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Why implementation matters | McKinsey & Company

Why implementation matters | McKinsey & Company | Extra Rants and Raves | Scoop.it
How important is the way you implement a major change effort? We surveyed more than 2,000 global executives to find out—and to learn from the best. A McKinsey & Company article.
Michael Petit's insight:

This is an interesting article. It's hard to argue with the logic while at the same time it clearly misses the underlying problem around change and innovation.

 

There seems to be an assumption that innovation or change only takes place when someone at the top of the organisation thinks it should.


But research by Robert Burgelman identified two ways that innovation and therefore change occurs. Innovation and change can be induced from the top or can originate from within the organisation autonomously.


What Burgelman found was that there was an interesting relationship between the appetite for innovation or change at the top and the level of innovation or change generated from within the organisation where the more slack there was in an organisation the more autonomous innovation took place.


But he also found that when the top has more appetite for innovation and change than the organisation is delivering a number of management pet projects are initiated that are likely to result in failure.


He also found that when there is more innovation or change in the organisation than management has an appetite for there is often funding shortfalls where projects become orphans or misfits.


So assuming that there is a mismatch between management's appetite for innovation and change and the level of innovation and change being delivered the question needs to be asked why the imbalance exists.


If management's appetite is greater than the level innovation being delivered the question needs to be asked why more autonomous innovation and change isn't taking place?


If the organisation is delivering more innovation than management's appetite for innovation the question needs to be asked how the value of the innovation and change can best be captured for the benefit of the organisation and the innovators or change agents concerned rather than suppressing it or losing it to others

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The Critical Few: Components of a Truly Effective Culture

The Critical Few: Components of a Truly Effective Culture | Extra Rants and Raves | Scoop.it

bach Forget the monolithic change management programs and focus on the elements of your culture that drive performance.

Michael Petit's insight:

Of all the contemporary management writers and consultants that focus on culture and leadership Jon Katzenbach is one of a very small number who I respect for their insight. I particularly enjoyed his book Leading Outside the Lines. What I like about his work is that he recognizes the influence of the informal side of organizations on the more formal dimensions and he isn't afraid to distance himself from the views and approaches of the mainstream. I have to admit, given my personal experience of Booz Allen and the way that organization operates that his continued involvement with that organization is nothing short of paradoxical.

 

Yet it has taken some time for the approach advocated here to be enunciated the way that it has in this article. In other words, it has taken some time to recognize what the brilliant Richard Normann encapsulated when he said, "The most crucial process that takes place in the company is the process through which the dominating ideas arise, and by which they change and are adapted to the prevailing situation" or what Thomas Khun wrote about in his book, "The Structure of Scientific Revolution" which describes how paradigm shifts occur.

 

The interesting thing, and perhaps the reason why the approach took so long to enunciate is the fact the ultimately the process is a conflict for dominance. This may ruffle some academic and practitioner feathers.

 

Once the role of conflict is recognized in organizations the relevance of Gregory Bateson's concept of schismogenesis becomes clear. Applying a schismogenetic frame to organizations recognizes the push-pull dynamics inherent in them which reveals their operation more accurately than the current dominant metaphors of organism or machine. However, I'm not sure that the enunciated approach has truly realized that fact.

 

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Align with Your Star Employees

Align with Your Star Employees | Extra Rants and Raves | Scoop.it
When you connect the development of your top talent with the needs of your organization, everyone wins—and your best people stay.
Michael Petit's insight:

Interesting article about the need to nurture top talent. It makes its case for enlightened practices. Many executives would argue that they are already doing many of the things advocated. But it's only when you realize that the reality of what happens in organizations is actually obscured in the discussion of those advocated practices that you start to ask the sort of questions that may lead to a better understanding of the real underlying dynamics that are at play and go some way to explaining the above stated paradox.

 

It is another example of the underlying metaphors and assumptions used in relation to organizations leading to practices that privilege the formal dimensions of organizations. By doing so it largely ignores the informal dimensions which is what really determines how organizations operate. Any discussion of leadership through the frame of the formal dimensions of organization is misguided at best. The formal side of organizations imposes the formal role of manager on leadership which perverts its essence. More than anything else the issue of retaining talent is a question of leadership which cannot be defined by a neat set of attributes of an individual but is in fact a dynamic relationship between leader and follower.

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Rita Gunther McGrath on the End of Competitive Advantage

Rita Gunther McGrath on the End of Competitive Advantage | Extra Rants and Raves | Scoop.it
The Columbia Business School professor says the era of sustainable competitive advantage is being replaced an age of flexibility. Are you ready?
Michael Petit's insight:

I've been very impressed with the work of Rita Gunther McGrath since reading her work on discovery planning a number of years ago. In her most recent research endeavors she questions the durability of the strategy concept of sustainable competitive advantage. In this interview she touches on a number of points which emphasize the need to radically rethink organisations when the competitive landscape is perpetually changing.

 

Most management theory tends to operate on a punctuated equilibrium model (borrowed from paleontology) in which industries emerge during a period of fundamental innovation, evolve through various phases of incremental innovation, and then collapse leading to the emergence of another industry or industries. What she is describing is more closely aligned to the emergence of bubbles of opportunity that exist over much shorter timeframes from those that gave rise to organisations in the past. It is a much more fluid environment than most businesses are suited. The fundamental changes she has identified have significant implications for any business, particularly in the areas of talent management, innovation and growth, and information flows required to confidently make fast decisions.

 

For the last five years I've often spoken about the challenge of taking advantage of bubbles of opportunity in terms of the financial markets where bubbles have become an enduring feature through the efforts of central banks around the world. It's interesting that similar developments (bubbles of opportunity) are starting to be used in relation to competitive strategy.

 

I've also recently spoken about one of the biggest problems that many industries and businesses face in Australia today - an attitude of entitlement. If Rita Gunther McGrath is right about the changes taking place this will have a significant impact on business in Australia unless this attitude of entitlement is dealt with decisively.

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Why leadership-development programs fail | McKinsey & Company

Why leadership-development programs fail | McKinsey & Company | Extra Rants and Raves | Scoop.it
Sidestepping four common mistakes can help companies develop stronger and more capable leaders, save time and money, and boost morale. A McKinsey Quarterly article.
Michael Petit's insight:

There are some interesting points made in this article but I feel that they skirt the real underlying problem and never really pin it down.

 

The criticism I would make is that there is no underlying theoretical framework for the arguments made. It is essentially a collection of anecdotal accounts without a common theme. This in turn reflects a naive view of how organisations actually operate.

 

As part of my own research I came to the view that much of the existing edifice of management theory is wrong. The underlying problem is that the dominant metaphors for organisations are the machine or the organism. Underpinning these metaphors are assumptions about rationality, stability and uniformity that don't reflect the reality of organisational life. Much of what happens in reality is non-rational, unstable and fragmented. But most management theory can't deal with those dimensions of organisations.

 

As a result there is a disconnect between theory and reality. In effect, people overlay a messy reality with a neat theory and then confuse their neat theory for reality.

 

The situation is made worse by the research methodology employed in studying organisations which in the main is still positivist. As a result ideas like leadership take on a completely wrong complexion.

 

For example, one of the positivist tenets is that the subject of study needs to be studied in isolation. Therefore, leadership became studied as a set of attributes associated with individuals.

 

But leadership is a relationship between two or more people.

 

More importantly, leadership isn't something a superior can give to an underling. That's not how it works. Leadership something that is given by a leader's followers. In other words, the power and authority a leader has in any circumstance is power and authority given to the leader by followers. If followers no longer believe a leader deserves authority and power over them they take it away and give it someone else.

 

Organisations like to appoint leaders in a top down fashion and assume once someone has been appointed a leader they are the leader in all circumstances. But the reality is that leadership can't fixed in an individual, it moves depending on the circumstances.

 

When I look at organisations I see strong connections between an organisation's culture, its leadership, its strategy, and any change that takes place. For example, culture is the legitimizing mechanism, leaders are those with legitimized power and authority, strategy is the legitimate exercise of authority to act, and change is the result of those legitimized acts. In other words only legitimated change can occur and legitimated change is change that only reinforces the basis of legitimacy.

