Passing the Baton – One Woman at a Time

Cheryl offers: October’s HBR article “Why Succession Shouldn’t Be a Horse Race” describes how Xerox’s former CEO Anne Mulcahy successfully identified, developed and eventually passed the CEO baton to Ursula Burns, the first African American woman to lead a Fortune 500 company while also marking the first ever woman-to-woman succession. What was most interesting was how Anne deliberately worked to avoid Jack Welch’s famous departure when two of the three top candidates left with him once they learned Jeff Immelt had gotten the job. She said “I don’t believe in having people face off against each other for the CEO job in a classic horse race.” Kudos to her on two fronts: first for recognizing that losing valuable talent in this day and age is not good business and secondly for seeing collaboration is better for the business than competition when putting the best person in the job. GE lost 3 very talented employees when Jack left. Anne managed to retain her 3 top contenders after Ursula was named CEO, although one has since retired.  This article reinforced a message I read in Women and Leadership by Barbara Kellerman and Deborah Rhode.  In chapter 9 written by Marie C. Wilson, she notes “We need to fuel each other’s ambition, to give women the encouragement they need, and the courage embedded in that word. With our help, they can and will step forward and say, “I’m here. I can do this, and I want to lead.” This was written in 2007, just about the time Anne and Ursula were starting to write business history.  Those who support the laws of natural attraction would say, “Of course!”

Winning, with the Right Stars, Leads To More…Winning!

Two things.

It really helps you win if you’re on a winning streak.
It really helps you win if you have the right stars to fill the right slots.

Both of these thoughts are stated pretty clearly, and strongly, in the Jack Welch book, Winning.

Here’s Jack Welch about winning:
There have been literally thousands of questions.  But most of them come down to this:  What does it take to win?  And that is what this book is about – winning.  Probably no other topic could have made me want to write again!  Because I think winning is great.  Not good – great.  When companies win, people thrive and grow…  Winning lifts everyone it touches – it just makes the world a better place.  When companies are losing, on the other hand, everyone takes a hit.  People feel scared.  They have less financial security and limited time or money to do anything else.  All they do is worry and upset their families, and in the meantime, if they’re out of work, they pay little, if any, taxes.

An effective mission statement basically answers one question:  How do we intend to win in this business?  It does not answer:  What were we good at in the good old days?  Nor does it answer:  How can we describe our business so that no particular unit or division or senior executive gets pissed off.

And here’s Jack Welch on hiring:
Hiring good people is hard.  Hiring great people is brutally hard.  And yet nothing matters more in winning than getting the right people on the field.  All the clever strategies and advanced technologies in the world are nowhere near as effective without great people to put them to work.

Here in Dallas, life revolves around one thing, and one thing only – how are the Cowboys doing?  (I am fairly convinced that if a scientist found the cure for cancer, war broke out between the USA and Canada, the Texas Rangers won the World Series, and Tony Romo had a hang nail, all on the same day, the lead story on the front page of the Dallas Morning News would be Tony Romo’s hangnail).  Lately, the Cowboys have looked like losers  (because they were losers, losing their first two games).  Their posture, their facial expressions, were all showing the strain.  And then, yesterday, it all clicked.  They looked like a different team.  They looked like…winners.  And winning literally changes the way you look!

And then I read this fascinating article, Without Star, Often Broadway Shows Can’t Go On by Patrick Healy, in the New York Times.  Consider these opening paragraphs:

To understand why the hit Broadway musical “Promises, Promises” will close after just nine months, gaze up at the show’s giant billboard over Times Square. There are the smiling faces of Sean Hayes and Kristin Chenoweth, stars who are the chief reasons the show usually grosses $1 million a week.

The producers built the $9 million revival of “Promises” as a vehicle for Mr. Hayes and Ms. Chenoweth — so much so, they now contend, that the actors have become irreplaceable, and the show will close in January when they leave.

Winning in business works the same way.  If your company, your department, you, are on a losing streak, you don’t have to tell anyone.  They can see it in your demeanor.

And if you are on a winning streak, you don’t have to tell anyone.  They can see it in your demeanor.

