Sterling Performance

Playing at work’s generally considered a valuable stress-buster, commonsense notwithstanding, and has even been linked to better team-working  and creativity.

But this year’s tough economic climate (not to mention the po-faced presence of world leaders at the G20 summit in London) may make merry pranksters wary of going too far on April 1^st.

Thanks to the financial meltdown, there’s a possibility you’ll be believed if you tell employees you’re shaving one-fifth of a second off their lunchbreak in order to claw back cost savings.

On the other hand, there’s never been a better time to lighten the mood.

Businesses are some of the most prolific jokers — the BBC’s Panorama report on spaghetti trees set the trend in 1957 and has carried on ever since (see the Flying Penguins take to the air in a migratory flight to the the tropics).

1. Google’s PigeonRank Search Technology Whereby low-cost pigeon clusters, or PCs, are used to rank pages. “PigeonRank’s success relies primarily on the superior trainability of the domestic pigeon”, which is  far superior to “traditional search engines, which typically rely on birds of prey, brooding hens or slow-moving waterfowl to do their relevance rankings.” (Dan Frommer’s compiled eight years of Google gags here.)
2. ESP-mail Red Herring magazine published an article in 1999 extolling new technology that allowed users to compose an email telepathically or through “visualisation”.
3. The Left-Handed Whopper Burger King’s 1998 spoof advertisement promised southpaws a burger with all the same ingredients - and the condiments rotated 180 degrees.There are loads more on “the Museum of Hoaxes” — Tesco’s “genetically modified” whistling carrots, brewer Guinness’s appropriation of Greenwich mean-time as “Guinness Mean Time“,  the story that the Channel Tunnel’s two halves wouldn’t meet in the middle because the French engineers were using metric. (Got me thinking — what if the site itself were a gag?)

So you may not have time to move the partitions or grow grass on your co-worker’s keyboard — but you can try out some of the more benign suggestions out there — change the caller ID on a co-worker’s phone to Mr Kitten, or variations on the ever-decreasing labcoat (the ever-lowering chair).

Just let common sense prevail. Steer clear of ‘hoax’ viruses, anything that cuts into your boss’s holiday time, or a stunt that has the effect of moving a company’s share price. That’s the kind of gag you could choke on.

(Photo: tomobothetominator, CC2.0)

Innovation has never been more important to companies as it is now. The recession is creating new needs and new forms of value are needed to fulfill them.

Yet there remains a yawning gulf between business leaders’ rhetoric on innovation and the reality on the ground. So what holds our companies back, and why is breakthrough innovation so rare?

Here are five factors that prevent successful innovation.

1. An intolerance of failure. The #1 top tactic for innovation, according to expert innovators, is to ‘experiment fearlessly’. Nothing works first time, so you may as well get it wrong as soon as you can. If you cannot accept failure you are unlikely to see too much innovation, no matter how much money you throw at it.
2. An excessive customer focus. Professional managers are great at using customer research to improve existing products and services. But, faced with a radically new proposition people are poor predictors of their own future behaviour. In a recent posting on this blog, Italian designer, Alberto Alessi described how he eschews market research and evaluates new ideas in order to help take informed risks and not as a simple yes/no exercise.
3. A desire for a magic pill, not a daily exercise regime. This requires innovation as a way of life rather than as an isolated change programme. 3M is the avatar of this approach, allowing its developers to spend a proportion of their time on their own development projects as a way of encouraging a stream of bottom-up ideas.
4. An unwillingness to cannibalise sales. The only way to prolong success is, paradoxically, to destroy it and create something even more valuable. Technology companies know that they must consistently add new features at lower prices if they want to stay ahead in the market. The same principles are true in other markets. Gillette has consistently strengthened its leadership in razors through its willingness to make its existing ranges redundant and introduce new, higher performing products and brands.
5. A reliance on a small cadre of innovators. Relying on a small development team to identify, create and deliver game-changing innovations is unrealistic. You have to cast your net much wider. In the past five years Procter & Gamble has dramatically increased its willingness to work source ideas from and work with external organisations and now aims to develop at least half of its new growth ideas through these external networks.

