Category: Organizations

• U.S. jobs aren’t shorter, but they are riskier

  James Surowiecki’s Lifers reviews some statistics and concludes that — contrary to popular belief — long-term employment in the U.S. hasn’t disappeared at all. But what has changed is the amount of risk employees are expected to shoulder in terms of…

  1. Benefits: Health benefits and pensions have decreased
  2. Stratification: “Companies now tie compensation more closely to performance, so that people at the top take home much more, relative to their colleagues, than did the high-fliers of thirty-five years ago.“
  3. Unemployment: “People who are unemployed stay unemployed, on average, about fifty per cent longer now than they did in the seventies, and only about half as many receive unemployment insurance as did so in 1947.“

  Yale political scientist Jacob Hacker has called this “the great risk shift.”

  2/5/2006

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• The Bells remind Google who runs the Internet

  From the Wall Street Journal today:

  Phone Companies Set Off A Battle Over Internet Fees
  
  Large phone companies, setting the stage for a big battle ahead, hope to start charging Google Inc., Vonage Holdings Corp. and other Internet content providers for high-quality delivery of music, movies and the like over their telecommunications networks.

  Ah, the value chain. Expect to see Google buy the rest of it.

  1/6/2006

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• 10 years of influential business ideas

  To celebrate s+b’s 10th anniversary, they looked back at the conceptual breakthroughs that appeared in the magazine — and invited readers to vote on which were most likely to last.

  1. Execution
  2. The Learning Organization
  3. Corporate Values
  4. Customer Relationship Management
  5. Disruptive Technology
  6. Leadership Development
  7. Organizational DNA
  8. Strategy-Based Transformation
  9. Complexity Theory
  10. Lean Thinking

  12/8/2005

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• SarbOx flawed, but fixable

  James Surowiecki’s Sarboxed In?…

  • The Sarbanes-Oxley Act was a political knee-jerk even the Republicans couldn’t avoid, in reaction to Enron, Worldcom, etc.
  • The complexity of the new rules went too far, requiring six figure enforcement costs, and possibly hindering small companies from going public. There are now talks of easing enforcement or modifying the Act.
  • But the problem SarbOx addresses is very real: to fake earnings and revenue, companies made acquisitions and hires they didn’t need. Two researchers estimate that companies who restated financials fired between two hundred and fifty thousand and six hundred thousand people between 2000 and 2002, slashing payrolls by more than twenty-five per cent, while other companies cut them by just 1.5 per cent.

  12/5/2005

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• Katzenbach and Smith’s team guidelines

  Since I’ve been working on how to structure teams to do innovation work, I thought it would be a good time to revisit the basics in the form of The Wisdom of Teams by Jon Katzenbach and Douglas Smith. One point they make is to differentiate between “performing teams” structured in a mindful way and other groups of people merely working together. A performing team has certain characteristics…

  • It is small in number
  • The members have complementary skills
  • They are all working towards a commonly identified purpose
  • They have group performance goals, in addition to individual goals
  • They have a common approach to working together
  • They hold themselves mutually accountable, not just individually.

  In the book and article The Discipline of Teams, they identify three kinds of teams:

  1. those that recommend things — task forces or project groups
  2. those that make or do things — manufacturing, operations, or marketing groups
  3. those that run things — groups that oversee some significant functional activity.

  For managers, the key is knowing where in the organization these teams should be encouraged.

  11/21/2005

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• Bill Swanson’s 25 Unwritten Rules of Management

  Raytheon CEO Bill Swanson offered his 25 Unwritten Rules of Management and Jim Collins asks, “I wondered, how would his rules stack up against the behavior and leadership styles of the successful CEOs profiled in Good to Great? …the overall fit appears quite positive.”

