In search of clarity

strategy+business, November 15, 2022

by Theodore Kinni

Photograph by Klaus Vedfelt

I’ve never envied CEOs for the hard decisions they must make. There are the career choices that threaten their work­–life balance and families, and the strategic decisions that put companies and employees at risk. And increasingly, there are a broad range of ethical conundrums related to social justice and equity, political ideology and conflict, and environmental sustainability. 

For lucky leaders, these decisions arise infrequently. But when they do, they often require introspection as much as—or more than—algorithmic analysis. After all, how much can AI-powered analytics tell a leader about how to frame a personal and organizational response to the war in Ukraine, Florida’s Parental Rights in Education Act, or the Black Lives Matter movement?

The inherent difficulty of crafting responses to such events is compounded by a couple of conditions. There’s the mantle of power and authority that can make some top leaders reluctant to reach out for help for fear of revealing their vulnerability or appearing indecisive or uninformed. There is the issue of trust, too: even in the most collaborative corporate cultures, senior management team members and other executives have their own agendas and ambitions that can skew their advice to the CEO.

Clearness committees offer leaders a way around these obstacles and through their most difficult decisions. The concept is rooted in the values of the Quakers, the Protestant sect that emerged in England in the 17th century. It has been adapted for a more secular context in the past half-century or so, a process in which Parker J. Palmer, cofounder and senior partner emeritus of the South Carolina–based Center for Courage & Renewal, was instrumental. Read the rest here.

To improve management, build a decision factory

strategy+business, June 21, 2022

by Theodore Kinni


Illustration by Lava4images

Decision Leadership: Empowering Others to Make Better Choices

by Don A. Moore and Max H. Bazerman, Yale University Press, 2022

“We think of organizations as decision factories,” write professors Don A. Moore and Max H. Bazerman in their new book, Decision Leadership. It’s an apt simile. Knowledge workers, whose output is typically decision-driven, now number more than 1 billion worldwide. Moreover, as the number of rote tasks that are automated increases, many more employees are being freed for higher-level work that entails decision-making.

Given this reality, it’s no surprise that boosting the decision intelligence of the workforce is moving up the leadership agenda. But Moore and Bazerman, holders of endowed chairs at the University of California, Berkeley’s Haas School of Business and Harvard Business School, respectively, take an even more expansive position on decision leadership—a stance that sets up a formidable ambition for this relatively short book.

“We aim to define leadership in a new way, one grounded in the belief that leaders’ success depends not only on their ability to make good decisions but also on their ability to help others make wise decisions,” they write. “In our view, great leaders create the norms, structures, incentives, and systems that allow their direct reports, the broader organization, consumers, investors, and other stakeholders to make decisions that maximize collective benefit through value creation.” To support their new definition of leadership, Moore and Bazerman seek to weave together the various threads of behavioral economics that pertain to decision-making and then translate them into practical advice for leaders who want to both improve the quality of their own decisions and bolster the decision prowess of their companies. Read the rest here.

A Field Guide for Human Capital Decision Intelligence

Learned a lot lending an editorial hand on this field guide:

Deloitte, March 22, 2022

By Dan Roddy, David Mallon, and Marc Solow

Organizations everywhere are standing on the threshold of a new era in decision-making. A global mining company uses data captured from the work itself to sense changes in worker skills needed over time, inform workforce development investments, and guide individual employee career choices. A logistics company anticipates truck repair needs, ensuring people and parts are at the ready. A consumer products company uses real-time visualizations of their distribution channels to identify the root causes of customer service issues within minutes and assign resources to solve them. A high tech company tracks the markers of company culture across a virtual workforce, ensuring their “secret sauce” isn’t diluted by distance.

So here companies stand, with a newfound capability for making better work, workplace, and workforce decisions within their reach and yet, just beyond their grasp. In Deloitte’s 2020 Global Human Capital Trends survey, conducted a few months before the onset of the COVID-19 pandemic, a mere 3% of nearly 9,000 respondents—only 3 in 100 globally—told us they had all the information needed to make people decisions.

The situation hasn’t improved in the COVID-19 context. If anything, people issues are murkier—and the ability to respond to them more urgent—today than before the pandemic struck. Witness the many business headlines featuring managerial missteps, even among the world’s most sophisticated companies. For most, the decision intelligence necessary to align and optimize work, workplace, and workforce in pursuit of mission and strategy remains at best an unfulfilled promise.

The technological enablers needed to consistently deliver actionable insights to leaders at all levels of the organization are at hand. They promise to support a new decision intelligence—to help leaders make sound and timely decisions—from the strategic-level choices made in the C-suite to the myriad tactical choices made by supervisors and teams every day.