And it really helps to have the right stars (the right people, doing the right jobs – the jobs they were born to, trained to, feel “called to,” perform) in the right places.  And when you find a true star, he or she is really, really hard to replace.

—————-

You can purchase my synopsis of this Jack Welch book, Winning, with handout + audio, at our companion web site, 15minutebusinessbooks.com.

E PLURIBUS UNUM: Origin and Meaning of the Motto Carried by the American Eagle

It should come as no surprise that recognition, appreciation, protection, and celebration of cultural diversity have been core values of the U.S.A. since E pluribus unum was suggested by the committee Congress appointed on July 4, 1776 to design “a seal for the United States of America.”

I am grateful to a number of different sources for providing the synthesis of information that follows.

The sketch below of their design accompanied a detailed description of the committee members’ idea for the new nation’s official emblem.

 

Original Sketch

The center section of their shield has six symbols for “the Countries from which these States have been peopled: the rose (England), thistle (Scotland), harp (Ireland), fleur-de-lis (France), lion (Holland), and an imperial two-headed eagle (Germany).”

Linked together around the shield are 13 smaller shields, 
each with the initials for one of the “thirteen independent States of America.”

On August 20, 1776, this first committee submitted their Great Seal design to Congress (including Benjamin Franklin’s idea for the reverse side).

Although their design was not approved (and two subsequent committees would be appointed), their motto was selected by Charles Thomson six years later when he created the final Great Seal in 1782 and inscribed E PLURIBUS UNUM on the scroll carried in the beak of the American bald eagle who carries “the power of peace & war” in its talons.

As Thomson explained, “The motto E pluribus unum alludes to this union between the states and federal government, as symbolized by the shield on the eagle’s breast. The thirteen stripes represent the several states all joined in one solid compact entire, supporting a Chief, which unites the whole & represents Congress.”

That was 234 years ago and yet our “nation of immigrants” still struggles to recognize, appreciate, protect, and celebrate the cultural diversity to which E pluribus unum refers.

Making the emotional case for change: An interview with Chip Heath

Chip Heath

In this excerpt from an interview with McKinsey & Company’s Allen Webb, Chip Heath interprets Switch for denizens of the C-suite. Supporting the interview are two case examples excerpted from the book. To read the complete interview, check out other resources, and/or sign up for a free but limited access subscription to The McKinsey Quarterly’s website, please click here.

*     *     *

In conversation and in excerpts from his recent book, a leading expert on organizational behavior explains why change often stalls and how top executives can use psychology to keep it going.
*     *     *

The Quarterly: Could you please quickly summarize the core ideas in Switch for the benefit of those who have not yet read it?

Chip Heath: The core idea is that there are two sides to the way human beings think about any issue. There’s the rational, analytical, problem-solving side of our brains, which may think, “I need to eat less.” But there’s an emotional side that’s addicted to impulse or comfortable routines, and that side wants a cookie. At work, the rational side may say that the company needs to go in a different direction. But the emotional side is comfortable with the old ways of thinking and selling, and it has great anxiety about whether the company can change successfully.

My favorite metaphor for this dynamic comes from the psychologist Jonathan Haidt, who talks about a human riding atop an elephant. The Rider represents our analytical, planning side. The Rider decides, “I need to go somewhere, here’s the direction I want to go,” and sets off. But it’s the Elephant, the emotional side, that’s providing the power. The Rider can try to lead the Elephant, but in any direct contest of wills the Elephant is going to win—it has a six-ton advantage. So part of achieving change, in either our lives or in organizations, is aligning both sides of the brain by pointing out the direction for the Rider but also motivating the Elephant to undertake the journey. Of course, the Path the Elephant walks down matters too. High-ranking executives can shape that Path, that environment, and make the journey easier even when the Elephant is less motivated.

The Quarterly: In helping companies to work through these conflicts and smooth the road to change, how useful is a senior executive’s formal power?

Chip Heath: The Rider–Elephant conflict may be a reason not to press too hard on formal levers. It’s not enough for people to intellectually understand that an organization must start moving in a different strategic direction. People need to be motivated.

