Good Leaders Acknowledge What Can’t Be Done

Here is an excerpt from an article written by Jeffrey Pfeffer for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

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It’s never easy to decide to stop pursuing a strategy. Americans got a reminder of that in President Obama’s speech recently on Afghanistan; it was dispiriting to hear him describe the extended timetable required to remove even just the incremental troops who went in as the surge. But at least Obama did manage to make a decision to scale back. Many leaders faced with a strategy that isn’t working don’t get that far.

Even when things clearly aren’t going right, strong psychological tendencies keep the average leader from admitting it and correcting course. A pathbreaking study by Barry Staw in the 1970s helped to clarify why. In it, MBAs were asked to choose the best R&D investment strategy for a case company; then, they were shown how that strategy played out (disappointingly). In the next round they were asked what to do next: Should they switch R&D projects in midstream, or pour more money into the original strategy? Staw found that the answer differed substantially based on who made the choice in the second round. When the same person responsible for the disappointing first strategy was given the power to decide the next move, it was much more likely that they would choose to stay the course. They were predisposed to escalate the commitment because to do otherwise would be to admit a mistake. (Interestingly, Staw’s paper makes direct reference to the war in Vietnam as a situation where logic might fall prey to face-saving.)

None of us likes to admit to bad decisions, but imagine how much harder that is for someone who has been chosen to lead a large organization precisely because he or she is thought to have the power to see the future more clearly and chart a wise course. The faith of others not only creates pressure, it also infects the leader with the impression that he or she really is powerful enough to make things work out. For proof of how far this self-confidence can go, look to Ellen Langer’s research on the “illusion of control.”

She showed that people have such an inflated sense of the control they personally exercise over their circumstances that they are willing to bet more on gambles when it is their own hand that rolls the dice or pulls a card from a deck. Among leaders, whose beliefs in their powers to intervene effectively have had plenty of reinforcement, that tendency is surely amplified.

And here’s one last piece of research I can’t resist citing in a discussion of why leaders are so likely to double-down on bad bets. Leslie Perlow  did a fascinating study of engineers doing software development and observed them frequently using their time in ways that could only make it more difficult to meet their aggressive deadline. Her perceptive interpretation of this behavior was that, while an action that prevents problems goes mostly unnoticed, pulling a flailing project from the fire garners plenty of attention and rewards. Since leaders — like doctors — earn reputations for being great by resolving crises, they may have the same incentive to create the need for heroics.

With all these psychological tendencies acting on a leader’s judgment, it’s a wonder anyone ever manages to pull the plug on an effort that is consuming resources but going nowhere. Only the best leaders can hold fast to the truth that their job is to set strategy and ensure effective execution of it — and that at least half of that job is deciding what not to do. They know they must be disciplined in thinking about what products not to pursue and bring to market, what geographies not to enter, what activities not to focus on at the moment.

Gary Loveman, CEO of Harrah’s Entertainment, is someone who gets this. Visiting Stanford one day, he told my class that when he entered the company as COO he reduced most executives’ job scope, because he believes that people don’t do very well processing complex agendas and that success mostly comes from effort focused on the most critical and achievable objectives. Scale this up and you have the notion of comparative advantage, which suggests that companies, regions, and even nations should prune their activities and focus on areas of relative strength.

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Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, where he has taught since 1979. His latest book is Power: Why Some People Have It and Others Don’t.

 

 

Judgment: A book review by Bob Morris

Judgment: How Winning Leaders Make Great Calls
Noel M. Tichy and Warren G. Bennis
Portfolio/Penguin Group (2007)

Why a great leader “is the Copernican pivot at the center of the decision-making process”

This is the first book on which Noel Tichy and Warren Bennis have collaborated. Separately, each has already authored or co-authored several of the most influential business books, including Tichy’s The Cycle of Leadership: How Great Leaders Teach Their Companies to Win and The Leadership Engine as well as Bennis’ Geeks & Geezers (later reissued as Leadership for a Lifetime) and On Becoming A Leader: The Leadership Classic.

