by Matt Perman
Here is the excellent article by Jim Collins and Jerry Porras on Building Your Company’s Vision, which is a great overall summary of their book Built to Last: Successful Habits of Visionary Companies.
I regard Built to Last as one of the most foundational and important books that you can read on the topic of leading organizations.
by Matt Perman
Daniel Pink summarizes an insightful article in the latest HBR on what really motivates workers.
Here is the main idea, which is interesting because it goes beyond simply saying that intrinsic motivation surpasses external motivation:
Amabile tracked the day-to-day activities and motivations of several hundred workers over a few years and found that their greatest motivation isn’t external incentives, but something different: Making progress (or what Drive calls “mastery” — the urge to get better and better at something that matters.)
So a key motivator is making progress. Good insight. Pink gives some more helpful quotes from the article in his post as well.
The article is a part of HBR’s “10 Breakthrough Ideas for 2010,” and I think you can obtain (purchase–sorry) it here.
by Matt Perman
From Profitable Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning:
With growth, the organization expands and people can build a career and a future. Growth enables a business to get the best people and retain them. People who see personal growth opportunities have more energy, better morale, and enhanced self-confidence.
At a company that is not growing, there is little emotional energy. Your entire workday is spent feeling as if you are moving underwater. The best people spend a significant amount of time looking for a job.
If you are not in a growth situation, you are in a limiting situation.
by Matt Perman
I haven’t read much John Maxwell, but I am intrigued by the subject of thinking, so I recently picked up his book How Successful People Think. Here are two good quotes:
“Nothing is so embarrassing as watching someone do something that you said could not be done” — Sam Ewing.
“Never tell a young person that something cannot be done. God may have been waiting for centuries for somebody ignorant enough of the impossible to do that thing” — John Andrew Holmes.
by Matt Perman
Harvard Business Review has an interview with historian and two-time Pulitzer Prize winner David McCullough, author of books such as 1776 and John Adams, on leadership.
You can also read the executive summary.
Here’s a section on why he thinks it critical for all leaders to have a sense of history:
You are passionate about the necessity for history education. Why do you think it’s so important for a leader to have what you call a sense of history?
Leadership, then, partly has to do with luck. And luck, chance, the hand of God—call it what you will—is a real force in human affairs; it’s part of life. Washington might have been killed; he might have gotten sick; he might have been captured; he might have given up. Besides being fortunate, he knew how to take advantage of a lucky moment, because he was blessed with very good judgment. Luck provided the opportunity, but Washington’s night escape across the East River—made possible by the direction of the wind—after an overwhelming defeat in the Battle of Brooklyn would never have succeeded had it not been for his leadership and the abilities of Colonel John Glover. Glover was a Massachusetts merchant and fisherman who, with his Marblehead Mariners, knew how to do the job.
I like to remind people of something General George C. Marshall said. Asked once whether he had had a good education at the Virginia Military Institute, Marshall said no, “because we had no training in history.” He knew that a sense of history is essential to anyone who wants to be a leader, because history is both about people and about cause and effect. The American historian Samuel Eliot Morison liked to say that history teaches us how to behave—that is, what to do and what not to do in a variety of situations. History is the human story. Jefferson made that point in the very first line of the Declaration of Independence: “When in the course of human events…” The accent should be on “human.”
History also shows how the demands of leadership change from one era to another, from one culture to another. The leaders of the past experienced their present differently from the way we experience ours. And remember, they had no more idea how things were going to turn out than we do in our time. Nothing was ever on a track, nothing preordained. The more you study the year 1776 and the course of the American Revolutionary War, the more you have to conclude that it’s a miracle things turned out as they did. Had the wind in New York City been coming from a different direction on August 29, 1776, Americans would probably be sipping tea and singing “God Save the Queen.”
by Matt Perman
Jim Collins states the two ways to shape society in his comments on Peter Drucker:
There are two ways to change the world: the pen (the use of ideas) and the sword (the use of power). Drucker chose the pen, and thereby rewired the brains of thousands who carry the sword. Those who choose the pen have an advantage over those who wield the sword: the written word never dies.
This is from the introduction to Drucker’s Management, revised Edition.
by Matt Perman
Here’s a good quote from Reagan:
Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided on is being carried out.
Note three things.
First, delegate authority–not tasks. I’m not saying there’s no place for delegating tasks, but if that’s your focus it won’t scale. You have to delegate responsibility areas and give people the authority to carry them out. (Responsibility in the final sense, of course, rests with the leader–he or she is the one ultimately accountable for results.)
Second, that means that you consequently need to let your people act–if you keep interfering and micromanaging, you haven’t truly delegated authority.
Third, notice that Reagan didn’t simply say “don’t interfere.” Which is interesting because the one main criticism of his leadership is that he was too hands-off. What he said was don’t interfere as long as the policy you decided on is being carried out.
There are defined outcomes. Let the person find their own way to accomplish them. If the policy that was decided on is not being carried out, then you need help the person make some course corrections.
by Matt Perman
D.A. Carson’s The Cross and Christian Ministry: Leadership Lessons from 1 Corinthians.
