Synergy in management

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Marshall Goldsmith writes about Sharing Leadership to Maximize Talent on HBR.org:

Shared leadership involves maximizing all of the human resources in an organization by empowering individuals and giving them an opportunity to take leadership positions in their areas of expertise. With more complex markets increasing the demands on leadership, the job in many cases is simply too large for one individual.

And he gives an example:

For instance, at a company that creates user interfaces for web design, the role of CEO was too extensive for one leader. As a result, it was split into two positions with equal status and complementary skills sets and responsibilities. After splitting the role of CEO, the leaders built on the new team, hiring experts to head up research and development, architecture and design, and sales. Using the shared leadership model gave these leaders the opportunity to focus on the areas in which they are most talented, to hire team leaders, and thus develop a successful, well-rounded and somewhat “flattened” company versus a more hierarchically structured company

I ask you this: isn’t the role of the CEO in most companies too extensive for one leader? The world of business is so complex, how can we expect one “general” at the top to know everything and make wise decisions about everything? The answer is, we can’t. And you should not believe me. I am not a CEO. Believe a CEO, Vineet Nayar, as he writes:

During the day, I try to avoid the traps that are so easy to fall into as a CEO. The most dangerous one is thinking you should know the answers to all questions that arise. This is ridiculous, of course. How can I possibly know the answers to questions that have to do with customers, relationships, technologies, solutions, countries, and offices that I have no direct involvement with? Impossible. But, for centuries, the world’s organizations have been built on the idea that the CEO knows everything. If he does not know, he should act as if he does. Today, everyone knows the CEO doesn’t know much, but assuming that he should (or hoping that he does) is a very hard habit to break. I believe that the CEO should be the Chief Question Asker, not the final provider of answers. And so, especially during the early hours of the day, I ask the following questions of myself:

Ask Bill Gates why he has Steve Ballmer next to him for so long. They each gives something different to the company. As Marcus Buckingham and Donald O. Clifton: write in their book Now, Discover Your Strengths:

…[Y]ou will excel only by maximizing your strengths, never by fixing your weaknesses. This is not the same as saying ‘ignore your weakness’. The people we described did not ignore their weakness. Instead, they did something much more effective. They found ways to manage around their weakness, thereby freeing them up to hone their strengths to a sharper point. Each of them did this a little differently. Pam liberated herself by hiring an outside consultant to write the strategic plan. Bill Gates did something similar. He selected a partner, Steve Ballmer, to run the company, allowing him to return to software development and rediscover his strengths’ path…

The idea of The Comparative Advantage has never been so powerful. And it should leave the confines of the world of economics and enter, through the main gate on a red carpet, to the world of management. By definition, synergy is the product of a number of individual parts creating something that is bigger than the sum of the parts. But today’s current management practices try to glorify “one” to lead all the other “ones” to be more than they are. Doesn’t that seem strange to you?

I don’t know if it is inertia, habit, ego, mistaken conventional wisdom or something else the leaves this kind of thinking intact. I am happy that there are some people out there crying out to change this. The world does not need superheroes. The world needs more cooperation that leads to synergy.

Elad

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The star system – bad news for teamwork?

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Bob Sutton writes in his blog about Boris Groysberg’s Research on star employees – Too Many Cooks Spoil the Broth:

The results of this research are interesting because, while some leaders might think that there is no such thing as having too many stars, Boris and his colleagues found a curvilinear relationship between the number of stars in a group and overall performance — so, having a few stars help, have a few more doesn’t hurt (but doesn’t help), but groups reach a tipping point where too many stars seem to dampen performance. Groysberg and his colleagues suggest that the “too many cooks” problem happens partly because, when a group is filled with individual stars, the dynamics degenerate because people devote excessive attention to the internal status game and competition and hesitate to share information that may help the group as a whole, but will threaten their standing in the group. In other words, when there are too many stars, people focus on what is best for themselves, see other top performers as people who are in the way rather than people they should help, and the overall performance of the team seems less important.

Now, I haven’t read the article (it hasn’t been published yet), but I have a general problem with the basic assumption, as it is described in the blog post, about stars and their importance in teamwork. Sutton writes: “leaders might think that there is no such thing as having too many stars”. The whole notion of looking at people as stars is in my opinion, misplaced. For me, this represents a common misunderstanding about what teamwork really is. I am not surprised this research was conducted in Wall Street, where this kind of thinking is probably common place and where individuality is put on a pedestal and adored as a pagan god. Teamwork is about differences.

