Ron Ashkenas2013-05-18T15:03:42-04:00Ron Ashkenashttp://www.huffingtonpost.com/author/index.php?author=ron-ashkenasCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Ron AshkenasGood old fashioned elbow grease.When Failure Is a Good Optiontag:www.huffingtonpost.com,2012:/theblog//3.18106342012-08-22T10:54:21-04:002012-10-22T05:12:07-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/uttered by Ed Harris in the movie Apollo 13: "We've never lost an American in space and we're sure as hell not gonna lose one on my watch! Failure is not an option."
Many managers use this same expression with their teams, and in most cases it's appropriate. Organizations are in business to win -- to serve customers better than the competition. And, of course, none of us wants to fail.
However, there are some occasions where failure is not only appropriate but absolutely necessary, most times to generate learning and improvement. It's important to recognize those situations and manage them intentionally and explicitly, rather than avoiding them. In fact, the most effective managers are those who not only welcome failure at the right times, but seek it out and leverage it.
For example, true organizational innovation is impossible without failure. At its heart, innovation is based on the scientific method: Develop a hypothesis, test it, and find out if it's valid. Doing this well requires repeated failures. But each one helps you cross out one more invalid hypothesis and gets you closer to figuring out what will really work, whether you are at an early stage of development or trying to determine the best way to commercialize and scale.
Therefore, the key to leveraging failure with innovation is to fail fast (and frugally), conducting rapid tests with low risk. For example, if you've ever tried to order a new product online and found that it was unavailable, it may have been a test to find out whether customers would actually buy the product, even before the product was produced. If no one expresses interest, then the company doesn't invest further, which saves time and money -- and frees up space for testing the next hypothesis.
Failure is also an essential player in performance improvement. One of the best ways to develop people is to push them beyond their comfort zones, to learn new content areas and practice new skills. With few exceptions, this type of learning inevitably comes with some amount of failure because it takes practice to learn -- whether it's music or management.
However, leveraging this type of failure requires managers to provide a safety net so that doing something wrong doesn't turn into a disaster for the company. For example, a CEO wanted some of his direct reports to learn how to work more effectively at the board level. To do so he began to give them the responsibility for crafting board presentations and facilitating board discussions -- but also gave them personal support and access to a consultant. Having this safety net allowed them to build competency without undue risk that their inexperience, and initially flawed attempts, would cause problems.
While it's easy to say that failure is not an option, the reality is that sometimes failure is not just an option but the preferred one. Effective managers leverage both innovation and performance failure to accelerate learning and create a stronger organization in the long term.
Cross-posted from Harvard Business Online.]]>Thinking Long-Term in a Short-Term Economytag:www.huffingtonpost.com,2012:/theblog//3.17558932012-08-09T15:51:57-04:002012-10-09T05:12:04-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/second quarter earnings release.
Almost all publicly traded firms are given "qualitative assessments" by analysts during earning announcement season, which influence investors. But too often the weight of Wall Street opinion causes executives to focus on hitting short-term earnings targets rather than creating long-term value. And even if executives' strategies are not playing to short-term expectations, they still have to spend a lot of time explaining why this quarter's earnings are not up to snuff.
So despite their robust, multi-billion dollar profits, analysts deemed Exxon Mobil and Shell's results "disappointing" and "dreadful" compared to previous quarters. And they use these terms even while acknowledging that the industry is facing lower oil prices, increased availability of natural gas, decreasing economic activity, and rising costs -- all factors largely outside of the companies' immediate control. The analysts also say that in the face of all this, both companies continued to make long-term investments and still delivered billions of dollars in profit. How is that "disappointing"?
Unlike Exxon Mobil and Shell, many other companies end up making decisions -- such as laying off staff or overpaying for an acquisition -- in order to appease these quarterly earnings pressures. In fact one of the surest ways to increase stock prices in the short term is to announce a significant layoff.
However, the reality is that most organizations can't be judged on a quarter-to-quarter basis. Strategies take time to unfold and bear fruit, and managers need time to develop their own capabilities and those of their teams. Yes it's important to achieve short-term results as a way to test new approaches and build confidence -- but these need to be put into the context of long-term value creation. Otherwise we run the risk of sacrificing our future.
But how do you keep the focus on long term value creation while the media and the markets exert pressure to do the opposite? Here are a few thoughts, not just for CEOs, but for all managers:
First, make sure that you have a dynamic, constantly refreshed strategic "vision" for what your organization (or unit) will look like and achieve three to five years from now. I'm not talking about a strategic plan, but rather a compelling picture of market/product, financial, operational, and organizational shifts over the next few years. Try to develop this with your direct reports (and other stakeholders) and put the key points on one page. This then serves as a true north to help guide key decisions.
Second, make sure that your various projects and initiatives have a direct line of sight to your strategic vision. Challenge every potential investment of time and effort by asking whether it will help you get closer to your vision, or whether it will be a building block to help you get there. Doing this will force you to continually re-balance your portfolio of projects, weeding out those that probably won't move you in the right direction.
Finally, be prepared to take some flack. There may be weeks, months, or quarters where the results are not on the rise, or don't match your (or analyst) expectations. Long-term value, however, is not created in straight lines. As long as you're moving iteratively towards the strategic vision on a reasonable timeline, you're probably doing the right things. And sure, you can always do more. But just make sure that you're doing things for the right reasons.