How many of these factors are present in your company? Once you are willing to welcome failure, lead rather than follow customers, involve your whole organization and beyond, cannibalise your existing businesses and see innovation as a way of life, you’re likely to make real and material progress.

(Photo: Brian ‘DoctaBlu’ Moore, CC2.0)

Was it deliberate or simply serendipitous that Bank of England governor Mervyn King inveighed against further fiscal stimulus just as PM Gordon Brown was extolling its virtues to Euro MPs (well, the few who turned up) in Strasbourg?

King is grown-up enough to know that timing matters as much as substance, especially with a rare contradiction of his boss.

The official line from Downing Street is that there is no rift between the governor and the PM.

HM Treasury is keeping its own counsel. Since King clearly had next month’s Budget in his sights, the Treasury probably agrees with him and may even have given him the nod. It won’t favour a political giveaway any more than he does.

There have been some howls of outrage, and some blog-blasts calling for King’s head, but criticism from the Labour Party itself has been strangely muted.

This is not because Labour politicos like their leader being made to look a fool. It’s because the ‘independence’ of the Bank of England is one of their most cherished myths and they don’t want to spoil the illusion.

Only days after Labour took office in 1997, then-Chancellor Brown surprised the City by giving the Bank responsibility for setting interest rates.

Since then, he and everyone else has called it independence and it has been seen as one of Labour’s great economic achievements.

Some say it is the only one. It was certainly a positive move and also a shrewd one, distancing the government from any subsequent surge in inflation.

But it’s only independence in the same way that a learner-driver in a dual-control car has independence. The government can wrest back the controls at any time.

The Bank, through its Monetary Policy Committee (MPC), pursues an inflation target. But that target is set by politicians, and confirmed annually in the Budget Statement.

The Chancellor directly appoints the four non-Bank members on the nine-seat MPC. Three of the five Bank employee members are the governor and the two deputy governors — and the Chancellor appoints them, too.

Doesn’t sound quite so independent, does it? But the impression of the Bank’s independence remains, and the government isn’t going to wreck it by decapitating, or even publicly reprimanding, its governor.

(Photo: den99, CC2.0)

Stop cosseting Gen Y employees, says author Bruce Tulgan in this Ypulse interview about his book, “Not Everyone Gets a Trophy: How to Manage Generation Y.”

Managers have been told to create ‘thank-you’ and ‘praise’ programmes for their younger employees, they’ve been advised to treat recruitment as “one long sales pitch” (for the company) and to tailor training to fit the interactive gamers’ mindset.

But Tulgan believes that playtime-at-work attitude, with managers encouraged to “soft-pedal their authority” is out of sync with hard economic realities. What Gen Y needs, he counters, is strong leadership.

Managers should spell out any workplace rules and steps Gen Y employees need to take to get from A to B, but there are also some things Tulgan advises them not to do:

1. Don’t undermine your own authority
2. Don’t pretend a job’s going to be more fun than it is
3. Don’t gloss over the details
4. Don’t suggest things are up to Gen Y employees if they are not
5. Don’t offer praise or rewards for anything other than excellent performance

Tulgan also dispels some other Gen Y myths — although some read like sophistry (they aren’t disloyal; they “offer the kind of loyalty you get in a free market — that is, transactional loyalty”.)

They will do the grunt work — but they will want to know that someone’s paying attention to what they are doing. They also need a level of feedback that some managers may not be used to providing.

“These kids want feedback multiple times a day,” says Don Tapscott, author of “Grown Up Digital”. He suggests using tools such as Rypple for “real-time performance evaluation”.

Tapscott leans more towards the idea that younger employees are the way forward for business and is an advocate of fun at work. But I doubt he’d disagree with Tulgan’s advice, which is really just a call for managers to take a more structured approach to managing people.

For more of Tulgan’s guidance, there is a good interview on the Complete Lawyer site (he used to be a lawyer). A couple of noteworthy observations: accountability shouldn’t be punishment. And if you think a ’sink or swim’ environment is empowerment, you’ve swung too far in the direction of tough love.

Business schools should stop operating as if they were selling products and take a leaf from modern businesses by deriving revenues from working in collaboration with the customer.

