Three Questions to Anticipate the Need for Change

Back in 2004, I came across the paper “Change in the Presence of Fit: The Rise, the Fall, and the Renaissance of Liz Claiborne” by Nicolaj Siggelkow (it is long, however, reading about the fashion industry was so interesting!).  Based on the author’s concept of “Fit”, to anticipate the need of change we must (caveat:  I am adding my own spin here):

  1. Look inside:  Does the organization have internal fit?  (Do all the functions of the company work seamlessly and efficiently?)
  2. Look around:  Does the organization have external fit? (Do the products, services, strategy and structure of the organization interact effectively and efficiently with customers, suppliers, competitors, government and other environmental factors?)
  3. Look ahead:  Is the current internal fit an asset for the company’s future external fit (which can be different from the current definition of external fit)? Responding this question requires an analysis of the short term and long term risks and opportunities the organization has.

If the answer to any of the questions is “No”, change is needed soon, or within a few years.  Such change could be disruptive and inclusive of apparently perfect processes and models.

Below I pasted a chart from the article.  It illustrates the fit concept (using Ford as an example).

Performance Landscapes

Performance drops when the internal fit is no longer an asset for the external fit of the organization. Article excerpt.

Change Framework

Starting from a status of perfect internal and external fit, shifts in internal or external fit impact organizational performance. Article excerpt.

 

Meetings and Smartphones

Yes? No?… Maybe? An article in the Forbes magazine headlines “Why Sucessful People Never Bring Smartphones into Meetings”.  Aside of the title (never bring? that sounds extreme), the survey information is interesting.  As bad as smartphones are, many times the issue is the meeting itself: Its duration, relevance, pace, productivity and politics.  Culture and staffing also influence behavior. The person could be swamped, always in meetings she cannot decline, demanded or could get in trouble if she doesn’t check.

Aesop stories are good reads for kids and CEOs

Simple, yet so true.  There is even a book that pairs the fables with real business stories!

The original fables are all available in Google books. Below I post one of the classics, “The Tortoise and Blockbuster”.  Sorry, I meant “The Tortoise and the Hare”.  Netflix was not exactly “plodding”, but oh well! there is only so much Aesop can include in the story:

The Hare was once boasting of his speed before the other animals. “I have never yet been beaten,” said he, “when I put forth my full speed. I challenge any one here to race with me.”

The Tortoise said quietly, “I accept your challenge.”

“That is a good joke,” said the Hare; “I could dance round you all the way.”

“Keep your boasting till you’ve beaten,” answered the Tortoise. “Shall we race?”

So a course was fixed and a start was made. The Hare darted almost out of sight at once, but soon stopped and, to show his contempt for the Tortoise, lay down to have a nap. The Tortoise plodded on and plodded on, and when the Hare awoke from his nap, he saw the Tortoise just near the winning-post and could not run up in time to save the race. Then said the Tortoise: “Plodding wins the race”.

Lead and Manage

Loved the article, a leader who doesn’t manage is like an orchestra conductor that suddenly forgets to give the tempo.

From the HBR Tip of the Day (Nov 11) by Robert I. Sutton:

Don’t Forget to Manage When You’re Leading

The distinction between leading and managing is a subject of ongoing debate. Leading is often characterized as the more glamorous job: leaders guide, influence, and inspire their people while managers implement ideas and get things done. But leaders who focus exclusively on coming up with big, vague ideas for others to implement can become disconnected from their team or organization. Avoid being a “big-picture only” leader. Make decisions and develop strategies that take into account the real-world constraints of cost and time. Stay involved with the details of implementation. Sure it’s easier to come up with ideas and tell others to make them so, but you also need to roll up your sleeves and understand what it takes to make those ideas a reality.

More at: blogs.hbr.org

Marketing in the Baking

When I talk about the “marketing mix” (the name that describes the elements to have in mind when doing marketing) I cannot stop thinking about marketing as a cake.   I imagine a myriad of marketing chefs baking all sorts of marketing cakes until Jerome McCarthy won the International Cake Competition and shared his secret mix.

