Level 5 Leadership and Change Management

Today I, with my other group mates (Tafazzul and Abid)  presented a topic on role of leadership, and specially the executives in managing the change process. I found this topic very interesting and I would like to share it with all of you and would love to have your comments about level 5 leadership.  Its more of a structured and academic post. I hope you enjoy reading it :)

Leadership cannot be defined in a standard format. However it is agreed by many researchers that leadership is related with influencing and motivating the people for the achievement of a common goal (Northouse, P.G. 2007). Role of executives are always of key importance while coping up any challenge for the organization in modern ever changing environment. Leadership, as a process, shapes the goals of a group or organization, motivates behavior toward the achievement of those goals, and helps to define group or organizational culture. Many authors, even consider top management or in other words the executives – as the transformers for the organization from a general to a great firm, and of no doubt a good executive can make wonders in the organizational long term goals and missions.

Jim Collins rightly mentioned that this level of leadership is a blend of professional will with personal humility, which in real unify the interests and influence of all stakeholders for the organization. As higher one rise in his/her career, and reach at the executive level of operations so as the augmentation of responsibilities. Now, with a modified role he/she must not only look on just making the decisions but also to involve the subordinates, not only for the feedback for the improvement of the organization but also for the proper time of implementing and action plan for the change. Thus, he/she must have to posses the skills and capabilities required in different levels plus additional skills at fifth level.

Many people baffle this level of leadership and consider it as the only requirement for growth but in actual, their function is just like a track for smooth running towards the ever aimed mission and vision for the people in general and organization in particular. It all starts with selecting the right people and then faith and fact on them for appropriate functioning. Rowland & Higgs(2001)mentioned lot about the behaviors of leaders in implementing change, which starts with creating case for change followed by structural change and then more importantly engaging people in the process and building commitment. Same scheme in three terms by them is Shaping behaviors, Framing change and Creating capacity, which in real a role of a leader for structuring and implementing change.

The policies and actions should be clear and simple enough that everyone in the organization understand that entirely and the top management while implementing change or even structuring about it should aim at continuous improvement of the whole process for widespread interest of the organization. Apart from all these characteristics for a leader, and especially an executive, is much responsible for integrity and truthfulness, which as mentioned by Joe Raelin is Spirituality at workplace and establishing a community of practice for everyone in the organization. So that employees act entrepreneurially and innovatively as their priority.

The wedge model by Macy(1994) explains how the executives takes in consideration the influence of stakeholders and external world through the highly capable staff which starts with the continuous feedback, specially from those hidden-geniuses in the organization who analyze all the actions by management critically and don’t have their say due to several reasons. For those in special and for all in general, leader must know that how to ignite the passion for the people, and when it comes to execute changes in the organization, it must always be started from the point where people are most receptive in the organization and especially if the idea(s) of change is from the people themselves then they accept it far more better than an outside idea, and a level 5 leader always give importance to their ideas.

The main fixation for the Level-5 leaders should be to focus on establishing a well defined process and structure, and efficient working even if there are conflicts, then smooth solution of them and finally build good relationships between team members. There is a point, when a firm is heading in the journey of change where the firm/organization’s management find it really difficult to maintain the change process and find it really difficult to head towards the real aim of change, even sometimes it performance falls below the current level. This has been stated by Kathleen U. Busick and Rita Hogog(1991) as ‘Implementation Dip’. It is again depends on the whole leadership of the organization particularly on the executive that how he/she maintain the morale of the workforce and do not let the change process down, rather reducing the length and depth of this so that firm head towards a changed organization.

By looking at the policies and critically reviewing the do and don’ts for the organization, level-5 leaders can reorder the things according to the situation and then lead the firm successfully to a changed organization. Usually they do by letting the familiar past to go in a pushing comfort zone for the coworkers, with the feelings about uncertain future and at the same time having in them the courage to fail and redesigning the focus according to new realities for the organization.

Leadership in change involves the movement of whole system from where it is now to some other, better place. That means that the leader (executives) must operate at the margins of what team members like and want rather than at the center of the collective consensus. This requires, many a times challenging the existing group norms and disrupting established routines, which can bring out anger and resistance in the staff. The post change phenomenon in many organizations especially in Picanol case showed how a false/solely taken decisions by executives can changed whole scenario and the final digits in the reports of the company. Leaders who behave courageously can make significant differences in teams operations (Adrain Furnham)--but they may wind up paying a substantial personal toll in the bargain.

Planning a pattern towards the position, and plying to achieve a certain perspective is usually a way adopted by most of the executives when they implement change and try to lead the organization towards a more successful organization. But all this must be done with three Ds which in real can make the real change to work or a leader to be an level five leader which are Disciplined People with a Disciplined Thought and through their Disciplined Actions, as when it’s a time for change every person in the organization is a change agent and it is another responsibility of a leader to educate them of the change as well as the targets of their roles in the change so that they just anticipate the change, instead of reacting to it, which could result in growing pains within the organization.

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References

· Five-Star Leadership by Patrick L. Townsend, Townsend, Joan E. Gebhardt - John Wiley & Sons (1999)

· All Changes Great and Small: Exploring Approaches to Change and its Leadership by Malcolm Higgs & Deborah Rowland

· Fiedler, F. E. (1967). A theory of leadership effectiveness. McGraw-Hill: Harper and Row Publishers Inc.