The problem:

Business schools tend to rely on a ‘banking’ model of education. They treat knowledge as a kind of currency.

The practical experience of mangers and business-people is gathered up by researchers, converted into general models and theories, stored in journals and books, and then sold back to practitioners. Even distance learning is the equivalent of the ATM.

But this is simply a distribution business model: knowledge is disconnected from practice, packaged in discrete parcels for later consumption.

Managerial knowledge comes in many types, is already widely distributed, and real learning comes from creative interchange, not one-way delivery.

The alternatives:

Important knowledge is embedded in managerial practice. We can create business education that makes use of this personal and tacit experience by using ‘close learning’ — students are all practicing managers and work with a personal tutor to make use of theories and models that encourage practical improvements.

Wikipedia provides an even more radical metaphor for management education Coachingourselves.com is a new company that helps managers to learn from their own experience.

Establishing knowledge about customer satisfaction, for example, rests with the managers responsible for delivering it.

CoachingOurselves pulls together the people with fragments of experience across a company and provides the intellectual framework, asking provocative questions to organize it into a well-tested theory.

Managers in companies like SAP and Sasken in India have hugely improved their understanding and become more engaged and creative in their managerial work using this approach.

Their new insights feed sessions for the CoachingOurselves portfolio, thus co-creating management knowledge as well as adding value to managerial practice. This is the Web 2.0 version of the business school — a wiki-school.

Close learning is a new metaphor for management education, and the wiki-school is a new way to think about a business school.

Is the recession putting paid to talent management. Several surveys suggest so: PricewaterhouseCoopers’s Global CEO survey finds company bosses struggling to balance the urgent need for cost-cutting with the longer-term, loftier-seeming notions of talent retention.

Globally, workforce development and training are dropping down the priority list and CEOs appear to be oblivious to the need to engage employees or collaborate to find ways of cutting costs.

In a Work Foundation study, called “Knowledge Workers and Knowledge Work”, meanwhile, companies were found to be squandering employee talent by tying them up in regulatory knots and allowing them little say on how they should organise their work. (Seeing a theme around consultation emerging here, anyone?)

Talent Q’s report earlier this month took HR professionals to task for their non-strategic, unco-ordinated approach to managing talent and developing people.

And as if to prove all of the statistics right, here’s a story in People Management about IT business Peer1, which is offering £1,000 to new recruits to leave within two weeks if they feel the job’s not for them.

UK HR director Terry Connor says: “Hopefully, if we interview correctly and trust our instincts”, there won’t be much need for the offer. “It’s a risk we are willing to take to get the best people,” he adds (adding to my bafflement.)

Talent Q director Dr Alan Bourne’s not the biggest fan of Peer1’s “instinct” approach — because the instinct at the moment, he says, is to cut people at departmental level without thinking too much about the longer-term implications for the business.

I asked him what was going wrong with talent management today and whether talent management was a necessary casualty of the downturn. Here’s his advice on adapting talent management to tougher times:

1. Share information and keep data The current economic situation’s exposed a lack of joined-up thinking and gaps in data sharing.

   Key talent’s often spread around the organisation, in different departments, but data as to who those people are is often restricted to senior people if it’s co-ordinated at all.

   There’s a legacy structure, especially in large businesses, that often divides HR up into functions, which may or may not share information. So the flow of information may be disjointed.

   That data could also be used to shave costs of internal development programmes, linking high-potential people up within the business or helping to develop coaching opportunities.

2. Make the business case HR professionals may understand why a joined-up talent management process matters, but they don’t necessarily have the techniques to analyse return on investment.
3. Revive the concept of teamwork Another casualty of the recession, teamwork may be something companies have to re-learn if they are to make it through the ‘new reality’.

   Companies tend to treat team builidng as something they do on away-days. And the past few years have fostered an individualistic work culture that rewarded high growth and acting on your own initiative.

   The context has changed: where high-potential, entrepreneurial individuals worked well in a growth environment, now companies need to develop people who have resilience, are cost-sensitive and understand profitability, who are supportive of leaders and good communicators.”

4. Get it right the first time Lots more people are applying for jobs, so the emphasis must be on making cost-per-hire efficient and making the right decision first time around.