Because if you think about stars in a team it implies that all team members are equal or do the same thing and thus, one can outshine the other. It also implies that performance is the result of individual effort and not of a team effort – the interaction between the unique strengths and talents that each team member brings to the table.

The importance of individuality and stars in teamwork might be a conventional wisdom and an underlying assumption that is unfit for the world we now live in and the challenges modern business face. In a fascinating article called “Are smart people overrated?” that appears in his book What the Dog Saw, Malcolm Gladwell writes:

The broader failing of McKinsey and its acolytes at Enron is their assumption that an organization’s intelligence is simply a function of the intelligence of its employees. They believe in stars, because they don’t believe in systems. In a way, that’s understandable, because our lives are so obviously enriched by individual brilliance. Groups don’t write great novels, and a committee didn’t come up with the theory of relativity. But companies work by different rules. They don’t just create; they execute and compete and coordinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star.

When a team or system is the star there is an understanding that individual performance and ability are important, but just in the way it aligns with the bigger scheme of things. There is an understanding that each member of the team or system has an important role that he or she has to perform to best of their abilities and that the final outcome is dependent on each individual contribution. It is based on the assumption that each member is indispensible in his or her contribution to the team effort, because he brings something special that the rest of the team cannot do. It is a synergy between different individuals with different strengths and talents that could not be a threat to each other or be in competition with each other, because each and every one of them is unique in the contribution to the team.

What do you think about the star terminology?

Elad

On ignoring best practices

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Jeffrey Pfeffer has a very interesting article in Newsweek about layoffs and how they are much less effective than people think they are. One of the closing paragraphs caught my eyes:

Despite all the research suggesting downsizing hurts companies, managers everywhere continue to do it. That raises an obvious question: why? Part of the answer lies in the immense pressure corporate leaders feel—from the media, from analysts, from peers—to follow the crowd no matter what. When SAS Institute, the $2 billion software company, considered going public about a decade ago, its potential underwriter told the company to do things that would make it look more like other software companies: pay sales people on commission, offer stock options, and cut back on the lavish benefits that landed SAS at No. 1 on Fortune’s annual Best Places to Work list. (SAS stayed private.) It’s an example of how managerial behavior can be contagious, spreading like the flu across companies. One study of downsizing over a 15-year period found a strong “adoption effect”—companies copied the behavior of other firms to which they had social ties.

That reminded me of a post I wrote about how when we did a case about SAS in our organizational behavior MBA class at AGSM. I was surprised that all three teams in my class suggested to change to a commission based sale force. This is part of what I wrote back then:

This is the reason I was truly surprised to discover that all 3 teams recommended changing the pay system for the sales representatives and adding a commission based system. My simple question is WHY? It seems to work. More important than that, this is what makes SAS unique. You know how I feel about the importance of being remarkable.

You can argue about the question whether the commissions approach is the right approach generally (or maybe argue about using a joint approach), but it seems to work for SAS. So why change it?

You might say that people think that if they are motivated by money than other people are the same. But we know they are not. People are different.

I am not sure how, but this point connected with a point I was reading in a post on the Harvard Business Review blog today, by Dan Pallotta, titled – Real Leaders Don’t Do Focus Groups:

Apple is famous for not engaging in the focus-grouping that defines most business product and marketing strategy. Which is partly why Apples products and advertising are so insanely great. They have the courage of their own convictions, instead of the opinions of everyone else’s whims. On the subject, Steve Jobs loves to quote Henry Ford who once said that if he had asked people what they wanted they would have said “a faster horse.”

And this in turn reminded me of a number of things I wrote about, especially, this post:

If you look at some of the best successes in the last few years, they come from companies that looked at the market and did not ask themselves – how do we compare? How can we do what are competitors are doing, just differently or better?

It came from companies that reinvented the game. That left the confines of the industry and created new industries where they excel. Itunes; Google; Twitter; Iphone; are just some of the examples that spring to my mind.

What are the best practices you should be ignoring but instead are trying to imitate?

Elad

The “other minds” problem

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I the last few days I am reading Malcolm Gladwell’s new book, What the Dog Saw (one chapter every night) and I must admit it if a fascinating ride. However, up until now, what stuck with me the most is a paragraph in the first page of the book, as part of the preface:

This was actually a version of what I would later learn psychologists call the other minds problem. One-year-olds think that if their like Goldfish crackers, then Mommy and Daddy must like Goldfish Crackers, too: they have not grasped the idea what was inside their heads is different from what is inside everyone else’s head. Sooner or later, though, children come to understand that Mommy and Daddy don’t necessarily like Goldfish, too, and that moment is one of the great cognitive milestones of human development.

