Boards must be proactive to execute governance responsibilities - http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/boards-must-be-proactive-to-execute-governance-responsibilities/

http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/boards-must-be-proactive-to-execute-governance-responsibilities/

Boards must be proactive to execute governance responsibilities: five issues which every company should examine.

 

Extract from Corruption, Crime & Compliance – Michael Volkov:

Life is full of anxieties.  We all know that.  Some suffer worse anxieties than others.  As I often say, anxiety comes and goes.  Anxiety cannot be measured but is something that everyone experiences on their own terms.

Corporate boards suffer anxiety.  When a group or organi ation suffers anxiety, the possible damage to an organi ation can be significant.  In some respects the whole of the anxieties can be more than the sum of the parts.  As a result, corporate boards, like individuals, have to take affirmative steps to manage their anxieties, respond to them and protect themselves from poor decision-making.

When identifying and measuring issues of concern for corporate boards, there are at least five major and basic worries that every board has to address, no matter what their industry or where they are located.  The global economy has now set in motion global anxieties.

I am not talking about issues of concern which are obvious – of course, every board has to focus on the obvious issues like: How will the economy perform? Will Congress address the sequester and bring about meaningful tax reform?  We all know about these issues, read about them every day, and listen to our politicians’ bloviate on them during 24-hour news presentations.

Instead, I want to focus on five issues which every company should examine, which may not be so obvious.  Or as I like to say do not require a profound grasp of the obvious.

Corporate governance means just that – governance.  And corporate boards need to be proactive if they want to carry out their duties and responsibilities.

1.  The rise of social media and mobile technology.  The story of our economy for the next few years will be written on social media and mobile communications.  Today there are more mobile devices connected to the Internet than the world’s population.  Nearly 300,000 tweets are sent every minute.

Companies have been slow to recogni e this reality and the implications of our Twitter nation.  It has been estimated that only five percent of US companies have embraced social media across all of its stakeholders (consumers, managers, employees, board members).

Companies are starting to communicate through social media.  Consumers interact with companies through mobile technologies.  Government regulators are rapidly starting to focus on corporate policies, practices and issues which occur in the social media space.  Companies have to embrace social media and analy e the implications for risks and competitive advantages.

2.  Cybersecurity.  The government and companies recogni e that cybersecurity is now an imperative.  Companies need to act to assess the risk of an attack, the cost of an attack, the direct harm to the company, the reputational risk and the need to protect the company from potential economic devastation.

3.  Information Management.  We are all suffering from information overload.  Social media and the internet have made us aware of too much information.   It is estimated that information overload costs US businesses nearly $1 trillion each year in reduced worker productivity.  The new trend, which is rapidly developing, is how to manage information overload so that companies and individuals access the proper amount of information.

Google is developing new and more effective algorithms for search results.  Information filters will become even more important as consumers and citi ens are bombarded with information which can cause overload and inefficiency.

Corporate boards suffer from the same phenomena.  Too much information means ineffective governance.  Key issues are lost in thick and useless reports which only waste time and energy.  Corporate boards need to address information efficiency – the new term for corporate governance.

4.  Government Enforcement and Regulation.  One of the legacies of the Obama Administration will be its commitment to increased government regulation and enforcement.  It has been a long time since the government has played such an active role in regulating business and enforcing the laws and regulations.  This trend will not end when the Obama Administration leaves in 2016.  The American public is comfortable with the current balance between economic freedom and regulation.  If anything, it can be argued that the public wants even more enforcement.  Companies have to recogni e this trend, prepare for it and refrain from delusional desires of deregulation.

5.  Creative Compliance.  One sure way to put a damper on a corporate board meeting is to invite the Chief Compliance Officer to make a compliance presentation to the board.  Traditionally, board members like to focus on the “fun” issues – financial performance, high-level strategy, business expansion plans and market assessments.

When it comes to compliance, board members like to brush those issues to the side.  The challenge for compliance professionals is how to make compliance integral to corporate performance.  Scary enforcement stories are usually just a teaser for more important discussions and strategies.

How does a compliance officer communicate the importance of compliance, the need for compliance to play a greater role in the business operation, and the importance of board commitment, focus and support?  This is the challenge for the profession over the next five years.

More … http://corruptioncrimecompliance.com/2013/02/high-anxiety-five-basic-worries-for-every-corporate-board/?

Leaders must reconcile managing business with strategic growth - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/leaders-must-reconcile-managing-business-with-strategic-growth/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/leaders-must-reconcile-managing-business-with-strategic-growth/

Leaders must reconcile managing business and strategic growth: due to increased market competition and outsourcing.

 

Extract from Supply & Demand Chain Executive – Natalia Kosk:

Market competition and increased outsourcing of basic business tasks are a few of the factors driving change for functional groups in the supply chain

Big changes are on the hori on for supply chain functional groups in the year ahead. Functional groups are being asked to play a more strategic role in the business, while simultaneously being leaner and more flexible. Driving this change are a number of factors, such as increasing competitive intensity; more outsourcing of transactional tasks; and companies own efforts at becoming more focused.

As a result, functional leaders in the supply chain must reconcile how they continue to manage their business while working to promote their company’s long-term strategic growth platform.

This month, we sat down with Curt Mueller, Vice President and Partner, Boo & Company, Chicago, who also leads the global consulting firm’s supply chain services offering, to dig deeper into some of the findings in their report, “The New Functional Agenda: How Corporate Functions Can add Value in a New Strategic Era” to discuss how functional leaders can take on a new strategic role while balancing their existing operational responsibilities.

NK: In your report, you confirm that businesses have, in fact, become more focused around capabilities, which confirms that business leaders must take more of a strategic role to deliver improved functions for optimal performance results. Traditionally, were business leaders more focused on overseeing the management or production of the business processes involved?

CM: Capability is a combination of processes, assets, tools, talent and culture. We see companies think about this ‘stitching together’ rather than silos/functions. In operations and supply chain, progressive companies are evaluating their current operations capabilities and what advantages they have that are latent or not fully understood. One area is innovation. Traditionally, the R&D groups would develop products with limited input from operations. Yes, they were practicing Design for Manufacturability but the leading companies are now innovating into the capabilities they have. For example, a company might have a highly manual operation and wants to squee e cost out through automation but the manual operation can be a capability that allows for more product variety and innovation whereas automation largely constrains variety.

NK: You also outline ways that companies can outline business functions to be more attuned to a “fit for purpose” operating model versus “best in class.” What businesses or particular market segment in the supply chain or might the “fit for purpose” strategy apply to better than “best of breed?”

CM: After defining differentiated capabilities, to get to a fit for purpose operating model you have to evaluate whether all parts of your organi ation, management and operating processes fit with the chosen capabilities, and whether the functions can enable the strategy. We find “class” hard to define because companies play very differently given their differentiated capabilities. For supply chains and operations, companies need to link back to their overall strategy and determine how they want to play and win. For example, ara, the clothing manufacturer and retailer, plays by being a fast follower of trends and focuses their supply chain on getting new products to the market quickly. They purposely do not want “best in class” in future design but rather want to quickly observe what is hot in the market and quickly get it on their shelves.

NK: In the past, manufacturing was largely outsourced. But with recent developments, reshoring of manufacturing jobs and production is an increasing focus in the supply chain. As this continues, how does the “fit for purpose” operating model apply?

CM: The primary move back to the U.S. is about economics. We see a major shift in production coming back to the U.S. from places like China. With the instability of the labor market, fluctuations in currency and increase in local consumption, the outsourcing dynamic is changing in China. Moving forward, companies are going to need to rethink and potentially rebuild some of their capabilities that they might have outsourced. The fit for purpose model always applies in relation to the capabilities that matter. If manufacturing highest-quality products is a desired differentiated capability, then the company should optimi e all of its aspects on achieving this, and de-emphasi e all other aspects that don’t contribute to it.   

NK: In discussing basic business capabilities, what if a company who does not yet outsource its basic business functions—such as payroll, HR or employee benefits—(but is looking to) does not know where to start and which functions to outsource? What is the first step to apply the “fit for purpose” model?

