Four Groups

Archive for the ‘Strategy’ Category

HRVendornews (here), highlights a new survey from Right Management and Chally Group that reports some interesting findings about the causes of corporate leadership failure. Among the more eye-catching figures are:

“Failure to build a team or relationships was singled out by the most (40%) survey respondents,” said Bram Lowsky, Executive Vice President of Right Management. “Second was mismatch for the corporate culture cited by 26%. Remarkably, not delivering acceptable results was named by just 11% of respondents as among the main three causes for failure”

This is all very interesting, not least because key drivers of leadership performance seem to be intangible factors rather than more quantifiable indicators of performance such as prior experience, education or aptitude and ability. Unfortunately for the majority of organisations, these seeming less valuable metrics are the ones that are most obvious or easiest to gather and have historically been given undue weight when making leadership decisions.

Maybe organisations could avoid the most damaging leadership mistakes by adopting a different approach? Moreover, perhaps the key to successful leadership development is not the identification of aptitude for certain tasks or responsibilities but a more open-ended and abstract idea about the role of “fit”? This would help explain one of the most perplexing problems of leadership, namely why some people are naturally able to achieve great things in one situation, whereas they cannot replicate that success in a different role or organisation. This brings to mind the fierce debate started by Bill Taylor over at HBR (here) about the value of corporate superstars. Maybe what these numbers are telling us is that it is better to have a leader that fits the organisation than it is to go out and hire an industry superstar?

Effective leadership, invariably involves situations where the leader is a good if not great fit with the underlying organisational culture. It is hard to argue that someone like Richard Branson would be as effective a corporate leader in an organisation that was inherently bureaucratic or risk averse. In other words great leadership is about the serendipitous confluence of personal characteristics and organisational context. In other words, the right person in the right place at the right time.

However, the report indicates that organisations still place significant emphasis on industry experience and track record.  This is borne out by the  numbers, with 73% of HR respondents citing track record as an indicator of leadership ability. However, I’d question this assumption. Is industry experience or track record a reliable indicator of performance in an unrelated or different role? Personally, I am sceptical. Of course leaders need to have credibility and ability, however beyond that I would argue that being able to develop strong and robust relationships with immediate colleagues and understand the culture that enables strategy to work with the culture is more important than in-depth industry knowledge or success in previous roles.

The fact that culture and relationships are intangible and highly complex inevitably leads to organisations focusing on more concrete or tangible. Why try to get to grips with the complex when there are easily available figures in black and white that everyone can understand? The good news for organisations is that with new tools and greater understanding of the intricacies of culture and relationships, it is now possible to place these key intangibles in a more systematic framework. Culture and relationships do not need to be implied but instead can be openly discussed and compared. There are now methods that can be used to take some of the guesswork or gut feel out of these big decisions. In fact organisations that want to get ahead should be looking at this issue in far greater breadth, the question of fit should not be confined to the upper echelons or the C-Suite, instead it should cascade down to all levels and inform the identification and selection of talent throughout. When making any decision about recruitment, promotion or team composition the question of “fit” should be uppermost in everyone’s mind.

Booz & Company’s Annual Innovation Survey (here) dropped into my inbox this morning and the conclusions are challenging and in many ways bad news for organisations striving to catch the elusive innovation wave.

The results suggest that it is not the amount of money spent on R+D that governs a company’s ability to innovate but something much more intangible and tricky to manipulate, organisational culture.

This is tough for business leaders as corporate culture is something that they as individuals have very little short-term influence over. Unfortunately a culture that encourages sustained meaningful innovation can’t be conjured out of thin air. Clearly, many executives are struggling to fully comprehend this and one of the biggest mistakes is the ongoing belief that strategic initiatives can kick-start innovation:

“Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture — it trumps strategy and leadership. That isn’t to say that strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.”

The first mistake that many executives make is not having a firm grasp or understanding of the current organisational culture, without this knowledge, it is impossible to know what is and what is not possible in terms of short-term cultural change:

“The larger lesson for companies that struggle to convert their R&D expenditures into successful products, solid financial returns, and unassailable market positions is that it may not just be traditional factors like the innovation pipeline that need rethinking. Instead, companies should follow the lead of the most successful innovators in ensuring that the company’s culture not only supports innovation, but actually accelerates its execution.”

