Three different ways the future can sneak up on you - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/three-different-ways-the-future-can-sneak-up-on-you/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/three-different-ways-the-future-can-sneak-up-on-you/

Three different ways the future can sneak up on you: and different reasons why you can’t predict what would happen.

 

Extract from Fast Company – Jamais Cascio:

Futurism is a richly metaphorical body of thought. It has to be; much of what we talk about is on the verge of unimaginable, so we have to resort to metaphors for it to make any kind of sense. Not all of the metaphors we use are complex: It struck me recently that there are several common futurist metaphors that take a relatively simple animal shape: the Dragon; the Black Swan; and the Mule.

The Dragon

The Dragon is the one that most people will find familiar. There’s a popular myth that the phrase “Here Be Dragons” can be found on medieval or ancient maps as an indication of uncharted regions. That this myth is untrue is somewhat beside the point. These days, “here be dragons” is a broadly-understood metaphor for something both dangerous and uncertain. And it seems that the future is full of dragons, considering how frequently I’ve heard the term.

That said, it’s been my experience that most of the times a futurist uses “here be dragons,” it’s to indicate a topic area in a forecast that is uncertain and dangerous to even think about, at least for the client. There’s something about a particular issue that makes people within an organization steer clear, even if it’s a potentially important problem. So the dragon–as in “here be dragons”–is a sign of something we don’t know much about, but really should.

The Black Swan

Of course, you won’t get very far as a Serious Business Foresight Strategist casually throwing around phrases like “here be dragons,” so our linguistic zoo also includes the “Black Swan,” a term popularized by the economist Nassim Nicholas Taleb in a 2007 book of the same name. Generally speaking, a Black Swan event is one that is outside of what we’d consider plausible, outside “our reasonable expectations,” yet is critically important when it happens. The term itself comes from the 16th century European belief that swans were only white, so a “black swan” indicated an impossibility; in the late 17th century, of course, Europeans found actual living black swans in Australia, and the meaning of the term flipped.

The problem with the Black Swan concept is that it’s highly subjective. After all, swans with black feathers were by no means unknown to Indigenous Australians. And many of the events Taleb offers as Black Swans (the emergence of the Internet, the fall of the Soviet Union, 9/11) may well have been outside of reasonable expectation for the general public, but they were identifiable for at least some of the people paying attention to those particular dynamics. In many ways, the actual Black Swan problem isn’t the difficulty in predicting the future, it’s the difficulty in deciding who to listen to. Every “black swan” is an “annoying bird digging up my garden” to somebody. The “black swan” is a sign of something that we don’t know much about, but probably could.

The Mule

If you’ve read Isaac Asimov’s Foundation trilogy, you know which Mule I’m talking about. If you haven’t, here’s a quick recap (and a spoiler for a set of novels published in the early 1950s): a brilliant “psychohistorian” named Hari Seldon–essentially a futurist with above-average math skills–successfully plots out a way for the dying galactic empire to get through a dark age much more quickly than it otherwise would. But after a couple of hundred years, Seldon’s predictions, which all along had been completely accurate, suddenly start going wrong. The reason? The emergence of a mutant able to control human minds, a mutant who called himself the Mule.

The Mule is more than a Black Swan event; his appearance is something that could not have been identified beforehand, because his existence is outside the realm of what had been considered possible. Nobody in the thousands of years of history of the galactic empire had ever developed psychic powers; there was no way for Hari Seldon to even imagine including something like him in his predictions.

Through diligent work, the heroes of the Foundation stories manage to get the future back on track, and that suggests the metaphorical role of the bestiary’s Mule. For futurists, the Mule is a sign of something that we don’t know much about, and really can’t–and will require us to redouble our efforts to get things going the right direction.

Here’s the thing: It’s easy to assume any surprise is a Mule. It’s much harder–ultimately more valuable–to recognize when you are looking in the wrong direction (a Black Swan) or refusing to open your eyes (a Dragon). The task for the futurist is to be able to tell these three animals apart. Good luck.

More … http://www.fastcoexist.com/1681668/3-reasons-why-your-predictions-of-the-future-will-go-wrong?

Hidden power of gratitude - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/hidden-power-of-gratitude/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/hidden-power-of-gratitude/

Hidden power of gratitude: relatively cost-free opportunities to motivate through heightened sense of self-worth.

 

Extract from Harvard Gazette – Chuck Leddy:

In “Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan,” Francesca Gino, an associate professor at Harvard Business School, explores a range of fascinating subjects, including how emotions influence decisions and the often-thorny matter of understanding the perspectives of others. Blending social science and real-world examples, Gino’s book also highlights the science of gratitude.

“The message of ‘Sidetracked,’” Gino said in an interview, “is that a lot of these forces happen even though we are unaware of them. People might just not realize how powerful expressions of gratitude are.”

In two of the gratitude experiments, Gino worked with Professor Adam Grant of the Wharton School. They first asked 57 students to give feedback to a fictitious student, Eric, regarding his sloppy cover letter for a job. Half were emailed a terse confirmation: “I received your feedback on my cover letter.” The other half received gratitude: “I received your feedback on my cover letter. Thank you so much! I am really grateful.”

When Gino and Grant measured the students’ sense of self-worth afterward, 25 percent of the group that received just an acknowledgment felt higher levels of self-worth, compared with 55 percent of the group that received thanks.

In a follow-up experiment, participants received a message from another fictitious student, Steven, asking for feedback on his cover letter. Would participants who had received thanks from Eric be more likely to help Steven? Indeed. More than double the percentage of students in the gratitude group (66 percent) helped Steven, versus just 32 percent of those in the no-gratitude contingent.

“Receiving expressions of gratitude makes us feel a heightened sense of self-worth, and that in turn triggers other helpful behaviors toward both the person we are helping and other people, too,” Gino said. She described the scope of the “gratitude effect” as “the most surprising part” of her research.

Gino built on the research in a field study that looked at 41 fundraisers at a university, all receiving a fixed salary. The director visited half of the fundraisers in person, telling them, “I am very grateful for your hard work. We sincerely appreciate your contributions to the university.” The second group received no such expressions of gratitude.  What was the impact of the director’s thanks? Gino said that “the expression of gratitude increased the number of calls by more than 50 percent” for the week, while fundraisers who received no thanks made about the same number of calls as the previous week.

By missing chances to express gratitude, organizations and leaders lose relatively cost-free opportunities to motivate, Gino said.

“I spend a lot of time working inside organizations and see teams working together to accomplish a task, usually with a deadline,” she said. “Oftentimes, you don’t see the leaders going back and actually thanking the team members. Those are situations where expressions of gratitude from leaders could have wonderful effects.”

Gino has seen those effects up-close, in both her own behavior and that of those close to her.

“My husband is now working for a start-up. I received flowers and a note from his company’s CEO thanking me for my understanding because my husband had been up all night working on a big project.” The gesture was a motivator for her husband, Gino said.

The work behind her book, she said, “really makes me think more carefully every time I am the one expressing gratitude to others. I don’t want to miss opportunities. … I learned from my own research and now try to say ‘thank you’ much more often.”

More … http://news.harvard.edu/gazette/story/2013/03/the-power-of-thanks/?

No clear consensus on what makes an innovative company - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/no-clear-consensus-on-what-makes-an-innovative-company/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/no-clear-consensus-on-what-makes-an-innovative-company/

No clear consensus on what makes an innovative company: ways of using measures to assess level of innovation.