Managing your online reputation has become a must. It is absolutely unthinkable for anyone who wants to make a professional appointment to leave a dodgy photograph on his facebook profile since there are many chances that the person with whom he is about to have an appointment has just gone straight to ‘Google’ his name on the Internet. This is what is called online reputation management (aka ORM), that is to say your image as it is showing online through Internet and social media exposure.

Here are 8 kinds of tools which could help you work on your online reputation:

1. metasearch engines for social media such as http://samepoint.com , will help you check whether you are popular online or not. Samepoint will combine results from various sources such as social networking sites (facebook, mybloglog, linkedin, typepad, wordpress.com, blogger etc.), wikis, bookmarking sites such as delicious and others. I used my own example and I found out my samepoint request could produce up to 1000 results. Not very surprising in fact, because this is the effect of my online work for the past 15 years,
   
2. blog search engines such as technorati or http://blogsearch.google.com make up the second kind of tools which you can use to manage your online reputation. Obviously, the more your write on blogs, including other people’s blogs of course, not just your own, the better your chances to increase your online reputation. Eventually, you will establish the credibility through your writing,
3. news search engines such as Google News which are not only scouring the Net for information from newspapers and press releases but blogs too – as long as they have been deemed reliable sources by the Google people. For your blog to be taken into account by Google you would have to go through the manual process of getting your blog registered. Finding the right place for you to submit your URL can be a bit tricky, so here’s the link which will make you save time,
4. some other search engines look for comments you may have entered on social media sites. http://www.backtype.com for instance, shows a relative low number of comments in my case. This can be explained by the fact that I’m rarely using my own name in comments, even on my own websites and blogs,
5. forum search engines, such as bigboards or Google Groups. Comments in B2C forums can sometimes be pretty direct and they don’t always provide real value with regard to your online reputation. As to expert forums and technical forums however, they can be very instrumental in publicising your expertise,
6. the next category is micro-blogging search engines such as http://search.twitter.com which scans the most popular micro-blogging engine www.twitter.com. that’s how you can recap on someone’s tweets or even trace those who forwarded or commented on your tweets or blog posts,
7. this category consists of social network aggregators such as Yahoo’s outstanding Mybloglog social website which enables you to link your blog to others and make friends with other bloggers and promote your articles,
8. the final category of online reputation tools which I’d like to present here is that of people-centric search engines. I would namely recommend http://www.123people.com and zoominfo. in zoominfo, once you have signed up, you will be also able to claim ownership of your profile.

Now, not only do you have evidence that you are leaving traces about yourself all over the Internet, but also the means to evaluate your reputation and shape your online image. And remember there is no erase and rewind button on the Internet!

The world is changing and will never be the same again. Incremental tweaks to your business are unlikely to create long-term gains.

Instead, organisations must combine shorter-term profit protection with more fundamental changes to their strategy and the way they operate.

There are three different types of response and levels of organisational agility and these reflect the confidence and progressiveness of the management team.

1. Cost minimisation is the first level of agility and involves cutting back on any costs that do not immediately drive the top line.The philosophy behind this approach is that if you get your heads down and keep things lean and tight you will survive to fight another day.Investments in future growth programmes are consequently reduced — training, advertising and R&D are cut back to protect current margins.

   If the company has enough clout, supplier terms are renegotiated.Qantas, for example, has recently announced a new wave of job cuts, delayed expanding its international reach and pushed back the delivery dates for new aircraft.But this approach is inadequate.

   The post-recession world will be different to the pre-recession world and new forms of value will be required.

2. Trading agility is the second level of action, where companies repackage existing products and services in order to maintain and drive customer interest, volumes and sales.At the low end of the scale, this simply means reducing the price of existing products.

   Last week, for example, I was on business in Las Vegas and discounts and deals on rooms and meals were everywhere. But at the top end, trading agility can involve reaching out to new customers who may now be more interested in your proposition.

   For the past few months, Virgin Atlantic has been advertising its Premium Economy offer presumably to cash-strapped business executives who can no longer afford business-class travel on rival carriers.

