The Optimization Edge: A book review by Bob Morris

The Optimization Edge: Reinventing Decision Making to Maximize All Your Company’s Assets
Steve Sashihara
McGraw-Hill (2011)

How to make complex decisions and recommendations about the best way to deploy assets

In a book I very much admire, Judgment: How Winning Leaders Make Great Calls, Noel Tichy and Warren 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.”

One of the most challenging decision a leader must make, every day and often many times each day, involves allocation of resources, especially of time. It is a common complaint among C-level executives with whom I have worked closely that their daily agenda comes under severe attack almost immediately after they arrive at work. I agree with Stephen Covey that many (most?) executives spend too much time with what’s urgent and not enough with what’s important. I also agree with Steve Sashihara that many (most?) of these same executives need to “change the fundamental approach to how their organizations are led, decisions are made [about but not limited to allocation of resources], and assets are managed,” especially those for whom they are primarily responsible.

Sashihara focuses on companies in which there has been reinvention of the decision-making process in order to maximize all of the company’s assets. They include Amazon, Google, Marriott, McDonald’s, UPS, and Walmart. However different these companies may be, here is what they share in common: Their leaders asked the right questions such as these and then obtained the answers needed to make the correct decisions with regard to optimizing assets and resources:

o  What are our under-utilized assets?
o  Where and how are repetitive decisions about key assets being made?
o  When and how are we forecasting? How accurate are our forecasts?
o  When and about what are we repeatedly having lengthy debates over strategy decisions or operational issues?
o  What does “best” mean?

It is important to keep in mind that, as Sashihara explains, optimization is presented not simply as a technology “but as a set of principles and a way of thinking that are achieving superior business results as they reshape businesses, industries, and the competitive landscape.” Indeed, it not only harnesses the new breed of software but also makes explicit recommendations that help business leaders to achieve their organization’s strategic goals. “This is particularly useful in areas where the data are voluminous and change rapidly, which when you think about it, are those facing just about every manager today.”

Readers will appreciate Sashihara’s provision of a “Final Note” section at the end of each chapter that can help to facilitate, indeed expedite frequent review of key points. He also includes other reader-friendly devices throughout his narrative, such as Figures, checklists, and mini-commentaries that may seem to be digressions but, in fact, complement the flow of his narrative.

I commend Sashihara for achieving his objective to “create a clear, compelling picture of the power and potential of Optimization, so that a great number of people across industries and disciplines will be motivated to step up and take a ‘swing’ at turning the images presented here into reality, now and well into the future.”

In other words, do much more and do it better with much less, faster, and at a much lower cost, with fewer people involved.

Those who share my high regard for this book are urged to check out the aforementioned Judgment as well as Kevin Murray’s Language of Leaders: How Top CEOs Communicate to Inspire, Influence, and Achieve Results and Robert Cialdini’s  Influence: The Power of Persuasion.

Suggested readings for leadership development in 2011

Awaiting you....

Randy Mayeux has already shared his choices and all are eminently worthy, to which I presume to add a few others.

Please keep in mind that this list is (as are Randy and I) a work in progress.

The Right Values
True North by Bill George and Peter Sims

MY ADDITIONS:
The Executive’s Compass by James O’Toole
The Highest Goal by Michael Ray
The Heart Aroused by David Whyte

The Right Strategy
The Opposable Mind by Roger L. Martin
Mastering the Rockefeller Habits by Verne Harnish

MY ADDITIONS:
The Art of War by Sun Tzu
Unstoppable by Chris Zook
Enterprise Architecture as Strategy by Jeanne Ross, Peter Weill, and David Robertson

Effective Leadership
Fierce Leadership by Susan Scott
Encouraging the Heart by James Kouzes and Barry Posner

MY ADDITIONS:
Maestro by Roger Nierenberg
True North by Bill George and Peter Sims

Effective Communication
Words that Work by Frank Luntz
Made to Stick by Chip Heath and Dan Heath

MY ADDITIONS:
Influence by Robert Cialdini
The Back of the Napkin and Unfolding the Napkin by Dan Roam
Crucial Conversations by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler

Functional & Effective Teamwork
The Five Dysfunctions of a Team by Patrick Lencioni

MY ADDITIONS:
Organizing Genius by Warren Bennis and Patricia Ward Biederman
Collaboration by Morten Hansen
Team of Rivals by Doris Kearns Goodwin

Cultivating Creativity and Innovation
The Creative Habit by Twyla Tharp
Where Good Ideas Come From by Steven Johnson

