I am grateful to my friend Thomas Huynh, founder of Sonshi, for the head’s up about Robert Gates‘s appearance on CBS 60 Minutes (Sunday, May 22, 2011) during which he indicates his high regard for Sun Tzu and his classic work, The Art of War.
You can watch Katie Couric’s entire interview of US Secretary of Defense Gates (a student of Sun Tzu), but especially at 13:00 and 14:00. Please click here.
In 1999, Thomas Huynh founded Sonshi.com, the Web’s most respected resource on Art of War. It now consists of a network of authors, scholars, and readers around the world, attracted from various disciplines and joined together by a common interest in Sun Tzu’s classic study of strategy. He is a seasoned business executive and nonprofit board member who earned an MBA from Vanderbilt University. He was named in BusinessWeek magazine’s “Top 12 Most Engaged Reader-Contributors of 2008.” Born in Saigon, Vietnam, Huynh now resides with his wife and child in Atlanta, Georgia, USA. As a war refugee, he seeks to put an end to warfare by affirming the practical ideals published in his book, The Art of War — Spirituality for Conflict.
I urge you to check out the wealth of resources at the Sonshi website, including the rare interview of Thomas Cleary. In my opinion, Cleary is the pre-eminent scholar and author of more than 80 books that examine classic Asian sources for concepts of leadership, management, and strategy. To do so, please click here.
Dimensions of “a new strategic imperative”
I have read all of Adrian Slywotzky’s previously published books and reviewed most of them. In my opinion, he is one of the most important business thinkers of the last several decades. What we have in The Upside is a continuation of Slywotzky’s emphasis on the importance of measuring what really matters, especially insofar as value migration during paradigm shifts within competitive markets are concerned, but I think there are some intriguing differences between this book and those which precede it. For example, Slywotzky establishes and then sustains throughout his narrative a conversational, at times almost (not quite) playful tone…certainly his tone is much less formal than in earlier works. Also, and more to the point, he devotes less attention to the “what” (i.e. seven strategies), preferring to focus primarily on the “why” and “how” of strategic risk management which enables just about any organization (regardless of size or nature) to “turn big threats into growth breakthroughs.”
More specifically, a major initiative fails or at least falls far short of high hopes and great expectations; there is a significant loss of customer revenue; there is an paradigm shift within the given industry; a seemingly unbeatable competitor appears; there is a loss of brand power and leverage; the given industry has become a no-profit zone; the organization struggles with zero or insignificant growth. “The first two jobs of strategic management are (1) to sidestep the unnecessary blows [i.e. self-inflicted wounds] and (2) to mitigate the blows you can’t avoid. You can avoid the biggest hits to your company’s value through as strategic risk management system that uses the principles and techniques described in the rest of this book.” Slywotzky then goes on to suggest: “Remember Warren Buffett’s first rule: Preserve your capital. And also his second rule: See the first rule.”
According to Slywotzky, “The first step in de-risking your product is to recognize the true odds of success; the second is to change them.” He explains how in the first chapter, citing Toyota as an exemplary company and its development of the Prius as a case in point. I especially appreciate that, on page 32 and throughout the book, Slywotzky includes a checklist of key points within the given context. These are action steps for his reader to consider. “How many of these types of moves can you adapt for your next big project?” (The key words are “moves” and “adapt.”) In fact, later in the same chapter and throughout his subsequent narrative, Slywotzky makes brilliant use of a reader-friendly device, “[name of company's] Moves to [name of initiative].”H e uses a variation of it (e.g. “Toyota’s Further Moves to Change the Odds”) to indicate that effective strategic risk management, responding effectively to “big threats,” is an on-going process.
At least for me, some of Slywotzky’s most valuable material is provided in Chapter Seven, “When Your Business Stops Growing.” Although the first two jobs of a strategic management system are to sidestep the unnecessary blows and mitigate the blows that cannot be avoided, it can do much more than defend. “It is also an incredibly efficient means to find some of the biggest growth opportunities your business faces.” Slywotzky first focuses on demand innovation (i.e. looking at customers differently in terms of their economic needs and other, higher order needs) and cites 12 examples which include Netflix, Crest Whitestrips, Harley-Davidson, and Swiffer. For example, Harley-Davidson uses a brand extension as the basis of a consumer lifestyle on which a host of activities and purchases can be centered. Purchase a product and you also buy into an entire lifestyle (Harley Owners Group or HOG) that celebrates the freedom of the open road.