How can you minimize the short-term "noise" and keep the focus on long-term value?
Cross-posted from Harvard Business Online.]]>You Can Prevent Layoffstag:www.huffingtonpost.com,2012:/theblog//3.17284842012-08-07T18:30:26-04:002012-10-07T05:12:03-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/fancy jargon, a successful business fundamentally makes more money than it spends. While managers can pull any number of levers to accomplish this, the one they most often choose reads: "Reduce costs!" And perhaps the most common way they cut costs is to eliminate jobs.
This is why we are so familiar with this PR-fueled refrain in business news: "[Company X] today announced that it will be [reorganizing/consolidating/streamlining] in order to better serve its customers. And oh, by the way, these changes will also save the company [Y million] dollars and result in the elimination of [Z number] of jobs."
In recent months we've heard variations on this theme from companies ranging from HP to GE to Peugeot; as well as from local schools and government agencies. And even though the overall number of job losses is actually decreasing on a year-by-year basis, they are still significant with over 37,000 U.S. cuts announced in June.
What they don't say is that the process of cutting jobs entails a number of hidden costs. In some cases these costs may be so significant that they reduce or even outweigh the benefits of job elimination. For example, depending on the employee, companies may need to provide severance, extended benefits, and out-placement counseling.
But that's just the tip of the iceberg. In addition to these measurable costs, layoffs cause firms to lose institutional knowledge about how to get things done, disrupt work relationships and patterns, and increase burdens on those who remain. These factors alone can reduce productivity for weeks or months, and can impact product quality, customer-service, and company image. One study of 4000 workers at 318 companies, for example, found that 77% see more errors and mistakes after layoffs than before. Layer on to that the time that managers, HR people, and others spend thinking, planning, and obsessing about layoffs, and the cost goes up even further.
None of this is to suggest that companies should never lay people off. Market forces can change quickly or strategic bets may not pay off, which will force managers to shift strategies or redeploy resources. At the same time, some employees may not perform up to the standards required, and companies need to be able to move them out.
However, given the costs involved, perhaps it's time to think about layoffs as a last resort rather than a prime strategy. As a manager, here are some actions that you can take to reduce the likelihood of layoffs in your organization:
First and foremost, watch out for creeping structural complexity. Just like any living organism, organizations have a tendency to grow, adding unnecessary layers, positions, and locations. As such we end up with headquarter staffs, divisional staffs, regional staffs, and local staffs all creating work that justifies their existence. Maintaining structural simplicity to begin with, with limited layers and as few extra locations as possible, is one way of avoiding layoffs.
Phase out products and services. Although we are always looking for new ways to benefit customers, often we don't eliminate the ones that have outlived their value. Without sunset laws for outdated products and services, we allow costs and infrastructure to build up that will eventually have to be taken down.
Manage the balance between today's revenues and tomorrow's opportunities. Managers always have a choice between investing in current operations and innovating for the future. When the balance is overly skewed towards short-term revenues, it's easy to build up costs (and people) that provide results today but cannot be sustained in the long-term.
In today's business environment, layoffs have become an accepted fact-of-life and a common tool for managers to maintain profitability. But we might be better off if we spend more time preventing layoffs rather than managing them.
Cross-posted from Harvard Business Online.]]>Ten Ways to Inhibit Innovationtag:www.huffingtonpost.com,2012:/theblog//3.17063492012-07-27T10:44:25-04:002012-09-26T05:12:33-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/gets in the way of innovation, especially in firms that already have lots of talented, creative, and motivated people. In other words, by identifying and removing barriers, it might be possible to accelerate innovation simply by leveraging the capability that's already there.
In that spirit, here are ten common inhibitors that can dampen an organization's ability to innovate effectively. For each one, think about the extent to which it applies to your firm (never? sometimes? often?):
Our focus on short-term results drives out ideas that take longer to mature.
Fear of cannibalizing current business prevents investment in new areas.
Most of our resources are devoted to day-to-day business so that few remain for innovative prospects.
Innovation is someone else's job and not part of everyone's responsibilities.
Our efficiency focus eliminates free time for fresh thinking.
We do not have a standard process to nurture the development of new ideas.
Incentives are geared towards maximizing today's business and reducing risk.
Managers are not trained to be innovation leaders.
Managers immediately look for flaws in new ideas rather than tease out their potential.
We look at opportunities through internal lenses rather than starting with customers' needs and problems.
After you've thought about these questions individually, bring together your team to discuss your answers. You also might want to send the questions to a wider group and see how they respond. The key is to use this list of inhibitors (and any others you might want to add) as a springboard for dialogue about your company's innovation practices and culture.
For example, through this process a group of 50 high-potential senior managers from different parts of a manufacturing company all agreed that the focus on short-term incentives was making it difficult for them to support innovation -- which was contrary to the message that the CEO was delivering to them and their people. This led the managers to initiate a dialogue with the CEO about alternative ways to fund innovation, resource and vet new ideas, and accelerate progress. While it's too early to know whether these shifts will make a difference or not, they have already reduced frustration and helped eliminate mixed messages about innovation.
