Managing at the Edge - Essay Example

1. In Freedom, Inc. the described “How” companies and “Why” companies. How does the operation of “why” companies differ from “how” companies?How companies are the type of companies which work through instructing their employees what to do, how to do it, how to behave at work place, and how to be a good employee (as cited in Carney and Getz, 2009, p.16). In other words, such companies are highly “hierarchical, bureaucratic, or command and-control companies” (as cited in Carney and Getz, 2009, p.23). These companies follow the “traditional” and “top-down” approach to management (as cited in Carney and Getz, 2009, p.23-24). This is an approach that underestimates the abilities of the employees to carry out tasks and to innovate and improvise as they go. In this kind of companies, each and every decision has to be taken at top level and the employees in the lower levels of hierarchy only have to mechanically obey what they are told. There will a fixed chain of command that will often be lengthy as well (Carney and Getz, 2009, p.23). The decision making will be highly “procedure-driven” (Carney and Getz, 2009, p.23). Lack of flexibility caused by stringent rules and stunning of the possibilities of creative contribution from employees, are two major drawbacks of how companies. In contrast to this, a why company is one which shares with its employees a single quest, namely, why we are doing what we are doing? (Carney and Getz, 2009, p.16). Naturally, it is a common quest for the company and the employees. The only answer possible for this question is, “ to keep the customers happy” (Carney and Getz, 2009, p.17). Thus the why company wants the employees to keep its customers happy and does not bother much about how it is attained (Carney and Getz, 2009, p.17-18). This is an approach that allows maximum contribution and participation from the employees. It gives freedom to the employees to innovate and improvise and through that, will enhance their motivation and self-esteem. In traditional how companies, the strict control can help achieve good growth and profits (Carney and Getz, 2009, p.43). But this positive aspect will be counter-balanced by the detachment and stress that the employees feel in an environment where there is least freedom (Carney and Getz, 2009, p.43). This will get reflected in their output as well (Carney and Getz, 2009, p.43). References Carney, B.M. And Getz, I. (2009) Freedom, Inc., New York: Crown Business. 2. What are the characteristics of a Level 5 Leader? Level 5 leader is someone who has the capability to lead a company from “good to great”, according to Collins (2001). The term, level 5, is used to indicate “a five-level hierarchy” (Collins, 2001). Collins (2001) has explained these five levels as given below: Level 1 relates to individual capability, Level 2 to team skills, Level 3 to managerial competence, and Level 4 to leadership as traditionally conceived. Level 5 leaders possess the skills of levels 1 to 4 but also have an "extra dimension": a paradoxical blend of personal humility ("I never stopped trying to become qualified for the job") and professional will ("sell the mills"). People who inhabit the level 5 leadership category are not egocentric and dislike showing off (Collins, 2001). All the same, they have the strength and will power to take bold decisions when the hour needs so (Collins, 2001). It is the goals, the organization and the meaningfulness of the whole exercise that come first for them rather than their personal ego (Collins, 2001). They are highly ambitious but not in the real sense the word, ambition is commonly used (Collins, 2001). Level 5 leaders are ambitious not towards their own narrow personal career goals but for greatness of the job involved and the organization (Collins, 2001). Level 5 leader will always be only partially satisfied by the results achieved and would constantly seek self-improvement (Collins, 2001). The greatest motivation of such a leader is to leave behind a real legacy that will be remembered through generations. This is a unique kind of ambition that leads not only to personal excellence but also to institutional brilliance. The level 5 leaders are also greatly focused on results rather than popularity or hype (Collins, 2001). As this kind of leaders are always intelligent and motivated by higher objectives, they do not go for public adulation and will display a rare kind of modesty often (Collins, 2001). This behavior is displayed simply because they realize the meaning of real greatness. Taking decisions, even tumultuous ones, with a clam composure and great determination is yet another trait of level 5 leaders (Collins, 2001). They are leaders who are never ready to compromise on standards and core values (Collins, 2001). They have the openness and courage to own up the responsibility of ones own errors rather than blaming them on others (Collins, 2001). They are no believers in fate but trust