The disconnect between the means of decision intelligence, such as data and sophisticated analytics, and the motivation and ability to wield them in a coherent, consistent manner across an organization is a serious challenge. In a world moving ever faster, employee and corporate performance are at stake, and financial results along with them. The success—and sometimes, the survival—of many companies hinges on their ability to navigate in what John Seely Brown, former cochair of Deloitte’s Center for the Edge, calls a “whitewater world.” To do this, leaders must be able to continuously and quickly identify and respond to internal and external challenges and opportunities arising at the intersection of the workforce, the workplace and work itself. 

What, then, is holding companies back? Read the rest or download free here.

Pay attention to your attention

strategy+business, February 10, 2022

by Theodore Kinni


Illustration by Sean Gladwell

Once upon a time, the Segway was going to revolutionize the transportation industry. Steve Jobs reportedly said that Dean Kamen’s invention had the transformative potential of the personal computer, and venture capitalist John Doerr predicted that Kamen’s startup would reach US$1 billion in sales—a lot of money in 2001, when nobody but tweens believed in unicorns—at record speed. Instead, sightseeing tours and mall cop beats were nearly the only things the two-wheeled, self-balancing personal transporter transformed.

There are many reasons why the Segway never achieved its purported promise, but a lot of them track back to the misplaced focus of Dean Kamen. He didn’t see the forest for the trees. He was so intently focused on one narrow aspect of the Segway—the innovative technology that enabled its intuitive, automatic balance and operation—that he and his early boosters were unaware that its markets were extremely limited. Where in a nation of cities and towns that considered skateboards too dangerous for the sidewalks would hundreds of thousands of Segway riders be allowed to zip around? And short of that, who was going to pay $5,000 to take a Segway for a spin in the driveway?

An overly intense focus on a goal can lead to what cognitive psychologists call goal neglect. That may seem counterintuitive to the average goal-oriented MBA or entrepreneur, but take, for example, the dynamic at work in micromanagement. Often, when leaders micromanage employees, an intense focus on task performance distracts those leaders from the larger goals of the company. They obsess over the trees and neglect the forest—and drive employees crazy while they’re at it.

Where you direct your focus is a function of the brain’s attention system. This system has three subsystems, which Amishi Jha, a professor and the director of contemplative neuroscience for the Mindfulness Research and Practice Initiative at the University of Miami, describes as the flashlight (or orienting system), which enables you to selectively direct and concentrate your attention; the floodlight (or alerting system), which enables you to take in the larger picture; and the juggler (or executive function), which enables you to align your actions to your aims. “What happens with goal neglect is that the flashlight is pointed very intently, but the floodlight is not quite working,” she told me in a recent Zoom interview.

There is nothing inherently wrong with using the flashlight or the floodlight—leaders need both. In both cases, writes Jha in her new book, Peak Mind: Find Your Focus, Own Your Attention, Invest 12 Minutes a Day, “we are paying attention. But our attention is too narrow or too wide, too stable or too unstable. You’re paying attention in some way successfully—but it’s not appropriate for the moment.”

This cognitive error arises from using the flashlight or the floodlight in an unconscious way. An Australian helicopter rappeller gave Jha a dramatic example of this when he told her about fighting one section of bush fire with such intensive focus that he lost track of the rest of the fire until he heard the air being sucked up behind him. The fire had nearly engulfed him. “There is a very enticing emotional quality to dominating something in that way, and so, it pulls you in,” said Jha. “It’s even hard to pull yourself back.”

The feeling of intense focus—of being fully and productively engrossed in a task—is a good indicator that it is time to take a step back and assess if your attention is properly directed. Even better, and more proactively, according to Jha’s research, you can hone your meta-awareness. Read the rest here.

Becoming a leader of conscience

strategy+business, August 2, 2021

by Theodore Kinni



Photograph by phototechno

Say what you will about economist Milton Friedman’s position on the responsibility of business, the idea that increasing profit within the rules of the game was the sole and righteous goal of executives clearly simplified leadership values and ethics. I suspect that is one less-recognized reason that so many CEOs avidly embraced Friedman’s monolithic view for so long. But now as more and more leaders are expanding the scope of their responsibilities and companies are adopting—and compensating leaders on—ESG (environmental, social, and governance) metrics, an increasing number of thorny ethical dilemmas are sure to come along with it.