How many times in your life have your said or heard something like this: “I treat others this way, because that is the way I like to be treated”. Think about it. Seriously, how many of your daily decision are based on that rule of thumb – that what you like is what everybody likes too? It is even an important religious concept – “The Golden Rule” which we hear about all the time and which I wrote about in the past:

This is a good general concept and at a religious (and maybe political) level it is a smart rule. But the problem is that if you move into the world of management, this well intentioned rule leads you to bad managerial decisions (like many conventional wisdoms). Because, if we agree that we are all different it also means that we like and hate different things. This means, I may hate the way you like to be treated. And if I follow the rule (and treat you like I want to be treated), I will avoid giving you what you want.

Isn’t it time to reach that cognitive milestone in managerial development as well? Isn’t it time we understand that the people we work with are different from us and thus enjoy and appreciate different things? They don’t want to be managed like we do. They don’t want to be recognized like we do. They are not driven and motivated by the same thing we are driven and motivated by. They might absorb information differently than us. They are different and unique. Each and every one of them.

The people around us, our employees, our bosses, our peers, they all have “other minds”. The sooner we realize that, stop assuming and starting talking to them, the better equipped we will be to really start creating partnerships with them.

Elad

Embrace the revolution – overcome the Illusion of control

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In the last few days I have read a lot about heuristics. For those of you who still haven’t been exposed to this intriguing concept, here is a short definition from Wikipedia:

[A]n adjective for experience-based techniques that help in problem solving, learning and discovery. A heuristic method is particularly used to rapidly come to a solution that is hoped to be close to the best possible answer, or ‘optimal solution’. Heuristics are “rules of thumb“, educated guesses, intuitive judgments or simply common sense. A heuristic is a general way of solving a problem

We all use heuristics every day. We have to. If we had to think about every decision and process every input fully, we would be totally overwhelmed. So we use these intuitive rules to make quick decisions. From estimating distances according to how well we see the object to estimating numbers instead of doing complex calculation. From deciding we like someone because he reminds us of someone else we like to taking business risks because of over optimism in our abilities. And many times, these are great mechanisms (we sometimes want people to take risks… because this is how progress is created, so it is good to be a little over optimistic, for example). However, as the research of behavioral economics has taught us heuristics are not always a smart way to make decisions.

In his book, Judgment in Managerial Decision Making, Max Bazerman writes about one heuristic that sometimes goes wrong, The Illusion of Control:

People falsely believe that they can control uncontrollable events …, and they overestimate the extent to which their actions can guarantee a certain outcome… Evidence suggest that experienced dice players believe that “soft” throws are more likely to result in lower number being rolled…

Two other researchers, Dan Lovallo and Daniel Kahneman, in an article in Harvard Business review, wrote the following paragraph:

Managers are also prone to the illusion that they are in control. Sometimes, in fact, they will explicitly deny the role of chance in the outcome of their plans. They see risk as a challenge to be met by the exercise of skill, and they believe results are determined purely by their own actions and those of their organizations. In their idealized self-image, these executives are not gamblers but prudent and determined agents, who are in control of both people and events.

Yes, you read it right. Managers have an illusion that they are in control of people. That their actions, more than anything else, will determine the success of the people around them. That if people will only do as they said, everything will be all right. That everybody around them is a cog to be used just in the right way. And why shouldn’t they have this illusion. For so many years, it worked. Bill Drayton and Valeria Budinich reminds us of how it used to work in a post on the Harvard Business review blog:

Fifty years ago, Detroit was the symbol of American ingenuity and prosperity. Henry Ford and his small group of managers did all the thinking and told everyone else what to do. This command-and-control approach works in a relatively static world where most tasks are repetitive — such as building cars on an assembly line. It does not work in today’s fast-paced, change-is-the-name-of-the-game world; and it will not work tomorrow.

Like every heuristic, The Illusion of Control is rooted in truth. But also like every heuristic, there comes a time when it becomes detrimental and instead of helping people make decision, it actually limits them and forces them to make mistakes and err in judgment. As Drayton and Budinich so accurately point out, the historic validity of the illusion led to the creation of mechanisms of control and to the creation of conventional wisdoms about how people should be managed, conventional wisdoms that are built on Tayloristic assumptions that people are just parts in a big machine of productivity.

