Blogging on Business Update from Bob Morris (Week of 12/24/12)
I hope that at least a few of these recent posts will be of interest to you:
BOOK REVIEWS
Tap Dancing to Work: Warren Buffett on Practically Everything
Carol J. Loomis
The Leaders We Need: And What Makes Us Follow
Michael Macoby
The Tao of Twitter: Changing Your Life and Business 140 Characters at a Time
Mark W. Schaefer
HBR Guide to Finance Basics for Managers
Various Contributors
The Leader’s Guide to Storytelling: Mastering the Art and Discipline of Business Narrative (Second Edition)
Stephen Denning
INTERVIEWS
John A. Daly
Bob Morris
Gregory Unruh
Bob Morris
Karen May (Google) in “The Corner Office”
Adam Bryant
New York Times
COMMENTARIES
“Economic Conditions Snapshot, December 2012″
McKinsey & Company
The McKinsey Quarterly
“Six Great Work Paradoxes”
Michael Bungay Stanier
from Do More Great Work
“Play Makes Us Human V: Why Hunter-Gatherers’ Work is Play”
Peter Gray
Psychology Today
“Lincoln’s Leadership Lessons”
Nancy Koehn
HBR
“Michael Lewis’ perspectives on the writing process”
“The ‘talent myth’ revisited”
BOB
“Three fertile problems”
Robert Kegan and Lisa Laskow Lahey
HBR
“How many of these Qs can you answer?”
Harold Urschel
“How and Why Perception Gaps Impede Working Women”
Kip Kelly
Talent Management
“4 of the best marketing videos of 2012″
Erik Sherman
CBS MoneyWatch
“Enduring Ideas: The Three Horizons of growth”
Steve Corley
The McKinsey Quarterly
“Overcoming a bias against risk”
Tim Koller, Dan Lovallo, and Zane Williams
The McKinsey Quarterly
“Beyond machines, then what?
IBM
* * *
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Harvard Business Review on Winning Negotiations: A book review by Bob Morris
Harvard Business Review on Winning Negotiations
Various Contributors
Harvard Business Review Press (2011)
How to bargain and close on deals by “letting the other chaps have it your way”
This is one of the volumes in a series of anthologies of articles that first appeared in Harvard Business Review. Having read all of them when they were published individually, I can personally attest to the high quality of their authors’ (or co-authors’) insights as well as the eloquence with which they are expressed. This collection has two substantial value-added benefits that should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; also, they are now conveniently bound in a single volume for a fraction of that cost.
Those who aspire to possess highly developed skills in bargaining and deal making will find the material in this HBR book invaluable. For example, how to seal or sweeten a “bargain” by uncovering the other side’s motives, counter faulty assumptions and premises, forge only those deals that support your strategy, and “know when to walk away”…and why. Authors of the ten articles focus on one or more components of a process by which to “persuade others to do what you want – for their own reasons.”
This is a slight variation of an observation made to me years ago by an English professor at Oxford who was (then and now) a personal friend. We were at a reception for the England’s ambassador to the United States. I asked my friend if there was a “secret” to effective diplomacy. He replied, “As a matter of fact, there is. Letting the other chaps have it your way.”
I now provide two brief excerpts that are representative of the high quality of all ten articles:
In “Deals Without Delusions,” Dan Lovallo, Patrick Vigueroie, Robert Uhlander, and John Horn recommend several strategies (“antidotes”) for countering mental biases at each stage of the M&A process:
Preliminary Due Diligence
o Confirmation bias
o Overconfidence
o Underestimating cultural differences
o Underestimating time, money, and other resources needed for integration
o Bidding
o Bidding above the target’s true value when multiple players enter the game
Final Due Diligence
o Anchoring
o Sunk costs fallacy
They discuss the strategies, antidotes, and other key elements and components in the immensely complicated – and perilous — M&A process, Pages 19-38.
In “The Fine Art of Acquisition,” Robert J. Aiello and Michael D. Watkins share their own thoughts about both the art and science of M&A as they discuss screening potential deals, conducting initial discussions, establishing a civil (preferably cordial, if not pleasant and friendly) atmosphere within which to address various issues, gearing up for rigorous negotiations, sizing up the other side, and getting to final terms and conditions. They also discuss “Managing the Deal Cycle” and the “Postmortem Questions” to be asked. You’ll find the complete article on Pages 155-175.
My own opinion is that the same basic principles that continue to be most effective during formal discussions such as those required by the M&A process can (with only minor adjustments) also be effective during informal conversations whose purpose is persuasion. Honesty is essential as are mutual respect and trust. Negotiation should not be viewed as a zero sum game. Treacherous and deceitful people who succeed initially are losers eventually.
