This is only a short article which lacks depth but is interesting in that it reveals the results of a recent poll to determine the 50 most influential management thinkers. One has to be suspicious of such lists which can often be poorly researched and produced to achieve headlines, but this one seems legitimate. It has been produced by the Times for many years in cooperation with London and Madrid Business Schools, and is based on a sample of 3,000 people.
There are comparisons with a similar survey two years ago so it is possible to see who are the rising and falling stars. As indicated by the headline above C.K Prahalad of the University of Michigan is seen as the most influential guru; he is best known for having introduced the concept of core competences into the management arena. His continuing influence is perhaps surprising as he has written very little since 2004 and has not come up with much that is original since his book ‘Competing for the Future’, jointly authored with Gary Hamel in 1996.
Even more surprising is the placing of Michael Porter of Harvard - famous for his ‘five forces of competitive advantage’ and number one in the 2005 survey - as only 11th, particularly when you look at some of those above him. Porter would be particularly concerned to see INSEAD’s Chan Kim and Renee Mauborgne ahead at number 5, with their - compared to Porter - rather shallow concept of ‘Blue Ocean Strategy’. It perhaps shows that a good label and a few headlines can push up your ratings in any one year.
It is interesting that some of those above Porter are practising businessmen like Bill Gates and Steve Jobs, which perhaps indicates a welcome move away from academic dominance. A surprising omission from the top 20 is Warren Buffet and a surprising inclusion is Richard Branson, perhaps confirming the European bias of the survey.
Another interesting development is the significant advance made by Malcolm Gladwell, author of the Tipping Point and the Outliers (as reviewed in past blogs). His advance from 8th to 2nd behind Prahalad is significant because he is neither an academic nor a businessman but instead a writer and journalist of Canadian origin. The wide publicity given to his latest book has obviously influenced his rating, together with an interest in his favourite topic - what makes people successful.
Other interesting snippets are that the top 20 contains six people of Indian origin and that the top 50 contains only five females. Much more important to us is the lack of an MTP tutor in the top ten! More seriously, we do find it surprising that Constantinos Markides of London Business School is not in the top 20; his work on the strategic aspects of innovation - ‘Fast Second’ - and another book on game changing strategies, have been very well received by managers on our courses and are certainly more valuable and practical than the work of some in this list. Perhaps it is proof that, to be influential, good PR and marketing are needed as well as original ideas.
To read this article go to
http://business.timesonline.co.uk/tol/business/management/article6873407.ece
Friday 27 November 2009
‘The Innovator’s DNA’ by Dyer, Gregersen and Christensen, Harvard Business Review, December 2009
This article is based on six years of research at Harvard, looking at the most successful senior level innovators and finding out what it is that makes them so successful. This immediately raised an objection in my mind, particularly when the name of Steve Jobs of Apple was mentioned in the first paragraph. I have read several biographies of this amazing man and note how he does things that other lesser mortals could never get away with; he seems to achieve the blind loyalty of his staff, despite treating them appallingly by most standards. To quote one of his biographers - ‘you can admire him but should never try to copy him’.
Nevertheless, despite this reservation, the article does have much to commend it. It starts by making a statement that should be of interest to those CEOs who see their role as facilitating innovation by others; the evidence of the research is that the CEOs of the most innovative companies like to do it themselves. It’s the one thing they don’t delegate.
There are five skills that are seen as fundamental to executives who want to be creative, what the research classifies as ‘discovery skills’ on which the most successful spend 50% of their time.
These are:
• Associating, making connections between different concepts and ideas
• Questioning, asking challenging questions, always why and what if, rather than how (Michael Dell tries to ask the questions that people don’t think he will ask)
• Observing, particularly how actual and potential customers behave in their everyday lives, small insights that can lead to new opportunities.
• Experimenting, trying out new ideas, not being afraid to launch pilots and test markets
• Networking, meeting people from lots of different fields (one particularly interesting insight was that the more countries you have lived in, the more likely you are to be innovative)
Other insights are that the really successful entrepreneurs have more than just these five skills. They also have a desire to change the world, to challenge the status quo, to take risks and to be unafraid of mistakes. Perhaps the other factor that allows this to happen is the ability to create a business that does not rely on risk averse colleagues and shareholders; it is interesting that most of those who are mentioned in the article started off with close private ownership.
The authors believe that ordinary mortals can develop the five skills by practice and I am sure that this will improve whatever qualities are being displayed now. However, I remain unconvinced that this would make me, or any other mere mortal, into a Jobs or a Dell. But, for those who want to encourage innovation, there is a lot to be learned from the article and the research on which it was based.
To read this article go to
http://hbr.harvardbusiness.org/2009/12/the-innovators-dna/ar/1
Nevertheless, despite this reservation, the article does have much to commend it. It starts by making a statement that should be of interest to those CEOs who see their role as facilitating innovation by others; the evidence of the research is that the CEOs of the most innovative companies like to do it themselves. It’s the one thing they don’t delegate.
There are five skills that are seen as fundamental to executives who want to be creative, what the research classifies as ‘discovery skills’ on which the most successful spend 50% of their time.
These are:
• Associating, making connections between different concepts and ideas
• Questioning, asking challenging questions, always why and what if, rather than how (Michael Dell tries to ask the questions that people don’t think he will ask)
• Observing, particularly how actual and potential customers behave in their everyday lives, small insights that can lead to new opportunities.
• Experimenting, trying out new ideas, not being afraid to launch pilots and test markets
• Networking, meeting people from lots of different fields (one particularly interesting insight was that the more countries you have lived in, the more likely you are to be innovative)
Other insights are that the really successful entrepreneurs have more than just these five skills. They also have a desire to change the world, to challenge the status quo, to take risks and to be unafraid of mistakes. Perhaps the other factor that allows this to happen is the ability to create a business that does not rely on risk averse colleagues and shareholders; it is interesting that most of those who are mentioned in the article started off with close private ownership.
The authors believe that ordinary mortals can develop the five skills by practice and I am sure that this will improve whatever qualities are being displayed now. However, I remain unconvinced that this would make me, or any other mere mortal, into a Jobs or a Dell. But, for those who want to encourage innovation, there is a lot to be learned from the article and the research on which it was based.
To read this article go to
http://hbr.harvardbusiness.org/2009/12/the-innovators-dna/ar/1
‘Is it fair to blame Fair Value Accounting for the financial crisis?’ by Robert C Pozen, Harvard Business Review, November 2009
A review of this article is included for our many contacts from the finance function, though it will hopefully be of general interest to all. However it is suggested that the full reading of the article should be confined to those with good accounting knowledge and an understanding of the issues involved. Though it is well written and simplifies as much as possible, there are some topics where even the best explanation is too complex for the lay person.
The question in the article’s title seems too obvious to require anything other than a quick ‘no’ but apparently serious commentators - including Steve Forbes, a high profile media figure and former US presidential candidate - have been putting forward this view. The authors reject the suggestion but, in their closing arguments, do concede that it has been a factor in reducing the stability of the banking system.
The basic question is not new and has been a subject of dispute in accounting circles since the 1970s when high inflation caused people to question conventional accounting reporting. Do you value assets at what you paid for them (historical cost) or what they are now worth? And if the latter, how do you value them? And does this apply to both assets that have gone up in value and those that have gone down?
Enron was an example of a company that moved away from historical cost methods and developed their own highly dubious ‘mark to market’ system which was used to produce imaginary profits and fraudulent results. This encouraged people like me to criticise the use of non-historical valuations and to recommend going back to good old conservative accounting methods.
However it was in an attempt to be conservative that the accounting authorities insisted on ‘mark to market’ methods for assets that have gone down in value and this is where the blame for the financial crisis has arisen. Should banks have to show investment assets at their current, maybe temporary, lower values and charge these losses in their accounting statements when they intend to hold such assets and in all probability, their value will recover? Isn’t showing such ‘theoretical’ losses only likely to increase the lack of confidence and create a downward spiral to bankruptcy?
There is not time to go into the detail of the highly complex arguments around different types of assets and valuation methods but it is worth mentioning the author’s rather elegant solution, similar to one that I have been advocating since the days of inflation accounting. If you want to show shareholders the impact of increased or reduced asset valuations, this can easily be produced as a separate statement apart from the main set of accounts. This separate statement can include all the information about methods, assumptions and reservations that inevitably accompany asset valuations and are necessary to fully understand them.
It may cause distrust to have two sets of books but that is better than pretending that one set of accounting statements can tell you everything. But such a solution is far too simple and logical for the accounting bodies of the world to accept so the debates and the misunderstandings will go on. And shareholders will become increasingly sceptical and confused about the results they are seeing.
To read this article go to
http://hbr.harvardbusiness.org/2009/11/is-it-fair-to-blame-fair-value-accounting-for-the-financial-crisis/ar/1
The question in the article’s title seems too obvious to require anything other than a quick ‘no’ but apparently serious commentators - including Steve Forbes, a high profile media figure and former US presidential candidate - have been putting forward this view. The authors reject the suggestion but, in their closing arguments, do concede that it has been a factor in reducing the stability of the banking system.
The basic question is not new and has been a subject of dispute in accounting circles since the 1970s when high inflation caused people to question conventional accounting reporting. Do you value assets at what you paid for them (historical cost) or what they are now worth? And if the latter, how do you value them? And does this apply to both assets that have gone up in value and those that have gone down?
Enron was an example of a company that moved away from historical cost methods and developed their own highly dubious ‘mark to market’ system which was used to produce imaginary profits and fraudulent results. This encouraged people like me to criticise the use of non-historical valuations and to recommend going back to good old conservative accounting methods.
However it was in an attempt to be conservative that the accounting authorities insisted on ‘mark to market’ methods for assets that have gone down in value and this is where the blame for the financial crisis has arisen. Should banks have to show investment assets at their current, maybe temporary, lower values and charge these losses in their accounting statements when they intend to hold such assets and in all probability, their value will recover? Isn’t showing such ‘theoretical’ losses only likely to increase the lack of confidence and create a downward spiral to bankruptcy?
There is not time to go into the detail of the highly complex arguments around different types of assets and valuation methods but it is worth mentioning the author’s rather elegant solution, similar to one that I have been advocating since the days of inflation accounting. If you want to show shareholders the impact of increased or reduced asset valuations, this can easily be produced as a separate statement apart from the main set of accounts. This separate statement can include all the information about methods, assumptions and reservations that inevitably accompany asset valuations and are necessary to fully understand them.
It may cause distrust to have two sets of books but that is better than pretending that one set of accounting statements can tell you everything. But such a solution is far too simple and logical for the accounting bodies of the world to accept so the debates and the misunderstandings will go on. And shareholders will become increasingly sceptical and confused about the results they are seeing.
To read this article go to
http://hbr.harvardbusiness.org/2009/11/is-it-fair-to-blame-fair-value-accounting-for-the-financial-crisis/ar/1
‘Why read Peter Drucker?’ by Alan Kantrow and ‘Drucker Today’ by Rosabeth Moss Kanter, Harvard Business Review, November 2009
HBR includes two articles on Drucker in its November issue to mark the 100th anniversary of his birth and this certainly provides a good opportunity to revisit the work of perhaps the most influential - and certainly the most prolific and long lasting - management thinker of our time. His influence is perhaps in need of revival because in the Times list mentioned above, he was at the top in 2001 but is no longer in the top 20. Of course one factor has been his death in the intervening period; no influence can last for ever.
Of the two articles, Moss Kanter’s is far more insightful and down to earth, as you would expect from someone of her reputation. She demonstrates Drucker’s wisdom by pointing out that much of what he said is relevant to the current economic crisis and, if it had been heeded, would have reduced the impact. In the 1980s he warned of the public backlash from excessive executive pay and also predicted the troubles ahead for General Motors, unless they became more innovative. Moss Kanter attributes this foresight to Drucker’s unique ability to spot broader trends and see beyond the need for short-term profit.
The Kantrow article is in fact just a reprint of one produced in the 1980s and suffers from over complication and theoretical wording. What Ross Kanter calls spotting broad trends, Kantrow calls ‘integrative thinking’ and the author rather pretentiously expresses the view that it was the way Drucker thought rather than the content of his output that was significant, not an easy or relevant separation to my simple mind.
It is however this article that provides the greatest insight into Drucker’s power and popularity. It is in the impact he had on high calibre senior people with concise but powerful statements of - what should be - blindingly obvious. Most impressive is how A.G. Lafley, CEO of Procter and Gamble, states that his leadership of P&G’s superb recovery was driven by Drucker’s simple statement - ‘There is only one valid definition of business purpose; to create a customer’.
Both articles mention Drucker’s wide influence on thinking in the developing world and it is interesting that Zhang Rumin, a CEO of one of China’s biggest companies, also attributes some of his success to the same Drucker quote which he ‘took to heart’ when developing the company’s strategy in the face of competitive challenges and a changing environment. Rumin has another Drucker quote on his wall - ‘Companies fail because the assumptions on which their organisations are being run no longer fit reality’.
Surely these two CEOs and their use of his quotations are a better and more convincing explanation of Drucker’s long-term appeal; he talked common sense and was able to produce memorable bite sized statements that have stayed in the mind of those who really influence events. A few simple sound bites can be worth far more than long articles in learned journals.
To read this article go to
http://hbr.harvardbusiness.org/2009/11/peter-drucker-today/ar/1
Of the two articles, Moss Kanter’s is far more insightful and down to earth, as you would expect from someone of her reputation. She demonstrates Drucker’s wisdom by pointing out that much of what he said is relevant to the current economic crisis and, if it had been heeded, would have reduced the impact. In the 1980s he warned of the public backlash from excessive executive pay and also predicted the troubles ahead for General Motors, unless they became more innovative. Moss Kanter attributes this foresight to Drucker’s unique ability to spot broader trends and see beyond the need for short-term profit.
The Kantrow article is in fact just a reprint of one produced in the 1980s and suffers from over complication and theoretical wording. What Ross Kanter calls spotting broad trends, Kantrow calls ‘integrative thinking’ and the author rather pretentiously expresses the view that it was the way Drucker thought rather than the content of his output that was significant, not an easy or relevant separation to my simple mind.
It is however this article that provides the greatest insight into Drucker’s power and popularity. It is in the impact he had on high calibre senior people with concise but powerful statements of - what should be - blindingly obvious. Most impressive is how A.G. Lafley, CEO of Procter and Gamble, states that his leadership of P&G’s superb recovery was driven by Drucker’s simple statement - ‘There is only one valid definition of business purpose; to create a customer’.
Both articles mention Drucker’s wide influence on thinking in the developing world and it is interesting that Zhang Rumin, a CEO of one of China’s biggest companies, also attributes some of his success to the same Drucker quote which he ‘took to heart’ when developing the company’s strategy in the face of competitive challenges and a changing environment. Rumin has another Drucker quote on his wall - ‘Companies fail because the assumptions on which their organisations are being run no longer fit reality’.
Surely these two CEOs and their use of his quotations are a better and more convincing explanation of Drucker’s long-term appeal; he talked common sense and was able to produce memorable bite sized statements that have stayed in the mind of those who really influence events. A few simple sound bites can be worth far more than long articles in learned journals.
To read this article go to
http://hbr.harvardbusiness.org/2009/11/peter-drucker-today/ar/1
Critical challenges for L&D by Ed Griffin, Training Journal, November 2009
In recent months there seem to have been rather too many articles asking how the L&D function can and should respond to the recession and I have reviewed several in this year’s blogs. And as I read the first few pages of this article, I thought it was the same old stuff - the need to be more focussed, to justify costs, to show value, to connect with the business and achieve senior level sponsorship. This is all true - and not just in recessionary times - but good L&D professionals should not need reminding of it.
It was only when the author began to reveal some quantitative data from CIPD research that I began to get interested. The most interesting result was the high percentage of L&D people surveyed whose companies were, as a result of the recession, placing greater emphasis on retaining people and developing talent in-house. This could lead to the counter-intuitive conclusion that the recession could provide an opportunity for more, rather than less, in-company training and the survey gave some evidence that this is indeed the case.