Clearly, achieving this is much easier said than done, and for many organisations the existing corporate culture may be so far away from one that actively promotes and encourages innovation that a truly innovative culture is impossible to achieve in the medium term. All is not lost however, as inevitably within the organisation there will be sub-cultures within certain department or groups that are more amenable or open to fostering innovation. Again, understanding the existing culture and where these groups exist is key to long-term change.

Once the existing culture and its constraints are understood, executives need to ask themselves whether they really want innovation? This may seem like a no-brainer but a culture of innovation is unlikely to be plain sailing. Many pay lip service to this but for most executives it means facing up to uncomfortable truths. This entails not just an evolution of organisational culture, itself something difficult to achieve but also on a personal level and the behaviours that has made them successful in the first place.

This argument was echoed in a blog posting by Saul Kaplan over at HBR in this piece (here) where he highlights the reluctant executive as a key impediment to innovation:

“The most obvious reason companies fail at business model innovation is because CEOs and their senior leadership teams don’t want to explore new business models. They are content with the current one and want everyone in the organization focused on how to improve its performance.”

This inertia also extends to an unwillingness to embrace new business lines or ideas that may cannibalise existing product lines:

“When executives look at new opportunities they see them through the lens of the current business model and view them as competing with the current way the organization creates, delivers, and captures value. Organizations fail at business model innovation because they blindly take cannibalization off the table even if a new business model may have significant upside potential.”

This gets to the heart of the problem, culture within organisations is myriad and many have a hard time understanding this.

A pre-requisite for moving up the corporate ladder should be a willingness to challenge and question what makes you successful. In reality exactly the opposite is in action in most organisations as norms that focus on preserving the status quo are perpetuated. This is touched on in Saul Kaplan’s final obstacle to innovation.

“Business model innovators go against the corporate grain. They see entirely new ways to create, deliver, and capture value. If those that are tasked with sustaining and growing today’s business models are allowed to reject those with the perspective and insight to help design the next one, business model innovation efforts will fail.”

The importance of aligning strategy and culture has never been more apparent. However, organisations must learn that before they run they must learn to walk, this means making the effort to understand the underlying cultures within the organisation and the constraints that these place on the ability to innovate and change. Only then can decisions be taken as to how best achieve this.

Over at MiX, (here), Luc Galoppin posted an excellent blog that succinctly summarises some of the inherent problems and contradictions present in most HR departments. These can be summarised by HR’s ongoing desire for a seat at the top table and to be seen as a key driver of organisational strategy and change that have been top of the HR agenda since the publication of Dave Ulrich’s 1997 book Human Resource Champions (here).

One of Galoppin’s key assertions is that rather than an agent for change, which many HRD’s like to see themselves as (being able to design, implement and promote organisational change programs). HR is in fact naturally much better placed to act as a stabilising force within the business, as he states an agent of continuity during periods of change. Galoppin states:

“In short, HR does not posses the skills that are required to manage change initiatives. Instead, HR’s strength is that of a ‘Continuity Agent’, a stabilizer if you will.”

This makes sense when one considers HR’s traditional strengths such as developing systems and outlining processes and best practice. On the other hand, to be an active proponent and driver of change requires a much more disruptive and experimental approach, not natural attributes one would think of when describing most HR professionals.

The Ulrichian logic that the best way for HR to increase its influence is by being at the heart of decision-making and having greater influence over strategy and decision-making is according to Galoppin the wrong way for HR to think about its position within the business.

All is not lost however and Galoppin charts a three-step process that could help improve matters. By focusing on developing credibility and embedding HR within the business rather than an independent support function, things can change:

“The third step for HR is empowering the business by outsourcing the core part of their activities … to the business. Whereas step 1 may include the outsourcing of administrative tasks to a shared service center, this step will require a handover of activities to the business. That way, HR processes get managed where they live and exist: on the shop floor among the people.

Only by abdicating power and embedding HR practice directly within the business can HR prove its value. For many HR professionals still committed to the idea of a seat at the top table, this is unlikely to go down well. Many HRDs argue that to be influential they need to have control over all these people issues, when in actual fact the opposite is true. For HR to be seen to add real value to the organisation, the HR department needs to devolve as much control as possible.