All of us in organizations have the capability to innovate. Sometimes we just have to get out of our own way.
What inhibits innovation in your company?
Cross-posted from Harvard Business Online.]]>Define What's Optional (and What's Not)tag:www.huffingtonpost.com,2012:/theblog//3.16825592012-07-19T13:09:36-04:002012-09-18T05:12:17-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/
Managers often have this same kind of parental dilemma. They need subordinates to achieve a certain result, but want them to have a choice about how to do it. This issue is particularly acute in organizations that emphasize empowerment and engagement, and in professional firms where it is difficult to order colleagues around. If a manager is too directive, subordinates might go through the motions to comply, but won't do it wholeheartedly. On the other hand, if the manager is only "suggestive," the instruction may not be taken seriously.
Take this example from a research services firm: In response to eroding margins, the president of the firm asked her business areas and support functions to find a way to either reduce costs or grow their higher margin offerings. Four months later the president was dismayed to learn that only a few managers had taken strong actions to actually change the numbers. Others were either admiring the problem or had reasons why they couldn't do anything different.
The president discovered that although she had given her managers plenty of choice about how to improve margins, because she hadn't given them a specific target and time frame they considered the entire exercise to be optional. She assumed that each manager would do his or her best, and the combined effort would be enough. The problem was that people had different views of how much improvement was needed overall; and most had a parochial perspective about how much change was needed in their own area. Only when the president gave each manager a top-down target that had to be built into the next budget cycle did the margins start to improve.
It's easy to criticize the president for not exhibiting stronger leadership. But in many organizations, forcing goals on subordinates is a last resort. In fact, in this kind of culture, managers who take this route are considered failures because they couldn't motivate their people to change voluntarily. And while this might be an extreme point of view, top-down goal setting also shouldn't be the norm, since it will eventually disempower your team. There needs to be a balance.
Finding this balance brings me back to the solution for putting my children to bed. To be effective as a manager, it's important to be clear about areas where subordinates have choice, and where they do not. In the case above, the president was unclear about where her managers had choice, and so the entire effort suffered. She would have gotten results sooner by making it clear from the beginning that margin improvement was not an option (just like going to bed) -- but that each manager could achieve it in his or her own way.
What's your experience with clarifying choices for subordinates?
Cross-posted from Harvard Business Online.]]>Bring Back the General Managertag:www.huffingtonpost.com,2012:/theblog//3.16627152012-07-11T14:44:38-04:002012-09-10T05:12:03-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/general managers are scarce these days? These are the executives who run discrete businesses and control all of the resources associated with them. But in many large companies, the only true general manager is the CEO. Everyone else, whether in the C-suite or in the senior management ranks, runs a piece of a business or a support function.
As a result, a limited number of people have full, end-to-end accountability for business success -- and there are few opportunities for managers to learn all aspects of a business. This may be one of the reasons why many organizations struggle to perform.
At one time general managers were at the center of the action. Two decades ago, organizations were designed around stand-alone business units, so all managers had to understand finance, technology, manufacturing, sales, marketing, strategy, human resources, and more. To get this broad exposure, managers were given a variety of functional roles, eventually assuming leadership for a small business unit. If successful, they then were given responsibility for increasingly larger businesses. However, starting in the 1980s, many companies evolved to "functional" structures to cut costs and reduce duplication. The transition consolidated those support functions which were common among the BUs. GE, for example, went from hundreds of discrete BU's to a dozen large businesses with each one having strong, centralized finance, HR, engineering, marketing, and manufacturing units.
As a result of this shift, career paths today are less geared towards filling the few remaining general management positions, and instead focus on functional specialization. As one of my clients advises his mentees, "Declare a major and stay with it." The only problem with this advice -- as my fellow blogger Vikram Mansharamani pointed out recently -- is that as business becomes more volatile and uncertain, the ability to work across specialties becomes more important. But today no one gets that experience. In fact, for many chief executives I've recently worked with, the first real GM job that they had was CEO!
This doesn't mean that there aren't opportunities for talented people to run real businesses and become general managers -- it's just that those opportunities tend to be in smaller companies and start-ups rather than in established corporations. So that's where entrepreneurs and GM-types tend to migrate. But corporations need these people too, now more than ever.
Obviously we can't reverse the structural trends of the past two decades. However, companies can take steps to give their people more general management experience, which may help them avoid the narrowness of functional specialization. Here are several ideas:
Turn discrete customer segments or geographies into P&L units by giving managers the ability to "purchase" centralized services, and the accountability for achieving profitability targets. Financial mechanisms like these will allow managers to experience the dynamics of running an end-to-end business. It also will force the functional service providers to be more market-driven.
Allow for two types of development paths in companies -- within functional specialties and across them -- so that at least some managers broaden their exposure and get more general management learning. As such, managers could have both majors and minors on their resumes.
Finally, carve out innovation incubators that will serve not only to build new businesses but also to grow general managers. Having entrepreneurial opportunities inside large companies will attract and retain talented people who have the inclination to run full-scale businesses.
Given the complex nature of business today, having people with broader perspective may be critical to developing successful organizations. So it just might be time to bring back the general manager.
To what extent does your company have opportunities for true general managers?
