It’s not enough for CEOs to empathize with employees

strategy+business, April 19, 2022

by Theodore Kinni


Illustration by Klaus Vedfelt

In the novel City of God, E.L. Doctorow wrote, “You find invariably among CEOs that life is business. There is an operative cruelty which is seen as an entitlement.” The three-time winner of the National Book Critics Circle Award for Fiction delivers this judgment as an aside, but it is a particularly disturbing indictment of business leaders.

I asked Rasmus Hougaard, founder and CEO of the leadership training consultancy Potential Project, what he thought of Doctorow’s observation during a recent video interview. He immediately pointed to J. Willard Marriott, founder of Marriott International, as a notable exception. Marriott reputedly lived the hotel business sans cruelty, and his famous dictate “Take care of associates and they will take care of the customers” remains a mainstay of the company’s culture after nearly 100 years.

And yet, admitted Hougaard, “there are a lot of CEOs in other companies [about whom] you could say the absolute opposite. It is almost as if they think, ‘Now that I’m a senior executive, I don’t have to be nice anymore.’” It is those CEOs who might find his new book, Compassionate Leadership: How to Do Hard Things in a Human Way, most valuable.

Hougaard and coauthor Jacqueline Carter, director of Potential Project North America, argue that the hard-nosed people management once espoused by CEOs like “Chainsaw Al” Dunlap and “Neutron Jack” Welch is a loser’s game. “It’s clear that entitlement is dying and for good reason,” Hougaard told me. “Anybody who says, ‘I can be mean, because now I have the power,’ gets punished, because people won’t work with them.” CEOs who live up to Doctorow’s caricature by shutting down their emotions and coldly making decisions that harm people also incur a personal cost. Hougaard adds: “You turn into someone who you probably won’t like.”

Often, empathy is touted as the antidote to mean business. But Hougaard thinks that an approach to leadership based solely on empathy has its own adverse side effects. 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.

What Is Your Business Ecosystem Strategy?

Learned a lot lending an editorial hand here:

Boston Consulting Group, March 11, 2022

by Ulrich Pidun, Martin Reeves, and Balázs Zoletnik





From media and technology to energy and mining—no major industry is untouched by the rise of business ecosystems. These dynamic groups of largely independent economic players working together to deliver solutions that they couldn’t muster on their own come in two flavors: transaction ecosystems in which a central platform links two sides of a market, such as buyers and sellers on a digital marketplace; and solution ecosystems in which a core firm orchestrates the offerings of several complementors, such as product manufacturers in a smart-home ecosystem. Both types can quickly generate eye-popping valuations; since 2015, more than 300 ecosystem startups have reached unicorn status.

Given the success of this cohort of startups, as well as the Big Tech ecosystem players now numbered among the world’s most valuable companies, it’s no surprise that ecosystems are high on the strategic agendas of incumbent companies. More than half of the S&P Global 100 companies are already engaged in one or more ecosystems, and in a recent BCG survey of 206 executives in multinational companies, 90% indicated that their companies planned to expand their activities in this field.

Yet many leaders of incumbent companies are still unsure how to define their ecosystem strategies. This article aims to help them in that pursuit. It is informed by the insights we’ve gleaned from three years of ecosystem research and engagements with large enterprises across industries and geographies. Organized in eight fundamental questions, it offers a step-by-step framework for developing a company’s ecosystem strategy. Read the rest here.

Follow your S curve

strategy+business, February 28, 2022

by Theodore Kinni



Photograph by R A Kearton

Recently, someone on LinkedIn asked me for career advice. LOL. The ink line of my career is a random squiggle with lots of breaks and blotches. It isn’t until about halfway through that the line begins to look like it might be going somewhere. That’s the point at which I found something I enjoyed doing that paid enough for me to keep doing it. I grabbed that like a drowning man does a life ring.

I grabbed Whitney Johnson’s new book, Smart Growth, with similar enthusiasm, because it seemed there might be a more rational and ordered way to view my career. There is. As Johnson might tell it, I didn’t flounder for years; I followed the “S Curve of Learning.”