Unfortunately the examples in the article to justify this conclusion were unconvincing. Scotrail was mentioned by name as a company that was continuing to invest in its people during the recession but the other examples were anonymous and barely relevant. When a name is not quoted it is bound to make one wonder why a company would not want to be mentioned publicly as an investor in its people? Maybe because it is not well known enough to be credible to the reader?
The latter part of the article does move onto practical guidance with the suggestion that simple frameworks like ‘Must, Should and Can’ and ‘Relevance, Alignment and Measurement (RAM)’ can be used to help decide upon priorities when times are hard and budgets are low. Again this is not something that should be new to most L&D professionals.
To me the most powerful part of the article was the reminder at the end that L&D professionals should not allow the recession and other pressures to hold back their own personal development. The author asks a series of questions to test whether we are developing ourselves sufficiently, for example:
• How is the field of L&D developing?
• What impact do generational differences have upon learning strategy?
• What are the implications of social networking Internet sites for learning strategy?
These questions are important because, just like the cobbler and his own shoes, we can be guilty of forgetting that our own effectiveness depends on continued personal development.
To read this article go to
http://www.trainingjournal.com/tj/2548.html
It was only when the author began to reveal some quantitative data from CIPD research that I began to get interested. The most interesting result was the high percentage of L&D people surveyed whose companies were, as a result of the recession, placing greater emphasis on retaining people and developing talent in-house. This could lead to the counter-intuitive conclusion that the recession could provide an opportunity for more, rather than less, in-company training and the survey gave some evidence that this is indeed the case.
Unfortunately the examples in the article to justify this conclusion were unconvincing. Scotrail was mentioned by name as a company that was continuing to invest in its people during the recession but the other examples were anonymous and barely relevant. When a name is not quoted it is bound to make one wonder why a company would not want to be mentioned publicly as an investor in its people? Maybe because it is not well known enough to be credible to the reader?
The latter part of the article does move onto practical guidance with the suggestion that simple frameworks like ‘Must, Should and Can’ and ‘Relevance, Alignment and Measurement (RAM)’ can be used to help decide upon priorities when times are hard and budgets are low. Again this is not something that should be new to most L&D professionals.
To me the most powerful part of the article was the reminder at the end that L&D professionals should not allow the recession and other pressures to hold back their own personal development. The author asks a series of questions to test whether we are developing ourselves sufficiently, for example:
• How is the field of L&D developing?
• What impact do generational differences have upon learning strategy?
• What are the implications of social networking Internet sites for learning strategy?
These questions are important because, just like the cobbler and his own shoes, we can be guilty of forgetting that our own effectiveness depends on continued personal development.
To read this article go to
http://www.trainingjournal.com/tj/2548.html
Accidental Billionaires by Ben Mezrich, published by Doubleday
The author’s note at the beginning of the book tells you straight away that this is not a standard ‘this is how we conquered the world’ story. It reveals that the author has written the book in ‘story’ form and has used ‘re-created dialogue’. Even more revealing, the author has received cooperation from many of the people involved but Mark Zuckerberg - the main creator of Facebook - ‘declined to speak to me despite numerous requests’.
Thus this book has to be accepted for what it is, an incomplete and probably biased account of what happened, particularly as Eduardo Saverin, the original co-founder, did cooperate and features as one of the aggrieved parties in the disputes that later took place.
The big advantage of the chosen format is that it reads like a novel and engages the reader from page 1. The first half of the book is all about Harvard University and the life of students there, including the pressure to find the right social network and the chase for sexual engagement, both of which were fundamental to the idea and the success of Facebook.
Zuckerberg is painted as the typical computer geek who has established a reputation by reportedly turning down a million dollar offer from Microsoft even before he entered Harvard. He develops his Facebook model by simple observation of how social networks operate in real-life and how technology can enhance and improve the experience. There is some dispute about whether he borrows the ideas of others along the way but it is clear that his model is superior to all the many competitors at Harvard.
Saverin is a financial whiz who has already made money and provides the financial backing to set up Facebook and extend it to other Universities. But Zuckerberg opts out of Harvard and takes some fellow geeks to California to work on the technology while Saverin stays on the East Coast and tries to find financial backers and recruit advertisers.
They both succeed in their different ways but the differences in philosophy are too wide to be resolved and they fall out over ownership rights. In the meantime another group of Harvard students believe that Zuckerberg stole their ideas and the main result seems to be that the lawyers have a field day!
However all this does not stop the Facebook idea becoming the most amazing global phenomenon, second only to Google in its rate of expansion and impact on the modern culture. The title of the book certainly describes the financial outcome for Zuckerberg and probably Saverin once the legal disputes have been settled, but the use of the word ‘Accidental’ is perhaps more questionable. Certainly Zuckerberg did not seem to have money making on his mind when he started Facebook but the way he developed the idea to meet the needs of young people for social networking was by no means accidental.
All in all, a great read and a fascinating story with lots of lessons for would be entrepreneurs.
Thus this book has to be accepted for what it is, an incomplete and probably biased account of what happened, particularly as Eduardo Saverin, the original co-founder, did cooperate and features as one of the aggrieved parties in the disputes that later took place.
The big advantage of the chosen format is that it reads like a novel and engages the reader from page 1. The first half of the book is all about Harvard University and the life of students there, including the pressure to find the right social network and the chase for sexual engagement, both of which were fundamental to the idea and the success of Facebook.
Zuckerberg is painted as the typical computer geek who has established a reputation by reportedly turning down a million dollar offer from Microsoft even before he entered Harvard. He develops his Facebook model by simple observation of how social networks operate in real-life and how technology can enhance and improve the experience. There is some dispute about whether he borrows the ideas of others along the way but it is clear that his model is superior to all the many competitors at Harvard.
Saverin is a financial whiz who has already made money and provides the financial backing to set up Facebook and extend it to other Universities. But Zuckerberg opts out of Harvard and takes some fellow geeks to California to work on the technology while Saverin stays on the East Coast and tries to find financial backers and recruit advertisers.
They both succeed in their different ways but the differences in philosophy are too wide to be resolved and they fall out over ownership rights. In the meantime another group of Harvard students believe that Zuckerberg stole their ideas and the main result seems to be that the lawyers have a field day!
However all this does not stop the Facebook idea becoming the most amazing global phenomenon, second only to Google in its rate of expansion and impact on the modern culture. The title of the book certainly describes the financial outcome for Zuckerberg and probably Saverin once the legal disputes have been settled, but the use of the word ‘Accidental’ is perhaps more questionable. Certainly Zuckerberg did not seem to have money making on his mind when he started Facebook but the way he developed the idea to meet the needs of young people for social networking was by no means accidental.
All in all, a great read and a fascinating story with lots of lessons for would be entrepreneurs.
The Murder of Lehman Brothers by Joseph Tibman, published by Brick Tower Press
Joseph Tibman admits that this is a nom de plume and that he is really an investment banker still hoping to resurrect his career. My advice to him after reading the book would be to maybe give up the day job because he is an excellent writer. He combines brilliantly a description of what it was like at Lehmans as they headed for meltdown with a deep and thoughtful analysis of the causes of the global financial crisis.
He quite rightly does not look for one cause or one party to blame. He traces the underlying causes back to the Clinton years when deregulation and high risk borrowing for home buyers were first encouraged. He admits however that Lehman sowed the seeds of its own downfall by overloading its Balance Sheet with too much property lending, making the fatal mistake of not seeing or spreading the risks involved. He is particularly hard on the former CEO Dick Fuld who would not listen to advice from colleagues and forced all those disagreed with him to leave.
But the author also blames himself and most others at Lehman who ‘drank their own Kool-Aid’, a curious expression which seems similar to ‘burying heads in the sand’. They heard what they wanted to hear and did not see the warning signs; they could not believe that the company that had survived 9/11 could ever be defeated by economic turbulence, or could ever be allowed to go bust.
Perhaps this was because they had seen the USA government arrange for rival Bear Sterns to be bailed out by JP Morgan and thought that this proved that no major bank could ever be allowed to collapse. And it is in this connection that the author becomes most bitter, his ire being directed towards Henry Paulson, the former Goldman Sachs investment banker who was Bush’s Treasury Secretary.
Though the author has a vested interest, you cannot help but appreciate his argument. First of all - why Lehman when Bear Sterns and later AIG were saved? Secondly, the bankruptcy of such a major financial institution was the major factor in accelerating the global depression. And, in the author’s view, it was all based on the principle of ‘moral hazard’ - that banks must believe that it is possible to fail because otherwise they will take undue risks.
The book reads like a novel, has some excellent footnote descriptions of relevant financial and banking concepts and provides a great inside story of the Lehman collapse; it is highly recommended.
He quite rightly does not look for one cause or one party to blame. He traces the underlying causes back to the Clinton years when deregulation and high risk borrowing for home buyers were first encouraged. He admits however that Lehman sowed the seeds of its own downfall by overloading its Balance Sheet with too much property lending, making the fatal mistake of not seeing or spreading the risks involved. He is particularly hard on the former CEO Dick Fuld who would not listen to advice from colleagues and forced all those disagreed with him to leave.
But the author also blames himself and most others at Lehman who ‘drank their own Kool-Aid’, a curious expression which seems similar to ‘burying heads in the sand’. They heard what they wanted to hear and did not see the warning signs; they could not believe that the company that had survived 9/11 could ever be defeated by economic turbulence, or could ever be allowed to go bust.
Perhaps this was because they had seen the USA government arrange for rival Bear Sterns to be bailed out by JP Morgan and thought that this proved that no major bank could ever be allowed to collapse. And it is in this connection that the author becomes most bitter, his ire being directed towards Henry Paulson, the former Goldman Sachs investment banker who was Bush’s Treasury Secretary.
Though the author has a vested interest, you cannot help but appreciate his argument. First of all - why Lehman when Bear Sterns and later AIG were saved? Secondly, the bankruptcy of such a major financial institution was the major factor in accelerating the global depression. And, in the author’s view, it was all based on the principle of ‘moral hazard’ - that banks must believe that it is possible to fail because otherwise they will take undue risks.
The book reads like a novel, has some excellent footnote descriptions of relevant financial and banking concepts and provides a great inside story of the Lehman collapse; it is highly recommended.
Thursday 15 October 2009
How strategy shapes structure by W Chan Kim and Renee Mauborgne, Harvard Business review, September 2009
I sought the help of MTP’s leading strategy tutor Chris Goodwin for this review because, as often happens with articles on this topic, it is difficult to be sure whether this is breakthrough thinking or a recycling of previous writings. In fact the article is at neither of these two extremes; it puts forward a new theory of strategic success but the arguments and examples are not convincing enough to make you believe in its practical application.
The basic argument in the book is that there are two ways to achieve success; you can either operate in the ‘Red Ocean’ where all the competitors are fighting it out and where blood is flowing into the water. The authors claim that this is the traditional ‘structuralist’ approach advocated by many writers on strategy, most famously Michael Porter. This can work but, as Porter convincingly argued, success needs competitive advantage by means of the right strategic positioning in terms of differentiation or cost leadership..
These authors argue that an alternative approach is to enter the ‘Blue Ocean’ where you are able to adopt a ‘Reconstructionist’ approach by changing the economic landscape and avoiding competitive pressures. This happens in circumstances where the product is so game changing that you are able to achieve competitive advantage via differentiation AND cost leadership.
This theory seems interesting at first but some of the examples are not sufficiently convincing to suggest that it is capable of general application. These examples include Cirque de Soleil, Dubai, Comic Relief and the Chrysler Mini Van in the USA. The first three seem to be rather too specialised to be the basis of wider application and our view is that the latter soon lost its uniqueness as it was copied by other car companies. This example raises the issue that the authors do not really address – how do you keep competitors from invading your nice blue ocean?
So when you get down to the fundamental crux of the article, it is saying that a unique product will be successful unless and until competitors copy it, which is not really anything new in strategic thinking; in fact Porter's more recent work made a similar point. In his article ‘What is strategy?’ he quoted for instance, IKEA, South West Airlines and Enterprise Car Rental as examples of companies that had developed offerings with strategic positioning that could not easily be copied, though he did not use the ‘Blue Ocean’ label.
The other main point made in the article – that the companies who develop unique products are often merely applying existing technologies in different ways – was made much more effectively in another recent strategic publication, ‘Fast Second’ by Markides and Geroski. This book talked about companies who were ‘consolidators’ of existing technology and contained much more convincing arguments, as confirmed by my review here earlier this year.
To read this article go to http://hbr.harvardbusiness.org/2009/09/how-strategy-shapes-structure/ar/1
The basic argument in the book is that there are two ways to achieve success; you can either operate in the ‘Red Ocean’ where all the competitors are fighting it out and where blood is flowing into the water. The authors claim that this is the traditional ‘structuralist’ approach advocated by many writers on strategy, most famously Michael Porter. This can work but, as Porter convincingly argued, success needs competitive advantage by means of the right strategic positioning in terms of differentiation or cost leadership..
These authors argue that an alternative approach is to enter the ‘Blue Ocean’ where you are able to adopt a ‘Reconstructionist’ approach by changing the economic landscape and avoiding competitive pressures. This happens in circumstances where the product is so game changing that you are able to achieve competitive advantage via differentiation AND cost leadership.
This theory seems interesting at first but some of the examples are not sufficiently convincing to suggest that it is capable of general application. These examples include Cirque de Soleil, Dubai, Comic Relief and the Chrysler Mini Van in the USA. The first three seem to be rather too specialised to be the basis of wider application and our view is that the latter soon lost its uniqueness as it was copied by other car companies. This example raises the issue that the authors do not really address – how do you keep competitors from invading your nice blue ocean?
So when you get down to the fundamental crux of the article, it is saying that a unique product will be successful unless and until competitors copy it, which is not really anything new in strategic thinking; in fact Porter's more recent work made a similar point. In his article ‘What is strategy?’ he quoted for instance, IKEA, South West Airlines and Enterprise Car Rental as examples of companies that had developed offerings with strategic positioning that could not easily be copied, though he did not use the ‘Blue Ocean’ label.
The other main point made in the article – that the companies who develop unique products are often merely applying existing technologies in different ways – was made much more effectively in another recent strategic publication, ‘Fast Second’ by Markides and Geroski. This book talked about companies who were ‘consolidators’ of existing technology and contained much more convincing arguments, as confirmed by my review here earlier this year.
To read this article go to http://hbr.harvardbusiness.org/2009/09/how-strategy-shapes-structure/ar/1
The Changing L & D Skillset by Paul Fairhurst, Training Journal September 2009
There have been several articles on this theme in recent months and I have chosen this one because it makes some new and interesting points and is part of a research project sponsored by TJ. It also contains some convincing examples from high calibre companies including our own client Rolls Royce, and looks to the future rather than the past and present.
The article starts by confirming that two of the most well documented current trends in L & D – the move towards a more continuous learning culture and a greater emphasis on informal approaches – are likely to continue into the next decade. Even more important – not least for us as specialists in business learning – is that L & D people will need greater business acumen so that management needs can be more easily understood.
This need for greater understanding of business is confirmed by all four of the senior L & D people interviewed, including quite surprisingly the two public sector organisations – the Department of Work and Pensions and the Civil Aviation Authority.
Other suggested trends in the future are suggested as:
• Less focus on internal delivery and therefore the need to manage effective outsourcing of training services
• Increased need for facilitation skills rather than content expertise
• Greater focus on internal relationships, requiring good consultancy and business partnering skills
• All of this making L & D people effective and credible when dealing with senior managers who will increasingly question the cost/benefit of L & D investment
The most convincing example is the Rolls Royce story which talks of a transformation over the last two years, moving from internal people delivering ‘stand-up’ training to a new model where the majority of delivery is outsourced. This allows ‘the flexibility to turn delivery rapidly on and off in response to business needs’. In addition to business acumen and partnering skills, Rolls Royce also emphasise change management and the need for an international perspective.
