The Strategist Notebook

Effexis Achieve Planner

noreply@blogger.com (K.S.Lye) — Tue, 15 Dec 2009 05:10:00 +0000

I have been on a look out for an effective planning software. Something a bit more than the standard to-do list one find in the Microsoft Outlook.

Then I happen to bump into the RPM Life Plan system by Tony Robbins. Its a great concept, makes a lot of sense on how it should work. But when I tried out the software - boy...this is one tough planner to LEARN! Yes, you will need to learn how to use it and it came with a lenthy manual and god knows how many hours of audio tapes in order to fully appreciate the application of RPM. I spend many hours trying to figure it out and finally, I gave up. The software was too buggy to begin with and the concept of top down life planning was taking up way too much time for it to be efficient in anyway. Its like trying to understand how and why a car can or should move, while all you wanted to do is move from one place to another. Its getting senseless, so I decided to drop it.

Then I surfed the net and came into the Achieve Planner software. Similar to the RPM, using the same methodology but this window based software is much more user friendly. Its also not as buggy as the RPM. Its still my first day of using this, which means that I am still learning and have not been able to do a great deal yet but thus far, this has been the best planner software I have came across.

Heres some info on the Achieve Planner.

Achieve Planner Summary / Description

Achieve Planner is a personal time management software application for Windows that helps you get organized, increase your productivity, and make better use of your time.

Some of the main features include hierarchical project/task outliners, a weekly calendar with support for weekly planning, ABCD prioritization of projects & tasks, comprehensive life planning, and synchronization with Microsoft Outlook.

Achieve Planner is designed to help busy people take control of their schedule, organize projects and tasks, and get things done using sound time management principles.

By combining project management functionality with a weekly schedule and hierarchical to-do lists, Achieve Planner goes a step beyond what traditional planners offer. Its clean and intuitive interface helps you easily capture everything that you need to do in one central place.

Achieve Planner works by separating projects from their tasks. Instead of having a single to-do list full of unrelated activities, Achieve Planner provides a project list that gives you an overview of the various projects you are working on.

Each project then gets its own task list to store the individual action steps for that project. You can break up big items into smaller steps using as many levels as you need, and easily hide unwanted details.

The resulting project list is much smaller and easier to manage than a traditional to-do list because all the details are stored separately.

Achieve Planner allows you to concentrate on your major outcomes, and only look at the low-level details when you actually need them. You can then use the color-coded ABCD system to prioritize your projects and tasks and focus on what is most important.

After you have organized your projects and tasks, you can use Achieve Planner's calendar to schedule meetings and appointments, and to perform weekly planning.

In general, it is more effective to work on related tasks for a block of time, rather than jumping from one unrelated task to another. The reason is that it takes a certain amount of time to "switch gears" when you work on several unrelated tasks.

Achieve Planner uses "project blocks," which represent blocks of time that you have committed to a particular project, to help you focus on project specific tasks.

You can think of project blocks as appointments with yourself to get your important work done. Achieve Planner even provides a weekly planning wizard that allows you to choose how much time you want to commit to different projects during the upcoming week, and then schedule corresponding time blocks in the calendar.

During the week, you can easily rearrange your schedule in case your priorities shift, or something unexpected comes up.

It's easy to learn to use Achieve Planner. The Getting Started wizard gives you an overview of all the main features. Plus, there is extensive documentation available in the training center, which includes a comprehensive time management training course with video tutorials that guide you through every step of the process.

Whether you are an entrepreneur who has to work with several projects, a professional working from home who needs more structure to get things done, or a busy corporate professional who needs to make better use of his/her time, Achieve Planner has all the tools that you need to work more effectively and take control of your time.

Achieve Planner runs under 2000/XP/2003/Vista, costs $79.94(US) for the Pro edition and $99.94(US) for the productivity suite edition that also includes life planning features.

You can download a free 30-day trial version of Achieve Planner at http://www.effexis.com/achieve/

Also visit our sponsor links at http://www.avaxel.com

For a quick tour of Achieve Planner, check out:
http://www.effexis.com/achieve/tour/

Paradox of Choice

noreply@blogger.com (K.S.Lye) — Thu, 22 Oct 2009 10:10:00 +0000

Last weekend I was at a Japanese buffet restaurant. Located in an up market district, this restaurant probably offers the most extensive array of choices I have ever seen in a buffet dinner. And it made me nervous.

Seriously, there were moments of discomfort as I enter the premise with my family and look at their 3000 sq feet seating area with the huge crowds fleeting around popular dishes like the sashimis and the oyster bars. There were literary hundreds of choices just from the Japanese section itself, not to mention the arrays of Chinese and Indian food added to the variety. I was actually feeling discomfort at not knowing where to start.

Not having choices should the mark of misery but on the contrary I actually thought that perhaps we would have better off headed off to KFC for a bucket of fried chicken. Why should this be?

Research has shown that a large array of options may discourage a decision to purchase because the effort to make the decision has significantly increased. Or even cause depression.

Not long ago, a study was conducted in a foot store where customers were accustomed to trying out new products. Researchers set up a table featuring high quality jams and encouraged customers to taste them – giving each taster a coupon so that he or she could get money off when they purchase a jar. In one sample of the study, six varieties of jam were available for testing and in another sample of the study 24 variety were available. In either case all the 24 varieties were for sale.

The result is mind blowing. Obviously the larger arrays of jam attracted more tasters than the small array. But when it comes to purchases, 30% of the customer exposed to the small array bought a jar of jam while only 3% of those exposed to the larger array did so.

It appeared that a large array of options may discourage a decision to purchase because the effort to make the decision is significantly increased – so customers decide not to decide.
One of the reasons we don’t feel good about choices is the concept of regret. Post decision regret or buyer’s remorse. What if you should have purchase the laptop with the additional memory and extended warranty rather than a standard package. Darn, how stupid was that now that something is wrong and you need to pay a bomb to get it fixed. We have all had that before.

So marketers next time around when it comes to decision on product mix, forget about the product length, the product depth and the product width. Focus on your best products, after all its common sense that your best products are often the most profitable one because you made it the best and customer tends to buy a lot of it. Forget about being everything to everybody, not in this era, at least. After all, it was not all arrogance that made Henry Ford quote “You can have any color you want so long that it is black”.

How I Upgraded This Blog

noreply@blogger.com (K.S.Lye) — Fri, 25 Jul 2008 11:53:00 +0000

I was surfing around the net until I came across this professional looking blogger template at http://www.eblogtemplates.com/. I simply could not resist from changing my dodgy looking old template. Then again I thought about the hassle to reinstall all the widgets and hacks which I have collected throughout the months. But heck, I thought why not just do it.

The followings are some of the cool widgets and hacks which I added to this blog:

1. Related articles hack by Hoctro. This is extremely useful to show relevant articles in the same categories.

2. Add this social book marking. Instead of posting tons of buttons all over, a simple add this button will include all the social bookmarks you will ever need.

3. Intense Debate commenting system. I was browsing through this and found that it offers much more than the traditional blogger comments. Its easy to install and looks great!

4. Translate this widget

5. Label showing title only (instead of entire posts). This is a very useful hack, as often when you have too many posts under one label, it is much easier to see if only the titles are display. Also another benefits is that, your viewer will have to click additional pages to see the post that he have selected.

6. Sitemeter

7. Top commenter widget

8. Top post widget

Some mandatory widgets which I had all along including:

1) Email me form

2) Technorati Widget

3) Who is among us

4) Cluster Map

5) Mybloglog recent visitors

It took me close to a day to rebuilt my entire blog, including reinstalling all the hacks and widgets. But overall, it has been an extremely sastifying process.

Post me some comments on what you think about the new look.

Cheers

P.S: Here is a picture of how it looked before.

When Death is Certain, They Will Live

noreply@blogger.com (K.S.Lye) — Thu, 17 Jul 2008 07:18:00 +0000

After a victorious battle, a group of soldiers asked the general, ” according to the art of war, we are told have a hill to the right rear, or a river of mash on the left front. You on the contrary ordered us to draw our troops with the river to our rear. How do you manage to gain the victory?

The general replied “I feared you gentlemen have not studied the art of war with care. Is it not written there? Plunge your army into desperate straits and it will come off in safety. Put them in deathly peril and they will survive. Had I taken the usual course I would not have been able to bring my men out alive. If I have not put my men in a situation of live and death and leave each men to fight for their lives, there would have been a general discretion and it would be impossible to do anything with them.”

This is a psychological method derived from observations that when common man is being thrown into desperate situation, they will exert maximum effort. The scenario also exemplifies many of the failures of our modern day strategies. When performing strategic planning, many corporate thinkers uses tools such as ‘scenario planning’ to map out all possible methods of execution of their forthcoming plans. From there, they will seek the best strategy.

But when they encounter an obstacle or challenge in their executions, often due to their ‘paralysis through analysis’, their first thought would be to switch to an alternative plan. Often time, it is the degree of effort into a executing strategy that fails, not the strategy itself. Once a strategy has been chosen, the leader should focused and ensure that ‘all bridges’ are burned and all efforts are focused 110 percent onto a perfect execution. Wondering about the enemy’s reaction and pondering to change as enemy responses, will often lead to poorly executed maneuvers.

In business, unlike in war – sometimes it is not about the killing of each other in order to declare victory. You will win when you deliver unsurpassed value innovation to your customers. You will win when you delight your customer by being able to solve their problem or deliver a solution they need at the right price. These may be simple strategies. But observation shows that many large multinational businesses fail despite a showcase of fancy and carefully planned strategies. Whereas, in the cases of desperate entrepreneurs, a simple strategy will be defended and executed to death, leading to success.