We are in a time of revolution. The mangers who will be able to overcome their heuristic towards control and understand that today, the power in every aspect of business lies in letting go of control and not in trying to sustain things as they are, will embrace the indirect power that comes with an environment with no rules, no mechanisms of control and that gives employees autonomy and purpose. It is not going to be easy, but this is one heuristic, that I believe managers can overcome.

Elad

Embrace the revolution – overcome the Illusion of control

Photo by Steven Snodgrass

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In the last few days I have been reading a lot about heuristics. For those of you who still haven’t been exposed to this intriguing concept, here is a short definition from Wikipedia:

[A]n adjective for experience-based techniques that help in problem solving, learning and discovery. A heuristic method is particularly used to rapidly come to a solution that is hoped to be close to the best possible answer, or ‘optimal solution’. Heuristics are “rules of thumb“, educated guesses, intuitive judgments or simply common sense. A heuristic is a general way of solving a problem

We all use heuristics every day. We have to. If we had to think about every decision and process every input fully, we would be totally overwhelmed. So we use these intuitive rules to make quick decisions. From estimating distances according to how well we see the object to estimating numbers instead of doing complex calculation. From deciding we like someone because he reminds us of someone else we like to taking business risks because of over optimism in our abilities. And many times, these are great mechanisms (we sometimes want people to take risks… because how progress is made, so it is good to be a little over optimistic, for example). However, as the research of behavioral economics has taught us heuristics are not always a smart way to make decisions.

In his book, Judgment in Managerial Decision Making, Max Bazerman writes about one heuristic that sometimes goes wrong, The Illusion of Control:

People falsely believe that they can control uncontrollable events …, and they overestimate the extent to which their actions can guarantee a certain outcome… Evidence suggest that experienced dice players believe that “soft” throws are more likely to result in lower number being rolled…

Two other researchers, , in an article in Harvard Business review, wrote the following paragraph:

Managers are also prone to the illusion that they are in control. Sometimes, in fact, they will explicitly deny the role of chance in the outcome of their plans. They see risk as a challenge to be met by the exercise of skill, and they believe results are determined purely by their own actions and those of their organizations. In their idealized self-image, these executives are not gamblers but prudent and determined agents, who are in control of both people and events.

Yes, you read it right. Managers have an illusion that they are in control of people. That their actions, more than anything else, will determine the success of the people around them. That if people will only do as they said, everything will be all right. That everybody around them is a cog to be used just in the right way. And why shouldn’t they have this illusion. For so many years, it worked. Bill Drayton and Valeria Budinich reminds us of how it used to work in a post on the Harvard Business review blog:

Fifty years ago, Detroit was the symbol of American ingenuity and prosperity. Henry Ford and his small group of managers did all the thinking and told everyone else what to do. This command-and-control approach works in a relatively static world where most tasks are repetitive — such as building cars on an assembly line. It does not work in today’s fast-paced, change-is-the-name-of-the-game world; and it will not work tomorrow.

Like every heuristic, The Illusion of Control is rooted in truth. But also like every heuristic, there comes a time when it becomes detrimental and instead of helping people make decision, it actually limits them and forces them to make mistakes and err in judgment. As Drayton and Budinich so accurately point out, the historic validity of the illusion led to the creation of mechanisms of control and to the creation of conventional wisdoms about how people should be managed, conventional wisdoms that are built on Tayloristic assumptions that people are just parts in a big machine of productivity.

We are in a time of revolution. The mangers who will be able to overcome their heuristic towards control and understand that today, the power in every aspect of business lies in letting go of control and not in trying to sustain things as they are, will embrace the indirect power that comes with an environment with no rules, no mechanisms of control and that gives employees autonomy and purpose. It is not going to be easy, but this is one heuristic, that I believe managers can overcome.

Elad

Bazerman Judgment in Managerial Decision Making<img src=”http://www.assoc-amazon.com/e/ir?t=thecompaadvan-20&l=as2&o=1&a=0470049456&#8243; width=”1″ height=”1″ border=”0″ alt=”” style=”border:none !important; margin:0px !important;” />

http://www.typepad.com/services/trackback/6a00d83451b31569e20120a73d1f5f970b

http://blogs.hbr.org/cgi-bin/mt/mt-tb.cgi/5531

Are you a happiness machine?

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This is a subject I wrote about before but that I am only starting to realize its true importance. Unpredictability of rewards.