G. Richard Shell, chair of Wharton School’s Legal Studies and Business Ethics department, pointed out during a recent interview for this column two generic types of ethical problems that leaders face. One type involves a personal problem in which the leader is aware of an ethical lapse—perhaps a colleague’s conflict of interest or behavior that puts the company at risk. “Class one ethical dilemmas are ones in which executives feel the burden of their own conscience,” explains Shell. “These problems have an emotional quality to them. You feel the tug of conflicting loyalties, or you feel guilty if you don’t do something.”

The second type of dilemma is organizational in nature. “Class two involves values that relate to the firm and its relationship to society,” Shell says. “They more often have to do with your responsibilities to the firm, its brand and stakeholders, and its code of conduct in terms of the firm’s social role. They are more cognitive than emotional because you have to process costs and benefits.” Coca-Cola’s response to Georgia’s voting rights bill is an example of this kind of dilemma.

Although the two kinds of ethical dilemmas have different dimensions, they can be assessed using the same framework, according to Shell. He calls the framework CLIP—consequences, loyalties, identity, and principles—and describes it in his new book, The Conscience Code: Lead with Your Values, Advance Your Career. Read the rest here.

Moonshot management

strategy+business, May 25, 2021

by Theodore Kinni


Photograph by Jeremy Horner

NASA has set its sights on Mars. In April, the space agency flew a solar-powered drone on the red planet — the first powered flight on another world. A month earlier, it successfully fired up the four engines of its most powerful rocket since the Apollo era. If the funding and political will can be sustained, this will be the rocket that lifts humans to Mars. James Edwin Webb would surely be delighted.

Webb was NASA’s second administrator, appointed by President John F. Kennedy in January 1961. He led the agency through the early manned flights of the Mercury and Gemini programs and set the course for the Apollo lunar missions. Webb resigned in October 1968, 18 months after three astronauts died in a cabin fire during a launch rehearsal for the first mission of the Apollo program. His resignation came just a few days before the program successfully resumed with Apollo 7, and less than a year before Neil Armstrong stepped onto the moon.

Kennedy chose Webb because, as Tom Wolfe wrote in The Right Stuff, “he was known as a man who could make bureaucracies run.” Webb’s CV included private- and public-sector leadership. He had advanced from personnel director to treasurer to vice president at the Sperry Gyroscope Company, as it grew from 800 to 33,000 employees, and served as president of the Republic Supply Company, a troubled business that its parent, Kerr-McGee Oil Industries, sold at a profit thanks to his leadership. In the public sector, President Harry S. Truman appointed Webb director of the Bureau of the Budget, and then, undersecretary of state to Dean Acheson. “I do not know any man in the entire United States, in the government or out of the government, who has a greater genius for organization, a genius for understanding how to take a great mass of people and bring them together,” said Acheson of Webb.

In January 1961, when the call came to lead NASA, Webb tried to avoid it. He refused meetings with Kennedy’s science advisor and turned down a direct job offer from Vice President Lyndon B. Johnson. But when Webb found himself face-to-face with Kennedy, he was unable to refuse the insistent president. As if to eliminate any chance that Webb might yet escape, Kennedy promptly marched his new administrator from the Oval Office to the White House press office, where the appointment was announced to the media. The keystone of NASA’s executive team, a man whom the New York Times would call an “extraordinary manager,” was in place.

Webb and his achievements at NASA are not as well-known as they should be. The intense interest in the astronauts and their exploits, the Apollo 1 tragedy, and the passage of time have obscured his role in the first era of the space age. But there are useful lessons in it for today’s leaders. Read the rest here.

How noisy is your company?

strategy+business, May 19, 2021

by Theodore Kinni



Illustration by SI photography

Companies live and die by the ability of the people who work within them to make sound judgments. Their judgments determine what strategy to follow, where to invest R&D funds, how to set prices, who to hire and promote, and a myriad of other decisions. Some of the decisions are one-offs; others are made repeatedly. There’s just one problem, assert Daniel Kahneman, Olivier Sibony, and Cass Sunstein: “Wherever there is judgment, there is noise — and more of it than we think.”

Noise is the major source of variability in judgment and, thus, a major cause of decisions that miss their mark, according to the professorial supergroup (henceforth, KSS). Kahneman was awarded a Nobel Prize for his work as a behavioral economist; Sibony is an expert on decision-making who teaches at HEC Paris and Oxford’s Saïd Business School; and Sunstein is the Harvard prof whose work on nudges has been influential in public policy.

Noise is also the title of the trio’s new book, a 400-page tome that should leave executives who take the time to wade through it more than a little unsettled. Their uneasiness should stem from the likelihood that they have been underestimating the negative effects of noise on decision-making in their organizations. When KSS asked 828 senior executives in a variety of industries how much variation they expected to find in expert judgments, their median answer was 10 percent.