CM: In the context of capabilities-driven strategy, the company would first segment its activities to figure out which ones support the strategy and which ones don’t. Next, for those that don’t or don’t matter, the company would assess based on market-based prices whether a make or buy path is the most optimal. A company must take a critical view of this. Our research shows that companies can only be differentiated in a few capabilities. Identifying those is often easier than having the conviction to not invest in those capabilities that are not differentiated.

For more information and to download the full report, visit http://bit.ly/Uk5h26.

More … http://www.sdcexec.com/article/10861171/is-your-team-strategically-aligned-to-meet-business-goals-for-2013

Value of proactive audits in anti-corruption compliance - http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/value-of-proactive-audits-in-anti-corruption-compliance/

http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/value-of-proactive-audits-in-anti-corruption-compliance/

Value of proactive audits in anti-corruption compliance: similar to transaction testing but focused on high-risks.

 

Extract from Corporate Compliance Insights – Michael Volkov:

This article originally appeared in Michael Volkov’s Corruption Crime & Compliance blog and is reprinted with permission.

The FCPA world is fast-becoming the leader in new compliance strategies.  The Justice Department and the SEC have embraced the requirement for conducting “proactive audits.”

Recent settlements have included new compliance program requirements for a company to conduct proactive audits of high-risk areas.  It is a new and growing area for anti-corruption compliance.

The concept of a “proactive” audit, however, is nothing new.  The strategy has been employed for years in other contexts but now has gained traction in the anti-corruption area.

The importance of proactive audits is even more significant in the anti-corruption context.  As everyone knows, financial audits are not designed to identify illegal bribes because they hinge on “materiality.”  Numerous bribery schemes have been carried out underneath the “materiality” radar screen because they do not involve significant amounts of money.  On the other hand, “forensic audits” are designed to identify illegal bribes, and often incorporate transaction testing and other techniques.

A proactive audit is akin to transaction testing but with a big difference – it is focused on a high-risk operation.

The first step in the proactive audit is to identify those “high-risk” operations.  It is easy to rely on the annual Corruption Perceptions Index to identify those high risk operations but a broader focus is needed.

For each “high-risk” country of operation, it is important to consider:

- how much business is conducted in the country;

- the nature and extent of government interactions;

- the business and compliance history of the company’s operations in the area;

- local business regulation and enforcement in the country; and

- the compliance and ethics reputation and performance of key personnel in each country.

A risk-ranking matrix based on all of these factors should be developed to prioritize those operations for audits.

While it may be desirable to audit almost every office, the available resources (time and money) will dictate how many offices can be audited.  It is unlikely that a company will be able to audit every “high-risk” operation.

The high risk audit program has to be dynamic.  It has to adjust as new risks and factors are identified.  New information has to be incorporated into the analysis.  As audits are completed, new information will be learned and factors may be re-assessed.

Proactive audits require a team approach – lawyers, auditors and compliance personnel need to be included in each audit team.  A coordinated audit requires careful coordination among these personnel.  A detailed protocol needs to be adopted and followed in each audit.

The process needs to be supervised from the top down in the company.  The Compliance Committee needs to sign off on the program, the compliance office needs to manage and design the process with the assistance of the legal and auditing offices.

About the Author:

Michael Volkov is a shareholder at the national law firm of LeClairRyan. His practice focuses on white collar defense, corporate compliance, internal investigations and regulatory enforcement matters, and he is a former federal prosecutor with almost 30 years of experience in a variety of government positions and private practice. He can be reached at michael.volkov@leclairryan.com

.More … http://www.corporatecomplianceinsights.com/the-cutting-edge-of-anti-corruption-compliance-proactive-audits/

Mounting evidence we all possess inherent bias against creativity - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/mounting-evidence-we-all-possess-inherent-bias-against-creativity/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/mounting-evidence-we-all-possess-inherent-bias-against-creativity/

Mounting evidence we all possess inherent bias against creativity: however there are ways of addressing this.

 

Extract from TEDTalk – David Burkus:

Have you ever debuted an exciting new idea to the world only to receive a lukewarm or even highly critical response? Well, get used to it. Mounting evidence shows that we all possess an inherent bias against creativity. David Burkus shares the good news that there actually is something we can do about it:

http://tedxtalks.ted.com/video/Why-Great-Ideas-Get-Rejected-Da

David Burkus is Assistant Professor of Management at Oral Roberts University where he teaches courses on creativity, innovation, entrepreneurship and organizational behavior. He is the founder and editor of LDRLB, an online think tank that shares insights from research on leadership, innovation, and strategy. He is the author of the forthcoming book Myths of Creativity to be published in Fall 2013.

More … http://tedxtalks.ted.com/video/Why-Great-Ideas-Get-Rejected-Da

Dimensions critical for survival in today’s uncertain economy - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/dimensions-critical-for-survival-in-todays-uncertain-economy/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/dimensions-critical-for-survival-in-todays-uncertain-economy/

Dimensions critical for survival in today’s uncertain economy: importance of learning faster than your competitors.

 

Extract from #hypertextual – Cecil Dijoux:

This is a sequel of Edgar Schein Organizational Culture and Leadership review, focussing on the sole Chapter 20. In this chapter, the great man discuss Learning Culture and the Learning Leader.

Schein shares Gary Hamel points of view regarding today’s market and economy : we have no idea what tomorrow’s world will be except that “It will be different, more complex more fast paced and more culturally diverse. This means that organizations, their leaders and all the rest of us will have to become perpetual learners.”

Which somehow echoes what Mary Poppendieck said during Lean IT Summit 2011 : “In any industry nowadays, the fastest learner wins. if your competitor are faster learners then you’re in trouble.”

There is a paradox in the concept of a learning culture : how to set up such a culture when by essence, culture is more a conservative force aiming at reducing cognitive anxiety by making things predictable, shared and meaningful ?

The author have identified 10 dimensions of such learning culture, 10 dimensions he has observed in successful companies that are critical for companies to survive in today’s economy, and that requires special skills for the Learning Leader.

I just could not resist discussing how these dimensions are aligned with some of the Lean and Social Business principles …

What is leadership ?

There are many definitions of leadership. Some people get confused between leadership and management. Best definitions I know are from Peter Drucker (Management is doing the things right, leadership is doing the right thing) and John Kotter – in What Leaders Really Do (Management is about dealing with complexity. Leadership is about coping with change).

According to Schein, the essence of Leadership is creation and management of the dynamic processes of culture (…). Leadership is the source of organization beliefs and values and is highly sought by group members to reduce anxiety.

1. Proactivity

Schein is adamant that proactive problem solving is a critical skill for people to build a learning culture. Not only because problems are solved but also because while solving a problem, people learn. Learning by problem solving is the gist of Lean philosophy. During the 2012 edition of the Lean IT Summit, Mike Orzen insisted that one of the most important systems in an organization is the problem solving system.

2. Commitment to learning to learn

This is the definition Michale Ballé gives to Lean [FR]. Schein insists that learning is achieved while getting feedback and taking the time to reflect. This is where its gets complicated in our organizations as Chris Argyris reports in this HBR paper Teaching Smart People How to Learn (1991) :

Success in the market place increasingly depends on learning. The problem is that members of organizations that many assume to be the best at learning are, in fact not very good at. (…) Because many professionals are almost always successful in what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure. Their ability to learn shuts down precisely at the moment they need it the most.

This is where Leadership comes into play : if leaders ask for help and accept it, they will show the path for learning. If leaders value experimentation and reflection, they will contribute to this learning culture.

3. Positive assumptions about human nature (Theory Y)

Douglas Mc Gregor Theory X approach of management (people are lazy and must be motivated and controlled) is not appropriate in the learning organisation as in that case, teams won’t learn and theory X will become self-fulfilling prophecy. Which can be viable in a stable context but surely not in such a turbulent one as ours.