· Rowley, Robin; Joseph Roevens (1999). Organize with Chaos. Management Books 2000 Ltd.

· Collins, Jim, “Level 5 Leadership: The Triumph of Humility and Fierce Resolve”, July-August, 2005

· Block, Peter, Flawless Consulting: A Guide to Getting Your Expertise Used, University Associates, 1981

· ewin, K.; Lippitt, R.; White, R., "Patterns of aggressive behavior in experimentally created social climates", Journal of Social Psychology: 271-301

market Share through Maketing - Advertising?

Some days ago i was enjoying a movie "The transporter" and came to knew that there were three movies out in the market in the same series of The Transporter. I liked the first part so i decided to enjoy all of them in one go and while enjoying these movies, i realized how the logos of different car manufacturers were highlighted in all the movies.

Almost, a decade ago, TV, Radio and newspapers where the three main revenue generators for the advertising world. But from the time of modern James Bond movies the trend has changed. We as customers, apart from accepting the new media types like internet, MMS and SMS as means of communicating, have also change the whole advertising world. The new ways of advertising are emerging. For example as i talked about the movies. James Bond series was the first one to promote the BMW autos and later on THE TRANSPORTER series, has promoted BMW, Mercedes and Audi. This type of advertising is, no doubt, more expensive than the conventional advertising but even then companies are attracted to these methods. The conventional media is still in use but the effectiveness of it is questionable as compared to past. So have these companies become so rich that they don't know where to spend money or there is some other issue.

as a marketer, I personally think that the issue is not related to money but the problem lies some where else. The problem is that we have become so used to the conventional media and i may include internet and mobile technology in that category as well, that we don't even notice it. For example, there are so much TV channels out there that whenever there is a commercial break during any program we will switch to some other channel and then come back again later. Same is the problem with the internet. We get so many commercial emails that even without looking at them , we simply discard them.
Companies are trying to grab the attention of the customer in order to increase their customer's mind share, own market share, and increase the profit revenues. They have realized that the effectiveness of ADs in between the programs is falling and whats the solution? the simplest solution lies in the fact that make the advertisement, the part of the program. Now, the effectiveness of such ads is much more than conventional advertising. When a young ad rich guy watches a movie like James Bond or Transporter and he watches the performance of a car out of this world, e is tempted to know which make and model it is and suddenly at the right time the logo of that company is focused and hence it becomes the part of customers' mind. this mind share later on leads to the market share and positive word of mouth (WOM)and ultimately enhancing the market share of the organization.
This type of advertisement is not limited to the car manufacturers only but different type of organizations like mobile phone industry and others are also in the play. The horizon of the advertising is changing.

Role of Middle Managers - Guest Lecture

Middle managers play a key role in any organization both in positive and negative sense. The main questions are that why middle managers are so important and what are the qualities of the middle managers which can lead to a successful organization.

The importance of the middle managers lies in the fact that they act in different roles between the top management and the lower managerial staff. they are the policy communicators, decision makers and some times implementers as well. These roles require some basic qualities by the middle management which they need to demonstrate.

The Guest lecture focused on these qualities and this leads to the answer of the second question. these qualities can be 1. Communication Abilities 2. Decision Making Power 3. Flexibility and Team Management

Communication Abilities

One approach where the importance of the communication abilities can be seen is that when one organization has to develop its competitive advantage all of its operations should be align in one direction. Apart from other organizational factors, the communication from the middle managers to their subordinates is a major factor. As in the organizations the information flow is hierarchical, hence it totally depends on the middle management that how much information do they filter and how they deliver it to their subordinates.  Hence managers with good communication abilities know that how they have to deal with the problem of information flow in the organization.

The other perspective is that during the time of change the role of middle managers in terms of communication is enhanced so that if there are layoffs taking place or restructuring is taking place, they have to inform the employees in such a way that there is no or very less chaos among the other employees.

Decision Making Power

Decision making power is always there with the middle managers. In some organizations it may be to a great extent and in other's it may be limited but the question here is that how to utilize that power and not how much of it should be? I would like to relate it to the change management. The decision of the top management to for example lay off the employees is normally implemented by the middle management. Now, apart from the communication ability they have to decide these who will be those to leave the organization. Here the wrong use of power can lead to a situation where other employees who are needed to be part of the change process might also leave the organization. so the use of power, in such a way that the situation remains under control and employees does not go out of just because of personal liking and disliking of the middle managers is very important. So managers have to communicate at this point as well that why a decision was taken and what are the advantages/disadvantages of those decisions.

   Flexibility and Team Management

Flexibility here refers to the fact that the ultimate purpose of the middle managers has to be that they themselves and their subordinates are working for the organizational goals and not the personal goals. So the role of middle managers has not to be authoritative always. they have to look for the feedback from different teams under them so that those teams also feel themselves the part of the organization and take the organizational goals as their own goals or at least prefer the organizational goals over the personal goals. When there is flexibility on the part of middle managers and subordinates feel it as a two way process in stead of the feeling that they have to do whatever is being asked by the top management; there is always less inertia during the period of organizational change. This sense of flexibility and team management is required always but it become more important when the organization is growing or is going through any kind of change.

Some times when organizations are going thr0ugh restructuring and  removing layers of hierarchy they feel that middle management is a only a burden on the organization but the fact is that middle management is even more important now than ever before.