There is a rather unconvincing attempt at the end of the article to summarise all this by introducing the need for ‘T shaped people’, with business acumen at the horizontal top of the T and in-depth HR skills as the vertical support, all surrounded by a circle of consulting skills.
Despite this stumble at the end, this article is well worth reading for the L & D professional who wishes to look ahead for the skills required into the future.
To read this article go to http://www.trainingjournal.com/tj/2391.html
The article starts by confirming that two of the most well documented current trends in L & D – the move towards a more continuous learning culture and a greater emphasis on informal approaches – are likely to continue into the next decade. Even more important – not least for us as specialists in business learning – is that L & D people will need greater business acumen so that management needs can be more easily understood.
This need for greater understanding of business is confirmed by all four of the senior L & D people interviewed, including quite surprisingly the two public sector organisations – the Department of Work and Pensions and the Civil Aviation Authority.
Other suggested trends in the future are suggested as:
• Less focus on internal delivery and therefore the need to manage effective outsourcing of training services
• Increased need for facilitation skills rather than content expertise
• Greater focus on internal relationships, requiring good consultancy and business partnering skills
• All of this making L & D people effective and credible when dealing with senior managers who will increasingly question the cost/benefit of L & D investment
The most convincing example is the Rolls Royce story which talks of a transformation over the last two years, moving from internal people delivering ‘stand-up’ training to a new model where the majority of delivery is outsourced. This allows ‘the flexibility to turn delivery rapidly on and off in response to business needs’. In addition to business acumen and partnering skills, Rolls Royce also emphasise change management and the need for an international perspective.
There is a rather unconvincing attempt at the end of the article to summarise all this by introducing the need for ‘T shaped people’, with business acumen at the horizontal top of the T and in-depth HR skills as the vertical support, all surrounded by a circle of consulting skills.
Despite this stumble at the end, this article is well worth reading for the L & D professional who wishes to look ahead for the skills required into the future.
To read this article go to http://www.trainingjournal.com/tj/2391.html
How to harness the special talents of clever people, by Rob Goffee and Gareth Jones, Management Today, September 2009
This article is a summary of a book recently published by the authors and is impressive. I intend to buy the book to make a deeper assessment and will maybe review it on a future blog.
The argument for the need to identify and manage clever people is that, as the ‘knowledge economy’ develops, retaining and motivating such individuals will be almost the only opportunity for sustainable competitive advantage. The authors define ‘clevers’ as highly talented individuals with the potential to create disproportionate amounts of value, but who need an organisation to achieve their full potential. This latter caveat distinguishes them from artists and other free agents who can survive on their own.
There is so much in the article about the nature of such people and how best to manage them that it is difficult to summarise everything here. Key points are that they are difficult to manage conventionally and hate any trappings of hierarchy; they will only work well for leaders whom they respect and whose value they appreciate; they want to work closely with other clever people yet paradoxically do not work well in teams; they need recognition but the recognition they value most is from peers and external sources, not the hierarchy; they hate red tape, tight discipline and ‘bullshit’.
There is a summary of do’s and don’ts at the end of the article that is helpful but perhaps simplifies and devalues the earlier content. Maybe this even briefer summary does so even more but I will try:
Do – give them space and time, protect them from the organisation, talk straight, provide challenges, agree boundaries
Don’t – use the hierarchy, interfere, try to deceive, give too much feedback, impose discipline, expose to politics
The overall message is in the final paragraph; you must manage the delicate balance between giving clever people the freedom they need to experiment and grow, and the minimum discipline that sets them useful boundaries.
Looking back over the history of MTP and all the ‘clever people’ that have come and gone during our history, I can see that we did not always follow these rules and believe that we have learnt the lessons. This article confirms much of what we have found out the hard way.
This is a contribution of high quality and depth, much more so than the normal content of Management Today. It is highly recommended.
To read this article go to http://www.managementtoday.co.uk/search/article/929304/9-ways-harness-special-talents-clever-people/
The argument for the need to identify and manage clever people is that, as the ‘knowledge economy’ develops, retaining and motivating such individuals will be almost the only opportunity for sustainable competitive advantage. The authors define ‘clevers’ as highly talented individuals with the potential to create disproportionate amounts of value, but who need an organisation to achieve their full potential. This latter caveat distinguishes them from artists and other free agents who can survive on their own.
There is so much in the article about the nature of such people and how best to manage them that it is difficult to summarise everything here. Key points are that they are difficult to manage conventionally and hate any trappings of hierarchy; they will only work well for leaders whom they respect and whose value they appreciate; they want to work closely with other clever people yet paradoxically do not work well in teams; they need recognition but the recognition they value most is from peers and external sources, not the hierarchy; they hate red tape, tight discipline and ‘bullshit’.
There is a summary of do’s and don’ts at the end of the article that is helpful but perhaps simplifies and devalues the earlier content. Maybe this even briefer summary does so even more but I will try:
Do – give them space and time, protect them from the organisation, talk straight, provide challenges, agree boundaries
Don’t – use the hierarchy, interfere, try to deceive, give too much feedback, impose discipline, expose to politics
The overall message is in the final paragraph; you must manage the delicate balance between giving clever people the freedom they need to experiment and grow, and the minimum discipline that sets them useful boundaries.
Looking back over the history of MTP and all the ‘clever people’ that have come and gone during our history, I can see that we did not always follow these rules and believe that we have learnt the lessons. This article confirms much of what we have found out the hard way.
This is a contribution of high quality and depth, much more so than the normal content of Management Today. It is highly recommended.
To read this article go to http://www.managementtoday.co.uk/search/article/929304/9-ways-harness-special-talents-clever-people/
Climate of change (e-learning), by Julian Dable, Training Journal, October 2009
I chose this article because I am interested in the issues and the trends around e-learning but, after reading it, I found myself focussing on what was missing rather than the points that were made. The other problem with the article is the lack of definition of what is meant by e-learning, for instance it appears not to embrace delivery by Virtual Classroom technology which, in our view, can be much more flexible, interactive and cost effective than the more conventional e-learning packages.
The basic argument of the article is that e-learning is on the increase because of desires to cut costs and avoid travel during the recession. At first sight this seems logical and likely until you think about a longer term perspective.
I realise that our own focus on management learning may give us a different view from those involved in training at lower levels but, from our perspective, e-learning has been around for a long time now. Our first experiences in partnership with Unilever were in the mid nineties yet the author implies that this technology has only just arrived.
Our other impression is that e-learning has a part to play within blended learning solutions but there are all sorts of issues and barriers which impact its wider use as an alternative to face to face delivery, none of which are addressed in this article, for instance:
• For which topics is the e-learning approach most suitable?
• For which levels of management and age groups will it work best?
• How best can you simulate the sort of interactivity that allows learning to be retained?
• How do you persuade busy managers to give valuable desk? time?
• How do you create a culture that makes giving desk time OK?
• How do you assess learning retention?
• How do you track completion?
The article does make the valid point that there are new authoring systems that make e-learning more affordable and easier to tailor but it is still not likely to be cost effective unless it is done well and the questions above are answered positively. There is a danger that people will start to think that e-learning is easy to develop and you end up with a cost driven solution that does not meet the learning objective. This happened with the early ‘text on screen’ computer based learning packages that were no more effective than text books.
We would also question the article’s assumption – without much convincing evidence from top companies - that e-learning has ‘increasing popularity’. Our feeling is that, at least in a management training context, it may have peaked and that on line trainer delivery via the Virtual Classroom is now seen as a preferred solution. The capital investment is usually less and the flexibility so much greater.
This is an article that shows the narrow perspective and limited experience of the author rather any new insights.
To read this article go to http://www.trainingjournal.com/tj/2469.html
The basic argument of the article is that e-learning is on the increase because of desires to cut costs and avoid travel during the recession. At first sight this seems logical and likely until you think about a longer term perspective.
I realise that our own focus on management learning may give us a different view from those involved in training at lower levels but, from our perspective, e-learning has been around for a long time now. Our first experiences in partnership with Unilever were in the mid nineties yet the author implies that this technology has only just arrived.
Our other impression is that e-learning has a part to play within blended learning solutions but there are all sorts of issues and barriers which impact its wider use as an alternative to face to face delivery, none of which are addressed in this article, for instance:
• For which topics is the e-learning approach most suitable?
• For which levels of management and age groups will it work best?
• How best can you simulate the sort of interactivity that allows learning to be retained?
• How do you persuade busy managers to give valuable desk? time?
• How do you create a culture that makes giving desk time OK?
• How do you assess learning retention?
• How do you track completion?
The article does make the valid point that there are new authoring systems that make e-learning more affordable and easier to tailor but it is still not likely to be cost effective unless it is done well and the questions above are answered positively. There is a danger that people will start to think that e-learning is easy to develop and you end up with a cost driven solution that does not meet the learning objective. This happened with the early ‘text on screen’ computer based learning packages that were no more effective than text books.
We would also question the article’s assumption – without much convincing evidence from top companies - that e-learning has ‘increasing popularity’. Our feeling is that, at least in a management training context, it may have peaked and that on line trainer delivery via the Virtual Classroom is now seen as a preferred solution. The capital investment is usually less and the flexibility so much greater.
This is an article that shows the narrow perspective and limited experience of the author rather any new insights.
To read this article go to http://www.trainingjournal.com/tj/2469.html
Three articles on the issues around business school education
• The pedagogy of the privileged, Economist September 26th
• Enlightenment rules, Director October 2009
• MBA focus report, Times 5th October
• A recipe for MBA success, Management Today October 2009
For this review I have taken three recent articles and a Times Supplement that all cover the issues around business school education. I am taking the Economist article first because, despite being the shortest, it is the most interesting and challenging.
The Economist’s message is mainly directed at the top business schools in the USA but should have meaning for all those who claim to prepare potential senior managers for their future roles in business life. It is reflecting the widespread feeling in the USA that places like Harvard and MIT should be feeling some guilt and responsibility for the irresponsible actions of their graduates that led to the financial crisis, for instance the former CEOs of Lehman Bros, Merrill Lynch and HBOS were all MBAs at the top schools. Enron was also a company that was’ stuffed with Harvard MBAs from top to bottom.’
The issue raised in the article is whether this means that management education should start again from scratch or merely initiate changes in tone and curriculum. The anonymous author comes out in favour of the latter, making the point that, despite financial crises and scandals, companies that are run in accordance with MBA theory are generally more successful. There is therefore still a steady demand for top MBAs from leading companies and countries.
The main change required, it is suggested, is more challenge and scepticism about the companies that are studied on MBA courses and a more realistic study of genuine history, not the ‘puffs’ that companies like Enron have received in case studies of their transient success. It is argued that it is not enough to paper over the cracks with token sessions on business ethics; there is a need for professors to move away from their tendency to boost their favourite companies via fawning case studies and to be more challenging around fads and ‘supercorps’. They must show greater independence of thought, a surprising criticism of institutions that are supposed to lead the way in the development of theory.
How then do the other three contributions match up against the Economist article? The answer is – not too well, because all three are barely hidden puffs for some business schools, presumably selected on the basis of willingness to contribute and advertising potential.
The Director’s contribution is the best of the three because it does face up to the issue raised by the Economist and allows the Heads of several UK schools to say how they have adapted to the recession. Most claim that these hard times have not materially reduced numbers enrolling for MBAs and there are the usual platitudes about the need to invest in people during the downturn. There are also several comments about business ethics receiving more attention but no sign of the more challenging approach suggested by the Economist article.
The Times supplement confirms the apparent buoyancy of the MBA market though one wonders if this is a concerted attempt to raise morale and present a ‘hard to get’ image to potential applicants. The supplement contains a number of interesting contributions, though one has to accept that its whole purpose is clearly to generate more business for the schools who contribute. The short article that stands out is from Leigh Drake, Dean of Nottingham Business School, who also seems to realise that business schools must bear some responsibility for the financial scandals and crises and recommends fundamental changes if they are to retain credibility.
The Management Today article adds very little, making some general and obvious points about the need for ROI and the requirements of a successful MBA student. There is however some interesting data on cost which is frequently bypassed by those who are advocating MBA benefits. The examples quoted are not the top UK names and these reveal a range of £20K to £40K, depending on whether part or full time. The issue that would have justified more attention is who pays the bill and whether the ROI on such an investment is likely to come to the individual or the company.
This could have been extended to an interesting debate on the pros and cons of in-company MBAs and why these, with a few honourable exceptions (for instance the IBM course at Warwick as mentioned in the Times Supplement) have not achieved as wide popularity as was initially expected.
To read these articles go to:
http://www.economist.com/node/14493183/comments
http://www.director.co.uk/MAGAZINE/2009/9%20October/ed_bus_ed_63_02.html
http://www.managementtoday.co.uk/news/940675/mba-business-education-guide-autumn-2009-recipe-mba-success/
We cannot locate the Times article online, if you have a link or an electronic copy please send it to alanwarner@mtpplc.com
• Enlightenment rules, Director October 2009
• MBA focus report, Times 5th October
• A recipe for MBA success, Management Today October 2009
For this review I have taken three recent articles and a Times Supplement that all cover the issues around business school education. I am taking the Economist article first because, despite being the shortest, it is the most interesting and challenging.
The Economist’s message is mainly directed at the top business schools in the USA but should have meaning for all those who claim to prepare potential senior managers for their future roles in business life. It is reflecting the widespread feeling in the USA that places like Harvard and MIT should be feeling some guilt and responsibility for the irresponsible actions of their graduates that led to the financial crisis, for instance the former CEOs of Lehman Bros, Merrill Lynch and HBOS were all MBAs at the top schools. Enron was also a company that was’ stuffed with Harvard MBAs from top to bottom.’
The issue raised in the article is whether this means that management education should start again from scratch or merely initiate changes in tone and curriculum. The anonymous author comes out in favour of the latter, making the point that, despite financial crises and scandals, companies that are run in accordance with MBA theory are generally more successful. There is therefore still a steady demand for top MBAs from leading companies and countries.
The main change required, it is suggested, is more challenge and scepticism about the companies that are studied on MBA courses and a more realistic study of genuine history, not the ‘puffs’ that companies like Enron have received in case studies of their transient success. It is argued that it is not enough to paper over the cracks with token sessions on business ethics; there is a need for professors to move away from their tendency to boost their favourite companies via fawning case studies and to be more challenging around fads and ‘supercorps’. They must show greater independence of thought, a surprising criticism of institutions that are supposed to lead the way in the development of theory.
How then do the other three contributions match up against the Economist article? The answer is – not too well, because all three are barely hidden puffs for some business schools, presumably selected on the basis of willingness to contribute and advertising potential.
The Director’s contribution is the best of the three because it does face up to the issue raised by the Economist and allows the Heads of several UK schools to say how they have adapted to the recession. Most claim that these hard times have not materially reduced numbers enrolling for MBAs and there are the usual platitudes about the need to invest in people during the downturn. There are also several comments about business ethics receiving more attention but no sign of the more challenging approach suggested by the Economist article.
The Times supplement confirms the apparent buoyancy of the MBA market though one wonders if this is a concerted attempt to raise morale and present a ‘hard to get’ image to potential applicants. The supplement contains a number of interesting contributions, though one has to accept that its whole purpose is clearly to generate more business for the schools who contribute. The short article that stands out is from Leigh Drake, Dean of Nottingham Business School, who also seems to realise that business schools must bear some responsibility for the financial scandals and crises and recommends fundamental changes if they are to retain credibility.
The Management Today article adds very little, making some general and obvious points about the need for ROI and the requirements of a successful MBA student. There is however some interesting data on cost which is frequently bypassed by those who are advocating MBA benefits. The examples quoted are not the top UK names and these reveal a range of £20K to £40K, depending on whether part or full time. The issue that would have justified more attention is who pays the bill and whether the ROI on such an investment is likely to come to the individual or the company.
