There is actually a silver bullet for increasing your organization’s effectiveness: hire well. More specifically hire good leaders that will step up and raise your organization’s performance bar and set a new standard. Peter Drucker summarized this straight-forward recipe in his book The Effective Executive (Drucker Series).

…[Effective executive] knows, moreover, that the standard of any human group is set by the performance of the leaders. And he, therefore, never allows leadership performance to be based on anything but true strength.
…In human affairs, the distance between leaders and the average is a constant. If leadership performance is high, the average will go up. The effective executive knows that it is easier to raise the performance of one leader than it is to raise the performance of a whole mass. He therefore makes sure that he puts into the leadership position, into the standard-setting, the performance-making position, the man who has the strength to do the outstanding, the pace-setting job.

Exceptional leaders can deliver the impossible while building the organization, creating excitement about the future, enhancing communication and team morale while strengthening customer and partner loyalty. No wonder “bet on the jockey, not on the horse” is a mantra that drives VC investment decisions.

There are many studies on what constitutes an effective and exceptional leader. These individuals share some common characteristics:

• They challenge the established processes, search for new opportunities and experiment with new ideas. However, they do this in a participatory fashion where they are inclusive of others. They listen well, consistently request feedback, encourage and share and in return they are persuasive, persistent and as they tend to be politically savvy, they use discretion.
• They are focused on key priorities, keep it simple, celebrate small wins and are clear about their values. This enables them to build a compelling vision for the future, create a nurturing environment and provide motivation to rally a team behind this shared vision where everyone understands how they fit into the big picture.
• They understand the importance of accountability and ownership, for themselves and for the teams they manage. They enable others to act by involving them in decisions, and continuously look for ways to coach and mentor their team for individual growth. They build on other’s strengths and use it to motivate them.
• They focus on results and prefer to ask for forgiveness over permission. They share the rewards and recognition while taking responsibility for setbacks.
• They have a presence that brings credibility to what they do and say. They build confidence as they are thorough, professional and insightful.

If you are in a people management position and struggling with raising your team’s performance bar to the next level, consider the following:

• Do a self-analysis of your own management style, observe yourself in action and request feedback from others. Are you emphasizing accountability and ownership, or micro-managing everything short of chewing the food for them? Are you building on the strengths of your team, or just bluntly pointing out their weaknesses expecting them to overcome it overnight?
• Analyze your organizational circumstances. You can certainly build a dynamic and high-performance team, but your organization might have put the choke collar on you. Powerlessness over external resources, lack of cooperation, issues of trust and openness are certainly frustrating experiences. Some could be solved by organizational restructuring, for others you will need to sharpen your political savvyness.
• Evaluate the cultural aspects of your organization. Is it participative and inclusive, or more command and control? There is a time and place for different styles, such as in case of emergencies where command and control can be most effective. However, in general this style destroys motivation, creativity and lends itself to just tell me what to do attitudes.
• Study information and knowledge sharing patterns of your organization. Ideas and innovations are built on other ideas, and transparency/openness creates an environment conducive to sharing, understanding and motivating.
• Be honest, are there egos at play? Effective leaders learn to supress their egos in favor of the team.
• Take a survey; is the problem with lack of focus and having unrealistic optimism? Too much task switching reduces productivity, expectations that are obviously impossible to meet kill any potential for motivation.

At the end of the day, you need to model the way. Demonstrate your new performance standards by setting the pace, by having challenging, exciting yet achievable goals, by motivating and coaching others to contribute their best to the team. And, don’t forget to celebrate small victories along the way.

Technorati Tags: leadership, raise performance of teams, characteristics of exceptional leaders, high performance teams, effective leadership

To which I ask “if everybody before you has jumped off the bridge, would you follow?” Yup, we’ve always done it this way is one of my pet peeves. I believe there is a time and place for everything, and things/circumstances do change.

Organizational memory is a valuable asset for the firm. It is defined as shared data, information or knowledge of past experiences that are relevant to an organization’s present activities. As such, it lives in the collective memory of the employees and evolves with them. Improvement in the overall effectiveness and success of the organization is dependent on the quality of its memory and how well it learns from the past. Yet, organizations routinely “forget” what they have done in the past and why they have done it, which reminds me of the classic Thanksgiving turkey story:

A teenager was watching her mom carefully stuff and prepare the turkey for the oven. As part of the preparation, prior to putting the turkey into the oven, mom cut about 3″ from the tail of the bird. When the teenager asked why that was, mom simply said “I don’t know… Mom always did it this way. Why don’t you ask your grandmother?”. Later on that night at the dinner table, the teen queried grandma, to which she responded “Well you see… My oven was too small, so in order to fit my 20lb turkey, I always had to cut off about 3″ from the tail.”

