Archives for posts with tag: Corporations

Screen shot 2010-06-10 at 11.18.36 AM

The World Cup is upon us and as a lifelong soccer fan and player, I reflected on a few insights that the soccer game taught me that can be applied to small and large businesses.

1. Embrace and live your culture

I started playing soccer when I was 5. We practiced twice a week and played each Saturday. Raised in Germany, our practice consisted of 90 minutes running and 30 minute playing time. Fairly insane when you think about it: forcing 5-year-olds to run for 90 minutes through the forest or doing laps after laps. But that’s the German culture for you. We were no masters on the ball but my team could outrun anyone. We won 90% of our games in the last 10 minutes because we never tired. (I hope there’s more balance in today’s practices in Germany, though)

Each country has a specific soccer culture: the playfulness of Brazil, the physical intimidation of England, the defensive discipline of Italy, the exuberance of African teams. While you need to embrace and live your culture to be successful, you shouldn’t fall in love with it and be always open to change. Brazil wasn’t a dominant force in the 70’s and 80’s because they focused too much on playfulness and not enough on execution. Once they added execution into the mix, matches and World Cup’s were won again.

2.) Hire entrepreneurs

Most soccer coaches last only for a few years. It’s a tough job to gather all your players from clubs all over the world, fight internal bureaucracies and deal with the press. Coaches, just like players, are superstars. They have to take huge risks in order to succeed and most of them fail. Just to rise on some other bench to try it again.

Soccer is a team sport but individual decisions make or break a team. The collective approach to soccer will always fail. Both coach and player are entrepreneurs, and the more creativity they display, the more leeway they are given. Coach and players have two different tools of influence to impact the outcome of the game.

The coach can create a cohesive, yet competitive culture that rewards creativity and innovation, build team spirit and nurture team culture. He has strategic tools at his hand (formations, substitutions, etc.) but his input won’t lead to innovation or moving the game to a new level.

This is done by 22 feet of 11 individual players. Players innovate on a daily basis to get a small but significant competitive advantage. They need to surprise other players with new ways of dribbling, moving, passing and reacting. The coach is there to create the right environment for players to innovate. Daily. With every move.

3.) Dramatic innovation is rare. Daily innovation a must.

As a soccer aficionado, it’s very interesting to watch games from the past and compare them to today’s sport. The game was much slower, formations not as fluid as they are today and positions have been redefined over the years. But, what’s even more intriguing is that these changes take years to really come to life. Franz Beckenbauer perfected the position of “Libero”, the “sweeper” before the goal-keeper, freeing him from marking a direct opponent. (Rather revolutionary, if you think about it: Instead of marking a person, you’re defending a zone.) He played his first World Cup in 1966, not really filling the position of Libero yet. In 1970, he showed massive improvements on this new style of play but it took him until 1974, when he crowned his career with a World Cup win and a performance that showcased his evolution from support player to innovator.

Innovation didn’t happen in one game. It happened over more than a decade. And influenced generations to come.

4.) Don’t blame technology. Don’t worship technology. Just use it.

Each time the World Cup comes around, there’s a lot of talk about the new ball. Some people fear it, some embrace it. Most players don’t care. The ball is just a tool they use to accomplish a task. Because it’s new, players will have to find the challenges/dead spots when handling or shooting it. Introducing a new ball right ahead of the biggest sporting event seems wrong. But it is a great way to determine the best playing team and the team that answered this challenge with a strong creative approach. There’s nothing to fear. And a lot to explore.

5.) Play. Hard.

I could write about the beauty of soccer, get all poetic and philosophical. But the real beauty of this sport is that’s it’s still a game. When players have a creative thought, they can implement this idea immediately. And fail. Or succeed. At the heart of American Football is strategy. Creativity is not rewarded. At the heart of soccer is creativity. (Based on a foundation of technical excellence, supreme conditioning and mental toughness.)

Tomorrow the World Cup begins. A clean slate. For all we know, North Korea might win it this time. Or South Africa. History exists only in the books and in our heads. On the grass, there’s no history. Just opportunity. Possibilities. The best playing team will win the tournament.

And, that’s the most important lesson soccer can teach business: Business is a game that reinvents itself each and every day. The basic rules remain the same, your team defines how to play with these rules creatively. As an executive, it’s your responsibility to assemble the best players, to lay down the rules and develop plans. At the end of the day, the players have to play to move your business. Let them play. And enjoy each moment of it.

