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The Drucker Difference: Complaining about uncertainty? Get over it

Rick Wartzman

I agree with Peter Drucker that no business, regardless of what the federal government does, can expect much control over the major forces shaping the world.

Here is an excerpt from an article written by Rick Wartzman for Bloomberg Businessweek magazine “The Drucker Difference” series. To read the complete article, check out other resources, and obtain subscription information, please click here.

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If there is one thing you can be certain about, it’s that Peter Drucker wouldn’t countenance all the complaining by business people about uncertainty.

They’re directing their grousing primarily at the federal government, as illustrated by an interview I caught last week on National Public Radio with Andrew Liveris, the chief executive of Dow Chemical (DOW). Commenting just before President Barack Obama’s State of the Union address, Liveris reeled off a litany of concerns that many American chief executive officers have expressed in recent months.

“Well, I not only have high taxes; I have uncertain taxes,” he said. “Right now, I have more regulations coming at me that are not fact-based, not science-based, not data-based. I actually don’t even know what my costs are going to be in the next five years. And so I’m sitting back waiting for regulatory reform, and the government, of course, is now engaged on that—health care and the uncertainty around the health-care bill and what’s going to end up happening there. Energy policy—we’ve got lots of uncertainty in the energy policy regimen. I mean, I can keep going, but that’s half a dozen.”

It’s not that Drucker would have felt entirely unsympathetic. “Modern government has become ungovernable,” Drucker asserted in his 1968 book The Age of Discontinuity, hitting on a theme that he never backed away from as the decades wore on. “There is no government today that can still claim control of its bureaucracy and of its various agencies.”

Drucker also believed that in the grand scheme of things, government’s influence tends to be relatively minor. (Unless, I suppose, you’re a federal contractor and your primary customer is Uncle Sam.) Forces outside the public arena act as the main drivers of the most profound changes shaping our world, including the continuing transition to a knowledge age.

“THE FUTILITY OF POLITICS”

“If this century proves one thing, it is the futility of politics,” Drucker wrote in 1994. “It is the social transformations, like ocean currents deep below the hurricane-tormented surface of the sea, that have had the lasting, indeed the permanent, effect. They, rather than all the violence of the political surface, have transformed not only the society but also the economy, the community, and the polity we live in.” Drucker added that “headline-making political events” would remain in this lesser role well into the 21st century.

Yet beyond all that there exists another, more fundamental reason to stop griping: Uncertainty is simply part of doing business. Executives need to manage uncertainty, not whine about it.

In fact, ever since the economy shifted from agriculture to manufacturing, uncertainty has been part of the equation. “The farmer knew that if he did not have a corn crop by the time the frost came, he would not have a corn crop at all that year,” Drucker wrote in his 1950 book The New Society. “The husbandman knew that if the ewes failed to lamb in the spring, he would not be able to restock his herd. But in industrial production it cannot be predicted with any certainty when a product or service will be successful. Whether it will be successful … we call ‘risk proper;’ but whether it will be successful in one year, five years, or in 20 years is ‘uncertainty.’”

More than 50 years later, with the bulk of the nation’s blue-collar manufacturing jobs supplanted by knowledge and service work, the amount of haziness managers face has only increased.

“Uncertainty—in the economy, society, politics—has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities,” Drucker wrote in his 1995 book Managing in a Time of Great Change.

So what then, is a bewildered executive to do?

[To read the complete article, please click here.]

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Rick Wartzman is executive director of the Drucker Institute at Claremont Graduate University. He spent the first 20 years of his career as a reporter, editor, and columnist for The Wall Street Journal and Los Angeles Times. His most recent book, Obscene in the Extreme: The Burning and Banning of John Steinbeck’s The Grapes of Wrath, was published by PublicAffairs in September 2008.


