Playing to Win: A book review by Bob Morris

Playing to Win: How Strategy Really Works
A.G. Lafley and Roger Martin
Harvard Business Review Press (2013)

“The essence of strategy is choosing what not to do.” — Michael Porter

I am pleased that A.G. Lafley has co-authored another book, with Roger Martin, after previously co-authoring The Game Changer with Ram Charan. Whereas in the first the focus is on how to drive revenue and profit growth with innovation, the focus in this book is on how strategy really works. Most of the time it doesn’t and reasons vary. However, Lafley and Martin identify these familiar troublemakers:

1. Defining strategy as a vision
2. Defining strategy as a plan
3. Denying that the long-term (or even the medium-term) strategy is possible
4. Defining strategy as the optimization of the status quo.
5. Defining strategy as following best practices

Rather, Lafley and Martin suggest that a strategy “is a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities, and management systems.” In this context, I am reminded of two recently published books. In Judgment Calls, Tom Davenport and Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” In Martin’s brilliant book, The Opposable Mind, he calls this “integrative thinking.” Winning the game (whatever its nature and extent) would thus require a strategy that is both inclusive and collaborative.

In Paul Schoemaker’s latest book, Brilliant Mistakes, he observes: “The key question companies need to address is not `Should we make mistakes?’ but rather `Which mistakes should we make in order to test our deeply held assumptions?’” The mistakes to which Schoemaker refers are deliberate. Their purpose is to help achieve strategic objectives. Those who play to win cannot be risk-averse. That is, play not to lose. If strategy is a set of choices “that uniquely positions the given enterprise so as to create sustainable advantage and superior value relative to the competition,” and I believe it is, then quality of judgment is imperative, not only when making a specific choice but throughout a continuous and cohesive decision-making process.

These are among the dozens of passages I found to be of greatest interest and value, also listed to suggest the range of subjects covered during the course of the book’s narrative:

o How to Win (Pages 24-29)
o Playing to Win (39-43)
o The Importance of the Right Playing Field, and, Three Dangerous Temptations (57-65)
o Differentiation Strategies (83-88)
o Gillette and the Strategic Choice Cascade (107-112)
o Understanding Capabilities and Activity Systems (112-119)
o Systems for Making and Renewing Strategy (129-136)
o Systems to Support Core Capabilities (144-149)
o Customer Value Analysis (167-171)
o Generating Buy-In: The Traditional Approach (183-200)
o The Importance of the Right Playing Field, and, The Dangerous Temptations Six Strategy Traps, and Six Telltale Signs of a Winning Strategy (214-216)

When concluding their book, A.G. Lafley and Roger Martin acknowledge, “All strategy entails risk. But operating in a slow-growing, fast-changing, intensely competitive world without a strategy to guide you is far riskier. Leaders lead, and a good place to start leading is in strategy development for your business. Use the strategic choice cascade [Pages 17-18 and 33-34], the strategy logic flow [161-177] and reverse engineering of strategic choices [186-200] to craft a winning strategy and sustainable competitive advantage for your organization. Play to win.”

No brief commentary such as mine can possibly do full justice to the scope of material that A.G. Lafley and Roger Martin provide in this volume but I hope that I have at least suggested why I think so highly of their book. Also, I hope that those who read this commentary will be better prepared to determine whether or not they wish to read the book and, in that event, will have at least some idea of how an enriched and enlightened understanding of what strategy is — and isn’t could perhaps be of substantial benefit to their professional development as well as to the success of their organization.

Mergers & Acquisitions Integration Handbook: A book review by Bob Morris

Mergers & Acquisitions Integration Handbook:  Helping Companies Realize the Full Value of Acquisitions
Scott C. Whitaker
John Wiley & Sons (2012)

How to combine, consolidate, and integrate resources effectively

Most mergers and acquisitions either fail or fall far short of original expectations. Reasons vary, of course, from one situation to another. However, more often than not, the primary cause is cultural resistance, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

What we have in this relatively short but remarkably thorough volume is just about everything a manager needs to know about the basics of various integration initiatives, be they post-merger, post-acquisition, or a partial variation on either. Scott Whitaker offers an abundance of information, insights, tools and techniques, and general counsel that can help achieve the given strategic objectives. However, as he correctly notes, “there is no one-size-fits-all approach to integration. The best approach is typically a combination of various integration strategies, tools, and timing that best fit the task at hand.”