  For posterity, here’s Swanson’s list:

  1. Learn to say, “I don’t know.” If used when appropriate, it will be often.
  2. It is easier to get into something than it is to get out of it.
  3. If you are not criticized, you may not be doing much.
  4. Look for what is missing. Many know how to improve what’s there, but few can see what isn’t there.
  5. Viewgraph rule: When something appears on a viewgraph (an overhead transparency), assume the world knows about it, and deal with it accordingly.
  6. Work for a boss with whom you are comfortable telling it like it is. Remember that you can’t pick your relatives, but you can pick your boss.
  7. Constantly review developments to make sure that the actual benefits are what they are supposed to be. Avoid Newton’s Law.
  8. However menial and trivial your early assignments may appear, give them your best efforts.
  9. Persistence or tenacity is the disposition to persevere in spite of difficulties, discouragement, or indifference. Don’t be known as a good starter but a poor finisher.
  10. In completing a project, don’t wait for others; go after them, and make sure it gets done.
  11. Confirm your instructions and the commitments of others in writing. Don’t assume it will get done!
  12. Don’t be timid; speak up. Express yourself, and promote your ideas.
  13. Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get it done.
  14. Strive for brevity and clarity in oral and written reports.
  15. Be extremely careful of the accuracy of your statements.
  16. Don’t overlook the fact that you are working for a boss.
  • Keep him or her informed. Avoid surprises!
  • Whatever the boss wants takes top priority.
  17. Promises, schedules, and estimates are important instruments in a well-ordered business.
  • You must make promises. Don’t lean on the often-used phrase, “I can’t estimate it because it depends upon many uncertain factors.”
  18. Never direct a complaint to the top. A serious offense is to “cc” a person’s boss.
  19. When dealing with outsiders, remember that you represent the company. Be careful of your commitments.
  20. Cultivate the habit of “boiling matters down” to the simplest terms. An elevator speech is the best way.
  21. Don’t get excited in engineering emergencies. Keep your feet on the ground.
  22. Cultivate the habit of making quick, clean-cut decisions.
  23. When making decisions, the pros are much easier to deal with than the cons. Your boss wants to see the cons also.
  24. Don’t ever lose your sense of humor.
  25. Have fun at what you do. It will reflect in your work. No one likes a grump except another grump.

  ©2003 Raytheon

  Links courtesy Pete Behrens.

  11/2/2005

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• Bloomberg and the open office

  

  I’m a big proponent of tearing down the walls and cubicles in offices to encourage teamwork. Even Herman Miller, who introduced cubicles decades ago, is opening up the cubes and shaving down the partitions.

  So I love the story of how New York mayor Michael Bloomberg replicated the trading floor atmosphere at City Hall…

  Wandering through the cavernous Board of Estimate chamber on the building’s second floor, Mr. Bloomberg said he would make his office there, forsaking an ornate private enclave that was the inner sanctum for previous mayors and their closest aides. The mayor-elect said he would create a huge workspace that would be just like the open-air trading room in which he worked at Salomon Brothers and later recreated at his private company, Bloomberg L.P.

  He would put his desk in the middle of the room and seat his top deputies and staff members around him, he said. Dozens of other aides would sit at cubicles placed side by side, ensuring the access of lower-ranking managers to the mayor’s inner circle and bringing with it more accountability.

  Mr. Bloomberg said the office setup had been critical to his management style. “It promotes cooperation,” he said. “When people aren’t happy, you see it. When people aren’t getting along, you see it.”

  10/21/2005

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• BusinessWeek on challenges in China & India

  I applaud BusinessWeek for promoting serious discussion of the social problems in China, and India as well. A sample:

  A Big, Dirty Growth Engine (on polution in China)

  Waking Up To Their Rights (on workers rights)

  The State’s Long Apron Strings (on Chinese multinationals’ relationship to the Communist Party)

  8/14/2005

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• Flying High, part II

  More notes from Flying High:

  • “You can call every day to United and get a different price (for a ticket). The reality is you get nickel-and-dimed. And more importantly, the customer thinks ‘You’re screwing me.’ So it’s better to just ask one price. You want to keep the service offerings very simple. The whole key is keeping trust in the system.“
  • Three elements that ‘insure’ customers to a brand: First, flawless execution. Second, make things right with customers when things go wrong, because no matter how flawless you try to be, sometimes things will go wrong. And third, a company needs employees that are ambassadors for their brand, who are proud to belong to the organization.
  • Behind the scenes, there’s a surprising amount of lean-but-progressive use of technology, such as a paperless cockpit. They own everything from their own booking system to the LiveTV, both of which they license to other airlines.
  • Basic metrics: “…the airline looks at the impact on CASM (cost per available seat mile), the industry’s standard metric of efficiency. This is the expense of flying one passenger one passenger one mile. Available seat miles (ASM), a benchmark of an airline’s total capacity, is calculated by multiplying the total of all seats available on every route by the length of the routes. If you divide an airline’s total operating costs by the ASM, the result is the CASM. Airlines also pay close attention to RPM, or revenue per passenger mile. RPM is the number of seat miles for which the airline is actually filling a seat and making money. Divide the RPM by the ASM and the result is the airline’s load factor.”
  • “…the marketing department’s funds come under the operations budget, reflecting a company philosophy Curtis-McIntyre strongly endorses: ‘Product and marketing should be intimately involved—in each other’s face and on the same side of the fence.’ “
  • On putting mission statements into use: “If subordinate workers feel a leader is not living up to these principles, they are encouraged to ask supervisors how the conduct in question complies with the principles, thereby providing for accountability.”
  • “Neeleman insists he doesn’t pay much attention to how much shares are trading for in the open market. “Herb Kelleher at Southwest Airlines said something very insightful,” Neeleman relates. “At the time it sounded shocking. He said, ‘I don’t care about my shareholders.’ ‘What do you mean you don’t care about shareholders?’ ‘Because I just take care of my employees. I know if I take care of my employees, they’ll take care of my customers, and my customers will take care of my shareholders.’ “

  Also notable for the approach of culture fueling product is this quote from Gareth Jones, VP, Corporate Communications about their competition…

  Song isn’t the success you might have heard it is from Delta. We’ve trounced them on any route we’ve shared. They copied the wrong things. They copied the obvious. They don’t focus on the human experience…they focused on the cosmetic. Ted is United with a different coat of paint.

  7/26/2005

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• Flying High

  Just finished James Wynbrandt’s Flying High: How JetBlue Founder and CEO David Neeleman Beats the Competition… Even in the World’s Most Turbulent Industry. I’d give it 3 stars out of 5 for being engaging enough to finish (something I rarely do anymore) and educational while a little light in critical point of view. Wynbrandt is clearly a fan, and he lays on the cheerleading a little heavy at times.

  Part I of some notes:

  • Moments of Truth, a 1987 book by SAS CEO Jan Carlzon, influenced Neeleman with a tale of turning around a declining carrier by transforming the operation into a customer-focused operation, radical at the time.
  • A low-fare airline shouldn’t equal cheap operations: Neeleman bet on the low-maintainance of brand new planes to keep costs down.
  • In deciding to base operations at Kennedy airport in New York, he went against the perception that it was crowded and hard to get to via top-down market sizing, estimating that even if only they only sold within the 5 million people who live closest to Kennedy (excluding all of Manhattan) JetBlue would still be a success.
  • Learning from an early experience where his first business suddenly failed due to undercapitalization, he way overcapitalized JetBlue, raising $130 million. At the beginning all the investors and vendors were waiting for everyone else to make the first risky move, so Neeleman prodded them all into action by investing $5 million of his own money.
  • When courting investors, the management team honestly said they weren’t out to make a killing, aiming for a margin of “between 15 and 20 percent, but not more than 20 percent. If our margin is higher than that, we’re either gouging customers or not paying our staff enough.“

  7/25/2005

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• Kitchen as management microcosm

  If you’ve only seen Gordon Ramsay as the Donald Trump figure in Hell’s Kitchen, you’re missing out on what he really has to teach. In Ramsay’s Kitchen Nightmares on BBC he goes into a slumping restaurant and tries to turn it around in one week. As a manager he can see the whole system: kitchen, menu, balance sheet, product portfolio, interior design, customer service… sometimes he’ll even do wayfinding analysis. As a leader he uses a variety of approaches to teach, from jokes to insults. And while his get yer fookin’ bullocks goin’ style probably only works in the kitchen or construction sites, his sense of management is impressive. Fookin’ brilliant.

  If you don’t get BBC/BBC America, I hear it might be out there on the internet somewhere (ahem).

  Thanks to Scooter for pointing it out.

  7/23/2005

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• An approach for working in China: Economics

  Given the destructive human rights situation in China, how do we decide to interact with companies there? I don’t think no action is a choice; the sheer amount of influence the Western world and China exerts on each other through commerce alone makes it impossible for any one person or company to remain unaffected.