Saturday, April 28, 2012 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , | Leave a comment

B-School Deans: Big Hopes for 2012 and Beyond

Sally Blount

Here is an exerpt from an article written by Francesca Di Meglio and featured by Bloomberg Businessweek magazine online. As business school deans make their resolutions for 2012, the collective hope is to produce graduates capable of thinking creatively about the challenges that face the world. Kellogg Dean Sally Blount says business schools must inspire students to think “deeply, creatively, and boldly” about those problems.

To read the complete article, please click here.

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Educators love a clean slate, free of chalk dust and open to new possibilities. That’s exactly what a new year brings, the opportunity to write your own destiny on that fresh blackboard. For the past two years, Bloomberg Businessweek has asked deans at top business schools about their resolutions for the year to come—for their schools, their students, and the world of management education. In 2012 they are aiming to produce more thoughtful and present leaders. Their goals go beyond the here and now; they are looking well into the future at the kinds of managers and businesspeople their schools will be producing. Ultimately they want better for the world, and constant improvement is what they say they need to achieve that.

For starters, some educators think traditional teaching methods can be stale and should be reconsidered. They want business schools to take more risks and produce graduates capable of confronting the world’s problems. “Looking ahead to 2012, it is critical for management education to inspire students, the next generation of business leaders, to think deeply, creatively, and boldly about solving the complex, large-scale problems facing our global society,” writes Sally Blount, dean of Northwestern University’s Kellogg School of Management, in an e-mail. “As educators, this means we must push boundaries in how we approach teaching and research. We must go beyond what has worked in the past to meet the current needs of this dynamic, vibrant planet of 7 billion people.”

Choosing a method of teaching is important. Determining what kinds of lessons you will teach is extra important. And the global financial crisis has put pressure on business schools to instill a greater sense of responsibility in their graduates. “Business leaders must master the ability to recognize the connections between their own actions and those of their organizations and industries in a global context,” writes Glenn Hubbard, dean of Columbia Business School, in an e-mail. “Now more than ever before, they must also take into account the social impact of their decisions. Management education will play a critical role in teaching the next generation of business leaders to ‘connect the dots’ in making informed decisions that encompass both cross-functional expertise and social responsibility.”

WHARTON REVAMP

University of Pennsylvania’s Wharton School, for example, is revamping its curriculum and will implement the changes in 2012. With increased focus on ethical and legal responsibility, oral and written communication, and self-analysis, the school is also going to provide recent graduates with ongoing executive education to encourage lifelong learning. The intent is to make sure the future is bright for individual students and business as a whole.

“The purpose of management education is to prepare the next generation of leaders. That means we have to focus not just on the needs of our students now, but also on their future needs,” writes Wharton’s dean, Thomas S. Robertson, in an e-mail. “Wharton’s new MBA curriculum design, which emphasizes continuous innovation, keeps this in mind. Our faculty and staff are hard at work to ensure that the implementation [of the curriculum] goes smoothly.”

To prepare students for the future, business schools need to consider what is happening in classrooms in the present. Paul Danos, dean of Dartmouth’s Tuck School of Business, says business schools must vow to improve on the delivery of core knowledge and skills, encourage principled leadership, provide students with access to great minds, and integrate global and social leadership ideas into their teaching. Specifically he calls for the following resolutions to address these issues: “continuously improve the rigor, breadth of coverage, and integration of the core; continuously create team involvement, feedback loops, and counseling to aid students in perfecting their own personal leadership plans; find ways for students to probe the knowledge creation and evaluation processes of the leading faculty thinkers and to create their own approach to knowledge evaluation; and create programs that inspire students to embrace the responsibilities that will be offered to them in their careers, to realize that they are best prepared to contribute to the lives of the diverse constituents in whose interest they will lead organizations.”

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To read the complete article, please click here.

You are invited to join the discussion on the Bloomberg Businessweek Business School Forum, visit us on Facebook, and follow @BWbschools on Twitter.

Francesca Di Meglio is a reporter for Businessweek.com in Fort Lee, N.J.