The secret lies in ensuring that once a strategy is formulated, it is followed through at 110% without looking back. Even if another competitor turned copy cat emulate the exact formula, the response should be to move full charge ahead and out do him. Often in life and in business, it’s the one single degree of efforts that made all the difference. When you have sunk all your ships, depleted all your rations and find yourself in fatal enemy terrain facing certain death, there is no other possibility but to fight your way out. Failure will not be an option. In such situation, you will perform and survive.

It is the micro seconds of a 100 meter race that makes the world champion. It is the one degree of extra heat that turns water into steam to power locomotives. One of the most applied, simplest and most successful strategies of all, to burn all bridges and force full steam ahead. When you have no other options, you will fight beyond what you thought was possible. And by this, unconsciously you are generating efforts that will outdo most people who thought they have options. False options.

The question to these people is - what good are your options if they are only second best?

Before You Armour Up For A Price War

noreply@blogger.com (K.S.Lye) — Mon, 05 May 2008 04:16:00 +0000

Competition in business are unavoidable. However competition can also afflict an industry like a cancer. Left undetected, competition may intensify and spread, threatening the survival of all but the hardiest competitors. Although it is important to have early detection and anticipation of the competitive market conditions, it is also equally important to understand a few basic underpinning theory before we draft a response.

Think of the value and profit as a pie as as shown by picture above, to be divided among competitors and consumers. Were it not for competition, this value may be shown as picture in the top pie above. Consumers would get some share of the value, but the lion's share would go to the competitors.

If businessmen want to partake from the pie at the top instead of the one at the bottom (which is common sense, really), they should keep the following ideas in mind:

An ounce of prevention is worth a pound of cure. Create conditions for your firm and the industry to minimize the intensity of price competition.
Be thy brother's keeper. Your actions may harm competitors. Their response may do the same to you.
People who live in glass houses should not throw stones. Some markets are more prone to price wars than others. If you cannot eliminate the conditions that precipitate price competition, then try to avoid throwing the first stone.
He who laughs last laughs best. In the worst case scenario, price wars devolve into wars of attrition. If such a battlelooms, it is essential to determine if and how you can win it.

Of course, it never hurts to increase the size of the pie . Or, have additional pies on your plate perhaps.

"We do not have a crisis of competition, we have a crisis of creativity"-KS Lye.

Reference: Dranove,D.& Marciano,S.(2005), "Kellog on Strategy", John Wiley and Son. Canada.

The Reason Why Alice is Lost In Wonderland: Goals and misdirection

noreply@blogger.com (K.S.Lye) — Mon, 05 May 2008 03:44:00 +0000

Ever notice how some people do better than others. Some companies make more money than others. Some government seems to have better policy while some anarchy.

Have you ever thoughts that perhaps because there are smarter people? Or that the element of luck is in play? Of just that some people have the right timing.

There is an old parable about strategy- derived from ‘Alice in Wonderland’ - conversation between the cat and Alice:

“Would you tell me, please, which way I ought to go from here?” asked Alice

“That depends a good deal on where you want to go from here”? said the cat

“I don’t much care where-“ said Alice.

“Then it doesn’t matter which way you go,” said the cat.

If you don’t know where you want to go, any road will take you there,

This story exemplifies what is happening to many people. Every day, in the city or in the country, millions of people woke up to their daily cores without having a plan. To many people, life or work has become so routine that one forgot where they really want to go.

Often we are caught up in life’s little ‘misdirection’, a term used often in magic tricks whereby magician uses his fingers to point to a direction to take away the audience focus, so that he can hide his objects with the other hand. Think of all the little life’s misdirection around you. Having a baby, job transfer, finance commitment etc. Did life’s little misdirection took you away from your goals and where you wanted to head to?

Pause and think.

Difficult Judgement

noreply@blogger.com (K.S.Lye) — Tue, 15 Apr 2008 05:03:00 +0000

In a small town in India , a person decided to open up his Bar business, which was right opposite to the Temple . The Temple & its congregation started a campaign to block the Bar from opening with petitions and prayed daily against his business.

Work progressed. However, when it was almost complete and was about to open a few days later, a strong lightning struck the Bar and it was burnt to the ground.The temple folks were rather smug in their outlook after that, till the Bar owner sued the Temple authorities on the grounds that the Temple through its congregation & prayers was ultimately responsible for the demise of his bar shop, either through direct or indirect actions or means. In its reply to the court, the temple vehemently denied all responsibility or any connection that their prayers were reasons to the bar shop ' s demise.

As the case made its way into court, the judge looked over the paperwork at the hearing and commented:I don ' t know how I ' m going to decide this case,but it appears from the paperwork, we have a bar owner who believes in the power of prayer and
we have an entire temple and its devotees that doesn't.'

Toyota tries flexible global strategy

noreply@blogger.com (K.S.Lye) — Fri, 22 Feb 2008 02:36:00 +0000

By Micheline Maynard
The Herald Tribune
Published: February 21, 2008

TOYOTA CITY, Japan: Workers at Toyota's training center inside its Motomachi assembly complex here use golf balls to limber up their fingers before they learn new tasks on the factory floor. Holding two balls in either hand, they try to make them revolve in opposite directions, which requires a surprising amount of concentration.

The exercises are just a small part of Toyota's plan to continually search for ways to streamline methods to build its cars, breaking down the steps used in thousands of tasks on the assembly line in order to teach them to new employees and managers.

Now Toyota plans to build training centers similar to the one here and one in Georgetown, Kentucky, in other parts of the world, as it gears up for its next major phase of growth.

With plants in 27 countries, more new factories under construction and workers speaking languages from Russian to Turkish, Toyota's top executives are attempting a difficult balancing act - replicating its success and operating principles in other countries while, at the same time, ceding more control to these new outposts.

"It's extremely important to have the same common Toyota Way infiltrated to employees in all corners of the world," Katsuaki Watanabe, the company's president, said. "But on the other hand, in each corner of the world, in each region, there are inherent characteristics that need to be respected."

For example, Watanabe has asked foreign managers to assess what they can handle on their own, what they can handle with help from Japan, and which areas Japanese officials still need to supervise.

Toyota needs to act quickly. Next year, it expects to sell more than 10.4 million cars worldwide, double what it sold in 2000. At the same time, Toyota is under pressure to put an end to the recalls of the past three years that have damaged its reputation for bullet-proof quality.

"As a global company, there are many, many things I believe Toyota has to do," Fujio Cho, its chairman, said. "We cannot go back to what we were in the past."

Watanabe said that Toyota had learned, especially through experience in the United States, that it cannot simply impose Japanese practices on workers in other countries. It also has learned it cannot spend decades handing off responsibilities.

"What took us 20 years is now concentrated down to 5 years," Watanabe said.

Such thinking represents a fundamental shift for Toyota, where senior management jobs are held entirely by Japanese executives, and whose major operations, from engineering to design to strategic planning, remain based in Toyota City, about 320 kilometers, or 200 miles, west of Tokyo.

"This is about a greater maturity about globalizing and transferring knowledge that Toyota certainly has at this point," John Paul MacDuffie, a professor at the Wharton School of the University of Pennsylvania, said.

Toyota's expectation that its sales will top 10 million next year would put it well ahead of General Motors, which is roughly tied with Toyota for the top spot in the global auto industry.

Toyota's sprawling organization includes American operations that have become a miniversion of the parent company, with a 51-year-old sales organization based in California that oversees 1,300 dealers, who are supplied by vehicles built in Japan and plants in Kentucky, Indiana, Texas and soon, Mississippi. Toyota also has a design center in California and another under construction in Michigan.

Europe, for its part, is quickly gaining the same kinds of operations, run from a headquarters in Belgium, and supplied by a plant in France that builds Yaris cars 24 hours a day.

In China, however, Toyota's production has long trailed other global auto companies because it hedged its bets with a modest venture, building only a few thousand vehicles a year. It regrouped in 2003 with a deal with a major Chinese player, First Automotive Works, and Toyota is laying plans, according to media reports, to build its first assembly plant there.

Toyota is not alone in taking a global approach to its business. Ford Motor is realigning its product development so that it uses the same underpinnings, or platforms, for most of its vehicles around the world.

Asked in December what company he views as a model, the Ford chief executive, Alan Mulally, immediately cited Toyota. Meanwhile, GM has been on its own drive to share platforms among its operations in North America, Europe, Latin America and Asia, a spokesman, Dee Allen, said.

"For all intents and purposes, our globalization is set," Allen said. Using the same platforms "really is a natural progression as the world has become smaller, and products are being sold in a lot more places than they used to be," he added.

But Toyota has a leg up on its American rivals, because it has spent decades leveraging its basic lineup in different world markets.

Toyota sees teaching its production system in the new training center here as key to maintaining quality levels, and to reducing the recalls that have plagued the company in recent years.

Such training is essential in places like China, where Toyota found some of its newest employees had never driven the cars they were hired to build.

At Motomachi, more than 3,000 tasks on the assembly line have been translated into video manuals that are displayed on laptop computers above 30 simulated workstations, situated where their functions would be inside the factory.

The videos show everything from the correct way to hold a screw to the best way to hold an air gun so that a worker's hand will not tire a few hours later. The instructions even demonstrate the best way to stand, or in some cases, squat.

