Quick takes

Citation

Gorrell, C. (2016), "Quick takes", Strategy & Leadership, Vol. 44 No. 2. https://doi.org/10.1108/SL-01-2016-0008

Quick takes

Article Type: Quick takes From: Strategy & Leadership, Volume 44, Issue 2

Catherine Gorrell

Catherine Gorrell is a veteran strategy consultant based in Portland, Oregon (4mcgorrell@gmail.com) and a contributing editor of Strategy & Leadership.

These brief summaries highlight the key points and action steps in the feature articles in this issue of Strategy & Leadership.

Interview Jeffrey Pfeffer: stop selling leadership malarkey

Brian Leavy

The recent book, Leadership BS: Fixing Workplaces and Careers One Truth at a Time, by Jeffrey Pfeffer, suggests that we have been seduced by the “inspirational” but “unscientific” nostrums of current leadership literature. In his view, adoption of an aspirational, character-focused agenda results in an unrealistic, dangerous and ultimately disappointing approach to making better leaders.

Professor Pfeffer, as a foremost expert on applying evidence-based management in large organizations, suggests that we need to deepen our insight into reality by acknowledging the central role that power and politics continue to play in organizational life.

Q: Why do we still find it so difficult to build better, more engaging workplaces?

A: The simplest answer is that most companies fundamentally don’t care about employees or employee engagement. And why should they? The biggest current trend is toward getting rid of the employment relationship and substituting independent contracting arrangements instead – the so called “gig” economy represented by Uber drivers, Instacart delivery people, and so forth.

Although the research consistently shows the economic performance benefits of building employee loyalty and engagement through the use of high performance management practices, cost-cutting is often quicker and easier to do, and there are precious few CEOs who really, deep down, see their people as a source of sustained competitive advantage rather than as costs.

Q: How can we educate people about the realities of our organizational dynamics?

A: My book should be read as a way of thinking critically and developing a deeper understanding of the realities of human behavior. If people do not like what they see in the world around them – a feeling I often share – ignorance is not going to do them any good. To get from point A to point B, you first need to know where you are, then where you want to go, and also what obstacles stand in your way – in short, why things are the way they are. In fact, one of the prevailing weaknesses in leadership literature and practice is the lack of base rate data on the extent to which behaviors like transparency, candor and putting others first actually occur in the workplace, and the journey to more engaging workplaces has to start here.

The leadership industry has been such a catastrophic failure. One reason is that there has been too much focus on the “shoulds” and “oughts” and not enough focus on what is, and why. Consequently, people are ill-prepared for the realities of organizational life and insufficiently steeped in knowledge that will help them change things for the better. And this condition does no one any favors.

Masterclass Christensen updates disruption theory

Stephen Denning

Clayton Christensen defines disruptive innovation theory as, “a theory of competitive response. It tells you: if I innovate in this way, then this is what I can expect incumbent competitors to do. If I introduce a sustaining innovation, incumbents will generally try to mount a defense and try to eliminate me. If it’s disruptive innovation, they are likely to ignore me or flee rather than fight.”

“Unfortunately,” Christensen has written, “disruption theory is in danger of becoming a victim of its own success…the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied. Furthermore, essential refinements in the theory over the past 20 years appear to have been overshadowed by the popularity of the initial formulation. As a result, the theory is sometimes criticized for shortcomings that have already been addressed.”

Correct understanding of disruption

Disruption is a process, not an event, and innovations can only be disruptive relative to something else. Over the last twenty years, the process creates changes, which require additional theories to account for what’s going on.

Different kinds of incumbents and responses

In cases of disruptive challengers, incumbents have proven that there are several ways to respond. According to Christensen’s updated view, a firm could go in different directions, up-market or down-market, or to the left or right, because sometimes there’s a better way to grow than just staying in your part of the market.

To the question of whether a corporate as a whole can survive the “innovate or die” reality of business, Christensen offers two proven approaches:

1. As demonstrated by IBM, a corporation can continue as long as it creates then sheds business unit models as the means for continuously adapting to evolutionary competition.

2. In contrast, Apple, Amazon and Zara are pursuing a continuous innovation model that focuses on customer delight, not maximizing shareholder value. Profit is a result, not a goal. Experimentation and innovation become an integral part of everything the organization does. Companies with this mental model have shown a consistent ability to innovate and to disrupt their own businesses with innovation, without setting up separate business units.

Bottomline

The only permanent way out of the innovator’s dilemma is to change the game being played and adopt a new corporate focus in which innovation is a necessity, not an option. Achieving continuous innovation lies outside the performance envelope of most firms. It requires major changes in mind and heart. It will need new roles for managers, new ways of coordinating work, new values and new ways of communicating.

What will happen to the “American Dream”? Four scenarios for opportunity in the United States to 2035

Stephen M. Millett

The American frontier has never been only about territory. The American economic frontier has been undergoing expansion because of advances into new arenas and innovations of all sorts. The ever-expanding frontiers of science and commerce – spurred by breakthrough discoveries and emerging technologies, new products, new businesses and new business models–have fostered widespread belief in “The American Dream.” From Silicon Valley to Wall Street to outer space, the American frontier remains ever changing.

At the heart of the optimism behind the American Dream is widespread access to opportunity, which has driven personal initiative, hard work, investment and innovation. The policy challenge before Americans today is to what extent will such opportunities exist in the future, and the question is, Who will likely achieve them, the many or the few? So is the American Dream at risk?

To fully consider the future of opportunities in America, consider portraits of what life would be like in four alternative possibilities, or scenarios, emerging from now to the year 2035. The logical basis for these four futures is that technological, political, economic and social factors – and the decisions of voters and their leaders–will result in either many or few opportunities which will be available to many or few players.

• Scenario A. The American Dream: Many opportunities with many individual participants.

• Scenario B. The End of the Shoe-string Startup: Numerous promising large investment opportunities require the resources that just the few largest private and public communities can afford.

• Scenario C. Elites Divide a Smaller Pie: Only fabulously wealthy individuals and their powerful private communities have the resources to reap the limited number of available opportunities.

• Scenario D. The American Dream re-imagined: When opportunities fade, public community alternatives and interests must take their place.

Explore the choices

There could be many variations upon these four basic outcomes. The driving trends can take various forms depending upon the conditions and personalities of any particular time. The central question is how should we best prepare for life in each scenario? And what scenario do we really want to live in and what decisions need to be taken to increase its likelihood of occurring? Conversely, which future is the most undesirable and what can we do to prevent it? These are the choices that need to be explored now to better anticipate and react to the challenges of the future.

Bottomline

Despite appearances, for most American citizens and for immigrants, both legal and illegal, the American Dream is still alive. But how long it survives depends greatly upon general and individual access to opportunities in the future.

Learning lessons in strategic novelty from outliers

Liisa Välikangas and Michael Gibbert

Outlier organizations – those brash companies on the edge of industries on in obscure corners of the world experimenting with unconventional business models or daring management innovations–can be the source of strategic novelty. Strategy, after all, is about experimenting with variation. The question is: how to learn from outliers and benefit from their strategic novelty?

From surprise to significance to amplification

An essential first step is to get over the attitude of dismissal–the-not-invented-here reaction–by embracing what can be learned serendipitously from innovators anywhere in the world and in any industry. Recognize that the surprise of novelty ought to be capitalized on and investigated further. Successful innovators are intuitively interested in developments that are incongruous to expectations.

To facilitate this reorientation toward learning from the novel, follow a three-step process to become an effective strategic-novelty hunter:

• First, identify the WOW (strategic novelty).

• Then, execute the SO WHAT? (decipher the significance for your company).

• Finally, amplify the OOMPH (leverage learning for outsized impact).

The tools and methodology

1. Identify the WOW

Outliers provide an ongoing experiment of ideas and business models that counter industry incumbent groupthink. Even if the outlier fails, strategists exploring alternative business models are better off knowing exactly why the idea did not succeed.

2. Execute the SO WHAT

Being receptive to new ideas is not enough. Knowing what ideas can enrich your organization is where novelty benefits strategy. After identifying something unexpected, something outlying, something strategically novel, ask yourself if this outlier organization, or the business model that it is experimenting with, may possibly challenge your company.

3. Amplify the OOMPH

Outliers can achieve outsized impact that is far beyond their size, legitimacy and resources by using amplification strategies:

• Inclusiveness/openness.

• Radical cost reduction.

• Modularization.

• Massive search strategies.

• (Re) Combination of adjacent ideas.

Bottomline

The largest hurdle for many companies is to instill an internal cultural appreciation for curiosity, receptiveness to surprise and strategic experimentation that would allow for renewal and transformative learning. By studying cases that deviate from the mainstream, established companies and other startups can draw important serendipitous lessons for inventing the future by being able to draw on original, even seemingly counterproductive ideas.

Transforming disagreements into opportunities to enhance learning, decision-making and trust

Sergiy Dmytriyev, R. Edward Freeman and Mark E. Haskins

This article reviews the potential benefits to be gained from constructive, sometimes heated and pointed disagreement that is addressed in a constructive way.

Responsibility to speak and to hear

There are four different types of organizational climates that dissenters encounter at the individual, work group, business unit or enterprise level:

• They are: the climate of silence, the climate of disruption, the climate of close-mindedness and discontent, and the climate of possibilities.

The latter is the most desirable. Listening skills are critical, as is the ability for a manager to facilitate a debate and discussion in a purposeful manner towards a constructive outcome. Disagreement directed at tasks, processes or strategies have the potential to produce added benefits. Disagreement directed at personalities does not.

Disagreement can create benefit in numerous ways

A climate of possibilities, wherein disagreements are purposefully offered and heard, can potentially benefit an organization in three areas: the robustness and quality of the decision-making process, enhanced relational connectivity of the people involved and the foundational DNA of the organization. Exhibit 2 summarizes ten specific ways, within these three general contexts, that disagreement can create benefit.

Creating a climate of possibilities

There are nine actions managers can take to sanction and capitalize on disagreement in a way that contributes to a climate of possibilities.

Bottomline: Champion constructive disagreement

Over time, what we have been taught, what we have observed and what we have experienced gives rise to our understanding of circumstances and a set of preferred paths of action. To be intentional about widening and deepening our experiences, observations and the potential learning we are exposed to, increases the opportunity for expanded and more insightful thought to flourish. Constructive disagreement is the foundation for establishing a climate for such a possibility. And, it is perhaps worth noting that it takes two to disagree but only one to extract value from it.