The article, “Tough CEOs Often Most Successful, A Study Finds“, was published in the WSJ.com last week. The research conducted by three University of Chicago business-school professors highlights that the ‘hard’ skills count more than ’soft’ skills when it comes to success.

In this research, hard skills refers to traits that “get things done”: persistence, efficiency, analytical thinking and setting high standards. Soft skills, on the other hand, include teamwork, creativity, persuasion, listening skills, enthusiasm and treating people with respect.

I have been chewing on these findings, and frankly I find the results conflict with my experience. I have found that innovation and technology management revolves around people: whether it is about motivating your team or pushing the diffusion/adoption of your new innovation and technology. Yes, to be successful one does need the hard skills mentioned here. However, I don’t believe it is possible to be successful nor establish a sustainable success without the soft skills, which are downplayed in the study.

Here are some highlights from my other postings on innovation and the need for soft skills.

• Innovation requires both sides of your brain — You can’t just be creative, but also need to be analytical to successfully exploit the opportunity. Think out of the box, look for connections even seemingly unrelated, be open to and seek new experiences and ideas, be observative and keenly inquisitive. Know that the future is unwritten and full of opportunities. Be positive, hopeful and optimistic, regardless of the current situation. But, while dreaming big, start small, simple and with focus. Iteratively build on your previous successes, and create your future one step at a time.
• Strategy and its execution requires ownership at all levels — This means everyone, from the CEO on down. Executive leadership must embed strategy in the organization: from its people, to its processes, to its culture and values. Any strategy, however brilliant, will fail unless people are emotionally committed to its success. In order to achieve unwavering commitment, people need to be involved in the strategy process early, they need to understand and believe in the strategy, and they need to feel included. The organization’s culture, values, incentives, people, structure and processes all contribute to how the existing internal environment will support its strategy.
• Innovation is change — In this case, change applies to all aspect of innovation process, not just the final output. Innovation is ambiguous and requires failures to achieve success. Innovation is also a change in behavior of customers, in how they work and produce something. Yet, market adoption and acceptance is a complex process where one rarely has the power to control or dictate.
• Innovation starts with people — Innovations do not occur by themselves: they are generated and sustained through the efforts of individuals and people. Creativity, commitment and persistence drives the innovation process. How well an organization cultivates and nurtures the creativity, knowledge creation and invention process plays into their innovation capability. Yet, it is important to note that these are necessary but not sufficient conditions for successful innovation; but they do make up the foundation that innovations are built upon.
• Your organizational culture is linked to your firm’s success — Various studies and surveys indicate the link between organizational culture and firm’s success. Denison Consulting’s 2006 study links high performance in key areas of the organizational culture (adaptability, consistency, mission and involvement) to long-term financial performance and short-term sales growth.

Innovation and top line growth is a concern for today’s CEOs. Yet at the same time, many will admit that only a small percentage of their innovative ideas, products and technologies are getting commercialized. Maybe this should not come as such a surprise, given that these CEOs are focusing on hard skills. Maybe even the successful CEOs are missing the crucial aspect of what it takes to innovate and drive innovation in their firms, limiting their true potential. Perhaps a follow on study should be made which compares/contrasts the successful and innovative CEOs in areas of character traits and skills. What do you think?

Technorati Tags: Tough CEOs Often Most Successful, innovation, soft and hard skills

“We cannot direct the wind,
but we can adjust the sails”
— Contemporary Western Proverb

Your firm is a living organism, a complex system. As with all living systems, it self-maintains, self-renews and evolves. The firms that recognize themselves as a living organism, a learning organization are aware of their environment, their place in the ecosystem and the shifts that are occurring. This awareness and sensitivity to internal and external changes gives them the flexibility to adjust and adapt.

“Adapt or die” is a common phrase that highlights the importance of survival for firms. As firms adapt and evolve, the organization determines and selects the traits necessary for the survival and through its culture continuously reinforces it. This continuous process of adaptation and evolution further ensures the success and survival of the successive generation.