After an Introduction, he begins each chapter “you will learn how to do the following” and then identifies several specific learning objectives for each of Chapters 2-15. For example:

Chapter 2: Lay the groundwork for your integration project
3: The most difficult areas of integration activity
5: How to stress-test the synergy plan
7: How to secure functional resources for your integration
8: Creating functional integration work streams
10: How to create a communication matrix for your integration
11: Assessment guidelines to topics to address when assessing culture
13: How to manage synergy programs within the IMO framework
15: How to collect feedback and assess your integration efforts

Then in the final chapter, Whitaker explains how his reader can create an “Integration Playbook.” Earlier, I quoted comments of his that deserve repeating now “there is no one-size-fits-all approach to integration. The best approach is typically a combination of various integration strategies, tools, and timing that best fit the task at hand.” Keep this in mind when proceeding through Chapter 16 as Whitaker discusses contents, elements, how the various elements work together, and then applying the playbook to the opportunities and (yes) perils at hand. Readers are provided (on Page 163) with directions to how and where they can obtain additional information related to this book.

Make no mistake about it: Even under so-called “ideal conditions,” combining, consolidating, and integrating resources effectively is an immensely complicated process. Hence the importance of the material that Scott Whitaker includes in his book…and hence the great value of the advice he shares when concluding his introduction, especially the second of his five key points:

“Integrations are disruptive. Expect your integration to disrupt you operations and hamper business. Do nit underestimate the preparations and work required to manage successful integration – they can be ugly, time-consuming, and contentious. Prepare for the worst and expect the best.”

Here’s my own take: Unless your integration is disruptive, you’re not doing it right. In The Opposable Mind, Roger Martin describes the mindset needed for those involved in effective integration, a mindset in which there is “a predisposition and the capacity to hold two [or more] diametrically opposed ideas” in one’s head and then “without panicking or simply settling for one alternative or the other,” is able to “produce a synthesis that is superior to either opposing idea.” Martin insists, and Scott Whitaker agrees, that integrative thinking that possesses a “discipline of consideration and synthesis is the hallmark of exceptional businesses [as well as of democratic governments] and those who lead them.”

Judgment Calls: A book review by Bob Morris

Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right
Thomas H. Davenport and Brook Manville
Harvard Business Review Press (2012)

How and why to take full and systematic advantage of technology and analytics to create deeper and more sustainable judgment

To introduce this review, I call upon Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” How to make the best decisions? Enter Thomas Davenport and Brooke Manville. In their book, Judgment Calls, they explain how and why decisions made by a Great Organization tend to be much better than those made by a Great Leader. Why? While conducting rigorous and extensive research over a period of many years, they discovered – as Laurence Prusak notes in the Foreword — “that no one was looking into the workings of what we term [begin italics] organizational judgment [end italics] – the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.”

The mistake to which Drucker refers is much less likely to occur when organizational judgment is centrally involved in a decision-making process. My own opinion is that this process resembles a crucible of intensive scrutiny by several well-qualified persons. Moreover, the eventual decision is the result of what Roger Martin characterizes, in The Opposable Mind, as “integrative thinking.” That is, each of those involved has “the predisposition and the capacity to hold two [or more] diametrically opposed ideas” in mind and then ”without panicking or simply settling for one alternative or the other,” helps to “produce a synthesis that is superior to either opposing idea.”

Organizational judgment must not only be discerned but also managed. And precautions should be taken to ensure, as Prusak notes, ”that the courses of action taken by organizations are more grounded in reality and a shared sense of what is right.” In recent years, the rapid emergence and development of social media enable organizations to become even more grounded in what has become an expanded reality. Only through an open and inclusive collaborative process can the use of social media enable any organization to tap the collective genius of its stakeholder constituencies.