Johnson, a consultant and speaker, has a knack for picking out theories from the discipline of innovation and applying them to individual growth. In her 2015 book, Disrupt Yourself, she used Clayton Christensen’s theory of disruptive innovation as the foundation for a guide to career-changing moves. In Smart Growth, Johnson applies Everett M. Rogers’s theory of innovation diffusion to forging a career path.

In his 1957 doctoral dissertation, Rogers showed that the number of Iowan farmers adopting a new weed killer followed an S curve: adoption started slowly, with only a few farmers willing to take a chance on the new product; shot upward as the majority of farmers became convinced of its benefits; and then leveled off as the remaining, most cautious farmers finally committed. By the time Rogers’s seminal Diffusion of Innovations was published in 1962, the rural sociologist was convinced that the S curve of innovation diffusion depicted “a kind of universal process of social change.” Indeed, S curves have been used in many arenas since then, and Rogers’s book is among the most cited in the social sciences, according to Google Scholar.

Johnson’s S Curve of Learning follows this well-established path. There’s the slow advancement toward a “launch point,” during which you canvas the (hopefully) myriad opportunities for career growth available to you and pick a promising one. Then there’s the fast growth once you hit the “sweet spot,” as you build momentum, forging and inhabiting the new you. And, finally, there is “mastery,” the stage in which you might cruise for a while, reaping the rewards of your efforts, before you start looking for something new, starting the cycle all over again. Read the rest here.

Think Globally, Innovate Locally

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, February 23, 2022

by Satish Nambisan and Yadong Luo


Michael Glenwood Gibbs/theispot.com

Digitization and globalization are converging to transform innovation in multinationals across industries. Companies such as Bayer Crop Science, John Deere, Johnson Controls, Philips, and Unilever are pursuing the promise of what we call digital globalization. They are finding that digitally infused innovation assets, such as data, content, product components, tools, and processes, are not only readily portable across national borders but also amenable to mixing and matching. This digitally enabled innovation generates new offerings, business models, and operations to suit specific country markets — at a faster pace and lower cost than previously.

Fashion brand Tommy Hilfiger has deployed a fully digital design workflow across all of its global apparel design teams. Designers catering to the demands of different markets around the world can create, store, share, and reuse digital design assets. Transforming traditional design and sample production steps into such digital-infused processes enables the label to not only accelerate its innovation but also diversify its offerings.

As promising as digital globalization sounds, however, it is facing headwinds that are driving deglobalization (or localization), including trade restrictions and uncertainties fueled by geopolitical tensions and nationalism. China, for instance, recently passed a host of protectionist laws and regulations aimed at controlling the internet and cross-border data flows. As companies such as Apple, Morgan Stanley, and Oracle have discovered, there is ambiguity around what constitutes personal data and what should be localized in China. This is significantly limiting the portability of multinational companies’ digital innovation assets and raising the level of innovation uncertainty and risk. Geopolitical tensions can also result in more closed and less trusting stances when companies pursue collaborative innovation ventures.

Thus, for multinationals, the coexistence of globalization and localization creates a challenging context for innovation. How, then, can they pursue innovation to take advantage of the forces driving digital globalization while also adapting to the forces driving localization? Read the read 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.

Actuarial outsourcing trends in the insurance industry

Learned a lot lending an editorial hand here:

Deloitte Capital H Blog, February 10, 2022

By Tony Johnson, Maria Itteilag, and Ashlyn Johnson


As insurance industry leaders seek to transform the cost structures, capacity, and capabilities of their companies in response to business, regulatory, and technological challenges, the actuarial function is a natural focus for their attention. The actuarial function is a driver of growth and profitability of insurers, so maximizing its value generation is a tantalizing prospect. At the same time, the function is an expensive one, so a successful transformation can generate significant savings on the cost side by focusing the actuaries’ attention on value-creating activities as opposed to those better suited for other professionals and functions to own.