It is however important to emphasise that the current predicament is not solely down to the inability of HR departments to demonstrate value. In many cases senior executives are guilty of failing to appreciate the complexity and importance of human behaviour, relationships and collaboration when it comes to organisational performance. As Galoppin puts it:

“The attitude in most projects is exemplified by this statement: “We’ll take care of the process re-engineering and the technical stuff; HR will do the soft stuff.””

The compartmentalising of the “soft stuff” is a very damaging attitude to have and highlights why many change projects are doomed to failure from the start. What many senior executives fail to appreciate is that it is actually the intangible people-side of things that is the hardest and most complex element of any change program that cannot be effectively sub-contracted to HR. In fact it can be argued that people-based issues represent the greatest risk to the success of any project. For this mindset to change, arguably it is going to require more than HR to prove its value, instead it will require senior executives to prioritise the naturally intangible, woolly and complex issues that surround the behavioural aspects of change.

Welcome to the first update of 2011, we have lots to get through so let’s get started.

Featured in this issue:

• The organisation as an ecosystem
• The neuroscience of change and innovation
• Rethinking promotion and recruitment
• The problem with creative types!

Articles are included from Clayton Christensen, Gary Hamel, Oracle, Strategy and Business, Wharton and Prof. Vlatka Hlupic.

Tag Cloud

Read the rest of this entry »

Welcome to the final round-up of 2010. In this issue we have brought together an assortment of provocative articles focusing on;

• Complexity
• Training
• Systems Thinking
• Being Counter-Intuitive
• Innovation
• Conclusion

Featured in this issue are articles from: Steven Johnson, John Hagel, Peter Senge, Richard Donkin and examples include HCL, the NHS, Minnesota public schools and the Roman Empire!

Tag Cloud

Read the rest of this entry »

Stowe Boyd is starting a long-range research initiative into Social Cognition. The main thrust seems to be around;

• Clarifying the elements of social cognition like learning, performance, decision making, affiliation, sense making, and others.
• Assimilating research from anthropology, sociology, cognitive science, linguistics, behavioral economics, media studies, education, and basically anywhere else that sheds light on social cognition, and interviewing the researchers to get them to extrapolate on their results, especially in the context of the social business.

It will be interesting to keep an eye on it. Good luck Stowe!

Being able to predict things, in business and elsewhere is critical. We don’t always get it right, but understanding the variables and relationships between ‘inputs’ and ‘outputs’ goes a long way to creating a positive outcome.

In terms of Enterprise 2 and related Social Business software, this point is key and is the subject of a post (and a good few comments) by Keith Swenson, entitled Social Has No Future (Yet). Here’s the opening paragraph.

This provocative title simply means: In general, social software systems record what is happening now and in the past, but for the most part completely lack any representation of the future. Enterprise Social Software, or Social Business Software, will succeed only if it has some representation of goals or other future activities.

While Keith goes on to talk about other aspects of social software, this initial point is the critical one in my mind. Without the ability to make predictions, the range of problems that can be solved is dramatically reduced.

John Hagel III and John Seely Brown have an excellent post which as usual covers a wide range of perspectives and insights. While some of the points are more strategically orientated, operationally, there is some really useful stuff too.

The part that is most relevant in terms of relationships covers the balance between the formal and informal. Put another way, this is the usually large discrepancy between a formal and ‘controlled’ way of doing things and the more free flowing networks which actually get the job done.

From the post;

Compare a standard company org chart with a network analysis of the day-to-day relationships and interactions in the same company. The contrast is striking. On the one hand, clearly delineated boxes with a few set relationships driven by formal authority; on the other, a bewildering array of rapidly evolving connections. The two representations are so different that one might question whether they in fact are focused on the same organization. Such is the chasm separating two mindsets.

There are a couple of interesting things here. Firstly, the apparent trade-off between the illusion of control and the reality of emergence. Secondly, John and John then go on to talk about control itself and how it differs from a ‘propensity’ mindset.