In this brilliant volume, Davenport and Manville rigorously examine “12 stories of big decisions and the teams that get them right.” However different the nature and extent of the circumstances as well as of implications and potential consequences of the given decision may be, all twelve followed essentially the same process, one that takes into full account four separate but related trends:

o The recognition that “none of us is as smart as all of us”
o Tapping not only the so-called wisdom of the crowd but also its leadership
o The use of data and analytics to support – sometimes even make – decisions
o Information technology that enables and then supports better decisions

Shrewdly, Davenport and Manville focus on an exceptionally diverse group and the major decisions to be made. They include NASA STS-119 “Should we launch?”), McKinsey & Company (“Should we recruit from a different pool of talent?”), Charlotte-Mecklenburg Schools (“How can we improve student performance?”), Ancient Athenians (How can we defend against a life-or-death invasion?”), and the (DeWitt and Lila) Wallace Foundation (“How can we focus a strategy for more mission impact?”). These mini-case studies achieve two critically important objectives. First, they help the reader to understand how each of the major decisions was made? Also, they help the reader to understand what lessons can be learned from the process by which the decisions were made.

No organization ever has too many great men and great women. Indeed, few have any. However, I agree with Davenport and Manville that all organizations can establish and then constantly improve a collaborate process by which organizational judgment produces a much higher percentage of appropriate decisions. This does not require a Great Leader. Rather, it requires development of collective leadership (i.e. results-driven initiative) at all levels and in all areas. It also requires constant communication, cooperation, and (especially) collaboration. These are among the defining characteristics of a Great Organization.

With their book, Tom Davenport and Brook Manville will help you and your colleagues to build one.

Creative Thinkering: A book review by Bob Morris

Creative Thinkering: Putting Your Imagination to Work
Michael Michalko
New World Library (2011)

How and why conceptual blending of dissimilar subjects, ideas, and concepts is the most important factor in creative thinking

Those who have read any of Michael Michalko’s previously published books, notably Cracking Creativity and Thinkertoys, already know that he has a unique talent for explaining the creative process (making something new) and the innovative process (making something better) and does so creatively and innovatively, in ways and to an extent that almost anyone can understand (a) what they are, (b) how they differ, (c) what they share in common, and (d) how to benefit from them.

In his latest book, he explains how and why conceptual blending of dissimilar subjects, ideas, and concepts is the most important factor in creative thinking. It is not only a matter of “connecting the dots,” although that skill important; it also involves “connecting the right dots in the right way” and, more importantly, being able to recognize especially important “dots” that others may not see, much less appreciate.

Michalko organizes his material within two Parts: Creative Thinking and The Creative Thinker. Obviously, the first focuses on various techniques, skills, drills, exempla, and exercises that explain what creative thinking is and can do. In Part II, he explains how almost anyone can become a much more creative thinker. More specifically, how to become much more alert for connections (especially between and among what are significantly dissimilar), intentionally thinking more creatively rather than haphazardly, changing the way one speaks in order to change the way one thinks (he devotes all of Chapter 12 to that), and “Becoming What You Pretend to Be,” the title of the next chapter. Long ago, Henry Ford observes, “Whether you  think you can or think you can’t, you’re right.” Michalko wholly agrees, noting that just as attitude can influence behavior, behavior can influence attitude. Of special interest to me is the “Thought Experiment” (“Velten’s Instructions,” on Pages 183-185″). I’ll say no more about it except this: What I learned from completing this exercises – all by itself – is worth far more than the cost of the book.

Here in Dallas, we have a farmers market near the downtown area at which several merchants offer slices of fresh fruit as a sample of their wares. In that spirit, I now provide a representative selection of Michalko’s insights from among the several hundred I carefully considered:

On Leonardo da Vinci: “His mind integrated information instead of segregating it. This is why he was polymathic. He created breakthroughs in art, science, engineering, military, science, invention, and medicine.” This is what Roger martin has in mind, n The Opposable Mind, when he discusses his concept of “integrative thinking.” Page 10

On the Edison research center in Menlo, Park (NJ): “Thomas Edison’s lab was a big barn with worktables set up side by side that held separate projects in progress. He would work on one project and then another. His workshop was designed to allow one project to infect a neighboring one, so that moves made here might also be tried there. This method of working allowe4d him to consistently rethink the way he saw his projects. You can use separate notebooks to do, in time, what Edison’s workshop did in space.” Page 70

On the creative thinker: Someone who is “a result of the assembly and interactions of certain critical human traits. First, you must have the intention and desire to be creative; second, you must consciously cultivate positive speaking and thinking patterns; and last, you must act like a creative thinker and go through the motions of being creative every day.” Page 145