 

Extract from HBR Blog - Scott Anthony:

Who is the world’s most innovative company? The editors of Fast Company say Nike. Last year, number crunchers at Forbes found that Salesforce.com is the company with the highest “Innovation Premium” baked into its stock price. MIT Technology Review didn’t pick a winner, but on its recent list of top 50 “disruptors,” the magazine mixed stalwarts such as General Electric and IBM with up-and-comers, Square and Coursera.

The difference of opinion isn’t a new thing — in fact, if you look back a few years at similar lists you’ll see less than 50% overlap. Why? Perhaps a company’s ability to innovate doesn’t last long. Or perhaps it is difficult to really tell how well a company’s innovation engine is functioning — so magazine editors are susceptible to the latest hot product or service.

There’s no doubt: measuring “innovation” is a fuzzy business. Part of the problem is there isn’t a clear consensus on what marks an innovative company. But there are some measurements that try.

Since the primary purpose of innovation for private companies is financial impact, “ Return on Innovation Investment (ROII) is a reasonable, aggregate measuring stick for innovation — you can calculate ROII by taking the profits or cash flows produced by innovation and dividing that figure by the cumulative investment required to create those returns. Conceivably, this ratio could look backwards (measuring the actual results of historical investment) or forward (measuring the expected value of current investments in innovation).

While ROII can be of some utility, it doesn’t precisely measure how a company achieved a particular result. That’s where the Dupont analysis come in.

In the 1920s, while companies used return on equity to assess their performance, DuPont recognized that the single metric had its limits. So it began disaggregating return on equity into three components.

Return on equity (net income divided by equity) results from multiplying three key operating ratios:

1.Profitability (net income over sales)

2. Operating efficiency (sales over assets)

3. Financial leverage (assets over equity)

This simple formula provides rich insight into a company’s business model, and can quickly diagnose a company’s strengths or opportunity areas.

With Dupont in mind, we can come up with a better measurement by sub-dividing ROII as follows:

1. Innovation magnitude (financial contribution divided by successful ideas)

2. Innovation success rate (successful ideas divided by total ideas explored)

3. Investment efficiency (ideas explored divided by total capital and operational investment)

This split would highlight different innovation strategies available to companies. Companies that played it relatively safe could have a high success rate, low magnitude, and high efficiency. A company could achieve the same returns by compensating for lower success rates with higher efficiency or magnitude.

This kind of breakdown would be valuable for both leaders and investment analysts who want to assess a company’s innovation capacity. It might even turn out that this framing highlights a few archetypical strategies that are more (or less) appropriate for different corporate circumstances.

One challenge today is that few companies have these numbers at their fingertips, and the lack of common definitions and publicly available statistics makes benchmarking difficult. Simple questions, like “what defines an idea?” or “what does ‘success’ mean?” need to be answered in consistent ways.

Given how critical innovation is for a company’s long-term success (and sometimes survival), perhaps it is time to mandate that publicly traded companies regularly report on their innovation pipeline and the key drivers of their innovation performance.

Until they do, at least be wary of the next company that graces a magazine cover. After all, half of the top 20 companies traded on U.S. equity markets* on BusinessWeek’s 2008 list ended up underperforming broader market indices between March 2008 and March 2013. While strong performance by Amazon.com and Apple meant an investment in those 20 companies beat an investment in the S&P 500, Blackberry (see Research in Motion), General Motors, Nokia, Sony, and Toyota certainly have had their share of difficulties over that time period.

* The top 23 also included India’s Tata Group and Reliance Industries and Germany’s BMW.

Author: Scott Anthony is the managing partner of the innovation and growth consulting firm Innosight.. His most recent books are The Little Black Book of Innovation and the new HBR Single, Building a Growth Factory. Follow him on Twitter at @ScottDAnthony.

More … http://blogs.hbr.org/anthony/2013/03/how_to_really_measure_a_compan.html

Momentum key for innovation success - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/momentum-key-for-innovation-success/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/momentum-key-for-innovation-success/

Momentum key for innovation success: work out of sight, prototype until might succeed … then show, don’t tell.

 

Extract from Management Innovation eXchange - Jeff DeGraff:

“The art of making art is putting it together.”  Stephen Sondheim

Pull out the list of the “most innovative companies” from your favorite business magazine. With the exception of their brand recognition, which is the entry fee for these beauty pageants, they have few innovation competencies or practices in common that would distinguish them from the rest of the rabble—whether unique strategies, unusual financing or novel ways of hiring and staffing.

The fact is that one size never fits all. Checklists are for complex routine tasks and situations that are predictable. Neither are conditions for disruptive innovation.  What makes innovation companies unique is, well, unique. That is they are highly adapted for their specific situation.

Corporations spend billions of dollars on innovation training every year. Take a close look at popular leading innovation programs and you are likely to find a wide array of distinct subjects and approaches—from state-gating processes to creativity methods to open innovation networks.

While important, the problem is that these subjects don’t get at the real issue that stops companies from innovating. It’s connecting the dots that makes enterprise innovation functional. Unlike most other forms of value, innovation happens horizontally. It doesn’t belong to any one department, discipline or region. Ask leaders in five different divisions of your company what innovation is and how it happens and it will become clear that they are not talking about the same thing. You might have tremendous research and development, marketing and logistics innovation and still fail miserably in the marketplace where these individual departmental functions are of no consequence.

Consider the 2010 BusinessWeek innovation survey of thousands of senior leaders in dozens of countries. It identified the following as the greatest challenges to making innovation happen in their companies:

1. Lengthy development times

2. Lack of coordination

3. Risk adverse culture

4. Limited customer insight

Ironically, during the worst recession in nearly a century, money wasn’t among the top barriers. Similarly, strategy, technology and competencies, the usual excuses for why innovation isn’t happening, were not among the main concerns of these executives. Instead, the primary challenges are essentially leadership issues of coordinating and integrating innovation throughout the enterprise and beyond.

Innovation is typically systemic, solution-based and therefore larger than the sum of its parts. It needs to seamlessly sync up across a labyrinth of boundaries and barriers. In fact, when it’s isolated within an innovation center it often becomes a not-invented-here orphan with little ability to find an operational home where it can grow to scale. While large organizations are designed to compartmentalize functions to optimize efficiency the coffee shop across the street isn’t. That’s partially why inventive work gets done there. It’s not just under the corporate radar, it’s beyond it.

The larger the company, the deeper the orthodoxy. Leaders of complex organizations tend to surround themselves with likeminded people, which reinforces their conventional approaches. At every stage in the life of a new idea or initiative, compliance crushes dissent.

The Point: According to executives the biggest challenge they face is connecting the dots between departments, regions and other companies which is inhibited by organizational design and control-based rules

What to Do: Reverse your field. Start your innovation in the coffee shop and work your way back to the company. As innovations move from the nascent ideation stage toward full implementation they become more convergent and incremental because they must confront the logistical realities of functional viability, funding, and the laws of science and commerce.

It’s easy to make a big idea smaller but making a small idea bigger is a Homeric task. Innovation is organizational treason. Innovators are conspirators connected by their dissatisfaction and sedition.

Launch your innovation projects off Broadway far away from the watchful eye of the ever-present critics.  Don’t fail in front of your most important clientele. Instead find your own New Haven or Buffalo where you can work on getting your show right before you open in your most important venue.