Rich or Royal: What Do Founders Want?

noreply@blogger.com (K.S.Lye) — Fri, 22 Feb 2008 01:49:00 +0000

What motivates entrepreneurs? Money? Control? In truth, some entrepreneurs are expecting to get rich. Others want to grow and control a new venture. But most would probably answer: "both."

The problem, as Harvard Business School assistant professor Noam Wasserman sees it, is that very few entrepreneurs can achieve both—the Larry Ellisons of the business world are few and far between. In fact, there is a fundamental tension between the money side and the control side—getting rich often means selling control to investors; keeping control reduces the payday.

Wasserman addresses this paradox in a recent paper called "Rich versus King: The Entrepreneur's Dilemma," an early draft of which was featured in the Best Paper Proceedings of the 2006 Academy of Management Conference and the 2005 Babson-Kauffman Research Conference.

In this interview, Wasserman discusses his research and suggests ways that entrepreneurs can work toward being both rich and royal.

Sarah Jane Gilbert: Tell us about the conflict entrepreneurs face when establishing a new venture between the profit motive and the control motive.

Noam Wasserman: The profit motive is one of the major motivations for becoming an entrepreneur, and the one on which past entrepreneurial research has focused, going all the way back to Adam Smith, Joseph Schumpeter, Israel Kirzner, and other pillars of economics. In my own research, I also approached entrepreneurs with the assumption that they were being driven by the profit motive.

However, early in my case writing, I began running into several decisions that founders were making that seemed to conflict with the profit motive. For instance, founders I was studying were facing the choice of remaining solo founders (and being able to keep all of their ventures' equity for themselves) versus giving potential co-founders a large share of the equity to come on board. The choices were: taking money from angel investors, who would let the entrepreneur continue controlling the board; taking money from top-tier VCs, who would take control of the board; or remaining CEO of the venture versus bringing in an experienced CEO who could build a more valuable company. The very different choices that I saw founders making regarding these co-founder, investor, and hiring decisions led me to question the centrality of the profit motive for some of these founders.

This question was bolstered by two recent papers that appeared in top economics journals, each showing that entrepreneurs as a whole do not make more than they could make if they were employed by others, and make significantly less than expected from a risk-return perspective. But if the profit motive is what draws people to become entrepreneurs, why don't they actually end up with higher financial returns than if they were to remain non-entrepreneurs?

Most of the founders I have studied started off wanting to become both Rich and King.As I looked across these cases, it was evident that the profit motive was competing with other motivations, most prominently the control motive. For instance, in my "Ockham" case, founder-CEO Jim Triandiflou summed up his co-founder and investor challenges as, "The issues are about control." Even though one choice might enable him to increase his financial gains, if that choice imperiled his control of the decision making within Ockham, he was inclined to maintain control at the expense of financial gains. Likewise for executive hires. In the "Wily" case I coauthored with Henry McCance, founder Lew Cirne fully realizes that hiring a professional CEO could help Wily grow markedly, but when it becomes evident that hiring that CEO will leave Lew without control of any aspects of Wily's growth, he recoils from doing so.

Across many of the cases we teach in our first-year Entrepreneurial Manager course, the founders we study run into choices that would enable them to increase financial gains at the expense of control, and vice versa. This recurring pattern helped me realize that two major entrepreneurial motivations—the profit motive and the control motive—often competed with each other, in that maximizing one imperiled the achievement of the other.

Q: What impact do the tradeoffs between these two core motivators have on resources?

A: As I delved into the tradeoff, I realized that the conflict usually emerges at the point where entrepreneurs have to attract resources to help them grow their ventures. HBS's working definition of entrepreneurship is Howard Stevenson's assertion that entrepreneurship is "the pursuit of opportunity beyond the resources controlled." If this is correct, then most entrepreneurs, after figuring out what opportunity to pursue, are stuck with having to procure the resources they need. Getting those resources will help the entrepreneur build a more valuable company. However, getting those resources is far from a free lunch. To get co-founders, investors, hires, and others to come on board and provide you with the resources you need, you have to give up things that are worth a lot to you and to them. In new ventures, the most prominent things you have to give up are equity stakes and sharing control of decision making. Both of these have implications for how much you'll gain financially from the venture and whether you'll be able to keep control of it—in other words, whether you'll be able to achieve the profit motive versus the control motive.

Interestingly, a colleague, Richard Tedlow, pointed out to me that this choice may be a more general managerial tension that exists long after companies pass through the start-up stage. He highlighted a section from (HBS professor emeritus) Tom McCraw's Creating Modern Capitalism book, wherein Henry Royce is talking about a decision whether to merge Rolls-Royce with Vickers, but "was determined to keep the firm independent." "From a personal point of view," Royce said, "I prefer to be absolute boss over my own department (even if it was extremely small) rather than to be associated with a much larger technical department over which I had only joint control." Royce could remain absolute boss over something extremely small, or could have something much larger over which he had to share control, and in this Rich versus King choice, he was choosing to remain King.

Q: Is it better to be focused on one or the other? Is it possible to have a healthy balance between the two and be both?

A: Most of the founders I have studied started off wanting to become both Rich and King—"Rich and Regal," if you will. This desire is reinforced when they see such prominent Rich and Regal entrepreneurs as Larry Ellison of Oracle Corporation, Marc Benioff of SalesForce.com, and Phil Knight of Nike. What's ignored is that these people are so well known precisely because they are the exceptions, the rare founders who are able to achieve both. Many others I've studied who tried to achieve both have ended up making some decisions consistent with Rich motivations and others consistent with King motivations, and in the process of mixing the two, ended up with neither.

A more successful approach seems to be that the entrepreneur step back to really understand what his or her true motivation is, Rich or King, and then to recurringly make decisions consistent with that motivation. This may reduce the chances of becoming Rich and Regal, but it may dramatically increase the chances of achieving what really motivated you to become an entrepreneur to begin with.

From an investor's perspective, Rich versus King is a fundamental issue.At the same time, initial analyses of my dataset have helped me start understanding what separates the Rich and Regal entrepreneurs from those who have to choose between Rich versus King.

The strongest factors that emerged from those analyses were whether the entrepreneur had leveraged his or her own prior assets in building the venture—in particular, regarding financial assets, whether the entrepreneur had provided the seed capital for the venture, and regarding social networks, whether the entrepreneur had been able to tap investors who had previously invested in a company of the entrepreneur's. These entrepreneurs were much more likely to achieve Rich and Regal status than entrepreneurs who didn't provide their own seed capital and who took money from investors with whom they did not have a prior relationship. In my current analyses and case writing, I'm trying to explore further what separates these rare entrepreneurs from those who have to choose between Rich versus King.

Q: Is this perspective helpful to investors in these ventures? Should investors care whether a founder leans toward Rich or leans toward King?

A: From an investor's perspective, Rich versus King is a fundamental issue. During my internship in venture capital, I heard the phrase "Rich versus King" several times, and it even appears in a case we used to teach about Onset Ventures. In that context, it refers to what VCs look for in the entrepreneurs they might want to back. VCs invest in a company in order to maximize their financial returns from the company—i.e., to become Rich themselves. They are driven by the profit motive. If an entrepreneur wants to become Rich, then VCs see that entrepreneur's interests as being aligned with theirs, for they both want to maximize financial returns.

However, if an entrepreneur wants to become King, that entrepreneur is more driven by the control motive and is willing to sacrifice financial gains in order to keep control. The interests of such an entrepreneur are not aligned with those of the VCs, and in fact may be in direct conflict with them. Thus, from the beginning, many investors want to find out whether an entrepreneur is motivated by Rich or by King, and then only want to invest in the "I want to be Rich" subset. At the same time, savvy entrepreneurs know that this is what VCs are looking for, and are able to "talk the Rich talk" convincingly. For many VCs, seeing through to a founder's real motivations is critical, but can be very tough.

Q: Did anything in your findings surprise you?

A: Of the surprises I described above, the biggest was that there is, in fact, an inherent conflict between these two major motivations, making it hard for most entrepreneurs to achieve the Rich and Regal status that's motivating them to become entrepreneurs. An even bigger surprise will be if we can actually nail down a relatively complete picture of what separates the Rich and Regal entrepreneurs from the others!

Q: What are you working on now?

A: The first follow-up to this paper includes further efforts to nail down what separates Rich and Regal entrepreneurs from the others, to see if we can find overall best practices that might help guide entrepreneurs. This effort includes two parallel projects. The first entails more sophisticated and detailed quantitative analyses of my datasets. The second is a richer exploration of a smaller number of cases where founders were able to achieve Rich and Regal.

In my current case writing, I'm looking at a couple of entrepreneurs who have been able to keep control of the CEO position for much longer than we might expect, along with more creative ways that founders were able to achieve Rich and Regal status. For instance, a current case I'm developing examines whether franchising might be a good "almost King, almost Rich" option for both the potential franchisor and the potential first franchisee, one in which they give away a small portion of the profits and a small amount of control in order to increase dramatically their chances of ending up with high levels of both.

However, I'm always looking for new cases and new examples of founders who were able to achieve both. In particular, I would love to write a case on a serial founder who either made King-consistent choices in one venture and then made very different Rich-consistent choices in a subsequent venture, or who achieved Rich and Regal status only after falling susceptible to Rich versus King tradeoffs in prior ventures.

In addition, I'm currently working on projects that delve more deeply into both the determinants of entrepreneurs' financial gains and of whether they can keep control of their ventures. My initial paper in the financial gains realm was my entrepreneurial-compensation paper that was just published in the Academy of Management Journal, and current follow-up papers are "Splitting the Pie" (examining equity splits within the founding team) and "Golden Handcuffs" (examining the role of vesting terms). In the control realm, my 2003 paper in Organization Science on founder-CEO succession examined the factors that lead to a founder's being fired as CEO, but my recent case writing (the "Wily" case mentioned above) suggested that the founder's involvement in the search process and in the venture after being replaced may also have important post-succession implications for the venture. My "After the Firing" paper will delve into these implications.