Instead, Schein think that Learning Leaders must believe people will be keen on learning if they are put in the right and safety context. Besides, Schein evokes the post-heroïc leader whereby knowledge is more distributed and leaders are dependent on experts in their organization.

This is one of the main core value of Social Business. Actually #hypertextual strongly believes that social software in organization are the tools to implement Theory Y in the organization.

4. Belief that environment can be managed

We are here on the Doing / Being cultural axis. Schein argues that for organizations to learn in a turbulent economy, a Being culture whereby people are fatalist and enjoy what they have could survive in a slowly changing market but not in such as fast paced as ours.

5. Commitment to truth through pragmatism and inquiry

Schein positions the cursor on the Truth axis (from Dogma to Pragmatic and scientific method).  The idea here is that there is not a single learning method : as the type of problems to solve change there should be different methods. This is where his view tends to be contradicted by Lean philosophy which has been thriving using the same problem solving method, at all levels of the organization for about fifty years : the PDCA.

However, and this is where Lean and this statement of the MIT Emeritus professor converge, Lean Leaders knows there is much they don’t know and they do teach this to their teams. The only thing they know is that regardless of the problem, the scientific method will help them solving it.

Note that this pragmatic approach whereby the organization exposes its products to customers (and therefore to market’s reality) as soon as possible in a view to learn is at the heart of the Agile software development approach and it has been discussed extensively in 37Signals book Getting Real or in Eric Ries Lean Start-Up.

6. Positive orientation toward the future

Learning culture position on the Time orientation lies in the future. As the author puts it : “If the environment is becoming turbulent, the assumption that the best orientation is to live in the past or to live in the present clearly seems to be dysfunctional.”

Embracing Social Software is a way to make sure the organisation is a/ using today’s problems with todays tools and b/ get used to integrating new wave of disruptive technologies as they emerge.

7. Commitment to full an open Task-relevant communication

The learning culture must be built on the assumption that communication and information are central to organisation well-being and must therefore create multi-channel communication system that allows everyone to connect to every one else.

This is a very strong statement which emphasizes the role of Social Software in the Learning Organization. Schein insists this openness must be limited to task-relevant information so that to prevent any interpersonal problems from happening across hierarchical or multicultural boundaries.

This views sheds a great light on a key issue for Social Software to create value : to be task-related and integrated in the flow of work.

8. Commitment to cultural diversity

The author idea here is that the more an organization is culturally diverse, the more likely it will be to deal with unpredicted events. This is something François Hisquin (CEO Octo Technology) reported to #hypertextual during his interview [FR]. The corresponding task for the leader is to ensure for diversity in the team and for good cross-cultural communication and understanding.

Here again, Social Software allows for horizontal communication across the organization and makes connections where none previously existed to quote danah boyd. This is invaluable as far as providing space for communication between different sub-cultures of the organization that would hardly have a chance to connect otherwise.

9. Commitment to system thinking

Ray Kurzweil made an impressive talk at USI 2011[FR] where he explained that the economy at the information age no longer is linear : it is exponential. Schein is aligned with this statement claiming that the learning leader knows the world is complex and overdetermined (most things are multiply caused).

There again, this is another pillar of Lean Thinking that Social Software, while creating horizontal real-time task-related communication, fosters and encourages.

10. Belief That Cultural Analysis is a Valid Set of Lenses for understanding and improving the world

According to Schein, in a learning culture, there is the belief that analyzing feedback and reflecting on their culture is a necessary part of the process.This point goes back to the whole book but also to Chris Argyris paper referenced earlier :

If learning is to persist, managers and employees must also look inward. They need to reflect critically on their own behavior, identify the ways they inadvertently contribute to the organization problems and then change how they act.

This takes courage and this is completely embedded in both Lean (reflecting on the way we work thanks to management coach – see Toyota Kata) and in Social Business which encourages rapid feedback and collaboration to solve business issues.

More … http://thehypertextual.com/2013/01/22/lean-social-business-and-scheins-10-dimensions-of-the-the-learning-culture/?

Realising strategic potential of boards - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/realising-strategic-potential-of-boards/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/realising-strategic-potential-of-boards/

Realising strategic potential of boards: three questions to help go beyond just review and approve activities.

 

Extract from McKinsey Quarterly – Chinta Bhagat, Martin Hirt, and Conor Kehoe:

Too many boards just review and approve strategy. Three questions can help them and executives begin to do better.

It’s late afternoon in the boardroom, and the head of a major global infrastructure company’s construction business is in the hot seat. A director with a background in the industry is questioning an assumption underlying the executive’s return-on-invested-capital (ROIC) forecast: that the industry’s ratio of leased (versus owned) equipment will remain relatively constant. The business leader appears confident about the assumption of stability, which has implications for both the competitive environment and for financial results. But the director isn’t convinced: “In my experience, the ratio changes continuously with the economic cycle,” he says, “and I’d feel a whole lot better about these estimates if you had some facts to prove that this has changed.”

An uneasy silence settles over the room: the board member’s point appears quite relevant but requires a familiarity with the industry’s behavior and economics, and the rest of the board doesn’t have it. Finally, the chairman intervenes: “The question John is raising is critical and not just for our construction business but for our entire strategy. We’re not going to resolve this today, but let’s make sure it’s covered thoroughly during our strategy off-site. And Paul,” says the chairman to the CEO, “let’s have some good …

More … http://www.mckinseyquarterly.com/Governance/Boards/Tapping_the_strategic_potential_of_boards_3060

Embrace storytelling to advance and protect - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/embrace-storytelling-to-advance-and-protect/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/embrace-storytelling-to-advance-and-protect/

Embrace storytelling to advance and protect: stories have power to move people to connect, feel and act.

 

 

Extract from Climate Access – Leslie Kerns:

A whitepaper from M+R Strategic Services provides insights as to why organizations and campaigns need to embrace storytelling to advance and protect the causes we care about.

Stories have the power to move people to connect, feel and act. Storytelling and the Power of Making Headlines offers recommendations on how nonprofits can connect with the news media to reach new and current supporters. The whitepaper helps organizations determine “What kind of story will attract reporters so it is told credibly as well as far and wide?

Storytelling matters because stories:

- Are Universal: they help us bridge cultural, linguistic, generational divides;

- Help us process information: because our brains think in narrative structures;

- Shape identities: stories define how audiences identify with the issue;

- Make connections: we want to know that others understand us vice versa.

What is it that reporters, editors, and producers are looking for in a newsworthy story:

- Personal: a person’s life is affected by a situation;

- Relatable: you can imagine being in the situation – and you don’t like it;

- Surprising: the situation is unheard of or opposite of what you’d expect;

- Relevant: the story adds to a conversation or is related to an issue currently happening in your community or state, on Capitol Hill, or across the country;

- Timely: the time to tell that story is now.

So how do you place your powerful story in the media:

1. GET POWERFUL STORIES: ask your supporters or your partners to submit their stories, scan social media, and pay attention to the media narrative around your topic;

2. VET YOUR STORIES: create a vetting guide and contact people you can help move along the conversation;

3. ORGANIZE YOUR STORIES: keep and update a simple database of your stories;

4. LET YOUR STORIES LOOSE: customize your story pitches for the medium you have in mind;

5. KEEP YOUR STORY-TELLERS ENGAGED: nurture an ongoing relationship with story-tellers.

More … http://www.climateaccess.org/resource/storytelling-and-power-making-headlines

Strategy only works if enough people want it to succeed - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/strategy-only-works-if-enough-people-want-it-to-succeed/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/strategy-only-works-if-enough-people-want-it-to-succeed/

Strategy only works if enough people want it to succeed: more is accomplished those doing the work love the strategy.

 

Extract from LDRLB – Max McKeown:

Strategy involves change. People have to change something to bring strategy to life. You need to be able to translate your strategy into actions, tasks and projects. You also need to communicate the logic and purpose of the strategy so people can get engaged with the work and are willing to help it succeed. If strategy is painful then you’re doing it all wrong.

