Sterling Performance

Research says that the regions that will best withstand recession will be globally and locally connected, and open to knowledge-sharing. And this would seem to make sense for organisations themselves, too.

In its report, “Innovation by Adoption”, London’s National Endowment for Science, Technology and the Arts (NESTA) predicts that those UK regions with connections to businesses in a number of different global locations will be will be most resilient to recession. They will be more innovative because they will be able to build on new ideas and contacts from around the world.
Locations with good inter-regional communications will also withstand a downturn better. But all UK regions need to become better at accessing knowledge and sharing it.

Overall, the report claims the regions best equipped to withstand a recession are London, the East of England, the South East and the central area of Scotland.

This is largely because they are regions with the highest concentration of “Russell Group” universities (the group of 20 research-intensive universities that includes Bristol, Cambridge, Oxford and Warwick) , as well as R&D-intensive organisations.

This creates a virtuous circle of innovation and knowledge sharing, and ensures these locations can draw on new ideas to stimulate the local economy.

All UK regions need to diversify and make more international connections. “More attention needs to be paid to how firms and universities acquire new ideas from other places,” says the report. The one-size-fits-all approach to regional development should be replaced by one that focuses on local strengths and weaknesses.

What applies regionally can also be scaled down to apply to a single company. The natural tendency of regions, and companies, is to close ranks during financial crisis, witholding knowledge that may seen as a key competitive advantage.

But the recession may be an opportunity to try what “Crowdsourcing” author Jeff Howe calls “competitive collaboration” — an approach familiar to the gaming community but probably less so to many CEOs.

NESTA’s CEO, Jonathan Kestenbaum, counsels UK businesses to resist that urge and instead learn “to respond flexibly and creatively”.

Learning to collaborate without giving away competitive advantage may not come naturally, but if you apply NESTA’s findings at corporate level, it will become a necessity for any company that wants to thrive in a downturn.

What do you think — is competitive collaboration too risky to test out during a downturn?

(Photo: Mishel Churkin, CC2.0)

Strategic breakthroughs occur when an organisation exploits a change in the market. The current economic turbulence is creating market changes for most businesses. Consequently, despite the difficulties in immediate trading, your organisation also faces great opportunities if you know how to spot and exploit them.

Trying to sit tight and do what you’ve always done, but at lower cost, is unlikely to be a recipe for short- or long-term success. Your customers (and non-customers) are likely to have different needs to those they had 12 months ago.

Innovation has never been more important. It can help your business survive and even thrive as we pass through the coming recession.

The building blocks of innovation are ideas. Taking the time to generate new ideas — whether for new product development, better IT project management or lower-cost HR support — always delivers a great ‘return on effort’ if it is carried out with a robust approach.

Over the summer, for example, I worked with Jo, a product brand manager, to turn the taps back onto an arid new product pipeline. We established a short, focused work programme based on three core principles that may apply in your business:

1. Establish a diverse team. Diversity encourages a mix of ideas and the creative tension that is vital to success. For Jo, we involved the product development managers, buyers, marketing managers and sales teams. We also invited finance, an external expert and a trusted supplier onto the team.
2. Look at the question through a variety of angles. I helped Jo and her team to generate ideas based on
   • (a) how other non-related companies might approach the issue (we used Boeing and BMW, among others)
   • (b) how they could kill the core assumptions of the category — why is the product made of that material? Why is it odourless? Why is it consumed at home?
   • (c) how they could make stronger links between their new products and key lifestyle trends, such as social networking.
3. Engage customers early. At the end of a full day’s workshop we held two customer group sessions. These provided immediate customer feedback on the group’s initial thinking. And they encouraged the team to create prototypes — pictures, diagrams or small, simple models — in order to shape their thinking and share their ideas more easily.

These three principles — a diverse team, using a variety of angles and early customer engagement — helped Jo and her team generate over 100 ideas and identify 12 major new products for further development, three of which will be brought to the market within six months.

Where does your business need new ideas right now? Share your thoughts and successes below.

Moving into a leadership role is far from easy. Rarely are you given a blueprint of what it takes to be successful. New leaders are left to work that out for themselves. But there are a couple of big banana skins they can avoid if they are aware of them.

One of the main reasons people fail is that they apply the same approach and the same behaviour that made them successful in their last role. It’s only natural — very few people persist in things that fail or stop doing things that succeed. The psychologist Edward Thorndike called this the Law of Effect. We call it common sense.

But new leaders have to think beyond the formula: performance leads to results. They now have to consider another ‘p’, perception, and another ‘r’, relationships.

Perception
Your success in a job, especially in the first 90 days, depends to a large degree on how you are perceived by others. Perceptions of you are principally based on your observed behaviour — what you say, what you do, what decisions you make, how you react to situations, how you treat people. You are what people perceive you to be. Individuals who fail to understand that limit their career potential severely.

