Do we really need flamboyant visionaries to run our companies?

Photo by Hamed Saber

The Economist decided to wage an all front attack against humility in leadership and management. One of Its recent columns discusses what kinds of leaders make the best CEOs. The argument?

In general, the corporate world needs its flamboyant visionaries and raging egomaniacs rather more than its humble leaders and corporate civil servants. Think of the people who have shaped the modern business landscape, and “faceless” and “humble” are not the first words that come to mind.

It looks like this claim comes just out of the best management books of the beginning of the last century. As Bill Taylor from Harvard Business Review Blog points out, most of the claims in the column are not only wrong, but plainly misleading:

The crux of The Economist’s argument relies on what’s known as the Great Man Theory of History. After trumpeting the virtues of business geniuses such as Bill Gates, Steve Jobs, Lou Gerstner, and Jack Welch, it then generalizes from this handful of larger-than-life moguls: “The best ambassadors for business are the outsize figures who have changed the world and who feel no need to apologise for themselves or their calling.” It’s an intriguing essay and a good read. It’s also a false choice — and a bad reading of history. For one thing, when it comes to larger-than-life CEOs, I can name as many scoundrels and failures as I can geniuses and world-changers.

My view? Three things are wrong with The Economist’s view.

First, the assumption that there is only one way. Maybe, for some companies and in certain situations, the flamboyant visionaries are the best fit as CEO’s. But not in every situation. Some companies need the quiet leadership behind the scene, the steady hand that improves and creates processes that lead to growth and innovation. Taylor’s choice of the historic Great Man Theory seems appropriate. It too claimed that only certain people are fit for leadership roles. We know today that this attitude was plain wrong.

Second, the assumption that the flamboyant visionaries must be in the top of the pyramid. You can be in a leadership role and create change in your company, without being the CEO, especially if the CEO in that company needs to deal more with management issues, where the “raging egomaniacs” are just not cut out to do the job. Management and leadership are different things that require different talents. The column refers to Bill Gates. We need to remember what Bill Gates is doing today: As Marcus Buckingham and Donald O. Clifton: write in their book Now, Discover Your Strength:

“…[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…

Third, when you read the column you feel almost like there have never been hugely successful leaders that changed the world while acting humbly. Has humble leaders never brought change and created value to society? Michael Dell comes to mind as someone who succeeded doing both. The research and consulting advice that The Economist is complaining about did not come out of thin air and it is based both on empirical evidence and experience. But what does that have to do with anything. The Economist wants a good story. A flamboyant leader, even if he will be less effective.

I am amazed how even a respected journal like The Economist falls prey to the conventional wisdoms and continues to harbor management principles that are almost a hundred years old, although we have so much research and experience suggesting otherwise.

Elad

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The gift that keeps on giving

3008436618_c76e56593bPhoto by Saquan Stimpson/monstersh aq2000’s

A few weeks ago I realized that a very good friend of mine’s birthday is coming up. I am really bad at buying presents, especially for women. So, I decided to enlist two other friends to help me with buying the gift. After I approached them, without me doing anything else, one came up with the idea, the other implemented it. Before I knew it, without really needing to do anything else, a great present was bought and given (including a card, which I signed a minute before we gave the present). My friend was really excited with the present and it was a big success.

Now, this sounds a little like laziness on my side. I had to do some work that I was not good at (buying a present) and instead of doing it, I just made other people do it. But, when you think about it, what I did was actually to put into practice two very important concepts for managers:

The first one, is Use your strengths and manage around your weakness. In my e-book I quoted a paragraph from, Marcus Buckingham and Donald O. Clifton book: “Now, Discover Your Strength“.

“…[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…”.

I had a weakness in buying presents. I do not know how to do it and it is highly unlikely that I will ever learn. I do know how to manage, find the right people and bring them together. Sometimes, doing the work is not actually about doing the work.

The second one is “Get the right people on the bus” – this is a term I borrowed from Jon Gordon. Check out this quote:

“This principle of identifying the right people was echoed by the Director of Learning at the Ritz-Carlton Hotel Company. He told me how the Ritz has saved millions of dollars by identifying the key characteristics, strengths and traits of each job/position at the hotel and then creating a benchmark that every potential employee is measured against. Utilizing a company called Talent Plus they interview each potential employee and then identify how they measure up to the benchmark of the position they are applying for. As a result they are better able to identify who the right people are for each job at the hotel”.

Sometimes, doing the work is not about doing the work, but about choosing the right people. Check out this inspiring example for how to implement this idea.

So, as a manger, how do you choose the people you work with? How does their strengths compare to yours?

