Monday, October 29, 2018

Leading a Bionic Transformation

Learned a lot lending an editorial hand here:

strategy+business, October 29, 2018

by Miles Everson, John Sviokla, and Kelly Barnes

Illustration by Mark Matcho

What is it about companies such as Alphabet, Amazon, Apple, and Alibaba? No matter where they turn their attention — cars, banking, groceries, healthcare, media, retail, trucking — industries quail before them. Company leaders start wondering if their moats are deep enough. Investors flee before the drawbridges rise. These companies are among the largest and richest in the world, and they use this leverage to become larger and richer still — in 2018, Apple and Amazon became the world’s first trillion-dollar companies. These powerhouses attract huge numbers of extremely talented people to work for them, and they generate one innovation after another. But none of that explains the source of their industry-disrupting power.

There are probably 100 companies around the world — including at least 40 “unicorns,” startups with a market capitalization of US$1 billion or more — with similar qualities. They are known for rapid, exponential success. Most are in the U.S. and China right now, but they will probably become more common elsewhere soon. We think of them as bionic enterprises: a name that evokes the fusion of technological and biological systems for extraordinary performance and growth. These companies compete in unprecedented ways by combining digital prowess, human ingenuity, and strategic purpose, as if they were the corporate equivalent of superhuman cyborgs such as Marvel Comics’ Iron Man.

Over the past year, as we’ve been researching and writing about the nature of bionic companies (see “The Bionic Company,” by Miles Everson and John Sviokla, s+b, Feb. 22, 2018), it’s become apparent that no company has a monopoly on this way of doing business. A few companies are out in front, but many others will follow. Some will be part of consortia; some will take advantage of highly capable platforms. You can lead your own company toward a bionic transformation if you think about changing your business in the following ways.

• From a business model based on managing the supply of your product or service to one based on providing whatever customers demand, using any means possible

• From an operational approach based on stocks of information that you hold and capture, to one based on flows of knowledge that you collaborate on and share

• From a competitive position based on a stable landscape of rivals to one based on platforms where a single winner dominates the system

Underlying these three shifts of mind is a quiet revolution in the sources of wealth that businesses deploy and create — the first such major shift since the Industrial Revolution. These new intangible (but very powerful) assets are behavior capital, the awareness and insight developed by tracking ongoing activity; cognitive capital, knowledge codified into digitally managed routines; and network capital, the human and technological connection points available to an enterprise (see “Wealth in the 21st Century”). When you deploy these three forms of capital effectively, you transform your the rest here

Friday, October 26, 2018

Why It Doesn’t Always Pay to Be Decisive about Making Decisions

strategy+business, October 26, 2018

by Theodore Kinni

Banal bromides are my pet peeve. They all sound like the wisdom of the ages, until you think about them for a few seconds and discover they don’t make any sense at all. Consider this one, which popped up in my LinkedIn feed the other day: “The best time to make a decision is before you have to.”

This is nonsensical, if not downright dangerous. Why would you make a decision before you have to?

For starters, if you wait, you may find that you don’t need to make the decision at all. I once worked closely with a leader whom I admired and respected, except for what I thought was a bad habit of dithering with decision requests. He wouldn’t offer rulings on even simple matters. It took me a while to realize that the decisions he sidestepped resolved themselves — either something changed that eliminated the need for the decision or it was made in a collegial way by the people directly involved. It was less a bad habit than a refusal to micromanage.

Photograph by Westend61

Let’s assume that eventually you will have to make an important decision, though. If you make it before you have to, you’re betting that nothing is going to change before the time comes to act on it. Given the speed of change these days, what are the odds of collecting on that bet?

If, as is likely, conditions do evolve, you’ll need to reconsider your decision. That means at least some wasted work. But worse, it opens you up to a cognitive heuristic that psychologists Daniel Kahneman and Amos Tversky named “anchoring-and-adjustment.” They found that when people have an anchor in mind — a numerical estimate, for instance — and then receive new information that requires rethinking it, the adjusted estimate tends to hew too closely to the anchor. In other words, if you make a decision before you have to, and then the conditions on which it was based change, you probably will not make the proper adjustments. The result: a suboptimal decision.

What should you do instead? Read the rest here

Thursday, October 25, 2018

Changing the Way Your Company Thinks About Change

Learned a lot lending an editorial hand here:

Boss Magazine, November 2018

by David Mallon

In 2003, when General Stanley McChrystal assumed leadership of the covert Joint Special Operations Command (JSOC) in Iraq, his first order of business wasn’t tracking down dictator Saddam Hussein or jihadist Abu Musab al-Zarqawi, it was creating an organization capable of responding effectively to constant change.