Cross-posted from Harvard Business Online.]]>Turning a Problem Into an Opportunitytag:www.huffingtonpost.com,2012:/theblog//3.16459842012-07-03T17:31:10-04:002012-09-02T05:12:16-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/facing challenges, whether they come from competitors, economic conditions, or customer demands. However, they can choose whether they treat those challenges as problems or opportunities.
Here's an example of two managers faced with the same challenge -- one approached it as a problem to overcome, and the other, a possibility for reinvention:
Although in different industries, both managers' firms count on the U.S. Federal Government for a substantial portion of their business. This means that they both have to deal with the impending downturn in government spending. As background, the federal government doesn't actually have an official budget, but the pressure to reduce deficits -- along with mandated cuts from previous budget legislation -- suggest that federal agencies will have significantly decreased funds in the coming year. So how do you respond to the challenge of knowing that a major customer is likely to reduce spending by as much as 20 percent in the coming year?
The first manager explained that his organization was responding by cutting their own budget. Taking a hard, analytic approach, his team projected likely places where orders (and revenue) would decrease, and then created scenarios for downsizing their organization to fit the new revenue models. It seemed a sensible and realistic way to proceed, albeit painful. But given the sensitivities about potential job losses, the work was being done by a small group while morale deteriorated in the broader team.
In contrast, the second manager decided to use the budget crisis as a catalyst for reinventing the company's business with the federal government. At an offsite, she challenged her team to identify what it would take to grow revenues -- be it taking market share from competitors, meeting unmet customer needs, or some other undiscovered direction. This led her people to re-think their entire go-to-market approach and come up with ways of shifting shrinking business to third-party partners, while redeploying their own resources to potential growth areas. In parallel, a sub-team is now looking at possible layoffs and restructuring options in case the growth ideas don't bear fruit. The second manager explained to me that even though everyone understood the severity of the situation, most of her organization was engaged in trying to figure out a solution.
Given the uncertainty of the federal government budget and marketplace, we won't know the outcomes for these two companies until sometime next year. In fact it's quite possible that both managers will be forced to hunker down and shrink their company's footprints. The second organization, however, at least has a chance to emerge as a stronger, more effective enterprise because the manager turned the budget reductions from a problem into an opportunity. And in the interim, she has a more motivated and focused set of leaders and professionals.
Unfortunately, this kind of contrast is not unusual. Many managers respond to challenges literally. When something happens in the external environment their default position is to continue the current way of doing things, but just ratchet the resources up or down as conditions change. As such, they treat their problems as temporary issues that need to be solved in order to get back to business as usual.
But other managers see problems in a different light -- as a signal from the environment that it's time for fresh thinking. For them it's not just a matter of resolving the immediate issue, but using the problem to reassess the current way of doing business, to identify new customer needs, and to innovate. In this way, problems can open new worlds.
To what extent do you view problems as opportunities?
Cross-posted from Harvard Business Online.]]>Embracing Risk in Career Decisionstag:www.huffingtonpost.com,2012:/theblog//3.16068102012-06-19T16:43:34-04:002012-08-19T05:12:08-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/Risk management is critical for business decisions -- but may not be healthy for making decisions about your career. In fact, if you want your career to take off, you may need to do the opposite of what risk managers try to do: Instead of focusing on how to reduce risks, you may need to embrace and enhance them.
In organizations, the basic purpose of risk management is to rationally identify and analyze threats that might compromise success, and then recommend steps to mitigate them. Since many risks are invisible until after-the-fact, the risk management function uses its tools and analytical abilities to uncover them early to reduce their impact. Because human judgment is involved, this doesn't always work -- as in the case of JPMorgan Chase's trading losses -- but in many cases the process is effective.
On the surface, career decisions should follow the same process. There are multiple sources of risk in making a decision to change jobs or enter a new field: economic considerations, future potential, family, relationships with co-workers, the need to learn new skills, stability of the employer, and many more. Obviously all of these issues are part of the decision process, and it would be logical to think that reducing the associated risks would be a good thing.
However, for many careers, minimizing these risks is much less important than considering two other major parts of the decision:
1. Happiness criteria: At the end of the day, your career success is determined not just by tangible indicators (compensation, title, reputation) but also by the underlying enjoyment you derive from your work. Though highly subjective, this "happiness" factor often overwhelms all other career issues; to the extent that a person can have an apparently stellar career but still be miserable, or vice versa.
2. The attitude factor: Also driving your career is your ability to learn and adapt over time -- to deal with new situations, different personalities, and ongoing surprises -- and make the most of them. Although people can paint logical pictures of their career paths in retrospect, in reality most careers are unpredictable -- influenced by particular people, seminal moments, or unique opportunities. Having the attitude to grasp these surprises and leverage them is critical.
Because career success depends so heavily on happiness and attitude, you need to treat these factors differently, and not just as two more parts of an overall risk-mitigation model. This means that career decisions need to start not with risks, but creating a prioritized list of "happiness criteria," or aspects that will critically determine your long-term satisfaction. The second step is to think through which of these criteria are non-negotiable and -- if compromised -- would force you to make a trade-off that could increase your risk in some other area.