This is one of the best books on leadership for those in ministry.
by Matt Perman
Post 5 in the series: Managing in a Downturn
In a recession, it is easy to give excessive focus to cost-cutting. And you do you do need to conserve cash, so I’m not saying that cost-cutting has no place. But I am always skeptical of obsessive cost-cutting, especially when this becomes the norm.
There are two problems with a default tendency to excessive cost-cutting when things get tough.
First, it often amounts to retreating. There are few better ways to retreat than to cut organizational capacity through down-sizing, closings, and extensive budget cuts. Sometimes these things may be necessary for sure, but if they are necessary do them with the aim of pruning, not retreating. The difference is that pruning is done strategically to make the organization stronger and enable new growth. And have as light of a touch as possible.
Second, an obsession for cost-cutting often fails to get at the real issues. It is often a one-shot reduction that does not improve the capacity of the organization for renewed growth but rather simply masks the poor management practices that are the real problem.
Here’s what Ram Charan has to say in Profitable Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning:
In contrast [to improving productivity], sporadic, deep cost-cutting — downsizing, closing plants, across-the-board budget cuts — are one-shot reductions (often without attention to the consequences for revenue growth) that do not result in doing things a better way [emphasis added].
Cost-reduction campaigns are largely a result of the lack of discipline of productivity improvement on a long-term consistent basis. When employees experience these cost-reduction campaigns every year and sometimes two or three times a year and revenues are flat or declining, they know they are in a business going nowhere.
That is spot on and fantastically well said.
Third, an obsession for cost-cutting often reduces revenue growth down the road. Deep cuts are often made without regard to the consequences they may have for revenue generation. For example, a store might decrease staffing in order to cut costs. But as a result of the decreased staffing, customers can’t get their questions answered or find what they want as easily, so both sales growth and buzz about the store decline. Money was “saved,” but at an even greater cost.
Another variation of this is the sacrifice of the long-term for the short-term. Tom Peters had a good word on this a few months ago:
I see far too many of my clients, good people with good motives, obsessing on pleasing Wall Street analysts, and taking actions that may well reduce their stock’s value two to three years out. They have slashed budgets on many longer-term strategies, such as research and development, talent retention and development, even preventive maintenance on their equipment. All of it in the name of improving margins and a short-term increase in share value (or so the analysts say).
Fourth, an obsessive focus on cost-cutting can stifle your people, which ultimately undercuts your company right at its energy source. Do not pursue cost-cutting in a way that overlooks your people. Continue to focus on and build the strengths of your people. As a helpful Gallup article points out, a strengths-based approach to management is more important than ever during a recession.
In sum, when cutting costs is necessary, don’t get tunnel vision. Continue to keep productivity improvement and revenue growth on the radar, continue managing to the strengths of your people, and don’t prize operational efficiency over continuing to treat your employees like people who are the true engine that will propel your company through the recession and beyond.
For more on specific ways to achieve profitable growth which can be implemented immediately, I would recommend Ram Charan’s book Profitable Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning — whether you are in a recession or not.
Ram Charan also has a book specifically on managing in recessions, called Leadership in the Era of Economic Uncertainty: Managing in a Downturn. I haven’t read much of it yet, but everything that I have read by Charan has been very solid.
One of the major points Charan makes in the book is the importance of putting cash efficiency front and central during the most severe points of the recession. Since “you must have sufficient cash or credible access to it to weather the storm,” this means not taking actions during a severe recession that will “consume disproportionate amounts of cash in the form of more inventory, extended duration of accounts receivable, or increased complexity.”
So do not retreat, do not turn to one-shot cost reductions to mask the real issue of a lack of discipline, and do not sacrifice the future, but do give a higher place to cash efficiency during a recession than during non-recessionary times.
Posts in This Series
- Managing in a Downturn: An Introduction
- Managing in a Downturn: The Good News
- Managing in a Downturn: Don’t Retreat
- Managing in a Downturn: Don’t Overreact
- Managing in a Downturn: Be Careful of Cost-Cutting Campaigns
- Managing in a Downturn: Keep Making Meaning
- Managing in a Downturn: It’s Time to Hire
by Matt Perman
Post 4 in the series: Managing in a Downturn.
We’ve seen that recessions are opportunities for those who refuse to obsess on the constraints of the external environment (post 2) and that one corollary of this is that you shouldn’t retreat (post 3).
Another corollary is that you shouldn’t overreact. Baveja, Ellis, and Rigby’s article continues:
Companies that fared poorly during the last recession exhibited a common response: they overreacted, then “stayed the course” even when rougher seas lay ahead.
The lesson? If your strategy isn’t showing results, reevaluate it. don’t expect it to start paying dividends just because the economy is recovering. Winning firms react to trouble early, scrapping ideas that aren’t working and turbocharging those that are. Firms that hunker down can miss opportunities and create even bigger problems down the road.
So don’t overreact, but if you do, make sure to course correct in a timely manner.
Perhaps the primary and most important example of over-reacting is excessive cost-cutting. That will be the subject of the next post.
Posts in This Series
- Managing in a Downturn: An Introduction
- Managing in a Downturn: The Good News
- Managing in a Downturn: Don’t Retreat
- Managing in a Downturn: Don’t Overreact
- Managing in a Downturn: Be Careful of Cost-Cutting Campaigns
- Managing in a Downturn: Keep Making Meaning
- Managing in a Downturn: It’s Time to Hire