About the author

Sarah Jane Gilbert is a project manager at Harvard Business School. This interesting article was bumped into while surfing at Harvard Business School Working Knowledge

Seven Blunders of The World - Mahatma Gandhi

noreply@blogger.com (K.S.Lye) — Wed, 20 Feb 2008 06:39:00 +0000

1. Wealth without work
2. Pleasure without conscience
3. Knowledge without character
4. Commerce without morality
5. Science without humanity
6. Worship without sacrifice
7. Politics without principle

Technorati Tags:seven blunders of the world, mahatma gandhi, quotes, saying

Blogger's Choice Award

noreply@blogger.com (K.S.Lye) — Thu, 14 Feb 2008 07:45:00 +0000

I started to put in this blog for the BLOGGER'S CHOICE AWARD 2008 since January and thanks for your support, currently its standing at No. 2 position under the BEST BUSINESS BLOG CATEGORY.

The Strategist Notebook needs your vote (a couple more), to reach the top position. Kindly show your support by clicking thru the BLOGGER'S CHOICE AWARD badge on the right sidebar.

Thanks for your support!

One day John Stein got a reference letter

noreply@blogger.com (K.S.Lye) — Wed, 13 Feb 2008 05:24:00 +0000

This is a good one from my friend. Read on:

One day, John Stein got the following job reference from his boss:

Thomas P., my assistant programmer can always be found
hard at work at his desk. He works independently without
wasting company time talking to colleagues. Bob never
thinks twice about assisting fellow employees, and always
finishes given assignments on time. Often he takes extended
measures to complete his work, sometimes skipping coffee
breaks. Bob is a dedicated individual who has no
vanity in spite of his high accomplishments and profound
knowledge in his field. I firmly believe Bob can be
classed as an asset employee, the type which cannot be
dispensed with. Consequently, I duly recommend that Bob be
promoted to executive management, and a proposal will be
executed as soon as possible

However, later on another addendum was sent:

Addendum :

Dear Thomas, that idiot was standing over my shoulder while I wrote that report sent to you earlier today. Kindly re-read only the odd numbered lines.

Technorati Tags:office jokes, humour, addendum, memo, reference from boss

White Paper on Strategic Outsourcing: Creating competitive advantage and organizational transformation.

noreply@blogger.com (K.S.Lye) — Fri, 01 Feb 2008 03:47:00 +0000

This will be the first white paper by the Strategist notebook, which is written on the topic of strategic outsourcing.

This paper introduces the idea of utilizing outsourcing as a strategic tool for creating competitive advantage and organizational transformation. In contrast with traditional functional roles of outsourcing in supply chain management, outsourcing is beginning to gain ground from a strategic point of view. Many companies such as Sainsbury, Nike, Boeing and IKEA has shown positive results in utilizing strategic outsourcing to create the competitive edge. This paper will extract specific outsourcing cases on these companies and discuss the application of off shoring strategies.

Download complete paper here (pdf)

Download Acrobat Reader

Technorati Tags:outsourcing, transformation, strategic outsourcing, strategy, nike, boeing, ikea, offshoring

How Stock Market Works

noreply@blogger.com (K.S.Lye) — Tue, 29 Jan 2008 05:35:00 +0000

I am often amazed at how some people swear by get-rich-quick books they read. Titles like "How to trade like Warren Buffet" or daily newspaper ads that wrote "I made US$2 gazillions through option trading and I am about to show you how" with an exploding price banner showing "Rm99.99 early bird special". No, not that I am a skeptic for possibly some mystical knowledge which may make you financially smarter or glamorously richer. But I just have my doubts that one 'can' trade like Warren Buffet. Why? My friend, simply because you do not have a company like Berkshire Harthaway with US$56 billion to buy shares! And forget Kiyosaki, because he kept rambling about how the rich don't work for money and money work for the rich. Isn't that overstating the obvious. So I figured there must be a simple logic to how things like this work. This story which just came through my email, tells a nice story. Read on:

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He then announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50 ! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

In the absence of the man, the assistant told the villagers. "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up with all their savings and bought all the monkeys.

Then they never saw the man nor his assistant, only monkeys everywhere!

Now you have a better understanding of how the stock market works.

Technorati Tags:warren buffet, berkshire harthaway, shares, stock market, parables, monkey story, selling monkeys

Amazing Lecture

noreply@blogger.com (K.S.Lye) — Sat, 26 Jan 2008 10:13:00 +0000

How I wished my professors can be as intriguing as this guy! No wonder top brains comes out of MIT. Watch this!

This is Prof Lewin Walter from MIT. There are a couple of his video lectures in youtube - all are equally as thought provoking. Check them out.

Rabbit and His PhD Thesis

noreply@blogger.com (K.S.Lye) — Fri, 25 Jan 2008 06:07:00 +0000

This parable has been circulating around for some time. Makes an awful lots of sense.

Scene

It's a fine sunny day in the forest, and a rabbit is sitting outside his burrow, tippy-tapping on his typewriter.

Along comes a fox, out for a walk.

Fox
"What are you working on?"

Rabbit
"My thesis."

Fox
"Hmmm. What's it about?"

Rabbit
"Oh, I'm writing about how rabbits eat foxes."
(incredulous pause)

Fox
"That's ridiculous! Any fool knows that rabbits don't eat foxes."

Rabbit
"Sure they do, and I can prove it. Come with me."
They both disappear into the rabbit's burrow. After a few minutes, the rabbit returns, alone, to his typewriter and resumes typing.

Soon, a wolf comes along and stops to watch the hardworking rabbit.

Wolf
"What's that you're writing?"

Rabbit
"I'm doing a thesis on how rabbits eat wolves."
(loud guffaws)

Wolf
"You don't expect to get such rubbish published, do you?"

Rabbit
"No problem. Do you want to see why?"
The rabbit and the wolf go into the burrow, and again the rabbit returns by himself, after a few minutes, and goes back to typing.

Scene: inside the rabbit's burrow.
In one corner, there is a pile of fox bones. In another corner, a pile of wolf bones. On the other side of the room, a huge lion is belching and picking his teeth.

(The End)

Moral
It doesn't matter what you choose for a thesis subject.
It doesn't matter what you use for data.

What does matter is who you have for a thesis advisor.

Strategy For Small Fish

noreply@blogger.com (K.S.Lye) — Tue, 22 Jan 2008 05:40:00 +0000

Microsoft, Wal-Mart, and eBay provide ecosystems in which other companies thrive or fail. But what are effective strategies for a small fish in a big pond? An excerpt from The Keystone Advantage by HBS professor Marco Iansiti and Roy Levien.

The essence of a niche strategy is to achieve specialization by taking explicit advantage of the opportunities provided by the ecosystem while avoiding the kinds of traps that challenge firms in such environments. Our observation of a variety of niche strategies in action highlights a few critical components.

Value creation
The first driver of an effective niche strategy is value creation.

Specialize in unique capabilities. An effective niche strategy creates value by selecting a specialization that is truly different and whose differences are sustainable over time. A classic mistake made by a variety of new ventures during the venture capital boom of the late 1990s was selecting areas that had no staying power, such as Web calendars or Web-dispatched limousine services. Over time, it was inevitable that these new niches would merge with existing ones. The services are now broadly offered, but the firms that started developing them have ceased to exist as independent entities. In those cases in which the skills and capabilities that characterized new ecosystem domains were distinct enough to justify a truly focused strategy (for example, personal financial accounting or customer relationship management software), these strategies have endured for many years and enabled the growth of large and successful firms (such as Intuit and Siebel Systems).

A well-executed niche strategy, because of its focus, will exhibit strong defenses against a keystone and dominator trying to expand. Intuit is again a strong example here, with the continued success of its Quicken application against Microsoft Money. The key is finding a large enough market that requires specialized capabilities.

Leverage other capabilities from keystones. Effective niche players recognize that they are no longer bound by the constraints of vertical integration. As with IDe or deNovis, they create system solutions by combining their specialized assets with complementary products and platforms provided by other niche players and keystones. They embrace the opportunity to be lightweight and focused and leverage the tools, technologies, services, and products available through the ecosystem.

In doing this, niche strategies trade off risk with productivity. Strong economies can often be found by niche players by leveraging a single platform—for example, NVIDIA can optimize its designs for yields on TSMC's production lines. If a strong, trustworthy keystone is present in the niche player's ecosystem, there may be no apparent reason for the niche player to connect to multiple platforms. However, because of the risk of keystone collapse and keystone hold-up, niche players may want to diversify and invest in connecting with multiple hubs. As we discuss in some detail later, the crucial factor in figuring out which of these strategies to pursue is developing an understanding of the necessary "coupling strength," which defines the switching costs between keystones.

Sustain innovation. Whether dealing with one or multiple keystones, the heart of technology strategy for a niche player is to continually innovate by integrating technology available from the ecosystem to sharpen the niche offering that it is crafting. It is important to examine technological threats coming from the edge, and to leverage the ecosystem in crafting response strategies. This lets focused players develop specific solutions and concentrate on integrating these with key specific assets inside the firm. Intuit enabled its application, Quicken, for the Web by integrating technology components provided by Microsoft.