  Ref:

• Sujunsky, J.G. (2008) Successful leaders inspire action through language. Tooling and Production.
• Balogun, J. (2003) From Blaming the Middle to Harnessing its Potential: Creating Change Intermediaries. British Academy of Management
• Kaplan, Robert S.; Norton, David P.Publication: Boston, Mass. Harvard Business School Press, Translating Strategy Into Action
• Huy, N. Q. (2002) Emotional Balancing of Organizational Continuity and Radical Change, Administrative Science Quarterly

Truth 9: Creativity is a Process not Accident

Creativity is thought of as a gift to only selected few and these are the people whoa re thought to be creative and no one else. However this is not the case. Creativity is a process and yes it can be learned. It needs consistency to learn it and although learning it is no doubt a difficult thing but once done, you will be able to soon master this process.

To be creative, first of all, you should develop a habit of looking at the things in a logical way and try to create links between the events and facts surrounding you. By events and facts we don't mean that you have to look into your area of interest only but you have to work on the general knowledge of yours and get yourself familiarized with new fields. After all what is creativity? It is the mix and match of old ideas. so if you have a broader knowledge base it is going to help you in your creative thinking process.

When you become good at collecting the knowledge and creating links between these facts, the very same facts which seemed a hurdle become the building blocks of creativity. In one of my earlier blogs i mentioned that if you want to be creative never think that the first solution to a problem is the best one but try to find alternatives. Same is the case with creativity.

When you start learning this process, you will learn a lot of ideas. Try to collect as many ideas as you can but do not try to judge one of them as the best one. When you will have a bunch of ideas, you will realize that your ideas are almost same in terms of potential and there is no single best.

At this time, take sometime off, enjoy a drink and get in touch with your social circle. Your head will get cleared out and you will unconsciously match the pool of ideas and bring yourself the most amazing idea standing apart from the previous ideas.

Since this process can be learned so it can get better with the passage of time and with the practice of this process.      

Truth 8: Better to Ask Forgiveness than Permission

When i was going through this truth, I found it more related to the organizational level than related to an innovator at individual level. The author is of the view that since asking for permissions takes a lot of time and following the standard procedures will delay the innovation hence its better to try new things and if they workout no body is going to ask about the formal procedures but if it does not, then there is always room for forgiveness.

As rightly put, the rules are meant to be broken or at least bent according to the need of the hour. however, i think if the organization is too much rigid then there is not going to be any innovation at the first place and if there are some departments doing that even then they will be afraid of policies and hence the fruits of innovation could not be tasted in full potential.

Why is are employees afraid of bending or breaking the rules? The first reason argued is that people love to have authority and whenever there is a breach to their authority, most of them want to make a good example out of that for others in the organization. Such authoritative behaviour leads to the problems and hence people become afraid of doing anything new on their own. 

No body wants to push their own comfort zone in normal circumstances and hence people do not want to challenge the existing rules. Instead, they try to change themselves according to the rules. Since change is a phenomena which is resisted so much hence the door to innovation in most of the organizations remain closed.

The solution to above two problems lies in skunkworks and bootlegging. Skunkworks are the teams of those people who are natural rule breakers and hence they are organized in a team by the organization itself and free to work in the way they want to. this keeps harmony in rest of the team and also there is innovation is going on in the organization. Bootlegging means that organizations, in way challenge the employees that the offer organization has brought on the table, if they can make it even better, it would be recognized and hence motive people in the organization to work towards a better future for the organization.  

If the above two solutions are part of your organization then its great, otherwise its better to ASK FORGIVENESS THAN PERMISSION

Times of Innovation and Change

All the organizations in an industry do have good managers and human resources but even then when there is a need for drastic change organizations fail to realize it and the success period of their life ends while the path to failure begins. At times when huge organizational changes are required due to external environment, the financial resources are not enough to cope up with the changes.

The external environmental factors make managers and leaders to act in a certain way, where they have to constantly develop a fit between all the soft and hard organizational resources for the incremental change and success of the organization. At the same time they must be ready to disturb that fit by them when there is a need of discontinuous change. This is the point where firms move towards failure. They are good for creating the ft but when it’s time to destroy that fit by them it becomes difficult for the organizations to do so.

Technological changes are both incremental and discontinuous and the organizations usually are able to gain incremental success for the organization with incremental technological changes while they face difficulty when combating with discontinuous changes. It is difficult for the organizations when they are facing discontinues technological changes because it not only sometimes requires them to leave the old technologies which are direct opponent to new technology but also requires them to make changes in the organizational structure and culture which is the hard part. The reason is that organizations have already invested in the old so much in terms of developing culture and organizational fit that at that time it seems difficult to part away from the old norms.

Organizational success depends upon the Size, Culture and organizational staff. All organizations are very flexible when they are small and growing. They feel the taste of success through evolutionary process where they are able to cope up with the incremental changes in the environment due to their size, culture and procedures. Since the competitive landscape remains the same during these incremental changes period hence the organizations have not worry about their competitive advantages and hence can reap the benefits. However as the organizations grow their own size becomes huge and due to which it leads to structural changes where formal procedures and hierarchies are introduced in the organization and that slows down the process of coping up with the change. This is the time when the managers have to look for the alignment of strategy for the changed internal factors and if done successfully, it leads to incremental growth for the organization. This is the S-Curve effect which comes in every organization’s life cycle.