This could have been extended to an interesting debate on the pros and cons of in-company MBAs and why these, with a few honourable exceptions (for instance the IBM course at Warwick as mentioned in the Times Supplement) have not achieved as wide popularity as was initially expected.
To read these articles go to:
http://www.economist.com/node/14493183/comments
http://www.director.co.uk/MAGAZINE/2009/9%20October/ed_bus_ed_63_02.html
http://www.managementtoday.co.uk/news/940675/mba-business-education-guide-autumn-2009-recipe-mba-success/
We cannot locate the Times article online, if you have a link or an electronic copy please send it to alanwarner@mtpplc.com
Managing Creativity and Innovation by Richard Luecke, Harvard Business Press (Business Essentials series)
It is interesting that the author’s name is very much played down in the book; this series appears to be an attempt to use the Harvard brand to sell short practical publications on key management topics. The Harvard book that was reviewed last month - on the topic of private equity investors and the lessons that we can learn from them – was an encouraging introduction to the series but this book is less powerful. It is perhaps because any attempt to reduce such a complex and challenging topic to a few short chapters is almost bound to lead to accusations of over simplification and superficiality.
This is certainly how it felt reading the book though there were some useful reminders of key issues and success factors around innovation. However these were usually in the form of bullet points and checklists that seemed rather out of place in the context of such a creative topic. For example a list of key success factors that just says – create right climate, reward idea generators, hire innovative people, provide necessary support etc – is not going to help those who are seriously looking for fundamental change.
But there are some useful reminders and insights, for instance that there is no proven correlation between intelligence and creativity, yet intelligence is often the criterion that is seen as most important for selection throughout life. Even more interesting – particularly to me as MTP’s senior citizen - is the lack of any proven link between age and creativity, which is counter- intuitive and, from what one hears, is not always followed in advertising agencies and similarly creative organisations.
There are also some very practical references to the need for the key innovators in organisations to be in physical proximity to each other with confirmation that most good innovation comes from collaborative efforts rather than individual brilliance. This led me to think of an issue that maybe could have had more attention in the book and elsewhere; does the modern tendency for more people to work at home or other remote locations put a damper on creativity and what are the best ways in which this can be mitigated?
There is also useful coverage of the criteria by which creativity should be rewarded which must relate to customer needs and the strategic context; the three tests of strategic fit, within technical competence and within business competence seemed to be sensible and practical as screening questions.
On a similarly practical note there is reference to the need for innovation to extend to the ‘commercialisation’ of the idea, which links to ‘Fast Second’ - the book on innovation that we mention above and was reviewed earlier in the year. The reference confirms that the people who make most money out of innovations are those like Steve Jobs of Apple who take other people’s ‘un-commercialised’ ideas and take them to market.
Overall this is a book that could be useful for someone just starting to think about innovation and creativity as key issues for the future, but not one to create new insights for more experienced managers.
This is certainly how it felt reading the book though there were some useful reminders of key issues and success factors around innovation. However these were usually in the form of bullet points and checklists that seemed rather out of place in the context of such a creative topic. For example a list of key success factors that just says – create right climate, reward idea generators, hire innovative people, provide necessary support etc – is not going to help those who are seriously looking for fundamental change.
But there are some useful reminders and insights, for instance that there is no proven correlation between intelligence and creativity, yet intelligence is often the criterion that is seen as most important for selection throughout life. Even more interesting – particularly to me as MTP’s senior citizen - is the lack of any proven link between age and creativity, which is counter- intuitive and, from what one hears, is not always followed in advertising agencies and similarly creative organisations.
There are also some very practical references to the need for the key innovators in organisations to be in physical proximity to each other with confirmation that most good innovation comes from collaborative efforts rather than individual brilliance. This led me to think of an issue that maybe could have had more attention in the book and elsewhere; does the modern tendency for more people to work at home or other remote locations put a damper on creativity and what are the best ways in which this can be mitigated?
There is also useful coverage of the criteria by which creativity should be rewarded which must relate to customer needs and the strategic context; the three tests of strategic fit, within technical competence and within business competence seemed to be sensible and practical as screening questions.
On a similarly practical note there is reference to the need for innovation to extend to the ‘commercialisation’ of the idea, which links to ‘Fast Second’ - the book on innovation that we mention above and was reviewed earlier in the year. The reference confirms that the people who make most money out of innovations are those like Steve Jobs of Apple who take other people’s ‘un-commercialised’ ideas and take them to market.
Overall this is a book that could be useful for someone just starting to think about innovation and creativity as key issues for the future, but not one to create new insights for more experienced managers.
Business stripped bare by Richard Branson, published by Virgin Books
This is a difficult shift for Branson, from writing his biography - ‘Losing my Virginity’ - to setting himself up as a guru who can help others to achieve the same sort of success, following the path of other high profile businessmen like Jack Welch and Lee Iacocca. This is a particularly difficult transition for Branson as he is such a ‘one-off’; someone to be admired rather than copied, as I used to say in my sessions on business success in years gone by. I am embarrassed that I also used to predict that Branson would never achieve lasting success because of his lack of strategic logic and focus on core competences. My excuse now is that he really is a ‘one-off’ individual who has been able to create a unique brand on the strength of his personality and charisma.
The book benefits from a simple chapter structure - people, brand, delivery, innovation, learning, leadership -and the advice is a mixture of common sense and business acumen, what you would expect from someone with his track record. From anyone else it might seem like motherhood and apple pie (particularly as he produces Kipling’s poem ‘If’ as a finale) but, because it is Branson and because it is laced with relevant examples and anecdotes, it comes over well. He has the great advantage of many friends and acquaintances who have also achieved success and his close relationship with them provides both credibility and insight.
Examples of his advice are:
• People – give them freedom to develop
• Brand – promises must match delivery (shame about Virgin Rail!)
• Delivery – attention to the details that customers value
• Innovation – capitalise on luck and go where ideas lead you
• Entrepreneurship – must be continued when you become big
The final chapter on social responsibility is the least convincing; his message is – make a difference where you can. He does not address the question of how going into the airline business makes the right kind of difference but perhaps this is expecting too much!
Overall this book is impressive but mainly because it is Branson. Like most of his businesses!!
The book benefits from a simple chapter structure - people, brand, delivery, innovation, learning, leadership -and the advice is a mixture of common sense and business acumen, what you would expect from someone with his track record. From anyone else it might seem like motherhood and apple pie (particularly as he produces Kipling’s poem ‘If’ as a finale) but, because it is Branson and because it is laced with relevant examples and anecdotes, it comes over well. He has the great advantage of many friends and acquaintances who have also achieved success and his close relationship with them provides both credibility and insight.
Examples of his advice are:
• People – give them freedom to develop
• Brand – promises must match delivery (shame about Virgin Rail!)
• Delivery – attention to the details that customers value
• Innovation – capitalise on luck and go where ideas lead you
• Entrepreneurship – must be continued when you become big
The final chapter on social responsibility is the least convincing; his message is – make a difference where you can. He does not address the question of how going into the airline business makes the right kind of difference but perhaps this is expecting too much!
Overall this book is impressive but mainly because it is Branson. Like most of his businesses!!
Thursday 3 September 2009
10 tips on finding the perfect venue, Phil Boucher, Personnel Today, 11th August
It is unusual to see an article on this most practical of topics which rarely gets the attention it deserves. Perhaps we at MTP feel this way because, in most cases, the venues for our courses are chosen by our clients and generally the standard is good. However from time to time there are disasters that could have been avoided by more careful selection. Often when our team gets together, the conversation will end up with the sharing of horror stories that we have experienced over the years.
Though the article contains a number of statements of the blindingly obvious – and some padding to get up to the obligatory ten tips – the article is worth reading. The simple point made at the beginning is true and obvious but often forgotten; the consequences of things going wrong can be so serious – particularly if senior management are around – that the choice of venue is not a decision to be taken lightly.
One simple suggestion is to check out the levels of satisfaction from previous users, not just to read the published testimonials but to pick up the phone and ask the questions that really matter, like how helpful are the staff and how do they respond to a crisis? For instance, is there a business centre for emergency copying when the papers are short or get lost?
Another piece of practical advice is to avoid being carried away by the ambience of an impressive venue and thus forget to ask the more practical questions about the facilities available. This point is connected with another helpful piece of advice, to make sure that you are clear on your objectives and priorities before starting the selection process.
An impressive ambience may be important of the event is of a prestigious nature with attendees who need to be made to feel important. On the other hand it may give the wrong impression if times are hard and the requirement is more routine. Similarly a London venue may be important if there are attendees from overseas who need to be occupied during evenings and weekends but a distraction for a local audience.
For those who do not get time to read the article fully, here’s an abbreviated version of the checklist:
• Make easy access a high priority
• Match venue to objective
• Match venue to audience
• Research thoroughly
• Don’t get swept along by the ambience
• Assess crisis management capability
There is also a suggestion that, where you are using a venue on a regular basis, you should consider changing from time to time, to keep them on their toes and to refresh the event. I found myself disagreeing with this, perhaps because of my conservative nature and the experience of so many sub-standard venues over the years. The other point of view is – if you find the right place and the standards are consistently high – stick with it!
To access this article go to http://www.personneltoday.com/articles/2009/08/04/51546/conference-venues-10-tips-on-finding-the-perfect-venue.html
Though the article contains a number of statements of the blindingly obvious – and some padding to get up to the obligatory ten tips – the article is worth reading. The simple point made at the beginning is true and obvious but often forgotten; the consequences of things going wrong can be so serious – particularly if senior management are around – that the choice of venue is not a decision to be taken lightly.
One simple suggestion is to check out the levels of satisfaction from previous users, not just to read the published testimonials but to pick up the phone and ask the questions that really matter, like how helpful are the staff and how do they respond to a crisis? For instance, is there a business centre for emergency copying when the papers are short or get lost?
Another piece of practical advice is to avoid being carried away by the ambience of an impressive venue and thus forget to ask the more practical questions about the facilities available. This point is connected with another helpful piece of advice, to make sure that you are clear on your objectives and priorities before starting the selection process.
An impressive ambience may be important of the event is of a prestigious nature with attendees who need to be made to feel important. On the other hand it may give the wrong impression if times are hard and the requirement is more routine. Similarly a London venue may be important if there are attendees from overseas who need to be occupied during evenings and weekends but a distraction for a local audience.
For those who do not get time to read the article fully, here’s an abbreviated version of the checklist:
• Make easy access a high priority
• Match venue to objective
• Match venue to audience
• Research thoroughly
• Don’t get swept along by the ambience
• Assess crisis management capability
There is also a suggestion that, where you are using a venue on a regular basis, you should consider changing from time to time, to keep them on their toes and to refresh the event. I found myself disagreeing with this, perhaps because of my conservative nature and the experience of so many sub-standard venues over the years. The other point of view is – if you find the right place and the standards are consistently high – stick with it!
To access this article go to http://www.personneltoday.com/articles/2009/08/04/51546/conference-venues-10-tips-on-finding-the-perfect-venue.html
How to manage your negotiating team, by Joanna Brett, Kristin Behfar and Ray Friedman, Harvard Business Review, August 2009
This article is at a relatively practical and down to earth level for the HBR and seems to be relevant to an increasing number of our clients. There was a time when negotiating teams mainly featured as part of major acquisitions and contract deals but now we see them increasingly as part of day to day business life.
Consumer goods companies send cross-functional teams to talk to retailer customers about next year’s terms of trade. Companies pitching for major contracts can no longer rely on one to one personal relationships but find Finance, IT and Procurement Departments becoming involved; their response has to be to fight fire with fire by sending in their own cross-functional team.
This article confirms the point that we have often made in our sessions on negotiations – that the more people you include in a negotiating team, the more difficult it is to coordinate and the more likely it is for things to go wrong. But if a multi-functional approach is essential, then something has to be done to make coordination as effective as possible.
The article is based on research into 45 negotiating teams and the results showed that the biggest challenges normally come from ‘their own side of the table’. The two key challenges are aligning the conflicting interests of the different team members and implementing a disciplined process during the negotiation itself. The finance person is likely to focus on costs and the marketer on quality so they must agree the right balance before the key meetings, not during the negotiations.
As with all things in negotiation, the answer is preparation, part of which must be the opening up of all the potential conflicts. Agreement of the overall business objective, discussion of the different priorities and internal trade-offs, must all be hammered out beforehand. In other words the internal negotiation must precede the external negotiation so that there are no signs of disunity.
The article sometimes seems to be better at highlighting the problems rather than finding solutions but identifying the problem may be enough in some cases to save companies from potential disaster. The solutions may be something that each company has to work out in its own unique context. However there were a few interesting suggestions of ways to improve:
•Where you have control over team selection, look for those who have good cross-functional relationships, which may be more important than negotiating skills
•Invite senior managers and other key influencers to planning sessions
•The team leader to carry out facilitation and bargaining outside meetings to ensure that all hidden agendas come out
I would have added one further simple question – does everybody have to be there? Cross-functional involvement does not have to mean attendance at every meeting; the planning discussions should agree clarity of roles and this should in turn lead to agreement on the optimum number to achieve the objectives.
Altogether an interesting and practical article that is worth a read by anyone who has team negotiation as a current issue.
To access this article go to http://hbr.harvardbusiness.org/2009/09/how-to-manage-your-negotiating-team/ar/1
Consumer goods companies send cross-functional teams to talk to retailer customers about next year’s terms of trade. Companies pitching for major contracts can no longer rely on one to one personal relationships but find Finance, IT and Procurement Departments becoming involved; their response has to be to fight fire with fire by sending in their own cross-functional team.
This article confirms the point that we have often made in our sessions on negotiations – that the more people you include in a negotiating team, the more difficult it is to coordinate and the more likely it is for things to go wrong. But if a multi-functional approach is essential, then something has to be done to make coordination as effective as possible.
The article is based on research into 45 negotiating teams and the results showed that the biggest challenges normally come from ‘their own side of the table’. The two key challenges are aligning the conflicting interests of the different team members and implementing a disciplined process during the negotiation itself. The finance person is likely to focus on costs and the marketer on quality so they must agree the right balance before the key meetings, not during the negotiations.
As with all things in negotiation, the answer is preparation, part of which must be the opening up of all the potential conflicts. Agreement of the overall business objective, discussion of the different priorities and internal trade-offs, must all be hammered out beforehand. In other words the internal negotiation must precede the external negotiation so that there are no signs of disunity.
The article sometimes seems to be better at highlighting the problems rather than finding solutions but identifying the problem may be enough in some cases to save companies from potential disaster. The solutions may be something that each company has to work out in its own unique context. However there were a few interesting suggestions of ways to improve:
•Where you have control over team selection, look for those who have good cross-functional relationships, which may be more important than negotiating skills
•Invite senior managers and other key influencers to planning sessions
•The team leader to carry out facilitation and bargaining outside meetings to ensure that all hidden agendas come out
I would have added one further simple question – does everybody have to be there? Cross-functional involvement does not have to mean attendance at every meeting; the planning discussions should agree clarity of roles and this should in turn lead to agreement on the optimum number to achieve the objectives.
Altogether an interesting and practical article that is worth a read by anyone who has team negotiation as a current issue.
To access this article go to http://hbr.harvardbusiness.org/2009/09/how-to-manage-your-negotiating-team/ar/1
Talent Management – key questions for Learning and Development, Sarah Cook and Steve McCaulay, Training Journal, July 2009
This article is like many in the area of Learning and Development; a combination of obvious statements, combined with a few insights that make you want to read on. The first part of the article confirms my initial cynical view that the current emphasis in books and magazines on the buzz phrase ‘Talent Management’ is really nothing new, just a recycling of obvious ideas. Is there really any need for us to be told at such length that there are dangers of not investing in people during a recession?
The article becomes more interesting when it moves on to the practical choices that have to be made. It defines talent management as the strategies and practices needed to identify, develop, attract and retain people of value. In the context of management talent, it then asks the important question – do we identify an elite group who have the highest potential? Or do we cast our net more widely and thus avoid the danger of a de-motivated under-class?