This implies a fundamental change in technology strategy models. In a vertically integrated setting, a company needs to develop into a massive organization and cover a broad variety of business areas in order to scale and survive. This makes scaling the company very challenging and requires a massive amount of capital. Additionally, it makes the company highly vulnerable to technological changes and other types of shocks. In a distributed business ecosystem, a firm can scale more easily and respond to shocks by leveraging capabilities provided by others.

Healthy business ecosystems will support a large number of niche firms for long, sustained periods of time. In the software industry, a large number of niche players have endured for many years, constantly generating a variety of product innovations. Despite the contraction caused by the crash of 2000 and the recession that followed, the ecosystem is still enabling thousands of different firms to survive.

Value sharing and risk management
How can a niche player influence the way that value is shared in an ecosystem? How can it protect itself against the risks of hold-up or keystone obsolescence? One of the most critical factors is the coupling strength of the implied interactions. Tight coupling (or high coupling strength) implies that a given niche player needs to develop highly specific internal assets to leverage the assets provided by a third party. NVIDIA needs to spend a significant amount of time optimizing its designs to TSMC's manufacturing process. This in turn implies that once committed to a given partner, the cost of switching is very high. Loosely coupled interactions instead imply minimal asset specificity and enable a niche player to easily switch from one relationship to another.

Tight coupling: Manage risk and dependencies. Tradition holds that tightly coupled relationships are by nature more efficient; for example, close collaboration between customers and suppliers is usually favored in existing management theories. However, tightly coupled models also have many disadvantages.

First, the tighter the coupling between organizations, the higher the risk of hold-up and the more power that platforms have over niche players. Thus, niche firms are much more at risk if a keystone decides to dominate its environment. Additionally, if the coupling strength is high, niche firms are more vulnerable to significant changes in technology and business models, which explains the many challenges and incumbent failures highlighted in a variety of research.19

A common failure of niche players is to bind too tightly to a keystone, which increases the power of the keystone over the niche player and can ultimately compromise the health of the entire ecosystem.

Loose coupling: Embrace mobility and flexibility. The heart of operating strategy for a niche player is to leverage the broad-based efficiencies offered by connecting up with several players in an ecosystem, while managing the dependencies that are created. This kind of behavior is made much easier by the emergence of loose coupling for the computing ecosystem. The essence of the argument is that less invasive, "minimalist" interfaces between organizations and technologies have the great advantage of minimizing technological risk and hold-up.

The emergence of loose coupling has enormous implications for niche firms because it means that an organization is no longer as threatened by the replacement of one technology with another. Because interfaces in loosely coupled systems are lightweight and noninvasive, firms can change much more easily in response to massive shifts in the technological environment. In essence, this means that they can much more easily "plug in" to a different way of doing business. Examples are provided by NVIDIA easily cutting across generations of semiconductor technology, or by enterprise IT departments easily embracing the Web.

In the software industry, for example, we have witnessed how the emergence of loosely coupled interfaces has enabled the majority of application companies to leverage multiple platforms. The same is true in the semiconductor and retail industries. The reality is that loosely coupled interfaces such as XML are quite powerful, so that reasonably strong efficiencies can be achieved with little commitment of platform-specific assets. Niche players can connect to both TSMC and UMC, or to Wal-Mart and Target, or to Microsoft and Apple. They can exchange design rules and purchase orders, and can optimize supply chains across different systems.

Niche leverage: Power over keystones. Finally, the emergence of loosely coupled technology interfaces has another critical implication for niche firms. Because loose coupling enables mobility, niche firms acquire enormous collective negotiating power with respect to keystones. The same mobility that allows them to escape devastating technological transitions allows them to potentially "leave" a keystone that is trying to extract too much value from the system for itself or that is not creating a platform that enhances opportunities for value creation.

Niche players, in effect, can use this leverage to keep keystones honest and to prevent them from straying into becoming dominators. It is in fact in this sense that ecosystems compete: They compete with each other for mobile niche players. And it is precisely this competition that keeps ecosystems healthy: Without niche players who understand and exercise this leverage, ecosystems will be less healthy than they could be and may fall into sickness if their keystone loses sight of its role.

Innovation and niche evolution
Firms that pursue a focused niche strategy have an ultimate advantage in the creation of novelty. This is partly because a focused new idea can more closely correspond to a new firm than is possible in vertical or modular industry structures: Everything beyond the scope of the firm can be integrated from external sources, or, conversely, a new product or technology offered by the firm can be easily integrated into the existing ecosystems as an extension or addition to its capabilities.

Firms that actively seek out new terrain in this way have the further advantage that as they distinguish themselves in new domains they may create platforms and become keystones themselves. NVIDIA is a great example of this kind of pattern.

NVIDIA's emergent keystone strategy
NVIDIA has grown rapidly to become not only a vibrant niche player in the integrated circuit ecosystem, but also to serve in some ways as a keystone itself, supporting the development of firms in the adjacent hardware and software communities. By following a successful and focused niche strategy, NVIDIA built a firm foundation for the next step: the transformation of its niche into an ecosystem in its own right, with NVIDIA as its keystone.

NVIDIA's Select Builder program, for example, supports system builders for PCs, laptops, and workstations. NVIDIA also maintains reseller and distributor partnership programs for firms that promote the NVIDIA line of products.20 In addition, the firm supports an active NVIDIA Registered Developer program to provide software developers in sectors ranging from video games to engineering simulation with training, tools, and support for application development tailored to exploit the unique capabilities of NVIDIA graphics processors.21 NVIDIA provides a significant set of tools, libraries, and standard interfaces that enable its own ecosystem to be more effective. This sharing of assets with channel partners and applications developers makes NVIDIA a keystone in its own right, with a role that is likely to increase in significance over time.

Building the complexity of the ecosystem
Firms like NVIDIA play a crucial role in structuring the complexity of an ecosystem in ways that make it accessible and manageable. In effect, they represent rungs in a ladder of ascending complexity that facilitate the power of platform leveraging: Hardware manufacturers that build on the "NVIDIA platform" are not just leveraging NVIDIA's products; they are also leveraging those of TSMC. This "serial leveraging" enabled by firms such as NVIDIA that are both niche players (focused experts in a domain) and keystones (platform providers) is a critical source of the productivity and rapid advance in capabilities of their ecosystem. Such firms are woven into the fabric of the business ecosystem just as surely as the textile craftsmen and merchants and traders were woven into the textile business ecosystem in Datini's time.

About the author
Roy Levien is a principal at Aldaron and founder of Keystone Advantage LLC.

Excerpted from Harvard Business School Press, The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability, by Marco Iansiti and Roy Levien. Harvard Business School Publishing Corporation.

Forget Cross Linking or Link Exchanges: The Fastest Love Linker is Right Here

noreply@blogger.com (K.S.Lye) — Tue, 22 Jan 2008 05:11:00 +0000

I did not believe in viral links at first. I really wanted to get my links up, and I tried posting one. To my surprise, my Technorati authority went from 30 plus to 130 plus and its still increasing!

What is a viral linking or speed linking?

Viral linking or speed linking, which basically means tagging a couple of your friends who are supposed return of the favor of you linking them in a post, by passing the tag along to their other friends. When you start off with say 5 links, and if these 5 good merry souls actually passed them along, you are going to be getting 25 lovelinks! And if this carry on, hypothetically speaking, you are getting the exponential of 5 on each layer?

Which is a GREAT DEAL of links and that means a great deal of Technorati authorities & traffic!

But what is the criteria of a good viral spread?

1. Least amount of work, max amount of results.
2. Simple and hassle free.
3. One that works in spreading to as many people as possible, of course.

How Does This Viral works?

So this is how it goes: I am tagging these five sites because I like the blog content and its individuality.

You guys who are tagged, goes out and tag another 5 blogs which you like and write why you like them. Just keep adding to the list (with the links). Do not replace, but add on. We hope this will continue to be a very long list, so that everyone will gain the love links they want.

1 The Strategist Notebook
2 Insanely Me
3 Random Views From Subconscious Mind
4 Charity blog
5 East Coast life

6 ChuanLing616

Just tag 5 special blogs that you like, comment them and post this on your blog.

Easy? You betcha.

Barstool Economics: How Taxes Works

noreply@blogger.com (K.S.Lye) — Mon, 21 Jan 2008 06:30:00 +0000

This parable was floating around in email circulation for a while. A columist with the star paper even published this yesterday.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Mattel: Getting a Toy Recall Right - John Quelch

noreply@blogger.com (K.S.Lye) — Thu, 17 Jan 2008 04:47:00 +0000

Mattel has been criticized heavily for having to recall not once but twice in as many weeks 20 million toys manufactured in China with lead paint and/or loose, potentially dangerous magnets.

Clearly Mattel did not have sufficiently tight quality control procedures in its supply chain to compensate for the extra risks of outsourcing to relatively new Chinese subcontractors. Clearly there were design flaws in the toys with the magnets that could come loose.

But Mattel deserves praise for now stepping up to its responsibilities as the leading brand in the toy industry.

What has Mattel done right?

The CEO has taken personal charge of the situation. He has apologized publicly and taken immediate steps to tighten quality assurance requirements on Mattel's suppliers. There has been no effort to duck behind blaming suppliers and distributors or, even worse, consumers—as Audi attempted to do in the famous unintended acceleration recall of the late 1980s.

Mattel is effectively getting the word out about the recall. Among other methods, the company is using bold red ads on high-traffic Internet sites such as Yahoo.com to find owners of the affected products and drive them to the Mattel Web site for more recall information. With this approach, consumers are being empowered to handle the problem themselves rather than clog customer service desks at Mattel's retail outlets, which would strain Mattel's dealer relations and cost the company extra dollars in processing fees.