The life-cycle refers to our knowledge and generalization of living systems, the principles and laws that govern life from birth till death. As businesses, we also go through our life-cycle stages. As always, these are guidelines and not definite steps. As with my son that skipped the crawling stage and went to straight to walking, firms can also skip stages. Here are the common stages of a business life-cycle:

• Seed: Similar to a plant life-cycle, the seed stage represents the germination of a compelling concept and the push for finding the first set of customers to validate the idea. The firm’s main challenge is market acceptance, and managing resources and time effectively.
• Startup: This stage is characterized as customer acceptance, where the focus shifts to obtaining new customers and delivering on the product’s promise. Usually at this stage, the firm has enough customers, are able to keep them satisfied and the focus is shifting from survival to managing revenues and expenses. The firms’ main challenge is to have checks and balances to ensure they are on track, and managing the burn rate. This is where you don’t want to run out of money…
• Growth: Congratulations, you have proven the idea, showed the market validity and are now acquiring many more new customers. The growth stage is a milestone that marks the validation of the idea, which also means increased competition. If the firm is focused on growth, it will strive for operational excellence, proper scaling of the product and the business, and will look at ways to expand into new businesses, markets and customers.
• Decline: This stage is usually marked by the reduced revenue and profitability. At this stage, there may be a crisis that calls for action and renewal. Or, the organization might be the frog in a pot of cold water, slowly being boiled, not realizing the situation they are in. All focus is now on managing negative cash flow and costs.
• Exit: The exit stage is all about closing the doors whether due to bankruptcy, selling the business, acquisition by someone, … This process mainly includes proper valuation of the company. There maybe psychological and financial impact that should be managed.

Just like a child growing up, each stage is a change, requiring different nurturing and focus areas for its survival. Yet, basics are needed for survival at every stage: basic management skills, basic financial knowhow, basic marketing competencies. In addition, there are also other factors to consider:

• Clarity on what you are and what you are not. This is important for your internal decision making, for your customers and your brand image. This continuous adjustment, explicit commitment and mutual adjustment from everyone is needed to achieve results.
• Know how you compete. Many new firms excel because they stress customer service and flexibility over what established firms can offer. This coupled with focus on high-quality products, flexibility in responding to customer needs and product customization gives them a boost in the market over competition.
• Innovate while managing your core business. It is too easy to put all your eggs in one basket or over commit yourself. Innovation and technology strategies correlated with growth, but need to be managed.
• Understand other life-cycles in motion, such as those of your customers. Where they are in their adoption curve drives their purchasing behavior and risk profile.

Technorati Tags: business life-cycle, business survival skills

Strategic planning is all about the future: where you are going over the next 3+ years, how you plan to get there and how you know when you arrive to your destination. However, your success at your strategic planning all depends on how well you know yourself, and your starting point.

Here are few key areas where you should build a good foundation and understanding in order to achieve success at your strategic plans. It is a good starting point, but not all inclusive. Please add to this list with your experience and insights.

Know yourself
This is all about self-examination and being introspective. It is about recognizing your strengths and weaknesses, understanding your distinctive competencies and realizing your competitive advantage. This process requires you to be true to yourself about who you are, so you can chart a course for who you want to become.

Know your customer
You want to understand your customer better than your customer understands herself. What keeps them up at night; what they don’t foresee today, but will need tomorrow; what motivates them to buy and turns them off; what makes them successful; why their customers prefer them to others; how are they profitable … This is where you are wishing for a mind-meld approach to getting to know your customer. In the end, you want to become a specialist in your customer’s businesses. It will help you understand their articulated needs, but also help you innovate for the unarticulated opportunities.

Know your competitor
You need to understand your competitors and your industry in order to play the game. What are the strengths and weaknesses of your competitors? Why are your customers choosing your competitors’ products? What is the layout of the industry structure; how is the ecosystem playing out; what are the trends; … These will help you to identify new opportunities and potential threats.

Know your data
What do you need to insure a sound decision making process? What key performance indicators do you need to benchmark and watch for? Always remember the saying: garbage in - garbage out.

Apply differentiation
There is a subtle yet important difference between being different and differentiating yourself. You don’t just want to be different. In everything you do, you want to offer significant value over your competitors. You want that value to shine through your brand image where your customers, current and future, can clearly recognize it.

Create your safe haven
We are living in a global world where competition is everywhere and customer loyalty is in demand more than ever. Recognize the challenge, and figure out how to create high entry barriers to protect yourself using your strengths. Aside from patents, look to build exceptional customer relationships, alliances and partnerships.

Know your resources
There are always more things we want to do than would fit into the time and resources available. But, that is no excuse to spread your resources too thin. Multi-tasking, frequent context switching will kill the productivity of your team. Instead, prioritize and stay flexible.

Be agile and adapt
In a way, everything is in a constant flux and all things change. So, be alert, stay in control and watch for shifts in the marketplace and in your customers. Recognize the changes, be agile and adapt accordingly.

Minimize your dependence
No doubt we can’t do it all ourselves and we need help. At the same time, recognize your dependencies and work to minimize them. This could be anything from your one customer, a product, partnerships or alliances.