MusicPhilosophy-18

Images: Courtesy of Music Philosophy (Mico, you rock!)

Strategic Planning was born around 100 years ago when the first cars went into mass production: The lack of product was vast and the economic landscape easy to oversee, making it easy for companies to adjust to changes immediately. Markets were slow and people believed humans can achieve anything, supported by Strategic Planning. This mechanical view of the economy and an enterprise left the role of Strategic Planning almost untouched and its importance has even grown over time.

Problem is: The world enterprises operate in has dramatically changed. In a world of saturated markets, educated people playing their consumer role rather unwillingly, globalization, terror attacks, ash clouds, etc. Strategic Planning becomes a farcical endeavor. Maneuvering an enterprise has become an illusion. But we continue to plan.

MusicPhilosophy25-07

Strategic Planning is a waste of time

Successful companies are highly flexible and adaptable in an ever-changing world and market. That’s the opposite of a plan: focusing on getting something done in a certain amount of time.

Let’s just have a look at the US government: Every year they plan on paying down the debt – and every year they face  new surprises: high unemployment rate, a Supreme Court decision, an oil spill. Immediately, all the Strategic Planning is out the door and projections have to be adjusted. Planning is not forward-looking, Planning is static and reactive.

Same is true for enterprises: The performance of a company is more often than  not influenced by factors out of their influence sphere: price of commodities change, currencies fluctuate or a banal law changes somewhere in the world and affects the performance of the enterprise – once again, projections have nothing to do with reality. This results in permanent frustration. And, companies develop the tendency to find someone to blame: Purchasing, Sales, Product.

Anyone who still hopes to control the future with numbers has no clue how markets work nowadays, doesn’t know how you can get optimal performance out of all stakeholders or just lives in a perfect world, fueled by selfish wishes and hopes.

MusicPhilosophy2-17

Executives don’t like change

The idea that executives don’t maneuver the enterprise through the stormy seas (Actually, it’s the other way around.) doesn’t fit in their MBA-fueled pipedreams of being the sole savior of this struggling ship. A myth born in the Industrial Age. In addition, executives believe they need Strategic Planning to control their employees. At its core, most managers believe their employees are lazy bums that can’t be trusted. (Honestly, without me they just wouldn’t do anything all day.) For that reason, employees need to get clear goals and constant observation.

Peter Drucker’s Management by Objectives (MBO) gave executives more fodder for their bizarre prejudice that people without objectives have no clue what to do. People wouldn’t work efficiently without planning goals. This resulted in an enterprise world gone crazy: Increase revenue by 13%, reduce costs by 12%, service has to increase their number by 10% for the next 5 years. Totally absurd. We call it: Management.

MP01

Shift power from executives to all stakeholders

This absurdity we call management has to be replaced with a new paradigm:

  • Focus on relative goals
  • Empower your employees by trusting them 100% and allow them to react individually to demands of stakeholders
  • Focus on culture

Don’t stick to numeric goals: Would you want a NASCAR driver to win a race or plan for him to drive the race in 2 hours and 32 minutes? Foster a culture where it’s about winning not making numbers.

If a department/division/branch has problems, don’t let the executives take over. Stakeholders have to find their own way out of the mess and don’t need the savior from headquarter. This might leave the executives with less opportunities to congratulate themselves but will increase team morale dramatically. The role of leadership has to be be redefined: It’s not about controlling people. That breeds resentments. And crushes spirits.

It’s about inspiring people. Engaging them. Executives need to lead, not control.

MusicPhilosophy2-21

Redefine enterprise success

Executives have to throw away their outdated Org charts, their hierarchy thinking and the focus on their selfish goals. The new enterprise places stakeholders on the pedestal, makes humans not plans their focus. Once you place your trust in all your stakeholders and empower them, goals like shareholder value, executive salaries and bonuses will fall into place.

Enterprises need less goals, not more. Goals are overrated. Real success metrics are an organic byproduct of a real corporate identity. It shouldn’t be about corporate goals determined by a few, it should be about corporate identity lived each and every day by all stakeholders. Focusing on corporate culture will help enterprises to develop a congruent group of like-minded people. Forget the performance review. Lean on peer pressure as the guiding force.