Mattel's recall Web site is a model of excellence. All the affected products are depicted and clear instructions are provided on how to return recalled products (including downloadable application forms and shipping mailers), which suggests strong contingency planning.

Where Mattel has fallen short so far is in compensation. Mattel is offering equivalent value coupons good for other Mattel products in exchange for recalled products. Given the inconvenience caused to consumers and the need to motivate them to return the affected products, this offer may not be sufficient.

The success of the recall will be determined by the percentage of affected products that are returned.Ultimately, the success of the recall will be determined by the percentage of affected products that are returned. Anything less than 90 percent within 3 months for a child safety hazard will represent failure.

As long as the 2 recalls to date are the whole of the problem and not the tip of an iceberg, Mattel's brand reputation should survive. The CEO knows that Mattel's brand trust—built up over 62 years—is at stake, just ahead of the holiday selling season. And with 80 percent of U.S. toys sourced from China, other U.S. toy marketers are under equal scrutiny; if similar problems surface at other companies, Mattel may earn some credit for getting out ahead of the problem.

Have you ever been involved in a product recall, either as a consumer or as a marketer? What do you think is important or not important to drive Mattel to as close to 100 percent success in "reverse marketing" its recalled products?

About the author

John Quelch is Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School.

Innovative management: A conversation with Gary Hamel and Lowell Bryan

noreply@blogger.com (K.S.Lye) — Wed, 16 Jan 2008 06:09:00 +0000

“Sometime over the next decade,” warns renowned strategy guru Gary Hamel in his new book, The Future of Management, “your company will be challenged to change in a way for which it has no precedent.”1 What’s even more worrisome, he argues, is that decades of orthodox management decision-making practices, organizational designs, and approaches to employee relations provide no real hope that companies will be able to avoid faltering and suffering painful restructurings.

McKinsey partners Lowell Bryan and Claudia Joyce, in their recently published book, Mobilizing Minds,2 arrive at a similar conclusion from a slightly different perspective. They find that the 20th-century model of designing and managing companies, which emphasized hierarchy and the importance of labor and capital inputs, not only lags behind the need for companies today to emphasize collaboration and wealth creation by talented employees but also actually generates unnecessary complexity that works at cross-purposes to those critical goals.

Forward-looking executives will respond to this looming challenge, these authors conclude, by bringing the same energy to innovative management that they now bring to innovative products and services.

The opportunity is substantial. Against the backdrop of the digital age’s dramatic technological change, ongoing globalization, and the declining predictability of strategic-planning models, only new approaches to managing employees and organizing talent to maximize wealth creation will provide companies with a durable competitive advantage. It won’t be easy. As companies discard decades of management orthodoxy, they will have to balance revolutionary thinking with practical experimentation to feel their way to new, innovative management models.

Hamel is the founding director of the Management Innovation Lab, a nonprofit research organization with offices in London and Silicon Valley dedicated to accelerating the evolution of management practice.3 He recently joined Bryan for a conversation on the subject of management innovation. Joanna Barsh, a director in McKinsey’s New York office, moderated their discussion.

Joanna Barsh: What is the opportunity both of you have identified and how did you spot it?

Gary Hamel: For almost 20 years I’ve tried to help large companies innovate. And despite a lot of successes along the way, I’ve often felt as if I were trying to teach a dog to walk on his hind legs. Sure, if you get the right people in the room, create the right incentives, and eliminate the distractions, you can spur a lot of innovation. But the moment you turn your back, the dog is on all fours again because it has quadruped DNA, not biped DNA.

So over the years, it’s become increasingly clear to me that organizations do not have innovation DNA. They don’t have adaptability DNA. This realization inevitably led me back to a fundamental question: what problem was management invented to solve, anyway?

When you read the history of management and of early pioneers like Frederick Taylor, you realize that management was designed to solve a very specific problem—how to do things with perfect replicability, at ever-increasing scale and steadily increasing efficiency.

Now there’s a new set of challenges on the horizon. How do you build organizations that are as nimble as change itself? How do you mobilize and monetize the imagination of every employee, every day? How do you create organizations that are highly engaging places to work in? And these challenges simply can’t be met without reinventing our 100-year-old management model.

Lowell Bryan: I arrived at the same point from a slightly different perspective. McKinsey asked me about 12 years ago to try to understand the impact of technology and globalization on our clients. We concluded that these forces were creating a fundamental discontinuity. Or to put it differently, that technology and globalization were creating a set of opportunities that didn’t exist before.

We observed that companies were struggling to take advantage of the opportunities created by digitization and globalization because their organizations were not designed for this new world.

Joanna Barsh: Is this a topic that CEOs are eager to hear about?

Gary Hamel: Not necessarily. The Internet is making it possible to amplify and aggregate human capabilities in ways never before possible. But most CEOs don’t yet understand how dramatically these developments will change the way companies organize, lead, allocate resources, plan, hire, and motivate—in other words, how new technology will change the work of managing.

Throughout history, technological innovation has always preceded organizational and management innovation. Think back to the end of the 17th century, when muskets started to be introduced into European warfare. At the time, battle formations were very deep, very square, with the archers in the middle of the formation shooting over the heads of the archers in front of them.

Eventually, those formations changed in size and scope to better reflect the capabilities of muskets. But it took almost 100 years for this to happen. Why? Because a couple of generations of generals had to die off before military planners were able to use this new weapon in a productive way.

It won’t take 100 years this time. Still, if we’re going to fully mobilize human minds, to borrow Lowell’s phrasing, we’re going to have to turn a lot of our legacy management beliefs on their head. The old model was, “How do you get people to serve the organization’s goals?” Today we have to ask, “How do you build organizations that merit the gifts of creativity and passion and initiative?” You cannot command those human capabilities. Imagination and commitment are things that people choose to bring to work every day—or not.

Lowell Bryan: I think the technological revolution that occurred in the past 15 years was basically equivalent to the industrial revolution—a fundamental discontinuity. And just as technologies have S curves, the technology of management also has an S curve.

If you look at the big management innovations that Gary has talked about—from, say, Taylor in the 1890s up to [Alfred P.] Sloan in the 1920s and then popularized by [Peter F.] Drucker and [Marvin] Bower—you could argue that the maturity of the 20th-century management model didn’t come until the 1960s and 1970s. Only then did what we view as modern management become pervasive throughout the world. In other words it took 50 to 60 years. Modern management itself was basically an effort to deal with the aftershocks of factories, which were created over 100 years before Frederick Taylor was born.

In other words, we are in the early stages of a very long innovation of organizational design that will eventually go to places we can’t yet see. But you can see enough to identify huge opportunities for companies to take advantage of what is already known. Innovation in organization is occurring all over the place, but a lot of those innovations go nowhere. There’s lots of experimentation going on, but organizational barriers prevent the adoption of good innovations throughout the company.

Gary Hamel: There are three reasons the technology of management may well change as radically over the first few decades of this century as it did during the adolescence of the last one. First, as Lowell says, is the impact of new technology. The availability of powerful new tools for coordinating human effort will profoundly change the work of management over the next few years. And then we have that new set of challenges I mentioned earlier: the increasing demand for companies to be adaptable, innovative, and exciting places to work. A third force for change is a revolution in expectations. Take a look at our kids—the first generation that has grown up on the Web. Their basic assumption is that your contribution should be judged simply on the merits of what you do rather than on the basis of your title or your credentials or providence or anything else. This is the lesson they’ve drawn from the experience with what I call the “thoughtocracy” of cyberspace.

Joanna Barsh: Are the thinking-intensive industries driving what Gary is talking about?

Lowell Bryan: New organizational models are needed in all industries because all companies engage in thinking-intensive work. The traditional, hierarchically based 20th-century model is not effective at organizing the thinking-intensive work of self-directed people who need to make subjective judgments based upon their own special knowledge. Such people work in all companies, in all industries, and in the digital age it is these people who create wealth. We need a model for such work—a model that uses hierarchical decision making only for activities that need that authority, such as allocating resources, appointing people to jobs, or holding people accountable—but at the same time enables self-directed professionals to collaborate with their peers continuously. And that’s where you need to adapt the model: by creating mechanisms to enable such collaboration to be efficient and effective. Such mechanisms can help the organization to work horizontally as well as vertically.

Every large company, even a retailer or a mining company, has large numbers of thinking-intensive employees who need to collaborate with one another. That’s where the value is today. The winners will be those that enable their thinking-intensive employees to create more profits by putting their collective mind power to better use.

Joanna Barsh: You both talk about talent and human beings as a company’s biggest asset. Are CEOs on that wavelength?

Lowell Bryan: Part of the issue is the definition of talent. Everybody says they want more talent, so it’s almost uninteresting to ask people what their biggest challenge is; it’s always going to be talent. But to be very clear, it isn’t just intrinsically talented people you need. You can hire all the intrinsically talented people you want. There’s a market for talent, and as long as you’re willing to pay what that marketplace demands, you can attract talented people. The real challenge is making profits off those talented people. That’s where the big opportunity is. The leading companies today are combining talent and technology and organizational design to generate much higher profits per employee than was possible in the past. So the trick becomes, “How do I hire talent that I can profit from?”