The higher up the leadership ladder you move the more the things you say and do are scrutinised and magnified. As Niall FitzGerald, deputy chairman of Thomson Reuters, once said: “One of the things that leaders don’t fully recognise is that when they speak or act, they are speaking into an extraordinary amplification system.”

Actions to which you may pay little attention will be subject to interpretation — and misinterpretation.

There’s a story about a factory manager who inadvertently fuelled a belief among staff that the business was going to be sold to a Japanese company simply by taking a group of Japanese managers on a tour of the factory to show them some new processes.

Relationships
Leadership implies getting other people to do things. But “followership” is not the pure reciprocal of leadership. Getting things done depends on a lot of people other than direct reports. Without the support and advice of individuals in different parts of the business, it would be impossible to work through the obstacles that systems, processes, procedures and interest groups create. Every successful manager knows there is a formal structure and an informal one — and it is the informal one that actually makes things work.

Research into why new leaders fail shows they don’t know who they should be creating relationships with and, more than 75 per cent of the time, they haven’t got a clear idea of what behaviour’s expected and what is censured.

Unless they identify the people who can help them with this, and establish good relationships with them, it’s likely they’ll fail in their new role.

(Photo: a.drian, CC2.0)

Wall Street has moved seamlessly from greed to fear. Fear is contagious. Fear of being downsized, rightsized, offshored, bestshored, re-engineered, let go or plain fired is on the rise in Main Street as well as on Wall Street. Success is no longer measured in promotions, bonuses and pay rises. Success is called survival.

To survive, you need to make sure that when the cuts come, others are cut before you are. You have to make it hard for your boss to hit the ‘delete’ button when he sees your name. From previous recessions, four principles quickly separate the survivors from the unemployed.

• Be positive. In a world where jobs are complex and ambiguous, it is often hard to identify individual performance. Style counts as much as substance.
  • Be positive when everyone else is gloom-mongering.
  • Look for solutions where others find problems.
  • Focus on the future not on the past.
  • Be supportive rather than play the blame game when things go wrong. Your bosses will find it much easier to fire the negative, problem focused people first.

• Be proactive. This means working harder, which is better than having no work at all. Volunteer for discretionary work, special projects. Make yourself useful to the boss, and make yourself visible to the rest of the organisation. Bosses find it very easy to fire the invisible people: if they can’t be seen, they can’t be missed.
• Be professional. You have to deliver on results and on promises.
• Build your networks inside and outside the organisation. Inside, make sure you have a sponsor at least two levels above you who will look out for you. Make yourself useful to your sponsor. Make sure you are in the grapevine so that you know what opportunities and risks are emerging.
  Externally, manage your network so that you can remain aware of potential openings elsewhere. Help head-hunters if they call. Over 70 per cent of people who find jobs after being let go find them through their personal networks. Your external network is your insurance plan if all goes wrong internally.

There are also two ways of becoming cannon fodder and getting fired.

• Be unlucky. In the wrong place at the wrong time, even the best people will lose out. But if you are really good, you should at least be able to find work elsewhere.
• Be disloyal. Surprisingly, most bosses are reasonably forgiving of most failings. They recognise that humans are not perfect. But the one unforgivable sin is disloyalty. Badmouthing the boss around the water cooler, failing to support the boss in a critical meeting, briefing against the boss are great ways to destroy the basis of trust on which all relationships depend.
  Once the trust has gone, there is no way back: you will be the first through the exit door when the time comes.

(Photo: Orangeacid, CC2.0)

Everyone needs friends during hard times. In business, social networking could be a safety net during recession, helping to build outside partnerships and encourage greater innovation and communication within the business, says think-tank Demos.

It’s done some research for telecoms provider Orange that indicates businesses are beginning to see the value of social networking within the business, using tools such as Facebook, Huddle, Twitter, as well as blogs and wikis to get people collaborating across the business and with customers and partners.

Social networking tools can provide a safety net for business during difficult times, says Peter Bradwell, Demos researcher and the co-author of the report, “Network Citizens”.

“In today’s difficult business environment the instinctive reaction can be to batten down the hatches and return to traditional ‘command and control’ techniques,” he says. But allowing employees flexibility and freedom “appears to create businesses more capable of maintaining stability,” he says.

According to their CEO John Chambers, Cisco saved $150 million through collaborative tools that harnessed networks of ideas: “For the first time, collaborative IT will be so
intertwined with the business strategy you won’t know the difference between the two.”

It also encourages employees to forge relationships across the company, and to build links with customers and partners.

Key areas where social networking can help are in encouraging people to innovate, raising productivity and helping with what Demos calls ‘democratic working’.

But the nature of social networking means there are certain unwritten rules that users should abide by — largely to do with respecting users’ freedom and trusting them not to abuse that freedom.