Culture also plays both a positive and negative role in the organizational evolutionary and revolutionary growth process. Culture plays big roles in terms of age and success of the organization. As the organization grows in size there is a harmony which develops among the employees and these are unwritten rules and procedures understood by everyone the organization. They help in the short term success caused by evolutionary changes. However during the time of revolutionary change, these factors play a negative role sometimes. These are the times when organizations are unable to shift its focus while the market is shifting its focus.

The solution lies in think big act small. These are called the ambidextrous organizations, where they reap both the advantages of being overall big but being small at the same time. These organizations are able to focus on both the incremental and discontinuous innovations and changes and overcome the dilemmas related to size and culture. The organizations like HP develop independent departments which retain their own culture and size is not too big as well. To reap the benefits of bigger size the activities like marketing are centralized in such organizations while they work independently when it comes to operations. In order to remain small such organizations also form autonomous groups and hence are able to overcome the difficulties when it comes to coping with changes. It happens because the change may be related to one department or group and if it is autonomous it would be able to incorporate the changes without disturbing the other groups or departments of the organization.

These organizations work on the basis of two cultures. One is corporate culture, which is common among all the groups and is told by the headquarters while the other is the culture of the autonomous group which holds it together. The later comes under the former. Later can be changed by the group as required and hence they are able to change as demanded by the both evolutionary and revolutionary innovations and changes.

Ref:Ambidextrous organizations: Managing evolutionary and revolutionary change Tushman, Michael L; O Reilly, Charles A III California Management Review; Summer 1996; 38, 4; ABI/INFORM Global pg. 8

Manage Successful Change in the Long Run

The importance of enabling change-processes over time has been documented by Huy & Mintzberg (2003). Latham described how management in several steps could promote behavioral change within an organization (2003). He emphasized the importance of goalsetting. Some organizations use goalsetting as a way of driving a dramatic change lead by top management. However the article is focused on the leadership-perpective with the downside of not including long-term strategic and tsructural perspctives. Lathams findings can hardly be described as sufficent for effectice long-lasting change and an equlibrium of dynamic stability as advocated by Huy & Mintzberg (2003).

How can we achieve the goal of organic growth/change in any organization? Brown & Eisenhardt (1997) suggest that semi structured organizations (Where border areas of responsibility/goals are defined but how to achieve those is up to the person responsible) are the key for continuous and organic change. The structure has not to be very rigid or very lenient. It should be a flexible structure for organizing change. It is also important to create “Links in time” (Past, present and future (activities in external environment)) for the organization in order to have continuous change process. I believe that in order to have successful quantum leaps, the dramatic change is the key but it should be triggered by the organic and systematic change. A way of succeeding with such a task is to apply the findings from Burgelman & Grove(1983).

Now what do I mean by the lenient structure? I am not proposing a single structure for any organization because I believe that “same size never fits all”; however the lienent structure means that organizations hae to work on developing such a structre where there is not a lot of hierarchy involved and the open communication is easily possible. This can be done by designing the office space in such a way that where employees work in a large room and can communicate easily. Also in terms of responsibility, the responsibilities should be defined clearly through job descriptions, and the widely applicable rules and policies of the organization should be efined. Then it should left on the employees that how they achieve the goals defined in teir responsibilites. This will lead to an enviorment where employees will be able to point out the errors in the system and hence the process of organic change will start. This will trigger the process of proactive change in the organization which will have te concent of the employees at all levels and hence it will be eas for te organization to stear itself in a new direction. The employees will be supporting the new process instead of opposing it and hence the long term change process will be sustainable.

BUT, you should be aware of the external environment at te same time. When you creat links in time, it gives you a clear picture that what was the time frame in which the process of discontineous innovation was triggered. So if u are anticipating such an innovation then may be it’s the time to go for the dramatic change in order to remain competitive in the industry. However, apart from the technological and computer industries, usually the time period between discontinuous innovations is huge and hence the organization has to focus more on the organic and systematic change I order to trigger the dramatic change process.

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Burgelman, R. A.” Corporate Entrepreneurship and Strategic Management: Insights from a Process Study. Management Science”. Dec 1983, Vol 29, No 12. pp. 1349-1364

Brown, S...L & Eisenhardt, K.M (1997) “The Art of Continuous Change: Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations”. Administrative Science Quarterly; Vol. 42, pp 1-34.

Latham, G.P. (2003) “Goal Setting: A five step approach to behaviour change; Organizational Dynamics”. Vol 32, No. 3, pp 309-318

Mcallaster, C.M. (2004) “The 5 P’s of Change: Leading Change by Effectively Utilizing Leverage Points within an Organization”. Organizational Dynamics, Vol 33, No. 3, pp 318-328

Nguyen Huy, Q & Mintzberg, H. (2003) “The Rhythm of Change”, MIT Sloan Management Review. Vol 44, No. 4, pp 79-84

Burgelman, R. A. & Grove. A. S. (2007) let chaos reign, then rein in chaos—repeatedly: managing strategic dynamics for corporate longevity, Strategic Management Journal, pp 965–979

Truth 7: All New Ideas are Made up of Old Ideas

The author discusses here the realities of life that each and everything physical in this universe is made up of same unit know as atom. Similarly all new knowledge is based on the existing knowledge. The idea here is that nothing can be created from point zero. We all are the same and yet different. Same in terms of physical unit of atoms and different in the sense that how those atoms interact with each other.