hard work and perseverance (Collins, 2001). Level 5 leaders are thus a rare category of leaders who leave back a legacy that is highly solid yet often uncelebrated. References Collins, J. (2001) The misguided mix-up of celebrity and leadership, Conference Board Annual Report, Jim Collins website, Retrieved from http://www.jimcollins.com/article_topics/articles/the-misguided-mixup.html 3. The game company Cranium and the DPR construction business are worlds apart in products and customers served. They have a common thread, however, that binds their employees, elicits commitment and connects effectively with customers. At Cranium they call it "CHIFF". What do these two companies have in common that gives them competitive advantage? Cranium had entered the game industry with a complete set of “non-conformist credentials” questioning all traditional approaches (Dann, 2009). CHIFF is a term coined by the founders of Cranium and this term represents a person (leader)/ an approach/ an institution, that is, “Clever, High-quality, Innovative, Friendly and Fun” (Taylor and LaBarre, 2008, p.43). From marketing to branding, and product development, the company has a different and unconventional approach (Dann, 2009). DPR also is a firm that puts as its ideals, quality, innovation and a commitment to meet the aspirations of the customer and green building projects have been the brand image of the company (Kubba, 2012, p.49). Regarding both these companies, it can be said that “life here just sounds different from life at most companies” (Taylor and LaBarre, 2008, p.42). Cranium has a proclaimed goal to “lighten and enlighten” your life (Taylor and LaBarre, 2008, p.43). DPR keeps “LEED-trained and -accredited professionals in every one of its offices across the country (…) (and) boasts a portfolio of more than $1 billion in green building projects” (Kubba, 2012, p.49). The company has also “trained more than 500 professionals in overall sustainability and green building above and beyond the available LEED programs” (Kubba, 2012, p.49). Cranium created a niche of its own through its tie up with Starbucks, the coffee company, wherein it made a successful attempt in non-conventional marketing (Dann, 2009). As far as branding was concerned, the approach was to develop itself into a “branded house”, rather than having several branded products (Dann, 2009). In product development, CHIFF became like a mantra and it permeated into the design of work spaces, and even employee behavior codes (dann, 2009). Both in the cases of Cranium and DPR, this tendency towards bold innovation was what became key to success. The CHIFF approach was attractive and easy to learn and adapt in its simplicity and clarity (Dann, 2009). This mantra helped employees to streamline themselves easily into the company culture, which otherwise would have taken months of training to get imbibed in. All these facts did not banish the need of systematic work and in Cranium systematization also played a crucial role in success (Dann, 2009). For example, there is a systematic five-step process involved in product development at Cranium (Dann, 2009). Even as Cranium developed products “for the brain”, the companys ethos made it mandatory that each product has an “emotional resonance” with the given situation (Dann, 2009). The company called this, “moment engineering” (Dann, 2009). The freedom given to the employees in this company is reflected in the words of one of its founders (Alexander): One main difference between the iterative design processes at Cranium and those at Microsoft, (…) lies in how quickly potential product changes can be implemented. At Cranium, product developers have the luxury of tossing in new ingredients into the proverbial Cuisinart almost any time they want. It was so hard in the software world to change the test article, there were so many interconnected pieces in the code. Here, we stop play tests right in the middle and have people jump back in with a new set of game rules (as cited in Dann, 2009). Collaboration has been another key word for both Cranium and DPR as Cranium outsourced almost all of its manufacturing work and treated such subsidiaries as “crucial partners” while DPR “collaborate(s) as much as possible even in situations where the contract doesnt obligate” so (Kubba, 2012, p.209). References Dann, J. (2009) Whats so smart about cranium?, HBR Blog Network, Retrieved from http://blogs.hbr.org/hmu/2009/01/whats-so-smart-about-cranium.html Kubba, S. (2012) Handbook of green building design and construction: Leeds, Breeam, and Green Globes, Oxford: Butterworth-Heinemann. Taylor, W.C. and LaBarre, P.G. (2008) Mavericks at work: Why the most original minds in business win, New York: Harper. 