In the first chapter, Tichy and Bennis assert that what really matters “is not how many calls a leader gets right, or even what percentage of calls a leader gets right. Rather it is important how many of the important ones he or she gets right.” They go on to suggest that effective leaders “not only make better calls, but they are able to discern the really important ones and get a higher percentage of them right. They are better at a whole process that runs from seeing the need for a call, to framing issues, to figuring out what is critical, to mobilizing and energizing the troops.”

Of special interest to me are the different perspectives on the decision making process preferred by a number of exemplary CEOs who include Brad Anderson (Best Buy), Steve Bennett (Intuit), A.G. Lafley (Procter & Gamble), James McNerney (Boeing), and David Novak (Yum! Brands). For example, Immelt’s “Boom, I make the decision” comes after he has obtained all the input needed. “There is a moment when, based on his view of time horizon for the judgment and sufficiency of input and involvement, the leader makes the call.”

According to Tichy and Bennis, there is a framework of three “critical domains” within which all decisions are made. Judgments about people are the most difficult, and most critical; the others involve strategy and crisis. They stress that good judgment calls are a process, not an event. Each begins when a leader recognizes a need and frames the decision to be made, with the process continuing through execution and adjustment. They also stress the importance of possessing sufficient self-knowledge because making a right call “isn’t a solo performance; support teams are vital.” I appreciate the fact that Tichy and Bennis employ a framework of their own when presenting the material concerning the “framework of leadership judgment.” Specifically, they anchor several exemplary, real-world decisions in terms of their storyline and then their preparation, judgment, execution, and evaluation phases.

For example, Tichy and Bennis provide this excerpt from CEO Magazine in which A.G. Lafley explains the storyline for the future success of P&G, one that created the stage to make critical judgments:

“Everything begins here with our purpose. It’s very simple. We provide branded products that improve everyday lives. The values of the company are integrity, trust, ownership, leadership, passion for service and winning…Then we turn to strategy which is choices. Our whole focus has been to grow and profit from the core – and that means core businesses, core capabilities, core technologies…Then (the other piece of this) is selecting, developing, training, teaching, and coaching the leadership team. They are the leadership engine…It’s one team with one purpose and one dream and one set of strategic choices.”

Many of those who read this book will especially appreciate a substantial value-added benefit: the “Handbook for Leadership Judgment” that follows the concluding chapter. In it, Chris DeRose and Tichy provide what I view as an operations manual that will enable a reader to apply what she or he has learned in ways and to an extent that are appropriate to achieving her or his own organization’s specific objectives. DeRose and Tichy make an important distinction between judgment and decision making. “Much of the academic literature and popular notions of decision making culminate in a single moment when the leader makes a decision. In this handbook, we focus on judgment as a process that unfolds over time.”

Noel Tichy and Warren Bennis have provided a brilliant explanation of how winning leaders make great calls and suggest that the greatest among them also help others to do so. (It is worth noting that Immelt spends approximately 25% of his time helping to develop leadership skills in GE’s middle managers.) Although their book will be of interest and value to C-level executives, I think it will also be of substantial benefit, especially to others now preparing for a business career or who have only recently embarked on one. It is imperative for them to understand as soon as possible that the process of making “great calls” requires a parallel, on-going process of increasing knowledge about one’s self, one’s social network, one’s organization, and finally, about the context within which each “call” is made.

The framework that Tichy and Bennis provide gives structure to the process of knowledge acquisition and evaluation; they also suggest a frame-of-reference within which to consider various options when making a decision. As the dozens of real-world examples they citer clearly indicate, all decisions have consequences. Obviously, the more difficult a decision is, the more serious its consequences can be…and usually are. The great leader possesses the judgment to make the “right call.” That is why she or he “is the Copernican pivot at the center of the decision-making process.”

Build Tomorrow’s Leaders Today

Here is an article written by Sandi Edwards for Talent Management magazine. To check out all the resources and sign up for a free subscription to the TM and Chief Learning Officer magazines published by MedfiaTec, please click here.

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You don’t have to look further than your own workforce for future leaders. With the right development offerings and an early start, tomorrow’s superstars can be built today.

Organizations want to know where their future leaders will come from, and if there is any value in tried-and-true practices. The business environment is changing so quickly we may need new, more innovative approaches. Further, how will we identify leaders, and how might talent managers best prepare them for success in this dynamic and increasingly global business world?