Saturday, December 24, 2011 Posted by | Bob's blog entries | , , , , , , | Leave a comment

American Schools Are Still Ahead—Way Ahead

Vivek Wadhwa

Opinions are divided (sometimes sharply divided) as to the relative quality of precollegiate education in the United States. Vivek Wadhwa says America has an inferiority complex about its education system. He believes that America’s alarm about international rankings of students overlooks some critical components of our education system.

Here is an excerpt from his article written for Bloomberg Businessweek magazine online (January 12, 2011). To read the complete article, please click here.

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You hear the sirens every year, when the OECD Program for International Student Assessment (PISA) releases its annual test results. Finland, South Korea, and Singapore usually come out on top; we start blaming our K-12 teachers for not teaching enough mathematics and science; we begin worrying about the millions of engineers and scientists China and India graduate.

This year the big surprise was that Shanghai garnered first place in the PISA rankings. Then The Wall Street Journal ran a story on the home page of its website titled “Why Chinese Mothers Are Superior.” The Journal article [written by Amy Chua] claimed that Chinese (and Korean, Indian, etc.) parents raise “stereotypically successful kids”—math whizzes and music prodigies.

They do this by not allowing their children to attend sleepovers; have a playdate; be in a school play; complain about not being in a school play; watch TV or play computer games; choose their own extracurricular activities; get any grade less than an A; not be the No. 1 student in every subject except gym and drama. The article went on to recount as typical a series of acts that would be considered child abuse in the U.S. (and aren’t the norm in India and China).

The Journal article was simply bizarre, yet it is true that education in China and India is very challenging and fiercely competitive. Children are brought up to believe that education is everything, that it will make the difference between success and starvation. So from their early years they work long and hard. Most of their childhood is spent memorizing books on advanced subjects.

AMERICAN STEREOTYPES

Meanwhile, the perception is that American children live a relatively easy life and coast their way through school. They don’t do any more homework than they have to; they spend an extraordinary amount of time playing games, socializing on the Internet, text-messaging each other; they work part time to pay for their schooling and social habits. And they party. A lot. These stereotypes worry many Americans. They believe the American education system puts the country at a great disadvantage. But this is far from true.

The independence and social skills American children develop give them a huge advantage when they join the workforce. They learn to experiment, challenge norms, and take risks. They can think for themselves, and they can innovate. This is why America remains the world leader in innovation; why Chinese and Indians invest their life savings to send their children to expensive U.S. schools when they can. India and China are changing, and as the next generations of students become like American ones, they too are beginning to innovate. So far, their education systems have held them back.

My research team at Duke looked in depth at the engineering education of China and India. We documented that these countries now graduate four to seven times as many engineers as does the U.S.The quality of these engineers, however, is so poor that most are not fit to work as engineers; their system of rote learning handicaps those who do get jobs, so it takes two to three years for them to achieve the same productivity as fresh American graduates.As a result, significant proportions of China’s engineering graduates end up working on factory floors and Indian industry has to spend large sums of money retraining its employees. After four or five years in the workforce, Indians do become innovative and produce, overall, at the same quality as Americans, but they lose a valuable two to three years in their retraining.

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Vivek Wadhwa is a visiting scholar at University of California-Berkeley, senior research associate at Harvard Law School, and director of research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on twitter—@vwadhwa and check out his research by clicking here.

Saturday, January 22, 2011 Posted by | Bob's blog entries | , , , , , , , , , , , , , , | Leave a comment

Napping Gets a Nod at the Workplace


Now that a number of companies are offering napping rooms, snoozing at work isn’t so embarassing any more. Photo credits clockwise from top right: Friedemann Vogel/Getty Images; Ziv Koren/Afp/Getty Images; Cynthia Johnson/Getty Images; Rex Usa; Jeff J Mitchell/Getty Images; Paul J. Richards/Afp/Getty Images; Antonio Calanni/Ap Photo; Kevin Lamarque/Reuters/Corbis.