The promise of getting more for less from the actuarial function is tempered by challenges and risks inherent to transformation initiatives. According to Gartner, 70% of transformation initiatives in finance fail to deliver their expected benefits and our observations suggest that actuarial transformations are no exception.1

However, we also find savvy insurers who are bucking the odds of transformation failure. They are using outsourcing arrangements in the execution of actuarial transformations to bolster implementation success, and as an integral element in the design of a revamped actuarial function that can deliver greater value to insurers at a lower cost. Your company can potentially do the same.

The imperatives of actuarial transformation

Like any business transformation, successful actuarial transformation hinges on the ability to navigate two imperatives: the first imperative is design—the vision of what the function will become, and the second imperative is execution—the journey that must be undertaken to make the vision a reality. Transformation failures are usually rooted in the inability to meet one or both imperatives.

The involvement of actuaries in the design of the transformed function is necessary. After all, who knows the processes better than the people who use them every day? But necessary is not always sufficient. Actuaries are experts in their work, but you should not expect them to be familiar with the transformational potential of new technologies or new ways of structuring workflow and executing tasks. Without a fully informed view of the art of the possible, the new design of the function will not likely reach its full potential.

Moreover, executing functional transformations requires mustering the resources and skillsets needed to implement the transformation while conducting business as usual. In the actuarial function, this often entails using highly specialized and highly paid actuaries to design and implement the transformation. In some cases, the actuaries do not possess the skills needed for this work. In many more cases, they simply do not have the time. As insurance companies begin to transform, their actuaries become overloaded as they try to meet the ongoing dictates and priorities of daily business, as well as the dictates and priorities of the transformation efforts. Many transformations fail when people become overwhelmed while simultaneously performing the work of today and building the capabilities of tomorrow. Read the rest here.

A leader’s handbook for managing culture

strategy+business, January 21, 2022

by Theodore Kinni


Photography by Paul Bradbury

Win from Within: Build Organizational Culture for Competitive Advantage
by James Heskett, Columbia Business School Publishing, 2022

One of the first business books I reviewed, back in 1992, was Corporate Culture and Performance, by Harvard Business School professors James Heskett and John Kotter. A few books explored organizational culture before it, most notably In Search of Excellence, by Tom Peters and the late Robert Waterman, but Corporate Culture and Performance was the first to try to quantify the economic returns of culture in a rigorous way. Thirty years later, Heskett, now 88 and professor emeritus, is still making the business case for corporate culture.

His new book, Win from Within, is a master class in building culture. It’s the kind of book that you can read in a few hours and then apply throughout your leadership career—which gets to Heskett’s thesis: most leaders don’t devote nearly enough time to managing the culture of their companies, and the time that they do spend on it is often wasted.

Heskett pins both problems to a flawed understanding of culture. “Strategy is hard; culture is soft,” he writes, beginning a list of common misconceptions. “The impact of a strategy on growth and profit can be measured, but that of a culture cannot. If you get the core values shared by everyone right, the rest will take care of itself. A strong culture helps assure good performance. To change an organization’s culture requires a long time. All of these assertions have been passed around in management circles over the years. And all of them are essentially wrong.” Read the rest here.

Getting proactive about reactance

strategy+business, January 18, 2022

by Theodore Kinni



Photograph by Klaus Vedfelt

The COVID-19 pandemic has been a case study in human contrarianism. In staggering numbers, people refused—and still refuse—to comply with mask and vaccine mandates. Some bridled at being sent home to work and at their kids being sent home from school. When everyone was summoned back, some bridled at that, too. It’s an ongoing, large-scale lesson in reactance, a concept with which any leader charged with trying to enact change should have at least a passing acquaintance.

The theory of psychological reactance originates in the 1960s with Jack Brehm, who developed it when he was a professor at Duke University. Brehm said that humans are negatively aroused when they perceive a threat to their freedom. What constitutes a threat to freedom? That’s your call. If you think a mask mandate restricts your freedom, Brehm’s theory suggests that reactance will not only increase your desire not to wear a mask but may also prompt you to refuse to wear a mask, even to the point that you get yourself dragged off a plane.