Here's a quick example: After several years of leading the flagship product of a fast-growing technology firm, Rachel* was asked to lead the company's largest division. Although this was clearly a pathway to the C-suite, she turned it down because it would have meant relocating away from her extended family and spending too much time away from her children, which were non-negotiable "happiness" criteria. As a result, Rachel took a staff job with less responsibility and status, but that passed the happiness test.
But starting with happiness doesn't mean that your career needs to be compromised. That's where "attitude" comes in. As long as you are focused on what is important to your long-term satisfaction, then the challenge is to grab other opportunities that might otherwise seem risky or even crazy. Rachel, for example, used the staff job to reinvent herself as a leader for innovation, and eventually helped the company build a replicable process for starting new businesses. Her success in this area opened up other opportunities that never would have emerged otherwise.
The key point here is that career success is not about reducing risks. Rather it's about maximizing your happiness in a way that also allows you to find surprises and push yourself into new territory. To do that you may need to maximize your risks rather than manage them.
How do you manage the risks in your career?
*name disguised
Cross-posted from Harvard Business Online.]]>Learned Helplessness in Organizationstag:www.huffingtonpost.com,2012:/theblog//3.15773352012-06-07T15:23:12-04:002012-08-07T05:12:03-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/was told that nothing could be done because every procedure was based on government regulations. "We're talking about nuclear reactors here," the managers said, "If we change the way we do things, something could blow up!"
Undaunted by their response, my colleague asked the managers to simply list all of their reports, approval procedures, reviews, audits, metrics, decision forums, standing meetings, and other management processes. He then had them identify which ones the government required, and which had been created internally. Much to the managers' amazement, the vast majority of these management processes were self-generated -- which meant that they could streamline much more than they had thought.
In the past year I've heard variations on this same theme across completely different industries: Pharmaceutical and financial services managers say that their hands are tied because of regulations or new legislation. Managers in a defense-related firm are constrained because of cuts to the Federal budget. Leaders in a professional services firm can't take actions because of long-standing partner agreements. And the list goes on. Everyone can blame some kind of external circumstance for his or her inability to act.
Of course all of these explanations are at least partially true. However, around these kernels of truth, managers build concentric circles of excuses that absolve them of accountability for change or improvement. So instead of finding creative ways to deal with regulations or budget cuts, they accept the status quo and blame external conditions for the problems that exist.
This phenomenon -- which one of my clients has dubbed "learned helplessness" -- has the power to permeate the culture of an organization. Like a spreading infection, managers pass on learned helplessness from group to group and level to level. Eventually the standard response to any initiative is some variation of, "We'd love to do that, but we really can't."
From the outside, this kind of culture doesn't make any sense. As my colleague pointed out to GE's nuclear managers, many of the constraints are self-generated. But you'll find most managers are unwilling to courageously challenge their beliefs about taking risks. To fight this resistance and start down this path, here are two steps that you can take:
First, shine a spotlight on the pattern. The first lever for changing a recurring cultural behavior is to make people aware of it. To do this, make an inventory of initiatives that people say they want, but haven't carried out. Ask why these kinds of initiatives die on the vine. Put together a list of the ten most common excuses for not taking action. The more dialogue you can create around these issues, the more your colleagues will become aware of their largely unconscious behaviors.
Second, prove your organizational power to act. Find one initiative that can demonstrate, even on a small scale, that taking action will not result in catastrophic failure. In one company for example, managers in the field were asked to identify requests from the head office that they thought were silly or redundant. Field managers had always complained about these requests, but never pushed back. Once they were given permission to challenge these "requests" and actually won a few victories, they began to develop the confidence to tackle more ambitious changes.
All managers face real constraints. Effective managers differentiate between those that must be accepted and those that can be challenged.
How can your organization overcome learned helplessness?
Cross-posted from Harvard Business Online.]]>Breaking Into a New Companytag:www.huffingtonpost.com,2012:/theblog//3.15556142012-05-31T10:33:07-04:002012-11-16T15:29:32-05:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/starting at a new company brings up those same anxieties we felt when starting in a new school as a child. All of a sudden you don't have any friends, you're not sure what you're supposed to do, and it's hard to find the bathroom. Adding to the pressure is the unspoken fact that the clock is ticking: Your new colleagues may give you a grace period, but you know that they are making judgments about whether or not you'll be a good fit, starting on day one. And of course you are also making a parallel assessment to figure out if you made the right choice.
Compounding these psychological stresses is the fact that some companies have a cultural bias against bringing in "outsiders" who haven't grown up in the company and don't act, think, and look like everyone else. Despite all of the evidence that diverse styles, skills, and experiences enhance innovation and productivity, many firms still struggle to successfully incorporate external talent. In these kinds of settings managers may unconsciously (or consciously) ignore or demean fresh perspectives.
All this makes it challenging to break into a new organization. If you want to increase the chances of success, these three actions might help:
First, take accountability for planning your own onboarding process. While your new company might require you to complete a new-employee orientation process, don't assume that it will be sufficient for you. In addition, work with your manager to identify key people that you should get to know, locations that you should visit, processes that you should understand, and products and services that you should be familiar with. If possible, spend time not just with your own people, but also with customers so that you get a first-hand appreciation of their expectations and points of view. In other words, treat the onboarding process as an intensive, one- to two-month graduate seminar about the company, using your manager and other colleagues as professors and sounding boards.