Elad

The Continuum

I was watching Nancy Etcoff talk on TED about happiness. The subject is, for obvious reasons, of interest to me, and I found it quite entreating. But one part of the talk really spiked my interest.

During the 7th minute of the talk, Etcoff talks about the fact that contrary to common belief, happiness and unhappiness are not on the endpoints of a single continuum. They are not on the same scale. Happiness is not simply absence of misery. There are actually two different continuums for each of these categories. Or as Etcoff says it, as you get less miserable you don’t become happy, you become less miserable.

This is a simple yet very powerful idea. But then I said to myself, haven’t I heard this idea before? Off course I have.

According to the Two-factor theory (also known as Herzberg’s motivation-hygiene theory) job satisfaction and job dissatisfaction act independently of each other. Two Factor Theory states that there are certain factors in the workplace that cause job satisfaction (Motivators, e.g. challenging work, recognition, responsibility which give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth), while a separate set of factors cause dissatisfaction (Hygiene factors,e.g. status, job security, salary and fringe benefits, which do not give positive satisfaction, although dissatisfaction results from their absence. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary).

In the book “First, Break all the rules“, Marcus Buckingham and Curt Coffman explain what Gallup found about costumer’s satisfaction and dissatisfaction. You guessed it. They are different. Granted, here they are not on a different continuum, but according to the book, costumers have two expectations that determine their level of dissatisfaction: accuracy and availability, and two different expectations that determine their satisfaction: partnership and advice.

The implications of each if these separately are profound in each field by itself. But put together, they produce something even bigger. Our tendency to think about phenomena as a continuum. This tendency might actually be wrong. And I ask you – what other tendencies do we have that our wrong? How many mistakes we do every day, because of our underlining assumptions? When is the last time that you conducted an exercise with the sole purpose of challenging your assumptions?  It is a difficult exercise, but it is worth it.

Elad

The new challenges of measuring and evaluating people performance – a few non-personal lessons from prison

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 Photo by aussiegal

A short story about prison

I don’t remember where exactly I read it. I think it was in one of Marcus Buckingham’s books. Anyway, the writer described an interview with a manager of the prison authority in England. That manager told the interviewer about the ways in which that organization became much more effective. Now, when you think of a prison, you would probably think about things in the lines of tightening security. But the most important activity that was described had to do with the way the prison authority measured its effectiveness. Instead of measuring how many people got out or escaped, which was the traditional way to measure the effectiveness of prisons, the manager changed the way that organization measured it success. They started measuring how many people who got out of prison legitimately, returned to prison. The manager said that he realized that the objective of a prison is to make sure prisoners who return to society don’t go back to the life of crime. In how many other places in life do we still measure the wrong thing because of habit or because of the available data?

From prison – to the basketball court

I was reminded of that story this week when I read this amazing article by Michael Lewis from the New York Times called: “The non-stat All-star”. In a nut shell, Lewis describes the story of Shane Battier, the NBA basketball player of the Huston Rockets. Battier, is the kind of player that his contribution to team does not show on the “regular” statistics usually measured during a basketball game. But if you look closely, you see that the effect he has on his team is amazing.

Now, I know what you are thinking. Because my E-book tries to draw conclusions about life from the basketball court to real life, and Lewis writes in the article that: “In its spirit of inquiry, this subculture inside professional basketball is no different from the subculture inside baseball or football or darts. The difference in basketball is that it happens to be the sport that is most like life”, I am discussing this article in this blog. But that is not the case. I bam discussing this article because of these quote:

There is a tension, peculiar to basketball, between the interests of the team and the interests of the individual. The game continually tempts the people who play it to do things that are not in the interest of the group… When I ask Morey if he can think of any basketball statistic that can’t benefit a player at the expense of his team, he has to think hard. “Offensive rebounding,” he says, then reverses himself. “But even that can be counterproductive to the team if your job is to get back on defense.” It turns out there is no statistic that a basketball player accumulates that cannot be amassed selfishly. “We think about this deeply whenever we’re talking about contractual incentives,” he says.

Isn’t this just like life in organizations?

Sounds familiar? Similar to basketball, where the interest of the individual player is to do things that benefit him, but hurt the team, the business world is a world where the individual has all the incentives to act for his own benefits even if it is not beneficial for the organization. In other words, the interest of the individual and organization are not in alignment. This is what is usually called, the agency problem or the principal-agent problem.   

After reading Lewis’s article Tom Davenport wrote in the Harvard Business blog that:

In business, we’ve all known managers whose units or companies perform better when they’re in charge. Unlike professional basketball, however, most companies haven’t yet begun to evaluate managers or employees systematically based on their individual and team contributions. No plus/minus statistics have been developed for a business context. The emerging field of human resource analytics has a lot to learn from the Houston Rockets

It is the measurement, stupid!

