The current economic crisis: perils or opportunities?

The Chinese character for “crisis” has two meanings: “peril” and “opportunity.”

According to a study by the Kauffman Foundation, nearly half of the companies on Inc. magazine’s 2008 list of fastest-growing companies were founded in a recession or bear market. Fifty-seven percent of the Fortune 500 companies were founded during downturns, an above-average number of them during the Great Depression. Instability forces change.

In fact, most of the biggest brands in the world today are vulnerable. Most people simply don’t trust them. It’s tough to get 96 percent of Americans to agree on anything. But according to a 2009 Harris poll, that’s the number that agree Wall Street, major banks, and credit card companies are dishonest and can’t be trusted. Only 14 percent now trust big business, period.

My take on all this?

1. Individuals as well as organizations can be greedy.
2. Individuals as well as organizations can live beyond their means.
3. The current economic crisis is somewhere between the end of its beginning and the beginning of its end.
4. It has created both perils and opportunities.
5. Those who focus only on perils will forfeit opportunities.
6. Those who focus only on opportunities will fall victim to perils.
7. Prudence urges “pruning” all non-essentials while leveraging resources only where they will have the greatest ROI.

Mary C. Gentile: An interview by Bob Morris

 

Mary C. Gentile

Mary C. Gentile is Senior Research Scholar at Babson College; Senior Advisor, Aspen Institute Business & Society Program; and consultant. Previously Gentile was faculty member and case development manager at Harvard Business School. She is author of Giving Voice To Values: How To Speak Your Mind When You Know What’s Right (Yale University Press 2010, http://www.MaryGentile.com. Gentile is Director of Giving Voice to Values (GVV), a business curriculum launched by Aspen Institute and Yale SOM, now based at Babson College. This pioneering approach to values-driven leadership has been featured in Financial Times, Harvard Business Review, strategy+business, Stanford Social Innovation Review, McKinsey Quarterly, BizEd, etc. and has been piloted in over 100 business schools and organizations globally. Gentile consults with corporations, non-profits and schools on leadership development, ethics and education. At Harvard Business School (1985-95), Gentile helped integrate ethics into the MBA. Gentile co-authored Can Ethics Be Taught? Perspectives, Challenges, and Approaches at Harvard Business School (with Thomas Piper, Sharon Parks, HBS Press, 1993). Other publications appear in Harvard Business Review, Risk Management, CFO, Academy of Management Learning and Education, BizEd, Strategy+Business, etc. Gentile holds a B.A. from College of William and Mary and Ph.D. from State University of New York-Buffalo.

Morris: Before discussing your brilliant book, Giving Voice to Values, a few general questions. First, as the titles of your various books and articles suggest, you have an especially strong interest in diversity. Why?

Gentile: First, thank you for the opportunity to talk about these topics that I believe are so important. As for my interest in diversity, I believe it is closely aligned with my work on the project, Giving Voice To Values. That is, there are often times when we may witness (or personally experience) situations where some individuals are not treated with the same respect or care as others, precisely due to some difference in their identities, their styles, their experiences, or their perspectives. Often it is difficult to speak up in such a situation, for ourselves or for others. What’s more, when we do speak up, sometimes it is with the kind of emotion or judgment that can lead our audiences to become defensive and to freeze in their positions.

While at Harvard Business School, I developed a set of pedagogical materials and designed and taught the first course there on Managing Diversity, precisely because I wanted to better understand this phenomenon and to find ways to enable future managers and leaders to talk about and address these kinds of inequities constructively. I believed that we would all come to better decisions and we would create more humane and ultimately more livable and more sustainably productive workplaces if we knew how to speak to each other about difficult issues and if we were more able to listen to and learn from diverse points of view.

Doesn’t that sound a lot like Giving Voice To Values?

Morris: It certainly does. Here’s my favorite passage in Lao-Tzu’s Tao Te Ching. Please share your own opinion of it, especially in terms of its relevance to effective leadership.

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Gentile: Well, this is a wonderfully succinct expression of participative and empowering leadership. It reflects an approach that is both respectful and pragmatic. In this way, it is quite akin to the Giving Voice To Values (GVV) approach to values-driven leadership.