The challenge is urgent. Many organizations realize their bench strength is not likely to deliver the talent or numbers required. According to “Your Organization’s Bench Strength — Succession Plan,” an American Management Association Enterprise survey conducted this year with 1,098 senior leaders and human resource professionals, the leadership pipeline for most organizations is not particularly strong. Most respondents were critical of their organization’s bench strength. Less than half consider their own company’s pipeline adequate, and just 10 percent think it is robust.

How to Spot a Future Leader


Every organization should take steps to prepare future leaders, at least in the near term since many employers find it impossible to look more than two years ahead. So, how does management isolate the future talent required?

Traditionally, organizations have looked at their vertical hierarchy — executives, senior managers and front-line managers — to identify those with the potential to move up. But today, they must be willing to look more creatively. Some of the best people may emerge from the individual contributor ranks or from team configurations, which are now critical in today’s matrixed organizations.

To identify future leaders organizations may need to use an array of assessments, including performance reviews from managers and peers and self-reviews. They need to look carefully at their present talent via competency and predictive-based assessments, 360-degree feedback and manager and promotability assessments. They also must look at performance results for individuals not already part of the vertical hierarchy.

High-performing companies recognize the importance of finding talent a few layers down, not just among those clearly destined for the C-suite. Further, high-performing companies will deliberately try out leadership candidates on assignments where they interact with executives a level or two above their own. Such visibility is mutually beneficial, and may come via task force, cross-functional assignment or other experiential learning activity.

Varied Development Key to Success


Those identified as potential leaders may be developed in a variety of ways: mentoring, coaching, stretch assignments, a variety of learning and development initiatives or cross-functional teaming. To determine the right types of development talent managers should consider corporate performance and business gaps, and benchmark skills and knowledge areas in other high-performing organizations. The next step is to design initiatives to close the gaps. These may include coaching, specialized training, action projects or cross-functional work experiences. Finally, it’s important to recognize and measure desired behaviors, isolate challenges and measure success.

Some up-and-coming leaders will not wait for talent managers to design their program and will aggressively and creatively seek their own opportunities. They will tap into various resources to find a mentor, volunteer for stretch assignments or seek external learning. This behavior is worthy of note — future leaders need to be different.

Organizations must determine their business requirements for sustainability and growth. What business challenges does the organization face? Where does performance lag? What stands in the way of attaining positive outcomes? Through skillful use of executive interviews, focus groups, talent audits and other tools, it is possible to pinpoint where new skills or knowledge — or a new way of thinking or working — could transform a team, division or the entire organization.

But if this is only a discussion, the result may be just a list of desired skills or attributes. Specific steps to achieve change won’t appear automatically. Leaders certainly have seen outlines of the characteristics or competencies for future leaders. They are expected to be ethical, agile and adaptable, technologically aware, committed to transparency, financially adept, skilled communicators, innovators, continuous learners, devoted team players, authentic in both style and substance, and the list goes on.

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To read the complete article, please click here.

Sandi Edwards is senior vice president at American Management Association Enterprise. She can be reached at editor@talentmgt.com.

Can You Train Yourself to Be the Next Steve Jobs?

Here is an article written by Donna Fenn for BNET, The CBS Interactive Business Network.

Ignore the dumb title. Only Steve Jobs can train himself to be the next Steve Jobs. He remains a work-in-progress, exploring and embracing (sometimes celebrating) whatever intrigues and delights him in ways and to the extent his circumstances permit. Jobs demonstrates the wisdom of Oscar Wilde’s advice: “Be yourself. Everyone else is taken.” So, I suggest, train yourself to become the next you, whoever and whatever that proves to be.

What Fenn offers is essentially a book review. Keep in mind that, although she refers only to Jeff Dyer, the insights she shares have joint ownership by Dyer, Dyer, Hal Gregersen, and Clay Christensen, co-authors of a brilliant book, The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators.

To check out an abundance of valuable resources and obtain a free subscription to one or more of the BNET newsletters, please click here.

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Are innovators born or made?

Most people believe that you are either born innovative and creative, or you’re not. But a growing body of evidence suggests that you can learn creative problem-solving and, with practice, hone your innovative abilities. “Studies show that when identical twins were separated at birth and given IQ tests from ages 16 to 24, that 80% of performance was based on genetics,” says Jeff Dyer, co-author with Hal Gregersen and Clayton M. Christensen of The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators.“But on creativity tests, only 30% of performance was based on genetics.”