Next, offer an outside perspective to your new colleagues. Document your lessons and observations from the onboarding process, and put them together into a feedback presentation for your manager, your team, and others as appropriate. In doing this, treat your new company with respect for what it does well. Focus on opportunities rather than problems and criticisms. If you want people to listen to new ideas (especially when they may not be so inclined) find ways of building on what they are already trying to do. One of the biggest mistakes I've seen "outsiders" make is to set themselves up as "smarter" or "better" than others by showing their new colleagues all the things that they are doing wrong. Even when they are right, they only generate defensiveness that gets them nowhere.
Finally, carve off an opportunity that you can tackle in the short-term. In other words, commit to one or two short-term goals that stem from your unique perspective and demonstrate how you can make a difference, quickly. In one company for example, a new marketing manager introduced an analytic method that helped a country team improve sales of a particular product in 30 days. This small project built her credibility and allowed her to move on to bigger opportunities in the months that followed -- a far more effective strategy than just saying, "You guys don't know how to analyze market potential."
Moving to a new company can be an exhilarating opportunity to build on past experiences in new settings with new challenges. But the anxiety that is present on all sides can sabotage the opportunity, unless you play it right.
How have you started with a new company successfully?
Cross-posted from Harvard Business Online.]]>It's Time to Rethink Continuous Improvementtag:www.huffingtonpost.com,2012:/theblog//3.15332262012-05-22T11:37:29-04:002012-07-22T05:12:24-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your organization's health. While it may be heresy to say this, recent evidence from Japan and elsewhere suggests that it's time to question these methods.
Admittedly, continuous improvement once powered Japan's economy. Japanese manufacturers in the 1950s had a reputation for poor quality, but through a culture of analytical and systematic change Japan was able to go from worst to first. Starting in the 1970s, the country's ability to create low-cost, quality products helped them dominate key industries, such as automobiles, telecommunications, and consumer electronics. To compete with this miraculous turnaround, Western companies, starting with Motorola, began to adopt Japanese methods. Now, almost every large Western company, and many smaller ones, advocate for continuous improvement.
But what's happened in Japan? In the past year Japan's major electronics firms have lost an aggregated $21 billion and have been routinely displaced by competitors from China, South Korea, and elsewhere. As Fujio Ando, senior managing director at Chibagin Asset Management suggests, "Japan's consumer electronics industry is facing defeat. "Similarly, Japan's automobile industry has been plagued by a series of embarrassing quality problems and recalls, and has lost market share to companies from South Korea and even (gasp!) the United States.
Looking beyond Japan, iconic Six Sigma companies in the United States, such as Motorola and GE, have struggled in recent years to be innovation leaders. 3M, which invested heavily in continuous improvement, had to loosen its sigma methodology in order to increase the flow of innovation. As innovation thinker Vijay Govindarajan says, "The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation. The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different."
So should we abandon continuous improvement? Absolutely not! It has created tremendous value and still drives competitive advantage in many companies and industries. But perhaps it's time to nuance our approach in the following ways:
Customize how and where continuous improvement is applied. One size of continuous improvement doesn't fit all parts of the organization. The kind of rigor required in a manufacturing environment may be unnecessary, or even destructive, in a research or design shop. Sure it's important to inject discipline into product and service development, but not so much that it discourages creativity.
Question whether processes should be improved, eliminated, or disrupted. Too many continuous improvement projects focus so much on gaining efficiencies that they don't challenge the basic assumptions of what's being done. For example, a six sigma team in one global consumer products firm spent a great deal of time streamlining information flows between headquarters and the field sales force, but didn't question how the information was ultimately used. Once they did, they were able to eliminate much of the data and free up thousands of hours that were redeployed to customer-facing activities.
Assess the impact on company culture. Take a hard look at the cultural implications of continuous improvement. How do they affect day-to-day behaviors? A data-driven mindset may encourage managers to ignore intuition or anomalous data that doesn't fit preconceived notions. In other cases it causes managers to ask execution-oriented, cost-focused questions way too early, instead of percolating and exploring ideas through messy experimentation that can't be justified through traditional metrics.
Continuous improvement doesn't have to be incompatible with disruptive innovation. But unless we think about continuous improvement in more subtle, nuanced, and creative ways, we may force companies to choose between the two.
What are your views about continuous improvement and innovation?
Cross-posted from Harvard Business Online.]]>Why Strategies Go Off the Railstag:www.huffingtonpost.com,2012:/theblog//3.15332482012-05-22T09:58:37-04:002012-07-22T05:12:24-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/strategy, but somehow it never happens?
See if you identify with this example: A technology firm -- with a number of different product areas, geographic units, and service functions -- was figuring out how to integrate services for their largest global customers. After extensive planning, the senior management team decided to assign experienced executives to a dozen of these customers, and give them the authority to manage the accounts end-to-end. What they failed to address was that many of the best sales executives couldn't be released to take on these roles; the financial systems couldn't provide the right information on a customer-by-customer basis; compensation plans didn't support integrated selling and research programs remained geared towards new technologies instead of integrated solutions. So while everyone agreed that an integrated approach was needed, very little change actually occurred.
