Rosabeth Moss Kanter tells a great story about an executive at a fabric manufacturer who took over a group and demonstrated that he was open to any new ideas. Someone from the production line approached the executive and, in a heavy foreign accent, said he had an idea that might solve a problem that had long bedeviled the company: An important type of fiber would sometimes snap, causing millions of dollars of production delays each year. The executive promised to try the idea, and it worked.
“That was a great idea,” the executive told the worker. “How long have you had this idea?”
“Thirty-two years,” the worker replied.
Source: Let’s Get Persian by Paul B. Carroll and Chunka Mui | ChangeThis, October 2008
Rabu, 24 Agustus 2011
Sales Treating Mistakes as Training
here’s the story of a top salesman who made a terrible mistake. He’d bought a vast amount of fruit. He thought it would be a bargain but had totally overestimated and his company was left with tons and tons of this rotting fruit. He arrived at his office the following day and started to tidy his papers, clearing his desk. He gets a call from his manager, “Could you pop up and see me?” she says. “Of course” he mumbles and slowly makes his way up the stairs to his boss’ office.
As he enters the room he says “Look I know I got it wrong – I’m sorry – I’ve written my letter of resignation – here it is ” and puts it on the desk.
His manager looks at the letter, rips it in half, rips it in half again and puts it in the bin. “You must be joking” she says smiling ” We’ve just spent £20,000 on your training – there’s no way you’re leaving until you’ve made that back for us.”
As he enters the room he says “Look I know I got it wrong – I’m sorry – I’ve written my letter of resignation – here it is ” and puts it on the desk.
His manager looks at the letter, rips it in half, rips it in half again and puts it in the bin. “You must be joking” she says smiling ” We’ve just spent £20,000 on your training – there’s no way you’re leaving until you’ve made that back for us.”
being an executive in a large company
In 1975, the CEO of pharmaceutical giant Johnson&Johnson presented his executive team with exactly those challenges. He sent the team on a two-day retreat to discuss the founding document of their company, the J&J Credo, which had hung unheeded and yellowing on company walls for decades after it was penned by the company’s founder. The Credo outlines the company’s specific responsibilities to all its stakeholders, starting with its customers—the doctors, nurses, patients and mothers of sick children who buy the companies medicines—as well as its suppliers, employees, host communities and, finally, the company’s share owners.
Toward the end of the meeting, one of J&J’s top executives summarized what he saw as the reality of corporate life. He said that being an executive in a large company was like being a circus juggler, attempting to keep five balls in the air simultaneously. Four of those balls were white (those representing customers, suppliers, employees and communities). The fifth ball, the one representing shareholders, was red. To the approval of most of his fellows in the room—and, in fact, reflecting the beliefs of the vast majority of corporate mangers at the time—the executive said it was possible to drop one of the white balls and still survive, but allowing the red ball of profit to fall would be fatal. At that point, the company’s president, James Burke, spoke up and said: “My friend, I am afraid you are wrong. Today, all the balls are red.”
By being the first corporate leader to acknowledge this new reality, and thus to accept the challenge of balancing the legitimate needs of all of J&J’s stakeholders, Burke later went on to become one of the most successful CEOs in North America. When his European competitors paid bribes to win business in developing markets, he refused to do so. When it was discovered that eight people had died from ingesting cyanide-laced Tylenol capsules (a J&J product), he immediately assumed full responsibility for the deaths, pulling $100 million worth of the analgesic off drugstore shelves. He then opened the company’s executive suite to the media and dealt with the issue in a transparent manner that, to this day, stands as the model for corporate crisis management. His critics in the financial community said he was a fool to do so, and that his actions would cause the company to go bankrupt. He was urged to put the interests of his shareholders first: Remember the red ball! Later, it was discovered that a psychopath had placed the poisoned bottles on the shelves of only a few stores in one city; therefore, the company was not responsible for the deaths. But by publicly assuming responsibility before that fact was known, J&J built such a strong reputation for integrity that it recovered quickly and went on to new heights of profitability.
In short, Burke did what was the unthinkable in North American big business in the 1980s and 90s: He sacrificed short-term profits to do the right thing for his company’s stakeholders in the conviction that it is the long term that counts. That he was right to do so is a lesson finally being learned in the executive suites of many large American companies.
Source: Connecting the Dots Between Leadership, Ethics and Corporate Culture by James O’Toole | Ivey Business Journal, September/October 2009
Toward the end of the meeting, one of J&J’s top executives summarized what he saw as the reality of corporate life. He said that being an executive in a large company was like being a circus juggler, attempting to keep five balls in the air simultaneously. Four of those balls were white (those representing customers, suppliers, employees and communities). The fifth ball, the one representing shareholders, was red. To the approval of most of his fellows in the room—and, in fact, reflecting the beliefs of the vast majority of corporate mangers at the time—the executive said it was possible to drop one of the white balls and still survive, but allowing the red ball of profit to fall would be fatal. At that point, the company’s president, James Burke, spoke up and said: “My friend, I am afraid you are wrong. Today, all the balls are red.”