 

I see all cultural change programs as a crisis in leadership. There are at least two bases of legitimacy in conflict for dominance over the other.

 

This view has been developed through years of research and experience that have not been confined to the study or management or organisation which are both immature disciplines, but through a broader study of sociology (social theory). anthropology, psychology, philosophy, and narrative theory in addition the management and organisational theory.

 

I'm happy to share my views with those who are open to a diferent way of looking at how organisations actually operate.

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Avoiding blind spots in your next joint venture | McKinsey & Company

Avoiding blind spots in your next joint venture | McKinsey & Company | Extra Rants and Raves | Scoop.it
Even joint ventures developed using familiar best practices can fail without cross-process discipline in planning and implementation. A McKinsey & Company article.
Michael Petit's insight:

Most people think about business through the metaphors of organism or machine. Underpinning these metaphors are assumptions about rationality, stability and uniformity. Yet much of what happens in businesses is not rational, there are inherent instabilities, and they are highly fragmented. It is fascinating that eventhough people have seen the non-rational, unstable and fragmented they still choose to overlay this reality with organisational theories that privilege the formal side of the organisation. The reality is that the behaviours that govern joint ventures are just more pronounced than they are in other organisational types but they have been well documented by Argyris and Schon in their theory in practice:

 

maximise winning and minimise losing;

minimize expressing negative feelings;

be rational;

decrease the opportunity for honest confrontation; and

define the group task unilaterally and have others agree with it.

 

The reasons I say they are more pronounced in JVs goes back to an earlier theory that actually underpins the thery of Argyis and Schon - one proposed by Gregory Bateson. Bateson observed that there are push pull tendencies in every organisational arrangement. He called these tendencies schismogenesis and proposed to variations - complementary and symmetrical. The former reflects a dominant submissive relationship while the latter reflects the situation of two parties competing for the same space best characterised in the situation of an arms race. According to Bateson once established these relationships persist until an external force changes them. Theoretically this is a much stronger model for explaining and overcoming the problems presented in JVs. It does require a shift in frame of strategy as seen through the formal organisational lens to be seen through the informal organisational lens. In other words the problem of JVs needs to be seen through the lens of behavioural strategy.

 

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Your Success Is Determined By Your Mindset | Merlin Associates

Your Success Is Determined By Your Mindset | Merlin Associates | Extra Rants and Raves | Scoop.it
Michael Petit's insight:

While people have often argued that attitude or mindset determine whether someone will be successful or not what has been missing is has been an explanation of what underpins one mindset versus another and more importantly how to change it to a more successful one, until now.

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Why Smart People Struggle with Strategy

Why Smart People Struggle with Strategy | Extra Rants and Raves | Scoop.it
Because there’s no right answer.
Michael Petit's insight:

Another excellent article by Roger Martin. It's worthy knowing that Roger Martin was a student of Chris Argyris and obviously has great respect for his research and ideas. So do I, although I also believe Donald Schon's contribution to the area may be undervalued. In the article Roger Martin exposes a few false assumptions about strategy that I've also written about elsewhere. For those interested the video below provides a snapshot of what I consider to be the relevant  issues in relation to strategy http://youtu.be/wD3LVGcrBzw

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Building a forward-looking board | McKinsey & Company

Building a forward-looking board | McKinsey & Company | Extra Rants and Raves | Scoop.it

I read this articleDirectors should spend a greater share of their time shaping an agenda for the future. A McKinsey Quarterly article.

Michael Petit's insight:

I read this article with interest because I personally believe the way boards operate today leaves a lot to be desired. In some ways board operation doesn't seem to have progressed that far from the original establishment of stock companies and in other ways something seems to have been lost.

 

Boards are supposed to represent the shareholders' interests in a company. But many investors today are only on the share register for a relatively short period of time with little interest in what the company does or how it does it than with the return they can provide. Other shareholders may be competitors who have taken a so-called strategic stake in the company. In other words shareholders' interests is a big bucket of ill defined motivations.