Harvard Business Review on Increasing Customer Loyalty: A book review by Bob Morris
Harvard Business Review on Increasing Customer Loyalty
Various Contributors
Harvard Business Review Press (2011)
How to create customers who are profitable
This is one of the volumes in a series of anthologies of articles that first appeared in Harvard Business Review. Having read all of them when they were published individually, I can personally attest to the high quality of their authors’ (or co-authors’) insights as well as the eloquence with which they are expressed. This collection has two substantial value-added benefits that should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; also, they are now conveniently bound in a single volume for a fraction of that cost.
Those who aspire to make their customers both loyal and profitable will find the material in this HBR book invaluable. It is one of the volumes in a series of anthologies of articles that first appeared in Harvard Business Review. Authors of the nine articles focus on one or more components of a process by which to turn angry customers into loyal advocates, get more people to recommend them, increase customer satisfaction by satisfying them, focus on profitable customers (loyal or not), invest in the right CRM technology, mine customer data for more effective marketing, and increase each customer’s lifetime value.
I now provide two brief excerpts that are representative of the high quality of all nine articles:
In “The One Number You Need to Know,” Frederick F. Reichheld explains what he characterizes as “The Ultimate Question”: “On a scale of 1 to 10, how likely is it that you would recommend our company to a friend or colleague?” There are two other questions that are effective predictors in certain industries: “How strong do you agree that our company sets the standard for excellence in our industry?” and “How likely is it that you will continue to do business with our company?”
The number to which the article’s title refers is what Reichheld calls the “The Net Promoter Score.” Promoters are those who provide a rating of 9 or 10, Passives 7 or 8, and Detractors 6 or less. For purposes of illustration, let’s say 100 customers respond as follows: 35 Promoters, 45 Passives, and 20 Detractors. The net score is determined by subtracting the total number of Detractors (i.e. 20) from the total number of Promoters (i.e. 35) and that is 15. That is a baseline against which subsequent efforts to increase Promoters and decrease Detractors are measured. Reichheld calls it the Net Promoter Score (NPS).
In “Diamonds in the Data Mine,” Gary Loveman offers these suggestions when using a database to measure/predict customer loyalty:
1. Acquire a rich repository of customer information.
2. Slice and dice data finely to develop marketing strategies.
3. Identify core customers by predicting their lifetime value.
4. Gather increasingly specific information about customers’ references – then appeal to those interests.
5. Generously reward employees who prioritize levels and degree of customer service.
Other articles of specific interest to me include “Companies and the Customers Who Hate Them” (Gail McGovern and Youngme Moon), “Putting the Service-Profit Chain to Work” (James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard A. Schlesinger), and “The Mismanagement of Customer Loyalty” (Werner Reinartz and V. Kumar).
SUGGESTED READING
The Ultimate Question
The Ultimate Question 2.0
Frederick H. Reichheld
Creating Customer Evangelists
Ben McConnell and Jackie Huba
On Great Service
Discovering the Soul of Service
Leonard Berry
The New Gold Standard
Joseph Michelli
Harvard Business Review on Thriving in Emerging Markets: A book review by Bob Morris
HBR on Thriving in Emerging Markets
Various Contributors
Harvard Business Review Press (2011)
“The early bird may get the worm but the second mouse gets the cheese.” Steven Wright
This is one of the volumes in a series of anthologies of articles that first appeared in HBR. In this instance, its ten articles focus on one or more components of a process by which to ”beat the local companies at their own game.” Having read all of the articles when they were published individually, I can personally attest to the brilliance of their authors’ (or co-authors’) insights and the eloquence with which they are expressed. Two substantial value-added benefits should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; they are now conveniently bound in a single volume for a fraction of that cost.
Here in Dallas, there is a Farmers Market near the down area at which several merchants offer slices of fresh fruit as samples. I now provide what follows in that spirit.
In New Business Models in Emerging Markets, Matthew J. Erying, Mark W. Johnson, and Hari Nair suggest and explain four ways to uncover unmet needs:
1. Study what your customers are doing with your product.
2. Look at the alternatives to your offerings that consumers can buy.
3. Watch for compensating behaviors (e.g. adjustments to unsatisfactory jobs).
4. Search for explanations.
“The ability to conduct rapid experiments inexpensively and use what you learn from them to hone the business model is essential to success.”