Technorati Tags: strategic planning process, strategic plans, know yourself

“Good and bad ways to go wrong” is David Weinberger’s article in KMWorld, and it is a definite good read.

David advises us not to be wrong in two or more ways, as that can be disastrous: “you can be arrogant or you can be ignorant, but you better not be both.”

In his article, he talks about the good and bad ways of generalizing, the need for making and learning from mistakes (though he indicates not every mistake is a learning experience), and the importance of good mistakes.

I hope you enjoy the article.

Technorati Tags: KMWorld, David Weinberger, good and bad ways to go wrong

Stop, don’t dismiss or shrug away that little nagging, semi-irritating feeling you get after an interaction with someone in your organization. Ask yourself, “is this a common occurrence?” If the answer is yes, it is time to look at your organization and its culture.

What, how and why your organization does the things it does and how it behaves is a reflection of your organization’s culture. It is all about how you as a collective see the world, interact with the world and what rules you instinctively follow.

Take a step back and think about your organization’s culture. You might use one or more of the following characteristics to define it. Note some are more positive than others.

• innovative and high risk tolerance
• good attention to details
• focuses on results
• values people and team work
• aggressive with take no prisoners attitude
• creative and out-of-the-box thinking
• tolerance for ambiguity
• entrepreneurship focused
• customer centric
• collaborative, open and values trust
• empowered, self-managed, adaptive and agile
• quality work is a given and not an after thought
• need to know basis only; i.e. limited knowledge sharing
• does enough, but reluctant to go further
• ownership and accountability
• not invented here
• penny wise, pound foolish or otherwise known as frugal
• do first, think later or otherwise known as just do it
• …

Yes, the list can go on and on and on… And here is why should you care.

• Your organizational culture is linked to your firms success: Various studies and surveys indicating the link between organizational culture and firm’s success. Denison Consulting’ 2006 study links high performance in key areas of the organizational culture (adaptability, consistency, mission and involvement) to long-term financial performance and short-term sales growth.

  What do you think? Can you establish cause-and-effect links between your culture and other performance indicators such as your current customer satisfaction or employee motivation scores?

• Your culture can attract and retain talent: Individuals differ in what motivates them, what degree of social and community connections they need at work, amount of pay and benefits, as well as level of innovation, entrepreneurship, empowerment and risk taking in the company. Great companies not only create excitement and camaraderie for their purpose, but also build a culture that attracts the type of individuals that they need.

  Think about it… Are you attracting the type of talent you need to be successful in your business? What is preventing you from creating a company culture where you attract best of the best?

• Your strategy and culture are joined at the hip: Lets face it, your culture has a big influence on how your company does things. This influence certainly extends to your strategy. Just think about different generic strategies: cost leadership, differentiation, fast follower, … Each of these require a different set of cultural characteristics to be successful. Along the same lines, for any change in your strategy, you will need to identify the cultural behaviors that need to be changed and managed.
• Your culture can deliver 1+1=3: When you have a high performing organization, you can truly achieve 1+1=3! By focusing on ownership, accountability, action and results you improve your product and services using the same or fewer resources. By relying on their values and leaders, successful companies can decentralize authority to succeed in times where there is a high degree of ambiguity.

  As leaders, our every action sends a message to our people: dusty action item lists, reoccurring discussions with no specific decisions or owners, late start to meetings, runaway meetings, … Just a reminder, the buck stops with us.

• Your culture defines your ethical behavior: The world is transparent and becoming more transparent everyday. Honesty, integrity and ethical behavior is no longer a nice to have, but a must to demonstrate. Sure, you can put in place as many controls, checkpoints and policies as you want to ensure ethical behavior. But, to be successful, this ethics DNA must be embedded into your culture.

  The real test comes when doing the right thing is extremely hard: schedule slippage, customers’ personal data is compromised, lower than expected revenue results, … When that happens, and they will, how do you work as an organization: conduct open, yet difficult communications, take ownership for the responsibility, ensure joint accountability, …?

Finally, here are some of the signs that hints your culture needs work:

• second guessing/revising of decisions;
• execution issues and problems achieving results;
• inability to deal with or tolerate ambiguity;
• excessive workforce turnover;
• living in the past rather than facing to the present;
• loss of confidence in the leadership, direction and purpose;
• excessive politics and bureaucracy;
• firefighting mentality that rewards heroics;
• inability to innovate and risk adverse behavior;
• difficulty attracting and retaining talent;
• lack of respect;

Technorati Tags: organizational culture, why organizational culture important