Our typical way of communicating speaks primarily—and in a lot of cases almost exclusively—to the Rider. It builds an intellectual case for change and relies on formal authority. In government, legislators have formal authority to change the rules of the system. The US Congress once changed the national speed limit to 55 miles an hour, for example. Did that automatically change behavior? As a parent, does formal power change the behavior of your teenagers?

It’s not enough to show intellectually that we need to change and then to decree what those changes will be. If it were, a lot more organizations would succeed in making strategic shifts. Formal power is tremendously useful, but if we start by wielding it we probably haven’t aligned the Rider and the Elephant. And if we rely only on the formal levers of power to lead, we may get too far ahead of people—they understand that they must change, but the motivation hasn’t kicked in.

The Quarterly: What’s an example of the kind of formal power you think executives mistakenly exercise and an alternative that might be more effective?

Chip Heath: Consider how change initiatives are typically rolled out. In many organizations, a change initiative consists of 35 slides in a PowerPoint deck analyzing the reasons for change. There’s nothing in the deck that helps employees believe that “We’re the kind of people who can successfully make this change.”

GE overcame this problem when they started talking about “ecomagination.” CEO Jeff Immelt said, “There’s a broad social trend toward finding more sustainable ways of doing business, and if we can take advantage of that, we will be well-positioned for the future.” GE did a green audit, looking for places where they already had industry-leading green products, and started highlighting those existing products for employees. One was an LED3 lighting system that produces great light with 10 percent of the electricity used by other systems. GE then said, “We’re the kind of people who can succeed in this new business environment that’s more and more focused on sustainability.” That motivates the Elephant.

The Quarterly: In Switch, you use the term “bright spots” to describe internal success stories like GE’s LED system. Could you say a bit more about the power of bright spots?

Chip Heath: Many companies try change themselves by benchmarking other organizations and borrowing their procedures or practices. The irony of benchmarking is that we’re essentially telling organizations to be more like GE or Apple or Nike. As Dev Patnaik, the author of Wired to Care,4 said to me one time, we know this doesn’t work on a personal level: we resist when members of our families say, “Be more like your brother.” The principle of bright spots is that you shouldn’t try to be more like Apple; you should try to be more like yourself at your best moments. Think about what you’ve done in the past, or what you’re doing now, that has worked tremendously well.

People have a tendency, especially in a change situation, to focus on the negative. Lots of research supports this negative focus—for example, if you ask sports fans what happened over the weekend, they dwell on the games their favorite teams lost. Companies too focus on the problems and not the bright spots.

I won’t say there’s no value in benchmarking. But if you believe that organizations differ in their cultures, capabilities, and structures, there’s something fundamentally odd about saying that you want to be more like another company that has a very different culture, structure, and set of capabilities. At the very least, the idea of looking to your own bright spots is a useful addition to your tool kit.

The Quarterly: What’s your view of the notion that change is easier when you have a “burning platform” from which to motivate it?

Chip Heath: That is one of the silliest pieces of business jargon. The idea of the burning platform is that people only change when they’re scared. But fear, as an emotion, creates tunnel vision. Police officers call this “weapon focus”: crime victims can often give great descriptions of the weapon, but nothing about whether the assailant was tall or short or had facial hair, because they focus on what evoked their fear.

That kind of tunnel vision is devastating in times of change. If you’re doing everything basically right and you just need to improve execution, you can scare people and they’ll execute better and faster. But that’s not true of most change situations, where you need to be doing something new. Fear is the worst motivator here because it makes people work harder at what they did in the past.

The Quarterly: In Switch, you talk a lot about “identity.” Why is that important?

Chip Heath: My Stanford colleague Jim March says there are two very different kinds of logic for making decisions. One is the logic of consequences. We’re great in business at changing behavior by changing consequences. If we want customers to buy more, we lower prices. If we want salespeople to sell more, we increase their bonuses. But the second kind of logic is the logic of identity. Many of the most profound decisions we make in life are made because of identity, not consequences. When our newborn child cries at night, we don’t undertake a net present value analysis of how much more valuable an hour of sleep would be. We get up because we are a committed mother or father.