Yup, things and circumstances usually do change… Alzheimer-like poor organizational memory usually results from a lack of leadership focus on learning from past success and failures, and where the organizational processes do not require employees to document and share organizational actions, outcomes, and to apply those learnings to new problems. The information overload that we experience daily certainly makes the problem more challenging to deal with. As the firm heavily relies on individuals to be the keeper of organizational experience, turnover, attrition and downsizing eventually erodes precious knowledge, learnings and insights. With that, effective organizational memory is compromised of three parts:

1. Explicit knowledge, information, facts, policies or rules that are embodied within the culture;
2. Tacit knowledge, insights, knowledge of the rationale, discussions, assumptions behind those explicit knowledge and information that is shared and understood by the organization;
3. Application of this knowledge, recognition of the knowledge, its context and successful internalization, associations and utilization of the knowledge by the organization;

Basically, you need to be able to move from “we’ve always done it that way”, to be able to share why, how and other relevant context, to successfully recognize how those experiences might be relevant to a new problem or that the circumstances have changed and it’s time for an update.

Companies heavily rely on groupware tools (wikis, Microsoft Sharepoint, …) to capture and manage their organizational memory. Given that the organizational memory lives as part of the collective memory of the employees, you can see the challenges associated with managing a living organism. However, the real competitive advantage comes from the application of this knowledge within the appropriate context of the new problem that needs to be solved. So, unless the organization successfully fires on all three cylinders and builds a learning organization, it will not be effective at utilizing their collective knowledge for new ideas, inventions or innovations.

If you think your organization is suffering from (hopefully) a temporary case of amnesia, here are some suggestions to improve the overall effectiveness of your organization’s memory.

• Formalize processes for creating and using organizational memory. This includes holding project postmortems where you capture the learnings, but also a specific action plan that would be applicable to the overall organization as well as next project. And, make it part of your project initiation phase to review prior postmortem reports.
• Build a learning organization by insisting on learning from past success and failures. As with life, learning is multi-dimensional, it is individual and collective. So, be inclusive and encouraging in your learning process.
• Make it easy for the organization to capture the knowledge by investing in tools to easily capture, catalog and organize knowledge and information being exchanged. However, focus on building a learning culture by putting in processes that requires connection with the rationale and assumptions of past decisions and learn from it in a way that would be applied to today’s problems.
• Continuously expand on the organization’s memory and experience. New knowledge can be gained through customer surveys, tradeshows, hiring people with relevant experience, … You can utilize your vision, your core competencies and strategic objectives as a method for determining where you want to enhance your learnings.
• Remember, people are fallible and our memories are flawed. As you remember and apply past learnings, make sure it is within the context of the new problems. Otherwise, you are dealing with apples vs. oranges.
• As with anything you want to improve, focus on measuring your initiatives. This can be simply implemented as assessment surveys, utilization of knowledge management and collaboration tools and measures of your best practices in the organization.

So, next time you catch yourself arguing “we’ve always done it this way”, stop and think. Recognize that it just might be the right time to question the so called wisdom.

Technorati Tags: organizational memory, organizational learning, best practices

What follows below is my interpretation and application of Werner Heisenberg’s uncertainty principle and Einstein’s relativity theory to innovation management. It is meant as a philosophical thought provoking reading, and I hope you will enjoy it. Afterwards, please share your thoughts with us. Of course, now that I asked for comments, I have already impacted your ideas and conclusions, but I won’t say how.

In extreme simple terms, the uncertainty principle states that it is impossible to determine exactly both the position and the velocity of a particle at the same moment: the more accurately you try to measure one, the less accurate the other becomes. This principle had profound impacts on how we view the world, as we now have a non-deterministic model for the universe. On top of that, just the aspect of observing in the present state could change future events! This interesting paradox has been contemplated by Erwin Schrödinger with his Schrödinger’s cat experiement: is the cat dead or alive? With all that and more, we know have quantum mechanics theory, where instead of a definite single prediction for a given event, we have a number of different possible outcomes and likelyhoods.

Einstein’s theory of relativity basically states that there is no absolute or universal time that all clocks would measure. Instead, each observer has his own measure of time, as illustrated in the twins paradox. Furthermore, Stephen Hawking showed that the time would come to an end inside a black hole, where no light can escape.