Gary Hamel: In a market where talent is largely a commodity and can be bought anywhere, the secret sauce is creating an environment in which you push that frontier out, in which you can steadily raise the returns on human capital. The combination of technology and talent is a powerful catalyst for value creation, but to take advantage of the Web’s capacity to help us aggregate and amplify human potential in new ways, we must first of all abandon some of our traditional management beliefs—the notion, for example, that strategy should be set at the top. So I think Lowell is 100 percent right: in terms of managing creative-thinking people, you have to separate the work of managing from the notion of managers as a distinct and privileged class of employees. Highly talented people don’t need, and are unlikely to put up with, an overtly hierarchical management model.

Increasingly, the work of management won’t be done by managers. It will be pushed out to the periphery. It will be embedded in systems. I think we’re on the verge of what I would call a postmanagerial society. The idea that you mobilize human labor through a hierarchy of overseers and bureaucrats and administrators is going to look extraordinarily antiquated a decade or two from now.

Lowell Bryan: These thinking-intensive people are increasingly self-directed. In fact, they’re directed as much by their peers as they are by supervisors. The management challenge is akin to urban planning. The art of it is that you must enable people to make thousands and thousands of individual decisions about how to live and work, but you have to create the infrastructure to make it easy for them to do so. You’ve got to have the sewer lines, you’ve got to have the four-lane highways, you’ve got to have the pedestrian malls thought through in a way that individuals find it natural and easy to work either by themselves or with others.

Gary Hamel: There’s a danger too, I think, of creative apartheid. Too many executives seem to believe that while a few people in the company may be really clever and creative, most folks aren’t. When you look at companies like Toyota, you see their ability to mobilize the intelligence of so-called ordinary workers. Going forward, no company will be able to afford to waste a single iota of human imagination and intellectual power.

Joanna Barsh: Let’s discuss what management innovation looks like. Gary, your book talks about experimentation as the key, and Lowell, you’ve got a number of ideas that are very, very different from what is actually going on in companies today. What really gets you excited as you start to innovate?

Lowell Bryan: What I find exciting are ideas that already exist in practice, that have been innovated over the past 10 or 15 years on a small scale, but have not been integrated together on a large scale. The necessary innovation is to adapt the specific organizational-design ideas that enable individual companies to perform better.

So it might be bringing talent or knowledge marketplaces inside a company or building formal networks or introducing dynamic management principles to a company. These are all ideas that have been tried somewhere; they just haven’t been integrated together, at scale, in very many companies.

Gary Hamel: The outlines of the 21st-century management model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position. In terms of the future of management, we’re at the beginning of what will be a fairly long journey. You can see some of the pieces starting to come together, but we’re not there yet.

To become inspired management innovators, today’s executives must learn how to think explicitly about the management orthodoxies that bound their thinking—the habits, dogmas, and conceits they’ve never taken the trouble to challenge. For example, many people believe that it takes a crisis to change a large organization, and when we look at the evidence this seems to be the case.

And yet it’s important to dig underneath that belief and ask, “Is this a law of physics? Is crisis-driven change the only way to change a large company, or is this reality the consequence of something we designed into our management system 100 years ago?” I would argue it’s the latter. It often takes a crisis to change an organization because in most companies the authority to set strategy and direction is highly concentrated at the top. As a consequence, a relatively small group of people at the top can hold the organization’s capacity to change hostage to their own personal willingness to adapt and to change.

So the orthodoxy is that it takes a crisis to change. OK, but in order to change that reality you have to change the distribution of power in large organizations. Some of these things are not going to happen overnight.

Richard Florida, who wrote a wonderful book called The Rise of the Creative Class,4 argues that some of the most bruising battles that will be fought over the next 15 to 20 years will pit the forces of organization against the forces of creativity. One model is not going to simply surrender to the other. To go back to Lowell’s idea about the S curve, I don’t think you shuffle your way from one S curve to the other. You have to jump.

Frederick Taylor often talked about the need for a mental revolution when he was trying to move organizations from the craft-based model to the factory model. Today we need a new mental revolution. Some companies will lead and some will follow, but we won’t be able to reinvent management for this new century without some trauma and some risk taking.

Joanna Barsh: So how should companies change as they jump to this next S curve?

Lowell Bryan: I like the notion of designing a managing concept or master plan—a master architecture, if you will—for every company. Such a master plan should lay out the big foundational elements to get your organization to work differently, including, for example, what is your fundamental metric for performance? Should it be return on capital or profit per employee?

Once you’ve designed your master plan, you can launch a series of initiatives aimed at achieving your goals. Part of this process is to stage-gate the initiatives in order to manage the risks of innovating. The thing that really stops innovation is risk. CEOs can be terrified of organizational disruption because it can put at risk a company’s ability to meet quarterly earnings, which in turn is often what causes CEOs to lose their jobs. So part of what you need is a bridge so that they can be innovative but also keep their jobs.

I think if you take the principles of private equity, venture capital, and R&D and bring them inside the company to stage-gate your investments in organizational innovation, you can first learn what works and then scale it, without taking excessive risk. None of us are smart enough to see in advance the ultimate answer, because the real answer lies in discovering the operating detail to make new ideas work in practice. You can see the broad directions, but you can’t see how it’s going to really work. You can’t even understand the secondary and third-level consequences of the design decisions you make. Those have to be discovered through trial and error.

Gary Hamel: When it comes to reinventing management, you must have the courage to set seemingly aggressive objectives—like GE’s goal of growing at twice the rate of GDP, net of acquisitions. But the actual work of reengineering our musty old management practices will be more evolutionary than revolutionary. You don’t take a large, complicated company and tear up all the track at once. To do so would expose a company to an intolerable level of operational risk. Yet companies must become as purposefully and creatively experimental in thinking about their management systems and processes as they already are in thinking about R&D or new-product development.

Joanna Barsh: Who in companies should spawn that portfolio of experiments that Lowell was referring to?

Gary Hamel: The folks who are responsible for the big management processes: the executive vice president for human resources, the CFO, the director of planning, and so on.

Lowell Bryan: In terms of companies that are really pushing innovation and mobilizing mind power, some of the best examples are private-equity players. With private equity, you have principals who are activists, and they’re really shaking up many industries.

Joanna Barsh: OK, I’ve got the courage, I’ve got the architecture. I can’t believe that’s all a company needs.

Gary Hamel: Most of all, there is a lot of discipline and work needed to migrate from one management model to another. I don’t think it’s obvious to a lot of companies that it’s really possible to experiment with management.

As in any scientific experiment, you have to set some very clear boundaries around what kind of risks you’re willing to take and then challenge people to test new ideas within the boundaries. That’s a new skill for most organizations. A lot of the inspiration will come from looking entirely outside the world of large organizations and management—and understanding how experimentation is used in the sciences to engender new insights will minimize risks.

Lowell Bryan: The real opportunity that companies have today is to take control of their own destinies and begin to consciously innovate. By that I mean they need to take on strategic initiatives and organizational initiatives at the same time. The scarce resources in any company today are discretionary spending, talent, and the ability to focus. You need the ability to focus in order to be able to allocate the resources. Like it or not, in order to really create any innovation and scale it, you’ve got to deploy some resources. How do you do that? The issue is not just raw innovation; it’s actually being able to scale the innovation through at a large company. That’s where the wealth will be created.

Gary Hamel: In this experimentation it’s critical to have what I call the voice of the user very much front and center—the individuals, throughout an organization, whose work is heavily influenced by a company’s core management processes. These people know which processes choke off innovation, impede adaptability, and frustrate employees.

Joanna Barsh: So I’m a CEO. What do I do? I have the courage; I’ve got the audacious goal.

Lowell Bryan: Assuming you’re well managed, the direction that most companies need to go in is improving how they enable their people to collaborate with one another at much lower cost by dramatically reducing unproductive search and coordination costs. And that means deploying such devices as talent marketplaces, knowledge marketplaces, and formal networks to make intangible assets flow throughout the company, as opposed to going up and down vertical chains of command.

I will say that the ideas on how to organize for the 21st century have now reached a stage of maturity where people are ready to consciously innovate. It isn’t like ten years ago, when we were still trying to figure out digitization and globalization.

Gary Hamel: I would argue there’s not 1 company out of 1,000 today that has created an organization in which innovation is truly everyone’s responsibility.

CEOs tell me, “Gary, we’re really serious about innovation”—and what CEO isn’t these days? My response is to go down to first-level employees and ask them a few questions. The first question I ask is, “How have you been trained as a business innovator? What investment has the company made in teaching you how to innovate?”

The second question I ask is, “If you have a new idea, how much bureaucracy do you have to go through to get a small increment of experimental capital? How long is it going to take you to get 20 percent of your time and $5,000 to test your idea? Is that a matter of months or is it very easy for that to happen?”

The third question is, “Are you actually being measured on your innovation performance or your team’s innovation? Does it influence your compensation?”

And finally I’ll ask, “As you look at the management processes in your company, do they tend to help you work as an innovator or get in the way?” When you ask these questions of first-line employees, you quickly discover that in most companies there’s still a big gap between the rhetoric of innovation and the reality.

Joanna Barsh: Final thoughts?

Gary Hamel: In any field of human endeavor you ultimately reach a point where you can’t solve the new problems using the old principles. I think we’ve reached that point in the evolution of management. When you go back to the principles upon which our modern companies are built—standardization, specialization, hierarchy, and so on—you realize that those are not bad principles but are inadequate for the challenges that lie ahead.

Lowell Bryan: More economic integration has taken place in the past 30 years, you could argue, than in the previous 10,000 years of human history. And the organization of companies, as Gary has said, is lagging behind the changes in the world economy. But to my mind, it’s just an incredibly exciting opportunity for the world at large because, for the first time, the ability to create wealth is being liberated from the inputs of labor and capital.