McDonald’s was known for being unhealthy, dirty, inconvenient, cheap, unethical and old-fashioned. In response, the new CEO introduced a new strategy: ‘Plan to Win’. It fit onto only one page. It explained very clearly the necessary changes so everyone understood what was required. The mission changed from ‘best fast food restaurant’ to ‘favourite place and way to eat’.

This clear change of strategy led to clear changes. Instead of growing locations they improved experience. They introduced healthier food, good tasting coffee, interiors that surpassed coffee shop competitors and free Wi-Fi.

Suddenly competitors were struggling to catch up. The strategy delivered 8 years of growth. McDonalds succeeded because everyone engaged with a clear strategy that made sense and motivated action.

Strategy involves change because it has to adapt to competitors, technology and customers. If you change the strategy but don’t succeed in changing the company, then the strategy is wasted. Even worse, the company may not succeed in adapting in ways that allow it to grow and thrive.

The McDonalds example shows the importance of clarity in getting strategic changes made. The changes are made by people. People can only help if they know what is expected. And they will only help if they feel engaged with the direction of the strategy.

The strategy may be correct but so boring that no-one wants to read it. It may include new ideas but ideas that are not credible. It may be so complex that it takes longer to read it than do anything about it. And it may be so vague that no-one knows what is expected of them if they do want to help.

According to McKinsey, fewer than 25% of executives use the strategic planning process to drive decision making, and only 14% believe it involves the talent of employees so it’s worth thinking about making strategy engaging before there even is a strategy in place.

So you could create your strategy in secret and spend months trying to make it work. But it’s far better to spend months involving everyone in creating strategy that encourages discussions between departments, improves understanding of competition and customers, and increases chances of creating something worthwhile that will help you to grow.

It’s also important to consider the scale and nature of the change that your strategy requires. Changes might be big or small. They may involve evolution or revolution. They may be positive or negative. They may involve losing jobs or gaining jobs. The strategy might require new skills or actions. It might involve different areas of the business in different ways. It may be more externally or more internally focused.

Change comes from different perspectives. Responses to changes come from different perspectives. And changes aren’t going to be welcome in the same way. These tensions are what creates the attempt to make changes in the first place and what will shape what eventually happens.

There may be clashes between different interest groups, or disagreements about competing plans for the future. There may be an absence of clarity about what needs to be done so that nothing clear is done. There are often winners and losers who both feel very differently about the strategy.

There are two key challenges: How to reduce wasted effort arguing about what change should be made or not made? And how to make sure that the right action is taken to make the change happen successful?

Fortunately, the best solution works for both challenges. First, make strategy clear and easy to understand for everyone. Clarity is next to effectiveness. Clarity helps people know how to contribute positively to the strategy. It also increases the chances that people will want to contribute. Second, include people in creating and making it work. Take them through the logic behind the strategy so your strategy comes to life.

Your task is to intelligently respond to real desire for change (and improvement) that already exists. Work with forces for change so it becomes organic rather than mechanical. In this way, you are working with people rather than against them. The friction involved is reduced. And the chances are higher that you will – at least – be attempting something desired and respected by your own people.

What has to change? How big are the changes? Who will be affected? Who do you need to really make the strategy work? For a strategy to be valuable, it has to be made to work. Smart strategists understand strategy only works if enough people want it to succeed. More is accomplished when the people doing the work love the strategy that guides the work.

More … http://ldrlb.co/2013/02/if-strategy-is-painful-youre-doing-it-wrong/

How to say no in a positive, strategic way - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/how-to-say-no-in-a-positive-strategic-way/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/how-to-say-no-in-a-positive-strategic-way/

How to say no in a positive, strategic way: enabling you to create space to be able to say yes more often.

 

Extract from HBR Blog Network – Peter Bregman:

Irene* is a great colleague. A senior manager in a large consulting firm, she pitches in when the workload gets heavy, covers for people when they’re sick, and stays late when needed, which is often.

She’s also a leader, serving on boards and raising money at charity auctions. She tries to be home for her kids at dinner time, but often works into the night after they’ve gone to sleep. That is, on nights when she’s not at a business dinner.

But if you catch her in a moment of honesty, you’ll find out that she doesn’t feel so great. In fact, she’s exhausted.

Irene can’t say no. And because she can’t say no, she’s spending her very limited time and already taxed energy on other people’s priorities, while her own priorities fall to the wayside. I have experienced the same thing myself. So, over time, I experimented with a number of ways to strengthen my no.

Here are the nine practices I shared with Irene to help her say a strategic no in order to create space in her life for a more intentional yes.

Know your no. Identify what’s important to you and acknowledge what’s not. If you don’t know where you want to spend your time, you won’t know where you don’t want to spend your time. Before you can say no with confidence, you have to be clear that you want to say no. All the other steps follow this one.

Be appreciative. It’s almost never an insult when people make requests of you. They’re asking for your help because they trust you and they believe in your capabilities to help. So thank them for thinking of you or making the request/invitation. Don’t worry; this doesn’t need to lead to a yes.

Say no to the request, not the person. You’re not rejecting the person, just declining his invitation. So make that clear. Let him know what you respect about him — maybe you admire the work he’s doing, or recognize his passion or generosity. Maybe you would love to meet for lunch. Don’t fake this — even if you don’t like the person making the request, simply being polite and kind will communicate that you aren’t rejecting him.

Explain why. The particulars of your reason for saying no make very little difference. But having a reason does. Maybe you’re too busy. Maybe you don’t feel like what they’re asking you to do plays to your strengths. Be honest about why you’re saying no.

Be as resolute as they are pushy. Some people don’t give up easily. That’s their prerogative. But without violating any of the rules above, give yourself permission to be just as pushy as they are. They’ll respect you for it. You can make light of it if you want (“I know you don’t give up easily — but neither do I. I’m getting better at saying no.”)

Practice. Choose some easy, low-risk situations in which to practice saying no. Say no when a waiter offers you dessert. Say no when someone tries to sell you something on the street. Go into a room by yourself, shut the door, and say no out loud ten times. It sounds crazy, but building your no muscle helps.

Establish a pre-emptive no. We all have certain people in our lives who tend to make repeated, sometimes burdensome requests of us. In those cases, it’s better to say no before the request even comes in. Let that person know that you’re hyper-focused on a couple of things in your life and trying to reduce your obligations in all other areas. If it’s your boss who tends to make the requests, agree upfront with her about where you should be spending your time. Then, when the requests come in, you can refer to your earlier conversation.

Be prepared to miss out. Some of us have a hard time saying no because we hate to miss an opportunity. And saying no always leads to a missed opportunity. But it’s not just a missed opportunity; it’s a tradeoff. Remind yourself that when you’re saying no to the request, you are simultaneously saying yes to something you value more than the request. Both are opportunities. You’re just choosing one over the other.

Gather your courage. If you’re someone who is used to saying yes, it will take courage to say no, especially if the person asking doesn’t give up easily. You may feel like a bad friend. You might feel like you’re letting someone down or not living up to expectations. Maybe you’ll imagine that you’ll be seen or talked about in a negative light. Those things might be the cost of reclaiming your life. You’ll need courage to put up with them.

After Irene tried these practices she started working less and spending more time with her kids. She’s still doing great work and she’s still valued by her boss and co-workers, but they’ve noticed the difference too, she told me. And not all of it is positive.

They’re respecting her boundaries — they don’t even seem to resent her for them — but she’s had to give up something she never knew was important to her: her sense of herself as someone who could do it all. It’s been hard for her to feel as valued and necessary as she did when she always said yes.

“Would you rather go back to saying yes all the time?” I asked her.

She answered me with a very well-practiced “No.”

*Name and some details changed.

Peter Bregman is a strategic advisor to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done. To receive an email when he posts, click here.

More … http://blogs.hbr.org/bregman/2013/02/nine-practices-to-help-you-say.html

Fulfilling inspiring visions by engaging all generations - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/fulfilling-inspiring-visions-by-engaging-all-generations/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/fulfilling-inspiring-visions-by-engaging-all-generations/

Fulfilling inspiring visions by engaging all generations: leaders must develop leadership capacity of eveyone.