As with the Harvard article, the authors seem to be better at asking good questions rather than answering them; other key questions are – do we make the process fully transparent within the organisation? Do we involve the individuals in the choices that have to be made or make plans on their behalf? Though it is right that these questions can only be answered in the context of each company’s culture and HR strategy, it would have been good to receive more guidance on the factors that determine the answers.
One area where a definite view is put forward is in the identification of talent; the authors believe that the ability to learn and develop should be a key factor in any person who is singled out for talent management, a necessary condition. They also believe that those chosen should be provided with a personal coach to help him or her manage personal development.
Three key areas of this development are identified – strategic awareness, personal effectiveness and career management – and the point is made that the plans must be more than attending courses. A flexible menu of secondments, projects, assignments and personal study should be arranged.
The article ends with a helpful checklist of questions for the L & D person to ask around talent management. This is the first contribution of a series of three and more answers may come during the next two articles. But somehow I doubt it!
To access this article go to http://www.trainingjournal.com/tj/2262.html
The article becomes more interesting when it moves on to the practical choices that have to be made. It defines talent management as the strategies and practices needed to identify, develop, attract and retain people of value. In the context of management talent, it then asks the important question – do we identify an elite group who have the highest potential? Or do we cast our net more widely and thus avoid the danger of a de-motivated under-class?
As with the Harvard article, the authors seem to be better at asking good questions rather than answering them; other key questions are – do we make the process fully transparent within the organisation? Do we involve the individuals in the choices that have to be made or make plans on their behalf? Though it is right that these questions can only be answered in the context of each company’s culture and HR strategy, it would have been good to receive more guidance on the factors that determine the answers.
One area where a definite view is put forward is in the identification of talent; the authors believe that the ability to learn and develop should be a key factor in any person who is singled out for talent management, a necessary condition. They also believe that those chosen should be provided with a personal coach to help him or her manage personal development.
Three key areas of this development are identified – strategic awareness, personal effectiveness and career management – and the point is made that the plans must be more than attending courses. A flexible menu of secondments, projects, assignments and personal study should be arranged.
The article ends with a helpful checklist of questions for the L & D person to ask around talent management. This is the first contribution of a series of three and more answers may come during the next two articles. But somehow I doubt it!
To access this article go to http://www.trainingjournal.com/tj/2262.html
FDs take the tiller, by Alastair Dryburgh, Management Today, June 2009
This article is typical of those in Management Today; short, easy to read, some good points but could have been so much more valuable.
It starts with the statement that there has been a recent trend for CFOs to be promoted to CEOs. There is no statistical analysis to justify this statement but it ties in with my own perceptions and the list of recent examples is convincing – Shell, BSkyB, Ford and BT.
There is then an examination of the reasons why and the point is made that the current economic conditions are the main driving force, as strategies change from growth to consolidation, from acquisition to retrenchment. It would have been interesting to follow this point up further by asking the obvious further question – what about when things turn up again? Won’t these companies be stuck with the wrong type of leader?
There are some other suggested reasons for the CFO’s elevation that are quite contentious; one is that the CFO is the only other director apart from the CEO who ‘can see the business as a whole’. There might be some Marketing or Planning Directors who would challenge this view! More convincing is that the CFO has the advantage of being close to the scorecard and therefore speaks the language of business more convincingly than anyone else.
Another suggestion is that the CFO has the closest relationship with the CEO and, if this is handled successfully and harmoniously, this will make the CFO the obvious person to take over. More questionable is the view that the CFO is the educator of the business and will be in a strong position because of his or her ability to communicate about financial matters. This may be an ideal but not always the reality in my experience.
I was just thinking that the article had missed the most important factor of all when it was made via a case study that supports the article. Michael Queen of 3i is an example of a CFO promoted to CEO and he quotes the key factor as being the CFO’s high profile with shareholders and external analysts, whose views are important when the CEO selection is made. If they have the confidence of the Stock Market, their appointment will have the right impact on share price.
It would have been good to have more examples like Queen to support the article. The other two case studies are interesting but hardly relevant to the arguments being made. Articles from Management Today are sometimes on well chosen topics and make many valid points but often give the impression of being superficial rush jobs. Such a well regarded magazine should do better.
To access this article go to http://www.managementtoday.co.uk/news/915848
It starts with the statement that there has been a recent trend for CFOs to be promoted to CEOs. There is no statistical analysis to justify this statement but it ties in with my own perceptions and the list of recent examples is convincing – Shell, BSkyB, Ford and BT.
There is then an examination of the reasons why and the point is made that the current economic conditions are the main driving force, as strategies change from growth to consolidation, from acquisition to retrenchment. It would have been interesting to follow this point up further by asking the obvious further question – what about when things turn up again? Won’t these companies be stuck with the wrong type of leader?
There are some other suggested reasons for the CFO’s elevation that are quite contentious; one is that the CFO is the only other director apart from the CEO who ‘can see the business as a whole’. There might be some Marketing or Planning Directors who would challenge this view! More convincing is that the CFO has the advantage of being close to the scorecard and therefore speaks the language of business more convincingly than anyone else.
Another suggestion is that the CFO has the closest relationship with the CEO and, if this is handled successfully and harmoniously, this will make the CFO the obvious person to take over. More questionable is the view that the CFO is the educator of the business and will be in a strong position because of his or her ability to communicate about financial matters. This may be an ideal but not always the reality in my experience.
I was just thinking that the article had missed the most important factor of all when it was made via a case study that supports the article. Michael Queen of 3i is an example of a CFO promoted to CEO and he quotes the key factor as being the CFO’s high profile with shareholders and external analysts, whose views are important when the CEO selection is made. If they have the confidence of the Stock Market, their appointment will have the right impact on share price.
It would have been good to have more examples like Queen to support the article. The other two case studies are interesting but hardly relevant to the arguments being made. Articles from Management Today are sometimes on well chosen topics and make many valid points but often give the impression of being superficial rush jobs. Such a well regarded magazine should do better.
To access this article go to http://www.managementtoday.co.uk/news/915848
Management candidate? Take them for a drive to meet a horse, Fran Tindall, Training Journal, May 2009
I carried this article over from the last update when there were many other more weighty articles competing for space. I confess to a certain bias here because my choice of wife has meant that horses have been a big part of my life and made me significantly poorer than I might otherwise have been!
My first reaction was that this must be some kind of joke. But apparently there is some logic around the idea.
If you want to know if that person you are planning to recruit is really the type of person they say they are, you should get them to meet a horse. The theory is that, just as a person’s driving may reveal their true instincts and behaviour, a person’s attitudes to animals will reveal similar hidden traits. Apparently ‘one business leader’ – whose quote was less impressive because it was anonymous – insists on contriving situations where candidates drive a car and meet dogs and horses before a final selection is made.
The theory is that you can fool people but you can’t fool animals; they can smell anxiety, fear, stress and authenticity. Also, we do not cover things up when dealing with animals, they see us without the usual gloss that we put on ourselves, particularly when looking to impress potential recruiters.
It was here that I parted company with the reasoning behind the idea. I confess to being biased because, apart from the way they give pleasure to my family, I have no positive feelings at all towards animals. I also confess that my driving leaves something to be desired, to some extent revealing the worst features of my character.
But isn’t working in business about managing behaviour and, to some extent, hiding your innate tendencies? Do we really care about our employees’ hidden traits if they manage to overcome them in their work environment? We often hear about people who are totally different at work compared to home – dominant in the job but henpecked in marriage, and vice-versa.
Nevertheless, this is an interesting article that does not need to be taken too seriously but is good for sparking off an interesting debate, by the water cooler or over the dinner table.
Note from the blogger’s family (supported by horses and various other dogs, hens, hamsters and snakes). They believe that there is much truth in the article and that the blogger’s views are prejudiced by all the cheques he writes!!!
To access this article go to http://www.trainingjournal.com/tj/2120.html
My first reaction was that this must be some kind of joke. But apparently there is some logic around the idea.
If you want to know if that person you are planning to recruit is really the type of person they say they are, you should get them to meet a horse. The theory is that, just as a person’s driving may reveal their true instincts and behaviour, a person’s attitudes to animals will reveal similar hidden traits. Apparently ‘one business leader’ – whose quote was less impressive because it was anonymous – insists on contriving situations where candidates drive a car and meet dogs and horses before a final selection is made.
The theory is that you can fool people but you can’t fool animals; they can smell anxiety, fear, stress and authenticity. Also, we do not cover things up when dealing with animals, they see us without the usual gloss that we put on ourselves, particularly when looking to impress potential recruiters.
It was here that I parted company with the reasoning behind the idea. I confess to being biased because, apart from the way they give pleasure to my family, I have no positive feelings at all towards animals. I also confess that my driving leaves something to be desired, to some extent revealing the worst features of my character.
But isn’t working in business about managing behaviour and, to some extent, hiding your innate tendencies? Do we really care about our employees’ hidden traits if they manage to overcome them in their work environment? We often hear about people who are totally different at work compared to home – dominant in the job but henpecked in marriage, and vice-versa.
Nevertheless, this is an interesting article that does not need to be taken too seriously but is good for sparking off an interesting debate, by the water cooler or over the dinner table.
Note from the blogger’s family (supported by horses and various other dogs, hens, hamsters and snakes). They believe that there is much truth in the article and that the blogger’s views are prejudiced by all the cheques he writes!!!
To access this article go to http://www.trainingjournal.com/tj/2120.html
‘The Goal’ by Eliyahu M Goldratt and Jeff Cox, published by North River Press (still available on Amazon)
I must confess to a vested interest in the Goal as it was the inspiration for me to start writing my own business novels which led to the Bottom Line series by Gower and several commissions for tailored versions from BP, Unilever and Barclays. I do not claim however to have reached anything like the standard – or the sales – of Goldratt’s original, though I can argue that he had the benefit of an experienced novel writer to support him.
On second reading, this book passes the test of time pretty well, both in terms of style and content. It achieves the remarkable feat – which I tried to replicate – of making you want to carry on reading at the end of each chapter, not an easy task or a normal scenario for a business book.
The other impressive aspect of the book is that, contrary to my recollection from reading it years ago, it does more than cover the theory of constraints which, some might argue, is of interest to only a limited audience. There is also some good stuff on financial measures and the need to cascade down from overall corporate performance to the variables controlled by management, which the book suggests are throughput, inventory and operating costs. The important point is also made that these must be seen as integrated metrics, not as separate indicators.
The chapter where the hero achieves his breakthrough in thinking through watching his son’s Boy Scout troop march through the countryside is as simple but powerful as ever and the quality of writing is particularly high. Maybe it is not high enough to justify sales of three million copies (compared to my measly total of not much more than thirty thousand) but still a brilliant idea and the start of things to come.
It is interesting that, in the 100 best business books, there are five novels (not including mine of course) and The Goal can clearly claim to have started a trend and created a new genre. If you haven’t read the Goal and are interested to see how a novel can educate, I recommend that you go on Amazon to buy a copy.
On second reading, this book passes the test of time pretty well, both in terms of style and content. It achieves the remarkable feat – which I tried to replicate – of making you want to carry on reading at the end of each chapter, not an easy task or a normal scenario for a business book.
The other impressive aspect of the book is that, contrary to my recollection from reading it years ago, it does more than cover the theory of constraints which, some might argue, is of interest to only a limited audience. There is also some good stuff on financial measures and the need to cascade down from overall corporate performance to the variables controlled by management, which the book suggests are throughput, inventory and operating costs. The important point is also made that these must be seen as integrated metrics, not as separate indicators.
The chapter where the hero achieves his breakthrough in thinking through watching his son’s Boy Scout troop march through the countryside is as simple but powerful as ever and the quality of writing is particularly high. Maybe it is not high enough to justify sales of three million copies (compared to my measly total of not much more than thirty thousand) but still a brilliant idea and the start of things to come.
It is interesting that, in the 100 best business books, there are five novels (not including mine of course) and The Goal can clearly claim to have started a trend and created a new genre. If you haven’t read the Goal and are interested to see how a novel can educate, I recommend that you go on Amazon to buy a copy.
Lessons from Private Equity that any company can use, by Orit Gadiesh and Hugh MacArthur, published by Harvard Business Press
This book is published by Harvard Business Press as part of their ‘Memo to the CEO’ series and the authors are senior people from Bain & Company, the prestigious management consultants who run their own Private Equity practice.
Private Equity (PE) has a bad image, some of it deserved and some less so. In the criticism of the extortionate amounts of money made by Private Equity investors who take over, turn round and then sell companies, it is often forgotten than many fail, particularly in the current downturn.
This book draws on another fact that is also often lost among the ill-informed criticism, that the PE operators are often only doing what the previous management didn’t want, or weren’t able, to do; to make the company more efficient and value creating. The authors therefore argue that if companies adopt the same practices before the PE operators can get their hands on them, they will keep their jobs and reward their shareholders.
The main headings of the potential for performance improvement are:
• Defining the full potential of the business through fact based analysis
• Developing what they call a blueprint; effectively a 3 to 5 year plan with a few (not to many) major initiatives
• Accelerating performance, monitored by a few key metrics
• Harnessing the high performing management talent (and sometimes taking it elsewhere when the turnaround has been achieved) and rewarding them well
• Making the assets sweat
• Creating a results oriented mindset
There is an interesting harmony with the messages of The Goal, in that the book recommends simple measures which drive cash flow and shareholder value. They look primarily at EBITDA (effectively operating profit before depreciation) and then monitor three other KPIs that impact cash flow – increases in working capital, investments in capital expenditure and the cost of servicing debt. If all these measures are moving the right way, the business will be cash positive and the shareholders will thrive.
So there is no rocket science about Private Equity. You need the capital backing and the guts to take the risk; then it is all about good business principles.
This is a highly impressive book and I will be reviewing others in the series in future updates to see if this is typical. As you would expect from Harvard it is conceptually strong and rigorous; what I did not expect was such a practical and concise approach. I particularly liked the chapter summaries and the many examples and case studies to illustrate the learning points, all within 126 pocket sized pages.
Private Equity (PE) has a bad image, some of it deserved and some less so. In the criticism of the extortionate amounts of money made by Private Equity investors who take over, turn round and then sell companies, it is often forgotten than many fail, particularly in the current downturn.
This book draws on another fact that is also often lost among the ill-informed criticism, that the PE operators are often only doing what the previous management didn’t want, or weren’t able, to do; to make the company more efficient and value creating. The authors therefore argue that if companies adopt the same practices before the PE operators can get their hands on them, they will keep their jobs and reward their shareholders.
The main headings of the potential for performance improvement are:
• Defining the full potential of the business through fact based analysis
• Developing what they call a blueprint; effectively a 3 to 5 year plan with a few (not to many) major initiatives
• Accelerating performance, monitored by a few key metrics
• Harnessing the high performing management talent (and sometimes taking it elsewhere when the turnaround has been achieved) and rewarding them well
• Making the assets sweat
• Creating a results oriented mindset
There is an interesting harmony with the messages of The Goal, in that the book recommends simple measures which drive cash flow and shareholder value. They look primarily at EBITDA (effectively operating profit before depreciation) and then monitor three other KPIs that impact cash flow – increases in working capital, investments in capital expenditure and the cost of servicing debt. If all these measures are moving the right way, the business will be cash positive and the shareholders will thrive.
So there is no rocket science about Private Equity. You need the capital backing and the guts to take the risk; then it is all about good business principles.
This is a highly impressive book and I will be reviewing others in the series in future updates to see if this is typical. As you would expect from Harvard it is conceptually strong and rigorous; what I did not expect was such a practical and concise approach. I particularly liked the chapter summaries and the many examples and case studies to illustrate the learning points, all within 126 pocket sized pages.
Wednesday 1 July 2009
Short Story
We have introduced another business short story, titled the Balanced Scorecard, providing a convenient link to the Kaplan/Norton book and showing how this approach can only operate with genuine and lasting commitment from the top.