Same is the case with the innovation. If anyone of us wants to innovate it is not a good idea to start from point zero and try to create the knowledge or products which already exist in the market. But we shall search through the existing knowledge and then try to develop our innovations on the basis of that knowledge. This will save the time for our innovations and if utilized better than the competitors it will also help in managing the market lead times and hence let us stay competitive.

Author provides a very common yet very interesting example of the wheal. the creation of the simple wheal lead to the creation of so many mechanical and electrical products in every field of life. You may take the example of as small a thing as an analogue clock or  as big as a ship or airplane. All used wheal to their benefit.

The idea is do not waste your precious time on creating a product/service/knowledge from scratch but look around you, look into your surroundings and environment to get the stimulus for your innovation and you will find a good combination of pre-existing things which will help you all the way for creating the same thing and yet different. 

Truth 6: Bet Small to Win Big

All of us must have heard that small is beautiful. In terms of business what does this means? It means that do not put all eggs in one basket and try to test as many ideas as possible. Some of them will fail but most of them will succeed. This will lead to more growth for the organization.

From the stock market point of view, it is called portfolio management. One has to manage the innovation portfolio in the organization so that it leads to the success of the company and the losses at one place can be substituted by the profits in other places. When you work on big ideas you use too much resources and when the idea is not working out you put more resources into it to make it possible. This leads to the extra utilization of resources and you are unable to withdraw.

It is wise to bet bigger only when you are certain about the future. you know the result before hand and hence you bet everything. Also you can bet big when you know there are no other choices left. I personally compare it to a game of poker as I am obsessed to it now a days and thanks to facebook for that :). When you get your cards and everybody bets, mostly the bet is small in initial phase till the time first three cards open. Then you become certain of the future. If you have got two pairs, straight or any higher hand in terms of poker, it is wise for you to bet everything and go "All in" in order to earn more. But if you have got one pair you wait for other cards to just show up and then you bet accordingly.

Same is the case for business. Do not go for blind bet until and unless it is really a matter of highest stakes for you. If you do so you are going to eliminate your options yourself and hence will bleed your business to death with your very own hands.  

As the text  describes that in business, working on different small ideas involve more people with less responsibilities as compared to the big ideas hence people are more focused and comfortable to work with them. The other advantage of small ideas is that they do not require a very huge investment and the fear of failure is not substantial in such cases. If losses occur they are manageable by the organization at a smaller scale.

Making as many small bets as possible increases the number of attempts possible and keeps options open.

We will be back with Truth 7 about innovation soon :)

Truth 5: Any Fool can do Either, Genius Does Both

The idea here is that there are always conflicting interests and one has to pick among the different alternatives. There is always a difference between a genius and obvious. If the innovation doesn’t overcome some contradiction between conflicting objectives then isn’t genius it’s obvious.

Whenever is you are trying to innovate try harder to see that if your innovation will be able to fulfil the conflicting interests or not. Try to make a genius out of it. The basic idea of each innovation is to convert an impossible to a possibility. The cars in past were thought to be having a disadvantage of pollution always. the technologies like carbon batteries or cars running on hydro technology have made it easier to achieve both the ease of transportation and that too without pollution.

The of such innovations is based on the fact that you ask questions about the innovation and and are never ready to accept the first answers as the best ones but you have to keep on trying. This habit of asking questions will bring a little bit panic in your organization initially because people will think that this will increase their work load and every body is afraid of this one thing. But once this habit has been developed in the organization, people will not complain anymore, instead they will ask hard questions which will make the product better and better.

When people have to make choice they ask the question "why...", however in order to make the innovations more attractive for the end user you have to ask "why..." and "why not..." at the same time.

Asking “why” and “why not” will question the assumptions of specialists and experts. This is uncomfortable for people who have enjoyed the comfort of standard answers and the protection of their profession. They may dismiss your ability to understand well enough to have an opinion. It is liberating to those who want to grasp what is really happening and improve it. They may welcome your ability to have an opinion that increases their understanding.

Truth 4: A Great Innovation Deserves a Great Name

What's in a name? We often come across this sentence when conversing with other people ;). But when talking of the name for your innovative product it is totally a different game. The name is not a guarantee for the success of a product but it does help in building a brand name for the product which in the longer run benefits the organization. The idea of black hole discussed in the text is a true reflection of what's there in a name.

In 1939, two physicists announced what they called a ‘gravitationally completely
collapsed object’. The world yawned. Forty years later, when a lecturer
commented that it deserved a better name, a member of the audience
suggested renaming it a ‘Black Hole’. The name stuck. This time the world woke
up and the name became part of our working vocabulary.

The name should reflect the product or service in its true sense but also it should be attractive and catchy. The old name has its benefits too in the sense that it is already established as a brand and hence people know about it. However, sometimes it leads to situations where it sold the new taste with the old name and hence people rejected the 'new coke'.

As said earlier newness in the name is not the guarantee for the success but it does help in some way or the other. So when looking for a name for your product. Focus on the character of the product or service and try to develop a relation with the name. Then at the second level look at your customer base. If your going to have a very tech savvy name and the customer base is not so technically aware you are not helping your product. In the third stage look at your competition and try to figure out that the name your going to give to your product is different from the competition and does it stands out from the rest of the players or not. Lastly, look at the promotional part of it. You have to communicate this name to the customer base and have to change it from just a name to a brand name. For this purpose try to build story around the name. it helps people to remember it for a longer period of time and hence it becomes effective for the Word of Mouth (WOM) advertising.