Remember innovation is a game of attrition. Every venture capitalist knows that you take multiple shots on goal because you never know what project is going to score and what isn’t until you take the shot. So hedge first and optimize later. Forget the 80/20 rule. That’s for efficiency wonks. It has nothing to do with making things amazingly new. Use the 20/80 rule instead. That is, it’s easier to change 20% of your company 80% than it is to change 80% of your company 20%. View your company’s performance on a bell curve and start at the tails where crisis or outstanding performance prevails. These are the places outside the norm where the risk of innovating and the reward of keeping things the same are reversed.

Momentum is the key when connecting the dots of innovation. Find existing projects with lawyers, guns and money and hide your revolutionaries inside these Trojan Horses. They already have political capital and the means for propulsion. Use them to keep moving forward. Work out of sight and prototype your project until it starts to look like something that might actually succeed. Show, don’t tell.

You can find many inspiring and instructive examples of what it means to develop innovation as a deep-seated capability among the finalists and winners of the MIX’s Innovating Innovation Challenge.

Author – Jeff DeGraff is Clinical Professor of Management and Organizations at the Ross School of Business at the University of Michigan.

More … http://www.managementexchange.com/blog/why-most-innovative-companies-arent

Using risk to drive growth and innovation - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/using-risk-to-drive-growth-and-innovation/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/using-risk-to-drive-growth-and-innovation/

Using risk to drive growth and innovation: importance of taking more risks to embrace failure and keep trying.

 

Extract from The Wall Street Journal, Europe Edition – Leslie Kwoh:

When Jim Donald took the helm at Extended Stay America a year ago, he sensed fear.

Many employees at the national hotel chain, which had recently emerged from bankruptcy, were still stuck in survival mode. Worried about losing their jobs, they avoided decisions that might cost the company money, such as making property repairs or appeasing a disgruntled guest with a free night’s stay.

“They were waiting to be told what to do,” recalls the former Starbucks Corp. chief executive. “They were afraid to do things.”

So Mr. Donald gave everyone a safety net: He created a batch of miniature “Get Out of Jail, Free” cards, and is gradually handing them out to his 9,000 employees. All they had to do, he told them, was call in the card when they took a big risk on behalf of the company—no questions asked.

Growth and innovation come from daring ideas and calculated gambles, but boldness is getting harder to come by at some companies. After years of high unemployment and scarred from rounds of company cost-cutting and layoffs, managers say their workers seem to have become allergic to risk.

Companies large and small are trying to coax staff into taking more chances in hopes that they’ll generate ideas and breakthroughs that lead to new business. Some, like Extended Stay, are giving workers permission to make mistakes while others are playing down talk of profits or proclaiming the virtues of failure.

At Extended Stay, Mr. Donald says the small lime-green cards have been trickling in since last summer, a sign that the staff’s risk-averse mentality may be dissipating.

One California hotel manager recently called to redeem her card, he says, confessing that she nabbed 20 business cards from a fishbowl in the lobby of nearby rival La Quinta in an attempt to find prospective customers.

Another manager in New Jersey cold-called a movie-production company when she heard it would be filming in the area. The film crew ended up booking $250,000 in accommodations at the hotel.

Workers may feel some whiplash as companies inadvertently bombard them with “conflicting messages” to be creative and cautious at the same time, says Ron Ashkenas, a senior partner at Schaffer Consulting, a Stamford, Conn.-based management consulting firm that advises Fortune 500 firms including Merck & Co. and General Electric Co.

A penchant for risk can get an employee flagged as a loose cannon or hard case for management. And, while companies may talk lovingly about experimentation, they’re often quick to deem someone a failure when results don’t come quickly, Mr. Ashkenas says.

Little wonder, then, that senior managers complain that “nothing happens” when they tell their employees to feel empowered and come up with new ideas, he says. The irony, he adds, is that a company where workers fail to take risks along the way often find themselves forced into a “position where it has to take a big bet, to put all chips on one shiny new object.”

Steve Krupp, CEO of consulting group Decision Strategies International, says one of his clients, a financial-services firm, dubbed its portfolio managers the “walking wounded” because they remain traumatized by losses their portfolios sustained during the economic downturn.

Many have become overly cautious about taking even ordinary risks with investments, adds Mr. Krupp, who is devising ways for the firm’s senior leaders and employees to overcome their fears and take balanced risks.

“You can’t just avoid all risk, because it will lead to entropy,” he says.

In many cases, risk-averse employees just assume that’s how the boss wants things. Mark O’Brien, North American president of ad agency DDB Worldwide, says he got a wake-up call when workers cited “profit” as the company’s top priority in a 2011 employee survey. In previous years, profit generally ranked second to creative work, and ahead of people.

He understood why workers felt that way. His division, DDB North America, had just laid off 10% of its workforce, and clients were paying less than before. He saw the work suffer, too—the division, which brought in roughly half of the company profit, only won a tiny share of industry awards given for creative work, a key driver for attracting talent.

Talking too openly about the company’s financial pressures was dampening morale and inhibiting creativity, he reasoned, so he took managers aside and told them, “You and I can talk about money, but don’t let that spill into the rest of the agency.”

Mr. O’Brien has taken risks of his own, going beyond the usual employee pools to source new talent in the U.K. and Latin America, where he says the advertising industry is more competitive.

To prod employees into action, some management gurus are preaching the virtues of failure.

Naveen Jain, CEO of information-technology company Inome, says his own missteps as an entrepreneur led him to urge his 400 employees to “fail fast” if they can, moving on quickly from projects that don’t take off.

“My whole life has been a set of failures,” says Mr. Jain, whose Internet-search venture InfoSpace almost ran out of money in the 1990s. “It’s impossible to try something new and not fail.”

A version of this article appeared March 20, 2013, on page B8 in the U.S. edition of The Wall Street Journal, with the headline: Memo to Staff: Take More Risks.

More … http://online.wsj.com/article/SB10001424127887323639604578370383939044780.html?

How other people can help position us for opportunity - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/how-other-people-can-help-position-us-for-opportunity/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/how-other-people-can-help-position-us-for-opportunity/

How other people can help position us for opportunity: leveraging the hidden strength and power of triangles.

 

Extract from VCO Global – John Niland:

The majority of people find it difficult to “market” themselves. Shameless promotion is “just not their style”. So how do they position themselves for the next job or opportunity?  

The sad reality is that many “contributors” fail to do so. They wait for that promotion, recognition or invitation to interview. They experience disappointment and resentment when others (“more politically savvy”) overtake them on the highway. 

Yet there is a real alternative, even for the most introverted “contributor”.  In a nutshell, this consists of allowing other people (or partners) to position us for opportunity.  We do not have to carry our own message; indeed it’s more effective when others do so for us – from a “third point” in the triangle made up of A) us, B) the person who has the need and C) the person opening the door. 

There are four solid reasons to consider these triangles.  First, timing.  It’s rare that we are present in the moment when opportunity (e.g. a job) is created. It’s more likely that others are; so they can be our eyes and ears.  Second, credibility. Others can convincingly speak about our talents, usually more powerfully than we ever could. Third, anticipation of possible objections. The person with the need (B above) is unlikely to voice their concern about us to our face.  They are more likely to discuss this with another (C above), who can counter-argue on our behalf.

But the most significant advantage of all is probably the fourth one: encouragement.  In creating these triangles, we are already on our way long before opportunity happens. We have been discussing our situation with others, gaining clarity and insight about our talents, seeing options we could never see on our own. We are building key relationships for the future.

There is no limit to the number of “triangles” we can create. Sometimes, we already have them; we are just not too sure about how to use them.  A very simple beginning might start with “I would like to ask your advice about the next step for my business/career… when would you have half-an-hour?” 

