Tuesday, January 27, 2015

Four-star leadership

My latest book post on s+b is about one of the US Navy's most unlikely leaders:

Leading, the Rickover Way

On December 3, 1989, during the summit meeting that marked the end of the Cold War, Sergei Akhromeyev—a marshal of the Soviet Union and Mikhail Gorbachev’s personal military advisor—told George H. W. Bush, “We have read every one of your submarine messages for ten years and have been unable to find or kill even one of them. We quit.”

Akhromeyev was talking about the U.S Navy’s fleet of nuclear submarines, which, starting with the 1954 launching of the Nautilus, undermined the U.S.S.R’s assured second-strike capabilities and tilted Cold War geopolitics in the favor of the United States. “Shrouded in secrecy, Nautilus’ successors could penetrate any and all underwater defenses the Soviets could develop,” explains retired rear admiral and defense company executive Dave Oliver in Against the Tide: Rickover’s Leadership Principles and the Rise of the Nuclear Navy (Naval Institute Press, 2014). “American submarines became so technically advanced that they were essentially invulnerable.”

The prime mover behind the construction of this fleet is four-star admiral Hyman G. Rickover, the unlikely leader of a long-shot endeavor that dates back to the dawn of the nuclear era. “In addition to trying to simultaneously invent and adapt a new technology to an otherwise unvalued naval vessel,” Oliver (who spent much of his career serving under the admiral) writes, “Rickover was personally not terribly charming, needed lots of money, had 98 percent of the Navy arrayed against him, was proposing shattering the cookie jars of many other admirals, and was seen as downright disrespectful of the submarine heroes who had just won the first global war.”

So how did Rickover pull it off? 

One thing he did was to manage up—way up. By 1947, the Soviet occupation of Eastern Europe and the U.S. policy of containment were creating what George Orwell had been characterizing as “cold war,” the U.S. economy had not yet entered the long postwar boom, and the wondrous potential of nuclear power was still being lauded. Rickover danced to these tunes. He pitched the nuclear navy to the Eisenhower administration and the U.S. Congress as a low-cost, high-tech alternative to a conventional navy. He built the Nautilus from used parts—bringing in the first nuclear sub for less than US$70 million. Thus, he bypassed the military hierarchy.

Rickover also understood and respected the power of culture—in this case, the heavily entrenched culture of the U.S. Navy. To drive innovation and establish new ways of working, he tried to avoid building his subs in Navy shipyards. (He preferred to use privately owned yards, where he did not have to buck the entrenched hierarchy.) And he refused to use most of the officers already serving in diesel subs because he wanted to start with a clean slate.

Finally, Rickover was unrelenting in his drive to marry safe, consistent processes with continuous improvements. This, explains Oliver, gave him a leg up on the task of transforming a powerful and unproven technology into a dependable source of military advantage. To be sure, submarining has always been a dangerous business, and nuclear subs are no exception: the Navy lost two of them—the Thresher and the Scorpion—and their entire crews in the 1960s. But the nuclear navy has never had a reactor accident.

Oliver has a weakness for hyperbole, illustrated by statements like this one: “It’s impossible to overstate the massive resistance Rickover encountered when he promoted nuclear power.” But despite his obvious admiration for Rickover’s abilities and achievements, he does not shirk reality in Against the Tide. “Even with his exceptional management and personal work habits,” Oliver tells us, in a final lesson that leaders everywhere might heed, “Rickover would have failed if history had not been on his side.” As always, timing plays an essential role in success.

Wednesday, January 21, 2015

We're all Gen Z

My latest book post on s+b is up:

Stop Managing Generational Diversity

Maybe it’s time to to pull the plug on the idea of managing different generations in the workplace in separate ways. We’ve now got the last few members of “the greatest generation,” baby boomers, gen Xers, millennials, and—depending on how you define them—members of gen Z working together. It seems impractical to ask managers to remember the traits, needs, and desires of five generations, let alone adjust recruiting, training, perks, policies, and interpersonal style to the generation in question.

If Thomas Koulopoulos and Dan Keldsen are right, the complexity associated with a multi-generation workforce will only get worse in the coming decades. “By 2080, increasing life expectancy, together with shrinking intervals of technology turnover and innovation, will create an unprecedented 15 generational bands in the workplace, based on each band being about four years in span and expecting people to work from age twenty to age eighty,” they write in The Gen Z Effect: The Six Forces Shaping the Future of Business (Bibliomotion, 2014).

I don’t know if I fully subscribe to the idea that meaningful generational differences are going to appear so quickly, but even the thought of additional employee age cohorts requiring distinctive approaches sounded so daunting to me that I almost stopped reading the book. But then, two sentences in bold print caught my eye: “Generational thinking is like the Tower of Babel: It only serves to divide us. Why not focus on behaviors that can unite us?”
Why not, indeed?