In the same chapter, Slywotzky also has much of value to say about the second major vector, creating or discovering just one Big Idea for your business. For examples, he cites and discusses Ikea (“from home furnishings to the home itself”), NTT DoCoMo (“the phone as universal gatekeeper”), and Nike (“making fitness cool”). For those readers who do not know how to create or discover a Big New Idea for their own company, Slywotzky observes that “the company that is constantly generating testing, and discarding new business ideas will be in a better position to find, recognize, and capitalize on the big new idea when it comes along than its more slow-moving competitors.” However different they may be in other respects, the most innovative companies (e.g. Apple, Google, Toyota, GE, and Microsoft) are guided and informed by the same conviction that it takes lots of bad ideas to get one good idea, lots of good ideas to get one excellent idea, and lots of excellent ideas to get one (as Steve Jobs characterizes it) “insanely great” idea.
Slywotsky’s new book, Demand: Creating What People Love Before They Know They Want It, will be published by Crown Business (October 2011).
Here is an excerpt from an article from Talent Management magazine that cites some key findings from recent research on how employers are using hiring bonuses to attract and retain A players and High Potentials. To read the complete article, please click here.
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With the employment outlook improving, employers are focusing their compensation programs on hiring and retaining top talent, according to a survey released today by Buck Consultants, A Xerox Company.
Employers are using hiring bonuses to attract talent and retention bonuses to keep them. Buck’s study, “Reviving and Inspiring the Workforce: 2011 Compensation Trends Survey,” found that nearly two-thirds (63%) of organizations report using hiring bonuses and 41 percent use or expect to implement retention bonuses.
The survey included a range of employee levels including; executives, directors, managers, other exempt employees, and nonexempt employees.
For those employees participating in a bonus program, the study found that eight out of every 10 employees can expect to receive a payout in 2011. Forty-four percent of employers who responded to the survey expect to pay bonuses that are at least five percent larger than last year.
Survey respondents also reported using the following strategies to engage their workforces:
• New career development opportunities (41 percent)
• Market pay adjustments (30 percent)
• Larger base pay increases (24 percent)
• More non-cash recognition (18 percent)
The survey also found an increase in the use of employee referral bonuses in the past six months, to 66 percent, up from 59 percent in mid-2010.
“During the economic downturn, many employers reduced staff and asked remaining employees to do more with less. As the job market improves, these organizations are using tactics such as employee referral bonus programs to not only attract proven performers, but also help retain the employees who make referrals,” said Kathi Myers, director at Buck Consultants. “Involvement in the hiring process engages employees and strengthens their ties to the organization.”
As employers become more confident in the improving economic environment, pay freezes are thawing and median pay increases are expected to rise to three percent this year – similar to levels seen immediately prior to the recession, and up from 2.7 percent in mid-2010 and 2.2 percent at the beginning of 2010.
Carla O’Dell is president of APQC and is considered one of the world’s leading experts in knowledge management (KM). In 1995 and under O’Dell’s direction, APQC launched its first KM best practices consortium study called Emerging Best Practices in Knowledge Management. Thirty-nine organizations sponsored the groundbreaking study. Since then, APQC has conducted over 25 consortium studies on topics related to KM, involving more than 300 participating organizations and producing the world’s largest body of actionable best practices in designing, implementing, and measuring KM. APQC has led more than 150 custom KM projects. APQC was the first nonprofit organization to be awarded the Global Most Admired Knowledge Enterprise (MAKE) award, as well as the North America Award, a total of six times.
In March 2011, O’Dell and Cindy Hubert, two leaders from APQC, released the definitive book on how to implement knowledge management (KM), The New Edge in Knowledge: How Knowledge Management Is Changing the Way We Do Business. The book is a follow up to O’Dell’s best selling business resource, If Only We Knew What We Know, co-authored by C. Jackson Grayson, that played an instrumental role in firmly establishing KM as an accepted and widely used management discipline.