So, we are living in a universe where nothing is deterministic, where the even the thought of measuring will likely change the outcome that is being measured, and even then, everyone has their own measures… Not to mention, with an ever expending universe, everything will eventually collapse on itself and become a black hole. Conceptually, I can’t imagine anything better that describes the challenges of innovation management and offers suggestions for coping.

Is the cat dead or alive? Now, ask the same question of your innovation or your new product that is about to be launched. As attractive as it is to have a ‘yes/no’ answer, the more appropriate approach is to measure the probability of various key outcomes. Think about it, how many times has a project been canceled because it didn’t meet a revenue projection plan, or a certain market size, or competitive foothold in the market place before the product even made it through the doors? Just like a quantum state, which is a combination of position and velocity, our project’s factors and likelihood of its success is a representation of a project’s quantum state. It is a combination of various key variables, usually specific to the given project, with their own set of measurement challenges, as it is impossible to accurately measure one variable without impacting others.

So, as the uncertainty principle states, your innovation doesn’t have a definite path, but more likely follows a probability distribution. How you measure and capture its progress and likely outcome of your innovation, as well as where in the life cycle you do it will certainly implicate the path that your innovation follows. The point here is not that this is good or bad, but more how do you get to a repeatable success story, I mean, probability distribution? At its core, this is the essence of innovation management.

Well, this is where your culture comes in. By embedding the needed aspects of innovation management and related measurement systems into your culture, you no longer introduce a random element into the system due to an observer interfering with the experiment and creating unintended entanglement. Rather, the process and its measurement is now a natural part of the system. In other words, you no longer need to worry about the cat. Now, the cat feeds itself and cares for itself until such time when the cat’s time comes to an end naturally or via a black hole where the concept of time no longer applies.

This brings us to the theory of relativity, which unfortunately also holds true for the innovation process. From experience, each stakeholder in the innovation system tends to have their own idea of success, priorities and objectives. Again, this is not good or bad, but just a fact. Through a good communication and an alignment process, it is quite possible to establish an agreed upon definitions for success, priorities and objectives. However, while this will hold true for a given point in time, it requires ongoing realignment in order to stay aligned.

Things do come to an end, eventually. Even for super products and innovations, where the product no longer generates necessary revenue to balance the force of its cost of maintenance. In the case of stars, they continue to shrink under pressure eventually becoming black holes, where light doesn’t escape and the concept of time no longer applies. Again, how is this different from products that are well past their useful life and should have been discontinued long ago? Where creativity, talent and other useful assets of the firm are shrinking away without any reasonable probability for creating a big bang? Yes, things do and should come to an end, eventually.

There is much we can learn and apply from theories that surround us. As I relearned recently, the more things change, the more they stay the same. Remember, early on I asked for comments. But, now that I asked, the probability of you actually doing that is next to nill. So, why don’t you surprise me anyhow.

Technorati Tags: innovation management, uncertainty principle, theory of relativity, Einstein, Heisenberg, Schrödinger, quantum mechanics

I finally created a Flickr account and even uploaded some of my photos…. Here is the fun part, FeedBurner will embed random photos to my feed. Hope you enjoy it!

There are many things to consider during your innovation journey: insights into your customer and markets, good understanding of your ecosystem and its complex interactions, being comfortable with uncertainty, your culture and its dynamics, focusing on concrete milestones while managing to a long-term vision, and even a bit of luck.

Peter Drucker has boiled down the essence of the innovation process into the following three necessary conditions: innovation is work, innovation is built on strengths and innovation is an effect in economy and society.

Innovation is work

“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system.”
- Niccolo Machiavelli, The Prince

Drucker indicates that innovation is work; it is hard, focused, and purposeful and makes great demands on diligence, on persistence, on commitment and requires resilience. Winston Churchill made the statement “To improve is to change; to be perfect is to change often.”

It is important to remember that innovation is not a linear process, but an iterative one. You learn by doing, where you discover market and technology unknowns and make course corrections on the fly. No wonder the traditional business planning falls flat in the face of the innovation process. Instead you need to utilize planning tools that are more appropriate, such as the assumption based planning processes.

Innovators must build on their strengths

Drucker also points out that innovators must build on their strengths, that innovators look at opportunities over a wide range, but evaluate these opportunities on the merits of their fit with the innovator herself, and with the organization.