If you would like to ready this story send an e-mail to blog@mtpplc.com
If you would like to ready this story send an e-mail to blog@mtpplc.com
The Business of Education by Steve Coomber, Training Journal, April 2009
This is one of a series of three articles based on different business schools. I have only included one because they all say much the same things and are, to a varied extent, ‘puffs’ for different schools. This one is chosen because it has more to say about broader issues and because it features Mike Osbaldeston, former colleague of the MTP founders at Ashridge and now on the point of retiring as Dean of Cranfield.
Inevitably such articles tend to be self serving and this one is no exception. In common with every management training institution, Osbaldeston emphasises the growth of customised courses as the main trend of the last few decades. Less typically he also stresses the importance of research to the Cranfield course designs, saying ‘research improves practice and our teaching is rigorously based on research’. It would have been interesting to explore in more detail precisely what is meant by research in this context and how this links in with the trend to customisation; for example, how far these days do global companies want their course content to be based on external academic research? Don’t most of them prefer course design and content that relate to their own needs and therefore require customisation to their own issues and culture?
The article contains other interesting information. Cranfield was apparently rated number one in the UK for customised courses (presumably only business schools were included in the survey as MTP courses did not feature!) and this may be something to do with the previous Ashridge experience that Osbaldeston brought to Cranfield. It is also interesting - and perhaps the reason for their success - that a third of their customised programmes are off the Cranfield site. Previously the need to fill bedrooms and conference rooms was a major barrier to flexibility of this kind and it is obvious that Cranfield have had to accept the reality that companies want to specify where their managers will be trained. A barrier to this trend in the past was the fact the academic staff were providing off-site training on a private consultancy basis and it would be interesting to know how Cranfield dealt with this sensitive issue.
Most interesting are Osbaldeston’s views on the recession and how Cranfield are coping. He states that some aspects of management training are counter cyclical, for example managers may use the opportunity during the downturn to take a year or two out to gain an MBA. He also believes that the trend to customisation makes management training more resilient; the cost of individuals going on expensive public courses would be the first to be cut, but the corporate programme would be more likely to continue because of its link to strategy and because cancellation would send out the wrong messages.
There is a final part of the article when the trends for the future are discussed and, in line with our own views at MTP, Osbaldeston emphasises the move to modularised programmes with a blend of face-to-face and on-line learning. It is interesting and surprising however that, while he mentions Cranfield’s podcasts and blogs, he does not mention the major trend that we are seeing, the delivery on-line by tutors in a virtual classroom environment.
To access this article go to:
http://www.trainingjournal.com/tj/2031.html
Inevitably such articles tend to be self serving and this one is no exception. In common with every management training institution, Osbaldeston emphasises the growth of customised courses as the main trend of the last few decades. Less typically he also stresses the importance of research to the Cranfield course designs, saying ‘research improves practice and our teaching is rigorously based on research’. It would have been interesting to explore in more detail precisely what is meant by research in this context and how this links in with the trend to customisation; for example, how far these days do global companies want their course content to be based on external academic research? Don’t most of them prefer course design and content that relate to their own needs and therefore require customisation to their own issues and culture?
The article contains other interesting information. Cranfield was apparently rated number one in the UK for customised courses (presumably only business schools were included in the survey as MTP courses did not feature!) and this may be something to do with the previous Ashridge experience that Osbaldeston brought to Cranfield. It is also interesting - and perhaps the reason for their success - that a third of their customised programmes are off the Cranfield site. Previously the need to fill bedrooms and conference rooms was a major barrier to flexibility of this kind and it is obvious that Cranfield have had to accept the reality that companies want to specify where their managers will be trained. A barrier to this trend in the past was the fact the academic staff were providing off-site training on a private consultancy basis and it would be interesting to know how Cranfield dealt with this sensitive issue.
Most interesting are Osbaldeston’s views on the recession and how Cranfield are coping. He states that some aspects of management training are counter cyclical, for example managers may use the opportunity during the downturn to take a year or two out to gain an MBA. He also believes that the trend to customisation makes management training more resilient; the cost of individuals going on expensive public courses would be the first to be cut, but the corporate programme would be more likely to continue because of its link to strategy and because cancellation would send out the wrong messages.
There is a final part of the article when the trends for the future are discussed and, in line with our own views at MTP, Osbaldeston emphasises the move to modularised programmes with a blend of face-to-face and on-line learning. It is interesting and surprising however that, while he mentions Cranfield’s podcasts and blogs, he does not mention the major trend that we are seeing, the delivery on-line by tutors in a virtual classroom environment.
To access this article go to:
http://www.trainingjournal.com/tj/2031.html
The hidden dangers of goal setting by Philip Delves Broughton, Management Today, June 2009
This article is of relevance to current debates in both the public and private sectors; for instance do targets make doctors and teachers focus on the wrong patient priorities to massage the figures? Are managers in the private sector too focussed on short-term goals and is that at the root of the banking crisis?
This article suggests an important shift in attitudes might be taking place and quotes the announcement by the new CEO of Unilever, Paul Polman, that he will abandon quarterly financial targets, as a potential watershed in attitudes at the top. Certainly those of us who remember the days of Unilever’s ‘Path to Growth’ and the impact of failing to meet the ambitious publicly declared goals, will sympathise with this view. Polman states that ‘consistent delivery over time’ is what matters and that ‘we need new habits and to avoid chasing our tail’.
The article quotes the police force and rail network as examples of public sector operations where common sense and customer interests have been forgotten in the interests of targets; to quote his words - ‘managers become target setters rather than implementors’. The author’s view is that both public and private sector bodies are far too complex to be judged by one or two quantitative goals and it is inevitable that there will be adverse, unintended consequences. These pose unnecessary stress and create a fear of failure, reduce cooperation and decrease motivation in the long-term.
Broughton suggests that slavish adhesion to short-term targets was a major factor in the demise of both Northern Rock and Enron; he also believes that this was exacerbated by the fact that they set revenue rather than profit goals as their number one priority. This may apply to Northern Rock but I do not agree with that assessment in the case of Enron. The key factor as that they were fraudently manipulating profits; the problem was not revenue or profit targets but ethics.
This view is confirmed later in the article when the author changes his stance to say that in fact targets are not the real problem; they do have benefits because most people perform better when they have clear goals. The problem is the ethics of those who pursue and monitor them. It is the lies and the bad behaviour shown by those who are being measured - and tolerated by those who manage them - that is the real problem. And if this is the way that most competitive managers behave, it would be better not to have targets, or at least to set goals that are more flexible and easily achievable.
One recommended answer in the article is to create learning goals rather than performance goals, which sounds sensible but is never fully explained with examples and guidance. It would have been good to hear more on this; without such a follow-up the article veers too much to the negative side. It would also be interesting to hear more about how those like Unilever’s Paul Polman, who are ditching targets, are replacing them with other more effective motivational tools.
To access this article go to:
http://www.managementtoday.co.uk/search/article/908158/why-excessive-goal-setting-bad-business/
This article suggests an important shift in attitudes might be taking place and quotes the announcement by the new CEO of Unilever, Paul Polman, that he will abandon quarterly financial targets, as a potential watershed in attitudes at the top. Certainly those of us who remember the days of Unilever’s ‘Path to Growth’ and the impact of failing to meet the ambitious publicly declared goals, will sympathise with this view. Polman states that ‘consistent delivery over time’ is what matters and that ‘we need new habits and to avoid chasing our tail’.
The article quotes the police force and rail network as examples of public sector operations where common sense and customer interests have been forgotten in the interests of targets; to quote his words - ‘managers become target setters rather than implementors’. The author’s view is that both public and private sector bodies are far too complex to be judged by one or two quantitative goals and it is inevitable that there will be adverse, unintended consequences. These pose unnecessary stress and create a fear of failure, reduce cooperation and decrease motivation in the long-term.
Broughton suggests that slavish adhesion to short-term targets was a major factor in the demise of both Northern Rock and Enron; he also believes that this was exacerbated by the fact that they set revenue rather than profit goals as their number one priority. This may apply to Northern Rock but I do not agree with that assessment in the case of Enron. The key factor as that they were fraudently manipulating profits; the problem was not revenue or profit targets but ethics.
This view is confirmed later in the article when the author changes his stance to say that in fact targets are not the real problem; they do have benefits because most people perform better when they have clear goals. The problem is the ethics of those who pursue and monitor them. It is the lies and the bad behaviour shown by those who are being measured - and tolerated by those who manage them - that is the real problem. And if this is the way that most competitive managers behave, it would be better not to have targets, or at least to set goals that are more flexible and easily achievable.
One recommended answer in the article is to create learning goals rather than performance goals, which sounds sensible but is never fully explained with examples and guidance. It would have been good to hear more on this; without such a follow-up the article veers too much to the negative side. It would also be interesting to hear more about how those like Unilever’s Paul Polman, who are ditching targets, are replacing them with other more effective motivational tools.
To access this article go to:
http://www.managementtoday.co.uk/search/article/908158/why-excessive-goal-setting-bad-business/
‘Empty Promises’ by Jane Simms, Director May 2009 and ‘Why I can’t stand the Apprentice’ by Hugh Greenway, Training Journal May 2009
I am reviewing these two articles together because they are both short and easy to read, and they are interesting as a follow-up to my review last month of the recent Alan Sugar biography.
These articles both represent the opposite view to his rather sycophantic biographer; they state that Sugar presents an unfortunate image of business that might give people - particularly those considering a business career - the wrong impression. Jane Simms’s article is something of a rant about the quality of the people who compete and the narrow thinking that goes into task selection. She compares the show to the 1990s programme Troubleshooters with John Harvey Jones which, she suggests, was much more realistic and informative about business. Though I agree with her sentiments, I think the ratings would be very much in favour of The Apprentice, and that is how success in TV is measured.
Simms criticises the contestants even further by saying that a matrix of talent and profile would put all of them in the high profile low talent box; she also hints that Sugar might be in the same box and suggests that it would be good to see more low profile, high talent people on TV, like Terry Leahy of Tesco. One wonders however if really successful businessmen like Leahy would take part and if the entertainment level would be the same; this raises the key issue of the programme’s objective, is it to educate or entertain?
Greenway has similarly strong views about the dysfunctional contestants but blames the selection process before and during the series; he says that ‘anyone who looks like they might have a shot at being a decent human being is usually trampled underfoot in the first few episodes’. He believes that the series has deteriorated as it has gone on, that it started with more educational business content but has collapsed into the worst kind of reality television.
His view of Sugar is also interesting. He believes that he has much experience to share and that he is capable of educating people, of admitting his own mistakes and of being more than a ‘tyrannical bully’. But the production and editing of the programme has made him into an absurd caricature of the macho senior manager. One suspects he is right and that the same could be said of the contestants too. A programme designed to show the worst of everyone may be entertaining but it tells you very little about business.
To access this article go to:
Empty Promises - http://www.director.co.uk/MAGAZINE/2009/5%20May/simms_62_10.html
Why I can’t Stand the Apprentice
- http://www.trainingjournal.com/tj/2107.html
These articles both represent the opposite view to his rather sycophantic biographer; they state that Sugar presents an unfortunate image of business that might give people - particularly those considering a business career - the wrong impression. Jane Simms’s article is something of a rant about the quality of the people who compete and the narrow thinking that goes into task selection. She compares the show to the 1990s programme Troubleshooters with John Harvey Jones which, she suggests, was much more realistic and informative about business. Though I agree with her sentiments, I think the ratings would be very much in favour of The Apprentice, and that is how success in TV is measured.
Simms criticises the contestants even further by saying that a matrix of talent and profile would put all of them in the high profile low talent box; she also hints that Sugar might be in the same box and suggests that it would be good to see more low profile, high talent people on TV, like Terry Leahy of Tesco. One wonders however if really successful businessmen like Leahy would take part and if the entertainment level would be the same; this raises the key issue of the programme’s objective, is it to educate or entertain?
Greenway has similarly strong views about the dysfunctional contestants but blames the selection process before and during the series; he says that ‘anyone who looks like they might have a shot at being a decent human being is usually trampled underfoot in the first few episodes’. He believes that the series has deteriorated as it has gone on, that it started with more educational business content but has collapsed into the worst kind of reality television.
His view of Sugar is also interesting. He believes that he has much experience to share and that he is capable of educating people, of admitting his own mistakes and of being more than a ‘tyrannical bully’. But the production and editing of the programme has made him into an absurd caricature of the macho senior manager. One suspects he is right and that the same could be said of the contestants too. A programme designed to show the worst of everyone may be entertaining but it tells you very little about business.
To access this article go to:
Empty Promises - http://www.director.co.uk/MAGAZINE/2009/5%20May/simms_62_10.html
Why I can’t Stand the Apprentice
- http://www.trainingjournal.com/tj/2107.html
Clarifying your Learning and Development Strategy, by Wendy Hirsh and John Burgoyne, Training Journal, June 2009
This is also one of a series of three articles but I did not review the other two because they said nothing new and focussed on conventional issues of course design and delivery. I have chosen to review this one because it concentrates on the thorny issue of evaluation - which everyone seems to want to hear about - and does make some useful points to guide the learning professional in the search for this Holy Grail.
As is normal in such articles, the four Kirkpatrick levels are used as the language of the debate; in our view this is the key benefit of the Kirkpatrick framework. The authors make the important point that there are multiple stakeholders who will want different kinds of evaluation of courses and four are mentioned - the learner, the external provider, the line manager and the L&D professional who commissions the training. The argument is that evaluation should be based on the decisions that have to be made by the stakeholders and their relative importance.
The article quotes a framework developed by Mark Easterby-Smith that suggests that the first stage of evaluation is to determine the questions to be asked; are they about the effectiveness of the process or the learning outcome? Are they about proving success or trying to find a better way of doing things? These fundamental questions need to be asked before any evaluation methodology can be considered.
One rule of thumb that I had not heard before is the suggestion that the cost of evaluation should not exceed 10% of the cost of the training. Though I applaud any attempt to relate the two together, it begs the question of how you define cost in each case and how much time it would take a financial person to carry out the costing evaluation. It does however lead to the sensible conclusion that more sophisticated evaluations at the higher end of the Kirkpatrick levels are only likely to be valid for major strategic learning initiatives.
The article ends - as many such articles inevitably do - with some points that have been made many times before; that evaluation should be built into course design and should be developed as a long-term strategic approach rather than a ‘one-off’ hit for a particular programme. There are rather too many clichés in the article - evaluation is a strategic journey for instance - but I did like the description of this journey; from doing things well to doing things better, to doing better things.
To access this article go to:
http://www.trainingjournal.com/tj/2186.html
As is normal in such articles, the four Kirkpatrick levels are used as the language of the debate; in our view this is the key benefit of the Kirkpatrick framework. The authors make the important point that there are multiple stakeholders who will want different kinds of evaluation of courses and four are mentioned - the learner, the external provider, the line manager and the L&D professional who commissions the training. The argument is that evaluation should be based on the decisions that have to be made by the stakeholders and their relative importance.
The article quotes a framework developed by Mark Easterby-Smith that suggests that the first stage of evaluation is to determine the questions to be asked; are they about the effectiveness of the process or the learning outcome? Are they about proving success or trying to find a better way of doing things? These fundamental questions need to be asked before any evaluation methodology can be considered.
One rule of thumb that I had not heard before is the suggestion that the cost of evaluation should not exceed 10% of the cost of the training. Though I applaud any attempt to relate the two together, it begs the question of how you define cost in each case and how much time it would take a financial person to carry out the costing evaluation. It does however lead to the sensible conclusion that more sophisticated evaluations at the higher end of the Kirkpatrick levels are only likely to be valid for major strategic learning initiatives.
The article ends - as many such articles inevitably do - with some points that have been made many times before; that evaluation should be built into course design and should be developed as a long-term strategic approach rather than a ‘one-off’ hit for a particular programme. There are rather too many clichés in the article - evaluation is a strategic journey for instance - but I did like the description of this journey; from doing things well to doing things better, to doing better things.