Dyer says that what we learn from role models and how we’re taught to ask questions directly impacts our ability to be innovative. “If you understand the behaviors that bring in new knowledge, you’re much more likely to trigger new ideas related to problems you’re trying to solve in your life or in your company,” he says. So what exactly are the behaviors that spark innovation?

[Fenn discusses behaviors. Here are the first to. To read the complete article, please click here.]

1. Ask the right questions. “We all know that questions are important as a catalyst for creative thought,” says Dyer. “But some people are much more inclined to question the status quo, and they tend to ask ‘what if?’ kinds of questions.” One technique that can be used to ask more provocative questions, says Dyer, is to impose constraints. “If you’re looking for innovative ideas on how to grow, you might ask ‘what if we were legally prohibited from selling our projects to any of our current customers?  How would we make money next year?’” Or, you might take the Steve Jobs approach and  try eliminating constraints by asking “what kind of product would we create if money were no object.” Either way, says Dyer, “creativity loves constraints.”

2. Observe what others don’t see.  “Some of us do it better than others,” says Dyer. “The kinds of observations that seem to make a difference for business owners are observations of customers and competitors.” Scott Cook of Intuit, for instance, always paid special attention to behavior that was in some way surprising. “The anomalies are the key,” says Dyer. “When you find the surprise, that may lead you to observe something no one has ever seen before, and that can trigger ideas for new businesses.” The best observers, he says, are people who have lived in multiple countries for three months or longer. “You more naturally tend to observe because things are different.”

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Dyer says that the more time you spend engaging in the above four behaviors, the more likely you are to trigger the fifth skill of disruptive innovators — “associational thinking.” That’s what the brain does when it attempts to make connections across seemingly unrelated problems or ideas. “Innovative breakthroughs often happen at the intersection of diverse disciplines and fields,” notes Dyer. “We found that founders and CEOs who ranked among the top 100 innovative companies by BusinessWeek spent 20% more time on these behaviors than a typical CEO.” And, he adds, those innovative leaders imprint the behaviors that fuel creativity into their organizations so that everyone becomes an innovator.

What do you think?  Are innovators made or born? What are you doing at your company to foster a culture of innovation?

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You might also enjoy these posts:

Tony Hsieh: How to Find the Perfect Business Opportunity

Five Management Tips from the Real Horse Whisperer 

New Insight Into the $43 Billion Market You’re Probably Ignoring

3 Critical Questions for Startup Entrepreneurs

Donna Fenn is the author of Upstarts: How Gen Y Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success and Alpha Dogs: How Your Small Business Can Become A Leader of the Pack. She has more than twenty years experience writing about entrepreneurship and small business trends as a contributing editor at Inc. magazine, an expert on Business.com, and a featured expert on SBTV.com. From 1988 to 1992, she lived in Riyadh, Saudi Arabia, where she was a correspondent for The Associated Press and covered business, culture, the economy, and the Gulf War. To her website, please click here. You can also follow her on Twitter: @donnafenn

Be a Realistic Optimist

Here is another valuable Management Tip of the Day from Harvard Business Review. To sign up for a free subscription to any/all HBR newsletters, please click here.

If you believe you will succeed, you will. Right?

Not quite. Research has shown that optimism and the confidence it brings will help you reach your goals, but there is no guarantee.

In fact, if you believe that success will come easily to you, you are more likely to disappoint. This is because you’ll fail to put in the necessary work.

1. You need to think positively but also be realistic about what achievement entails.

2. Knowing that success is hard won forces you to put in the necessary effort.

3. Don’t spend too much time visualizing the end result. Instead, envision the steps you will take to get there.

Today’s Management Tip was adapted from “Be an Optimist Without Being a Fool” by Heidi Grant Halvorson.

To read that article and join the discussion, please click here.

Heidi Grant Halvorson, Ph.D. is a motivational psychologist, and author of the Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). She is also an expert blogger on motivation and leadership for Fast Company and Psychology Today. Her personal blog, The Science of Success, can be found at www.heidigranthalvorson.com. Follow her on Twitter @hghalvorson.