3. Strategic agility represents the highest level of agility — the corporate cheetah. It is a business’s ability to shift its allocation of resources and reposition its customer value in order to drive future success in a changed world.It is present in those organisations where executives (1) believe that the markets in which they operate are fundamentally changing, and (2) have the foresight and cash to take advantage of new opportunities as they arise.

   Cisco Systems fundamentally changed its organisational approach in 2001 in the light of the bursting of the dot.com bubble.

   In addition to refocusing its product range and cutting costs dramatically,CEO John Chambers also transformed a top-down management approach into a more democratic and responsive organisation.

   How agile is your business?
   Is it focused on cost minimisation, on trading its way out of the recession or on building a new business that can both survive the current recession and the potential to thrive in the future upturn?

(Photo: frederic.salein, CC2.0)

Best Buy is coming to the UK, but only when it is good and ready, according to the US electricals retailer’s international chief executive Bob Willett, speaking at this year’s Retail Week Conference in London.

Slated for a spring 2010 opening, already delayed from the original plan of a UK launch some time this year, the entrance of Best Buy has incumbent retailers like DSGi and Kesa scrambling to up their game.

It looks like they could get even more breathing space if a couple of key aspects are not in place by the proposed open date. One of these is an adequate supply chain infrastructure that can guarantee 98 per cent availability in stores and next day delivery.

The second is a highly competent and motivated sales workforce that will take an active interest and have a say in the running of the business.

If Willett has his way, the days of trying to buy electrical goods from the spotty, teenaged Saturday boy who knows nothing about the store’s products and cares even less about customer service will be gone – a change in UK electricals retailing that can’t come soon enough.

Already, incumbents are reacting to Best Buy’s advent with moves like store refreshes, but it’s probable even they aren’t quite prepared for the sort of shake-up Willett is hoping to bring.

In an uncharacteristically frank presentation for such a business leade, he described how Best Buy’s distribution centres were underutilising space and ran at 40 per cent capacity for much of the year.

This has since been tightened up and the retailer shares parts of its delivery fleet with other businesses. He told the audience this level of collaboration has been met with hostility in the UK, but it’s an indication of how far he wants to go beyond the level of efficiencies retailers currently expect – getting the right product to the right customer at the right time.

(Photo: Ian Muttoo, CC2.0)

The debacle over banking pay and performance has led to people being very wise after the event. Everyone now knows that paying people short-term bonuses for taking long-term risks is dumb — managers cash the bonus and leave the shareholder and taxpayer to pick up the tab when the risk goes sour. As one writer put it:

“Banks reward loan officers on the volume of loans they make. Lending money to people is easy: getting it back is harder. By the time the bad debt mounts up, the loan officers have received their bonus and moved on.”

Wise after the event? No. I wrote that in “How to Manage”, published in 2006, when top bankers thought they were masters of the universe rather than greedy scumbags.

The problem was staring us in the face. If I could see it with my warped eye, then even the abysmal executive teams at HBoS and RBS should have seen it. They saw it, but turned a blind eye while voting themselves ever bigger bonuses.

The godfather of free markets saw this problem over 200 years ago. Adam Smith in “Wealth of Nations”(1776) wrote:

“The directors of such companies (owned by absentee shareholders), being the managers of other people’s money than of their own, it can not be well expected that they should watch over it with the same anxious vigilance with which the partners in a private company watch over their own money…. Negligence and profusion must always prevail, in the management of such a company.”

In other words, executives put themselves first, everyone else third or fourth (employees, taxpayers, environment, shareholders).

The only time when shareholders exert any influence is when the company runs out of cash, because of executive incompetence and profligacy.

Then they need more money from shareholders whose only real choice is to cough up the cash and replace the management in a forlorn hope that the next lot will be more competent and less profligate.

Listen carefully and you can hear the sound of regulators shutting stable doors long after the horse has bolted.

The regulators will vainly try to stop the last bust happening again. They are addressing the symptoms of the problem (solvency ratios, short selling, global regulation etc) not the cause of the problem.

Their solutions are as effective as treating a child’s measles with spot remover. The symptoms go, but the problem of ownership versus management control remains.

What goes round, comes round. Give it another 10 years, and we will see the same problems emerging in a different form. You read it here first.

(Photo: Andrew_J_W, CC2.0)