In reality, the variation in expert judgments can be four to five times that. When two members of KSS ran a noise audit for an insurance company, they discovered that the median difference in the pricing determined by its underwriters for identical policies was 55 percent, and the median difference in the payouts determined by its claims adjusters for identical claims was 43 percent. “One senior executive estimated that the company’s annual cost of noise in underwriting — counting both the loss of business from excessive quotes and the losses incurred on underpriced contracts — was in the hundreds of millions of dollars,” they write. Read the rest here.

Does Your C-Suite Have Enough Digital Smarts?

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, March 3, 2021

by Peter Weill, Stephanie L. Woerner, and Aman M. Shah


Image courtesy of Anna & Elena Balbusso/theispot.com

There’s little doubt that the future of business is digital. Companies that are in the lead implementing digital technologies have radically improved their operational efficiency and their customers’ experiences. And, even more important, the new capabilities unlocked by digital technologies have allowed them to reimagine their purposes and their business models.

Having a digitally savvy top leadership team — that is, a team in which more than half of the executive members are digitally savvy — makes a huge difference. Our latest research shows that large enterprises with digitally savvy executive teams outperformed comparable companies without such teams by more than 48% based on revenue growth and valuation.

Digital savviness is an understanding, developed through experience and education, of the impact that emerging technologies will have on a business’s success over the next decade. Sharing this understanding across the top management team is a key ingredient in the success of corporate transformation. As Jean-Pascal Tricoire, chairman and CEO of energy management company Schneider Electric, told us, “When every business becomes a digital business, every executive needs to take digital transformation personally. The last thing you want in your team is the belief that digital is somebody else’s problem.”

Unfortunately, the demand for digital savviness in the upper echelons of leadership has grown far more quickly than the supply. In 2019, when we studied the boards of directors in 3,228 large U.S.-listed companies with more than $1 billion in annual revenues, we discovered that only 24% of boards were digitally savvy. In 2020, we extended our research to encompass top management teams — C-level executives and leaders of functions and geographic territories — in 1,984 large companies globally. Our new findings indicate that only 7% of companies have digitally savvy executive teams.

In this article, we report the findings of our research into the level of digital savviness among top management teams, the business value it delivers, and the actions that companies can take to increase the digital savviness of their senior executives. Read the rest here.

Arguing your way to better strategy

strategy+business, March 2, 2021

by Theodore Kinni



Illustration by johnwoodcock

There is no shortage of theories regarding the proper basis for a winning corporate strategy. You can set sail on blue oceans with W. Chan Kim and Renée Mauborgne, hone core competences with C.K. Prahalad and Gary Hamel, and get competitive with Michael Porter, to call out just a few of the fashionable options. But how do you transform the theories into a unique strategy capable of driving your company’s long-term success?

This is the question Stanford business school professors Jesper Sørensen and Glenn Carroll address in Making Great Strategy. It’s a book about strategic due diligence. And it fills an important gap in the literature by caring not a whit about a company’s strategy per se, but rather focusing entirely on how rigorously that strategy has been formulated and how thoroughly it has been vetted.

Toward this end, Sørensen and Carroll define strategy as a logical argument that coherently articulates “how the firm’s resources and activities combine with external conditions to allow it to create and capture value.” They further assert that “the development, communication, and maintenance of a strategy argument is best achieved through an open process of actually arguing within the organization, engaging in productive debate.”

Sørensen and Carroll find that in many companies this process of argumentation is either altogether missing or poorly conducted. Instead of using logical argument, decisions about strategy are often dictated by the most powerful people in the room. Or, when they are made more democratically, they are chosen in a rigged or otherwise flawed manner. The authors’ insights help explain the findings of a 2019 survey by Strategy&, PwC’s strategy consulting group, in which only 37 percent of 6,000 executive respondents said that their company had a well-defined strategy, and only 35 percent believed their company’s strategy would lead to success. Read the rest here.

How to Pressure Test Your Strategic Vision

Insights by Stanford Business, January 15, 2021

by Theodore Kinni

iStock/BeholdingEye

There is no shortage of advice regarding the art and craft of business strategy. Yet, in 2019, when the consulting firm Strategy& surveyed 6,000 executives, only 37% said their companies had well-defined strategies and only 35% believed that their strategies would lead to success.

Stanford Graduate School of Business professors Jesper Sørensen and Glenn Carroll peg this lack of confidence in the ability to make sound strategy to a dearth of critical analytical thinking. They find that the strategies that have driven the long-term success of companies such as Apple, Disney, Honda, Southwest Airlines, and Walmart are typically — and insufficiently — attributed to either an innovative vision or the fortuitous discovery of emerging opportunities. In their new book, Making Great Strategy: Arguing for Organizational Advantage, they assert that neither explanation tells the whole story.