McCarthy’s marketing mix, known as the “Four Ps of Marketing” says that good marketers consider four key ingredients:

  • Product.  What are you selling? What is your product or service positioning? What makes your product or service desirable? Who is the product or service for?
  • Price. How much are individuals going to pay for your product or service?
  • Placement.  Which channels of distribution are you going to use? Where are you selling your product or service?
  • Promotion.  How are you getting the word out? Where does it make sense to advertise? What are you doing to make your communications meaningful? What are you giving consumers to make them act (an offer, a sweepstake)?

I like McCarthy’s mix, however, many rightfully criticize it because it is too supply centered.  To solve that, Robert F. Lauterborn created a new set of ingredients.  He didn’t discredit McCarthy’s work, he just added a consumer spin.  Below his mix (known as the “Four Cs of Marketing”):

  • Consumer.  Who are you selling to? What consumer need is your product satisfying?
  • Cost.  How much will it cost the consumer to have the product while it is functional? How much is the cost to dispose your product when it is no longer functional? In other words, it is not only about the price, but about the total cost of ownership.  For example, it is not the same to buy a car with a one year guarantee than one with a three year guarantee.
  • Convenience. If the consumer wants it, can he get it? Is it easy for him to buy it?
  • Communication. How do you advertise? Do you do PR? Do you have a relationship with your customers? What is said in the news about you?

There are books and books and books that talk about all the ingredients or just one ingredient at a time.  It is amazing how everything marketing can fit in those eight words.  Lovely isn’t it? You just take the “marketing mix”, stir and voila! You can have a marketing cake. There is no guarantee it will be a good cake, however, it will definitively be a marketing one.

Source:Peter, J.P. and Donnelly, J.H. (2004). A Preface to Marketing Management. McGraw Hill. Pg.18; ”Let’s Talk Business”.

Successful Strategy Execution

Gary L. Neilson, Karla L. Martin and Elizabeth Powers get it.  They are authors of the Harvard Business Review article titled “The Secrets to Successful Strategy Execution”.  It is a great read (I highly recommend it in its entirety).  The authors provide a quick framework to succeed in improving company performance.  To increase performance you have to keep in mind four blocks:

  • Information
  • Decision Rights
  • Motivators
  • Structure

All four blocks are important and have to be considered concurrently.  It was interesting to read that reorganization, the very first choice of many managers, is not as effective as clarifying the information flows and the decision rights.  In other words, you can change the machine, however, if the operators don’t know how to use it, what to ask, when to turn it on and off, and why they should care about even working on it, nothing has really changed.  Please don’t get me wrong, reorganizations can be very useful (sometimes they are a fundamental part of a problem’s solution).  However, if there is a change of structure, it is paramount to ask: What is each individual responsibility, what are the incentives, what are the information flows, who takes the decisions and how do the new interactions make things more efficient.  Managers do not need to get involved in all details, however, they have to create processes and forums to permit the adequate set up and consideration of all blocks.  In brief, they just need to follow through.

In my mind, efficiencies come not only from the above mentioned blocks.  They also come from the organizational interactions and from having the right skill sets and personalities in the right positions.  A reorganization definitively makes things easier (if it is done correctly, the information flows  and decisions rights make so much sense that everybody feels that the move was well overdue). With that said, structure is not all, new lines of communication, processes and decision stakeholders always find resistance.  It is during those times that managers need to be hands on and make sure they are supportive of the new era, rather than doing a series of patchworks to keep the old era alive, when its time to either evolve, or immediately get away from it.

Source: Neilson, G, et al. (2008). The Secrets of Successful Strategy Execution. Harvard Business Review. Vol. 86, No. 6

Needy People

We all are about needs:  A need can move us (motivate us), or prevent us from doing something.

Management theory definitively considers the “Need” topic seriously.  Especially when we talk about what motivates us and what makes us more productive.

[I have to insert a note here.  There is a fine line between management and psychology.  Companies’ success depends a lot on human motivations and social relations.  It just becomes natural to have a lot of psychology infiltrated in the management world.  I won’t duel a lot on that side (although it is almost unavoidable).  Let’s just say that a manager with a lot of technical common sense will not be able to get things done without some people common sense.]