On creating one’s own experiences: “Cognitive scientists have discovered that the brain is a dynamic system – an organ that evolves its patterns of activity rather than computes them like a computer. It thrives on the creative energy of feedback from experiences either real or fictional. An important point to remember is that you can synthesize experience, literally create it in your imagination. The human brain cannot tell the difference between an `actual’ experience and an experience imagined vividly and in detail.” Page 186

I presume to offer two suggestions to those who purchase this book: highlight key passages (my preference is for the Sharpie ACCENT wide tip pen with Smear Guard) and complete the several dozen “Thought Experiment” exercises using a notebook (my preference is the Mead Black Marble Wide-Ruled Composition Book). This really is a workbook without spaces within which to complete the exercises. Fortunately, Michael Michalko has a very creative mind and thus has been into his book a lively and substantive interaction between his reader and the material he provides.

Henry Chesbrough: A second interview by Bob Morris

Henry Chesbrough

Chesbrough is Adjunct Professor, Haas School of Business at the University of California, Berkeley, and Executive Director of its Center for Open Innovation. His landmark book Open Innovation: The New Imperative for Creating and Profiting from Technology (2003) articulated a new paradigm for industrial research and development. His more recent book, Open Business Models: How to Thrive in the New Innovation Landscape (2006), carries the open approach a step further, arguing that business models themselves need to become more open.  Innovating business models requires open technology strategies, but also new approaches to managing intellectual property as well.  His most recent book, Open Services Innovation: Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era (2011) explores innovation in a services context.  He earned a BA degree in economics from Yale University, an MBA degree from Stanford University, and a PhD degree in business administration from UC Berkeley.

*     *      *

Morris: Before discussing your latest book, Open Services Innovation, a few general questions. A great deal has happened in the global business world since our last conversation three years ago. In your opinion, which change during that recent period is the most significant and why do you think so?

Chesbrough: In the past three years, there has developed a short-term crisis in both the EU and the US, as each region wrestles with serious issues that are somewhat different.  But these issues have had a dampening effect on innovation in both regions, as companies manage through a turbulent and uncertain environment.  There is an unfortunate tendency to treat innovation as a luxury good, something to welcome in good times, but cut back on in tough times.

Meanwhile, there is a longer term and to my mind even more important trend, which is the rise of the “emerged markets”.  China, India and Brazil of course, but also Turkey, Latin American, South Africa, places that many innovation scholars gave little attention to in the past.  There is no question that in this rebalanced world innovation is going to become a global phenomenon to manage and to study.

Morris: As I survey the ever-increasing number of new technologies that appear, I am reminded of Goethe’s poem Der Zauberlehrling (The Sorcerer’s Apprentice) written in 1797. Do you share my concern that at least a few of the new disruptive technologies have taken on a life of their own?

Chesbrough: The statistic that blew me away the most was one I read on Henry Blodget’s Business Insider website.  It showed that people are spending fully half of their online time on the Net on Facebook, and the other half on everything else there is on the Web.  I don’t know if that’s true, but if so it is truly mind-blowing.  I know that it is not true of me or my wife, and that it is true of both of my daughters.  I don’t know what a world built around Facebook will look like in the future.  It makes me feel like I am on my way to becoming obsolete.

Morris: Howard Gardner’s extensive research on multiple intelligences suggests this next question: Can an “open” mindset be developed? If so, how?

Chesbrough: Yes I believe it can be developed.  While this is not an area that I have studied rigorously, I know from my own life experience that at the root of whatever open mindset I have is a basic humility that recognizes my own limitations and numerous areas of ignorance.  Being open for me means not being paralyzed by those shortcomings, but using my realization of them as a spur to learn and to grow. When I must function as an expert, ironically that often blocks my own growth.  When I get to ask questions, wonder why something is happening or how it works, I can feel myself being stretched ever so slightly in new directions.  Happily, being a teacher and having children both force me into stretching myself with some frequency!

Morris: In The Opposable Mind, Roger Martin has much of value to say about integrative thinking. As he explains, it is ”the predisposition and the capacity to hold two [or more] diametrically opposed ideas” in one’s head at the same time and then “without panicking or simply settling for one alternative or the other,” be able to ”produce a synthesis that is superior to either opposing idea.” Integrative thinking requires a “discipline of consideration and synthesis [that] is the hallmark of exceptional businesses and those who lead them.” This seems to describe the open mindset you have endorsed for years. Am I correct?