“To put it bluntly: Without reasoned analysis, neither vision nor discovery will lead to strategic success,” Sørensen and Carroll write. In their book, which grew out of developing and teaching strategy and organizational design courses at Stanford GSB, Sørensen and Carroll apply the logician’s tools to the creation of successful corporate strategy.
The Importance of Rigorous Logic

Executives need the tools of logic to construct a coherent and valid strategy argument, which Sørensen and Carroll identify as the common core in all successful strategies. They define a strategy argument as “an articulation of how a firm’s resources and activities combine with external conditions to allow it to create and capture value.”

“We tend to venerate and celebrate strategic intuition, but intuition can always be wrong,” explains Sørensen. “Leaders need to buffer themselves against that possibility by being rigorously logical, too. Logic also is easier to communicate accurately than vision. If I articulate a grand vision for the future, you may be inspired by it, but how will you act on it?”

“There’s a distinction between talent and a skill,” adds Carroll. “Steve Jobs had a talent for envisioning the future that can’t be taught. But the skills needed to develop a logical argument that will reveal if the strategy being envisioned has holes in it or is missing things that you haven’t thought about — those skills can be taught.” Read the rest here...

Four Questions for Appraising Your Alliances

MIT Sloan Management Review, December 22, 2020

by Theodore Kinni



Over the past four years, many of the United States’ geopolitical alliances have been remade with bewildering speed. It’s no surprise that many of those changes created an uproar — some of these relationships dated back a century or more and seemed sacrosanct, until they weren’t. It also prompted Stephen Walt, the Robert and Renée Belfer Professor of International Relations at Harvard University, to cut through the noise with an article in Foreign Policy titled “How to Tell if You’re in a Good Alliance,” which is instructive for business leaders as well as diplomats.

Walt is a pragmatist, so the first thing he points out is the unspoken assumption behind the uproar: that each of a nation’s existing political alliances is actually worth maintaining. “Surely this is not the case, for all allies are not created equal, and the value of any commitment is likely to wax and wane over time,” he writes. “Wise countries choose their allies carefully and do not treat any of them as sacred and inviolable.”

This is as true in business as it is in international relations. Corporate alliances are a means to an end, and they involve costs and obligations. Accordingly, corporate leaders, like the heads of nations, should never take the value of their partnerships for granted. Toward that end, you can conduct a fast review of the value of your company’s alliances by asking the following four questions, derived from the short list of attributes of a good ally that Walt offers in his article.

Does your partner make a meaningful contribution to the alliance? This is a key question when reviewing a partnership. It’s also one that torpedoed the 2009 alliance between Suzuki Motor Corp. and Volkswagen. Volkswagen wanted to gain greater access to the fast-growing Indian market through Suzuki, and Suzuki wanted access to Volkswagen’s hybrid and diesel technologies. The problem, claimed Suzuki chairman Osamu Suzuki less than two years after the companies bought stakes in each other, was that the technology Suzuki sought wasn’t forthcoming. Suzuki didn’t need the technology that VW was willing to provide, and VW wouldn’t provide access to the technology that it did need. If your partner hasn’t made the contributions it promised, you don’t have a good ally. Read the rest here.

What people like you like

strategy+business, November 11, 2020

by Theodore Kinni




Photograph by Paper Boat Creative

I don’t set much store in the endless stream of recommendations offered by Amazon, Netflix, Spotify, and most other online businesses. Occasionally, a book, flick, or song pops up that delights me, but most of the suggestions I get either miss the mark or appear suspiciously advantageous to recommendation engine operators and their advertisers.

Michael Schrage, visiting fellow at the MIT Sloan School of Management’s Initiative on the Digital Economy and s+b contributor, awakens us to the potential of delightful discovery in his latest book, Recommendation Engines. “Recommendation inspires innovation: that serendipitous suggestion—that surprise—not only changes how you see the world, it transforms how you see—and understand—yourself. Successful recommenders promote discovery of the world and one’s self,” Schrage writes in its introduction. “Recommenders aren’t just about what we might want to buy; they’re about who we might want to become.”

If this smacks of techno-utopianism, well, there is a strong strain of that ideology running through Recommendation Engines. For the most part, however, Schrage grounds this rosy view in the powerful effects that recommenders are already producing and balances it with acknowledgment of these systems’ potential for abuse. He also provides a short history of recommendations and a suitably technical description of how recommendation engines work and are built.