Some do’s and don’ts for making social networking successful at work:

1. Don’t separate ‘professional’ and ’social’ networking — don’t try to control your team’s use of social networking tools.
2. Do recognise the value of building outside relationships via Web 2.0. Too often, it’s only the most senior people in a business who are allowed to build outside relationships, but the more democratic workplace recognises the value of “horizontal networks” at all levels of the organisation.
3. Keep in contact with former employees through networking.
4. Do encourage employees to use social networking to build relationships with people across the business.
5. Don’t police networks, but do look at how you can improve them and collectively create your own in-house rules for operating within networks. Otherwise, there’s a risk you create exlusive and “self sealing” clubs which act against openness.
6. Don’t allow networking tools to replace face-to-face meetings. Mix and match tools to fit your business needs.
7. Do canvass your employees to find out which tools will work best for your business and try out a few methods before committing — don’t just latch onto the social networking tools competitors are using.
8. Do start at the top — encourage interaction between the business’s senior executives and the rest of the business. Show your commitment to creating an open, democratic organisation by getting everyone to learn how to use social networking tools.

(Photos: Luc Legay, CC2.0)

Fear of failure can prevent people from doing various things, but fear of success also gets in the way. We develop our self-concept from an early age and once it is formed, it is difficult to change. We “know” what we can — and cannot — do.

Sometimes when things are going really well and success is following success there is this little voice that starts saying: “This is too good. I’m not that talented. I can’t sustain this.”

If you listen to the voice, you will never be that good and you won’t succeed. People who play competitive games know all about this. To overcome failure you have to have a level of self-belief and tenacity.

The trick is to overcome failures when they happen — and they will. First, you must recognize that failure’s an essential part of success and that it’s an opportunity to learn and improve.

Second, look carefully at every so-called failure to see what didn’t work and what needs to be done differently. Why is it that the sporting world understands the indispensable nature of performance feedback but public service organisations and companies don’t?

Why does Tiger Woods spend hours practising? So he can play any golf shot imaginable. And why does he have a coach with him while he’s practising? To adapt Bill Clinton’s famous phrase: “It’s the feedback, stupid.”

Third, you need to persevere. The fur trappers of the far north used to say: “The next mile is the only one a person really needs to make”. But if a fur trapper’s motto doesn’t suit you, here’s another source of inspiration: “Perseverance is failing 19 times and succeeding the 20th”.

How can you argue with Mary Poppins?

(Photo: Stewart Rassier, CC2.0)

Most organisations die, not with a bang, but with a whimper. The headlines may be grabbed by the major company disasters, such as Lehman Brothers’ collapse or Enron’s self-destruction.

But corporate cemeteries are more commonly filled with businesses that breathed their last after a long, gradual decline or which were so frail they failed to overcome the organisational equivalent of a common cold.

What’s even more depressing for these companies is that they aren’t missed, or maybe even remembered, by their old customers. Their graves are unkempt, overgrown and abandoned.

The emerging recession will undoubtedly accelerate the demise of many more organisations, large and small. And the companies most at risk are those where their customers don’t really care about them.

Woolworths is currently at the centre of speculation about its ability to survive. The speculation may or may not be true, but what is clear is that their customers seem to have stopped caring.

In a recent Retail Week survey over 40 per cent of shoppers said they wouldn’t miss Woolworths at all if it ceased to exist. For a mass high-street retailer, this is a hugely worrying statistic and suggests that Woolies is in danger of following the likes of C&A or Fine Fare or Safeway — once high-street stalwarts that no longer exist.

There are three cornerstones to building stronger support from your current and potential customers:

1. A distinctive proposition. Customers face too many choices to notice incremental improvements or me-too offers. Distinctive businesses create more interest, excitement and profits. In their book, “Blue Ocean Strategy”, W. Chan Kim and Renee Mauborgne found that out of 100 business launches they studied, only 14 per cent were truly distinctive, but these companies accounted for over 60 per cent of the total profits generated.
2. An engaging experience. Starbucks’s success, for example, was based on its ability to transform the purchase of coffee into a lifestyle experience.
3. A long-term relationship. Tesco’s slogan of “Every little helps” has led it to create a series of small wins for its customers. Quicker queues, new products and services, lower prices and loyalty card benefits have all helped improve the lives of Tesco’s customers and create closer ties between the company and its shoppers.

What do you think? How else can companies become indispensible to customers? Share your ideas below.
(Photo by WWarby, CC2.0)

UCLA neuroscientist Gary Small has found that Web searching and text messaging is changing the way our brains work — and helping us to filter information and make quick decisions.

In a study of 24 adults, he found that experienced Web surfers’ brains showed double the activity in areas controlling decision-making and complex reasoning as the those of fledgling Net users.