 

Extract from The HR Director – Lindsay Wittenberg:

Planning and creating workforces of the future means that in a world that’s changing faster than ever, leaders need to develop the leadership capacity of the talent pool and engage all generations in their workforces to fulfill inspiring visions together. Lindsay Wittenberg, Managing Director, Lindsay Wittenberg Ltd.

Demographic shifts that are transforming the global workforce mean that employers will no longer define the workplace. It is the priorities and preferences of employees, rather than employers, that will dictate what the future workplace will look like – and, critically, it is leaders who provide the connection to the workforce and help shape it for the future. More than ever, leadership will be required which is empowering, collaborative, inspiring and co-creative. A quality of leadership is required that is about ‘being’ even more than ‘doing’. Leaders need to be authentic and emotionally intelligent, and to develop these qualities in the talent pool, i.e. those who follow today and will lead tomorrow.

Authentic leaders are anchored by their own deep sense of self. They clearly and accurately see themselves, their values and beliefs, and where they stand on important issues. They’re true to themselves and to what they believe to be right, rather than conforming to the expectations of others. They’re motivated by their own personal convictions rather than to attain status or other personal benefits. They’re originals, not copies. And they behave morally. An authentic leader focuses on nurturing confidence, development, hope, and optimism in their followers. They help create meaning at work, and they motivate discretionary effort in the fulfilment of an inspiring vision, engagement in the purpose and the vision, and trust.

Employees give their best when their values are met and their motivations are reflected in their work, and when they have a sense of achievement from that work. These values differ across the generations of increasingly ageing workforces, which may be categorised as follows: ‘Matures’ (born 1939-1947) expect their leaders to offer them learning experiences, and goals as ambitious as those for other team members. Baby Boomers (1948–1963) are motivated by recognition. They want to compete as individuals and be part of a team. They like working independently, and they value money and status. Generation X (1964–1978) expect leadership that offers them opportunities to learn marketable skills and skills for self-enrichment. Gen Xers value life outside work, and consider freedom and flexibility at work as essential. A coaching style of leadership is effective with these people (as it is with Generation Y).

Generation Y (1979 -1991) expect individual attention from their leaders, and respond to opportunities to grow and improve, and to immediate, constructive feedback. They want to ‘understand why’. This generation are ambitious, strongly motivated by money, status and career advancement, and expect rapid progress. They value freedom, autonomy, and work-life balance. Generation Z (1992-2008) will be the most socially networked generation in history. Leaders will need to satisfy this generation’s expectation to be ‘always on’, to do work they love, and to be able to flex their work so that it offers meaning. Senior leaders (often Baby Boomers or Generation X-ers) need to engage or re-engage the experienced base of talent alongside the always-on generations (i.e. Generations Y and Z) and every generation between, running cohesive workforces where the generations work harmoniously together and where all feel connected to the organisational culture and values.

Self-awareness is a crucial and fundamental skill for this challenge, not least because it helps leaders establish and nurture transparent and compelling relationships. The self-aware leader is more likely to respond than react, and is easier to trust and engage with – and self-awareness can be nurtured by engagement with others’ feedback through reflection. These are critical attributes if the leader is to inspire and empower others to deliver on the organisational agenda. The leader who lacks self-awareness is operating in a fog which makes it impossible to make well-informed judgments or to really connect with others. Self-awareness is one component of emotional intelligence. The research of Dr Martyn Newman for example, identifies the following ten emotional skills that drive leadership performance and distinguish great leaders: Self-awareness: self-knowing and straightforwardness, Self-management: self-control, self-confidence and self-reliance: Social awareness: empathy; Social management: relationship skills; Adaptability: adaptability, optimism and self-actualisation.

Leaders with these skills can energise workforces around a common cause, enable creativity and courage in response to the changes in their environments, build resilience and performance, and meet the demands of employees’ priorities and preferences. They deliver on Jack Welch’s dictum: “The most important job you have is growing your people, giving them a chance to reach their dreams.” How capable might workforces be if workforce planning meant believing in and implementing the principles set out here, so that employees reach their dreams, and the talent pool consistently delivers a quality of leadership that is equipped for now and the future?

www.lindsaywittenberg.co.uk

More … http://www.thehrdirector.com/features/leadership/planning-for-a-very-diverse-workforce/?

Effective innovation needs better understanding - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/effective-innovation-needs-better-understanding/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/effective-innovation-needs-better-understanding/

Effective innovation needs better understanding: value from building robust synergies across all parts of portfolio.

 

Extract from HBR Blog Network - Greg Satell:

Albert Einstein is often quoted (perhaps apocryphally) as saying, “If I had 20 days to solve a problem, I would spend 19 days to define it.” Innovation is a particularly sticky problem because it so often remains undefined. We treat it as a monolith, as if every innovation is the same, which is why so many expensive programs end up going nowhere.

So how should we go about it? Should we hand it over to the guys with white lab coats, an external partner, a specialist in the field, crowdsource it, or what? Before handing them off, you need a clear framework for defining innovation problems and approaches that are most likely to resolve them.

Defining a managerial approach to innovation starts with developing a better understanding of the problem we need to solve. I’ve found asking two basic questions can be enormously helpful.

How well is the problem defined? When Steve Jobs, who was a master at defining a clear product vision, set out to build the iPod, he framed the problem as “1,000 songs in my pocket.” That simple phrase defined not only the technical specifications, but the overall approach. Unfortunately, some problems, like how to create a viable alternative to fossil fuels, aren’t so easy to delineate. So your innovation strategy will have to adapt significantly depending on how well the problem can be framed.

Who is best-placed to solve it? Once Jobs defined the iPod problem, it was clear that he needed to find a disk drive manufacturer who could meet his specifications. But, sometimes the proper domain isn’t so cut and dried. Once you start asking these questions, you’ll find that they clarify the issues quite quickly. Either there is a simple answer, or there isn’t.

Once we’ve asked the framing questions, we can determine which approach to innovation makes the most sense:

Basic Research: When your aim is to discover something truly new, neither the problem nor the domain is well defined. While some organizations are willing to invest in large-scale research divisions, others try to keep on top of cutting edge discoveries through research grants and academic affiliations. Often, the three approaches are combined into a comprehensive program.

While most basic research happens in academic institutions, some businesses can excel in it as well. In 1993, IBM research accomplished the first quantum teleportation, a technology isn’t likely to result in a product until after 2020. They continue to lead in patents. Basic research requires a long time horizon in order to pay off and therefore must be combined with other methods, either internally or through partnerships.

Breakthrough Innovation: Sometimes, although the problem is well-defined, organizations (or even entire fields) can get stuck. For instance, the need to find the structure of DNA was a very well defined problem, but the answer eluded even the most talented chemists. Usually, these types of problems are solved through synthesizing across domains. Watson and Crick solved the DNA problem by combining insights from chemistry, biology, and X-ray crystallography.

Many firms are turning to open innovation platforms such as Innocentive, which allow outsiders to solve problems that organizations are stuck on. Proctor and Gamble has built its own Connect + Develop platform which allows them to benefit from expertise in a variety of domains across the world.

Sustaining Innovation: Every technology needs to get better. Every year, our cameras get more pixels, computers get more powerful and household products become “new and improved.” Large organizations tend to be very good at this type of innovation, because conventional R&D labs and outsourcing are well suited for it.

Apple, for example, is a superior sustaining innovator. They didn’t invent the digital music player, the smartphone, or even the tablet computer. However, they improved on earlier designs to such an extent that they seemed like they’re something completely new. In a similar vein, Toyota makes cars just like any others, except better.

What both companies have in common is that they are masters at adapting breakthrough innovations for existing markets. In essence, great sustaining innovators are great marketers. They see a need where no one else does.