Ideas are being monetized in ways never before possible, and the world is a richer place. I’m not just talking about creating financial wealth; I’m talking about a much more stimulating work environment, with more interesting jobs for employees to create more valuable products and services for the world’s consumers. It is just an incredibly exciting time to be alive.

About the Author
Joanna Barsh is a director in McKinsey’s New York office.

Notes
1 Gary Hamel with Bill Breen, The Future of Management, Harvard Business School Press, 2007.

2 Lowell L. Bryan and Claudia I. Joyce, Mobilizing Minds: Creating Wealth from Talent in the 21st-Century Organization, New York: McGraw Hill, 2007.

3 McKinsey is a strategic partner in the Management Innovation Lab, which works directly with companies to test and scale innovative management approaches.

4 Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life, New York: Basic Books, 2002.

Making The Right Enemies

noreply@blogger.com (K.S.Lye) — Mon, 14 Jan 2008 04:29:00 +0000

Do you go through great lengths to run away from confrontations? Do you store that resentment rather than approach people to talk about it? When you are being treated unfairly, do you just walk away while storing the anger and ruining your day? No matter how articulate or professional you may sounds, sometimes confrontation is unavoidable. Of course it is idiotic to try to build a successful reputation by being rude or combative. However, it is equally idiotic to build a successful reputation by being afraid to speak up.

Sometime you have to disagree with people. Sometimes you have to pick a fight or fight back. You can disagree without being confrontational which is always the first option but when that fails – have a good clean fight but do that without doing any damage to your reputation.

The fact is, you will make enemies in your professional. The more successful you are, the more enemies you will have. Your enemies will hardly ever confront you directly. Instead, they will destroy your reputation through malicious gossip. Do not allow yourself to be eaten by vicious gossip. Instead, learn to recognize the signs that a campaign is being made against you and fight back. Find out what is being said and fight it. If someone undermines your authority and is disloyal to you, do not tolerate him. There is no mercy for disloyalty, fire that bastard!

Your best reputations will include courtesy, fairness, tolerance, self-respect and having good and proper manners. However, a small amount of ruthlessness is good for your reputation. Your reputation will not suffer much if you fight your enemies, but it will suffer if you lose your self-respect.
Furthermore, bottling things up causes pressure and leaves you open to the risk of exploding. If you're harbouring anger it will manifest itself in one way or another, regardless of how well you think you have it under control. Your annoyance will come out in other ways and undermine your relationships anyway. So what the heck?

So how do you nail that bastard?

First law of warfare, observe the surrounding. Is this a proper place for confrontation? Is this a proper time? Surprise your enemy by picking the time and place which gives you an upper hand.

Is there any observers? Which sides are they on? Simple logic will tell you that, when you are outnumbered – retreat will be the best strategic options. There is always another day to fight.

When you have more supporters on your side, its time to do some serious flanking. But do fight fairly as it is important that you are viewed as fair and just. The last thing you want in a confrontation is winning the battle but losing the war.

When the observers are neutral or seemed to be, neutral – pricked them into the fight. Engaged them, pull them in to your side. Tell them about the scenario if they were in it and asked if this is fair. When they side you, starts your flanking.

Attack your opponent’s weaknesses. Suppose in a physical fight, good fighter always strikes the places on the body that are most vulnerable. Look for pressure points, areas that don’t have any protection. Also, try to strike the areas that will cause the most pain. If it’s a corporate or a business fight, the same strategies apply. Try to attack areas that will hurt your opponent the most. Attack his previous failures, his character flaws, his soft spots, his annoying habits, his relationship failures, dumb decisions he has made, put him down where he is the weakest.

Create weaknesses for your opponent. If possible, reduce their ability to function. For example, in a physical fight you can attack the person’s eyes so they won’t be able to see you. Or, you could attack their knees so they can’t move in the same way. Regardless, you want to make it as difficult as possible for the person to counterattack. The same goes for a corporate fight. You want to make it impossible for your enemy to maneuver against you.

Make him lost control. The easiest way to win a fight is to make him lose his temper and his control. Irritates and poke your enemy into an uncontrollable rage, and let him do the dirty job of embarrassing himself. Meanwhile, you maintain your calm professionalism and composure, but do not resort to lower yourself to his level of vulgarities. Use facts, logic and tacts in your continual attack. Tell him being loud doesn’t mean being right. Let him shame himself in front of the crowd.

Capitalize on the reputation. When this confrontation is over, obviously people will be talking about it. Act cool, act as if, nothing happened and you were not affected a bit by all that confrontation of your enemy’s rage. Give a calm and casual response like “I really have no clue why the chap could not take a little tackle, really. (smile)“ Impressed the gossiping observers that you can handle scuffles anytime of the day (but for the right cause).

Do it right and chances are, nobody will pick a fight with you, ever. Now, a little confrontation can make life interesting, doesn’t it?

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Kick out the butt kissers during a strategic meeting

noreply@blogger.com (K.S.Lye) — Thu, 10 Jan 2008 02:45:00 +0000

This is an old story told at General Motors:

At a meeting with his key executives, CEO Alfred Sloan proposed a controversial strategic decision. When asked for comments, each executive responded with supportive comments and praise. After announcing that they were all in apparent agreement, Sloan stated that they were not going to proceed with the decision. Either his key executives didn't know enough to point out the potential downsides of the decision, or they were agreeing to avoid upsetting the boss and disrupting the cohesion of the group. The decision was delayed until a debate could occur over the pros and cons.

Always remember that making a strategic choice is about evaluation of alternative strategies and selecting the best alternatives. You need options and fallbacks at the bare minimum. There is mounting evidence that when an organization is facing a dynamic environment, the best strategic decisions are not arrived through consensus when everyone agrees on one alternative.

They actually should involve a certain amount of heated disagreements- and even conflict. This is certainly the case for firms operating in a global industries. Because unmanaged conflict often carries a high emotional cost, authorities in decision making propose that strategic managers use 'programmed conflict' to raise different opinions, regardless of the personal feelings of the people involved. Two techniques help strategic managers avoid the consensus trap:

1. Devil's Advocate: The idea of the devil's advocate original from medieval Roman Catholic Church as a way of ensuring that impostors were not canonized as saints. One trusted person was selected to find and present all the reasons a person should not be canonized. When this process is applied to strategic decision making, a devil's advocate is assigned to identify potential pitfalls and problems with a proposed alternative strategy in a formal presentation.

2. Dialectical Inquiry: The dialectical philosophy, which can be traced back to Plato and Aristotle and more recently Hegel, involves combining two conflicting views - the thesis and the antithesis - into a synthesis. When applied to strategic decision making, dialectical inquiry requires that two proposals using different assumptions be generated for each alternative strategy under consideration. After advocates of each position present or debate the merits of their arguments before key decision makers, either one of the alternatives or a new compromise alternative is selected as the strategy to be implemented.

The ultimate objective is really to have a superior method in decision making rather than having a group of managers nodding their heads in consensus. As a chairperson, you can actually improve the quality of the decisions by formalizing and legitimizing constructive conflict and by encouraging critical evalution. Ultimately, what you want are better assumptions and recommendations and to a higher level of critical thinking among people involved.

Technorati Tags:strategy, formulation, meeting, alfred sloan, general motor, devil's advocate, conducting meeting, choices, options, thesis antithesis

UN Shoes

noreply@blogger.com (K.S.Lye) — Tue, 01 Jan 2008 06:35:00 +0000

I got this from a friend of mine, Major Inderjit, a UN observer for mission in Ethopia couple of years back.

The UN ran a base camp somewhere in the norther part of Ethopia whereby everyday cartons of drinking water were being rationed to the staff. Empty bottles were disposed nearby whereby the local took and creatively made sandals out of them.

Happy 2008 everybody.

Technorati Tags:ethopia, united nation, shoes, mineral water bottle, photo, creativity

PhD Research - The Wood Pecker Story

noreply@blogger.com (K.S.Lye) — Thu, 27 Dec 2007 13:02:00 +0000

The wood pecker story is quite similar to the mushroom story posted a while ago, and this has to do with taking assumptions for granted in your research.

According to the story, the developers of safety helmets decided to look to nature to find inspiration for a new approach to design. One of them wondered whether there were any animals which experienced powerful blows to the head without suffering brain damage. Inspiration struck, in the form of the woodpecker, which spends most of its waking life banging its head against the tree with considerable force. The team accordingly read up on the anatomy of the woodpecker and discovered that it had a spongy base to its beak which absorbed the force of the impact. The team used this inspiration to come up with a design for a helmet which was not designed to stop objects from penetrating the helmet (as with First World War military helmets, for instance), but instead was designed to absorb the blow by deforming harmlessly, preventing most of the energy of impact from reaching the wearer's head (unlike helmets designed to prevent penetration). The designers were proudly demonstrating their concept when, according to the story, a member of the audience asked: 'How do you know woodpeckers don't suffer brain damage?" Painful sinlence ensued.......

In the mushroom story, the student failed to identify a relevant variable (the central heating). In this woodpecker story, the design team had not checked a key assumption (that woodpecker don't get brain damage). The woodpecker story in fact had a happy ending; the current design is demonstrably good and the designers were proved right (even though, as far as we know, nobody ever check on brain damage rates in woodpeckers). In other cases, however, unchecked assumptions have led to years wasted in pointless research, which could have been spent instead in a useful area.

For this reason, external examiners are likely to poke around in the foundations of your research, checking that you have neither missed anything which you should have thought of, nor made an unwarranted assumption.

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