To date, the powerful effects of recommenders have manifested themselves mostly in commerce. Schrage cites a variety of facts in this regard: a survey that found recommendations account for approximately 30 percent of global e-commerce revenues; another that found online shoppers are 4.5 times more likely to buy after clicking on a recommendation; and research that “strongly suggests” recommendations drive roughly a third of Amazon’s sales. Read the rest here.

To Cut Costs, Know Your Customer

Learned a lot lending an editorial hand here:

Sloan Management Review, November 4, 2020

by Vikas Mittal, Shrihari Sridhar, and Roger Best




Image courtesy of Robert Neubecker/theispot.com

The economic disruptions caused by the ongoing pandemic are forcing myriad decisions on CEOs of B2B companies. Often, the most pressing decisions are whether and how to cut costs.

As in business downturns past, some CEOs are implementing across-the-board salary cuts and widespread furloughs, while others are taking a more piecemeal approach — renegotiating vendor contracts; trimming underperforming products, regions, and divisions; and shifting to lower-cost sales channels. Our research shows that both of these approaches can be misguided.

A more effective cost-cutting strategy should begin — and end — with customer focus.

Customer focus tends to be overlooked during cost cutting because it is usually seen as a revenue enhancement strategy. This is a mistake: B2B companies that ignore what customers value when they are cutting costs leave a lot of money on the table.

In our benchmark assessment of 626 publicly traded B2B companies and 4,105 of their customers, we found that companies with high levels of cost cutting and low levels of customer value — as measured by customer satisfaction — had the worst gross margins, while companies with high levels of both cost cutting and customer value had the highest margins. In other words, cost cutting that is devoid of customer value sank margins.

B2B companies can pursue cost reduction with a customer focus in three ways: by reducing value-added waste to deliver more compelling customer value, by improving the effectiveness of customer acquisition and retention, and by narrowing focus to those strategic initiatives best aligned with customer value. Read the rest here.

Fit-for-context leadership

strategy+business, July 6, 2020

by Theodore Kinni


Illustration by wildpixel

From Herodotus and Machiavelli to Peter Drucker and Warren Bennis, most leadership writers have followed the same basic approach: They study successful leaders and try to derive practices from their lives and careers that aspiring leaders can adopt. Amit Mukherjee, a professor of leadership and strategy at Hult International Business School, rejects this approach in his intriguing new book, Leading in the Digital World.

As Mukherjee tells it, the technologies that gave rise to the industrial era — mass manufacturing, electric power, and scientific management, among others — created the context for authoritarian leadership. Then, in the mid-20th century, new technologies, starting with statistical process control, which was pioneered by Walter Shewhart at Bell Telephone Laboratories in the 1920s, gave rise to the quality movement and spawned empowered leadership. Today, new technologies with a long arc of impact are giving rise to the “digital epoch” and creating the need for a new set of leadership practices.

In a variation on the theme of contextual leadership championed by Harvard Business School’s Anthony Mayo and Nitin Nohria, Mukherjee contends that the practices of business leaders must evolve with and from the technological context of their times. “Periodically, technologies appear that have long arcs of impact into the future,” he writes. “When introduced, they require dramatic changes in the nature of work, which, in turn, require profound changes in how people are organized. That changes how people must be led. Companies — and executives — who fail to adapt are cast aside by those who do.”

It’s been clear for several decades that digital technologies are driving the transformation of entire industries. As an example, Mukherjee points to the pharmaceutical industry, in which technologies such as genomic medicine and radio-frequency identification (RFID) tracking have driven a fundamental revamping of R&D and distribution models.

Instead of focusing on digital technologies themselves, however, Mukherjee examines their ramifications for work and organizational structures, which he categorizes as seven principles...read the rest here

Want to Make Better Decisions? Start Experimenting

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, Summer, 2020

by Michael Luca and Max H. Bazerman



Image courtesy of Ken Orvidas/theispot.com

Suppose you work on Google’s advertising team and need to decide whether ads should have a blue background or a yellow background. You think that yellow would attract the most clicks; your colleague thinks that blue is better. How do you make the decision?

In Google’s early days, the two of you might have debated the issue until someone caved or you both agreed to kick the decision up to the boss. But ultimately, it dawned on leaders throughout Google that many of these debates and decisions were unnecessary.

“We don’t want high-level executives discussing whether a blue background or a yellow background will lead to more ad clicks,” Hal Varian, Google’s chief economist, told us. “Why debate this point, since we can simply run an experiment to find out?”

Varian worked with the team that developed Google’s systematic approach to experimentation. The company now runs experiments at an extraordinary scale — more than 10,000 per year. The results of these experiments inform managerial decisions in a variety of contexts, ranging from advertising sales to search engine parameters.