Watch the movie above. How do you feel? Putting all the cynicism aside, just seeing people this happy is contagious. Indeed positivity is contagious. And really, who doesn’t want his workplace, school or even home to be this happy? I know I do. And no, I am not advocating bringing a Coca-Cola vending machine or even giving people around you expensive gifts. I am talking about noticing people around you and doing something about it. One of the side effects of the prevalent system of Carrot and Sticks, is that people almost don’t expect anything surprising anymore. It is so easy to surprise them. And what does that have to do with management? A lot, as Tanveer Naseer writes in the original post where I first saw this ad:

So instead of having another typical team meeting, secretly plan to end it early and surprise everyone by bringing out cocktail platters and giving your employees time to just relax and enjoy their work environment. Or announce an impromptu hockey game in the office parking lot – with a request for spectators needed to cheer the game on. The point is it doesn’t have to be expensive or elaborate to plan – the only objective is to break up the routine and offer something to motivate your employees and raise team spirit.

And I will take it another step further and make it simpler. Notice and make sure the people around you know that they are noticed:

And the same happens to us when we see an employee doing good work. We assume that the fact that we saw him and know what he did means that he knows that we saw him and knows what he did. What is the solution? Taking the opposite assumption. We need to assume that our employees never know that we noticed them. Then make it a priority to let them know that we did. Let’s overcome the curse of knowledge and starting noticing people.

And also see here.

You know the saying – “I feel like you take me for granted”.

It is known because it is true – how many people around you do you take for granted every day? How many employees who are doing exactly what is expected of them are you ignoring? What will happen if you show them, in a simple way, how much you appreciate them? What will happen if you recognize their contribution? What will happen if you give them consistent feedback, all the time?

Tom Peters constantly writes about this and asks all of us: who did you take to lunch today? Every lunch is an opportunity to connect, with a costumer or an employee or in this case – recognize. How many thank-you notes have you written this week? How many people did you send flowers too?

And Dan Pink writes in his new book, Drive: The Surprising Truth About What Motivates Us, about the same thing – “if-then” rewards are bad motivators. We should move to “now that” rewards:

In other words, where “if-then” rewards are a mistake, shift to “now that” rewards – as in “Now that you’ve finished the poster and it turned out so well, I’d like to celebrate by talking you out to lunch”.

As Deci and his colleagues explain, “If tangible rewards are given unexpectedly to people after they have finished the task, the rewards are less likely to be experienced as the reason for doing the task and are thus less likely to be detrimental to intrinsic motivation”

Let’s take this idea one step further – “now that … let me surprise you! Let me make you happy! Let me do something unpredictable and unexpected”.

It is so easy to create the feeling we see above, yet it so hard. As I wrote a few months ago:

We know that predictable rewards are not as effective as unpredictable rewards, but still, most companies and managers stick to a schedule of predictable rewards. Why? Well, my guess is that it is just easier. As a manager, I don’t need to think and worry about my employees all the time. Does it really matter if I do in once every quarter for an hour or if I do it 30 times over the quarter for 2 minutes each time? But, the fact that it is easier does not mean that it is right (like most conventional wisdoms). We know nothing worth gaining is ever gained without effort.

Are you becoming a happiness machine? It is about time you become one…

Elad

I want to have a conversation with all of you

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For a number of days I have been thinking about how to introduce one of my new projects to the readers of this blog.

I think there is no better way to do that than this TED talk by Clay Shirky. The talk deals with issues I write about a lot in this blog, but from a different prescriptive (connectivity, transparency, autonomy, letting go the mechanisms of control and stopping with rules) and more then everything explain the essence of what this blog is about – a conversation with all of you.

Watch it. It will be worth your 16 minutes.

As effective is this blog may be, I found myself yearning to spread my thoughts in other mediums. Changethis is one of these mediums. Thus, I have a Changethis proposal up for a vote on their website. At the end of this post you will find the proposal. If you would like to see it written, please take a minute and cast your vote right here. Thank you.

Breaking time – Going after the Conventional Wisdoms

A few hundred years ago the world was flat. Everybody knew that. Trying to dispute that could result in being hung. It was the Conventional Wisdom. And it didn’t change for hundreds of years.

The field of management is a prominent victim of Conventional Wisdoms. Living in the 21st century, almost a century after Frederick Winslow Taylor wrote The Principles of Scientific Management, our understanding of the subtleties of managing has changed considerably. However, the average manager still conducts herself according to Taylor’s principles. It is our modern day Conventional Wisdom.

Isn’t it time we stop believing the world of management is flat? There is so much evidence out there to teach us that some Conventional Wisdoms are just wrong, but we continue to embrace rigid and unyielding ideologies. Isn’t it time we start breaking some of these Conventional Wisdoms? It’s breaking time!

Elad