Chesbrough: Yes, you are.  I define open innovation to be a process whereby companies utilize external knowledge more extensively in their own innovation processes, and allow others to utilize the unused ideas they have outside.  Open innovation thinking is an “and”, not an “or”.  It is NOT an argument that calls for outsourcing all of one’s R&D.  Rather, it is a call to integrate internal and external in the integrative manner that Martin articulates.

Morris: What seem to be the most common – and troublesome – misconceptions about open innovation and open business models?

Chesbrough: Many conflate open innovation with open source software, or open source development methodologies.  While both concepts share an appreciation for open, participatory engagement of many people in the innovation process, open innovation explicitly incorporates the business model as a core part of the innovation process.  Many adherents in open source explicitly eschew business models as irrelevant or even evil.  Yet many observers of open source software itself would acknowledge that many businesses have built “open source business models” that helped them achieve greater impact and scale than they otherwise would have done.  To me, this is both a good thing (it is good that these open source tools and products have expanded greatly) and a statement of how the world works.  It also raises the possibility that adherents of open source sometimes overlook, that some business models could pervert the good intentions of open source and harness all that community contribution for nefarious purposes.  This was a concern when Microsoft tried to fork Java some years back by offering a version that only ran on Windows.  Oracle seems to be testing the waters lately with Java as they file suits against Google and others who utilize open source.

Morris: What, in fact, is true?

Chesbrough: Some of the most successful open source projects these days are led by large companies, who are investing significant time and effort into the open source projects because it directly or indirectly benefits their own business models (not because they have become altruistic).  Contributors and volunteers need to pay attention to who is driving the agenda for these projects, so that they remain aware of how their hard work is being used in the world.

Morris: Now please shift your attention to Open Services Innovation. When and why did you decide to write it?

Chesbrough: Well, I focused my previous books on innovating new products and new technologies.  But I often got questions about “what do I do if I am a service firm”?  I realized that we know a lot about how to innovate new products, new processes, and new technologies, but know far less about how to innovate in services.  Yet this is the majority of economic activity for most OECD countries.  So there was a gap to fill.  And there is good academic work going on in services innovation research, but little of that has been translated to a general audience.  That is part of what I tried to do in Open Services Innovation.

What gives this topic special importance is the rise of China and other emerging economies, those that are now innovating as well as manufacturing the innovations of others.  There is a risk of a commodity trap, where firms that focus exclusively on developing better products and technologies run the real risk of failing to differentiate their offerings sufficiently, and instead become commoditized by innovative entrants from the emerging parts of the world.

*     *     *

To read the complete interview, please click here.

Henry Chesbrough invites you to check out the wealth of resources at these websites

http://www.openinnovation.net/

http://openinnovation.berkeley.edu/

Twitter:  @OpenInno
 

 

Doing Both: A book review by Bob Morris

Doing Both: Capturing Today’s Profit and Driving Tomorrow’s Growth
Inder Sidhu
FT Press/Pearson

Organizational transformation is not — repeat not – a zero-sum game

One of the most self-defeating mindsets is suggested by the admonition, “You can’t have your cake and eat it too.” Obviously there are situations when there are two options that are mutually-exclusive. However, most of the time, when facing a choice, it is a mistake to select only one and dismiss all others. Inder Sidhu does not advocate “a balanced compromise between two objectives, but [rather] a mutually reinforcing multiplier in which each side makes the other better.” He cites comments included in Built to Last (1994) co-authored by Jim Collins and Jerry Porras when discussing a highly visionary company “that doesn’t want to blend yin and yang into a gray indistinguishable circle that is neither highly yin nor highly yang; it aims to be distinctly yin and distinctly yang – both at the same time, all the time. Irrational? Perhaps. Rare? Yes. Difficult? Absolutely.”