I think the story Lewis describes, although about basketball, actually represents some of the most urgent problems the world is facing today:

  • 1. In order to create comparative advantage, new ways to make people more effective are in high demand. If we create a way to the get people to do the right thing for the organization where other employees of other organizations don’t, we create a comparative advantage.
  • 2. Many of the incentives we have in the world today, measure the wrong things. Just read some of the explanations for the Global Financial Crisis.
  • 3. Today it is much easier than it used to be to measure things. Basketball, off course is just an example. Think about companies which accumulate enormous amounts of data in ERP systems. The data is immense, and it is almost free to collect it. but still, although we have more data and statistics than we ever had, we still succussed at measuring the wrong thing. It is more than that. The more data we have, the tendency to measure the wrong thing only increases.  

What can we do? – let’s return to prison

Two things you can ask yourself:

  1. Am I measuring the right thing? Think about the prison example and about the way they used to measure basketball players. The fact that we can measure or that we have a certain stat does not mean it is the right one to use.
  2. What can that data I have tell me about the non obvious things. In Rudy Giuliani book “Leadership” he describes some of the process he implemented in order to improve New-York city. Most of them revolve around using statistics they had to measure different things. One story I remember vividly is again, about prison. They found out, that when sales in the prison cantina went up, it meant there are going to be prisoner riots. The prisoners were gathering food for the hard time after the riots. 

Vital signs

A few months ago, after reading a manifesto tilted: “Redeeming Sisyphus – Get Out of Control! Get More Done!” by I. Barry Goldberg of Entelechy Partners I wrote:  

Everybody knows saying by Peter Drucker that what isn’t measured does not get managed. But modern economics and behavioral economics, also shows us that if you decide on the wrong measures (or in Goldberg name: “vital signs”) you can create negative incentives. Books like “The Goal” by Eli Goldratt have been saying this for years. So, I believe the challenge of managers in the next few years, especially in the more subtle fields that are hard to measure will be to create the right vital signs

After reading Lewis’s article about Battier I think this is an understatement of the challenge. The challenge of managers today is to find the needle of right measures in the haystack of statistical data. The challenge is to re-think the way we measure our success. The challenge is to re-invent the way we interpret the actions of people.

Elad

The leader-manager dilemma

Today we had a very interesting session in class dealing with leadership. Every person of our 60 people class had to walk up and talk for about a minute about one important characteristic of a good leader that they think they embody. Now, I know this sounds a bit corny, but the main issue was getting people to speak about themselves and see their presentation skills as well as getting the know everybody.

There were some very interesting presentations and many people talked about important characteristics: Well organized, a good listener, Able to take harsh decision under pressure, passionate, determination, confidence, delegating of authority and more.

But the process and the above mentioned list did get me thinking about the difference between leadership and management. A lot of people mix them. Do leaders really need to be well organized? Or have confidence? I can think of a few leaders who aren’t. I do think it is more important for a manger to have these characteristics.

 I was wandering why people mix the two definitions (actually the words are sometimes used as synonyms). I think it is because in too many roles, people are expected to be both. The problem is it is hard to be both.

I think leadership and management are different. I really like Marcus Buckingham‘s theory in the book “The one thing you need to know“, claiming that managers’ role is to find the strength of every employee and do what they can to allow him exploit it to excellence while leaders are agent of change, their role is to paint a vivid picture of the future in order to dissipate the our natural fear of the unknown and the uncertain.

Recently, I read Seth Godin‘s book “Tribes“, where he writes:

Management is about manipulating resources to get a known job done… Managers manage a process they’ve seen before, and they react to the outside world, striving to make that process as fast and as cheap as possible. Leadership, on the other hand, is about creating change that you believe in… Leaders have followers. Mangers have employees. Managers make widgets. Leaders make change…

So why is the difference important?  If you accept that there is a difference then you accept that there are different talents, skills and knowledge for each group. That means that usually, we cannot expect the same people to do both. But so many roles do. Instead of finding out what is more important to the success of the role, there is an attempt to achieve both, which ends up in an average result. And average, in our society, is just not good enough. So I think this is another conventional wisdom that needs to be broken.

Elad

can you learn how to presude?

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Photo by Neuibe

A few days ago I finished reading “The 7 triggers to yes – the new science behind influencing people’s decisions” by Russell H. Granger  (you can check out the book’s site here). In the last few weeks, I hit the jackpot with all the books I read and recommended them here on this blog. Unfortunately, with this book, I can’t do that. Well, it is not that it is a bad book. I just think it will be helpful to specific people.  I guess this needs a little pit of explaining…

I bought this book because its title and description led me to believe that I will learn a lot about the science behind people’s decisions. Lately, I have been reading some fascinating books about this subject (like the amazing “YES!” and Nobel Prize winner Daniel Kahneman‘s book (with co-authors) “Rationality, Fairness, Happiness”) and I wanted to know more about it. What I discovered, is that the book doesn’t actually describe the science behind people’s decisions. It only explains that there is science. If you compare this book to “YES!” which actually describes many of the experiments behind the rules for persuasion, than you discover that this book only promises explanations, but does not supply them.

Like previous books I wrote about here, this book tries to break the conventional wisdom that great arguments persuade.  To put it in general terms the book main thesis is that most of time, most of the people, don’t make decisions which are based on their intellect but make decisions based on their emotions, and then, justify them with their intellect. So, if you want to persuade, you need to use people’s emotions and not apply to their logic. The main idea in the books id derived from a statement by Dr. Richard Restak, Neuropsychologist and author of “The Secret Life of the Brain“, saying: “We are not thinking machines – we are feeling machines that think“.  The book claims, that by understanding this concept (which is based on brain research which is described shortly) and by using 7 triggers (Friendship, Authority, Consistency, Reciprocity, Contrast, Reason Why and Hope), you can become a master persuader.

The reason I cannot recommended this book to everybody is that it tries to convince the reader that anybody can be a master persuader by following the process described in the book using the 7 triggers. I was not persuaded. I just don’t believe that everybody can learn to excel at anything. I believe, like Marcus Buckingham claims in his book, “First, breaking all the rules” that people are different and there is a limit to what they can learn. I expected that a book based on brain research will take into account the fact that each of us develop mental pathways (that can actually be seen of on our brains) that create recurring behaviours. These behaviours are our talents or our strengths.  This means, that even if I used all the process described in the book, I will never be a master persuader.  This is due to the fact that I just don’t have the inherent ability to use these processes, because this ability requires a talent to communicate with people, to learn about them and then use this knowledge a talent I don’t have and that no matter how hard I try, I will never excel at.

The books tries to tell us that persuasion is a key component of many leaders describing people like Donald Trump, Bill Gates and Lee Iacocca who used their persuasion skills to accomplish great things. I think this just proves the opposite. These people had the basic talent to do it naturally without learning about the 7 triggers. If they had learned the the 7 triggers, they would have been able to enhance their abilities. People like me, who are not conversationalist, who find it hard to chit-chat with other people, who don’t naturally learn about other people, will never be able to use the concepts of the book.

So, it is not that you can’t learn anything from this book or that you can’t improve some of your persuasions skills and techniques after reading it. But, if you (or somebody you know) have great communication skills, which enable you to learn a lot of information about other people in short periods and are able to use it, this book can really make the difference. It will give you (or whoever you buy it for) the ideas, skills and triggers to transform from a natural good persuader, to a master persuader.

Elad

Conventional Wisdom

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Photo by Kevin Hutchinson

Today I finished something that was well overdue for me. I read “First, break all the rules” by Marcus Buckingham and Curt Coffman. As I already mentioned in this blog a few times, I am a keen reader of Buckingham‘s books and I talk a lot about the strengths thinking in my e-book. So, I can’t say that I really discovered new things when I read the book. But as always, many ideas wear fine-tuned. Off course this is a book that any person that is a manager of people must read.

I think the interesting thing for me in this book was the systematic way that the book attacks the conventional wisdom. This is something that most of the books I read in the last few weeks did. “Outliers” and “Billion Dollar Lessons” are just two names that pop to my mind. All of these books show us how the commonplace thinking regarding success, excellence and human behaviour is fundamentally wrong.

“First, break all the rules” was written I 1999. Almost ten years ago. It is an international best seller. And still, the misplaced conventional wisdoms that are described in the book are commonplace. I am sure that all of you felt them at some point.

And the question that comes to my mind is: “how can that be changed?”. How can me make these conventional wisdoms become obsolete. How can we make the idea that everybody can excel in any job if they only get the right opportunity and training disappear? or the idea that if you work hard enough you can success no matter what disappear? These two ideas represent a romantic but false stories should be changed. But they don’t.  Because these stories are so fundamental and are so intertwined into our thinking they affect decisions and polices. And when your basic assumptions are wrong, the chances that you will make the right decisions seriously drop. And we still can’t change them.

There is a dire need to create education systems which will eradicate all these wrong notions and that will create, over time, new conventional wisdoms, ones that work. I am not sure our current education systems are up to the challenge. In three weeks I will be starting an MBA course at AGSM. I am quite sure that these conventional wisdoms will be the curriculum. But I am more afraid there will be more misplaced conventional wisdoms that I will be taught and I will never know they are wrong.

Elad