The fascinating thing about this case, and many others like it, is that nobody took accountability for the lack of strategic execution. In other words, everyone felt individually successful, even though the company experienced a collective failure.
I recently saw this dynamic play out at a meeting of a large consumer products firm, where the top 100 managers were anonymously surveyed with two questions: How aligned are you with the company's ambitious change strategy; and how aligned do you think your peers are with the strategy? Over 90 percent of the managers said that they, personally, were aligned with the strategy -- but 50 percent felt that their peers had doubts. In other words they were saying, "I'm fully on board, but many of the other people here are not."
Obviously something about these answers does not make sense. So to understand them, let me suggest three underlying psychological factors that often cause strategies to derail:
Passive aggressive disagreement: It's unlikely that everyone in an organization will agree with all of the nuances of a major strategic shift. Disagreement can be based on logic, experience, or (perhaps unconsciously) discomfort with change or loss of power. In any case, if the culture of the company does not encourage dissent, the resistance will go underground. People will voice their support but not actively do anything to make it happen. For example in our technology case above, the newly appointed account executives found that the finance function, while not standing in the way of the integrated customer approach, also was not doing anything to help.
Fear of confrontation: In most nice organizations where teamwork is encouraged, managers hesitate to confront colleagues who are not fully engaging in the strategic shift. They may not want to make waves or fear harming the relationship. So instead they try to work around it and end up sub-optimizing the strategy. Again, in our case, the account executives and their sales leaders didn't want to push too hard on finance for fear that it could make things worse for them later by damaging relationships.
Lack of persistent top-down demands: If the successful implementation of a strategy requires change across a number of functions, then a senior leader needs to get everyone on board. Without this explicit expectation -- reinforced again and again -- people will avoid taking action even though they will continue to smile, nod, and profess support. Many senior leaders are hesitant to push too hard for fear that they will have to take drastic action, like firing someone. So instead they just assume that the pieces will fall into place.
Obviously it's not easy to change these dynamics, especially when they are often invisible and rooted in long-standing cultural patterns. A good place to start is to point them out and provoke some dialogue, which was the purpose of that survey used at the consumer products meeting. Most people do not want to be part of a collective failure -- so holding up a mirror can be a powerful way of helping managers realize when they are headed in the wrong direction.
What's your experience with the challenges of strategy execution?
Cross-posted from Harvard Business Online.]]>Managers Don't Really Want to Innovatetag:www.huffingtonpost.com,2012:/theblog//3.14741212012-05-03T12:42:42-04:002012-07-03T05:12:03-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/Innovation may be an organization's life blood, but still its success rate in most companies hovers at just 17 percent. Even innovation leader P&G succeeds less than 50 percent of the time.
What prevents companies from innovating better? One possibility is that managers don't really want their people to innovate, no matter what they say otherwise. Take time utilization: How many hours per day, week, or month are you encouraged to think creatively, or work on innovation? Companies, like 3M and Google, that allow employees to carve off a certain percentage of their paid time for innovation are rare. Most other firms want their people to stay focused on today's business -- and only work on innovation in their spare time. So in the end, it's a mixed message: "We want you to innovate, but only after you've done your real job."
Based on my experience, there are at least three (largely unintentional) reasons why managers send mixed messages about innovation.
First, managers need immediate results, often reinforced by short-term incentive plans or the regular expectation of earnings improvements. Innovation may take a long time to produce returns, which conflicts with these short-term requirements. So even though managers know that innovation is necessary, most do not have the patience to wait years for results. Consequently, they say that innovation is important, but they don't back it up with time or resources.
Managers may also fear that innovation will cannibalize current business. I've seen managers slow down investments in new products because customers might switch to something less expensive or longer-lasting, or otherwise impact existing results. In other words, while managers might want to disrupt their competitors, they are less comfortable disrupting themselves.
Additionally, managers are often schooled in slow, continuous improvement. Approaches like Six Sigma have helped companies squeeze out inefficiencies, but also tend to reinforce existing processes with an eye towards doing them better. On the other hand, innovation requires messy experiments instead of methodical analysis. As a result, managers who have grown up in a continuous-improvement culture may be uncomfortable with change that doesn't happen step-by-step.
If you recognize these mixed messages in your organization, here are a couple of ideas for picking up the pace of innovation:
Talk about how innovation is avoided. Politely and respectfully ask your manager or senior team about their commitment to innovation. Share the mixed messages you've perceived and provide examples of missed innovation opportunities. Remember that most managers are not intentionally trying to prevent innovation -- so discussing the dilemmas will make decision-makers more conscious of them.
Work on innovation with colleagues. Instead of working alone, partner with co-workers to achieve an explicit innovation goal. For example, one divisional leadership team decided to spend every Friday morning focusing on how they could develop business for "the year after." By carving out the time, and reinforcing to each other the legitimacy of working on something without a short-term payoff, they were able to make more progress than any of them could have made alone.
Obviously, trying to change your company's innovation culture won't be easy. But that's what innovation is all about.
To what extent does your company really want to innovate?
Cross-posted from Harvard Business Online.]]>The Paradox of High-Potential Employeestag:www.huffingtonpost.com,2012:/theblog//3.14519402012-04-25T17:48:32-04:002012-06-25T05:12:02-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/develop, and nurture them. By paying special attention to the very best people, they will stay with the firm and eventually emerge as key leaders.