MY ADDITIONS:
Freedom, Inc. by Brian M. Carney and Isaac Getz
The Idea of Innovation and The Ten Faces of Innovation by Thomas Kelley
Six Thinking Hats by Edward De Bono
Hare Brain, Tortoise Mind by Guy Claxton

Successful Execution
Execution by Larry Bossidy and Ram Charan

MY ADDITIONS:
Reality Check by Guy Kawasaki
The Other Side of Innovation by Vijay Govindarajan and Chris Trimble
Open Innovation and Open Business Models by Henry Chesbrough

Plus two additional categories:

Leadership Development

MY RECOMMENDATIONS:
Handbook of Leadership Theory and Practice co-edited by Nitin Nohria and Rakesh Khurana
The Talent Masters by Bill Conaty and Ram Charan
The Center for Creative Leadership Handbook of Leadership Development co-edited by Ellen Van Velsor, Cynthia D. McCauley, and Marian N. Ruderman
Extraordinary Leadership co-edited by Kerry Bunker, Douglas T. Hall, and Kathy E. Kram

Employee Engagement & Talent Management

MY RECOMMENDATIONS:
A Sense of Urgency and Buy-In by John Kotter
The Art of Engagement by Jim Haudan
Engaging the Hearts and Minds of All Your Employees by Lee J. Colan
Growing Great Employees by Erika Andersen

Q #52: Should negotiation skills be among the core competencies of everyone within an organization?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

I think so. Granted, some negotiations are more important than others but all negotiations involve discussions between or among people who want to reach an agreement of some kind. Some negotiations are formal (e.g. a labor contract); others are informal (e.g. rescheduling a meeting). The eminent psychologist Carl Rogers once suggested that all negotiation issues be divided into three categories. First, identify those on which there is agreement and set them aside. Next, identify those on which concessions and compromises (e.g. trade-offs) can easily be determined. Resolve as many of those issues as possible, and then add those that remain to issues in the third group that are also unresolved, important, and probably more complicated. The focus of discussion should be on them resolving issues in dispute.

OK, but specifically how to do that? The most eminent authorities on formal negotiation (e.g. Dawson, Donaldson, Schell, Ury) suggest that all issues be prioritized in terms of most important, important, and less important. For the time being, set aside those less important and concentrate on important. Resolving them will usually make it easier to resolve the other issues.

The experts on formal negotiation agree on these general guidelines:

1. Know exactly what you want…and why. Have a ”drop dead” (i.e. walk-away) point pre-determined.

2. Recognize where your position is weakest and be prepared to defend it there, if and when attacked. Also know where the vulnerabilities are in the opponent’s position.

3. When an opponent expresses a strong opinion, listen intently and without interruption. Then respond, “If I understand correctly you…” and repeat the opponent’s opinion, position, etc. This will reassure an opponent (or opponents) that you hear what is said and understand it. That does NOT mean that you agree with it.

4. Use silence strategically while maintaining eye contact. There are moments when the less said, the better, and that includes body language and tone of voice.

5. The most successful negotiations produce “Win-Win” agreements.

Also, in my opinion, every executive ought to obtain, read, keep near at hand, and frequently consult Robert Cialdini’s Influence: The Psychology of Persuasion. I know of no other single source that offers better advice on how to develop persuasion skills.

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob

Q #22: What are the most basic fallacies?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

Here’s a “baker’s dozen” of troublemakers:

Begging the Question: Restates assertion as a conclusion
Red Herring: Distracts with irrelevancies
Non Sequitur: Literally, “does not follow”
Stacked Evidence: Presents only one of two (or several) sides
Either/Or: Offers only two choices when in fact there are several
Post Hoc: Asserts a faulty cause-and-effect relationship
Hasty Generalization: Leaping to conclusion unsupported by evidence
Ad Hominem: Attacks a person rather than her/his argument, qualifications, etc.
Guilt by Association: Asserts that one’s value (e.g. character) is determined by one’s associations
Irrelevant Authority: “They say….”
Bandwagon: “Everyone else is doing it.”
Slippery Slope: Scare tactic (“If you don’t….”)
NOTE: Also called Fear of God (FOG) fallacy.
Citing a False Imperative: “This must be done” rather than “This could be done”

The best sources for improving one’s ability to reason more effectively and make better judgments include Robert Cialdini’s Influence: The Psychology of Persuasion, Roger Martin’s The Opposable Mind: How Successful Leaders Win Through Integrative Thinking, and Judgment: How Winners Make Great Calls co-authored by Noel Tichy and Warren Bennis.

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob