HBR: Evidence-Based Management

My response to HBR’s article on Evidence-Based Management:

I agree with the article’s view on evidence based management and especially in the counter argument against forced ranking.  It does make sense to pay your higher performing individuals more, at first glance.  As the article states, the larger the gap between senior leaderships pay and the rest of the employees the more likely the chance that the product quality will be poor.  I’ve seen this at my own company.  You end up with resentment and a disengaged team of employees.  Creativity breaks down and the system runs like a motor that hasn’t had its oil changed in thirty thousand miles.  Moral maturity takes a couple right hand jabs that force frustration and lead directly to inefficiencies in time management.

Many managers use intuition to make decisions but that intuition should be supported by evidence based facts.  I would counter that it can’t be the only deciding factor in the decision making process but it should play a vital role and that judgment falls on the managers. 

Evidence based techniques could potentially play an important role in the decision making practice.  Implementing the system will be difficult though as long as the manager is not engaged and invested in the plan.  Training anyone, including yourself, to avoid some of the six or so different pitfalls the article mentioned is difficult.  When you’re comfortable with a certain method or limited by past experience or not aware of other possibilities moving to the articles methods will come with some obstacles and as I see it, will depend heavily on leaderships commitment.

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Good to Great, or Just Good?

My response to Good to Great, or Just Good?:

The article states that there are two fatal errors in GTG and that they are data mining and mistake association for causation. Data mining is the process of collecting patterns, formulating explanations and treating the underlying causes. The problem with data mining is that it relies on the specific time period and circumstance as per the article states. The article continues on to state that Collins identified an association between great firms and five characteristics and then deemed them those five characteristics to be the driving force behind the greatness, ignoring the firm’s position in time and other factors. He did not show ‘how’ the characteristics made the firms great. The article seeks to prove Collins’ invalid by measuring the performance of the 11 companies for the 10 years after the study and also by comparing stock return performances to the S&P 500 during different periods in time. Of course, this article is assuming the leadership and the commonalities have stayed the same though out these periods in time. When measuring results of a firm from 1964 through 2005 there will be an incredible amount of disparity from leadership changes and process accountability. I had a hard time buying into Niendorf and Beck’s opinions, especially when they’re comparing the five characteristics with the results of a company. As the article points, these 11 companies are ranked average at best when compared to the S&P 500, but these companies during the study period rose to be a top 500 company. They got there for reasons such as the five characteristics that Collins points out. Once that time period is over, many things change including leadership and systems, so accountability afterwards wouldn’t make any sense. I would think that common sense tells us, after reading the five characteristics, that yes they are commonalities that you would find in excelling companies. Is that not what Collins is saying? Not to mention that the book was voted in as one of the best business model books of all time.

Senate Select Committee on Intelligence

My response to CBC News Online’s report on pre-Iraq war intelligence:

I had never heard the term groupthink before today.  After reading and comparing the symptoms and guidelines for preventing groupthink, as described by Irving Janis, I’m astonished by how many decisions are results of groupthink.  The article points out the CIA’s intelligence-gathering efforts when seeking information before the steps that lead to the Iraqi invasion back in 2003.  The US select senate committee proposes that stereotyping of the enemy, rationalization and shared mental models lead to the ‘quick’ decisions.  Maybe more devil’s advocates inside the senior officials group would have helped prevent what the article describes as a failure of Intelligence Community managers. 

I’ve taken these concepts and models and applied them to some my own decisions and group actions and can completely see the mechanics of Janis’ explanations.  Some of the more dominant symptoms that I’ve seen are illusions of invulnerability and peer pressure.  To avoid criticism and to build loyalty and group empowerment are very powerful symptoms.  It’s easy to see why groupthink can finds in way into the decision making process.  I believe that the idea of one or more devil’s advocate and really having a leader that holds their ideas until they’ve heard the group’s opinions are the best ways to avoid this phenomenon.  A great leader listens before they commit to a decision.