So despite the focus on high potentials and the importance of effectively managing them, why do so many organizations struggle to do it well? Let me suggest two reasons.
Discomfort with Differentiation: In order to focus on high potentials, some employees need to be singled out. And, truth be told, most managers hate to differentiate. They would prefer to treat everyone the same, avoiding the uncomfortable process of sorting people by levels of performance. As a result, managers will identify certain employees as "high-potential" simply because they don't want to tell them that they're outperformed by their colleagues. And others, who are appropriately selected, are not told because it would create an uncomfortable two-class system. In other words, managers avoid declaring who the high potentials are, for fear of upsetting people who were not selected.
Discomfort with Developmental Dialogue: Even if high potentials are identified properly, bringing them to the next level requires a continual, complex dialogue. Managers need to stretch, challenge, and coach their high-potential employees and make sure their assignments push them beyond their comfort zones. To do so, they have to work with senior business leaders and HR to clarify assessments, identify opportunities, and coordinate possible moves. Without multi-dimensional dialogue about these issues, managers tend to hold on to their high-potential people instead of helping them along an intentional developmental pathway. High-potentials then may interpret this as a lack of company support and will be inclined to look elsewhere.
Unfortunately, engaging in this kind of developmental dialogue is foreign to many managers and can cause just as much anxiety as the need to differentiate. In fact most managers avoid coaching discussions, particularly with employees who have more potential in their careers than they do.
Taken together, the twin discomforts of differentiation and dialogue hinder high-potential programs, even when senior line and HR executives do a good job of centrally structuring assessments, rotations, and training. This may at least partly explain why so many company-identified high potentials don't remain with their firms.
To increase the odds of success, senior executives need to focus not just on the high-potential programs, but the underlying anxieties of managers who have to execute them. One way to do this, for example, is to require managers to mentor one of their high-potential direct reports. Not only will this approach be good for the chosen employees in the short-term, but also it will force managers to get more comfortable with performance differentiation and developmental dialogues. As anyone who has done it can attest, mentoring benefits the mentor as much (if not more) than the mentee.
How well does your company retain and develop its top talent?
Cross-posted from Harvard Business Online.]]>Telltale Signs of an Unhealthy Hierarchytag:www.huffingtonpost.com,2012:/theblog//3.14341002012-04-18T17:46:46-04:002012-06-18T05:12:02-04:00Ron Ashkenashttp://www.huffingtonpost.com/ron-ashkenas/talk about eliminating hierarchy, but most organizations still have one. Frankly, it's very hard to mobilize limited resources and diverse skills without someone taking charge. That's why hierarchies have existed for thousands of years -- from the days of the Pharaohs to the modern corporation.
Yet there's no doubt that hierarchies can be dysfunctional and make it difficult to get things done. As such, we blame them for slowing things down, lowering morale, and choking off innovation.
You would think the key to a healthy hierarchy is a well-drawn organization chart, but it has more to do with company culture and behaviors. That's why reorganizing alone doesn't create a more effective hierarchy in a useful or permanent way. If you don't address the ineffective behaviors, nothing will change.
But how do you know when those behaviors are off track? Let me suggest three common warning signs of an unhealthy hierarchy, and what you can do if you see them:
Hierarchical Mirroring: This is the subtle notion that meaningful discussions only occur between people of equal rank across the organization, like a diplomatic negotiation. For example, I worked with a financial services company that was trying to improve coordination between the product groups and the client relationship teams. On the product side of the house, the key experts were "managers" who reported to vice presidents. The client relationship managers, however, were all vice presidents, and only wanted to deal with their vice presidential (but less knowledgeable) counterparts. As a result the meetings included more people than necessary, the experts had less influence, and everyone was frustrated with the pace.
Decision Churn: This occurs when decisions continually need to be revisited because someone of sufficient rank in another part of the hierarchy raises an objection. In the financial services example, after many weeks of discussion, the relationship team and the product managers had seemingly reached an agreement about how to go to market together. But at that point, a vice president of finance (who had not been in the meetings) expressed some concerns and sent the team back to the drawing board.
Invoking the name of the boss: This is when people tend to make decisions based on what they presume the most senior person wants. In the financial services case, one of the common expressions in the team meetings was, "The division president won't let us do that." Of course the division president wasn't in the room. But invoking her name gave weight to people's arguments, even if no one had asked her what she thought of the idea.
Given that these are deeply embedded cultural behaviors, there's no way to change them overnight, even if you are the CEO. However, anyone -- regardless of organizational level -- can call them out and make people aware of them.
Often these behaviors are subtle and unconscious, which makes them seem impossible to deal with. But if you spotlight them, especially in a humorous way, their absurdity and dysfunctionality will become more apparent. For example, in one organization a colleague created a "decision churn diagram" that portrayed the long and winding journey of a typical decision. When the Executive Committee saw the chart, it sparked a good discussion and the beginnings of a more conscious approach to decision-making.
As a manager, you have the authority -- and the responsibility -- to constructively highlight behaviors that don't make sense, no matter where you stand in the hierarchy. It's not easy to do, but if you don't try, you'll be a passive contributor to an unhealthy hierarchy.