Disruptive Innovation: The most troublesome area is disruptive innovation, which target light or non-consumers of a category and require a new business model, because the value they create isn’t immediately clear. While every new Apple product turns heads, when Google comes out with something most people won’t even understand what it is, much less how they’ll make money on it. From Google Maps to autonomous cars, they manage to fill needs we didn’t even know we had. 3M, the company that pioneered scotch tape and post-it notes, derives up to 30% of its revenue from products launched in the past 5 years.

Both companies use a version of the 15% / 20% rule, where employees are required to devote a fixed portion of their time to projects unrelated to their jobs. Other firms have dedicated innovation labs where they can “test and learn” without excessive risk. A VC approach, in which small investments are made in emerging firms, can also be successful.

While focus is important, no company should limit itself to just one quadrant. Apple, for instance, is mainly a sustaining innovator, but iTunes was certainly an important disruptive innovation. While Google might be the greatest disruptive innovator on the planet, they spend considerable resources to improve existing products.

So it’s important to develop an effective innovation portfolio that has one primary area of focus, but also pursues other quadrants of the matrix and builds synergies between varied approaches. Innovation is, above all, about combination.

Greg Satell is a recognized authority on digital strategy and innovation. He is a speaker, consultant, and writes the Digital Tonto blog. Follow him on Twitter @DigitalTonto.

More … http://blogs.hbr.org/cs/2013/02/before_you_innovate_ask_the_ri.html

Meetings can increase and amplify team creativivity - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/meetings-can-increase-and-amplify-team-creativivity/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/meetings-can-increase-and-amplify-team-creativivity/

Meetings can increase and amplify team creativivity: value of connecting to share work, setbacks and insights.

 

Extract from The Creativity Post – David Burkus:

No one is a fan of meetings anymore.

Most people seem to abhor the idea of sitting around a conference table checking off items from an agenda while their “real work” waits impatiently for their return. A quick glance at the world of business books echoes these ideas, with statement such as “meetings are toxic” (Rework, Jason Fried & David Heinemeier Hannson) and whole books titled Death by Meeting (Patrick Lencioni). It seems the overwhelming majority of opinion sides with these statements and movements are underway to reduce or eliminate meetings.

I’d like to defend meetings.

While I can not return the hours wasted in meetings or present a foolproof method for ensuring every meeting is productive every time, I would like to mount an argument and present evidence for the following statement:

Meetings make us more creative.

The evidence for this claim is found in research from the field of molecular biology, or rather research on the field of researching molecular biology. Psychologist Kevin Dunbar studied the workings of four prominent microbiology laboratories for insights into the creative work of experimentation. The findings from these field studies defied the conventional image of the lone scientist staring into a microscope to reveal a great discovery. Instead, Dunbar found that the most creative insights and greatest discoveries actually occurred during regularly scheduled lab meetings, where individual researchers revealed their latest findings and shared their most difficult setbacks. The creative discoveries produced by these labs occurred only after these individuals conspired together to find a solution or draw connections between previously unconnected insights.

These findings imply that getting individuals to connect and share their work, setbacks and insights can amplify the creativity produced by the team. Whether your researching the actions of individual cells, or leading a cross-functional team for a new program launch, you stand to benefit from the creative power of our old friend: meetings.

For further proof, consider two software companies: Atlassian and Google. Atlassian, a software development company based in Australia, regularly what they called “FedEx Days,” where developers drop their normally assigned tasks and work on whatever they want. At the end of the 24 hours, Atlassian holds a meeting. Not a bland, sit around a large table meeting, but a social event with food and drinks where the developers share the end result of their 24 hours. The company reports that these events are responsible for numerous new products, software fixes and process improvements.

While Atlassian throws elaborate party-like meetings, Google takes a simpler approach: free food. Google is often praised for its free meals program, which gives employees a variety of gourmet meals on demand in various locations throughout their Mountain View, California campus. This free food is not just to increase employee happiness – it increases creativity as well. Douglas Merrill, the former Chief Information Officer at Google once revealed that another reason behind the free food is that it encourages Googlers to sit down, interact with others outside their department and share what they are working on, what problems they’ve encountered and what counsel they can give to others in the Googleplex. The benefits of these connections are difficult to track, but it is not unreasonable to assume they are similar to those experiences at Dunbar’s microbiology labs.

Creative work sometimes appears a lonely endeavor, but this is largely a stereotype. Regardless of the format, be it a regular staff meeting, an after hours party or a gourmet lunch, there really is something to the way connection opportunities can magnify the creative output of teams.

More … http://www.creativitypost.com/business/why_meetings_make_us_more_creative

Five questions for effective strategy execution - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/five-questions-for-effective-strategy-execution/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/five-questions-for-effective-strategy-execution/

Five questions for effective strategy execution: ensuring you have perspective, commitment, and alignment to deliver.

 

Extract from strategy+business – Ken Favaro:

Without addressing the strategic five, your company will lack the foundation and the context for making the choices and allocating the resources that are critical to superior execution. Without the corporate five, your organization will lack the perspective, commitment, and alignment required to perform at its very best.

When leaders substitute visions, missions, purposes, plans, or goals for the real work of strategy, they send their firms adrift.

When discussing strategy, executives often invoke some version of a vision, a mission, a purpose, a plan, or a set of goals. I call these “the corporate five” (see exhibit, below). Each is important in driving execution, no doubt, but none should be mistaken for a strategy. The corporate five may help bring your strategy to life, but they do not give you a strategy to begin with.

Nevertheless, they are often mistaken for strategy—and when that happens, real damage can ensue. If the corporate five are the cart and strategy is the horse, leaders who put the cart first often end up with no horse at all.

Before they get to the corporate five, companies need to address five much more fundamental, and difficult, questions. Let’s call them the “the strategic five”:

1. What business or businesses should you be in?
2. How do you add value to your businesses?
3. Who are the target customers for your businesses?
4. What are your value propositions to those target customers?
5. What capabilities are essential to adding value to your businesses and differentiating their value propositions?

Although most companies can articulate a vision (for instance, “to be the leading biotech company”), a mission (“to find and commercialize innovative drug therapies”), a purpose (“to improve patients’ lives”), a plan (“to develop molecule X, enter market Y, and partner with company Z”), or a goal (“to bring three innovative molecules to market by 2025”), few convincingly answer all five strategic questions, especially with one voice across their top teams and down their organizations.

They can’t answer those questions because often they haven’t asked them in a very long time, if at all. Instead, the corporate five have become a mask for strategy. When that happens, the real substance of strategy—making deliberate and decisive choices about where to play and the way to play—is lost. There is no foundation for decision making and resource allocation. Everything becomes important. Indiscriminate cost-cutting and growth become the order of the day and, sooner or later, with no strategy as a guide, a business drifts. Consider Procter and Gamble. It has a mission (“to touch and improve the lives of more consumers, in more parts of the world, more completely”) and a CEO who says he is “totally focused on the plan.” Yet the company is struggling to regain its footing and direction because the strategic five has been lost while the vast, complex enterprise strives to operate in a more volatile economic environment.

 

IBM, on the other hand, is an example of getting it right. When Lou Gerstner took over the reins of the troubled company in 1993, he famously declared, “The last thing IBM needs right now is a vision.” This was widely interpreted as a statement that execution would be the priority and strategy would take a backseat, at least while Gerstner was busy turning around the company. But he proceeded to redefine IBM’s business boundaries (from computer hardware to hardware, software, and services), value proposition (from best products to corporate solutions), and essential capabilities (for example, from selling to the IT department to selling to the C-suite). In other words, he focused on the strategic five—not the corporate five—to make his elephant dance. Gerstner was as strategic a CEO as they come. James E. Burke, former CEO of Johnson & Johnson and former IBM board director, said of him, “He thinks strategically about everything. I once asked him if he thought strategically about his dog.” Gerstner knew that IBM was suffering from a lack of clear and coherent strategic choices and that fixing this was far more important to the company’s immediate needs than was envisioning the company’s longer-term future. Without the former, there would be no need for the latter.