Here is an excerpt from an article written by Jascha Hoffmann featured by Bloomberg Businessweek magazine online (August 26, 2010).

To read the complete article, please click here.

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A growing number of companies are encouraging employees to snooze at work—and boost their productivity

From Thomas Edison and Winston Churchill to Bill Clinton and George Costanza, the nap has had many famous champions. And with good reason. Ever since sleep scientist David Dinges helped found the modern science of napping in the early ’80s at the University of Pennsylvania School of Medicine, short periods of sleep have been shown to improve alertness, memory, motor skills, decision-making, and mood. All while cutting down on stress, carelessness, and even heart disease.

With Americans averaging fewer than seven hours of sleep per night—and around 20 percent suffering from sleepiness during the day, according to a recent Stanford University study—many companies have turned to the humble nap in an attempt to stave off billions in lost productivity each year. Following the rise of workplace perks like lactation rooms, gyms, and child-care facilities, Nike (NKE) workers now have access to nap-friendly “quiet rooms” that can also be used for meditation. Google (GOOG), a forerunner in employee perks, has a number of futuristic napping pods scattered throughout its Mountain View (Calif.) campus.

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“Tiny naps are much more refreshing than people tend to realize,” said Jim Horne, director of the Sleep Research Centre at Loughborough University in England. “A short nap in the afternoon will get rid of sleepiness without interfering with nighttime sleep.” That said, it’s best not to depend on napping as a permanent replacement for lost sleep. “On occasion it will get you over the hump, but whether it gets you back to peak is an open question,” says Dr. Roger Rosa, a senior scientist at the National Institute for Occupational Safety and Health. “If you’ve lost an hour of your previous night’s sleep, a nap may be just the ticket. If you’ve been up all night, it may give you a hangover effect” known as “sleep inertia.”

According to Dr. Sara Mednick, a professor of psychiatry at the University of California at San Diego, not all naps are created equal. Mednick believes that naps weighted toward different stages of the sleep cycle confer different benefits. “If you do physical labor, you need more Stage 2 sleep,” says Mednick. “If you are doing memorization or verbal work, you need more slow-wave sleep. And if you do creative or visual work, you need more REM sleep.”
Dr. Mednick has devised an “Optimized Napping Formula” so ambitious nappers can maximize the desired phase of sleep. Napping newbies can purchase a device called Zeo ($199), which promises to track your sleep cycles for you via your brainwaves with a special headband. Those looking for a simpler contraption might prefer the Dream Helmet ($29.95), which serves as mask, pillow, and earplugs all at once.

DO’S AND DON’TS OF DOZING

Napping at work has become acceptable at some companies. Yet pulling off a “productivity nap” at the office isn’t easy. Here are suggestions from sleep scientist Dr. Sara Mednick, author of Take a Nap! Change Your Life.

1. Make time and space
: Twenty to 30 minutes is all you need to reap the rewards of midday slumber. The best time is the early afternoon when your body is tired—so consider reserving the second half of your lunch break for shut-eye. If your employer doesn’t have a nap room, a yoga mat beats a bathroom stall, though the most comfortable option may be a parked car.

2. Set the proper conditions: In the dark our brains produce more of the sleep-inducing hormone melatonin, so close the blinds, turn off the lights, and consider using a sleeping mask. Keep the temperature on the warmer side. If you must nap sitting up, use a travel pillow to avoid the dreaded “nap nod.” And don’t forget to turn off your cell phone.

3. Careful with the chemicals
: Avoid caffeine for a few hours before a nap. The same goes for nicotine, diet pills, and antidepressants. Although alcohol makes it easier to nod off during the day, it interferes with sleep and should also be avoided. Refined sugars and carbs may keep you up, but meat, dairy, and some nuts have tryptophan, which our bodies break down into melatonin.

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Jascha Hoffman is a journalist who has written on science and culture for The New York Times, Nature, and other publications. He lives in San Francisco and is also a songwriter.