By being the first corporate leader to acknowledge this new reality, and thus to accept the challenge of balancing the legitimate needs of all of J&J’s stakeholders, Burke later went on to become one of the most successful CEOs in North America. When his European competitors paid bribes to win business in developing markets, he refused to do so. When it was discovered that eight people had died from ingesting cyanide-laced Tylenol capsules (a J&J product), he immediately assumed full responsibility for the deaths, pulling $100 million worth of the analgesic off drugstore shelves. He then opened the company’s executive suite to the media and dealt with the issue in a transparent manner that, to this day, stands as the model for corporate crisis management. His critics in the financial community said he was a fool to do so, and that his actions would cause the company to go bankrupt. He was urged to put the interests of his shareholders first: Remember the red ball! Later, it was discovered that a psychopath had placed the poisoned bottles on the shelves of only a few stores in one city; therefore, the company was not responsible for the deaths. But by publicly assuming responsibility before that fact was known, J&J built such a strong reputation for integrity that it recovered quickly and went on to new heights of profitability.
In short, Burke did what was the unthinkable in North American big business in the 1980s and 90s: He sacrificed short-term profits to do the right thing for his company’s stakeholders in the conviction that it is the long term that counts. That he was right to do so is a lesson finally being learned in the executive suites of many large American companies.
Source: Connecting the Dots Between Leadership, Ethics and Corporate Culture by James O’Toole | Ivey Business Journal, September/October 2009
Where’s the Brown M&M in Your Business?
In its 1980s heyday, the band Van Halen became notorious for a clause in its touring contract that demanded a bowl of M&Ms backstage, but with all the brown ones removed. The story is true — confirmed by former lead singer David Lee Roth himself — and it became the perfect, appalling symbol of rock-star-diva behavior.
Get ready to reverse your perception. Van Halen did dozens of shows every year, and at each venue, the band would show up with nine 18-wheelers full of gear. Because of the technical complexity, the band’s standard contract with venues was thick and convoluted — Roth, in his inimitable way, said in his autobiography that it read “like a version of the Chinese Yellow Pages.” A typical “article” in the contract might say, “There will be 15 amperage voltage sockets at 20-foot spaces, evenly, providing 19 amperes.”
Van Halen buried a special clause in the middle of the contract. It was called Article 126. It read, “There will be no brown M&Ms in the backstage area, upon pain of forfeiture of the show, with full compensation.” So when Roth would arrive at a new venue, he’d walk backstage and glance at the M&M bowl. If he saw a brown M&M, he’d demand a line check of the entire production. “Guaranteed you’re going to arrive at a technical error,” he wrote. “They didn’t read the contract…. Sometimes it would threaten to just destroy the whole show.”
In other words, Roth was no diva. He was an operations expert. He couldn’t spend hours every night checking the amperage of each socket. He needed a way to assess quickly whether the stagehands at each venue were paying attention — whether they had read every word of the contract and taken it seriously. In Roth’s world, a brown M&M was the canary in the coal mine.
Like Roth, none of us has the time and energy to dig into every aspect of our businesses. But, if we’re smart, we won’t need to. What if we could rig up a system where problems would announce themselves before they arrived? That may sound like wishful thinking, but notice that it’s exactly what Roth achieved. Surely, you won’t be outwitted by the guy who sang “Hot for Teacher.”
Where’s the brown M&M in your business?
Get ready to reverse your perception. Van Halen did dozens of shows every year, and at each venue, the band would show up with nine 18-wheelers full of gear. Because of the technical complexity, the band’s standard contract with venues was thick and convoluted — Roth, in his inimitable way, said in his autobiography that it read “like a version of the Chinese Yellow Pages.” A typical “article” in the contract might say, “There will be 15 amperage voltage sockets at 20-foot spaces, evenly, providing 19 amperes.”
Van Halen buried a special clause in the middle of the contract. It was called Article 126. It read, “There will be no brown M&Ms in the backstage area, upon pain of forfeiture of the show, with full compensation.” So when Roth would arrive at a new venue, he’d walk backstage and glance at the M&M bowl. If he saw a brown M&M, he’d demand a line check of the entire production. “Guaranteed you’re going to arrive at a technical error,” he wrote. “They didn’t read the contract…. Sometimes it would threaten to just destroy the whole show.”
In other words, Roth was no diva. He was an operations expert. He couldn’t spend hours every night checking the amperage of each socket. He needed a way to assess quickly whether the stagehands at each venue were paying attention — whether they had read every word of the contract and taken it seriously. In Roth’s world, a brown M&M was the canary in the coal mine.
Like Roth, none of us has the time and energy to dig into every aspect of our businesses. But, if we’re smart, we won’t need to. What if we could rig up a system where problems would announce themselves before they arrived? That may sound like wishful thinking, but notice that it’s exactly what Roth achieved. Surely, you won’t be outwitted by the guy who sang “Hot for Teacher.”
