SAST Wingees

Do leaders overcompensate for their strengths?

Recently Brad Feld wrote an insightful post titled “Do CEO’s overcompensate for their strengths?“.  The key insight he found is that – depending on which function the CEO came from, s\he hires a weak person to handle that function and ends up spending most time beefing up that function. This results in other functions suffering from lack of focus on the part of the CEO. His example:

while the sales oriented CEO might hire a weak VP of
Sales, he overcompensates for this, spends a lot of time “leading
sales”, and ends up with an effective sales organization.  However, the
CEO neglects other parts of their organization because he spends to
much time on sales, and as a result is a less effective CEO.

This got me thinking and I realized that this overcompensation phenomenon probably occurs in many leadership roles which involves multiple sub-disciplines. For instance, in software development, a project manager (PM) has to manage Technical Architects, Test Leads, Functional Leads, Development Leads, Data Architects, Process Leads etc.  As I started to think about the many projects I have come across, I think this overcompensation pattern does play out a lot. Depending on which of these disciplines the PM came from, there is a lot of focus on that area. The one difference (from what Brad observed), I have observed is that overcompensation happens even when a “star” player is in charge of that discipline.  The project manager still tries to spend a lot of time in that discipline overriding or questioning decisions made by the Technical Architect or the other Leads as the case maybe, frustrating the team as well as the leaders in question. If you extend this a bit further, I think this can happen even to other functional leaders. Today, the business environment is so complex that every function (accounting, marketing, sales, engineering..) consists of many sub-disciplines. Therefore, depending on which sub-discipline the leader came from, that sub-function could witness this overcompensation problem. As I was doing some reading on this topic, I came across an excellent essay titled “the leader’s new work” by Peter Senge, the man who propagated the idea of the learning organization through his many books. I read this essay in a compilation of excellent essays in the book How Organizations Learn. It includes essays from Chris Argyris, Rosabeth Moss Kanter, Tom Peters and others. Peter Senge talks about an organizational archetype he describes called “Shifting the burden”.  He says in this type of organization, the people keep creating lot of short term solutions which do produce the results but is unable to solve the foundational issue which if solved could lead the organization to long term leadership. He cites an example:

Several years ago, a team of managers at a consumer goods organization, found themselves under financial stress. There were 2 solutions they could think of – market promotions or product innovation. Given that market promotions give short term results, they kept choosing that option. Therefore, over the longer term, the company’s product innovation suffered and it started sliding further – essentially they had “shifed the burden” away from product innovation and hence it slid. When they dug deeper, it was found that the past 3 CEOs of that company had come from the Advertising function. Naturally, this led the teams to choose the politically expedient solution to the problem at hand.

This is another insight into this problem – the political values of the organization, typically, stem from the core expertise of the leader.  Aside from the expertise of the people running a particular function or sub-function, the leader also needs to look at whether the politics in the company is driving a certain behavior and preventing learning. In sum, as a leader, you have to constantly be on the look-out for unnecessary over-focus on certain areas that are stemming from – your own  expertise bias or  your  team member’s biases or simply  the political equation in the organization.

World eBook Fair – till Aug 4th 2006

We have all heard of book fairs. Now this idea has migrated online. There is a world e-book fair going on since July 4, 2006 and they are giving away a number of ebooks and audiobooks for free. Collection includes classics like “Alice in Wonderland”. Check it out.
<Via Bhojaraju G>

The World eBook Library Consortia Collection shelves more than 330,000 PDF eBooks in 100+ languages contained in 112 of the finest eBook and eDocument collections published on the Internet today. The mission of the World eBook Library’s Acquisition Department is to add new eBooks 24/7 to our shelves.

Fortune magazine agrees – rank and yank is dead

Its always encouraging when the Fortune Magazine (MSM) agrees with a call we made  2 months ago – the death of “rank and yank“.  Fortune has actually gone one step further and declared most of Jack Welch’s rules as obsolete in the current circumstances, including his famous rule “be the No.1 or No.2 in the market or exit the market”.  This has appeared as the cover story titled “tearing up the Jack Welch Playbook”  in the latest issue of Fortune Magazine. Check it out. Flashback:
1. Tournament theory of compensation

Creative Destruction

Updated July 18,2006 (please see references below). Creative Destruction by Richard Foster and Sarah Kaplan of McKinsey is an excellent book, first published in 2001.  Lots of insights.

First, they show using data from the Mckinsey Performance Database (an internal database which has information about the historical financial performance of companies) and the S&P 500, that the market does a better job of weeding out the non-performers. It appears that as of the writing of this book only 2 companies had beaten the s&p 500 over the long term – GE and Eastman Kodak. Given Kodak’s recent performance, GE maybe the one and only.  Another insight is that the average tenure of a company on the S&P 500 index has fallen from over 65 years in 1920s to about 20 today and by 2020 would fall to 10 years. The key takeaway is that we have reached the age of discontinuity from an age of continuity and so the likelihood of any one company beating the S&P 500 is next to impossible. Given that no company is able to meat the S&P 500 what can companies do? S&P 500 does it by evolving with the economy adding and deleting companies, over time reflecting the broader mix of industries in the economy as a whole. Foster and Kaplan say that companies must also destruct their products at a rate in pace with that of the market or better. For a company to do that, they say that companies should practice more divergent thinking – the type that generates more radical ideas or those that produce transformational innovation. Another interesting idea they propose is that of scanning the periphery. For instance, you can observe which companies in your industry or adjacent industries are obtaining VC funding.  The gales of destruction as they call it start at the periphery.

I think Clayton Christensen’s approach, as described in The Innovator’s Solution, of competing against non-consumption is an excellent technique for monitoring the periphery. If you observe why a certain population of customers is not consuming your product, it can give you clues to the probable birthplace of your next disruptive competitor.  They also cite a few other ideas like how Nike gets a first hand view of customer likes/dislikes through their Nike Town stores. Overall, this is a book which contains another view of how to tackle discontinuities by saying that from now on discontinuities are the only certain thing, continuity is dead. Overall, its an excellent effort by Foster and Kaplan. Negatives:
The whole chapter on how J&J sought McKinsey’s help at the time IBM was in turmoil to ensure they don’t fail in the same way seemed more like a sales pitch than real insights. Even the frameworks process as they call it (discovery, “forcing event”,synthesis are the 3 phases) seems to be pretty basic to be considered path-breaking. The number of times Enron has been praised is a bit jarring. Yes, Enron had not yet melted down then. But it is still jarring. References:
1. Scanning the periphery for weak signals an excellent article in the HBS’S Working Knowledge. <Via Sadagopan>

Kawaii – the japanese phenomenon of cute

Kawaii – Japanese for cute is sweeping the Japanese marketplace. Hello Kitty is an example of cute products which has made it stateside. Many products like toasters, cell phones, flash drives and air-conditioners have been Kawaii-ed in Japan. Piers Fawkes of PSFK tells me that this has been going on for a few years now. <Via Hemispheres Magazine>