HCL Technologies

My response to the HBS article on HCL Technologies (A,B):

After reading the HBS article on HCL Technologies, I want to focus my response on the 360° feedback that Vineet implemented.  I’ve been having a lot of trouble with this one lately.  It reads like it’s been working well for HCL, but at what point are you too transparent?  It seems to me that a certain level of transparency is good.  It helps create a more personable atmosphere for the company.  CEO’s and vice president become ‘real’ people and it spawns a team structured environment with similar goals.  These are all good things, but political and personal goals are now going to be more tempting.  What I mean is that people are going to engage more in the social game to move up the corporate ladder instead focusing on ‘work’ work.  As senior management becomes ‘real’, now younger ambitious employees are going to be able to hone in on self positioning by means of the social game.  More information is on the table.  More knowledgeable employees can make more educated moves and more importantly, these employees will be spending their time doing this instead of the before mentioned ‘work’ work.  So, while I agree with the 360° feedback tactic, I’d like to know what kind of mid-level politicking resulted from it, if any.

Strategies of Effective New Product Team Leaders

My response to the article titled above:

According to the article, during an interview, an effective leader is one that coaches and facilitates, which I agree with.  Then it goes on to say that a leader is a form of protector and that a leader should keep the team protected from corporate seagulls.    I definitely agree with isolating your team from political distractions.   On the other hand, towards the end of the article, table 2 shows effective leaders as ones that are likely to build transparency.  Transparency in the form of no hidden agendas and hunting and gathering for information both within and outside of the firm to help with informed decision making.  I believe that there is a fine line between goal transparency and political isolation.  Both are important and the article explains it well, but it’s not as easy as it sounds.  In the book, “The Smartest Guys in the Room”, the authors point towards the lack of transparency and hidden agendas for contributing to the scandals.  It’s very important to avoid this and to really develop a team oriented environment based on trust, human relations and openness, and at the same time, blocking out the political struggles within a company which can devastate a department’s production.  As the article shows, senior management must find the type of NPD leadership that possesses these key mentalities.  I haven’t been in this position yet, but it’s must be very difficult yet very important to select the right leaders.

Sins of Commission Article

My response to Sins of Commission: Be Careful What You Pay For, You May Get It:

If the study that the article references to, found that most employees seek to please their colleagues and leaders and do a good job, then vocal feedback seems like the best way to promote quality and efficiency out of your employees.  Let them know when they’re doing a good job.  Get out on the floor, or out in the field and talk.  Get engaged and give positive feedback when it’s deserved.  When you’re consistently giving someone positive feedback, then give them a raise because they deserve it.  Leadership needs to give their management empowerment to make those decisions, and if leadership is engaged then they’ll know if the manager’s feedback and raises given were appropriate.  Trying to quantify production in terms of employees is difficult in most jobs, and it’s even more difficult to fairly blanket across a large company.  This article is spot on when it states that you get what you pay for.  The executive reference to CEO incentives that are proportional to share prices encourages foul play.  I still believe that getting engaged and involved with your ‘team’ is the way to spawn teamwork and a team like atmosphere where everyone has an important role.

Arrow Electronics Article

HBS Atricle on Compensation and Performance Evaluation at Arrow Electronics:

The compensation and performance evaluations at Arrow Electronics sound like a complete mess.  Managers are pressured to average 3’s and the whole company knows it.  The manager tells their staff, “The reason I’m giving you all 3’s is because that’s all I’m allowed to do, even though personally I feel that you are going above and beyond.”  So the staff walks out upset and disappointed.  The system is set up to fail.  Who gets a 5?  How does that manager know that that employee fits in the 5% of top tier employees across the whole company?  What happens is that everyone sees the leadership as disengaged and disconnected.  As a manager, if you don’t already know who your best employees are, then you’re out of touch with them.  It is possible to have more than 5% of your staff working well above target.  I noticed that on table 1 in 1995 management obviously felt pressure to limit their ratings to anything except 3’s, then in the following years, low and behold, the numbers reflect the goals.  How accurate can that be?  This is a joke and you can sense the tension that Kaufman was feeling, knowing that the process wasn’t working.