MusicPhilosophy28

Strategic Planning vs Being Prepared

Strategic Planning means: Derived out of an executive vision of the future and assessment of the present, the company develops a plan that everybody has to follow blindly. Enterprises based on this belief try to manage the future.

Being Prepared means: We’re trying to be ready for any eventualities, we prepare, we’re staying intellectually fit, always question everything – never separate acting from thinking. Being prepared is an attitude. This attitude will allow companies to be successful in the future. Strategic Planning dooms them.

MusicPhilosophy-04

Strategy has its roots in the military. Even the military doesn’t need mindless warriors anymore

The idea of Strategic Planning was based on the thought construct that there are two kinds of people: The thinkers, the directors, the controllers. And the mindless workers that do their task and don’t ask questions. Strategy is a tool to keep the doers from thinking and under tight control.

Since the markets control enterprises more efficiently than managers, what’s the value of managers hiding behind strategy decks anymore? Instead, every stakeholder has to think, adjust and do. What company still can afford to employ non-thinking people, happily entrenched in operations? That’s what automization is for.

MusicPhilosophy-21-02

Perpetual Test Mode

Enterprises need to ask themselves constantly “How could I do this better?” even when everything works out fine right now. Once enterprises believe they’ve found the perfect model, they will switch into the mode “Why change anything?” And die.

Enterprises need to follow two paths:

  • Implement perpetual, incremental improvements. Why not improving a dozen of little things? Can you improve your website daily outside of the yearly refresh? Can you change the way customer service interacts with people? Are your key employees fully invested on Social Media Channels, always ready to reply? How can you move your company from good service to utter delight?
  • Think big: Some problems can’t be solved with incremental changes. They need significant innovations. How can you leap ahead of your competitors by rethinking how a problem can be solved?

MusicPhilosophy20-16

How to begin the transformation process

This is an unusual paradigm for enterprises. Everything they learned in business schools and on wooden conference tables is useless. Even more: counter-productive.

It behooves every employee to internalize this new world view. And start to develop multiple pilot projects or beta programs. A good first step would be to eliminate the yearly performance reviews and axe yearly planning.

Let’s face it: the world was not meant to be perfect and nobody can control it. We’re supposed to muddle along and work our way through challenges and problems. Once enterprises accept this fact, they have a chance to succeed in the future. Most importantly: As long as managers don’t trust all stakeholder, as long as they don’t believe people will work without control and incentives, just because they want to, as long as managers don’t change their thinking, enterprises will remain the places of outdated hierarchy, intellectual imprisonment and planned economy.

tumblr_kqevn7zD7m1qzb7gjo1_500

The B2B playbook is well known: B2B don’t focus on selling specific products, they are mostly focused on listening to customers and meeting their needs. Let’s say you are selling Cloud Computing. You have to identify first why a customer would like to switch: Lower computer and/or software costs, improved performance, improved document format compatibility, unlimited capacity, increased data reliability. In addition, sales people need to identify why customers might be hesitant to make the switch: Reliability, specific location of data is unknown, personal identifiable information can be distorted and a switch might disrupt the organization for a specific time. These insights allow you to organize your enterprise and sales organization based on customer needs, fostering long-term relationships by promoting whichever of the company’s products the customers values most at this moment in time.

Compare this customer focus to the current B2C landscape: Most companies still use the top-down method to develop products: Develop a new product based on (often) flawed customer research, such as focus groups or surveys. Hand the new product over to the marketing department which identifies segments to target, sets the price and promotions and develops the communication plan. The whole organization is set up to push products out, transact as much as possible. A short-term strategy that is showing decline in performance due to the need of consumers to develop relationships with brands.

Instead, brand have to focus on building lifetime value by humanizing the brand-people relationship and create a culture (followed by structure) to execute this new strategy.