Readers of The Courage to Ask will have spotted the catch: this request is the hardest part of the whole process. Without question, courage remains the single greatest challenge for “contributors”; even more than skill.  It takes courage to create the triangles. 

Not everyone thus approached will turn out to be a real supporter. Others have good intentions; they just cannot help. This is why we usually need to build a bigger network of partners than we initially imagine, and with people further afield.  Maybe it will be the seventh or twelfth person approached: we just don’t know.  

What we do know, however, is that they can often do for us what we could rarely do for ourselves.

© John Niland, March 2012

John works with individual people (www.success121.com) and organisations (www.vco-global.com) that want to grow via the power of real collaboration. To visit his blog, see www.johnniland.com

More … http://johnniland.com/

Compliance and ethics is separate profession with distinct competencies and expertise - http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/compliance-and-ethics-is-separate-profession-with-distinct-competencies-and-expertise/

http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/compliance-and-ethics-is-separate-profession-with-distinct-competencies-and-expertise/

Compliance and ethics is separate profession with distinct competencies and expertise: needs autonomy from management.

 

Extract from Corporate Counsel, The Compliance Strategist –  Donna Boehme:

In January/February 2013, the Society of Corporate Compliance and Ethics (SCCE) polled 800 compliance and ethics professionals on the topic of whether the chief compliance officer should report to the general counsel, and 80 percent said: “No.” The same group overwhelmingly said that the GC should not attempt to also serve as the CCO—a whopping 88 percent.

Here is my shocked face :-0

No doubt some will dismiss these results as the C&E profession questing for power, a turf battle between GC and CCO—a kind of Hunger Games competition with each trying to convince top management and boards of their primacy. But such blithe cynicism would be overlooking the complexity of issues, common-sense reasoning, and wealth of settlement agreements, government guidance, regulatory action, and anecdotal data in support of separating the two roles.

I’ve also heard some complain that the momentum for CCO independence is being driven by non-lawyers. Nonsense. A large percentage of CCOs are lawyers (although the significant number of successful CCOs without legal backgrounds testifies to the fact that compliance is not a legal function). Also, as illustrated by the SCCE survey, CCOs regard their in-house legal colleagues as close and valued allies with whom they enjoy a positive working relationship.

But none of that changes the fact that compliance and ethics is an entirely separate profession that requires distinct competencies and expertise—and autonomy from management—to do its job well. As some of the survey comments specifically noted, it is pretty hard to make a case for that autonomy when the CCO reports to the GC, and essentially impossible where the CCO is the GC.

Having spent years on the ground in both camps (as both in-house counsel and chief compliance officer) and hearing countless anecdotal stories on the topic, I can say with absolute conviction that a “turf battle” is the least of the C&E profession’s concerns. These are the folks that former federal prosecutor Michael Volkov has called the “unsung heroes” of the workplace and his 2011 Person of the Year.

Compliance officers are often the least political, least power-hungry folks at the company holiday party. It may sound cliché, but most CCOs are driven by their own internal desire to “do the right thing,”—i.e., just what they ask their company colleagues to do every day. And they do this, more often than not, without personal recognition, career protection, or understanding of the job by others whose support they need to do the job well. Many work under extraordinarily difficult circumstances—under so much stress, in fact, that in a 2012 survey 60 percent pondered leaving their jobs.

Does that sound like a power-hungry professional profile to you? I’d say there are safer ways to get ahead in life, like bank robbery. Because at least then you have a gun and a getaway car . . .

The CCO mandate is ambitious, broad, and complex: no less than to oversee their organization’s ability to “prevent and detect” misconduct. It requires, as its basic platform, an appropriate reporting structure, access to top management and the board, and resources that will enable the CCO to discharge that mission. The SCCE survey results show that most CCOs do not believe that either a double-hatted GC/CCO role or a reporting line through the legal department meet these standards, as further illustrated by the following comments by participants:

- “The GC and the CO must be separate but equal.”

- “The great majority of GC’s do not have the background, worldview, and experience to be, or be in a position to veto/filter, the CCO.”

- “Compliance should be independent of Legal to ensure that information flow is not interrupted or ‘spun.’ ”

- “GC tends to have a defensive outlook and approaches issues differently than Compliance.”

- “If the (Ethics) and Compliance officer is to be most effective they must feel confident to speak truth to power and be the disruptive thinker when necessary.”

That last “truth-to-power” comment takes on dramatic real-life significance when viewed against the alleged “vast” Wal-Mart Mexican bribery scheme that hit media headlines in 2012 . Evidently, the compliance-reporting-to-legal structure didn’t work out so well for Wal-Mart. According to the exhaustive 8,000-word New York Times investigative report on that case, the general counsel is alleged to have had a key role in advising the CEO to “hush up” an internal investigation by referring it to the local counsel who had approved the bribes in the first place.

An independent CCO voice in the C-suite may have helped the company to choose a very different path. As the government noted in 2009’s record-breaking $2.3 billion Pfizer corporate integrity agreement [PDF]: “The lawyers tell you whether you can do something, and compliance tells you whether you should. We think upper management should hear both arguments.” Recent reports indicate that Wal-Mart is already paying the price for its bad C-suite decisions—over $600,000 a day in legal costs and expenses (not to mention reputational damage), to be exact.

The SCCE survey results also track developments in the healthcare and finance sectors, two highly regulated industries that have helped to define the meaning of modern “compliance.” In the former, the heavy hand of government has regularly resulted in a mandatory separation of legal and compliance. In the latter, after years of subordinating the CCO to the GC, at least four big banks have now separated the functions and elevated their CCOs to a more impactful position. At least one of those firms also boosted its CCO to the ranks of its top 50 managers.

Developments like these are what led Deloitte and Touche Director Tom Rollauer to declare the CCO “an official member of the C-suite.”

The SCCE survey results confirm that Volkov’s “unsung heroes” are more than ready to emerge from under the shadow of the GC, a result that boards, regulators, investors, and other stakeholders are increasingly demanding.

Author: Donna Boehme is an internationally recognized authority and practitioner in the field of organizational compliance and ethics, designing and managing compliance and ethics solutions within the U.S. and worldwide. As principal of Compliance Strategists LLC, Boehme is the former group compliance and ethics officer for two leading multinationals and currently advises a wide spectrum of private, public, governmental, academic, and nonprofit entities through her NJ-based consulting firm. She was named by ComplianceX to its list of “Who Compliance Professionals Should Follow on Twitter in 2013,” so follow her on Twitter @DonnaCBoehme.

More … http://www.law.com/corporatecounsel/PubArticleCC.jsp?id=1202592518804&Making_the_CCO_an_Independent_Voice_in_the_CSuite

Strategy needs to happen in real world - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/strategy-needs-to-happen-in-real-world/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/strategy-needs-to-happen-in-real-world/

Strategy needs to happen in real world: must consider little things, local things but react to real world events.

 

Extract from LDRLB – Max McKeown:

Every now and then you need to wake up and smell your real world strategy. Strategic reality is about events, and coping, and figuring things out. Real world strategy is a living thing. Overconfidence in strategic planning has led to financial crisis, botched and illegal wars, and missed opportunities in business, politics, sports, and life. It has led to quarter of a million missing school places in the UK and over half of Spain’s youth being without work. Failed businesses from Lehman brothers to Blockbusters to Borders all had strategic plans. They all had charts and spread-sheets.