All this is not to denigrate the role and power of having visions, missions, purposes, plans, and goals. Strategy is the primary tool a leader uses to guide decision making and resource allocation for a business and its people, but the corporate five give the leader a means to excite, focus, inspire, mobilize, and challenge. A vision paints a picture of the future around which your company can rally; a mission articulates an objective that defines what the company is seeking to achieve; a purpose describes why your company exists and gives meaning to what it does and the people who do its work; a plan lays out a set of actions to be undertaken within a certain time frame; and goals define how your success and progress will be measured and evaluated. None of these gives you a strategy, but they do play an important role: They motivate an organization to perform at its very best in the context of that strategy. That is what execution is all about.

Gerstner knew this too. After stabilizing the company and establishing IBM’s strategic five, he did, in fact, create a vision: “To lead big companies into the brave new networked world, IBM will devise their technology strategies, build and run their systems, and ultimately become the architect and repository for corporate computing, tying together not just companies but entire industries.” But, even then, he recognized the need to connect that vision to the strategy (and execution). “Vision is easy. It’s just so easy to point to the bleachers and say ‘I’m going to hit one over there,’” Gerstner told a CNN interviewer in 2004. “What’s hard is saying, ‘OK, but how do I do that? What are the specific programs, what are the commitments, what are the resources, what are the processes in play that we need to go implement the vision, to turn it into a working model that people follow every day in the enterprise?’ That’s hard work.”

If you want to have a bit of fun sometime, just ask your head of strategy or general manager how the corporate five differ from strategy. A typical response will be, “Who cares? Aren’t they all about giving direction to a business? Does it matter what you call ‘direction,’ as long as you have it?” Now, you have an answer. Without addressing the strategic five, your company will lack the foundation and the context for making the choices and allocating the resources that are critical to superior execution. Without the corporate five, your organization will lack the perspective, commitment, and alignment required to perform at its very best.

Author Profile: Ken Favaro is a senior partner with Booz & Company based in New York and global head of the firm’s enterprise strategy practice.

More … http://www.strategy-business.com/article/cs00006?

Importance of discovering your real value system - http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/importance-of-discovering-your-real-value-system/

http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/importance-of-discovering-your-real-value-system/

Importance of discovering your real value system: then understanding how it relates to your own organisation’s culture.

 

Extract from 99U – Michael Bungay Stanier:

Edgar Schein is a colossus for those of us who think hard about how people and organizations work. His core model explains corporate culture, and it’s one that we can take and use as we look to maximize our own potential and do work that makes a difference, work that matters.

Schein says you can understand an organization on three levels: 

The first level is the Artifacts that we can see and experience when we come into an organization. It’s everything from the way people dress to the organizational chart, the layout of the office to the technology people are using.

The second level is what he calls the Espoused Values of the organization. That’s what the CEO goes on about in her speeches and what appears in the “help wanted” ads. 

The final level, deeper and more elusive than the first two, is what Schein calls the Basic or Unspoken Assumptions. This is what shows up in the habits of the organization, the way people automatically behave. It’s the deeper rhythms of the organization that reflect what the organization truly values.

You can guess that when all three levels are in alignment, you have a powerful organizational culture. What we say is how we behave and the stuff around us supports the cultural and brand experience.

When these three levels don’t quite jive you get a weak culture. As you might suspect, there’s often a disconnect between the espoused values and the unspoken assumptions. (A classic case is “our people are our greatest asset” in an organization that clearly sacrifices employees on the altar of profit.) It also explains why slapping a bright coat of paint on the walls and having uncomfortable yet funky furniture in the reception area doesn’t make a dent in a corporate culture.

When all three levels are in alignment, you have a powerful organizational culture.

Where Are You Out of Sync?

Let’s apply Schein’s model to the way you’re showing up in your own life.

Start with the Espoused Values. “Personal values” has something of a life coach-y ring to it, but understanding what matters to you and what you want to be known for in this world can help you bring a more powerful version of yourself into play. It’s beyond the scope of this essay to go deeply into ways of uncovering and refining your values, but there are plenty of resources out there to help. I’m a particular fan of Dick Richard’s book, Is Your Genius at Work?

Once you’ve started getting clear on values, let’s go to the Artifact level and see just how those values manifest. How do you embody what you stand for, from the way you dress to how you arrange your workspace?

Find Your Values With A “This/Not That” Test.

In my experience, most people aren’t clear on their own values. Even if they have a list, it’s often as vapid as any organization’s: empty words that speak to some sort of Platonic ideal that has no traction in reality and no impact on behavior. In other words, they exist at the “espoused” level rather than the “assumption” level.

An exercise taken from the world of branding might help. When I worked in the world of innovation, I would often work with a client to position a new product. Unfortunately, most clients had a vocabulary of less than six words to describe the positioning they wanted, not nearly as precise as we needed to be.

A simple “This/Not That” exercise helps. For instance, a client might say they wanted a new vodka to be “premium”. We would help them be more specific and descriptive by having them articulate pairs of what it was and wasn’t like. We’d upgrade “premium” to: “Its The Hamptons but it’s not Lake Como; it’s black but it’s not platinum; it’s evening but it’s not ‘after midnight’; it’s the 60s but it’s not the 90s; it’s Audi but it’s not Mercedes; it’s Justin Timberlake but it’s not George Clooney.” 

We can use this tool to maximize our own potential. Reflect back on those times when you were at your best. Times when you were really showing up as the best, most powerful, most fully inhabited version of yourself. Times when you were doing Great Work. Write down five or so words that sum that up.

Now, for every word describing you at your best, pair it up with a word that is not the failed or opposite version of your Great Work, instead choose the ho-hum, mediocre version. For instance, here’s what is on my This/Not That list right now:

- Step Forward not Hold Back
- Playful not Serious
- Loose not Tight
- Curious not Knowing
- Provocative not Sycophantic
- “Bigger picture” not ”it really matters”

There are two benefits in this exercise: First, it is grounded in how you actually show up, so you build your espoused values up from your behavior rather from some fantasy you have about what you actually think is important.  And secondly, it helps you start noticing the gap between your espoused values and what sub-optimal looks like.

Michael Bungay Stanier is the author of Do More Great Work and Senior Partner of Box of Crayons, a company that helps organizations do less Good Work and more Great Work. Follow Michael on Twitter at @BoxOfCrayons.

More … http://99u.com/articles/7282/Are-You-Out-of-Sync-With-Your-Values

Only 55% of supply chain risk management programmes effective - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/only-55-of-supply-chain-risk-management-programmes-effective/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/only-55-of-supply-chain-risk-management-programmes-effective/

Only 55% of supply chain risk management programmes effective: four important attributes critical for resilience.

 

Extract from SupplyChainBrain – Deloitte:

Global executives are increasingly concerned about the growing risks to their supply chains and costly negative impacts such as margin erosion and inability to keep up with demand, according to a report from Deloitte. Yet as they operate in this environment of escalating risk, an alarming 45 percent of surveyed executives say their supply chain risk management programs are only somewhat effective or not effective at all.

“Supply chains are increasingly complex, and their interlinked, global nature makes them vulnerable to a range of risks,” says Kelly Marchese, principal, Deloitte Consulting LLP, who specializes in manufacturing operations and supply chain strategy. “This increased complexity, coupled with a greater frequency of disruptive events such as geopolitical events and natural disasters, presents a precarious situation for companies without solid risk management programs in place.”

According to the global survey of 600 executives, supply chain disruptions are not only more frequent, they are also having a larger negative impact. Among the findings:

- More than half (53 percent) of executives said that supply chain disruptions have become more costly over the last three years.

- Executives from the technology, industrial products and diversified manufacturing sectors were most likely to report that supply chain disruptions have become more costly.

- Nearly half (48 percent) of executives said the frequency of risk events that had negative outcomes – such as sudden demand change or margin erosion – has increased over the last three years.

Margin erosion is considered the most costly outcome of supply chain disruptions, with 53 percent citing it as one of their top two issues. Consumer products, diversified manufacturing and energy companies were especially likely to report margin erosion as one of their most costly issues.