 

As a result it became fashionable to equate shareholders' interests with shareholder value on the basis that maximising shareholder value was the best way to look after shareholders' interests to the point where shareholder value is now the mantra of management.

 

There has always been a problem with agency costs where executives are inclined to undertake activities for their own benefit at the expense of shareholders. So it's understandable that boards should take an interest in what management is doing. But it seems that they are doing so to the exclusion of other, arguably more value adding, activities.

 

At the centre of a boards role therefore are tensions between various stakeholder groups - customers, employees, shareholders, management, the community etc. Some boards have recognized the tensions by appointing different representatives of these stakeholder groups on the board. But those companies are in the minority.

 

I believe there boards should be given responsibility for ensuring the good governance of the company for the benefit of all its stakeholder groups rather than just shareholders because by doing so shareholders' interests will naturally benefit.

 

But in order for boards to be able to do that they need to take greater responsibility for an organization's strategy. If directors can't because they don't have the time or capability to do so, quite simply, they shouldn't be on the board. The board isn't there for the directors own convenience, directors are there to serve the interests of, at the very least, the company's shareholders.

 

There is always going to be a tension between the board and management because the board is there to keep management honest. But they also have a responsibility to keep management competent and effective and the best way to do that is through strategy.

 

Unfortunately a board's role in strategy is very reactive. Let's face it, many boards are totally reliant on management for all information and analysis when it comes to the company and there have been lots of instances where management manage the board agenda and information flows to get the outcome they want.

 

But there is growing realization that boards are being underutilized in terms of strategy. What normally happens is that management frames the strategic agenda and presents it to the board of directors for approval. Each director then reflects on the proposed strategy given their own experience and insights. It's a very reactive and unsystematic way to leverage directors experience.

 

I believe boards should be more proactive. I believe that boards should take more of a role in framing the strategy of a company and the best way that could happen is through boards getting involved in the development of scenarios which could then be used to test the strategies proposed by management. This way the board will be much more able to fulfill its role and each director will be more fulfilled that they are performing a value adding role beyond just keeping management honest.

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Get yourself in design thinking mode to build a better future

Get yourself in design thinking mode to build a better future | Extra Rants and Raves | Scoop.it
The work of strategy experts should ideally be focused on analytic, conceptual thinking, before stepping into operational planning. But often, the pressure to present a hands-on and actionable plan stands in the way of studying situations from a wider angle. However, this is not a plea for a free ticket on contemplation and philosophic navel staring. Instead, be like a designer.
Michael Petit's insight:

I've been attracted to the idea of design in strategy for a number of years since stumbling across the work of Roger Martin. In some ways it is the antithesis of what many strategists envision as the way to craft strategy and yet it captures so well the essence of testing as you go that delivers superior strategies.

 

Traditional approaches to strategy are often extremely formulaic, often with the implicit concern about not wanting to make a mistake which tends to constrain creativity, whereas design embraces the prospect of failure as the means by which you learn, adjust and arrive at a superior solution in real time.

 

I don't now how many times I've heard about a strategy being developed involving large commitments of resources only to fail miserably. Strangely enough this seems to be an error of logic that many financial service companies seem to repeat with their technology platforms. The idea seems to be to get the strategy completely right and then implement it as planned. Big mistake!

 

The other thing that prevents traditionally bound strategic approaches from adopting design principles is that there's this view that strategy is something that only some people can do and all those people are senior executives or strategy consultants with MBAs whose superior strategic abilities are evidenced by their seniority or their employment with strategy consulting firms. Another bad assumption.

 

People are promoted to senior positions for lots of different reasons that have nothing to do with their strategic abilities and sadly just because someone works for a strategy consulting firm doesn't mean they're any good at strategy. In too many situations too many of these senior executives or so called strategy consultants are promoted or employed because they just do what they're told to do.

People who have been promoted in this way tend to think in terms of hierarchy and entitlement which are the two biggest killers of creativity and initiative. Design on the other hand encourages play and fun which everyone should realise encourage creativity and initiative.

 

In my view there should be much more application of design principles in strategy. But, from the forgoing, there are some well entrenched interests that would definitely not agree.