So according to the text by McKeown, look at four things while looking for a good name

1. Character 2. Customers 3. Competition 4. Communication

Enjoy the read. Will be back soon with the fifth truth. 

Truth 3: A Crisis is a Terrible Thing to Waste

Moving forward and looking into the future is the name of the game. Crisis management has emerged as very strong field in these days in relation to business.

The author is of the view that mostly organizations don't take tough decisions on their own, until and unless it has to be done and there are not a lot of choices. this is one point which differentiates innovative organizations from the rest of the clan.

The real point is that when you are facing a crisis situation you can take it as an opportunity or threat as you may want it to look like. The thinking about threat will lead to inertia while opportunistic mind set will lead to innovation.

In case of IKEA, it faced different crisis in different era. As written in the text,

"IKEA’s history is a sequence of such choices. Competition with other mail order
firms led to its first showroom. Supplier boycotts led to it designing and building
its own furniture. Transportation problems led to the flat pack concept. A
showroom fire led to a much bigger showroom concept. Insufficient numbers of
sales people at the showroom launch led to the self-service idea. It would have
been easy to waste each crisis but instead they inspired innovation."

This is an example of reactive thinking. The writer is of the view that waiting for the crisis to drive the innovation is not the right strategy because such an innovation may not drive as much benefits for the organization as it may have done otherwise.

The need of the time is to develop a proactive thinking like Intel, where the goal is that no matter what the processor speed has to be doubled in a period of two years. it can be done by tools like scenario planning where you look at the possible future situations and plan accordingly. For such proactive thinking you have to "Create links in time". It means that you look at your past, present and the possible future and then make strategies accordingly. This, in the longer run, will lead to a position for your organization where you will be able to stand in the hard times as well.

However this thinking about the future, according to the author, may lead to a  paranoid organization. It means that the organization is limited in the expansion of its business and it is always thinking of the current products. Here I differ with the write in the sense that it also leads to specialization and this specialization also drives growth.  

Soon the next truth will be discussed on this blog :) Truth4:A GREAT INNOVATION DESERVES A GREAT NAME

Rule 2: A beautiful Idea is Never Perfect

This rule explained in the book is related to the rule 1 described earlier on my blog. By the heading of this rule you can well correlate it with the rule 1. The rule one described that any innovation can be successful only if there is a market need. A market need arises only when there is something missing which customer requires. These requirements can be due to many reasons and one of them is the external environment in relation to your organization.

If your idea would be perfect then what does it means? It means that you will be reaping profits out of it always or it also means stagnation over a longer period of time and if later is possible then i think there would be no new innovations and hence we would not be where we are today.

Now focusing on the fact how this idea has been described in the book. It starts by focusing on the point that there is always room for improvement. Even if your innovation is the perfect one according to the present environment, it would not be the case in the future due to the changes in environment and changes in customer needs and wants. 

"There are no ideas complete beyond practical or theoretical improvement. There are no ideas that exactly fit customer’s needs ever or forever. There are no ideas entirely without flaws, defects, or shortcomings. This is good news for anyone who wants to contribute and for any business that wants to grow."

The author provides the examples from the big chains like K-Mart where it changed its slogan several times. It was always low price, always once and then it was Expect More, pay less later. These changes were made due to the changing customer needs. Similarly, Wal Mart was built on the idea of convience shopping and it has done so. It started of as a business where one employee started selling bread to others in the work place and later on this business was taken by the Japanese to the level. The idea of this store is still the same but locations of the stores have changed according to the changes on the changes in the nature of the work of major workforce of any particular location.

In the end regarding this rule I would say that the whole idea is:  as an innovator, everyone of us is of the view that his/her idea is the best one and it will work out. Being possessive about your brain child is a good thing but remember, one thing which is perfect today is not going to be so tomorrow and hence love your brain child but also bring up this child in such a way that it is adaptable and able to fulfil  his/her future needs otherwise living alone will lead to death of your this brain child.

Hope you enjoy the read... will be back soon with the next RULE 3: A CRISIS IS A TERRIBLE THING TO WASTE.

Rule1: Innovation is new stuff and useful

Looking at the book "The truth about Innovation", i got a very clear idea and which many of you know already that although there is much hype these days about the innovation and innovative systems but it has been there for a very long time. Look around you and you will find that whatever you are and where ever you are its just due to the innovation which has been taking place for centuries. it started even before the invention of the wheal.

As the author rightly says that now is the time for innovation boom and later on will be the time for innovation bust. At present innovation is a fashion for some people and for some it is a fact. The reality is that those who believe it as fact are going to succeed in the long run. this is not going to happen due to the belief they have but due to the reason that their belief will make them strategic in such a way that they work towards their own innovative goals and for those who think its a fashion may well stop growing if they don't change their thinking.

Now talking about the Rule1. It says innovation is new stuff and useful and is described as the definition of the innovation and then it says that it is useful for whom and how new is new. So the answer to the first question is that is it useful for the user (you) or not. If i have a new idea but never worked on it or shared it then there is not going to be any innovation but if i do either of the above then it will lead to innovation. the innovation is the basis of growth. if one likes my innovation as compared to the previously existing solutions in the market then its a success.