That’s useful in business, especially in a change situation: if we can harness the power of identity, it helps motivate the Elephant to undertake a long, arduous journey. In a change situation, you want creativity and flexibility—and that’s more likely to come from identity than from consequences. Consequence-based logic is great at narrowing people’s focus, but it can backfire for the same reason. If you give people incentives to sell a lot of mortgages, for instance, they will do so. But they’re not necessarily selling the right mortgages to the right people.

Most successful companies have a distinctive identity in our minds. I can picture the identity of a Wal-Mart or a Southwest or an IBM employee. I have a harder time picturing the identities of some of their competitors. Intel recently has been running a national ad campaign that features its own employees. It’s called “Our rock stars aren’t like your rock stars.” Ajay Bhatt, one of the coinventors of USB, is shown walking into a company canteen and being surrounded by adoring employees. The point is that what they value at Intel may be different from what’s valued in the outside world, but if you’re the next Ajay Bhatt, you want to work for Intel, where your talents will be respected. Another great example of a company that motivates employees by giving them a sense of identity is Brasilata.
How can senior executives create appropriate identities?

Chip Heath: They don’t have to be invented from whole cloth, because, again, you can build on bright spots. For example, when Lou Gerstner came to IBM it had a long tradition of selling “big iron,” or large mainframe computers. But there was also a division selling solutions that might or might not involve IBM hardware. Its employees had an identity as problem solvers for customers. Gerstner seized on that existing expertise and rolled it out as IBM’s strategy.

As a top leader, you want to use your platform to celebrate people, like Ajay Bhatt, who create and sustain your company’s identity. At Brasilata, they tell stories about great innovations from frontline employees. In identity-based logic, we think about how “people like us” behave in order to uphold an identity. Celebrating case studies of success is exactly what a company should do.

*     *     *
The Quarterly: What messages do you want to leave with senior executives who are seeking to catalyze change?

Chip Heath: Pay attention to creating an emotional case for change, not just an analytical one. Scale up bright-spot successes. And use your power as a top leader to smooth the path to change. Your people are ready to step up to the plate, but if systems or procedures are getting in the way of change, you are the one with the power to eliminate them.

*     *     *

Chip Heath is currently a professor of organizational behavior at Stanford Graduate School of Business and co-author with his brother Dan Heath of two books, Made to Stick: Why Some Ideas Survive and Others Die (2007) and Switch: How To Change Things When Change is Hard (2010). He has also published research in such academic publications as Cognitive Psychology, Organizational Behavior and Human Decision Processes, and Quarterly Journal of Economics, and his research has been reviewed in publications including Scientific American, Financial Times, Washington Post, and Vanity Fair. Heath graduated with a BS in industrial engineering in 1986 from Texas A&M University and received a PhD in psychology in 1991 from Stanford University. He currently serves on editorial board of Stanford Social Innovation Review.

The Times, They Are a-Changin’ – Yes, They Are

Daniel Gross - moving from Slate Moneybox to Yahoo Finance

I’ve read Daniel Gross through the years on Slate.com.  He’s now moved over to Yahoo Finance.

I enjoyed this paragraph in his final slate column, Farewell, Slate Readers! What I’ve learned in eight years of covering business for Slate.

When my first Moneybox column appeared on June 26, 2002, things were quite different. Many of my current Slate colleagues were making snarky comments in their high-school A.P. classes. There was no Twitter and no Facebook, and Google was a private company. I spoke to editors and sources on a device called “the telephone.” My joints didn’t ache.

It reminded me of Dylan:

Then you better start swimmin’
Or you’ll sink like a stone
For the Times they are a-changin’

The Way I Work: Jason Fried of 37Signals

BOOK BREAK Jason Fried, who sometimes works from his house in Chicago, likes to read in the afternoon. But only nonfiction.

Here is an excerpt from an article about Jason Fried as told to Liz Welch. It appeared in Inc. magazine. To read the3 complete article, check out other resources, please click here.
*     *     *

Jason Fried hates lame meetings, tech companies that don’t generate revenue, and companies that treat their employees like children. A peek inside his typical workday.