Forty percent of respondents cited “sudden demand change” as one of their two most costly problems – a reflection of ongoing challenges involved with growing customer expectations, short product cycles and emerging competitive challenges. Executives at retail and technology companies, which operate in a world where markets change rapidly, were most likely to identify demand change as being costly.

Executives surveyed recognize the strategic importance of supply chain risk, with 71 percent responding that supply chain risk is an important factor in their strategic decision-making. Nearly two-thirds (64 percent) claim to have in place a risk management program specific to the supply chain.

However, only 55 percent of surveyed executives think their risk management programs are extremely or very effective. The top two challenges according to executives surveyed were “lack of acceptable cross-functional collaboration” (32 percent), followed by “cost of implementing risk management strategies” (26 percent). There are also organizational factors making effective supply chain risk more difficult: Three-quarters (75 percent) of executives said their supply chain risk management model is organized around silos, which can lead to a lack of supply chain visibility and collaboration, and make it difficult to assess and manage risk on a holistic basis.

Although surveyed executives report using a wide range of tools to manage risk, only 36 percent use predictive modeling and less than one-third (29 percent) use risk sensing data, worst case scenario modeling, or business simulation – all tools that help drive more proactive management of supply chain risk.

“Many companies have some form of a supply chain risk management program, but unfortunately they do not always get the results they need from these programs,” said Marchese. “To be effective, companies should take a holistic and integrated approach to managing supply chain risk and go beyond traditional approaches. Because of the complex nature of today’s supply chains, disruptions will inevitably occur. True resilience means building in the ability to recover efficiently and decrease the impact of those events.”

According to Deloitte. the four important attributes that are critical to supply chain resilience are:

- Visibility: The ability to monitor supply chain events and patterns as they happen, which enables companies to proactively—and even preemptively—address problems.

- Flexibility: Being able to adapt to problems efficiently, without significantly increasing operational costs, and make timely adjustments that limit the impact of disruptions.

- Collaboration: Having trust-based relationships that allow companies to work closely with supply chain partners to identify risk and avoid disruptions.

- Control: Having policies, monitoring capabilities and control mechanisms that help confirm that procedures and processes are actually followed.

A copy of the 2013 Global Supply Chain Risk survey report can be accessed by clicking here.

More … http://www.supplychainbrain.com/content/nc/single-article/article/execs-not-confident-in-risk-management-plans-as-threats-to-supply-chains-grow-survey-finds/

Functional leader as new strategic partner - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/functional-leader-as-new-strategic-partner/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/functional-leader-as-new-strategic-partner/

Functional leader as new strategic partner: delivering not what individual function demands but what enterprise needs.

 

Extract from HBR Blog Network – Paul Leinwand and Cesare Mainardi:

Business units come and go, but finance, HR, IT, marketing, legal, and R&D are forever. Nonetheless, many CEOs and top executives struggle with their functional organizations, and some question whether the established functional model is still relevant. In their view, functional priorities are all too often in conflict with — or not fully supportive of — the strategic needs of the business.

The challenge for the functional model today is that companies don’t need to build generic functional strengths. They need to build more specific, bespoke capabilities that are part of the inherent identity of the company, and hard for anyone else to duplicate.

For example, Walmart doesn’t succeed just because of a strong operations group. It has built impressive capabilities that include logistics, inventory processes, buying standards, real estate practices and labor models — most of which it created for itself. Similarly, Amazon doesn’t succeed because its people apply broad marketing expertise. It has sophisticated functions that together manage user-generated content, the in-depth tracking of consumer buying behavior, and the innovation of new features based on the resulting insights. No other company does these things the same way these two companies do.

In nearly all industries, the expertise needed to differentiate a company and win in the marketplace is much more complex than it was in the past. If a company wants to be better than anyone else, at something relevant to its customers, its specialists must be more efficient, technically proficient, and creative than ever before.

Therefore, it is crucial to be clear about the capabilities your organization most needs to stand apart. Too often we see functional leaders and staff struggling because this is not well defined. Imagine trying to use the objective of being “innovative” as a criterion for the multitude of investments a company must make around product launches and R&D.

Unfortunately, when the company isn’t coherent — when its strengths are not linked explicitly to its strategic focus — most functions end up trying to keep up with an overlong list of “really important priorities.” This is an unwinnable proposition.

How can you tell when the functional model is not working well? Typically, you will see functions being good at many things, but great at nothing. These functional teams struggle to meet the short-term needs of all their constituents, juggling an endless (and often conflicting) list of demands from line units. They talk about the long-term requirements to build true differentiation, but never seem to get the time or resources for them, and thus fail to gain the type of advantage that is required for success.

Indeed, mono-functional excellence will almost never guarantee success. The most distinctive, differentiating capabilities are almost always cross-functional. P&G’s vaunted ability to launch breakthrough products isn’t just a matter of R&D; it requires an integration of competencies, including consumer insights, engineering, external partnerships and brand marketing. Similarly, IKEA’s capability in creating and selling stylish but utilitarian furniture combines functional expertise in design, sourcing, manufacturing, packaging, logistics, the design of customer experience in its retail stores, and cost management; all of these reinforce each other.

This type of capability requires a higher level of cross-functional collaboration than many specialists are used to. But if the functional model is obsolete, what might replace it? There are several possible solutions, each with strengths and weaknesses.

Many companies try to build complex capabilities by assembling small-scale functional teams — committees of people from the relevant professional groups to tackle particular problems. These are relatively easy to organize and they can make a genuine difference in solving cross-functional problems.

Unfortunately, however, most cross-functional teams fall far short of delivering truly differentiating capabilities. They rarely have the time to resolve the different ways of thinking that people bring from their professional specializations. When the team members first come together, they tend to misunderstand one another. The teams are also limited by their conflicting functional priorities and sometimes a lack of clear accountability. Many of these teams will dissolve once the project is over, and their members may not work together again. They therefore have little incentive to overcome these hurdles.

Permanent cross-functional teams tend to fare better. A growing number of innovation groups bring together disparate functional skills (typically R&D, marketing, IT, and customer insight) to launch new products or services, and then keep the teams together afterwards. Frito-Lay Inc., for example, set up a unit like this in the early 1980s; merchandising, IT, and supply chain worked together to develop the company’s celebrated direct-store-delivery capability, enabled by handheld devices that Frito-Lay developed itself. Similarly, Pfizer Consumer Healthcare (since sold to Johnson & Johnson) set up communities of practice in the early 2000s, made up of lawyers, health professionals, and marketing experts who could help spread key ideas and best practices to brand and product groups around the world.

We’ve recently seen a more robust cross-functional construct emerge, one with an overarching organizational structure, based on building and maintaining a distinctive capability. Members of these capabilities teams are assigned permanently to them, reporting there rather than through a functional hierarchy. For example, a retail bank might have a single large group overseeing its remarkable capability in customer management — professionals who were formerly part of marketing, back-office operations, IT, sourcing, and legal organizations would all report to the same part of the hierarchy, all working together to maintain and improve the way their bank serves consumers and small businesses.

This approach links the organization’s specialists more directly to the capabilities that support the company’s core strategy, lifting them to a new level of accountability and reward above the status they would have had in functions like supply chain, finance, or marketing. One early variant of this approach, rapidly taking hold in technology-oriented companies, is the “strong-form” product management team — in which multifaceted product launches are overseen by a single leader, who coordinates all the activities involved in a product launch and has the final responsibility for the outcome. A few of these cross-functional groups are even gaining representation on their company’s executive team. Their leaders are officers with titles like Chief Risk Officer, Chief Innovation Officer, and Chief Growth Officer.

Different companies will find different paths, but every company will need to reconsider the functional organization as its primary way of managing specialized expertise. The most farsighted functional leaders are not just waiting for these changes to affect them. They are helping evaluate the current state of their company’s capabilities system, and suggesting ways to bring it closer to its potential. This is part of the functional leader’s new mandate as a strategic partner for the enterprise: delivering not what individual constituents demand, but what the enterprise needs.

More … http://blogs.hbr.org/cs/2013/02/strength_focus_and_corporate_c.html