Sidhu devotes the bulk of his lively narrative to explaining how exemplar companies such as Apple, BYD, Cisco, GE, Google, IBM, and Procter & Gamble achieve these strategic objectives:

• Improving the core business while conducting disruptive innovation
• Strengthening current account relationships while adding new ones
• Fine-tuning what is done well while transforming or eliminating what isn’t
• Creating customer evangelists while creating steadfast partners
• Thriving on “Main Street” while exploring “the road less traveled”
• Doing it right and doing what is right (i.e. what matters)

Obviously, doing both (of whatever) is not always possible or, when possible, advisable. Also, any lessons learned from the exemplar companies such as those Sidhu examines (especially Cisco) must be modified to accommodate the specific needs and resources of much smaller organizations.

With all due respect to the value of these lessons, I think the single greatest benefit of this book is the mindset it can help its reader to develop. Although Sidhu does not cite them and their books, he has clearly been influenced (albeit indirectly) by business thinkers such as Henry Chesbrough (Open Innovation and Open Business Models) and Roger Martin (The Opposable Mind) as well as Venkat Ramaswamy and Francis Gouilllart (The Power of Co-Creation). The most effective executives an open mind in combination with insatiable curiosity, emotional intelligence, and highly-developed skills for integrative thinking. Organizations as well as individuals must never play a zero-sum game. Long-term growth and short-term profitability are NOT mutually exclusive.

The authors’ recommendations in the aforementioned books track almost seamlessly with Sudhu’s own:

1. Be open-minded to possibilities, whenever/wherever they occur
2. Respect and examine those that are plausible, especially if unorthodox
3. Seek out collaborations that are mutually-beneficial
4. Welcome each “failure” as a precious learning opportunity
5. Juxtapose (for rigorous scrutiny) contradictory ideas and options
6. Embrace change as an ally, not as a threat
7. Achieve constant improvement with a discovery-driven process
8. Welcome and support principled dissent
9. Cultivate and nourish an insatiable appetite for learning
10. Constantly challenge what James O’Toole characterizes as “the ideology of comfort and the tyranny of custom”

I highly recommend all of the aforementioned books as well as Dean Spitzer’s Transforming Performance Measurement; also Enterprise Architecture as Strategy co-authored by Jeanne Ross, Peter Weill, and David Robertson.

The Opposable Mind: A book review by Bob Morris

The Opposable Mind: How Successful Leaders Win Through
Integrative Thinking
Roger Martin
Harvard Business School Press (2007)

When I first read this brilliant book, I was reminded of what Doris Kearns reveals about Abraham Lincoln in Team of Rivals. Specifically, that following his election as President in 1860, Lincoln assembled a cabinet whose members included several of his strongest political opponents: Edwin M. Stanton as Secretary of War (who had called Lincoln a “long armed Ape”), William H. Seward as Secretary of State (who was preparing his acceptance speech when Lincoln was nominated), Salmon P. Chase as Secretary of the Treasury (who considered Lincoln in all respects his inferior), and Edward Bates as Attorney General who viewed Lincoln as a well-meaning but incompetent administrator but later described him as “very near being a perfect man.”

The great leaders whom Martin discusses (e.g. Martha Graham, George F. Kennan, Isadore Sharp, A.G. Lafley, Lee-Chin, and Bob Young) developed a capacity to consider what Thomas C. Chamberlain characterizes as “multiple working hypotheses” when required to make especially complicated decisions. Like Lincoln, they did not merely tolerate contradictory points of view, they encouraged them. Only in this way could they and their associates “face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension [whatever its causes may be] in the form of a new idea that contains elements of the opposing ideas but is superior to each.”

This process of consideration is based on a quite different model than the more commonly employed scientific method based on, as Martin explains, the working hypothesis that is used “to test the validity of a single explanatory concept through trial and error and experimentation.” He rigorously examines the process of integrative thinking in terms of four constituent parts: salience, causality, architecture, and resolution. He devotes a separate chapter to each, citing dozens of real-world examples, and then (in Chapter 5), he introduces a framework within which his reader can also develop integrative thinking capacity.

When I recently re-read The Opposable Mind, I was even more impressed by the nature and extent of the potential applications and implications of integrative thinking. This mindset is the very foundation of the “open” business models and “open” innovation that Henry Chesbrough so brilliantly explains in  his books and articles. It is also essential to effective persuasion and collaboration as well as to problem solving and, especially, to the success of the discovery process when identifying and then solving problems throughout process improvement initiatives. For these and other reasons, Martin’s book is now widely viewed — and acclaimed — as a business “classic.”

