach, we refer interested readers to the sidebar “Identifying and Managing Preventable Risks” in lieu of a full discussion of best practices here.
 
Category II: Strategy risks. A company voluntarily accepts some risk in order to generate superior returns from its strategy. A bank assumes credit risk, for example, when it lends money; many companies take on risks through their research and development activities.

Strategy risks are quite different from preventable risks because they are not inherently undesirable. A strategy with high expected returns generally requires the company to take on significant risks, and managing those risks is a key driver in capturing the potential gains. BP accepted the high risks of drilling several miles below the surface of the Gulf of Mexico because of the high value of the oil and gas it hoped to extract.
Strategy risks cannot be managed through a rules-based control model. 

 Instead, you need a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur. Such a system would not stop companies from undertaking risky ventures; to the contrary, it would enable companies to take on higher-risk, higher-reward ventures than could competitors with less effective risk management.
 
Category III: External risks.Some risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. External risks require yet another approach. Because companies cannot prevent such events from occurring, their management must focus on identification (they tend to be obvious in hindsight) and mitigation of their impact.

Robert S. Kaplan is a Baker Foundation Professor at Harvard Business School and the cocreator of the Balanced Scorecard management system. Anette Mikes is an assistant professor at Harvard Business School. 

Source 

Kamis, 07 Juni 2012

Big Mistake: Neglecting Your Corporate Blog


Your corporate blog can help you improve your brand profile, but it also provides a substantial SEO impact and marketing value when properly utilized.

While the original intent behind a corporate blog is to share news and timely information with visitors, the sharing platform also provides a substantial SEO impact and marketing value when properly utilized. Here are four reasons to stop neglecting your corporate blog today:

Search engines like to see sites updated regularly

Since your corporate blog is used to communicate recent news and upcoming events, it's a great way to leverage two very important freshness factors that speak to search engine spiders:

1. Search queries for recent events or hot topics that are trending on the web will favor fresher pages over older pages (e.g. "occupy Oakland protest" or "NBA lockout").

2. For queries on regularly recurring events such as annual conferences or presidential elections, Google returns the most recent content on the assumption that the user is planning for the upcoming event. This also applies to short-term repeat occurrences such as "NFL scores," "Dancing with the Stars," or "Exxon earnings."

It's important to remember that a blog post's "freshness" score is based on its inception date (the date it was discovered by Google), which fades in value over time. So, if you're blogging in anticipation of a large conference months in advance, you'll need to revisit that topic on your blog multiple times in order to continue being seen in queries for that event.

The takeaway: publish frequently on topics relevant to your organization and industry.

Enhance rapport with your site visitors (a.k.a. potential clients) by helping them

Think about the last time you Googled for a "how to" document or some other kind of advice from the Internet. Since you weren't shopping for a tangible product, you completely skipped over the sponsored links to e-commerce sites.

If, by chance, you landed on an organic search result that was also selling products, you bounced shortly after landing there. But if you found the piece of information you were looking for, you probably stayed to read for a few minutes or more.

It is human nature to reciprocate, so once a website has satisfied a user's need without requiring any compensation (money, personal information, etc.), the user subconsciously "owes" that organization. They may share the article with their networks, leave a comment, browse the site for more information, or even make a purchase from the e-commerce store.

The takeaway: write about topics that users will find helpful and actionable, initiating the desire to reciprocate by recommending you to friends or by doing business with you.

Provide a great opportunity for organic links to your site

Building on the concept of enhancing rapport, sometimes users are so moved by an article, they are inspired to re-blog it or write their own blog post in response. Either way, they're going to link back to the original source of their inspiration--your corporate blog.

This natural link is the poster child of organic SEO: an independent, third-party backlink to a site that has created meaningful content and deserves to be recognized for thought leadership (more on that in a second).

SEO companies around the world spend hundreds of hours utilizing countless resources in an effort to replicate this type of linking activity on a scalable level. You can do it on your own by creating stellar, authoritative content that people want to link to.

For example, HCC Medical Insurance Services supplies international medical insurance for people traveling outside the country, including business people, students studying abroad, humanitarians on mission trips and more.

An article on their corporate blog about traveling in a country with a travel alert explains why an alert may be issued, where to find out if an alert has been issued and other helpful tips to consider when preparing to visit a country with conditions that could lead to a travel alert.

The takeaway: create content that inspires users to socially react to it.

Increase your brand's presence as a thought leader in your industry

If you follow through on providing an opportunity for organic linking, increasing brand awareness happens naturally. By sharing your knowledge with information-hungry trailblazers in your industry, your social presence will begin to naturally elevate.

There's a catch, though: your writing has to be truly innovative, not a concept that belongs to someone else and recycled into your own words. Thought leadership is a product of a hunch, an idea or a thesis that's either proven or disproven by cold, hard facts. You may even need to engage R&D to test a notion or experiment with a new process.

If your brand can develop a reputation for creating intelligence, then your organization's thought leaders will soon be writing guest blog posts (hello, backlink!), speaking at conferences and establishing new relationships in all four corners of your industry.

The takeaway: use your specialized knowledge and experience to create intelligence and share it with the world, which can lead to increased brand presence and an industry thought leader.

By keeping your readers updated with a regular flow of information that's pertinent to your industry, you'll grab the attention of search engine spiders, strengthen your relationship with current (and future) clients and increase your organization's reputation as a thought leader. So what are you waiting for? Start corporate blogging today!

Source


Selasa, 05 Juni 2012

3 Creative Ways to Boost Employee Morale

 Whether you're running a start-up or are a manager at one of the world's largest companies, the morale of your team can make the difference between success and failure.

People want to know why they are going to work each day and they want to feel that they are making a difference.

Helping employees connect with purpose will not only help you retain and attract the very best people, but also will enable you to discover ideas which will save you money and do more good in the world.

1. Cultivate "Stories of Self"

This classic principle of community organizing was applied brilliantly by the Obama campaign during the 2008 election. Instead of training volunteers to memorize a script as to why candidate Obama was great, the organizers trained volunteers to speak about their own experience and why they became involved in the campaign.

Today organizing principles are uniting with business head on. At the recent staff retreat Dev attended for Change.org, a fast growing B Corp, employees developed "stories of self" by reflecting on why they were involved, why the work was important and the turning points that had brought them to that very juncture. It ended up being one of the most intimate and rewarding parts of the retreat grounding everyone in their individual purpose.

2. Contextualize Your Mission

What problem does your company solve? How have people tried to address these issues in the past? Helping your employees identify themselves as part of a long historical arc working towards a common goal fosters purpose and provides meaning. It is a sense of purpose that is commonly found in those interested in family genealogy. Uncovering the past links and stories of our industries forbearers can spark that familiar genealogical sense of importance and responsibility to the work we carry forward.

3. Empower Intrapreneurs

Intrapreneurs are individuals who reshape companies for the better from within the business. Your job is to create an environment that is conducive to intrapreneurs by setting up processes to gather, vet and act on the best ideas coming from employees throughout the company. In these days, it goes beyond just setting out a 1980s-style suggestion box.

As an employer, it is your responsibility to connect like-minded employees encouraging them to move disruptive ideas along for the benefit of the company. It was a Vice Chairman at Morgan Stanley who decided to connect an optimistic micro finance-obsessed intern with the right manager that ultimately led the company to develop a micro finance offering.

Source




  • Senin, 04 Juni 2012

    A Simple Tool You Need to Manage Innovation

    Management knows it and so does Wall Street: The year-to-year viability of a company depends on its ability to innovate. Yet many companies have not yet learned to manage innovation strategically. The companies we've found to have the strongest innovation track records do things differently: Rather than hoping that their future will emerge from a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige, they manage for "total innovation."

    One tool we've developed to help companies manage their innovation portfolio is the Innovation Ambition Matrix (see the chart below). It is a refinement of a classic diagram devised by the mathematician H. Igor Ansoff to help companies allocate funds among growth initiatives. Ansoff's matrix clarified the notion that tactics should differ according to whether a firm was launching a new product, entering a new market, or both.

    Our version replaces Ansoff's binary choices of product and market (old versus new) with a range of values. This acknowledges that the novelty of a company's offerings (on the x axis) and the novelty of its customer markets (on the y axis) are a matter of degree. We have overlaid three levels of distance from the company's current, bottom-left reality.

    Innovation Ambition Matrix.gif
    In the band of activity at the lower left of the matrix are core innovation initiatives — efforts to make incremental changes to existing products and incremental inroads into new markets. Whether in the form of new packaging (such as Nabisco's 100-calorie packets of Oreos for on-the-go snackers), slight reformulations (as when Dow AgroSciences launched one of its herbicides as a liquid suspension rather than a dry powder), or added service convenience (for example, replacing pallets with shrink-wrapping to reduce shipping charges), such innovations draw on assets the company already has in place.

    At the opposite corner of the matrix are transformational initiatives, designed to create new offers — if not whole new businesses — to serve new markets and customer needs. These are the innovations that, when successful, make headlines: Think of iTunes, the Tata Nano, and the Starbucks in-store experience. These sorts of innovations, also called breakthrough, disruptive, or game changing, generally require that the company call on unfamiliar assets — for example, building capabilities to gain a deeper understanding of customers, to communicate about products that have no direct antecedents, and to develop markets that aren't yet mature.

    In the middle are adjacent innovations, which can share characteristics with core and transformational innovations. An adjacent innovation involves leveraging something the company does well into a new space. Procter & Gamble's Swiffer is a case in point. It arose from a set of needs P&G knew well and built on customers' assumption that the proper tool for cleaning floors is a long-handled mop.

    But it used a novel technology to take the solution to a new customer set and generate new revenue streams. Adjacent innovations allow a company to draw on existing capabilities but necessitate putting those capabilities to new uses. They require fresh, proprietary insight into customer needs, demand trends, market structure, competitive dynamics, technology trends, and other market variables.

    The Innovation Ambition Matrix offers no inherent prescription. Its power lies in the two exercises it facilitates:
    • First, it gives managers a framework for surveying all the initiatives the business has under way: How many are being pursued in each realm, and how much investment is going to each type of innovation?
    • Second, it gives managers a way to discuss the right overall ambition for the company's innovation portfolio.
    For one company — say, a consumer goods producer — succeeding as a great innovator might mean investing in initiatives that tend toward the lower left, such as small extensions to existing product lines. A high-tech company might move toward the upper right, taking bigger risks on more-audacious innovations for the chance of bigger payoffs. Although this may sound obvious, few organizations think about the best level of innovation to target, and fewer still manage to achieve it.

    This blog post was excerpted from Bansi Nagji and Geoff Tuff's article "Managing Your Innovation Portfolio" in the May issue of the magazine. 

    Bansi Nagji and Geoff TuffBansi Nagji and Geoff Tuff
    Bansi Nagji and Geoff Tuff are partners at Monitor Group and leaders of the firm’s global innovation practice.


    Source





    Rabu, 30 Mei 2012

    13 Ways of Looking at a Leader

    Steve Jobs, the co-founder, chairman, and chief executive officer of Apple Inc.

    Our endless fascination with leadership has inspired an endless parade of leadership books, many of which strive to identify distinctive styles of top-doggery. Whether CEOs can learn to lead from the prescriptions of academics, consultants, and management thinkers is open to debate.

    For those wishing to try—or at least to be inspired—here are a baker's dozen of the most prevalent types of leaders. We have also cited a book associated with each leadership style, as well as some real-world examples of each archetype.

    1. Adaptive

    In normal times, there may not be easy answers, but at least there are answers. In times of crisis or King Kong–scale change, leaders must devise entirely new approaches to doing business. Adaptive leaders rise above the noise to interpret dynamic situations, adjust their values to changing circumstances, and then help their people stretch to meet the unfamiliar without sacrificing their trust, says Ron Heifetz, director of Harvard's Center for Public Leadership. Sam Palmisano, late of IBM, is one such change maestro. Ford's Alan Mulally is another. For more: The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World, by Ronald A. Heifetz, Marty Linsky, and Alexander Grashow

    2. Emotionally Intelligent

    Psychologist Daniel Goleman correlates leadership success with awareness of one's own feelings and the feelings of others. Emotionally intelligent leaders are expert managers of themselves and their relationships with others, and consequently they are masters of influence (but in a good way). Howard Schultz and Warren Buffett fill the bill. Though neural hard-wiring plays a part in emotional intelligence, Goleman believes even nonempaths can learn it.

    For more: Emotional Intelligence: Why It Can Matter More Than IQ, by Daniel Goleman

    3. Charismatic

    These are the folks who put the I in Iacocca. Charismatic leaders influence others through sheer leaderishness. Ninety years ago, sociologist Max Weber described charismatic authority as deriving from exceptional character, heroism, or sanctity. These days, it is more often a function of personality and, consequently, tough to teach. Though charismatic leaders are tremendous motivators and often run fantastically successful organizations, they tend to suck up oxygen, and their reigns can grow cultlike. Think Jack Welch, Theodore Roosevelt, and Voldemort.

    For more: Charismatic Leadership in Organizations, by Jay A. Conger and Rabindra N. Kanungo