You could sum up Jason Fried’s philosophy as “less is more.” Except that he hates that expression, because, he says, it still “implies that more is better.” Fried prefers “less is less.” It’s a core principle of 37Signals, the Chicago-based company he launched in 1999 with Ernest Kim and Carlos Segura. The company started as a Web design firm. Then, in 2003, Fried hired David Heinemeier Hansson, a Danish programmer, to write software to keep the company’s design projects organized. Soon, clients began requesting the program, and by 2005, software development eclipsed design in both revenue and focus. Today, 37Signals, which is run by Fried and Hansson, has a staff of 16 and more than three million customers who use the company’s Web-based applications, such as Basecamp and Campfire, to collaborate and manage projects. Jeff Bezos, founder of Amazon, is the company’s only investor. Fried, 35, isn’t afraid to do things differently or to express his opinions. He condemns traditional corporate office culture, with its 40-hour workweeks and constant meetings, and shoots down many of his customers’ suggestions. And he’s not opposed to a little goofing off in the afternoon.

*     *     *

I don’t use an alarm clock. Lately, I’ve been naturally waking up at 6:38 every morning. I used to wake up at 7:31 every morning, which is actually when I was born. So that was kind of creepy.

I try not to grab my phone and check e-mails first thing. I used to do that, and it’s just not good for you. Instead, I’ll go and brew some tea and try and relax a little bit. But the computer’s always kind of pulling me toward it, so I end up looking at e-mail sooner than I’d like to.

I love tea. I drink green tea and white tea mostly. I play with different varieties depending on my mood. These days, I’m really into matcha, which is a powdered tea. You add hot water and use a bamboo whisk to make a frothy liquid. You actually consume the tea leaves. I get it online, because there’s better selection, and I’m lazy.

For breakfast, I usually eat a couple of maple-infused Van’s waffles and a handful of pistachios. Unless it’s really cold — then I have oatmeal. Three mornings a week, I go to the gym for an hour. I’ve been going to a trainer for two years. Otherwise, I think I’d blow it off.

Then sometimes I head in to the office. I might work from home for a week and then get bored of that, so I will spend the next week at the office. I live about two miles from my office. I drive there most of the time. I should bike more, but I saw someone on a bike get hit two years ago, and it really freaked me out. I figure I’m better off driving.

I usually get to work between 10 a.m. and 11 a.m. Of the 16 people at the company, eight of us live here in Chicago. Employees come to the office if and when they feel like it, or else they work from home. I don’t believe in the 40-hour workweek, so we cut all that BS about being somewhere for a certain number of hours. I have no idea how many hours my employees work — I just know they get the work done.

I spend most of my day writing. I write everything on our website. Communicating clearly is my top priority. Web writing is terrible, and corporate sites are the worst. You don’t know what they do, who they are, or what they stand for. I spend a lot of time taking a sentence and reworking it until it’s perfect. I love the editing process.

Our blog has more than 100,000 readers, but I don’t post every day. I write when I have something specific to say. I recently wrote a scathing piece on the tech media. It really bothers me that the definition of success has changed from profits to followers, friends, and feed count. This crap doesn’t mean anything. Kids are coming out of school thinking, I want to start the next YouTube or Facebook. If a restaurant served more food than everybody else but lost money on every diner, would it be successful? No. But on the Internet, for some reason, if you have more users than everyone else, you’re successful. No, you’re not.

I spend another good portion of my day thinking about how to make things less complicated. In the software world, the first, second, and third versions of any product are really pretty good, because everyone can use them. Then companies start adding more and more stuff to keep their existing customers happy. But you end up dying with your customer base, because the software is too complicated for a newcomer. We keep our products simple. I’d rather have people grow out of our products, as long as more people are growing into them.

I used to handle all the customer service e-mails, but now we have two people dedicated to that. I still get involved, and so does my partner, David [Heinemeier Hansson], if something has escalated and the standard operating procedure doesn’t apply. If anyone ever writes us with a complaint, our stance is it’s our fault — for not being clear enough or not making something work the way it should. I’m constantly keeping an eye on the problems that keep arising, and then we address them. But I don’t keep a list of all the complaints, because that’s too time-consuming. We also get thousands of suggestions. The default answer is always no. A lot of companies lie and say, “Sure, we’ll do that.” We never make promises that we can’t keep, so we say, “We’ll keep that in mind.” Some customers don’t like that.