To access this article go to:
http://www.trainingjournal.com/tj/2186.html
Getting HR on board, by Kathleen O’Donovan, Personnel Today, June 2009
I remember Kathleen O’Donovan as the first female to be Financial Director of a top 100 company and who, after a period of impressive performance, lost her job. However she seems to have found a niche as a mentor and serial non-executive director. Here she writes about the role of HR and the ways in which HR people can and should reach board level; it is clear that her career gives her a different perspective from someone with a more conventional HR background.
My reason for liking this article is perhaps because it ties in with our own views and the trends that we see - the need for HR people to have business as well as personal skills. The author stresses that, to have a chance of being successful at board level and achieving the desired ‘strategic relationship’ with the CEO, the HR person must be confident and fluent in financial topics. This would include general knowledge such as understanding company accounts as well as hot topics within the HR orbit, such as the financial implications of pension schemes (An example of a company taking a similar view is MTP’s biggest project this year, the on-line delivery of a business acumen programme to all the senior HR people of one of the world’s biggest high tech companies).
O’Donovan believes that HR people with a desire to ‘go plural’ like her can use such skills to obtain non-executive directorships with other companies; she suggests that many major companies are looking for people who have business skills, understand executive remuneration and would be suitable for the increasingly important remuneration committees within the main boards of public companies. She does however fail to mention the problems of getting yourself into the non-executive network - often much more closed than it should be - or the fact that such roles can often be poisoned chalices, as the members of the remuneration committee of RBS has recently found!
The article also suggests that the HR person who wishes to rise further should try if possible to spend time in a line management role in another function, not just to improve business skills but also to understand how HR is seen by the internal customer. She also believes that there must be a good relationship with the Financial Director, a powerful axis based on mutual support, a powerful combination of the hard and the soft side of board level decision-making.
Financial and business skills are not the only ones mentioned in the article. She emphasises emotional intelligence as a quality possessed by most HR people which is sorely needed at board level. But it is only possible to use it to influence others at board level if the confidence and competence in business skills are there.
Maybe I liked this article because it told me what I believe and want others to hear, but it is certainly worth a read by the ambitious HR person who is prepared to take on that poisoned chalice.
To access this article go to:
http://www.personneltoday.com/articles/2009/06/01/50923/how-to-get-board-ready-trade-secrets.html
My reason for liking this article is perhaps because it ties in with our own views and the trends that we see - the need for HR people to have business as well as personal skills. The author stresses that, to have a chance of being successful at board level and achieving the desired ‘strategic relationship’ with the CEO, the HR person must be confident and fluent in financial topics. This would include general knowledge such as understanding company accounts as well as hot topics within the HR orbit, such as the financial implications of pension schemes (An example of a company taking a similar view is MTP’s biggest project this year, the on-line delivery of a business acumen programme to all the senior HR people of one of the world’s biggest high tech companies).
O’Donovan believes that HR people with a desire to ‘go plural’ like her can use such skills to obtain non-executive directorships with other companies; she suggests that many major companies are looking for people who have business skills, understand executive remuneration and would be suitable for the increasingly important remuneration committees within the main boards of public companies. She does however fail to mention the problems of getting yourself into the non-executive network - often much more closed than it should be - or the fact that such roles can often be poisoned chalices, as the members of the remuneration committee of RBS has recently found!
The article also suggests that the HR person who wishes to rise further should try if possible to spend time in a line management role in another function, not just to improve business skills but also to understand how HR is seen by the internal customer. She also believes that there must be a good relationship with the Financial Director, a powerful axis based on mutual support, a powerful combination of the hard and the soft side of board level decision-making.
Financial and business skills are not the only ones mentioned in the article. She emphasises emotional intelligence as a quality possessed by most HR people which is sorely needed at board level. But it is only possible to use it to influence others at board level if the confidence and competence in business skills are there.
Maybe I liked this article because it told me what I believe and want others to hear, but it is certainly worth a read by the ambitious HR person who is prepared to take on that poisoned chalice.
To access this article go to:
http://www.personneltoday.com/articles/2009/06/01/50923/how-to-get-board-ready-trade-secrets.html
Chasing Daylight by Eugene O’Kelly, published by McGraw-Hill
Eugene O’Kelly, global CEO of KPMG, thought he had a great and well balanced life until he found he had three months to live. But this news made him evaluate whether his life priorities had been well balanced and he soon decided to resign from his job and spend his remaining time tidying up the other aspects of his life that he now realised he had been neglecting - his family, friends and all the things that he had never had time to do. He also decided to write this book in order to help others see things as clearly as he did.
The book then describes the story of his last three months, the last chapter being completed by his wife as he became too weak to finish it. He also became too weak to do some of the things that he had planned but this did not seem to matter; he had found a positive purpose to help him cope with his devastating news.
It is difficult to know whether his admirable combination of clear thinking and contentment was a sort of bravado or a genuine response to tragedy, but in a way it does not matter. I not only read the book myself but also gave to several others who are in busy management roles; the feedback confirmed that no-one can read this book without thinking more seriously about their own life work-life balance.
Is it a good thing to encourage managers under pressure to think this way or is it best for them to carry on blindly as company committed workaholics? Clearly there is no answer that applies to everybody because we all have different circumstances and needs but this book will make everyone who reads it stop and think about their life priorities.
The book then describes the story of his last three months, the last chapter being completed by his wife as he became too weak to finish it. He also became too weak to do some of the things that he had planned but this did not seem to matter; he had found a positive purpose to help him cope with his devastating news.
It is difficult to know whether his admirable combination of clear thinking and contentment was a sort of bravado or a genuine response to tragedy, but in a way it does not matter. I not only read the book myself but also gave to several others who are in busy management roles; the feedback confirmed that no-one can read this book without thinking more seriously about their own life work-life balance.
Is it a good thing to encourage managers under pressure to think this way or is it best for them to carry on blindly as company committed workaholics? Clearly there is no answer that applies to everybody because we all have different circumstances and needs but this book will make everyone who reads it stop and think about their life priorities.
Balanced Scorecard by Robert S Kaplan and David P Norton, published by HBR Press
Re-reading this book reminded me how easy it is for management teachers to think that they know and can explain a subject while in fact they are leaving out some key principles and nuances. Thus it pays for each of us to go back from time to time and study again the principle source, to see if knowledge can be reinvigorated and enhanced. This is particularly true of the Balanced Scorecard where the authors have produced updated versions, clarifying and building on their original methodology.
These were the insights that were either clarified or reinforced on my second reading:
- The financial metrics should be reviewed as the business life-cycle stage changes over time.
- The original framework was Financial, Customer, Learning and Growth (not just ‘People’ as is often seen) and Internal Business Processes.
- Later thinking is that there should be more flexibility depending on strategic goals, for instance innovation can be a separate dimension if - as is likely for growth companies - this is seen as central to achievement of long-term goals.
- From this it is clear that the scorecard should evolve and be developed by top management as the strategy of the company changes over time.
Kaplan and Norton seem to have a refreshing view that they did not get it right first time and have refined their ideas, as well as encouraging others to develop them further. Just recently some further work by Hannabarger, Buchanan and Economy - with the rather populist title of ‘Balanced Scorecard for Dummies’ - was welcomed by Kaplan as a ‘fourth generation’ development; it provided a split between tactical and strategic aspects, and more drilling down to day-to-day operations.
In the current climate there is more criticism than ever of businesses that are too financial and short-term in focus; therefore the message and discipline of the Balanced Scorecard is even more important than it was at the time of the original book in the mid nineties. Even if you do not use the label, the principles are essential knowledge for those running the modern business.
These were the insights that were either clarified or reinforced on my second reading:
- The financial metrics should be reviewed as the business life-cycle stage changes over time.
- The original framework was Financial, Customer, Learning and Growth (not just ‘People’ as is often seen) and Internal Business Processes.
- Later thinking is that there should be more flexibility depending on strategic goals, for instance innovation can be a separate dimension if - as is likely for growth companies - this is seen as central to achievement of long-term goals.
- From this it is clear that the scorecard should evolve and be developed by top management as the strategy of the company changes over time.
Kaplan and Norton seem to have a refreshing view that they did not get it right first time and have refined their ideas, as well as encouraging others to develop them further. Just recently some further work by Hannabarger, Buchanan and Economy - with the rather populist title of ‘Balanced Scorecard for Dummies’ - was welcomed by Kaplan as a ‘fourth generation’ development; it provided a split between tactical and strategic aspects, and more drilling down to day-to-day operations.
In the current climate there is more criticism than ever of businesses that are too financial and short-term in focus; therefore the message and discipline of the Balanced Scorecard is even more important than it was at the time of the original book in the mid nineties. Even if you do not use the label, the principles are essential knowledge for those running the modern business.
Friday 8 May 2009
Building an evaluation strategy, by Martin Schmalenbach, Training Journal, April 2009
I have included this article because I know how much anything on the Holy Grail of learning evaluation is always appreciated by learning professionals, even if articles usually only remind us of the major challenges involved. This article is different from others because it focuses on the need for a strategy on evaluation - the direction to be taken - and therefore focuses very much on the questions that need to be asked and that are often overlooked.
One interesting question comes early in the article - should evaluation be pre or post the training? I have always assumed that it has to be post but, if you compare training evaluation with other types of investment appraisal such as capital expenditure, you could argue that it has to be before the training to fully support the decision. Of course any
pre-evaluation requires assumptions about future benefit but that is exactly the issue that should be addressed during the early stages. Also pre-evaluation makes post-evaluation that much more effective because it provides a basis for comparison, which is fundamental to good evaluation.
The author also poses another valid question that must be asked as part of the strategy - are you sure you really want to do this and why? To address evaluation as a broad issue before looking at individual programmes must be the right approach, rather than assuming that evaluation is a good thing per se. It allows an organisation to say that maybe we prefer to rely on our business judgment to assess priorities, rather than get into detailed analysis that does not produce reliable information. Or maybe we have to do so for certain types of programme and levels of management.
The article’s coverage of what you evaluate is less original and helpful; the author is really only repeating the Kirkpatrick framework when he suggests that a decision be made on whether to ask for reaction, learning, behaviour or organisational impact. He is however on more original ground when he asks the question - who should do the evaluation? At MTP we have often been interested that most organisations want us to evaluate ourselves - which of course we do fairly! - rather than having an internal process that ensures objectivity and independence.
Having made all these valid and interesting points, the article then rambles on rather too long by asking the same questions in a different way and produces a checklist as a framework for ensuring everything is covered - stakeholders, purpose, coverage, responsibilities, process and product, reporting and communicating.
However the author does end with another powerful point and a good reason for pushing forward an evaluation strategy - the impression that it creates for learning people as business partners with other functions, helping to ensure that they are seen to add value.
He also makes the point that pre-evaluation will often allow this business partnering to take place in such a way that mistakes are avoided. Too often, it is suggested, the training department takes criticism for supplying non-value adding training that partners in other functions have asked for!
To access this article go to http://www.trainingjournal.com/tj/2040.html
One interesting question comes early in the article - should evaluation be pre or post the training? I have always assumed that it has to be post but, if you compare training evaluation with other types of investment appraisal such as capital expenditure, you could argue that it has to be before the training to fully support the decision. Of course any
pre-evaluation requires assumptions about future benefit but that is exactly the issue that should be addressed during the early stages. Also pre-evaluation makes post-evaluation that much more effective because it provides a basis for comparison, which is fundamental to good evaluation.
The author also poses another valid question that must be asked as part of the strategy - are you sure you really want to do this and why? To address evaluation as a broad issue before looking at individual programmes must be the right approach, rather than assuming that evaluation is a good thing per se. It allows an organisation to say that maybe we prefer to rely on our business judgment to assess priorities, rather than get into detailed analysis that does not produce reliable information. Or maybe we have to do so for certain types of programme and levels of management.
The article’s coverage of what you evaluate is less original and helpful; the author is really only repeating the Kirkpatrick framework when he suggests that a decision be made on whether to ask for reaction, learning, behaviour or organisational impact. He is however on more original ground when he asks the question - who should do the evaluation? At MTP we have often been interested that most organisations want us to evaluate ourselves - which of course we do fairly! - rather than having an internal process that ensures objectivity and independence.
Having made all these valid and interesting points, the article then rambles on rather too long by asking the same questions in a different way and produces a checklist as a framework for ensuring everything is covered - stakeholders, purpose, coverage, responsibilities, process and product, reporting and communicating.
However the author does end with another powerful point and a good reason for pushing forward an evaluation strategy - the impression that it creates for learning people as business partners with other functions, helping to ensure that they are seen to add value.
He also makes the point that pre-evaluation will often allow this business partnering to take place in such a way that mistakes are avoided. Too often, it is suggested, the training department takes criticism for supplying non-value adding training that partners in other functions have asked for!
To access this article go to http://www.trainingjournal.com/tj/2040.html
Predicting your competitor's reaction, by Ken Favaro, Tim Romberger and David Meer, Harvard Business Review, April 2009
This article covers some fascinating research by McKinsey which challenges some of the conventional wisdom around the ways that managers assess competitor reaction to new innovations and initiatives. It starts by quantifying what we have often observed in our work with a range of companies - that very few of the managers surveyed recalled having brought competitor reactions into their decision-making processes.
Many of the more sophisticated companies would respond by pointing out their use of game theory and War Games as evidence of their practice of predicting competitor reaction. However the authors are sceptical of both these approaches; in the case of game theory this is because they say it becomes unmanageable in the real world, particularly when there are multiple competitors with multiple options.
The criticism of War Games is that the assumptions are inevitably arbitrary and are likely to miss out on the subtleties of politics and personalities involved in real-life decisions. A more valid point in my view is the fact that War Games may over-estimate the likelihood of significant response, because there is an implied assumption that the innovation will be noticed and reacted to.
Maybe this is because there is a tendency for companies to think that they are bigger players than they really are. McKinsey’s research confirms that, despite what companies expect, many innovations are not noticed at all by competitors, which would of course make for a short and boring War Game session!
The article does disappoint by being less good at putting forward solutions compared to knocking down other approaches. It does however suggest four fundamental questions that may seem blindingly obvious but which are a good discipline and structure:
- Will the competitors see your actions?
- Will they feel threatened?
- Will mounting a response be a priority?
- Will they overcome organisational inertia?
It then goes on to suggest that the analyst should try to assess the options open to the major competitors, the extent to which they look ahead and the metrics they use. They stress that most competitors are likely to see the world quite simply and to restrict the number of options being considered. There is a danger that sophisticated companies think that every other company looks to maximise net present value, just because they think that way.
I know that our strategy and War Game specialists will look at this article and say that it is merely repeating the thinking that should go into all strategic assessments and War Game designs. They would nevertheless benefit - as every reader will - from the challenges to conventional assumptions and the survey evidence that the decisions of many companies are often less logical and rational than we think.
To access this article go to http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=R0904H&_requestid=13084
Many of the more sophisticated companies would respond by pointing out their use of game theory and War Games as evidence of their practice of predicting competitor reaction. However the authors are sceptical of both these approaches; in the case of game theory this is because they say it becomes unmanageable in the real world, particularly when there are multiple competitors with multiple options.
The criticism of War Games is that the assumptions are inevitably arbitrary and are likely to miss out on the subtleties of politics and personalities involved in real-life decisions. A more valid point in my view is the fact that War Games may over-estimate the likelihood of significant response, because there is an implied assumption that the innovation will be noticed and reacted to.
Maybe this is because there is a tendency for companies to think that they are bigger players than they really are. McKinsey’s research confirms that, despite what companies expect, many innovations are not noticed at all by competitors, which would of course make for a short and boring War Game session!
The article does disappoint by being less good at putting forward solutions compared to knocking down other approaches. It does however suggest four fundamental questions that may seem blindingly obvious but which are a good discipline and structure:
- Will the competitors see your actions?
- Will they feel threatened?
- Will mounting a response be a priority?
- Will they overcome organisational inertia?