Hubert is the executive director of APQC’s Delivery Services, which provides individualized and collaborative approaches to solve business problems and address strategic needs. Over the past 16 years, Hubert and her team have worked with more than 400 organizations to provide assessments, strategy development, project management, transfer of best practice design and implementation, and metric and best practices research engagements using APQC’s proven knowledge management methodologies.
Hubert has played instrumental roles in the innovation, development, and implementation of APQC’s Levels of Knowledge Management Maturity™ and Knowledge Management Capability Assessment Tool. These best practice frameworks are used by organizations across the world to guide, develop, and execute their KM strategies and approaches.
Morris: Before discussing your book, The New Edge of Knowledge Management, a few general questions. First, for those who are unfamiliar with the American Productivity & Quality Center (APQC), tell us a little bit about the APQC’s mission and history in KM.
O’Dell: APQC is a member-based nonprofit founded by C. Jackson Grayson to help organizations improve productivity and quality. We are known as a global resource for benchmarks and best practices in finance, supply chain, HR and many other disciplines. We are one of the world’s leading proponents and advisors in knowledge management (KM), communities of practice, measurement, using social media and other related disciplines.
Working with more than 750 organizations worldwide in all industries, APQC has spent more than 15 years studying what works—and what doesn’t—in the fast-moving arena called Knowledge Management (KM).
APQC is the leading source of trusted KM tools and information for both those just starting on their journey to KM excellence and those already advanced in their KM practices. Companies and governments use APQC’s KM implementation guides to quickly build an enterprise knowledge management strategy to span organizational silos, build a common way of working, and lead to more reuse of knowledge in new and innovative ways.
Morris: Why did you write this book?
O’Dell: Our first KM book, If Only We Knew What We Know, was published in 1998. A lot has changed since then. Many recent changes in the way we do business and communicate in general have exciting implications for KM. Even companies and governments with mature KM programs have adjusted their strategy for these game-changing trends.
- The digital world has begun to reshape KM. Online social networking has shaken up traditional KM. Although new technologies always present new challenges, no KM function can ignore this opportunity. Enterprise 2.0 tools may be the best thing to happen to KM since the water cooler.
- In their personal lives and on the job, employees have become digitally immersed. All ages of employees expect more engagement and access to information and want work processes that reflect the ease with which they communicate outside of work.
- Smart phones and other mobile devices now allow us to communicate and share any place, any time, and with anyone. KM can take advantage of these always-on and always-on-you devices to make content available to employees at their most teachable moment.
- A huge demographic is now leaving the work force. As baby boomers exit the playing field, their absence puts a greater need on incoming employees to get up to speed quickly.
These societal shifts have changed the power dynamics for how all organizations operate. An increasingly savvy work force is dictating how and when they need information, and organizations face tremendous opportunities to turn individual employees’ knowledge into organizational intellectual assets.
Employees need vivid, relevant examples and practical advice for everyday work. Executives need a tangible and substantial ROI. And organizations need to respond to the forces at work and create new approaches. In this new environment, KM is an absolutely necessary core business practice to face the competition. With it, employers can reasonably expect better knowledge-based decisions from their work force.
Morris: During the last decade, what has been the single most significant change in how knowledge is managed? What are its major implications? Please explain.
O’Dell: Organizations realize that you don’t “manage” knowledge, but you manage the processes that help knowledge flow. Knowledge management professionals realize that a portfolio of approaches with supporting technologies is required opposed to “one way” to collect and disseminate knowledge. For example, a community of practice can be foundational for other approaches, such as lessons learned, that allow knowledge to flow. Communities also promote collaboration that can be enabled by Web 2.0 technologies, such as wikis and blogs, that also provide interaction and documentation of critical knowledge.
Organizations operate more virtually than they have in the past, which reduces the face-to-face opportunities that are such a rich environment for creating and responding to teachable moments.
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If you wish to read the complete interview, please click here.
APQC cordially invites you to visit its KM expertise and services: http://www.apqc.org/knowledge-management.