One of the major changes in human relationship organizations is the elimination of the CMO position and transferring all responsibilities to the Chief Customer Officer. Forrester’s briefing titled “Customer Experience thrives with executive leadership” found that “firms with these leaders view customer experience as more important, have more enterprisewide customer experience efforts, report having fewer obstacles, do more primary customer research, and score better in all three areas of Experience-Based Differentiation.” Executive stewardship is imperative to implement the next steps:

  • Move CRM out of IT and into the customer department.
  • Use market research throughout the organization to improve customer lifetime value. As an example, R&D needs to work directly with people to develop products that answer emerging needs.
  • Sales and Marketing should be merged into one division, reporting to the new Customer Division. Sales needs to step up and help marketing develop communications because they are closer to the ground and understand what consumers desire.
  • Let your best sales people (your greatest fans) in and collaborate with them throughout the product development process.
  • Suppliers and other stakeholders should not deal primarily with procurement, they are customers as well and should be treated as that.
  • Develop new metrics that focus less on short-term goals and more on customer profitability and lifetime value. Extend these new metrics to financial reporting, helping the markets to understand that stock prices should reflect this new model. Focus on market share should be replaced by focus on customer equity value.

Transforming an organization to focus more on customers is a challenging task. However, continuing on the current path is not an option. Unless brands consider extinction an option.

photo (1)

This is my daughter. Look at her. There’s this aura of infinite possibilities – she’s ready to take on the world. Nothing will stand in her way to explore this world that’s hers. We all used to be like that. We all had this fire in our eyes. Each morning we couldn’t wait to get out of bed, ready to make this world our world. We were curious. Eager. Had so many questions. Tried things out. Fell down. Tried them again.

And then life happened to us. Or better, institutions stood in our way. Pre-school. Kindergarden. Norms. Criticism. Homework. Schedules. School. Cruel teachers. Critical teachers. Grades. Norms. The system integrated us. We integrated the system into our lives. Into our thinking. And being. We graduated. When we were lucky, we traveled for a while. Found that joyful life experience again. But now it was time to join the workforce. To fit in. To accept mediocrity. Suddenly, it’s hard to get out of bed in the morning. Weekends and vacations are the only remaining highlights. We are slowly killing off everything that made us happy and curious in the first place.

Hold on, we just got a second chance.

The Great Recession is the biggest opportunity we will encounter in our lives. The Great Recession equals major hardship for many people but it also marks the end of the corporate era. If you’re corporate drone, your job will be eliminated very soon. If you try to fit in to make it in this world, you will struggle for the rest of your life. In order to succeed, you have to become an artist.

That’s the premise of Seth Godin’s newest book “Linchpin – Are you indispensable?” We have to become more human, creative and generous to be seen as unique and irreplaceable. And, most importantly, we have to ship. Meaning, we have to produce. Not spending hours on email trafficking, Twitter scanning, blog commenting. No, shipping. Producing. Doing. We can either give in to the lizard brain, the little part of your brain that is concerned with survival and is the reason for your procrastination and all your irrational fears. Or we can create our own destiny. Our own reality. And, at the same time, change the world.

Seth Godin’s Linchpin might be the most important book you’ve read in a long time. Hopefully, it will change you and your thinking. We’ve been working with major Fortune 100 corporations for years, even decades. We understand how tough it is to implement cultural change. But, it’s necessary. Actually, it’s imperative. Would you rather help your company change or see it vanish?

Seth Godin’s Linchpin and Hugh McLeod’s Evil plans (he illustrated Linchpin because he’s one) will give you the motivation and desire to change the world. We started our company with the goal to help transform businesses and change the way we work and live. Seth Godin distilled our thoughts in a neat and exciting package. Now it’s your turn to take the ball and change the world. We hope you’re ready.

tumblr_kx32k1ekuQ1qz6f9yo1_500

Image courtesy of 24 Media

Since corporations were formed, businesses always relied on analytical decision-making. Large corporations were able to create their own ecosystem, shaping their world at will. In this world, being smart was enough. But these walled garden are gone. And the world outside doesn’t follow the rules the corporations used to force on us. This created a severe alienation between people and companies/institution. And leaves many corporations craving for the old world order and fearing the future.

There’s nothing to fear. Actually, there’s a lot to look forward to. To an era where emotional skills will be paired with analytical skills. New MBAs already learn to focus more on “self-awareness and the capacity for introspection and empathy.” I would argue, empathy will be the key differentiator for successful institutions. And lack thereof their downfall.

Empathy will provide you with insightful knowledge of the world outside of your walled garden. Spock never was able to get the full ‘human experience’, just like many managers who are trapped by their own analytical skills. Empathy allows you to experience the world and analyze data outside of your own life experience. It helps you to develop innovative strategic and tactical opportunities. That’s what real Enterprise 2.0 is about: focusing on the strengths of the right brain, understanding patterns, argue holistically and interpret emotions. When we have all the analytical technologies and skills as a foundation and layer right-brain capabilities on top of it to deliver real value. Suddenly things make sense. Empathy helps us to transform enterprises by our new-found ability to see the big picture and take collaboration to a new level.