I ran across reactance in a recently published book, The Human Element: Overcoming the Resistance That Awaits New Ideas, by Loran Nordgren, an organizational psychologist and professor at the Kellogg School of Management, and David Schonthal, a clinical professor at Kellogg and director of its venture accelerator program. Nordgren and Schonthal seek to add what they call friction theory to the discipline of change management, arguing that corporate change initiatives often fail because leaders focus their attention on attracting people to their cause, while neglecting four frictions that work against change: inertia, effort, emotion, and yes, reactance.

A lot of leaders become leaders because of their charisma and their ability to sell a vision,” Schonthal explained to me during a video interview with both authors. “But you have to balance the ability to sell a vision with a willingness to clear away some of the friction and actually help employees get started on the path to that vision.”

“Leaders aren’t thinking about the barriers to action,” Nordgren added. “Shifting your focus to friction requires moving away from the idea and thinking about the audience. Taking that perspective requires empathy, it requires understanding the context, and it requires more effort and attention.” Read the rest here.

The Three Internal Barriers to Deep-Tech Corporate Venturing

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, January 10, 2022

by Josemaria Siota and Maria Julia Prats

The flow of capital to deep-tech startups is rapidly becoming a torrent. From 2016 to 2020, annual investments in startups focused on commercializing emerging technologies such as biotechnology, robotics, and quantum computing grew in value from $15 billion to $60 billion worldwide, with the average private investment more than tripling in size. Deep-tech corporate venturing (CV) — the second-largest source of this funding — grew from $5.1 billion in 2016 to $18.3 billion in 2020.

The intent behind these deep-tech corporate investments is clear. In theory, deep-tech CV enables companies to quickly gain expertise in leading-edge technologies and pursue potentially disruptive innovations without building internal capabilities from scratch. In reality, however, such funding can come with high hurdles, such as time-to-market durations that often exceed five years, and the greater risk inherent to novel and complex technologies. The difficulties are underscored by an analysis we conducted using CV data from 46 international companies that was collected under the auspices of IESE Business School in 2018. It revealed that 68.9% of the initiatives failed to deliver their expected results.

To better understand the most significant barriers to success in deep-tech CV and the tactics that chief innovation officers (CINOs) can use to achieve more positive results, we turned to East and Southeast Asia for our new study. (In 2019, Asian companies accounted for 40% of corporate venture investments in startups, the largest percentage globally.) The study included an analysis of CV in 180 companies and interviews with 77 of their innovation executives, most of whom work in companies with CV portfolios that include a 25% or greater concentration of deep-tech startups. It revealed three internal barriers that CINOs commonly encounter with deep-tech startups and the ways in which they can be overcome. Read the rest here.

Open Up Your Strategy

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, December 20, 2021

by Christian Stadler, Julia Hautz, Kurt Matzler, and Stephan Friedrich von den Eichen


Michael Austin/theispot.com

Formulating and executing sound organizational strategy is difficult work. Strategy is often made by elite teams and thus can be limited by their biases about competitors, customer needs, and market forces. And it can be an uphill battle convincing stakeholders across the company to channel money, time, and energy in a new and unproven direction.

Our solution to both the strategy formulation and execution challenges is radical: Open up your strategy process. Open strategy offers leadership teams access to diverse sources of external knowledge they wouldn’t otherwise have, while also making individual leaders aware of their biases and helping them build the buy-in needed to speed up execution.

This approach is particularly valuable when companies face disruptive threats and contemplate transformational change. It’s much easier to master disruptions when you’re forging strategy in concert with others who view the world through a different lens than you do. Progress and innovation depend less on lone thinkers with exceptional IQs than they do on diverse groups of people working together and capitalizing on their individuality, as social scientist Scott E. Page has shown.1 In short, diversity of perspective matters — a lot.

Involving people from outside the C-suite — and outside your company — in strategy-making not only provides a wellspring of fresh ideas but also mobilizes and galvanizes everyone involved. Thus, execution becomes an integral part of strategy. The best part: All this can happen without a loss of control over the strategy-making process. Read the rest here

Better management through anthropology

strategy+business, December 13, 2021

by Theodore Kinni


Photograph by Kilito Chan

The next time you hear someone arguing that a liberal arts education is wasted on businesspeople, direct them to Gillian Tett’s Anthro-Vision. In this new book, the award-winning journalist, chair of the Financial Times’s US editorial board, and Cambridge Ph.D. in social anthropology makes a compelling, readable argument for the business value of her academic discipline. Tett finds that this value is delivered in three ways: anthropology makes the strange familiar, it makes the familiar strange, and it attunes awareness when listening for social silence.