It then goes on to suggest that the analyst should try to assess the options open to the major competitors, the extent to which they look ahead and the metrics they use. They stress that most competitors are likely to see the world quite simply and to restrict the number of options being considered. There is a danger that sophisticated companies think that every other company looks to maximise net present value, just because they think that way.
I know that our strategy and War Game specialists will look at this article and say that it is merely repeating the thinking that should go into all strategic assessments and War Game designs. They would nevertheless benefit - as every reader will - from the challenges to conventional assumptions and the survey evidence that the decisions of many companies are often less logical and rational than we think.
To access this article go to http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=R0904H&_requestid=13084
Roundtable discussion on training and qualifications, Director Magazine, April 2009
I chose this article because I know that many of our clients and contacts have interests in qualifications and because it provides new thoughts on the perennial issue of their value to managers. It also updated me on government involvement in learning, skill development and qualifications; for instance I had never previously heard of the ‘Qualification and Curriculum Authority’ whose ‘Director of Qualification and Skills’ was represented on the panel.
The article is made up of the separately expressed views of this panel which was supposed to represent ‘directors, educators and employee representatives’. Though the views expressed come over as generally informed and sensible, it would have been nice to have seen a rather more high calibre group; it is not the first time that a good feature in the Director Magazine has been adversely impacted by the low quality of the names. Apart from the Head of Skills and Economic Affairs of Microsoft, there is no other household name and it is surprising that the Director could find no educators other than the Principal of Norwich City College and some hardly known private sector suppliers.
Nevertheless, there is knowledge to be gained. Readers may already know this but apparently there is now an ‘Employer Recognition Programme’ (ERP) and a ‘Qualifications and Credit Framework’ (QCF), both sponsored by the above mentioned ‘Qualification and Curriculum Authority’ (QCA). Apparently employers can bundle up in-house training into qualifications to have national recognition and McDonalds and Flybe are among the companies who have done this, though it was interesting that no other names could be quoted. Also quoted was the ‘Training Quality Standard’ (TQS, obviously all designed to be TLAs!) which is awarded by the Learning and Skills Council (LSC) and needs to prove business gain before it can be granted.
One of the panellists mentioned that the ERP is reminiscent of attempts to build management qualifications around the NVQ framework some years ago; another questioned whether a future employer would be attracted by a qualification earned through a specialist company like McDonalds. Yet another point - which was going through my mind as I read the article - was that, for high calibre managers, it is difficult to turn them on unless the qualification is an MBA, and they haven’t the time for that. Clearly some of the panellists were sceptical about the government initiatives, particularly in a management context and during a recession when coping with or keeping a job become the main priorities.
Though the representative of the QCA was selling very hard the benefits of a flexible and integrated qualifications strategy, the answers to the final question - would you employ someone with a McDonalds qualification? - were interesting. The article finished with these three responses from employers:
- ‘I’m interested in ability not qualification’.
- ‘You look at attitude to learning and development’.
- ‘You can develop skills but you can’t train values’.
Maybe it’s because my focus is tailored management training but I was left wondering about the cost effectiveness of the taxpayers’ money that is being spent on maintaining all these TLAs.
To access this article go to http://www.director.co.uk/MAGAZINE/2009/4%20April/round_table_62_9.html
The article is made up of the separately expressed views of this panel which was supposed to represent ‘directors, educators and employee representatives’. Though the views expressed come over as generally informed and sensible, it would have been nice to have seen a rather more high calibre group; it is not the first time that a good feature in the Director Magazine has been adversely impacted by the low quality of the names. Apart from the Head of Skills and Economic Affairs of Microsoft, there is no other household name and it is surprising that the Director could find no educators other than the Principal of Norwich City College and some hardly known private sector suppliers.
Nevertheless, there is knowledge to be gained. Readers may already know this but apparently there is now an ‘Employer Recognition Programme’ (ERP) and a ‘Qualifications and Credit Framework’ (QCF), both sponsored by the above mentioned ‘Qualification and Curriculum Authority’ (QCA). Apparently employers can bundle up in-house training into qualifications to have national recognition and McDonalds and Flybe are among the companies who have done this, though it was interesting that no other names could be quoted. Also quoted was the ‘Training Quality Standard’ (TQS, obviously all designed to be TLAs!) which is awarded by the Learning and Skills Council (LSC) and needs to prove business gain before it can be granted.
One of the panellists mentioned that the ERP is reminiscent of attempts to build management qualifications around the NVQ framework some years ago; another questioned whether a future employer would be attracted by a qualification earned through a specialist company like McDonalds. Yet another point - which was going through my mind as I read the article - was that, for high calibre managers, it is difficult to turn them on unless the qualification is an MBA, and they haven’t the time for that. Clearly some of the panellists were sceptical about the government initiatives, particularly in a management context and during a recession when coping with or keeping a job become the main priorities.
Though the representative of the QCA was selling very hard the benefits of a flexible and integrated qualifications strategy, the answers to the final question - would you employ someone with a McDonalds qualification? - were interesting. The article finished with these three responses from employers:
- ‘I’m interested in ability not qualification’.
- ‘You look at attitude to learning and development’.
- ‘You can develop skills but you can’t train values’.
Maybe it’s because my focus is tailored management training but I was left wondering about the cost effectiveness of the taxpayers’ money that is being spent on maintaining all these TLAs.
To access this article go to http://www.director.co.uk/MAGAZINE/2009/4%20April/round_table_62_9.html
Learning Integration; can informal learning be formalised? Training Journal March 2009, by Gareth Walters
When I saw the title of this article, my initial reaction was that the real question is not can it be formalised but should it be formalised? Isn’t the whole question a contradiction? But after reading what the authors have to say, I became convinced that they have a point and that this topic is a valid issue for the learning professional. Perhaps a better question is - how can the two types of learning, formal and informal, best be integrated?
Informal learning is defined by the authors as the ‘unofficial, unscheduled, impromptu way most people learn to do their jobs’. They make the same point as several articles which I have reviewed on the blog recently; the different ways in which people - particularly the younger population - are now learning, mainly as a result of the technology available and the increased opportunities that it provides via Facebook, YouTube, Wikipedia, Google etc. The question the article faces is - can you, should you try to embrace this trend through adaptations of learning strategies and learning management systems?
The point is made that to ignore these trends would be wrong, not least because many of the ‘new media’ may produce data that is wrong or misleading, notably Wikipedia. There is also the point that the younger learners, who use these media the most, are the ones most in need of formal structures to replace their lack of experience.
The author sees great benefit in building in access to blogs, wikis and podcasts through learning management systems, thus showing a willingness to embrace them and allowing some element of control. There are opportunities to provide a structure - for example a series of Podcasts - and encourage the sharing of data and opportunities among users. They also suggest that the LMS can track usage, which is perhaps more arguable and rather depends on the purpose and the uses of the tracking information.
Another excellent idea which this blog has discussed before is the integration of informal learning into course design, for example, using on-line access to Google et al as part of a case study or exercise. Previous discussion of this type of integration encouraged me to develop an exercise for my grandchildren over Easter - ‘answer these sport questions via Google and the first to finish can start the Easter Egg hunt’. I was amazed at the speed and motivation (largely due to a cash reward at the end) and it confirmed to me what can be done by some structuring of informal learning!
So I agree with the thrust of the article if not the title question. You cannot formalise the informal but you can integrate the two to get the best of both worlds.
To access this article go to http://www.trainingjournal.com/tj/1987.html
Informal learning is defined by the authors as the ‘unofficial, unscheduled, impromptu way most people learn to do their jobs’. They make the same point as several articles which I have reviewed on the blog recently; the different ways in which people - particularly the younger population - are now learning, mainly as a result of the technology available and the increased opportunities that it provides via Facebook, YouTube, Wikipedia, Google etc. The question the article faces is - can you, should you try to embrace this trend through adaptations of learning strategies and learning management systems?
The point is made that to ignore these trends would be wrong, not least because many of the ‘new media’ may produce data that is wrong or misleading, notably Wikipedia. There is also the point that the younger learners, who use these media the most, are the ones most in need of formal structures to replace their lack of experience.
The author sees great benefit in building in access to blogs, wikis and podcasts through learning management systems, thus showing a willingness to embrace them and allowing some element of control. There are opportunities to provide a structure - for example a series of Podcasts - and encourage the sharing of data and opportunities among users. They also suggest that the LMS can track usage, which is perhaps more arguable and rather depends on the purpose and the uses of the tracking information.
Another excellent idea which this blog has discussed before is the integration of informal learning into course design, for example, using on-line access to Google et al as part of a case study or exercise. Previous discussion of this type of integration encouraged me to develop an exercise for my grandchildren over Easter - ‘answer these sport questions via Google and the first to finish can start the Easter Egg hunt’. I was amazed at the speed and motivation (largely due to a cash reward at the end) and it confirmed to me what can be done by some structuring of informal learning!
So I agree with the thrust of the article if not the title question. You cannot formalise the informal but you can integrate the two to get the best of both worlds.
To access this article go to http://www.trainingjournal.com/tj/1987.html
A War of Words, by Kate Halpern, Personnel Today 7th April 2009
This article is to some extent tongue in cheek but it raises some interesting issues. It makes fun of the increasing tendency for businesses in general, and the HR function in particular, to use jargon, and the extent to which this is a problem. There is also the question - when does a word or a phrase become jargon? ‘Stakeholder’ and ‘incentivising’ are mentioned as examples but aren’t these just words that succinctly express a concept?
There is also a suggestion that the HR function is more guilty of jargon than others and Sales and Marketing are also mentioned as guilty parties, but my reaction was to say that neither are in the same league as Finance or IT. It is even suggested that the term ‘Human Resources’ is jargon and that simple ‘Personnel’ expresses the role much better. I can see that one word is better than two but my recollection is that HR was coined to make it clear that the role was more than managing canteens and hygiene, which came to be associated with Personnel. If this change of title has helped to change the image, it surely was worthwhile.
The article does produce some quite silly examples which I had never heard of - like ‘strategic staircase’ and ‘re-baselining’ - but it also makes fun of other terms that have become part of business and general language like ‘in the loop’ and ‘singing from the same hymn sheet’, both of which I confess to using quite regularly.
My well known defensive instincts therefore drive me to ask the question - why not? If there is a phrase which easily encapsulates a state or a concept, isn’t this just a natural development of language? In fairness the article does ask this question at the end and says that maybe we should be celebrating rather than criticising our ability to ‘jargonise’.
In the end it comes down to why it’s used and whether it helps or hinders communication - that should be the test. If it is being used to make others feel excluded or to make the user feel clever, it should be discouraged. But if it helps us all to express our ideas clearly and succinctly, go for it!
To access this article go to http://www.personneltoday.com/articles/2009/04/01/50111/jargon-war-of-words.html
There is also a suggestion that the HR function is more guilty of jargon than others and Sales and Marketing are also mentioned as guilty parties, but my reaction was to say that neither are in the same league as Finance or IT. It is even suggested that the term ‘Human Resources’ is jargon and that simple ‘Personnel’ expresses the role much better. I can see that one word is better than two but my recollection is that HR was coined to make it clear that the role was more than managing canteens and hygiene, which came to be associated with Personnel. If this change of title has helped to change the image, it surely was worthwhile.
The article does produce some quite silly examples which I had never heard of - like ‘strategic staircase’ and ‘re-baselining’ - but it also makes fun of other terms that have become part of business and general language like ‘in the loop’ and ‘singing from the same hymn sheet’, both of which I confess to using quite regularly.
My well known defensive instincts therefore drive me to ask the question - why not? If there is a phrase which easily encapsulates a state or a concept, isn’t this just a natural development of language? In fairness the article does ask this question at the end and says that maybe we should be celebrating rather than criticising our ability to ‘jargonise’.
In the end it comes down to why it’s used and whether it helps or hinders communication - that should be the test. If it is being used to make others feel excluded or to make the user feel clever, it should be discouraged. But if it helps us all to express our ideas clearly and succinctly, go for it!
To access this article go to http://www.personneltoday.com/articles/2009/04/01/50111/jargon-war-of-words.html
Sir Alan Sugar - The biography, by Charlie Burden, published by John Blake
The fact that I was disappointed by this book may be something to do with my own rather negative views of ‘Sir Alan’. I had hopes and expectations that, as the book was written by a journalist rather than by the man himself, there might be some challenge to the sycophantic attitude of everyone involved in the Apprentice series. But challenge and questioning was kept to a minimum and always answered with a rationalisation or a ‘he was right all along’ explanation.
The book takes on a rather conventional structure by starting with his birth - ‘you’re sired’ is the chapter heading - and emphasising the rags to riches story that the man himself loves to tell us about. And it certainly was impressive during the seventies and eighties when he developed technology products that were cleverly geared to consumer needs and price points. But somewhere along the way he seemed to lose his spark and his flair for product development, perhaps when he became one of the first rich businessmen to be tempted to invest in the glamour of football clubs.
It was at this stage that I began to suspect that the author was being less than objective: I had hoped that a journalist might at least be open about the mistakes that were made, and investing in Tottenham Hotspur with Terry Venables as a partner was about as big a mistake as it was possible to make. But even this is glossed over as a triumph, with not a suggestion that perhaps this was a distraction that helped to derail his progress as an innovator in the electronics market.
The final part of the book covers in some detail perhaps his greatest triumph, his ability to ‘out-trump’ Donald Trump by making the Apprentice so much more entertaining and compulsive than its US equivalent. Yet this part of the book follows the misleading line of the TV programme by continuing to talk about his ‘sprawling business empire’ while admitting elsewhere that it is now not much more than a property portfolio based on past successes.
Whilst accepting the brilliance of Sugar’s early innovative drive and his undoubted TV charisma, I found the book to be so one sided and sycophantic that I wanted someone to write a ‘hatchet job’ to provide some kind of balance. This might also have raised the issue that the book avoids - whether the management style represented by his manner and the way in which conflict is encouraged on the Apprentice, give out all the wrong signals about the way in which business success is achieved.
One interesting insight into the Apprentice is that the two grey haired sidekicks who appear to work for him on the programme, are not his employees at all, but are retired legal and public relations executives whom Sugar used to do business with. It perhaps explains something that has always puzzled me - how two such shrewd individuals could have possibly worked for ‘Sir Alan’.
The book takes on a rather conventional structure by starting with his birth - ‘you’re sired’ is the chapter heading - and emphasising the rags to riches story that the man himself loves to tell us about. And it certainly was impressive during the seventies and eighties when he developed technology products that were cleverly geared to consumer needs and price points. But somewhere along the way he seemed to lose his spark and his flair for product development, perhaps when he became one of the first rich businessmen to be tempted to invest in the glamour of football clubs.
It was at this stage that I began to suspect that the author was being less than objective: I had hoped that a journalist might at least be open about the mistakes that were made, and investing in Tottenham Hotspur with Terry Venables as a partner was about as big a mistake as it was possible to make. But even this is glossed over as a triumph, with not a suggestion that perhaps this was a distraction that helped to derail his progress as an innovator in the electronics market.
The final part of the book covers in some detail perhaps his greatest triumph, his ability to ‘out-trump’ Donald Trump by making the Apprentice so much more entertaining and compulsive than its US equivalent. Yet this part of the book follows the misleading line of the TV programme by continuing to talk about his ‘sprawling business empire’ while admitting elsewhere that it is now not much more than a property portfolio based on past successes.
Whilst accepting the brilliance of Sugar’s early innovative drive and his undoubted TV charisma, I found the book to be so one sided and sycophantic that I wanted someone to write a ‘hatchet job’ to provide some kind of balance. This might also have raised the issue that the book avoids - whether the management style represented by his manner and the way in which conflict is encouraged on the Apprentice, give out all the wrong signals about the way in which business success is achieved.
One interesting insight into the Apprentice is that the two grey haired sidekicks who appear to work for him on the programme, are not his employees at all, but are retired legal and public relations executives whom Sugar used to do business with. It perhaps explains something that has always puzzled me - how two such shrewd individuals could have possibly worked for ‘Sir Alan’.