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Guest Post: Does The Trail Of Dead Bankers Lead Somewhere? | Zero Hedge

What are we to make of this sudden rash of banker suicides? Does this trail of dead bankers lead somewhere? Or could it be just a coincidence that so many bankers have died in such close proximity? We will be perfectly honest and admit that we do not know what is going on. But there are some common themes that seem to link at least some of these deaths together.
Michael Petit's insight:

I am reminded of the comment often made in matters of intrigue that "all is not as it appears" or perhaps more accurately that " all is not as it is made to appear". I'm not sure that we will ever be able to link the dots together in relation to these unfortunate events but I do get the feeling that the economic reality that is the unfolding global financial crisis is closer to reasserting itself in place of the potemkin recovery so eagerly championed by mainstream economists and media.

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Building the healthy corporation | McKinsey & Company

Building the healthy corporation | McKinsey & Company | Extra Rants and Raves | Scoop.it
It is difficult—but vital—for managers to strike a balance between the short and long terms.
A McKinsey Quarterly article.
Michael Petit's insight:

In his excellent book Crisis and Renewal David Hurst argues that a narrow focus on performance leads to decline and crisis which is subsequently overcome by a renewed focus on organisational learning. The process he documents provides an template for thinking about how to prevent this occurences from taking place. The process, presented in the form of the symbol for infinity, has a narrow focus on performance leading to conservation, which in turn leads to crisis, which in turn leads to confusion, which in turn leads to the emergence of chraismatic leadership, which in turn leads to the establishment of new creative networks, which in turn leads to new choices being pursued through entrepreneurial action. Then after a period a narrow overemphasis on performance again leads to conservation and crisis and the cycle starts again.

 

More recently in a comprehensive review of failures of S&P500 companies over the last 50 years the Corporate Executive Board identified a number of factors that lead to their failures but concluded that the one thing that underpinned all of them was the inability of senior management to bring the assumptions that underpinned their organisations' strategies into line with the new realities.

 

The brilliant Richard Normann encapsulated the problem beautifully when he said, "The most crucial process that takes place in the company is the process through which the dominating ideas arise, and by which they change and are adapted to the prevailing situation".

 

Sadly management theory is not the place to look for the answer. Rather it's to be found through a focused study of anthropolgy, sociology, philosophy, psychology and narrative theory. However, as far as I know, I'm the only person to have done just that and documented their findings.

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Mastering the building blocks of strategy | McKinsey & Company

Mastering the building blocks of strategy | McKinsey & Company | Extra Rants and Raves | Scoop.it
Increase your likelihood of developing effective strategies through an approach that’s thorough, action-oriented, and comfortable with debate and ambiguity. A McKinsey Quarterly article.
Michael Petit's insight:

Interesting article that nicely presents the challenges involved in crafting strategy and highlights the conflictual nature of strategy encapsulated in the unasked question, "What is the role of the executive team versus the strategy team?"

 

At it's most fundamental the conflict inherent in strategy revolves around questions of legitimacy. Culture is the legitimising mechanism. The executive team and other organisational leaders holds legitimate authority and power. Importantly, an organisation's strategy is the legitimated action of leaders and their followers in the organisation.

 

The ultimate question is how do the dominating ideas within an organisation arise and how do they change over time. Anyone interested in strategy needs to develop a view about that fundamental challenge. Unfortunately, this article skirts that issue.

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The Message Is Sinking In That Central Banks Are In A 'QE Trap'

The Message Is Sinking In That Central Banks Are In A 'QE Trap' | Extra Rants and Raves | Scoop.it
LONDON (Reuters) – The message is sinking in – economies of the rich world face super-easy money far into the future and central banks are now convinced it’s the least of all policy evils.
Michael Petit's insight:

It is interesting how news flow results in desensitisation. The quaint analogy of the boiled frog is everpresent when I read the musings of money managers. We would seem to have reached the point where there is general acceptance that QE will be with us "ad infinitum" and worse that the consequences of tapering will be dire. Yet in my view there is something very wrong in perpetuating something where the burden will increasingly fall on those least able to cope with the consequences of QE4EVER while those responsible for creating the problem prevent the reset button from ever being pressed. 

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