“Making the strange familiar”—the quest to understand other people and cultures—goes back to the origins of the science of anthropology in the 19th century (although its main purpose in the early days was to justify “civilized” Western colonialists who were stealing the labor and resources of “primitive” peoples). In 1990, this quest—understanding, not plunder—led Tett to a remote village in Soviet Tajikistan, where she studied marriage rites for her Ph.D.

Making the strange familiar has also led marketers in a global economy to embrace anthropology in their quest to figure out how to sell their products to customers in far-flung markets. The resulting insights can be valuable indeed. Switzerland-based Nestlé’s sales of Kit Kat bars were lukewarm in Japan, until 2001, when marketing executives noticed that sales of the confection surged in December, January, and February on the island of Kyushu. Curious, they discovered that students associated the name Kit Kat with kitto katsu, which means “you must overcome” in the local dialect. The students were buying the bars for luck when they took their exams for high school and university. Nestlé built its Japanese marketing strategy around this insight, and by 2014, Kit Kat was the country’s best-selling confection. Read the rest here.

Break Out to Open Innovation

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, December 7, 2021

by Denis Bettenmann, Ferran Giones, Alexander Brem, and Philipp Gneiting


Image courtesy of Daniel Garcia/theispot.com

Mercedes-Benz AG produces over 2 million passenger cars annually for a global market in the throes of transformation. Automakers are meeting new demands for electrification and connectivity, new competitors are arising, and customers have new expectations, such as the desire for sustainable mobility. All of these trends are driving the need to speed innovation in every facet of the automotive industry.

In 2016, R&D and digital business managers at Mercedes’s headquarters in Stuttgart, Germany, realized that their efforts to collaborate with startups — a valuable source of external innovation — were being hampered by the company’s existing innovation processes. Those processes were overly focused on internal development and ready-to-implement solutions provided by the company’s established base of suppliers and weren’t well suited to uncertainty-ridden collaborations with promising technology startups. The company needed an innovation pathway capable of more effectively integrating startups earlier in the R&D process and significantly reducing the time required to identify, develop, test, and implement their most promising technologies and solutions.

In response, a new team within R&D was formed to build a better bridge between the promising ideas of external startups and the innovation needs of Mercedes’s internal business units. The team joined forces with partners from academia and industry to cofound Startup Autobahn, what we call an open corporate accelerator (CA). Unlike a conventional corporate accelerator — typically established by a single company for its own benefit — an open CA welcomes multiple sponsor companies and can attract a broader array of more mature startups. This model, also known as a consortium accelerator, improves sponsor access to external innovation and enhances the overall competitiveness of regional ecosystems...read the rest here

Setting the Rules of the Road

Learned a lot lending an editorial hand on this article:

MIT Sloan Management Review, November 22, 2021

by Ulrich Pidun, Martin Reeves, and Niklas Knust

Image courtesy of Cathy Gendron/theispot.com

The rapid rise of a few powerful digital ecosystems disguises a harsh reality about this business model: Less than 15% of business ecosystems are sustainable in the long run. When we examined 110 failed ecosystems in a variety of industries, we found that more than a third of the failures stemmed from their governance models — that is, the explicit and/or implicit structures, rules, and practices that frame and direct the behavior and interplay of ecosystem participants.

Business ecosystems are prone to different types of governance failures. One reason why the BlackBerry OS lost its competition with Apple’s iOS and Google’s Android was because Research In Motion failed to open its app ecosystem widely to developers until it was too late. Conversely, the video game industry fell into recession during the so-called Atari Shock in the 1980s in part because of overly open access to its ecosystem, which resulted in a flood of inferior games. Badly behaved platform participants, conflicts among ecosystem partners, and backlash from consumers or regulators are other indicators of governance flaws that can bring down an ecosystem.