Now newness is defined in there ways. it may be an incremental innovation, radical innovation or revolutions. the author points out that in fact one leads to the other starting from the incremental to revolutions. A very good point, pointed over here is that a although its not necessary to follow the steps but mostly that's how it works otherwise your innovation is of no use (Example of Divinci drawings of helicopter).

Then idea of independent and dependent innovation is floated. When we mix and match the previous innovations and it needs some pre-existing components then it is a dependent innovation. if it is a standalone product/service then it is an independent innovation. Most of the modern time innovations are thought as dependent innovations just like Iphone. Its software technology is a revolution to the mobile market but this touch technology has been in use in USA by doctors and others in the medical field.

So whenever you are going to innovate always try to answer the above two questions and if the answer turns out to be yes.... then move to rule 2. which will be up soon

The Truth About Innovation

The truth about the innovation by Max McKeown is really a nice read. It lists down 55 rules related to innovation. In my blog in future readings I will try to cover all of them one by one in detail. I would recommend you all who are interested in innovation to go through this book. Here are some of the comments given in the start of the book. I hope they are more than enough ,interested in innovation, for anyone to go through this amazing book.
"If you want to lead innovation efforts in your company, buy it for everyone so
that they all understand how to create an innovation culture."
Dr. David Gillen, Innovation Board & Medical Director, Pfizer

“For once a book about innovation that does not sound idealistic or impractical.
Max fills his text with great examples and simple ‘rules’ which bring the subject to
life, and at the same time show how innovation is possible anywhere, anytime.
Linda Holbeche, Research & Policy Director, CIPD

“Max’s truths will expand what your company imagines to be possible through
the power of ‘beautiful ideas’ now and in the future.
Bryan Kirschner, Director of Open Source Strategy, Microsoft

“We now live in the Innovation Age. I loved this book – it will help you begin and
continue your lifelong innovation journey.”
David Keene - VP Marketing and Competition, SAP

“Refreshingly helpful and stylishly entertaining: Max gives useful information
which is excitingly new and common sense. This takes talent - something he amply
demonstrates in this thought provoking book.”
Professor David Crowther, De Montfort University

“It’s a great book that shows innovation is about keeping our eyes and minds
open, questioning what we know and reconciling the irreconcilable. To keep at
hand and share widely”

Helene Finidori, Author of The Menemani Blog

“Max has created something of use to both new and experienced practitioners.
The bite-sized essay format is an easy read, and highly recommended for anyone
that wants to get a handle quickly on the business – and process – of innovation”
Dr James Gardner, Head of Innovation at Global Retail Bank

Creativity in Staff and Organization 2

While writing about hiring the staff in entrepreneurial organizations Leona has very rightly pointed out in the comments that a very big issue is that what happens to the authority and overall role of the entrepreneur in the organization.

Entrepreneurial organization, in its structure is more like a spider web. where entrepreneur as a spider and if there is any disturbance in the web he/she knows it immediately and can rectify the problem. The problem with the entrepreneurs is that since business is their own brain child and hence they are sometime afraid of letting the control of their business go in other hands.

                                                   

However the   point to remember is that entrepreneur has to be careful and should know that a certain point it becomes difficult to control the organization single handedly due to the growth of the organization. this is the point of decision in your business's life that you want it to grow in future or are you satisfied with the current level of business. if former, then be ready to hire new people but not only assign them the responsibilities but also give the authority to fulfil those responsibilities. if later, then be aware that you are moving towards stagnation and the hunger for authority may bleed your business to death.

So while hiring the staff for the organization, one should always remember that you are moving to a machine structure (2nd stage of business growth) from web structure and hence the thinking should change accordingly. You should be able to let go the authority if you want the business to grow :) 

Opportunity Identification vs Opportunity Creation 2

Previously while writing about the above topic was unable to post my own reflection for this topic. I personally think that we can not confine ourselves to only identification or creation. Although there is a lot of literature available related to identification and even there are models available in literature which focus on how to identify an opportunity but I think creation of opportunities is also as much important as identification is. In fact creation to me is more important than identification. As one creation leads to the identification of several new opportunities. An example could be of Nano technology. Where this technology in itself is an innovation and hence an opportunity created. this creation has identified many new gaps where this technology can be implemented like in the field of engineering, medicine or even weapons.

we can not say that a person who identifies opportunities is a passive entrepreneur but it depends on the nature of the industry in which you are operating in that if there are still wide gaps available you may go for identification as it is relatively easier than creation in my view. However creation is always necessary for progress in any field. here carrying forward the example of Nano Sciences, i would say that in computer industry when the microprocessors reached a stage where Moore's law was becoming obsolete it was becoming difficult to place more transistors on a single chip the temporary solution came in the shape of dual core and quad core processors and hence it was identification of opportunity but then came Intel with the n45 processors based on nano technology and it opened new avenues for the microprocessor industry.

Hence its not about being an identifier or creator, but its about your own thinking that what is the need of your business at this point in time related to the industry you are operating in.

Opportunity Identification Vs Opportunity Creation

I participated in a seminar on opportunity identification and opportunity creation. While preparing for this topic there is mostly research available related to identification of opportunities. There are even systematic models available how opportunities can be identified. It is also favored by researches as well as venture capitalists due to the reason that identified opportunities raise due to the market gaps, and it is easy for the investors to measure the level of risk related to filling that gap. Hence deciding to capitalize on the opportunity or otherwise.