We first designed Basecamp for our own needs, to help better organize our projects. That’s our philosophy: Build what we like, and other people will like it, too. Ta-Da was built to make simple to-do lists. Backpack is a digital version of a filing cabinet. We created Writeboard when we were collaborating on Getting Real, our first self-published business book, to track all of the back-and-forth drafts and keep us from going insane. Even though there are better products out there, I still use Writeboard, because it’s dead simple. In fact, we just wrote our second book, Rework, using that program.

These books are our cookbooks. I look to chefs for inspiration. Mario Batali is a great chef who invites a camera into his kitchen and shares his recipes. It’s a great business model. In the business world, people are proprietary — they’re afraid to share. Rework is our recipe for doing business.

We rarely have meetings. I hate them. They’re a huge waste of time, and they’re costly. It’s not one hour; it’s 10, because you pulled 10 people away from their real work. Plus, they chop your day into small bits, so you have only 20 minutes of free time here or 45 minutes there. Creative people need unstructured time to get in the zone. You can’t do that in 20 minutes.

Instead, we use Campfire, our group chat tool. We built it when we started getting bigger — with employees in different cities. We wanted to be able to communicate as a group easily. Campfire is like an all-day voluntary meeting. If I’m busy, I can close the window. And when I’m free, I can check it and chime in. If people have questions for me, they will post them, and I will answer when I can. Very rarely is a question important enough to stop people from doing what they’re doing. Everything can wait a couple of hours, unless it is a true emergency. We want to get rid of interruption as much as we possibly can, because that’s the real enemy of productivity.

*     *     *

Jason Fried is co-founder of 37signals, a Chicago-based software firm, and co-author with Hansson of the book Rework, which was published in March.

The Power of Positive Deviance – One of the Two Good Books for this Friday’s First Friday Book Synopsis

Bob Morris, my blogging colleague and general all around font of amazing knowledge and wisdom, reads books by the bushel full.  I read fewer – far fewer.

And, more times than not, in the last couple of years, I have chosen a book that Bob tells me “would be a good one for the First Friday Book Synopsis.”  This Friday I am presenting The Power of Positive Deviance: How Unlikely Innovators Solve the World’s Toughest Problems by Richard T. Pascale, Jerry Sternin, Monique Sternin — one of Bob’s suggestions.  An excellent suggestion!  Look at this hint about the book:

(A Leadership for the Common Good book.
Published in partnership with the Center for Public Leadership).  (Read Bob’s review of the book, on our blog, here).

It will take me a while to process all that the book says.  The book presents the principles, the “guts” of “Positive Deviance,” and then illustrates the concept with story after story of breakthrough findings that flesh out the concept.

By the way, Monique Sternin, one of the authors of the book, leads the Positive Deviance Initiative.  Read about it here.

Here are some key quotes from the book, setting up the concept:

As a problem solving process, this approach requires retraining ourselves to pay attention differently…

What matters far more (than the “what”) is the “how” – the very particular journey that each community must engage in to mobilize itself, overcome resignation and fatalism, discover its latent wisdom, and put this wisdom into practice.  This bears repeating:  the community must make the discovery itself.  It alone determines how change can be disseminated through the practice of new behavior – not through explanation or edict.

People are assumed to be rational, and their social system adaptable, and it is sufficient to “give them the answer and expect them to get on with it.”
The standard model is probably the best course of action for roughly 70 to 80 percent of change problems encountered.  But when empirical experience leads us to conclude, “we’ve tried everything and nothing works,” harnessing local understanding may be the only way to break the impasse.

Pay attention differently
Focus on the “how” – results matter!
Don’t assume that people are rational.  You can’t just say, “do this,” and expect people to do it.  “They” (any group that needs a breakthrough) have to discover the “it” from among themselves.

These are just some of the lessons of The Power of Positive Deviance.  More to come as I finish my reading of the book.

If you are in the DFW area, come join us this Friday morning.  My colleague, Karl Krayer, is presenting his synopsis of the new Tony Schwartz book, The Way We’re Working isn’t Working.  These are two really good books, and you really can learn the key content and transferable principles from these books at our event.  Register here.