I highly recommend Tony Schwartz’s latest book, The Way We’re Working Isn’t Working in which he focuses much of his attention on rest/sleep deprivation and rest/sleep renewal issues.

You can also check out my blog posts about Schwartz and his work by clicking here.

Friday, November 12, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Pat Lencioni on “Why Companies Need Less Innovation”

Pat Lencioni

Here is an excerpt from an article written  by Pat Lencioni for Bloomberg Businessweek magazine. To read the complete article, please click here.

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Perhaps the most popular—and misunderstood—term of the first decade of the new millennium is “innovation.” A new stack of books and articles is produced every year asserting the critical importance of innovation for organizations that want to survive, especially during these challenging times. And to a large extent, I agree with that assertion. Unfortunately, most organizations in search of innovation seem to be generating as much cynicism as they are new thinking.

The problem isn’t so much that we’re overstating the importance of innovation; it’s more about what so many leaders are doing with it. Too many of them are exhorting all of their employees to be more innovative, providing classes and workshops designed to teach everyone how to think outside the box. They’re also doing their best to include innovation on a list of core values, emblazoning the word on annual reports and hallway posters, hoping that this will inspire people to come up with new ideas that will revolutionize the long-term strategic and financial prospects of the company.

Even well-intentioned and dedicated employees are bound to respond cynically to these efforts, frustrated by what they see as hypocrisy. They just don’t perceive a genuine eagerness among leaders to embrace the new ideas of rank-and-file employees, and they’re mostly accurate in that perception. For all the talk about innovation, most executives don’t really like the prospect of their people generating new ways to do things, hoping instead that they’ll simply do what they’re being asked to do in the most enthusiastic, professional way possible. And so it is no surprise when they get pounded for preaching innovation without really valuing it.

ONLY A FEW INNOVATORS

What should leaders do? Be more open to new ideas from employees? Probably not. Better yet, they should stop overhyping innovation to the masses and come to the realization that only a limited number of people in any company really needs to be innovative.

As heretical as that may seem to those who want to believe that “innovation is everyone’s business,” consider that even the most innovative and creative organizations need far more people to be dutiful, enthusiastic, and consistent in their work than innovative or creative.

Think about a movie set. For every writer or director or actor on the payroll, there are hordes of people who have to be technically proficient, consistent, patient, and disciplined in their responsibilities. If they innovate, the project turns to chaos.

And the most creative restaurant requires the work of a single chef to design a fabulous menu, and dozens of cooks and waitresses and waiters and dishwashers who will do their jobs with commitment, consistency, and dutifulness. If the cooks innovate, consistency is gone and customers can’t rely on what they’re going to get. Even a high-tech company, regardless of what they say, doesn’t want or need its finance department or sales staff to be truly innovative.

What should leaders demand of their people, if not innovation? How about a combination of interpersonal creativity and autonomy? “Creatonomy.” I realize that sounds like a protein drink for bodybuilders, but what it means is that we need our employees to take complete responsibility to do their jobs and satisfy customers in the most effective and charismatic way possible, but within the bounds of sound business principles. For those who say, “Well, that’s what we mean when we use the word ‘innovation,’ ” you need to realize that it’s not what your employees are hearing.

THE CREATONOMY FACTOR

Creatonomy is something that thrives in great companies. The world’s best airlines (e.g. Southwest), quick-service restaurant companies (e.g. Chick-fil-A), department stores (e.g. Nordstrom), and entrepreneurial businesses excel in it. Their employees are passionate and committed and take complete responsibility for their work, consistently turning customers into loyal fans. Sure, they’re encouraged to share their ideas about new ways to work, but most of what they are known for is being great at what has already been defined as the product or service that their company offers. And most leaders I know would take that any day, even before innovation.