Give me time to think

In 2009 a Toyota vehicle hurtled down a highway with no brakes and a stuck accelerator and crashed into another car killing four members of the same family. In September 2009, Toyota recalled of 3.8 million vehicles but blamed a removable floor mat instead of the real cause and ignored reports of similar fatal crashes dating back to 2007. Not until February 2010 was there a full recall of 8.5 million vehicles, new parts to fix accelerator and brake problems and a public apology from the president along with a ceremonial bow criticized for being too little, too late.

Toyota is a remarkable organization. Its famed Toyota Production System (TPS) – a careful combination of process and collaborative culture – led them to the top for quality and satisfaction. Toyota’s 100 year plan had weekly strategic meetings after high level of consensus was gained from the core of Japanese managers with life-time contracts. If real world strategic failure can harm them it can harm you.

The real world is global, not local

Toyota’s strategic process involved consensus in Japan not consensus worldwide. It favoured head office ahead of the rest of the world. Senior managers forgot the Japanese principle of gemba – going to the place to understand the problem – or perhaps thought only applied to engineering.

The real world is about little things not just big things

TPS does produce quality inside but found it hard to notice important events outside that seemed less important – less urgent – less deserving of senior management attention. They were busy too looking at the big picture at a distance to see the detail that could trip them up.

The real world is about events in real time

Leaders who hide away like monarchs of old – as with the ex-CEO of RBS who threatened to fire people for putting cheap pink wafers in his meeting room –  are confused by events because they minimise, attack and deny reality. Smart leaders know events matter more to real strategy than fantasy strategy.

The future is not just more of the past 

The future is not a simple extrapolation of the successful past. Growth will not always be growth. Quality will not always be quality. Particularly if circumstances change – which they will – and if assumptions are not complete – which they never are. Action takes place in the real world so strategy needs to take place in the real world. You need open door strategy, real time strategy,  with real people doing real things. Smart leaders consider little things, local things, and react to real world events to successfully shape the future.

Author: Max McKeown is an English writer, consultant, guru and researcher specialising in innovation, strategy, leadership, and culture. He is the author of six books, including The Strategy Book and Adaptability.

More … http://ldrlb.co/2013/03/wake-up-and-smell-your-strategy/

Indicators to help assess functional performance - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/indicators-to-help-assess-functional-performance/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/indicators-to-help-assess-functional-performance/

Indicators to help assess functional performance: importance of aligning resources with highest value activities.

 

Extract from strategy+business – Deniz Caglar, Namit Kapoor, and Thomas Ripsam:

Every function’s first priority should be to support the building and management of differentiating capabilities. Therefore, it is essential to define and measure explicitly just how much value each function is delivering. You can use four distinct indicators to assess this value.

1. Quantifiable impact. Measure all the function’s activities against definable business outcomes that are aligned with the company’s strategic priorities and tied to a specific time frame. A centralized consumer insights capability, for instance, might be measured by the reduction in the number of weeks required to develop new products during the next 18 months.

2. Clear drivers of value. Identify the sources of your function’s greatest contributions to the enterprise. Improved demand management might depend, for example, on having sophisticated analytical tools that can provide streamlined access to data, greater scale, and the bundling of expertise. Metrics should establish the degree to which these tools exist and are used.

3. Cost-effectiveness. Continue to track the relationship between expenses and outcomes. Your function’s contribution to the enterprise—measured through financial performance improvement in revenue or profit—must outweigh the cost of its activity.

4. Internal market validation. Seek out and incorporate feedback from your clients and constituents within the company, to drive your function’s effectiveness and efficiency wherever possible. This may include the use of charge-backs, service-level agreements, and make-versus-buy assessments (analysis of whether to build a capability in-house or outsource it).

Leading companies deploy rigorous processes and tools to ensure the alignment of ongoing and proposed functional activities and investments with the functional priorities and the operating model, and to ensure maximum value creation. Within the context of continuing pressure on support budgets, this helps functional leaders allocate their resources to the activities with the highest value.

Continues at http://www.strategy-business.com/article/00158?pg=all

Author Profiles:

Deniz Caglar is a partner with Booz & Company based in Chicago. He focuses on organizational design and cost fitness in the consumer packaged goods and retail industries.

Namit Kapoor is a partner with Booz & Company based in Chicago. He specializes in formulating shared-services strategies and improving the effectiveness and efficiency of sales and marketing functions.

Thomas Ripsam is a partner with Booz & Company based in Munich. He specializes in strategy-based improvement of top-line and bottom-line performance, with particular focus on sales, marketing, and general and administrative functions.

More ... http://www.strategy-business.com/article/00158?gko=3300c

Economy and regulations are top risks for organisations - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/economy-and-regulations-are-top-risks-for-organisations/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/economy-and-regulations-are-top-risks-for-organisations/

Economy and regulations are top risks for organisations: greater need for transparency into nature and magnitude

 

Extract from CFO – Caroline McDonald:

The top two risks identified by executives send the message that they are more concerned with what they don’t know, regarding economic conditions and regulations, than with what they do know, even about significant operational risks, according to an author of the study Executive Perspectives on Top Risks for 2013.

James DeLoach, a managing director at Protiviti and a risk management expert, said the study, conducted with North Carolina State University’s ERM (enterprise risk management) Initiative, suggests “the importance of policymaking and of politicians and government to create an environment that is more predictable, to take the cap off of the economy.”

While the top risks pertain to strategic and macroeconomic issues, “Five of the top-10 are operational issues, but they are in the bottom half,” he explains. “That says that directors and executives are more concerned about what they don’t know than what they do know.”

The survey asked more than 200 board members and executives across a wide variety of industries about the risks their organizations expect to face in 2013. Participants were asked to rate a list of 20 risk issues on a scale of one to 10, with one indicating “no impact” and 10 indicating “extensive impact.”

The two risks that stood out as being of highest concern were:

- Perils relating to profitability constraints because of economic conditions that could curb growth.

- Possible regulatory changes and heightened regulatory scrutiny that could curb the production and delivery of products and services.

“What that says is that most people are used to a more rapidly growing environment,” DeLoach said. “We’re growing in the U.S., but at a slower pace. People are trying to get used to that, but it’s a different game than they have been used to over the course of their careers.”

That issue, he said, “is paramount as a significant impact risk. [Company executives] are having to modify their approach to the market…given the fact that we have slower growth in the economy.”

The second, regulatory risk, was significant for most of the survey respondents, “when you think about Dodd-Frank in financial services and the Affordable Health Care Act, which affects health care providers and also their cost structure,” he says.

Citing a second example of regulatory pressures, the risk management consultant cited the restaurant and consumer products industries which face issues like those stemming from the Foreign Corrupt Practices Act anti-bribery provisions “and the unprecedented prosecutorial cooperation across borders on corruption issues.”

A third risk, he says, is related to growth opportunities and companies’ being restricted “by the uncertainties surrounding political leadership for national and international markets, particularly in developing countries with political stability issues.”

While companies understand their operational issues and are concerned, DeLoach said, “when you’re talking about the issues around regulatory risk and the growth in the economy and political issues, that creates an environment of uncertainty that makes it difficult to hire and invest.”

What this does, he said, is change the game of planning away from one-dimensional strategies. “In these rapidly changing times, if you set strategy with a single view of the future, that can be very dangerous. You have to have multiple views of the future, assess scenarios and stress test your plan,” he explains.

What’s more, one of the operational risks identified was resiliency and adaptability. “To be adaptive means you have to shift and change as markets evolve and customer preferences change,” he says.

Other survey highlights included: 

- Most respondents rated the current environment as significantly risky and said they’re likely to make changes or deploy more resources to managing their respective risk over the next year.