• In a control mindset, the assumption is that we need to own resources and tightly direct them in order to achieve objectives with the minimum amount of risk.
• A propensity mindset focuses on the intrinsic development paths that characterize all resources and the dynamic relationships across resources that are continually shaping those paths. From this perspective, the best way to reduce risk is to understand these paths and find ways to leverage them.

Jon Ingham posted a review of his predictions for 2010. You have to applaud the bravey and transparency, especially when Jon writes;

These [predictions] included this video blog suggesting that HR needs more ambition (a point that I still strongly support) and a podcast suggesting that this would be the year that things would start to change (towards a more people centred approach). Note that I did only suggest ‘start to’ – I didn’t expect to see much progress, but I don’t think I’ve even seen a start, to be frank. In general, I’d give my predictions about a 3 out of 10.

Like Jon, I’d love to see a change towards a more networked and people centred approach. My sense though is that this shift isn’t happening as fast as some might wish for for several reasons.

1. Is it easier to measure and manage tasks and things rather than people. As its easier to manage these things, they combine to create a culture of managing the tangible over the intangible. Today, this is the dominant ‘management paradigm’ and my sense is that to really succeed, anything needs to either build on this, or distrupt it and building is easier than disrupting.
2. Looking at business historically, nothing in the history of HR has hit the 5 criteria for transformation. Talent Management might feature, but I’m not convinced. Equally, Social Media may well enable more people-centric organisations, but if it does, HR is highly unlikely to get the credit, or that Social Media will be seen as a HR led initiative in any case.
3. Don’t forget, some people even take the view that training doesn’t work and we’ve had two government sponsored initiatives in recent years, Accounting for People and the MacLeod Review on Engagement.

As above, until there is a scalable HR driven activity that solves (currently unsolved) problems, adds economic value and demonstrates a unique contribution, not much is going to change.

Another way for HR to make itself indispensable is through a more sophisticated and considered approach to talent management. Again, we are not talking about talent management in the traditional sense. Instead by focusing on social networks and connectivity, HR can play a key role at the very heart of the business.

The problem with the current approach is discussed in this Zielinski piece and features comments from Laszlo Bock, vice president of global people operations at Google:

“HR is still essentially doing talent reviews the same way they were done 40 years ago, and doing compensation the way it was done 20 years ago.”

A further critique of “we focus on getting the smartest people” approach is featured in a Wired article which discusses the role of individual intelligence on group performance:

“Their analysis, published Sept. 30 in Science, found several characteristics linked to group performance — and none involved individual intelligence. What mattered instead was the social sensitivity of individual members, the proportion of women (who tend to be more sensitive) in each group, and a balanced participation of conversation.”

On a similar theme, another piece of research appearing in Strategy + Business suggested that:

“hiring too many high-status employees dampened effectiveness, the authors found. Moreover, companies with high-level expertise tended to fare worse with superstars in tow than did more run-of-the-mill outfits.”

The alternative is that HR can play a key role in fostering experimentation, creating networks, identifying the key influencers, mapping change etc.

This means adopting a new and in many ways experimental approach to talent. A couple of interesting articles have tapped into this idea and present some new ideas that may hold the key to improved performance. By moving the focus away from identifying and developing talented individuals, the focal point should be on groups and networks.

For example, there is an interesting blog post from Stowe Boyd, where he discusses some recent research from Maksim Kitsak at Boston University:

“The importance of hubs may have been overstated” say Kitsak and pals.

In contrast to common belief, the most influential spreaders in a social network do not correspond to the best connected people or to the most central people”

At first glance this seems somewhat counter-intuitive but on reflection it makes perfect sense. Kitsak and co point out that there are various scenarios in which well connected hubs have little influence over the spread of information. “For example, if a hub exists at the end of a branch at the periphery of a network, it will have a minimal impact in the spreading process through the core of the network.”

“By contrast, ‘a less connected person who is strategically placed in the core of the network will have a significant effect that leads to dissemination through a large fraction of the population.’”

This is an interesting idea and has clear implications for change management, communication and collaboration. At the same time, the identification of such people who are strategically best placed in the network is not always the most straightforward challenge.

“The subtle, dark-matter mystery of social networks is that influence is oblique and not easily determined by the sorts of tools we have today.”

This entry is an extract from Four Groups’ Quarterly Update, originally posted here.