In The Battle for Female Talent in Emerging Markets, Sylvia Ann Hewlett and Ripa Rashid explain how to attract and keep talented women.
1. Fine talent early. The best place to start looking is in universities.
2. Help your women recruits build networks to fight isolation and gain visibility while achieving their business goals.
3. Give them international exposure, but provide plenty of support for families in the host countries.
4. Build ties outside the company – to clients, customers, and communities.
In Strategies That Fit Emerging Markets, Tarun Khanna, Krishna G. Palepu, and Jayant Sinha share their thoughts about how to select the right strategy.
• Adapt your business model: Ensure that changes to your model preserve your competitive advantage.
• Change the institutional context: A powerful company’s products or services can force dramatic improvements in local markets.
• Stay away: If adapting your business model is impractical, avoid investing.
“We have learned that successful companies work around institutional voids. They develop strategies for doing business in emerging markets that are different from those they use at home and often find novel ways to implementing them, too. They also customize their approaches to fit each nation’s institutional context.”
My take on this volume: An emerging market is by nature a market of opportunity. More often than not, much of it remains unexplored and undefined. Although opportunities and competition to exploit them can be assumed, it is difficult (if not impossible) to anticipate fully (a) the perils that await, (b) their nature and extent, and (c) how best to prepare for them.
There is much to be said for Steven Wright’s observation, “The early bird may get the worm but the second mouse gets the cheese.”
Harvard Business Review on Inspiring & Executing Innovation: A book review by Bob Morris
Harvard Business Review on Inspiring & Executing Innovation
Various Contributors
Harvard Business Review Press (2011)
How to create and then deliver new or better products and services
This is one of the volumes in a series of anthologies of articles that first appeared in HBR. In this instance, its ten articles focus on one or more components of a process by which to inspire and then execute breakthrough innovation. Having read all of the articles when they were first published individually, I can personally attest to the brilliance of their authors’ (or co-authors’) insights and the eloquence with which they are expressed. Two substantial value-added benefits should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; they are now conveniently bound in a single volume and for a fraction of that cost.
Here in Dallas, there is a Farmers Market near the downtown area at which several merchants offer slices of fresh fruit as samples. I now provide what follows in that spirit.
In “Innovation’s Holy Grail,” C.K. Prahalad and R.A. Mashelkar use the term “Ghandian” innovation because, “at the core of this type of innovation lie two of the Mahatma’s tenets: ‘I would prize every invention of science made for the benefit of all’ and ‘Earth provides enough to satisfy every man’s need, but not every man’s reed’…Ghandian innovators solve problems in two ways: by acquiring or developing technologies and by altering business models or capabilities.”
In “The Customer-Centered Innovation Map,” Lance A. Bettencourt and Anthony W. Ulwick suggest that all jobs have the same eight tasks. To use job mapping, look for opportunities to help customers at every step.” They are:
1. Define: Determine their goals and plan resources
2. Locate: Gather items and information needed for the job
3. Prepare: Set up the environment to do the job
4. Confirm: Verify that they’re ready to perform the job
5. Execute: Carry out the job
6. Monitor: Assess whether the job is being successfully executed
7. Modify: Make alterations to improve execution
“Because problems can occur at many points in the process, nearly all jobs also require a problem resolution step. Some steps are more critical than others, depending on the job, but each is necessary to get the job done. Successfully.”
In “Innovation: The Classic Traps,” Rosabeth Moss Kanter identifies and then rigorously discusses eight (8) common mistakes that must be replaced by the “potent remedies” she recommends. The mistakes are:
• Rejecting opportunities that at first glance appear too small
• Assuming that only new products count – not new services or improved processes
• Launching too many minor product extensions that confuse customers and increase external complexity
• Strangling innovation with the same tight planning, budgeting, and reviews applied to existing businesses
• Rewarding managers for doing only what they committed to do – and discouraging them from making changes as circumstances warrant
• Isolating fledgling and established enterprises in separate silos
• Creating two classes of corporate citizens – those who have all the fun (innovators) and those who must make the money (mainstream business managers)
• Allowing innovators to rotate out of teams so quickly that team chemistry can’t gel
• Assuming that innovation teams should be led by the best technical people
Suggested Readings:
Two by Thomas Kelley with Jonathan Littman:
The Art of Innovation
The Ten Faces of Innovation
and two more recently published books:
The Other Side of Innovation: Solving the Execution Challenge
Vijay-Govindarajan and Chris Trimble
Innovation to the Core: A Blueprint for Transforming the Way Your Company Innovates
Peter Skarzynski and Rowan Gibson
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