- Chief risk officers (CROs) and CFOs were the executives with the highest ratings in terms of their likelihood to make changes.

- The biggest outfits rated the greatest number of risks as “Significant Impact” risks, reflecting the complexities of their operations.

- Companies in the financial services, health-care and life sciences, and technology, media and communications organizations industries reported the greatest number of significant risks.

More … http://www3.cfo.com/article/2013/3/regulation_erm-international-risk-protiviti-nc-state-university-deloach-

Using extreme transparency to drive high performance teamwork - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/using-extreme-transparency-to-drive-high-performance-teamwork/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/using-extreme-transparency-to-drive-high-performance-teamwork/

Using extreme transparency to drive high performance teamwork: turning values and culture into action.

 

Extract from Fast Company – Lydia Dishman:

At Asana, the collaboration software startup from Facebook cofounder Dustin Moskovitz and Justin Rosenstein, the culture is designed to be “transparent ’til it hurts.” Here’s how to replicate it for pain-free productivity.

Justin Rosenstein and Dustin Moskovitz, the founding duo of collaboration software startup Asana, officially launched in 2011 with one lofty goal: “To empower every group on earth to have clarity, accountability, and transparency in their daily work.”

So what began as rudimentary solutions to productivity problems both Moskovitz and Rosenstein faced in their previous positions (the former as cofounder and CTO of Facebook, the latter as a software engineer at Google) has turned into a tool to save teams from doing “work about work” and get down to business. Essentially, it’s a web application that facilitates project management. Any team can post a task they are working on and then keep track of who is doing what to complete it, without using email or calling status meetings.

Though it hasn’t quite helped all of mankind yet, Asana is currently used by the likes of Foursquare, Airbnb, and Uber to eliminate status reports to the dreaded weekly check-in meeting. To date the company has had “tens of thousands of teams create more than 40 million tasks using Asana.” No wonder they’ve been able to raise $38 million from Founders Fund, Benchmark Capital, Peter Thiel, and others.

What the two also managed to pull off was to embed those very same values in their company’s culture–with an emphasis on the transparency. Rather than let it be a buzzword in the vein of publicly airing a failed product launch or relegating it to the release of quarterly financial statements, Rosenstein maintains that the kind of transparency both Asana the tool and the company are trying to achieve is more subtle. It’s not about everyone knowing everyone else’s business, says Rosenstein, “It’s that everyone has the information they need to do their job effectively.” Lots of companies are so siloed that there is no context for anyone to make good decisions about their work, he says. “For us, transparency is providing as much information as [an employee] needs to act in the best interest of their team, the company, and its mission as a whole.”

They call it “transparency ’til it hurts.” Here’s how they make it pain free:

Start With Hiring
It’s one thing to strive for hiring the best and brightest. It’s quite another to hire people at ease with the notion of transparency (as opposed to the more common workplace power plays like, say, withholding information to use as leverage). Yet when Asana hires, they don’t tell candidates that they must be comfortable with the idea. Instead, when they discuss how the company operates, it becomes a selling point. “People that are attracted to [working here] already feel that way,” Moskovitz says. “They are not trying to hide,” adds Rosenstein, “They are excited to share the experience, not just get paid and go home.” The side effect that’s rippled through Asana’s 38-person ranks is that “we can all celebrate success,” says Rosenstein.

Empower Through Context
Even if you hire the best people, Rosenstein says if you tell them exactly what to do, it limits their creativity. Empowering them by offering context around what the company cares about and its goals allows staff to bring their own wisdom and experience to bear as they tackle projects.

One way Asana does this is to take exhaustive minutes of board meetings and weekly executive meetings and post them for all to read. Rosenstein contends that most companies would keep such high-level meetings under wraps or couch the information in a way that doesn’t reveal it all. “We think it’s really critical for everyone to understand to know what the high order bits are and what is top of mind for leadership,” he argues, so when a staffer is making individual decisions about parts of the product or marketing, they can position it against the company’s overall goals.

Set Areas of Responsibility
Another silo buster at Asana is the concept of areas of responsibility, or AORs. Rather than having everyone report up to the boss, AORs allow individuals to own performance metrics. With an understanding of overall strategy, they can take input from others and make decisions. No one is ever stuck making all the decisions, notes Rosenstein. The AORs change frequently depending on what is a priority any given week. “This allows for distribution of responsibility, and people can develop expertise,” he notes.

Create a Roadmap
Instead of dividing time according to fiscal quarters, Asana has “episodes,” which are roughly four-month blocks of time. Before each episode, everyone “stops doing normal work” to sit down for a week-long session to create a roadmap. Committees are formed around different agendas that are relevant for that time period and members are selected to be on them not solely based on their job description but what they can offer to achieve the goal. This allows everyone to offer input as well as to make it absolutely clear what milestones need to be hit in order to reach the goal.

At the end they pull together a document that summarizes their hits and misses. Moskovitz then puts the summary out on Google Docsto share not just with the team or investors, but the entire rest of the world. Taking a page from the playbooks of Toyota and Eric Reis, Moskovitz says they also dissect trouble spots using the “5 Whys” method to figure out how to do better in the future. They publish that analysis, too. “At some companies that can be scary, but our culture is set up so we all respect each other. It is not a blame game,” adds Rosenstein.

Recognize Accomplishments–In Your Own Way
Aside from their offline champagne celebrations for product launches and TGIF get-togethers, Asana staff developed “hearts” for the software tool which allows for colleagues to recognize each other’s achievements. Rosenstein argues that “hearting” completion of a task is less shallow or political than liking someone’s comment on Yammer. “We have the ability to celebrate accomplishments on a much more granular level.

When To Dim the Lights
There is such a thing as too much transparency, says Moskovitz. That’s why performance reviews and personal matters that come up in meetings aren’t shared with the company.

Rosenstein admits they’ve had to coach people to be more confident about receiving the flood of feedback that can come from this practice. “One of our values is balance,” he says, to maintain the flow of ideas without having someone bottleneck over a perceived slight to their work.

More … http://www.fastcompany.com/3006798/work-smart/how-extreme-transparency-can-make-your-team-its-most-productive?

Solving big challenges with breakthrough levels of innovation - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/solving-big-challenges-with-breakthrough-levels-of-innovation/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/solving-big-challenges-with-breakthrough-levels-of-innovation/

Solving big challenges with breakthrough levels of innovation: using collaboration effectively to make this happen.

 

Extract from HBR Blog Network – Paul Ellingstad and Charmian Love:

Collaboration is the new “it” trend in business strategy circles these days. Everyone is talking about it. And most people believe it’s necessary if we’re going to solve the world’s seemingly intractable problems — such as poverty, climate change, access to education and healthcare, creating renewable energy sources, and increasing global security. Technology has dramatically simplified our ability to access, analyze, and act on ever-expanding volumes of information, and to do so more effectively by connecting and collaborating.

But, does collaboration deliver on its promise? Or is it at risk of simply becoming a new form of “greenwashing” as companies talk the talk, but don’t walk the walk?

To make a collaborative effort effective, it’s important to think through what it will mean for everyone involved. That starts with mapping key parameters: Who are the players you want to work with? What does each bring to the table? Why would each player be motivated to work with the others? Figuring this out upfront is critical. The next hurdle is figuring out how people are going to work together in practice, including which tools and resources you have available to facilitate the process.

Real, genuine, messy collaboration involves reaching out to unconventional organizations that your company may never have worked with before. A rule of thumb to keep in mind: If it feels uncomfortable, overwhelming and challenging, you’re probably on the right track. If it were easy, these models of collaboration would have been done before.

These partnership strategies also require a big-picture understanding of the landscape or system you’re working within. You can identify areas to leverage by mapping out the particular challenge you want to explore, including where and how different stakeholders fit across this map. To get started on mapping complex systems, check out Marshall Clemens’ work with the Tellus Mater Foundation.

These complex partnerships also require the understanding that when working at a system level, there is often no defined end point for your activities. The further you go, the more opportunities you identify. Therefore, it’s helpful to frame the scope broadly and allow for unforeseen change and modification rather than establishing a set timeline with a strict exit/sunset clause.

We often take the enabling role of technology for granted when collaborating on complex, systems-level problem solving. Technology has improved communication flows with “anyone anywhere”; made processes exponentially more efficient; enabled resilient feedback loops; and improved our decision-making through rapid synthesis of large amounts of complex data. But technology doesn’t need to be framed as the innovative solution itself — it can also be applied to improve existing processes.

For example, in Kenya, HP has collaborated with the Clinton Health Access Initiative, the Kenyan Ministry of Public Health & Sanitation, Strathmore University, and other players to reduce the turn-around time for providing results of HIV testing in infants. The result is that health care workers in the country now have near real-time online access to other vital reporting data. Through this multilateral collaboration and the innovative use of technology, government, the private sector, NGOs, and academic players have tapped into a diverse wealth of expertise to improve processes that literally save lives.

What started in Kenya as a specific process improvement expanded to a much broader information revolution, encompassing other programs and information flows, including disease surveillance and reporting. It’s a collaboration success story that we can all learn from.

When embarking on your own partnerships, keep the following tips in mind:

Make it real. Don’t fall into the “collaboration-washing” camp by talking more than doing. Be aware that the ease of technology can sometimes mask the importance of fostering the personal relationships needed to make a solution stick. Chemistry between partners across the system is impossible to manufacture and can be the defining thread that keeps things on track.

Make it resilient. Even great partnerships don’t last forever. When architecting solutions, avoid “single points of failure”, including dependence on any single player. Design solutions to thrive regardless of whether players come and go from the collaboration.

Make it reciprocal. Partners should not be afraid of capturing business value from collaborating. Be clear around the expectations of different parties (inputs as well as results). Ror a company, this might include increased employee engagement, the development of new products or services and improved corporate reputation, among other things.

To solve the big challenges in the world today we need to aim for nothing less than breakthrough levels of innovation. An African proverb offers: “If you want to go fast, go alone; if you want to go far, go together.” We all have a role to play in making these breakthroughs happen.

Paul Ellingstad is the partner and program development director in HP’s Sustainability and Social Innovation group. Charmian Love is chief executive at Volans, a future focused business that works at the intersection of innovation, entrepreneurship, and sustainability movements.

More … http://blogs.hbr.org/cs/2013/03/is_collaboration_the_new_green_1.html?

Successful innovation for mature organisations - http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/successful-innovation-for-mature-organisations/

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/successful-innovation-for-mature-organisations/

Successful innovation for mature organisations: benefits of using external motivation, strong leadership and teamwork.

 

Extract from HBR Blog Network – Brad Power:

What do you do if you’re a leader in a large, successful organization with an entrenched bureaucracy, and you see the need for innovation? Can you change the way a large organization — such as the federal government — does its work, when all the forces are arrayed for stability and conservatism?

Consider the story of the Business Transformation Agency of the Department of Defense, which was founded in 2005 under Defense Secretary Rumsfeld, and “disestablished” in 2011 by Defense Secretary Gates. The Business Transformation Agency was populated by people brought in from the commercial sector. They were bold and brash and injected fresh new ideas that challenged existing policy and practice in many quarters of the Department of Defense administration (such as finance, human resources, procurement, and supply chain processes). They ran into many of the familiar challenges of making changes in the federal government: the difficulty of firing; the complexity of hiring at many levels of management; the need for contracts to be put out for competitive bidding; multiple stakeholders including civil servants, appointees, contractors, regulators; and Congress to be considered in almost all decisions. Unlike at commercial companies, there was no senior leader who could mandate changes. The Deputy Secretary of Defense that originally sponsored the agency under Rumsfeld left, and the new leader was less enthusiastic, ultimately leading to the agency’s demise. The entrenched culture of the Department of Defense defeated attempts to change it.

The Internal Revenue Service (IRS), however, was successful in transforming its bureaucracy. The IRS had two advantages: Congress provided a strong mandate for change (the U.S. IRS Reform and Restructuring Act of 1998); and an outstanding, senior executive from the private sector, Charles Rossotti, was appointed for a five-year term to drive the changes. Under Rossotti’s guidance, the IRS reorganized from a geographic structure to four new customer-oriented operating divisions. IT also upgraded old technology and processes, achieving significant improvements in service and compliance. For example, it implemented an Internet service that answers the question “Where’s my refund?” that has had over one billion hits and freed up 800 customer service representatives to handle more complex issues.

So, what makes the difference between success and failure? Based on long experience working with government agencies and with large organizations of all stripes, I have seen that big changes to the way work is done require:

- a team of insiders and outsiders to come up with new ideas;
- a clear external motivation to do something;
- strong leaders who believe in the ideas and push the bureaucracy to implement them consistently over a number of years.

Sometimes (but not often) bureaucracies do make incremental changes to the way they do work, but they are usually not sufficient to meet citizen-customer needs. An innovation team composed of the “best and brightest” (like the “bold and brash” Business Transformation Agency) can identify bigger changes, but those cannot be implemented inside a strong bureaucracy without a strong and clear motivation to change. Now, in a competitive free-market environment, a for-profit company can be motivated by threats to its survival, or by declining market share and profitability. The big challenge for a government agency, however, is that the motivation needs to be a congressional or administration mandate. I’d like to tell you there’s another way to motivate change in case you don’t have such a mandate, but in the extreme environment of an entrenched bureaucracy, I haven’t seen it. Thus, needed process changes within bureaucracies should always be built into such initiatives. Probably most important, though, as in the example of the IRS, a senior leader is absolutely essential to drive the change and sharpen the organization’s focus on citizen-customers — to overcome the natural tendency of bureaucracies to focus internally. And as the IRS and Department of Defense stories illustrate, the bureaucratic ship won’t turn on a dime — leaders need to sustain focus on the changes over the long term, likely for five years or more.

Leaders of big bureaucracies need to get — and keep — everyone enthused, create and communicate a future vision, assure support during the transition, insist on excellence, create demands on managers, and convince everyone of top management’s conviction and commitment to change. These leadership challenges may seem familiar, but in a bureaucracy they are, if anything, magnified. To sustain momentum in this special context, leaders may need to adopt the behaviors of a fanatic — as Winston Churchill said, “A fanatic is one who can’t change his mind and won’t change the subject.”

Of course, the federal government provides an extreme example of entrenched bureaucracy with an established way of doing things. But it offers lessons to any organization that is mature, successful, and set in its ways, yet recognizes the need to transform itself.

Brad Power has consulted and conducted research on business process innovation for the last 30 years. His latest research focuses on how top management creates breakthrough business models through process innovation, building on work with the Lean Enterprise Institute and Hammer and Company.

More … http://blogs.hbr.org/cs/2013/03/innovating_around_a_bureaucrac.html

Using choices to create strategy that is fit-for-purpose and really works - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/using-choices-to-create-strategy-that-is-fit-for-purpose-and-really-works/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/using-choices-to-create-strategy-that-is-fit-for-purpose-and-really-works/

Using choices to create strategy that is fit-for-purpose and really works: two important questions to make it happen.

 

Extract from SmartBlog on Leadership – David Burkus:

For too many executives, strategy is a heavy topic. Either it requires a seemingly infinite time commitment, or it is easily mistaken for an organizational vision or (perhaps worse) a short-term operational plan.

If you’re trying to build a solid strategy, then there are a number of resources you can draw from. So many in fact, that it can get a little confusing. Do you run a SWOT analysis, draw up a Five Forces Model, or try and sail into Blue Oceans? It’s enough to confuse even the most senior leaders.

But strategy doesn’t have to be that difficult.

In their latest book, A.G. Lafley, former CEO of Procter & Gamble, and Dean Martin, dean at the Rotman School of Management in Toronto, argue that, in the end, all strategy begins with two simple questions: “Where will we play? And “How will we win?”

Where will we play?

No company can serve every customer. In the end, strategy starts with the fundamental choice of which customers to pursue. It starts by deciding which industry to be in, which market to compete in and even which position in that market to occupy. Wal-Mart might seem like a mass-market retailer, but its decided to pursue specific customer segments and doesn’t mind alienating others who aren’t looking for “everyday low prices.”

Too often, we embark on a strategic plan assuming that the industry we’re in is the one we have to build a strategy for. But you always have a choice of where to play. If the market you’re in now doesn’t serve you, don’t be afraid to pivot and pursue a new market or customer segment.

How will we win?

Depending on which field you’ve chosen, you will have to decide how you will win in that field. Mimicking the product offerings or marketing plans of established players on that field is a sure-fire road to failure. Instead, decide how to craft a specific and differentiated plan to pursue customers through activities different from your competitors’.

Zappos doesn’t offer the lowest price on shoes, but it doesn’t have to. Instead, it chose to win by offering outstanding customer service. Trying to be the low-cost leader and also offer the best customer service experience will likely result in a second-place finish (or lower) in both categories. You can choose how you want to win, but you can’t choose a plan that others already dominate in.

You can use these two choices in different ways. If you’re creating a strategy, start with these two questions and align objectives and activities to the answers you’ve come up with. If you’re evaluating existing strategy, then compare that plan with how clearly it provides answers to these questions. If you know how to ask and answer these two questions properly, then you can cut through the confusion and craft a strategy that really works.

David Burkus is assistant professor of management at Oral Roberts University and editor of LDRLB, an online resource that offers insights from research on leadership, innovation, and strategy.

More … http://smartblogs.com/leadership/2013/03/05/2-questions-to-guide-your-strategy/

Innovating innovation challenge winning entries - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/innovating-innovation-challenge-winning-entries/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/innovating-innovation-challenge-winning-entries/

Innovating innovation challenge winning entries; some of the world’s most daring and comprehensive approaches. 

 

Extract from HBR Blog Network – Polly LaBarre (Management Innovation eXchange):

Most companies put innovation at the top of their agendas. But how many devote the energy and resources it takes to build innovation into the values, processes, and practices that rule everyday activity and behavior? Not many, as we argued when we launched the Innovating Innovation Challenge in October.

That disconnect isn’t due to lack of human ingenuity or resources; it’s actually the result of organizational DNA. Productivity, predictability, and alignment are embedded in the marrow of our management systems. Experimentation, risk-taking, and variety are the enemy of the efficiency machine that is the modern corporation. Of course, it’s variety and the daring to be different that produces game-changing innovation.

So how do we make every management process a catalyst, rather than a wet blanket, for innovation? And, importantly, how do we make innovation a true core competence? While we didn’t expect to find many organizations that had woven innovation into every element of their management model, we did hope to discover individuals and teams making real progress on important pieces of the puzzle.

After a few months, 140 superb contributions, and 24 finalists, we’ve zeroed in on a set of winning entries that represent some of the world’s most daring and comprehensive approaches to making innovation an everyday, everywhere capability.

Today, we’re delighted to announce the 10 winners of the Innovating Innovation Challenge, the first leg of this year’s HBR/McKinsey M-Prize for Management Innovation.

In alphabetical order:

Managing for 21st Century Crime Prevention in Memphis
by Toney Armstrong, Memphis Police Department

An inspiring story of transformation from a traditional bureaucracy to a vibrant innovation culture in which the insights and observations of every individual from edge to edge not only matter, but produce immediate impact and make the organization continuously smarter.

Democratizing Entrepreneurship: Village Capital’s Peer Selection Model
by Ross Baird, Village Capital

An exciting and powerful model for cultivating, evaluating, funding, and growing new ideas — and a detailed recipe for unleashing the power of peer review in any organization.

Case Coelce — Inspiring Innovation for Traditional Work Environments
by Luiz De Gonzaga Coelho Junior, co-authored by Odailton Arruda, Coelce

An honest and human account (dead ends and all) of developing a continuous innovation capability in an electricity distributor in the poorest region in Brazil.

Fail Forward
by Ashley Good, Engineers Without Borders Canada

The “Failure Report” is a refreshing and bold practice that takes the tired mantra of “embracing failure” and turns it into a way of life for an organization — and a provocative invitation to all of its partners.

Sustainability as Innovation Strategy: How Sustainability and Innovation Drive Each Other and Company Competitiveness at Danone
by Monica Kruglianskas, Danone, co-authored by Marc Vilanova, ESADE Business School

This story unpacks Danone’s singular approach to embedding sustainability in its innovation agenda and innovation in its approach to sustainability. A case study in how to bring values to life, unleash the spirit of experimentation, and scale new ideas and practices.

Democratize Innovation — For Sustained Innovation Culture
by Lalgudi Ramanathan Natarajan, Titan Industries

A multiplex approach to layering in innovation capabilities from the shop floor up in India’s largest jewelry and watch retailer. The Titan story is a down-to-earth account of true social innovation — both in terms of the process and the result.

Whirlpool’s Innovation Journey: An On-Going Quest for a Rock-Solid and Inescapable Innovation Capability
by Moises Norena, Whirlpool, co-authored by JD Rapp

The state of the art when it comes to developing innovation as a core competence. Whirlpool changed its organizational DNA to embrace innovation at the deepest level and unpacks the journey in generous detail here.

Unleashing Inclusive Innovation at Cisco
by Kate O’Keeffe, co-authored by John Marsland, Carlos Pignataro and Lisa Voss, Cisco

A thorough and instructive account of working every lever and animating an entire organization — from the bottom up and the top down — to embrace innovation.

Project Bushfire — Focusing the Might of an Entire Organization on the Consumer & Customer
by Stephen Remedios, The Stephen Remedios Company, co-authored by Aswath Venkataraman, Sandeep Ramesh, Shruti Kashyap and Shashwat Sharma, Hindustan Unilever

A compelling, homegrown practice for jolting a vast organization into tight communion with the marketplace — and a recipe for seeing around corners, energizing every last person in the company, and closing the gaps between “sense” and “respond.”

Is Managed Innovation an Oxymoron?
by Kumar Sachidanandam, Cognizant

A comprehensive and illuminating story of how one organization tackled the über challenge of building innovation into its management model — with powerful insights on wrestling with the right big questions.

Congratulations to all of the winners and the organizations behind them! We’ll be unpacking many of these stories and others from the Innovating Innovation Challenge here in the weeks to come. In the meantime, stay tuned for the launch of the second leg of the HBR/McKinsey M-Prize here in early March.

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