It’s nothing short of an evolutionary change, according to Small, whose book, “iBrain: Surviving the Technological Alteration of the Modern Mind”, is all about how technology’s affecting the way people’s minds develop.

“We are changing the environment. The average young person now spends nine hours a day exposing their brain to technology. Evolution is an advancement from moment to moment and what we are seeing is technology affecting our evolution.”

But while technology gives with one hand, it takes with the other. Users can become addicted to surfing and spend so much time scanning the Web for the latest information that they become overstressed. What’s more, too great a focus on virtual friendships and too little on real ones can result in poor social skills, with online ‘friendship addiction’ causing insecurity among users.

Too much time online may leave so-called “digital natives” unable to read human behaviour — a major problem for anyone in a position of leadership, especially in an age when individual personal development is a management priority.

The people who will have the edge in this not-so-distant future will have technological ability and the social skills in equal measure. Either that or their entire business will be run online.

 (Image: Reigh LeBlanc, CC2.0)

Blogging is dead. Long live Twitter, says Paul Boutin in a Wired essay. Apparently, “micro-blogging” sites such as Twitter and Facebook make blogging “so 2004″. Brevity is now the watchword — 140 characters is the limit of a Twitter text (a tweet).

Blogging is cumbersome by comparison. It is, says Weblogs and Mahalo’s Jason Calacanis, “too big, too impersonal and lacks the intimacy” it once possessed.

Meanwhile, social media sites such as YouTube, Flickr and Facebook allow you immediate gratification and the option to post pictures and videos, not just text. Influential tech blogger Robert Scoble is leading the way by focusing on posting videos and Twitter updates, says Boutin.

But alecthegeek, responding to Rory Cellan-Jones’s blog on the subject, makes a few interesting points in favour of blogs as a business tool:

• They allow him to record detailed notes that he can refer to later.
• Sometimes others find them useful and leave him nice comments.
• Customers have been known to check out his blog before giving him a contract.

Mind you, social networking’s also a useful tool for checking people out — it’s regularly used for recruitment and vetting potential suppliers.
The Today programme weighed in with a lively debate on the subject, pitting Luddite John Humphrys against Twitter advocates Robin Hamman of Web 2.0 consultancy Headshift and Technophile writer Kate Bevan.

But its value at work remains open for debate. BNET readers are clearly warming up to it, if Team Taskmaster’s poll is anything to go by. Thirty nine per cent believe Twitter’s definitely an asset at work if used wisely — and BNET itself can now tweet readers the lastest business and management thinking.

But back to Boutin’s assertion. Is blogging dead? Reason dictates that both blogging and micro-blogging will continue co-exist online, along with a range of other networking and communication tools.

Their value to business will also continue to grow, if only because a younger generation of ‘digital natives’ will integrate them into their working lives.

It’s several months since I read Charlene Li and Josh Bernoff’s “Groundswell”, but I recall it offering some valuable tips on how to put social networking to work in your business. Might be worth dusting off for a re-read.

We’re all agreed now, even the pathologically optimistic. Business may be tough for the foreseeable future, at least in the developed world.

Already, we see our customers cutting their cost bases and controlling expenditure for the next budget cycle. This gives us a direct line of sight to the job cuts and changes we will choose to make in order to lead our businesses through these times.  We can also see that we will personally be affected by this. At best we’re likely to change the way we run our division or business. At worst, we could lose our current job.

So here are some principles to bear in mind:

1. The Stockdale Paradox, as described by Jim Collins in “Good to Great”.  I still love this book, despite the 20/20 hindsight which makes me question Fannie Mae as an exemplar organisation.

   Jim Stockdale was a military leader who spent long periods of time as a prisoner of war. His approach while imprisoned was always to confront the brutal truth. He used the difficulties facing him during a harsh internment and helped fellow prisoners deal with torture and communicate without their guards knowing.

   He never lost the belief that he would be able to turn the experience into a defining and positive event in his life. He used the detailed knowledge of the facts to create opportunities that others could not see.

   The takeaway: Face up to reality and have the resilience and creativity to move through it. Exploit the current economic instability, turning it into a time when you really learn how business works. This resilience is completely different blind optimism, which is passive — this is about finding ways to control or influence the performance of our businesses.

2. The second principle is that we can control how much of the news coverage we choose to take on board. Consuming too much of the 24/7 coverage is unhelpful.

   The takeaway: Thanks to technology, you can filter the news to get a higher proportion of useful information.

3. The third is comes right back to Maslow’s Hierarchy of Needs. It is hard to concentrate on making our businesses successful and secure when we fear for ourselves and our families.
   
   The takeaway: Take direct and immediate action to get in as good a place, personally, as possible. Then turn your attention to the business. As an economy and as individuals, creative and positive commerce provides the best outcome for us all.

   (Image by Pinkarman, CC2.0)