Where’s the brown M&M in your business?
Skipping Design Research Can Be Costly
Skipping design research can be costly. For example, high-end German automobile manufacturers were stunned when U.S. customers would not buy cars without cup holders. While drinking coffee in the car seemed unthinkable to Europeans, it wouldn’t have taken much design research to learn how important it is to U.S. car buyers. The manufacturers, forced to retrofit, created some of the most complex, expensive, unreliable and least user-friendly cup holders ever produced. Design research findings are not typically assembled in the form of data and reports but are instead stories and characters, often captured on video. Such findings resemble and evoke real experience more powerfully than data and reports can, vividly conveying the desired emotional connections between people, products and services, and they help a company to triangulate these findings with appropriate technologies and economic objectives.
Source: The Evolution of the Design-Inspired Enterprise | Gabriella Lojacono, Gianfranco Zaccai | Rotman Magazine, Winter 2005
Source: The Evolution of the Design-Inspired Enterprise | Gabriella Lojacono, Gianfranco Zaccai | Rotman Magazine, Winter 2005
The Best Bosses Shield those Who Work for Them
Annette Kyle managed some 60 employees at a Texas terminal where they loaded chemicals from railcars onto ships and trucks. In the mid-1990s, Annette led a “revolution” that dramatically raised her unit’s performance through a host of changes, including better planning, greater responsibility at the lowest levels, improved and more transparent metrics, and numerous cultural changes. She personally sewed “no whining” patches on workers’ uniforms, for example, to discourage the local penchant for complaining and auctioned off her desk to workers for $60 because, as she explained it, “I shouldn’t be sitting behind a big desk. I should be contributing to team goals however possible.”
This transformation virtually eliminated the penalties that were levied when ships arrived at the terminal’s dock but (despite considerable advance warning) workers weren’t ready to load them. These “demurrage charges,” which cost the company $2.5 million the year before the revolution, were down to $10,000 the year after. Previously, it had taken more than three hours to load an average truck. Afterward, more than 90 percent were loaded within an hour of arrival. Surveys and interviews by University of Southern California researchers showed that employees became more satisfied with their jobs and felt proud of their accomplishments. I asked Annette how she could make such radical changes in her giant company. She answered that her boss shielded her from top-ranking managers—he found the resources and experts she needed but never discussed these moves with senior management until they succeeded.
Source: Why Good Bosses Tune in to Their People by Robert I. Sutton | The McKinsey Quarterly
This transformation virtually eliminated the penalties that were levied when ships arrived at the terminal’s dock but (despite considerable advance warning) workers weren’t ready to load them. These “demurrage charges,” which cost the company $2.5 million the year before the revolution, were down to $10,000 the year after. Previously, it had taken more than three hours to load an average truck. Afterward, more than 90 percent were loaded within an hour of arrival. Surveys and interviews by University of Southern California researchers showed that employees became more satisfied with their jobs and felt proud of their accomplishments. I asked Annette how she could make such radical changes in her giant company. She answered that her boss shielded her from top-ranking managers—he found the resources and experts she needed but never discussed these moves with senior management until they succeeded.
Source: Why Good Bosses Tune in to Their People by Robert I. Sutton | The McKinsey Quarterly
Criticizing your servant
Criticizing a subordinate can be a real test for even the most seasoned manager. Too often what is supposed to be a constructive session turns into a futile confrontation, with mutal gripes and hard fellings, but no solution of the problem.
5 simple suggestions can help the manager make criticizm sessions more productive and problem-solving.
1. Get to the point. Don't ecade the issue. Skip the small talk and go straight to the target: "Bill, I want to talk to you about your late reports". This advice appears cold and heartless. You probably fell that a warm and friendly opening, such as " Bill, How are you? that will relax your subourdinate and ease the path to solving the problem.
But. it rarely works out that way. Stalling and beating around the bush usually only increase the anxiesties on both sides.
2. Describe the situation. Use a descriptive opening that is specific. not general. Avoid evaluative openings at all costs.
example: Bill, I can no longer deal with you late, sloppy reports." Descriptive: "Bill. you've been late on three reports in the last two weeks.
5 simple suggestions can help the manager make criticizm sessions more productive and problem-solving.
1. Get to the point. Don't ecade the issue. Skip the small talk and go straight to the target: "Bill, I want to talk to you about your late reports". This advice appears cold and heartless. You probably fell that a warm and friendly opening, such as " Bill, How are you? that will relax your subourdinate and ease the path to solving the problem.
But. it rarely works out that way. Stalling and beating around the bush usually only increase the anxiesties on both sides.
2. Describe the situation. Use a descriptive opening that is specific. not general. Avoid evaluative openings at all costs.
example: Bill, I can no longer deal with you late, sloppy reports." Descriptive: "Bill. you've been late on three reports in the last two weeks.
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