Koulopoulos and Keldsen think that companies should stop managing for generational differences with gen Z, a demographic cohort that is often pegged as beginning around 1995. Why this generation? “These kids are not just digital natives, they are hyperconnected junkies whose expectations will radically change business forever,” write the authors.

This might seem like hyperbole given the fact that many members of gen Z are still in elementary school. But the authors support their statement with evidence drawn from six compelling, albeit opaquely named forces: “breaking generations, hyperconnectivity, slingshotting, shifting from affluence to influence, adopting the world as my classroom, and lifehacking.” These forces, described at rapid-fire speed in the video below, make the case—and set the stage—for gen Z as the only generation on which companies should focus their efforts.

Happily, this doesn’t mean that the rest of us are on the verge of becoming obsolete. Membership in gen Z is not merely a function of your birthdate—according to the authors, it is also a conscious choice. That means two things: One, if we adopt the right behaviors and beliefs, we can all be gen Zers (an idea that the legions of us boomers—who are approaching our discard-by dates—will surely love). And two, companies don’t need to wait around for gen Z to come of age.

Toward that end, I asked Koulopoulos and Keldsen for three things that leaders can do to begin developing a Gen Z workforce today.

"First, adopt reverse mentoring,” they said. “Reverse mentoring, which is used by less than 14 percent of companies, is just mentoring turned upside-down. Rather than having older, wiser employees show young employees how to navigate the organization, the young employees show older employees how to navigate the nuances of new technology, which can be surprisingly difficult to grasp. Companies, like Cisco, which has been doing this for years, have found that the benefits are significant and go in both directions, creating bridges across generational divides that otherwise end up undermining collaboration.

“Second,” they added, “be transparent to increase participation, trust, and innovation. One of the most dramatic generational differences in how employees view organizations is a radical rise in the demand for transparency. For gen Z, transparency is a predicate for trust, and trying to control, govern, or argue the merits of transparency is a sure fire way to alienate and frustrate its members. They believe that access to information ultimately creates greater value than hording it. Think of Elon Musk giving away Tesla’s patents and the open source and copyleft movements, and you start to get a sense for the level of transparency that gen Z expects.

“Third, provide meaning. This one sounds soft,” they explained, “but it may the most important lesson of all if you really want to engage Gen Z. In an always connected, always on world, employees will live in constant conflict if their work does not align with their values and purpose. Creating meaning is not just about being an organization that does good things. More importantly, it is about allowing employees to do things that are fulfilling and rewarding at a very deep level. This means that you have to provide Gen Z the ability to integrate lifestyle and personal passions with work. Luck Stone, one of the largest family-owned and operated producers of crushed stone, sand, and gravel in the U.S., is obsessed with helping employees ‘ignite their human potential’ through values-based leadership. And all they do is crush rock. So, what’s your excuse?”

Wednesday, January 14, 2015

The Kinect Way of Partnering

My new book post is up at s+b:

Give-to-Get Corporate Partnering

In late 2010, Microsoft introduced Kinect, a motion-sensing device that enabled Xbox users to play games using gestures and speech. Within days, however, the platform was hacked by people who started using it in all sorts of ways that Microsoft hadn’t intended.

At first, the company announced it would take legal action against anyone who tampered with its device. But hackers—excited by the opportunities presented by the first general purpose, low-cost gestural interface—ignored the threat. Then, a few months later, Microsoft decided to take a different tack, and embraced the hackers by releasing a software development kit for Kinect. They effectively turned the new platform into a huge open source project, with the company at its center. It was an unexpected about face, one that Bob Johansen and Karl Ronn describe as “truly remarkable and even inspiring” in their new book, The Reciprocity Advantage: A New Way to Partner for Innovation and Growth (Berrett-Koehler, 2014).

Johansen, a distinguished fellow at the Institute for the Future in Silicon Valley, and Ronn, managing director of Innovation Portfolio Partners, point to Kinect as an example of reciprocity-based partnering. “This new type of partnership gives a partner access to your best assets now to achieve rapidly scaling future growth that neither of you could have pulled off on your own,” Ronn explained in an email interview. “At a time when disruption is the greatest threat to business, it allows you and your partner to embrace disruption and harness it for rapid growth.”

With more conventional partnerships, like those between suppliers and their customers, the big problem is that one partner is in control, Ronn says. As a result, only one partner is seeking to develop the asset and the potential for innovation, and profit is reduced. This was the problem with Microsoft’s initial inclination to restrict access to the Kinect platform: Its potential was being limited to the gaming applications for which it was created.