The Design of Business: A book review by Bob Morris

 The Design of Business: Why Design Thinking is the Next Competitive Edge
Roger Martin
Harvard Business Press (2009)

I just re-read this book and value it even more now than I did when it was first published. One point I want to make here that I failed to make in a prior review is that the design of business (in fact, the design of anything) requires a mindset that is guided and informed by certain principles that must accommodate both analytical and intuitive issues. Stated anoter way, how you design is even more important than what you design.

In his latest book, Martin explains why “design thinking is the next competitive advantage.” In fact, it may well be the most valuable application of integrative thinking as explains in his previous book, The Opposable Mind), in part because successful business innovation is the result of collaboration and proceeds through a “path” or (as Martin describes it) a “knowledge funnel.” The model for value creation that he offers in this book requires a balance – “or more accurately a reconciliation – between two prevailing points of view on business today.” One is analytical thinking that “harnesses two familiar forms of logic – deductive reasoning and inductive reasoning – to declare truths and certainties about the world.” The other is intuitive thinking – “the art of knowing without reasoning. This is the world of originality and invention…Neither analysis nor intuition is enough,” however. Martin presents a compelling argument in support of reconciling the two modes of thought, asserting that the most successful businesses in the years to come will balance analytical mastery and intuitive originality “in a dynamic interplay [he calls] design thinking.”

How so? “Design thinking is the form of thought that enables movement along the knowledge funnel, and the firms that master it will gain an inexhaustible, long-term business advantage. The advantage, which emerges from the design-thinking firms’ unwavering focus on the creative design of systems, will eventually extend to the wider world. From these firms will emerge the breakthroughs that move the world forward [because] design-thinking firms stand apart in their willingness to engage in the task of continuously redesigning their business.” And, I presume to add, because their leaders have mastered integrative thinking, without which creative and productive collaboration cannot be achieved, much less sustained.

So, what is “the design of business”? It is the process by which business leaders apply design thinking within the current knowledge stage and hone and refine what is known so that they can “generate the leap from stage, continuously in a process I call the design of business.” Citing the pioneer insights of Charles Sanders Pierce, Martin duly acknowledges that it is not possible to prove any new thought, concept, or indeed in advance. In fact, “proof” must be redefined and “the answer, Pierce said, would come through making a ‘logical leap of the mind’ or an ‘inference to the best explanation’ to imagine a heuristic for understanding the mystery.”

 

Most Valuable Business Insights: 11-15

After having read and reviewed so many business books, I now share brief comments about what I consider to be the 25 most valuable business insights and the books in which they are either introduced or (one man’s opinion) best explained. Here are the third five:

11. Leadership: In essence, leaders attract followers so that together they can achieve shared objectives, guided and informed by shared values based on mutual trust and respect. History’s greatest leaders are remembered for a heritage, usually based on great achievements that had an enduring impact. Alexander and then Julius Caesar for establishing or extending a great empire and Lincoln for preserving union despite a civil war.

The same is true of great business leaders such as Albert Sloan, Thomas Watson Sr. and Jr., and Steve Jobs. They could not have succeeded, had they not attracted sufficient followers who embraced both a dream and great challenges. Today, no organization can survive – much less thrive – without effective leadership at all levels and in all areas. Seth Godin said it well: “Initiative is taken, not given.”

Best Sources: Warren Bennis’ On Becoming a Leader, James O’Toole’s The Executive’s Compass: Business and the Good Society, Bill George’s True North: Discover Your Authentic Leadership co-authored with Peter Sims, and William C. Taylor’s Practically Radical: Not-So-Crazy Ways to Transform Your Company, Shake Up Your Industry, and Challenge Yourself

12. Management: In essence, managers organize and then complete tasks and among their most important tasks is supervising others. The most efficient managers do that most efficiently, with highly-developed emotional intelligence. I’ve always believed that managers help keep the promises that leaders make. With all due respect to compelling visions, someone has to take out the garbage, milk the cows, and turn off the lights. I agree with Thomas Edison: “Vision without execution is hallucination.”