  Free marketers like the Cato Institute argue that “America should not play the dangerous game of pitting human rights activists against free traders. American prosperity and global prosperity are better served by open markets than by well-intended economic sanctions.” But this does nothing to address the human rights problems, and we know that ‘all it takes for evil to triumph is for good men to do nothing.‘

  And there’s no doubt we should be careful about it, as even seemingly innocuous efforts like Yahoo!’s can draw undesirable attention.

  One option is to exert pressure politically. The U.S. government is already doing this to a limited extent. But given we cooperated much less with the communist Soviet Union and apartheid-ridden South Africa, it’s surprising we cooperate so much with communist, oppressive China. Politicians could use this issue in order to embarrass opponents for their cow-towing China-friendly behavior, but given the reflexivity of the dollar that’s a long shot. A subtle variation on this would be to embarrass anyone not willing to reduce our debt because it’s handing control of our economy to Asia, which in turn will give us more leverage with Asia on issues like human rights.

  7/17/2005

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• If China was a company, would you work for it?

  In all the hoo-hah about China’s economy we almost never hear of the human rights situation there anymore. The reason is not that the situation has vastly improved, in fact it’s compared to South Africa’s apartheid. I’m reminded of economic bubbles past when big money clouded our view of everything behind it.

  Human Rights Watch still knows what’s up. Their backgrounder on China is disturbing, and includes…

  • Widespread official corruption
  • China prohibits independent domestic human rights organizations and bars entry to international human rights organizations
  • The official cover-up of the SARS epidemic in Beijing
  • Institutional pressures on the police to extort confessions through beatings and torture
  • Chinese authorities employing increasingly sophisticated technology to limit public and private expression
  • One of the largest AIDS epidemics in the world
  • Employers routinely ignore minimum wage requirements and fail to implement required health and safety measures
  • A government ban on independent trade unions
  • Forced evictions of hundreds of thousands of residents in order to build new developments
  • The crackdown on terrorism in Xinjiang has been characterized by systematic human rights violations including arbitrary arrests, closed trials, and extensive use of the death penalty
  • The Chinese leadership continues to limit Tibetan religious and cultural expression and seeks to curtail the Dalai Lama’s political and religious influence in all Tibetan areas
  • Chinese officials curb the growth of religious belief and its expression in practice through a series of laws and regulations
  • The shortage of women and girls in rural areas has led to the kidnapping and selling of females as wives or prostitutes
  • In 2004, as it had in the past, China suspended its dialogue with the U.S. in retaliation for the American sponsorship of a resolution condemning its human rights record

  Most of the companies I’ve worked for have refused to work for one company or another, citing objections to the harm done by, for example, tobacco, alchohol or the defense industry. So I have to ask, if China was a company, would you work for it?

  7/11/2005

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• Edge competencies

  I’ve been thinking about how organizations today are more distributed and decentralized, relying on the performance at the interface to the customer. Compared to core competencies that power the creation of new products and live deep within the company, most companies have one or more particular capabilities that live at the fringes where organizations exert their last influence over performance before the consumer takes over. I’m starting to collectively refer to these capabilities as edge competencies (yes it’s a little jargony, but core capabilities probably was as well back in 1990).

  For example, Coca-Cola’s core competency is the manufacture and distribution of nonalcoholic beverages, and their edge competency is how they create brands through marketing campaigns.

  T-Mobile’s core competency is building telecommunications infrastructure, and their edge competency is the design of each customer-facing service.

  The concept becomes interesting when you think about how executives crafting the organization’s strategy must align with one or two particular project teams doing tactical work (incidentally, I think the dichotomy of strategic and tactical is less useful in these situations, since the importance of edge project work can have deep importance to the organization).

  There should also be a feedback loop between core competencies and edge competencies, so that customers are both informed and have a voice in crafting an organization’s work.

  More to come…

  Update: More is here… I’ve expanded this idea into an essay and renamed it Strategic Delivery Points to avoid any confusing comparisons between it and core competencies. Enjoy.

  6/14/2005

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• Google buys Dodgeball (yay!)

  Google has acquired Dodgeball, a neato mobile social networking app. It was co-founded and developed by my friend and former mentee Alex, so I’m thrilled for him. Congratulations Alex!

  5/12/2005

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