Now that I’ve discouraged the wholesale application of innovation within a company, I’d like to backtrack a little. There is one group of people in an organization that has to exercise the capacity for innovation, regardless of their functional area. That group is the leadership team. Those who are chartered with overseeing a company’s various departments from the top are the keepers of innovation.

They are ultimately responsible for determining the boundaries of change that are acceptable and, perhaps most important of all, identifying the handful of others within their departments who have the invitation and freedom to innovate.

So, if you’re a leader, the next time you think about giving a speech or sending out an e-mail calling for your people to innovate, consider being more specific about what you really want from them. And if you really believe that your organization isn’t innovative enough, focus your efforts first on the people at the top.

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Pat Lencioni is the founder and president of the Table Group [click here], a business dedicated to providing organizations with ideas, products, and services that improve teamwork, clarity, and employee engagement. Lencioni’s speaking and consulting clients include a mix of Fortune 500 companies, professional sports organizations, the military, nonprofits, schools, and churches. Lencioni is the author of nine best-selling books with nearly 3 million copies sold, including the new release, Getting Naked, and The Five Dysfunctions of a Team, which continues to be a fixture on national best-seller lists.

Friday, September 10, 2010 Posted by | Bob's blog entries | , , , , , , , , , | Leave a comment

Stefan Lindegaard on the side effects of open innovation

More and more executives are experimenting with open innovation initiatives. Stefan Lindegaard outlines some potential knock-on effects—both good and bad. Here is an excerpt from his article appeared in Bloomberg Businessweek magazine (June 10, 2010). To read the complete article and to sign up for free email alerts from Bloomberg, please visit: http://www.businessweek.com/print/innovate/content/jun2010/id2010063_908184.htm.

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Open is a new paradigm shift that has been steadily gaining attention from executives in the past few years. Successfully adopted by companies such as Procter & Gamble (PG), General Mills (GIS), and Intuit (INTU), open innovation is about bridging internal and external resources and executing on the innovation opportunities that arise from this combination.

Open innovation will not only lead to new ways of making innovation happen; there will also be side effects. As an open innovation advocate, I think most of these effects will be positive. But it’s also reasonable to expect that some will be mixed or perhaps even negative. Here, then, is a handy checklist of some of the possible ramifications from adopting and executing open innovation.

[Lindegaard identifies and briefly discusses ten. Here are the first four.]

• Open innovation is about managing change.

While some executives are open to change, most seem to prefer to keep things just as they are. A risk of disturbing the status quo is inherent in the open innovation process—and should be recast as opportunity. The winners will be the companies and executives that are best at handling this.

• As a company matures, executives often end up focusing more on internal needs than on those of the market.

Before long, that focus can turn a corporation into its own worst enemy. Innovating with partners can remind corporate leaders to keep their eye on funneling resources toward serving real commercial needs. This mindset can be helpful way beyond the innovation process.

• Beyond the benefit of ensuring that companies remain focused on the marketplace, working with external partners means executives become familiar with other ways of getting things done.

Open innovation also allows corporate leaders to evaluate their practices in light of other real-world examples. Then they can gauge whether (and how) to adjust their processes or perhaps even develop entirely new ways of doing things.

• Increased focus on customers can be harnessed through open innovation and can lead to better relationships with them.

Sure, there are dangers in listening too closely to existing consumers, who might just ask for an improvement to an existing product or service rather than imagining a new way of doing something. But closer ties to brand evangelists can change the role of sales and marketing units. Those groups need to be involved with innovation initiatives, too, so this is a healthy side effect.

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Stefan Lindegaard is a Copenhagen-based speaker, network facilitator, and adviser on open innovation and intrapreneurship. He is the author of the book, The Open Innovation Revolution, published by John S. Wiley & Sons (2010). I suggest you check out Chuck Frey’s excellent review of it at http://www.innovationtools.com/Weblog/innovationblog-detail.asp?ArticleID=1496.

Friday, June 11, 2010 Posted by | Bob's blog entries | , , , , , , , , , , | Leave a comment

   

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