Ok.  As I was saying, there is a whole wealth of theory about what motivates us. Abraham Maslow, who introduced the hierarchy of needs in 1943, is the person to remember here.  Below I show his hierarchy of needs (factoid: Maslow didn’t use a pyramid to present his hierarchy, if someone knows who displayed it that way first, please let me know).

Image

Image was created by Let’s talk business. Content source: Richard Bird, et al. (2006). Business the Ultimate Resource. Ed. Basic Books

The question is:  Do we need to satisfy the lower needs to satisfy the higher ones?  The generally accepted answer is: No.  Some people can sacrifice the full satisfaction of  a lower need to achieve a higher need (for example, the artist that eats beans and bread because he/she prefers to buy his materials to “actualize” himself).  In my opinion, we do need to satisfy the lower levels first.  The main difference lies on “how much” of each satisfier each individual needs to be satisfied.

There have been many other contributors to motivation theory, some of them contemporary to Maslow. Herzberg is another thinker on the need issue.  His model focuses on the workplace (employee satisfaction).  He classified the needs in two categories:

  • Lowe level needs (the basics)
  • Higher level needs (those that are more appropriate to the psychologically complex human being)

Herzberg said that both needs have to be satisfied in the workplace.  He also believed that satisfaction depended upon two kinds of factors:  Hygienic factors and motivator factors [I wonder why he used the word “hygienic”… it sounds so… unoriginal, maybe in the 50s it was not important to have cool fancy theory names, the name definitively describes his thought and probably the conditions of the time, but it is still so…arg!).  Anyway, the hygienic factors have to do with the context and environment where the work takes place (workplace set up, rules, supervision, status, security, pay).  The motivator factors relate to what a person does at work or gets from the work itself (achievement, recognition, responsibility, advancement, growth). Having excellent hygienic conditions is the first step to avoid dissatisfaction, however, it doesn’t necessarily bring satisfaction.  The motivators, on the counterpart, can bring satisfaction as they are personal.

Yep, needs, needs, needs.. on my side I now need to take a break.  What kind of need would that be?  I guess it fits into the psychological need category.  Maybe I can create a new classification:  It is part of my change of activity needs.  Yep, you got it right, models are nice, however, we humans are still quite complex… and, of course, needy.

Source: Richard Bird, et al. (2006). Business the Ultimate Resource. Ed. Basic Books

The Management Process

Let’s talk about Mr. Fayol. What a great guy, he might have been the Jack Welch of his era. Want to look smart in a management discussion? Just say his name and you are immediately part of the smart club (though be careful… don’t say you agree to all he says, let’s face it, he lived in the 1890s and many things have changed since then). I like that we are starting our journey with him, his ideas are somehow in-temporal.

According to Fayol the Management process involves the below key activities:
Plan
Organize
Coordinate
Command (yes, he used the tabu word; it sounds tough, however, I read that his view was rather soft)
Control (what he means is reviewing the results, seeing what happened as planned and what not, and finding problem’s root causes)

As funny as it looks, his thought was the base for this other fancy list:

Plan
Organize
Staff
Direct
Coordinate
Report
Budget

Simple, right? I wonder how many managers would find the source of their problems by coming back, once in a while, to the basics… However, let’s also be fair, in many cases,the greatest challenge is not finding the problem, but finding and executing the solution.

Just Simple Common Sense

By no means the above statement diminishes the advancements achieved by management theorists. Management history is fascinating and entertaining. Having said that, when I read about the different trends and contributions made by many important people (some of whom I will mention here), one thing was shared among them all, they all made me think “makes sense, why didn’t I think about that? How could I miss it?”. Maybe that is why pure management classes are regarded as easy, they make us feel that we are discovering what we know, but didn’t know how to express.

Now you may be wondering, if we know all deep inside, why is it important to listen to these guys? The answer is simple,it is important because we easily forget the basics and over-complicate things… common sense becomes complex sense. This blog is my journey to keep my common sense in check.