Empathy and collaboration are fellow partners. Both are closely linked because they require to focus less on self and more on the outside. People who have the ability to see world through someone else’s eyes are much more likely to share information with others. They understand how their work is linked to that of other people, understand the necessity to overcome of silos. Too many E2.0 experts base their opinion of collaboration on technologies and the obvious benefits for organizations.

Real collaboration is not reactive. Real collaboration is pro-active. Focusing on the needs of others before they can express them.

Not “I just got this information request, I should answer.” Instead, “I should share this information because it might benefit XY and her project.”

Not “A customer complains, I need to resolve this situation.” Instead, “My customer needs are changing and I have to change my products/services to accommodate them.”

We have to understand collaboration becomes more effective when it’s based on human interaction and relationships. When we have a comfort level with another person, see them as a human, not a resource, collaboration is an organic outcome. Technologies help us to organize and calibrate the collaboration efforts. Empathy helps us build trusting relationships and deliver ROI in the value chain. Empathy is critical for E2.0 organization to harvest the benefits of collaboration and co-creation.

grimreaper0911

Image by Hugh McLeod, the most influential Web 2.0 artist (Not sure if he likes that characterization.)

‘Up in the air’ premiered at an inflection point in the history of corporations. The brightest minds in academia and in the business world have caused terrible suffering in the last two years (and beyond), destabilized the economy and the whole world and sped up the demise of the capitalism as we know it. I don’t believe businesses and their executives had any evil intentions but the fact is that most corporations and big institutions are deeply mistrusted, yes, even despised by most people. If this is not a failure, I don’t know anymore what counts as a failure.

Watching ‘Up in the air’ almost felt like an obituary, remembering the worst excesses of corporate dehumanizing strategies. For people that didn’t see the movie: George Clooney works for an agency that helps corporations fire their employees, and escape the messy situation of having to do it themselves. His job keeps him on the road, rather “up in the air” for more than 90% of the year. The agency hires a recent Cornell grad that proposes the money saving, highly efficient, zero travel requiring idea of firing people over the Internet. Making one of the most humiliating and dehumanizing moments in a person’s life even more dehumanizing.

According to the 2009 Financial Trust Index, only 10% of Americans trust large corporations. In the mid-50s this numbers was around 80%. Corporations now stand for cutting costs, outsourcing, off-shoring, downsizing. It’s pretty obvious that corporations need to salvage what’s valuable in their business practices and models and focus all their energies into a new model: New foundation, new rules, new game:

1) Change your perspective:

Businesses used to look at the world from their perspective: How does it benefit me? How does it benefit the shareholders? How does it benefit the overall organization? Corporate darwinism at its best. And people followed along, slaving away to increase shareholder value. Not anymore. Now, it’s about the needs and desires of individuals. Who can help people to solve their problems, help them with their challenges? Organizations that stay behind the corporate wall will fail. Organizations that step outside, connecting with real people trying to help them will prosper.

2) Stop competing, start collaborating

Yes, C-level executives, you better start talking and co-creating with your competitors or you will fail. New networks will arise that will be more powerful than just one corporate entity. The power of networks will severely diminish the power of corporate organizations. Start building networks with partners that share your vision, values and valuation of transparency and trust. Individuals don’t care about your corporation, they care about their problems.

3) Employees are not resources. They are humans.

While companies should focus on the new consumer, the best way to start is with your own employees. In most industries, they are really all you have. They make or break your company. Cherish them by listening to them. Don’t just buy another piece of social technology because everybody is talking about Enterprise 2.0. Listen to their needs. How can we help them not giving in to Email bankruptcy? How can we make their work life more valuable, exciting and energizing?

The last few years have been tough for many people and businesses. And I’m not diminishing the effect the Great Recession had on so many lives. In order to move forward, we need to experience this inflection point as the biggest opportunity companies ever had. We’re in unchartered territory. No GPS, no Org-Chart will guide us through this messy new world. But, we all feel the current strategies and rules don’t apply anymore. Let’s build this new GPS together. And one day the idea of outsourcing the termination of your own employees will feel like the Berlin Wall: What were we thinking?