Instead, the authors of The Reciprocity Advantage urge companies to share their most valuable intellectual property and other assets. “Sharing instead of protecting your assets sounds scary,” Ronn says, “but it's not when the partner you are sharing your intellectual property or know-how how with is the partner that unlocks new growth potential.”

The goal is a two-way partnership focused on creating a “new ecosystem that will support radical changes in products and services.” The authors profile various examples of such partnerships: IBM and its big data initiative Smarter Planet; Google and its Google Fiber program; TED and its TEDx partners; and Apple and well, everybody.

The payoff for such initiatives, even when they are launched in a less-than-premeditated way, can be handsome. Microsoft already had a billion-dollar business selling Kinect to gamers. But in July 2014, it released Kinect V2, with improved body tracking, development support, and tooling to the developer market. It also announced that developers who create Kinect apps can sell them through the Windows Store if they wish.

How can your company create a reciprocity-driven partnership? “First define what you can share. Apple shared its iPhone platform, for example,” Ronn says. “Then define a partner whose skills could be combined with your assets to create a new business. When Google wired Kansas City with high-speed fiber, it partnered with the whole city. Kansas City is now a hotbed for digital businesses. Finally, learn together with your partner by conducting small experiments until you perfect the new business model. When you have it perfected, scale it quickly.”

The underlying principle in reciprocity partnering is one we’ve heard before: Give first, and taking will take care of itself. Wharton School prof Adam Grant made a strong argument for individuals to focus first on giving in his book, Give and Take: A Revolutionary Approach to Success (Viking, 2013). In The Reciprocity Advantage, Johansen and Ronn extend the same line of thought to the art and craft of corporate partnering.

Monday, January 5, 2015

Zombie Marketing 101

My latest book post on s+b is here:

Zombify Your Customers

These days, zombies are everywhere. They’ve become so commonplace that the Centers for Disease Control and Prevention in the United States uses “zombie preparedness” as a way to educate people about being ready for an emergency. But what, aside from their infectious personalities, accounts for our current fascination with the walking dead?

“Perhaps technology’s unstoppable progress—ever more pervasive and persuasive—has grabbed us in a fearful malaise at the thought of being involuntarily controlled,” suggests Nir Eyal, author of Hooked: How to Build Habit-Forming Products (with Ryan Hoover, Portfolio, 2014). But he is less interested in finding a cure for humanity’s tendency to zombieism than in explaining how to exploit it.

Eyal’s goal in Hooked is to show companies how to stimulate “unprompted user engagement, bringing users back repeatedly, without depending on costly advertising or aggressive messaging.” The idea is to transform services or products into unconscious habits √† la Google and Twitter, Angry Birds and Candy Crush Saga, or lottery tickets and slot machines.

To that end, the high-tech entrepreneur, blogger, and lecturer at Stanford’s Graduate School of Business and D.School presents the “Hook Model,” which he constructed from “distilled research and real-world experience.” The model has four consecutive phases: trigger, action, variable reward, and investment.

A trigger activates a customer. You advertise your product, get somebody like me to review it, get friends to tell each other about it, or—in the case of an app icon—place it on a customer’s phone or computer screen. An effective trigger prompts customers to do something: For instance, Eyal points to a Coca-Cola vending machine, with its big color photo of an attractive young person who is reaching out to you, Coke in hand, and the easy-to-read question, “Thirsty?”

Once triggered, the customer acts in anticipation of a reward. If you want customers to act, Eyal says, make it easy and mindless for them —like Facebook does when you want to share something you’ve read with your pals. The author borrows Stanford professor B.J. Fogg’s six simplicity factors for guidelines on how to achieve this task.

Once you’ve got them, it’s time to reward them. And the key to reward, the next phase in the Hook Model, is variation. The same old rewards eventually bore us. So, mix it up using three categories of extrinsic and intrinsic rewards, says Eyal, borrowing from various motivational researchers: “1. Rewards of the tribe—the gratification of others; 2. rewards of the hunt—material goods, money, or information; 3. rewards of the self—mastery, completion, competency, or consistency.”

Finally, to turn use into unconscious habit, the customer must make an investment. “The more users invest time and effort into a product or service, the more they value it,” Eyal writes. “In fact, there is ample evidence to suggest that our labor leads to love.”

The Hook Model is a positive feedback loop: Induce me to do something, and when I do it, give me a reward—preferably something that intrigues me enough to sign up, pay up, or otherwise invest in doing it again. Repitan, por favor, as my high school Spanish instructor used to say. But before you go counting your money, there’s also one more not-so-small thing to consider: First, you have to create something so cool that I’ll want to run around the loop enough times to transform myself into a zombie.