Best Sources: Henry Mintzberg’s Management? It Isn’t What You Think!, Peter F. Drucker’s The Effective Executive: The Definitive Guide to Getting the Right Things Done, and Execution: The Discipline of Getting Things Done co-authored by Larry Bossidy and Ram Charan

13. Marketing: Create or increase demand for a customer-focused, multi-sensory experience that pro0mises a unique, enjoyable, and fulfilling experience. Initially, a “market” was a specific location; later, it was viewed as a specific segment of sellers/buyers (e.g. housing) and then as a cluster of demographics (e.g. males ages 29-45); later, marketing was defined as a brand, then a promise, and now an experience that creates “customer evangelists.”

Best Sources: Theodore Levitt’s The Marketing Imagination and Philip Kotler’s Kotler on Marketing.

14. Mergers & Acquisitions: Mergers are (usually) blended consolidations of two previously independent entities whereas acquisitions (usually) involve one entity being absorbed and then controlled by another. A majority of M&As fail or fall far short of expectations and the reasons vary but usually include irreconcilable cultural differences (e.g. values, silos, and turf issues).

Best Sources: Steve Steinhilber’s Strategic Alliances: Three Ways to Make Them Work (Memo to the CEO) and The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level co-authored by Timothy J. Galpin Mark Herndon

15. “Open” Mindset: This mindset is well-named because those who develop it are literally “open” (i.e. receptive to and respectful of) whatever possibilities they may encounter. They constantly ask “Why?” and “Why not?” They consider, compare/contrast, and integrate sometimes contradictory information but also opinions, assertions, theories, etc. The metaphor I use to describe this mindset is that it opens doors and windows and sheds light on whatever has possible relevance and value. The singe most significant, indeed defining characteristic of an open mindset is insatiable curiosity.

Best Sources: Henry Chesbrough’s Open Business Models: How to Thrive in the New Innovation Landscape, Open Innovation: The New Imperative for Creating And Profiting from Technology, and Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era as well as Roger Martin’s The Opposable Mind: Winning Trough Integratuve Thinking, and Morten T. Hansen’s Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results

You may also wish to check out Most Valuable Business Insights: 1-5 and Most Valuable Business Insights: 6-10.

The Execution Premium: A book review by Bob Morris

The Execution Premium: Linking Strategy to Operations for Competitive Advantage
Robert S. Kaplan and David P. Norton
Harvard Business Press (2008)

I have read and review all of Robert S. Kaplan and David P. Norton’s previous books and consider this one their most valuable…thus far. Why? Here are three reasons.

First, I agree with Kaplan and Norton that managing strategy differs from managing operations but both are vital and need to be integrated. I appreciate their mastery of what Roger Martin characterizes as “integrative thinking” in The Opposable Mind. That is, they agree with Thomas Edison’s observation that serves as the title of this review: “Vision without execution is hallucination.” They also agree with Peter Drucker who once observed, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” According to Michael Porter, “The essence of strategy is choosing what not to do.” That is why Kaplan and Norton devote almost all of their attention to focusing on (a) what is most important in terms of linking strategy to operations for competitive advantage and (b) how to do that with resources and initiatives that are cohesive, comprehensive, and cost-effective.

Also, they make brilliant use of various reader-friendly devices to highlight, consolidate, and summarize, and emphasize especially important points. For example, Figures: Figure 1-1 “Strategy management: State-of-the-art practices,” Page 5; Figure 3-14  “Establishing targets based on cause-effect-scenarios,” Page 92; Figure 9-9 “Strategy map and scorecard for Store 24’s new Ban Boredom strategy,” Page 267; and Figure 10-3 Strategy management: An integrated closed-loop process,” Page 289. I also appreciate the dozens of checklists that are strategically inserted throughout the lively but eloquent narrative. Together with the Figures, the various checklists facilitate, indeed expedite frequent review of key points.

Finally, as in their previous books, Kaplan and Norton share information, insights, and advice that all relevant to any organization, whatever its size and nature may be. No two organizations are exactly the same…nor is any organization the same today as it was a year ago or will be a year from now. Kaplan and Norton do everything humanly possible to educate their reader with regard to what is needed to link strategy to operations for competitive advantage but they also help their reader to develop what I characterize as the “executive premium” mindset: challenge all assumptions and premises, seek out and welcome principled dissent, be receptive to unorthodox ideas (especially from unexpected sources), and meanwhile focus (as do Kaplan and Norton) on what is most important and measure all initiatives, viewing each setback not as a failure but as a precious learning opportunity.