A self-admitted “control freak” as a young officer, McChrystal quickly discovered that the complex conditions and enemy capabilities in Iraq were unique. “We realized pretty quickly that raids were not our product. People kept thinking it was the operators going through the [enemy’s] door, but, no, it was knowing where the enemy was and constantly adapting,” he explained in Deloitte Review.

The missions of most companies are not as dramatic—or dangerous—as JSOC’s mission. Nonetheless, many companies are facing disruptions and competitive challenges that require an unprecedented degree of agility and adaptability.

Every business leader knows that the ability to manage change is an organizational imperative. They also know that there can be significant people barriers to achieving change: employees don’t like change, so they resist it; and when they are forced to deal with too much change, they become fatigued.

But what if those barriers aren’t always as imposing as they seem? After all, change resistance and fatigue are psychological states, not immutable conditions. There is no reason why change can’t trigger enthusiasm and energy, instead of resistance and fatigue. In fact, such a transformation can be achieved with three shifts in your company’s change the rest here.

Monday, October 22, 2018

The Four Building Blocks of Transformation

Learned a lot lending an editorial hand here:

strategy+business, October 22, 2018

by Al Kent, David Lancefield, and Kevin Reilly

Illustration by Miguel Montaner

If you are a business leader, you are probably thinking about radical change. New industrial platforms, geopolitical shifts, global competition, and changing consumer demand are reshaping your world. You face upstart competitors with high valuations encroaching on your business, and activist investors looking for targets. Meanwhile, you have your own aspirations for your company: to be a profitable innovator, to seize opportunities, to lead and dominate your industry, to attract highly committed talent, and to carve out a socially responsible role in which your organization makes a difference. You also probably want to clear away the deadwood in your legacy system: practices, structures, technologies, and cultural habits that hold your company back.

The conventional response is a transformation initiative — a top-down restructuring, accompanied by across-the-board cost cutting, a technological reboot, and some reengineering. Maybe you’ve been through a few such initiatives. If so, you know firsthand how difficult it is for them to succeed. These efforts tend to come in late and over budget, leaving the organization fatigued, demoralized, and not much changed. They don’t take into account the fundamentally new kinds of leverage available to businesses that have emerged in the last 10 years: new networks, new data gathering and analysis resources, and new ways of codifying knowledge.

Successful transformations may be relatively rare, but they do exist — and yours can succeed as well. A transformation, in this context, is a major shift in an organization’s capabilities and identity so that it can deliver valuable results, relevant to its purpose, that it couldn’t master before. It doesn’t necessarily involve a single major initiative (though it could); but the company develops an ongoing mastery of change, in which adaptability feels natural to leaders and employees.

An effort of this sort can take place on a large or small scale; it can involve the front, middle, or back office; it can be conducted by any type of enterprise, from a startup to a global enterprise; and it will affect every aspect of the organization’s structure, including such functions as innovation, finance, marketing, sales, human resources, and operations. At any scale, it requires a cultural shift and highly engaged leaders, who take control of the organization’s future in these four ways... read the rest here.

Saturday, October 13, 2018

Best fit vs best practice: 3 keys to developing a compelling rewards offering

Learned a lot lending an editorial hand here:

InsideHR, October 8, 2018

by Pete DeBellis

It’s a good time to think about your company’s rewards offering – not just because it’s essential to stand out in tight talent markets. But also, because you may be missing out on a valuable opportunity to attract candidates who are more in sync with your company, more likely to perform well, and more likely to stick around.

You can tell if you are missing this opportunity by answering a simple question: What information does your company use to design its rewards offerings?

If the answer is simply “best practices,” you’re not alone. It’s common practice to set rewards based on competitive benchmarks: just figure out what your competitors are offering and match or beat it. The problem is that a best-practices approach to rewards can be a prescription for mediocrity and anonymity in recruitment and retention.

Bersin’s High-Impact Total Rewards research reveals that high-performing organisations aren’t following the best-practices pack. Rather they are unapologetically different when it comes to rewards, and what makes them different is their approach to rewards design. They give a nod to best practices and benchmark data to make sure they understand what’s being offered by other companies. But they follow a best-fit approach to rewards that is tailored to their organisation.

The primary focus of the best-fit approach is finding candidates and keeping employees who are already aligned with your company. These are the people who like to do things the same way things get done in your company. And they are predisposed to go where your company is going.

Bringing a best-fit rewards offering to market

A properly designed rewards offering should represent a differentiated brand in and of itself. It entices the candidates you want to come to you. There are three principal steps to designing and bringing such an offering to the rest here