Hamel and Prahalad define core competency as something that a firm can do well, such as technical know-how, specific processes, design skills, innovative culture, or relationships with customers and suppliers. However, more specifically, a core competency needs to meet the following conditions:

• Has a direct customer benefit, such as lower cost, key feature/functionality, …;
• Is difficult for competitors to imitate, thereby providing key differentiation;
• Has the ability to leverage and utilize the competency in other parts of the firm, including products, technologies and/or markets;

Jeffrey Phillips of Innovate on Purpose shares a key observation: “consider your core competencies when you generate and consider ideas, but don’t define them too narrowly or you’ll likely miss a great opportunity - one that exists at the intersection of your capabilities and anothers.”

My experience and past interviews in large organizations have shown that opportunities that are adjacent to the organization’s existing competencies help increase the innovation’s success rate. Along the same lines, there is a higher degree of failure on projects that did not have synergistic fit with the organizations’ strategy or existing workforce competencies.

Building new competencies in an area is a valid reason for pursuing a new innovation. M&As are often used to close a competency gap, and to acquire new ones. However, about two-third of M&As fails. At the same time, the innovation process requires constant vamping of your core competencies and exploiting them in unique and creative ways. So, not only do you need to build on your strengths, but also you do need to have the competency to further grow your strengths.

Innovation is an effect in economy and society

Finally, Drucker indicates that the innovation is an effect in economy and society; it is a change in behavior of customers, in how they work and produce something. As such, he points out that the innovation always has to be close to the market, focused on the market, and be market-driven.

Yet, market adoption and acceptance is a complex process where one rarely has the power to control. No wonder resilience is highlighted as an essential strength for the innovators. Innovators use their experiences and skills for solving problems, where their background and interest define their innovation’s target focus. However, the real work starts with the answers and insights they gather through this experimentation.

With that, we came full circle – innovation is work, it is built on strengths where strengths continuously need to evolve, and it is an effect in economy and society, where its adoption requires even more work and new competencies for it to be successful.

Technorati Tags: innovation process, core competency

I am a WSJ (Wall Street Journal) reader. I find the articles insightful and interesting, which makes it an enjoyable experience, especially with my morning coffee. However, I can’t say the same thing for their customer service experience. So, Mr. Murdoch, I hope you are reading this post and will take this customer’s recommendations to heart as you are developing your strategic plans.

I almost posted about my WSJ customer experience couple of months ago. You see, their Online Journal and Print Edition are two very different organizations, and they don’t share any subscription information at all. So, early this year, when I re-subscribed through WSJ Online which also gave me a print subscription, their Print Edition group had no idea. This wouldn’t normally be a problem, except I kept getting letters for subscription offers, which didn’t make any sense to me. Unfortunately, they also sent a letter accusing me of taking advantage of their good will for continuing my print subscription and urging me to re-subscribe for something that I already paid for! This issue was finally resolved when I got in touch with their print subscription service representative that admitted she doesn’t receive any notice from the Online WSJ group regarding the print subscriptions offered through their promotions.

Today, I ran into a different issue with WSJ services group. Guess what, for every new WSJ account, you need to create yet another user account to manage it. I actually called up their 800 number as I thought they could update my user information with the new account number, but no go… It is bad enough that I have a spreadsheet to manage my accounts/passwords, but now I have 3 different user accounts for one site and one is no longer valid???

When I asked how I can provide customer feedback and suggestions for their Website Services group, I was told that they would be happy to pass my feedback along. However, they don’t have any mechanism to submit it directly to them. Lack of customer connection is in my top 10 list of how NOT to innovate!

This is quite different than my UPS delivery experiences. I always enjoyed using UPS and their online tracking services. Yesterday, however, I was introduced to a new service from them, which has apparently been around for the past 6 months. It is an automated voice message that they send out when the package they are delivering requires a signature. The service today cannot give a specific delivery time (sometime between 8am-7pm). However, with the latest technology advances, I wouldn’t be surprised if we see an updated service integrated with their SMS messaging to give a 1-3 hour delivery window within the next 6 months.

Thank you for listening. For more on the importance of quality of your customer service and dangers of siloed organizations, please read my previous posts. If you happen to have one of these siloed customer service organizations, please take action today and put a strategic plan in place with specific milestones to fix it. How well you service your customers can be your strategic differentiation or a sign of your deteriorating brand.

• Innovate with quality
• Strategy 101: Revisiting Low-Cost Leadership with Dell
• Good, Bad and Ugly: Organizational Silos

Technorati Tags: WSJ, Wall Street Journal, customer service, Murdoch, UPS