That is, GVV does not dictate that there is one way to voice and enact our values. Rather we do well to examine our own strengths, style and preferences, and then to frame our values conflicts in ways that draw on our best. So if I am most comfortable in a “learner” role, I may raise my values-related concerns by asking the well-crafted and well-timed question, rather than by strenuously arguing a particular point of view. Or if I am a risk-taking, aggressive manager, I may frame the values conflict as just one more challenge that I want to take on, as opposed to a “constraint” on my action choices.

Much like the leaders in the Lao-Tzu quotation above, GVV ‘begins with what we have and builds on what we know,’ but GVV is as much about leading and enabling ourselves – to be more of who we want to be and to do so more effectively – as is about leading others.

Morris:Whenever I hear the phrase “shoot the messenger,” I think of corporate whistle-blowers. In your opinion, why are so many of them reviled and punished rather than praised and rewarded?

Gentile: Well, of course, there are many answers to that question. Whistle-blowers may be punished because they are seen as disloyal, as stepping outside of the organizational circle and exposing their own colleagues to negative consequences. They may be seen as somehow uncommitted, lacking in the strength or commitment that is needed to “get the job done.” And at the most basic level, they may be seen as “spoilers” who ruin the boss’s or their organization’s or their colleagues’ plan. At a deeper level, they may be reviled because they make visible to the rest of us the very things we don’t want to look at, about our own choices and our own failures to take a values-driven stand.

However, the Giving Voice To Values approach was designed precisely because the costs of whistle-blowing are often so high – not only to the whistle-blower and his or her family, but also to the organization itself, the whistle-blower’s colleagues, and so on. The thinking was that, in many of these whistle-blowing scenarios, there are likely other individuals, earlier on in the process, who also saw the problems but who did not feel that they had an option to speak or act. We wondered whether there was a way to better prepare and equip organizational participants to speak and act constructively, possibly collectively and early on, so as to avoid having to get to the point of costly and often devastating whistle-blowing scenarios.

Morris:After I read several of your articles, including those published by Harvard Business Review, here’s a question that occurred to me: What specifically can be done to establish and then sustain a culture within which everyone feels “safe” (if that’s the word) to express their thoughts and feelings without fear of rejection, ridicule, perhaps even abuse and punishment?

Gentile: I am so glad you asked that question. Often when people are introduced to the GVV approach to values-driven leadership development, they make the assumption that it is focused only on the individual. However, by more fully understanding how and why we can, as individuals, be more empowered and more skillful at voicing our values, we also are identifying a set of conditions that make it more likely that we will do so. These conditions become a sort of checklist for our own career choices – that is, they become a list of cultural characteristics we will look for in any potential employer. But these “enabling” conditions also become a sort of “recipe” for the kind of organizational culture and context that we will want to develop in the organizations that we lead.

Interestingly, many of the organizational characteristics that have been identified as conducive to effectively managing diversity and as conducive to fostering innovation and creativity in the workplace are also important for enabling employees to voice their values. Some examples include:

•  Invite alternate viewpoints. By creating explicit occasions to invite dissenting viewpoints on a new project, strategy or policy, leaders enable employees to feel that their questions are welcomed and appreciated.

•  Create “islands of time.” Although time pressures are a reality of business life that cannot be eliminated entirely and that even can create a beneficial focus at times, it can be powerful to set aside discrete occasions where individuals are invited to step back, to look at their projects from different vantages, to consider input not usually examined, and so on. This again encourages folks to express alternative points of view.

•  Share your own thought process – and of times you changed your mind because of your values. When leaders are willing to talk through their own decision-making process, making visible that values are an important consideration, this sends a powerful signal to employees.

•  Share stories of values-based choices. Communicating and celebrating the times when individuals have made values-based decisions is, of course, empowering and can provide role models. But perhaps more importantly, it removes the sense of futility that often prevents employees from speaking up.

•  Provide opportunities to pre-script typical responses to values conflicts. GVV is premised on the idea that both anticipating the kinds of values conflicts we are likely to encounter in a particular industry or firm or profession, and literally practicing responses to them, out loud, is hugely important.

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To read the complete interview, please click here.