Many orchestrators struggle to find an effective governance model because managing an ecosystem is very different from managing an integrated company or a linear supply chain. Ecosystems rely on voluntary collaboration among independent partners rather than clearly defined customer-supplier relationships and transactional contracts. The orchestrator cannot exert hierarchical control but must convince partners to join and collaborate in the ecosystem. These challenges are exacerbated by the dynamic nature of many ecosystems, which develop and evolve quickly and continually add new products, services, and members.

Ecosystem leaders who understand the components of a comprehensive governance model and glean insights from ecosystem successes and failures can make more informed and explicit governance decisions. In doing so, they can improve the odds that their ecosystems will be among the lucky few that survive and prosper over the long term. Read the rest here.

Getting real about DEI means getting personal

strategy+business, November 18, 2021

by Theodore Kinni


Photograph by Timsa

In her 2019 book, Diversity, Inc.: The Failed Promise of a Billion-Dollar Business, New York University journalism professor Pamela Newkirk reported that, despite billions of dollars spent annually by companies, over decades, to diversify their workforces, little progress had been made. Although racial and ethnic minorities made up 38.8% of the US population in 2019, they accounted for only 4.5% of Fortune 500 CEOs, 9% of US law firm partners, 16% of Fortune 500 board members, 16.6% of US newsroom journalists, and 17% of full-time university professors in the US. Similar inequities—with respect to not just race and ethnicity, but also gender, age, disability, and other factors—have been documented around the world. For instance, the International Labour Organization reports that women participate in the workforce at a rate 26% lower than that of men (and in some places, 50% lower).

The COVID-19 pandemic hit a few months after Newkirk’s book was published, and a few months after that, protests and racial unrest, set off by the murder of George Floyd and lingering outrage over the killing of Breonna Taylor, broke out in cities across the US and around the world. As heated arguments spread into the workplace, diversity, equity, and inclusion (DEI) rose high on corporate leaders’ agendas. They made aspirational promises and set ambitious targets. But will the DEI initiatives launched over the past year produce anything more than slow, small, and easily lost gains?

Experience suggests that it’s necessary to lower the structural barriers to DEI and set quantitative targets for creating more open and equitable organizations. But it’s becoming clear that leaders must undertake personal initiatives in addition to organizational ones before large-scale, enduring change can take hold in the workplace.

This idea serves as the foundation for Melinda Briana Epler’s How To Be An Ally: Actions You Can Take for a Stronger, Happier Workplace, a new book that guides leaders at all levels (and the rest of us, too) toward personal transformation in service of more diverse, equitable, and inclusive companies. Allyship, a concept that dates back at least 30 years, is the mechanism behind the transformation.

“Allyship is empathy and action,” Epler, who is CEO of Change Catalyst, a DEI consulting, training, and coaching firm, said in an interview with me. “It’s seeing and understanding the person in front of you, taking the time to listen to their unique experiences, and then taking action to support them in whatever way they need.” This is a prescription for good leadership no matter who is standing in front of you, but particularly for people whose gender, race, ethnicity, age, disabilities, or sexual orientation can leave them isolated in companies. Read the rest here.

Best Business Books 2021: Taming collaborative dysfunction

strategy+business, November 8, 2021

by Theodore Kinni


Illustration by Serge Bloch


In the 1920s, Mary Parker Follett put forth the heretical idea that managers should pursue power with—not power over—employees. “It is possible to develop the conception of power-with, a jointly developed power, a co-active, not a coercive power,” argued Follett, whom Peter Drucker dubbed “the prophet of management.”

A century later, Follett’s vision is a reality. “Today, practically everything you do at work is a collaboration,” writes Rob Cross, the Edward A. Madden Professor of Global Leadership at Babson College, in Beyond Collaboration Overload, this year’s best business book on the topic of management. “When you attend your morning meeting, when you confer with a direct report, when you help the new person figure out the right expert to speak with about a project, when you page through your emails, when you pause to chat with a colleague, when you move from one webinar to the next while simultaneously addressing instant messages that seem to have urgent time frames—again and again, you’re collaborating.”