More broadly, an experimental mindset has permeated much of the tech sector and is spreading beyond that. These days, most major tech companies, such as Amazon, Facebook, Uber, and Yelp, wouldn’t make an important change to its platforms without running experiments to understand how it might influence user behavior. Some traditional businesses, such as Campbell Soup Co., have been dipping their toes into experiments for decades. And many more are ramping up their efforts in experimentation as they undergo digital transformations. In a dramatic departure from its historic role as an esoteric tool for academic research, the randomized controlled experiment has gone mainstream. Startups, international conglomerates, and government agencies alike have a new tool to test ideas and understand the impact of the products and services they are providing. Read the rest here.

Making experiments pay

strategy+business, June 2, 2020

by Theodore Kinni




Illustration by AndSim

The current pandemic is a dramatic case study in why experiments matter. How else are we to know which tests accurately identify COVID-19 infections and their telltale antibodies, whether and how well drugs already at our disposal mitigate the suffering inflicted by the coronavirus, or whether the vaccines currently in development will actually protect us from it? Randomized controlled trials are the only way to answer these questions short of playing Russian roulette with the lives of large numbers of people.

Experiments have been around for a long time. In The Power of Experiments, an introductory paean to the benefits of experimentation for corporate and government decision making, Harvard Business School professors Michael Luca and Max Bazerman peg the first recorded experiment to the reign of King Nebuchadnezzar in Babylonia circa 600 BC.

As the Old Testament story goes, Nebuchadnezzar attacked Jerusalem and took a group of young Israelites, including one named Daniel, as servants. He ordered that they be acculturated for three years, in part by being fed the same food as the royal court, which the Israelites considered “ritually unclean.” But Daniel proposed that he and three other prisoners be fed only vegetables and water for 10 days, at which point a guard would compare their health to that of the rest of the prisoners, who would have been fed the local fare. At the end of the experiment, the guard judged the vegetarians healthier, and Daniel and his three comrades were able to continue eating the less objectionable diet.

About 2,600 years later, Luca and Bazerman write, “We are in the early days of the age of experiments.” By this, they mean that experiments have spread far beyond the boundaries of science labs and medical trials. In 2018, Google ran more than 10,000 experiments. Amazon, Facebook, Uber, Yelp, and TripAdvisor run thousands of experiments per year. As these names indicate, technology companies, especially those with digital platforms, are at the forefront of corporate experimentation. That’s because it is relatively easy to run experiments on their large, captive audiences. Read the rest here.

The general wisdom of Ulysses S. Grant

strategy+business, May 27, 2020

by Theodore Kinni



Photograph by drnadig

Prior to the Civil War, Ulysses S. Grant didn’t show much promise. He called his admission to the U.S. military academy at West Point “an accident,” and when he graduated in 1843, he was only in the middle of his class. Just over a decade later, in 1854, he resigned from the U.S. Army. In the next few years, he proved to be a failure in business — even during boom times, such as the California gold rush.

In 1861, as the slave states seceded from the U.S. and the Union rushed to build up its army, Grant struggled just to get a commission leading 630 men in the 21st Illinois Infantry Regiment. And yet, four years later, it was Grant who, as the chief strategist and leader of more than 1 million men serving in the Army of the United States, left Robert E. Lee with no choice but to surrender at Appomattox, effectively ending the Civil War.

What was it that made this least likely of leaders such a success? And what can we learn from Grant’s experience? I recently read 1,700 pages looking for answers — Grant’s best-selling memoirs, which he wrote as he was suffering from cancer and finished a few days before he died, in 1885, and Ron Chernow’s more wide-ranging and much-praised biography. Both contain valuable lessons for leaders.

The first striking attribute about Grant was his low-key management style, which is the polar opposite of the textbook definition of an alpha leader. He assumed leadership more than he asserted it. And he certainly didn’t dress for success: Instead, Grant wore a mostly unadorned blue coat and black hat throughout much of the war. He showed up for his first regimental assignment in civilian garb, reports Chernow, prompting one soldier to quip, “He don’t look as if he knew enough to find cows if you gave him hay.” Read the rest here.

Pride and the pandemic

strategy+business, April 23, 2020

by Theodore Kinni



Photograph by svetikd

My sister-in-law texted two photos to our extended family on March 31. One was of a sign installed on the lawn of the Sentara Northern Virginia Medical Center, a 183-bed not-for-profit hospital in Woodbridge, Va. It read “HEROES WORK HERE” in big, colorful letters. The other was of my nephew, wearing scrubs, gloves, and goggles, in the entrance to the hospital’s emergency room, where he’s been working 12-hour shifts. We’re all worried about him. We’re also damn proud of him.