You are cordially invited to check out the resources at

www.MaryGentile.com

www.GivingVoiceToValues.org

The Power of Design

Here is an abbreviated version of an article written by the staff of Fast Company magazine that appeared in its June 2005 issue. It anticipates the subsequent publication of so many books (e.g. Roger Martin’s The Design of Business, Tim Brown’s Change by Design, and Thomas Lockwood’s Design Thinking) and an even greater number of articles on a subject that has yet to be fully explored.

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Look around you: The evidence of design’s power is everywhere. Customers expect, even demand, more from the design of everything they buy. Companies as varied as Adobe, Nokia, Toyota, and Virgin understand that great design is a prerequisite for turning consumers into customers. Whether it’s software or sippy cups, when something works right, looks right, and feels right, it sparks an emotional connection. People come to love it and loyalty soon follows, along with the three Rs: repurchase, reuse, and recommendations — benefits that fall directly to the bottom line. Such is the power of design.

Design is shaping the way we communicate and educate; it’s a catalyst for reinventing cities and reimagining nonprofits. Look at how companies such as Whirlpool are leveraging design as a competitive weapon — and stealing market share from formidable foes. Or how companies like Procter & Gamble and Samsung are using design thinking to recast their strategic thinking. As Ideo CEO Tim Brown puts it, “Where you innovate, how you innovate, and what you innovate are design problems. When you bring design thinking into that strategic discussion, you introduce a powerful tool to the purpose of the entire endeavor, which is to grow.”

Even a quick look at the design world shows that many of today’s designers defy easy categorization. They might have expertise in architecture, the graphic arts, or industrial design, but increasingly their work takes in many other fields: animation, anthropology, biology — just follow the alphabet. That’s why we devised five categories that encompass all of the design world and reflect this need to break through old boundaries.

Peak Performers have innovated over the long haul; they are design’s leaders and influential thinkers. Impact Players are those who, over the past year or so, have demonstrated design’s capacity to shape strategy.Game Changers are the agitators who are transforming the way we think about design. Collaborators are allies from outside the design world who work with designers to reinvent their organizations and even their cities. Next Generation billboards the rising stars who are creating design’s future.

If you are leading a team or company, mapping out a marketing strategy, innovating part of a supply chain, or streamlining a manufacturing operation — that is, if you are a decision maker facing a problem — think about this question: What are you and your organization doing to fully seize on design’s power and promise?

Col. Bernard Banks on “How Companies Can Develop Critical Thinkers and Creative Leaders”

Col. Bernard Banks

Here is an excerpt from an article written by Col. Bernard Banks for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.

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This post is part of an HBR Spotlight examining leadership lessons from the military.

Today’s leaders are continually cajoled to act as “outside-the-box” thinkers. Such pronouncements give the impression the only sound solutions are ones never previously conceived. However, what industry and the military really strive to produce are leaders possessing strong critical and creative thinking skills. Both implicitly eschew the notion that a box even exists. What can industry learn from the military about how to advance the development of such leaders? One tangible example is how to construct and execute experiential training while continuing to meet the needs of customers and stakeholders.

Today’s organizations operate in what the U.S. Army War College defines as a VUCA environment. Volatility, uncertainty, complexity, and ambiguity are constant realities in the 21st century. The military seeks to prepare for the challenges it will inevitably face by crafting realistic training scenarios and routinely integrating such activities into its ongoing operations. The goal is not to teach them what to think, but to enhance their ability to think critically and creatively about the myriad of contingencies posed by a fluid environment — in essence to teach them how to think.

In industry, 90% of time is typically devoted to executing business actions, and less than 10% is allocated for increasing organizational and individual capabilities through training. The military, on the other hand, spends as much time training as it does executing — even in the midst of high stress/high risk operations. A unit in Afghanistan or Iraq will not suspend its experiential training program while involved in combat operations, because its ability to cogently and creatively address future challenges is enhanced by an enduring commitment to improving people’s competence and adaptability through experiential exercises, as well as actual experiences. But the real lesson for industry leaders is not simply that training is important. What’s really valuable is how the military crafts its training opportunities.

The Army defines leadership as both accomplishing the mission and improving the organization. Permanently improving the organization requires the development of its human capital. The military believes you substantively improve people by improving their ability to adroitly address challenges in their environment. Therefore, we do not seek to confine people’s thinking by restricting the solutions available to them, unless the proposed action violates any of these criteria: is it immoral, unsafe, unethical, or illegal?