If that description seems to be taking on a manic tinge, welcome to the manager’s world. “The collaborative intensity of work has exploded over the past few decades,” writes Cross. Drawing on a series of studies conducted under the aegis of Connected Commons, a consortium of more than 100 large employers, where Cross serves as chief research scientist, he finds that 85% or more of employee time is devoted to collaborative activities. And yet companies have “no idea what impact this time has on corporate performance, individual productivity, or—perhaps most disturbing—employee well-being.”

But Cross has an idea of the impact. Organizational network analysis, performance metrics, and extended structured interviews reveal that many managers collaborate too much—becoming obstacles to organizational performance and their own well-being in the process.

Take Scott, a manager of 5,000 people working in three business units of a large company. In just one of those units, which employed 1,800 people, a staggering 118 people on an average day were going to Scott with requests. Worse, more than 65% of them—78 people—said they couldn’t hit their business goals without more of his time. “This is another obscene number,” writes Cross. “When we see that figure edge up past 25% of a leader’s immediate network, we know we’ve got trouble. Although the leader doesn’t feel it while racing from meeting to meeting, he or she is slowing things down significantly.” The results are burnout, attrition, and lower engagement scores because people can’t get their work done. Indeed, Cross learned that Scott, whom many people in the company considered the leading candidate to succeed the CEO, was about to get fired.

If you’re lucky, your level of collaboration overload is nowhere near Scott’s level. But if you are feeling hard-pressed to keep up with the collaborative demands on your time, and those demands are taking a toll on your performance and well-being, Cross offers succor: he says he can show you (or someone with whom you work or live) how to “reclaim 18 to 24% of your collaborative time”—about one day per week. Read the rest here.

Sharing Value for Ecosystem Success

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, November 1, 2021

by Ron Adner


Image courtesy of Jon Krause/theispot.com

What do you call an ecosystem in which you always see your company as the central actor?

An ego-system. This is how we end up with labels such as the “Google ecosystem,” the “Facebook ecosystem,” the “insert-your-name-here ecosystem.” These labels seem impressive at the get-go, but they undermine an important truth: Ecosystem strategy is alignment strategy.

Defining ecosystems around companies blinds everyone involved to alignment hurdles and limits their ability to craft appropriate strategies. The presumption of centrality makes it harder to establish the relationships needed to achieve their goals: It’s harder for ecosystem leaders to create strategies that attract followers, and harder for ecosystem partners to know which leaders to follow and where to place their bets.

Apple offers a stark example. The most valuable company in the world has been enormously successful in extending the mobile data device ecosystem it leads — iPod to iPhone to iPad to Apple Watch, encircled by its App Store and iOS platforms. But it has been shockingly disappointing in its efforts to expand into new businesses that require the construction of new ecosystems. Apple’s failures to deliver on ambitious promises — that health care would be the company’s “greatest contribution to mankind”; that the HomePod would “reinvent home audio”; that its classroom education platform would “amplify learning and creativity in a way that only Apple can” — are concealed by the profits gushing from its core ecosystem, but they are failures nonetheless. The consequences of these failures are borne not only by Apple, but also by all the companies that joined as complementors in these efforts.

If successfully aligning the partners and other participants in new ecosystems is challenging to a company as sophisticated as Apple, a giant at the height of its power, then (1) no would-be market leader should be deluded into thinking that its success in one ecosystem will naturally translate to leadership elsewhere, and (2) no would-be complementor should assume that following established leaders into new domains is a safe bet.

How can all ecosystem players do better? They can anchor their notion of ecosystems in the value propositions that are being pursued, not in corporate identity. This shift in mindset supports the formulation and execution of more successful strategies for leadership (not always the most advantageous role to play) and followership (far more common, but too often neglected) in an ecosystem world...read the rest here

People Analytics: A key component to your HR Technology strategy

Learned a lot lending an editorial hand here:

Deloitte Capital H Blog, October 28, 2021

by Jamaal Justice and Albert Hong

What do you get when you combine promising new technological advances, a host of evolving solutions, and droves of eager customers who see the potential of these new solutions to move their businesses forward but are uncertain about what they should buy? The people analytics market.