The daily stream of reports detailing the brave work of medical professionals around the world these past few weeks has been a revelation. Facing a virus without a cure and often working despite critical shortages of personal protective equipment, many of these people have been risking their lives simply by walking into work.

They aren’t the only ones working far from the comparative safety of home in this pandemic. Delivery people, warehouse workers, postal employees, supermarket clerks, gas station attendants, and many others are choosing to go to work. Facing layoffs, union members at General Electric’s aviation plants pressured the company to put them to work making ventilators.

Are they doing it for the money? I hope so, at least in part. But there’s also something else at play here — pride.

“An intrinsic feeling of pride based on the relentless pursuit of worthwhile endeavors is a lasting and powerful motivating force,” wrote Jon Katzenbach in his 2003 book, Why Pride Matters More Than Money. Katzenbach, a managing director with PwC US and founder of the Katzenbach Center at Strategy&, PwC’s strategy consulting practice, explored the institution-building capacity of pride and concluded that it is the “most important motivational element in a company.” Read the rest here.

Joel Peterson: How Entrepreneurs Should Lead in Times of Crisis

Insights by Stanford Business, April 14, 2020

by Theodore Kinni


 iStock/DrAfter123

One Saturday afternoon in 2016, Diana Peterson left home for a 4-mile hike in Millcreek Canyon, just outside Salt Lake City, and disappeared. As darkness fell, her husband, Joel, began calling family members to see if anyone had heard from her. A short time later, Diana’s car was located at a trailhead and a search-and-rescue mission was launched.

As morning broke, cadaver dogs were called in and Joel Peterson drove home to find some of his wife’s clothing so the dogs could track her scent. Morbidly, he found himself composing her obituary. Happily, he didn’t need to finish it. As he arrived back at the canyon, Diana reappeared. She had a shattered wrist and was exhausted, but she was alive.

It’s an odd story to find in a book on leadership, but Peterson — a long-time Stanford Graduate School of Business adjunct professor and the chairman of JetBlue — eventually came to see the harrowing incident as a metaphor.

“Just as Diana knew all about flashlights, trail mix, water bottles, walkie-talkies, the importance of hydration, of staying on trails, and of not hiking on trails after dark or alone, in theory our students know about the perils of entrepreneurship and the requisite principles of effective leadership,” he writes in the introduction to his new book, Entrepreneurial Leadership: The Art of Launching New Ventures, Inspiring Others, and Running Stuff. “They are well-prepared in theory, but not in practice.”

The book is Peterson’s way of addressing this gap between leadership theory and practice. In it, he offers the same practical framework — the “set of principles, mind-sets, and self-talk” — that he has used to good effect in his life and career. Here, based on excerpts from a recent interview and the book itself, Peterson offers four key pieces of advice for leaders facing crises — such as the current COVID-19 pandemic and the economic chaos it has spawned. Read the rest here.

Caveat emptor, CEO

strategy+business, March 6, 2020

by Theodore Kinni




Photograph by triloks

Purpose-driven organizations. Disruptive innovation. Reengineering. Five Forces analysis. Shareholder primacy. For better or for worse, many of the ideas that leaders adopt — and sometimes bet the future of their companies on — come from the academic world, and virtually all of them are promulgated by academic research. That’s why the rigor and validity of management studies should be as great a concern inside C-suites as they are in colleges and universities.

It’s also why Dennis Tourish’s take on the current state of management research is disturbing. “It has…become evident that various forms of research malpractice are common in our field,” writes the professor of leadership and organization studies at the University of Sussex in the introduction to his book Management Studies in Crisis: Fraud, Deception and Meaningless Research (Cambridge University Press, 2019). “I’m talking about outright fraud such as inventing data, but also about plagiarism, self-plagiarism, poor-quality statistical analysis, and p-hacking.” Tourish goes on to support this contention with a tour of the current state of management research that is akin to Dante’s tour of hell.

Tourish has particular scorn for the research on two concepts currently in vogue — authentic leadership theory (ALT) and evidence-based management (EBM). ALT, an offshoot of James MacGregor Burns’s transformational leadership that was popularized by Harvard Business School professor and former Medtronic CEO Bill George, holds that leadership success derives from the alignment of who you are on the inside with how you behave on the outside. After examining the research, Tourish concludes, “ALT is little more than a series of fables, designed to reassure us that leadership is simpler than it is and that introspection can lead us all to salvation.” Be still, my cynical heart. Read the rest here.