In order to have people wrestle with what it takes to conceive of action plans where the aforementioned criteria constitute their only boundaries, the military structures its experiential training activities with wide parameters. Events are constructed to reflect ambiguity in the operating environment (while also targeting specific organization needs). Leaders are responsible for setting the conditions in every training event and resourcing them appropriately, as well as for reminding participants throughout the exercises that there are a myriad of potentially elegant solutions to each ill-defined challenge.

Two other things are important to take away from the military practice of engaging in routine experiential training. First, feedback is crucial. The military practice of conducting intermediate and final after-action reviews (AARs) — in which all participants examine the planning, preparation, execution, and follow-up of any significant organizational initiative — fosters a learning culture. Second, coaching is required to translate feedback into behavioral changes. Research has demonstrated that feedback without coaching rarely results in behavioral changes. So, all leaders must develop their capacity to coach others. Reflection and dialog lie at the heart of development. Experiential training creates the impetus for both to occur.

If you wait for the right time to train it’ll rarely occur. Today is the opportunity to prepare for tomorrow, regardless of how much else is going on.

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Bernard (Bernie) Banks is a faculty member in the Department of Behavioral Sciences & Leadership at West Point and a Colonel in the United States Army. He has presented on the topic of leadership at the University of Pennsylvania’s Wharton School of Business, Duke University’s Fuqua School of Business, and Harvard’s Kennedy School of Government, and consulted or provided training to companies including GE, IBM, Citigroup, Best Buy, and Procter & Gamble. He is a graduate of West Point and holds graduate degrees from Harvard, Northwestern, Columbia, and the U.S. Army War College.

Clutch: A book review by Bob Morris

Clutch: Why Some People Excel Under Pressure and Others Don’t
Paul Sullivan
Portfolio/The Penguin Group (2010)

According to Paul Sullivan, “Clutch, simply put, is the ability to do what you do normally under immense pressure. It is also something that goes far beyond the world of sport. And while it has a mental component, it is not a mystical ability, nor somehow willing yourself to greatness…Being under great pressure is hard work. This is part of the reason why we are so impressed by people who seem immune to choking. These people come through in the clutch when others don’t…Just because someone is clutch in one area of his life does not mean he will be clutch in others…Transferring what you can do in a relaxed atmosphere to a tenser one is not easy – or else everyone would be clutch.”

That said, we now understand why Sullivan wrote this book: To share what he learned while seeking the answers two questions: First, “Why are some people so much better under pressure than other, seemingly equally talented people?” In response to the first question, Sullivan organizations his material according to six themes (Focus, Discipline, Adapting, Being present, Fear and Desire, and Double Clutch) and devotes a separate chapter to each. Then in Part II, he shifts his attention to explaining why some people choke and others don’t…why people choker in some situations…and nit in others. He also examines the implications and possible consequences of “overthinking.” Then, “Can people be clutch if they are not regularly in high-pressure situations?” Sullivan devotes Part III, “How to Be Clutch,” to answering the second question.

I especially appreciate how Sullivan anchors his observations and insights in a human context. For example, there is much of great value to learn from his discussion of the renowned attorney, David Boies, in the first chapter. “Early in his career, he started to focus on the same two questions for every trial. ‘First, what are the facts,’ he told me. ‘And then, second, what are the basic principles of the law here – not what were the detailed holdings of fifty cases, but just what are the basic principles of law that apply to this area’…Boies’s focus on having a clear understanding of the issues and laws creates a solid foundation. He builds the morality play around that.  However, it is not the play that helps him excel under pressure but his focus on telling the story in court. This ability allows him to withstand the immense pressure of any high-profile trial.”

Boies and other exemplars throughout the book commit years of time and effort to becoming able to excel despite indescribably severe pressure in one or two domains of their lives…but not in all. Tiger Woods is clutch during competition in golf but has encountered well-publicized problems in other areas. Few (if any) of those who read this book will be sufficiently talented to achieve success in competition with Boies or with Woods but everyone who reads this book can – over time and with sufficient concentration – manage more effectively stress and the pressures that create it. One final point: What Paul Sullivan learned and then shares in this book will be of substantial benefit to those who wish to alleviate or isolate and block out stress as well as to those who must cope with it.