The promise of generating actionable insights in every aspect of work, the workplace, and the workforce has created fast-growing demand for people analytics (PA). A myriad of vendors are seeking to meet the demand with an ever-expanding mix of solutions (e.g., tools for Human Capital Management Systems (HCM), data ingestion, data warehouse/lake, extract/transform/load (ETL), business intelligence, and advanced analytics that are evolving as quickly as their underlying technologies.

The explosive proliferation of Human Resources (HR) technology and solutions is a challenge for HR leaders at every step along the PA maturity curve for two principal reasons. First, the ideal set of PA tools and solutions for meeting all organizational needs has not yet emerged. Second, most organizations are still in the process of developing the capabilities needed to evaluate their PA needs: Deloitte’s 2020 High-Impact People Analytics study found that 82% of organizations globally are in the earlier stages of their maturity journey.

Whether HR leaders are in the early stages of building PA capabilities or trying to stay on the cutting edge of what is possible, they need a North Star — a guiding light and a path that will lead them to a strategy and HR technology architecture capable of delivering on the promise of PA across their organizations over time. Read the rest here.

What’s Your Return on Visibility?

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, October 26, 2021

by Michael Schrage



Digitalization driven by COVID-19 has accelerated and transformed management’s ability to track what and how workers are doing. This growth in networked visibility significantly increases the risk of institutional and interpersonal conflict, as well as challenges to cultural norms.

Many workers rationally fear that enhanced monitoring empowers management — and micromanagement — at their expense. When experienced as corporate surveillance, monitoring implies a lack of trust and an invasion of privacy, especially when people are working from home. That’s not sustainable; no one wants to feel spied on. Consequently, if not ironically, leaders are being pushed to make visibility far more visible.

While greater transparency around visibility can allay employee fears, it may also expose and provoke clashes in core values. If the interactions on a distributed work team, for example, are appropriately inclusive, but that negatively affects productivity, what happens next? Workers in general — and remote workers in particular — want credible narratives explaining visibility’s benefits, costs, and trade-offs. Opacity around visibility invites credible accusations of hypocrisy.

Visibility, like capital, compensation, and digital transformation, requires explicit purpose and policies. Leaders, not just HR and IT administrators, should explicitly manage visibility as an enterprise asset. Read the rest here.

A transactional approach to power

strategy+business, October 13, 2021

by Theodore Kinni


Photograph by Metamorworks

Transactional has become something of a dirty word in the business world. It suggests a short-term, one-off mindset and a commoditized approach to value. Nobody wants transactional relationships with employees, suppliers, or customers. But when it comes to exercising power, understanding power as a transaction may be a leader’s best bet.

That’s because power is something leaders are commonly thought to possess, either by force of personality or by dint of positional authority. The mistaken idea that you are inherently powerful can be extraordinarily seductive—and comes with a variety of leadership pitfalls. Hubris (an exaggerated sense of self-confidence) is one of them. Arrogance (the belief that you are smarter than everyone else) is another. Worst of all is omnipotence—the conviction that you are above the rules. From there, it’s only a short hop to becoming living proof of Lord Acton’s famous line, “Power tends to corrupt, and absolute power corrupts absolutely.”

There are lots of worthy prescriptions for avoiding the pitfalls of power, including servant, humble, and empathic leadership. But they depend on a level of self-awareness and mindfulness that can be difficult to muster on a day-to-day basis. If you struggle with the siren call of power, it might be easier to rethink your view of power than to remake yourself.

Organizational behavior professors Julie Battilana of Harvard Business School and Tiziana Casciaro of the Rotman School of Management offer leaders (and followers) such a reframing in their new book, Power, for All: How It Really Works and Why It’s Everyone’s Business. They do it by tapping power dependence theory, a branch of social exchange theory that was developed starting in the 1960s by Richard Emerson, then a sociologist at the University of Cincinnati. Read the rest here.