The opportunity creation is what an entrepreneur has to do. In creation, there is not a lot research available. The reason is that risk can be calculated though financial tools like NPV etc however how can one measure the uncertainty. Due to the reason that whenever an opportunity is created while thinking out of the box, the level of uncertainty raises so much that very few people are will to invest in your venture. However now opportunity creation is becoming the focus of research where we are trying to focus that how new opportunities can be created instead of just identification.

Creativity in Staff and Organization

I have been working on a business plan for starting an electronic media advertising agency. Apart from the requirement of support staff the major question is who are the people going to be the part of organization as all the work in media industry is related to creativity. Also not only the creativity has to be visible in the work but as well as the organizational environment.
In order to foster a creative environment, leading to creativity in my organization, there are certain elements which should be there. For example there should be open communication among the employees which flows from the flatter structure of the organization. Also I have to focus on the fact that there are no prolonged procedures and paperwork involved when any one the organization has to do something. In fact the process has to be quick and easy.
Now when it comes to hiring the staff which will be more creative. There are certain steps which I have to follow certain steps

·What do I want this person to do? (the job description)
·What qualifications, skills, qualities and experience do I want them to have? (the person specification)
·What will I pay them?
·How can I recognize and practice diversity and equal opportunity?
·How am I going to find the right person?
·How will I handle the applications?
·What happens next? (the recruitment timetable)

Now I have to make sure about the diversity among the staff and team members. Diversity in terms of education, work experiences and the previous cultural background etc. this diversity leads to the creativity.

These are the general steps which organizations go through and may seem very generic in nature. But when applied to any different industry and market it provides a clear picture about 3Ws and 2Hs and answers the requirements which I have to fulfill.

Ref:http://www.skillset.org/companies/your_staff/hiring_staff/article_5653_1.asp

Creativity Module Articles

Jane Epstein has been appointed as a new manager at TechniCO. All the team members she has got at this place are supportive and also good performers. She is trying to catch the personalities of her team members. She is satisfied with all the members but one-Andy Zimmerman. He is the person who wants to be more authoritative and have the things done his own ways. He is used to humiliate the coworkers and subordinates over very small mistakes. This type of behavior may be necessary in some situations but he has developed a habit of such a behavior. As we see in the case of brainstorming session where only ideas have to be generated his aggressive behavior demolishes the whole work environment. On the other had he is one of the top performers of the organization.

The manager has tried to convey the message to him to change his behavior but there is no improvement. The problem is arising due to the fact that the manager seems to be afraid of using the positional powers she has. The lack of communication among the employees is leading to these problems. I once read in case related to Boeing Corporation, where the manager said that we always look for team performers and not the individual stars. The basic reason for this type of hiring, at Boeing, was that problems surface up immediately at initial stages and can be rectified there and then. Here I think in this situation, the communication part is missing. Sometimes boss has to tell, Who is the Boss? I think that part is missing and has to be communicated in order to resolve the situation otherwise it would lead to point where the organization may have to loss the start performer.

The article MBA Admission Criteria and an Entrepreneurial Mind-Set: Evidence From “Western” Style MBAs in India and Thailand by dean a. Shepherd and other authors has negated the GMAT as a criteria for being good MBAs. The article has provided an insight that people who score more on GMAT may become more risk aversive. On the other hand it relates work experience with learning. Learning through experience makes a person a good manager but the MBA education can even future enhance the capabilities and convert a good manager to a better one. I think this depends and varies from person to person. The education may provide a person with the basic outline and guidelines about the business and how to deal with the risk. But it all depends on the Micro and Macro culture in which a person is operating. It includes the culture of the organization and the region as well

The article “The Weird Rules of Creativity” by Sutton is very thought provoking article. It has compared the conventional ways of doing business with the creative ways. I think it focuses on a single point and that’s related to the diversification. You have to think out of the box for anything new. If you want success you don’t have to be afraid of failure and it will open new possibilities for you. Similarly the work force diversity is also necessary for idea generation. Initially this concept was thought to raise friction between employees but now the idea is how to use that friction for creativity.

Technology Push and Market Pull

While attending the lecture on new venture financing, the point which garbed my attention was the difference between technology push and market pull. the basic point during the discussion was that it is easier to get the venture financing if the product which is being developed is on the basis of market pull (customer demand)while the life cycle of the technology pushed products is short lived and sometimes it is very difficult even to get financing for such products.

So what is the basic difference between these two types of products. According to SAP market pull is described as
•Envisioning what the customer wants
•Create awareness
•Create demand for customers
•Define appropriate pricing strategy by direct product placement
•Seeking customer knowledge
•Applying customer knowledge
•Reaching for larger customer basis
•Listening to the others
⇒"Seeking customer acceptance"

Market Pull (Source:Companies: Corporate Research Units as Pull Facilitators Barbara Flügge, Till Janner and Christoph Schroth, SAP AG /RESEARCH Lab, St Gallen)

The Technology push products are described as following by SAP

•Envisioning the product

•Invent technology itself

•Create how-to-manufacture scenario

•Define feature driven products

•Create appropriate manufacturing facilities

⇒Stage of product offering and to-be-standards

The figure provided by the SAP for such a product is as under:

Technology Push(Source:Companies: Corporate Research Units as Pull Facilitators Barbara Flügge, Till Janner and Christoph Schroth, SAP AG /RESEARCH Lab, St Gallen)