4. The authors use the Goldcorp Challenge, the development of the Linux operating system, a TopCoder tournament and the Fringe Arts Festival as examples of a new and unorthodox approach to tap into creativity and talent. They call it "open source thinking" and creating an architecture of participation. What is the magic principle that underlies the "architecture of participation" and what are the implications for more traditional business approaches? The magic principle that underlies the “architecture of participation” is the idea that “head-to-head competition leads to group collaboration” (Taylor and LaBarre, 2008, p.87). It is the facilitation of creativity and innovation over ego and rigidity (Taylor and LaBarre, 2008, p.111). The process involved has been described as a merging of “wild-eyed creativity with the spirit of unblinking competition” (Taylor and LaBarre, 2008, p.84). The individual-based side of this notion rests in the concept of simultaneously sharing and competing in matters of creativity and discovery. The group dynamics of it is related to more creative and wholesome outcomes. The term, “architecture of participation”, is the contribution to English literature and business by “Internet pioneer, Tim OReilly” (Haneberg, 2012, p.177). In general, the term represents “the systems that must be in place to support participative efforts” (Haneberg, 2012, p.177). There is a prevalent misconception that architecture of participation is all about applying technology to make collaboration effective (Haneberg, 2012, p.177). Along with making the right choice about which “collaboration software” has to be used, the “cultural component” also needs to be taken care of (Haneberg, 2012, p.177). N other words, it has to be realized that “if the organization doesnt support, reward, and make it easy for collaboration and openness to thrive,” companies functioning as communities will remain a distant dream (Haneberg, 2012, p.177). In OReillys (as cited in Haneberg, 2012) words, open source thinking is crucial in building an architecture of participation and he added: The core architecture of participation at the heart of the open source software movement is the Internet, and without it the kind of large-scale open collaboration necessary could never occur. Certainly for collaboration to work, technology is important, and there are a number of great collaboration systems and tools now available that both improve organizational transparency and make it easier for employees to work together (p.177). From the above discussion, it is clear that architecture of participation is primarily about people working together and once the relationship and bonding are in place, its facilitation can be done through technology. References Haneberg, L. (2012) The ASTD management development handbook: Innovation for todays manager, Virginia: American Society for Training and Development. Taylor, W.C. and LaBarre, P.G. (2008) Mavericks at work: Why the most original minds in business win, New York: Harper. 5. One of the strongest messages in Mavericks at Work is: "Advertising to customers is not the same as connecting with customers." Jones Soda and Netflix understand this message and have each built a marketing strategy that taps into a key psychological attribute of human behavior. What do you consider to be the element of strategy or "best practice" that gives them competitive advantage? Jones Soda has been described as having an “exuberant style and rebellious attitude” (Taylor and LaBarre, 2008, p.172). This very style had given them a positive feedback from the market. The “guerrilla-marketing tactics” of Jone Soda that resulted in the introduction of the “far-out flavors” is also one practice that gave them a competitive advantage. Another marketing strategy adopted by Jones Soda is related to the love that the general public carry for trendy music. The strategy involves selecting “every month, 20 bands or solo artists (…) to appear on labels of Jones Soda” (Taylor and LaBarre, 2008, p.172). The pictures of each band are displayed on a fixed number of bottles making the bottles seem like antique pieces worth collecting and keeping, yet another tactics that has psychological implications (Taylor and LaBarre, 2008, p.174). The concept of cool was adopted by the company and it targeted mostly “12-14 year olds” (Doole and Lowe, 2005, p.5). Other notable marketing strategies that had a psychological edge included, “backing alternative and extreme sports, stocking the brand in non-traditional outlets and even showing customer photos on the labels, all to try to develop an emotional connection with their young consumers” (Doole and Lowe, 2005, p.5). Netflix, the online movie-rental company and a pioneer in the field, has a business model that brought in a sea change in the US movie rental business (Hitt, Ireland and Hoskisson, 2009, p.275). The company made intense brand building operations in its early stages (Hitt, Ireland and Hoskisson, 2009, p.275). The first steps towards effective brand building included cancellation of all kinds of late fees and deadlines (Hitt, Ireland and Hoskisson, 2009, p.275). The next stage amounted to making “an initial public offering (IPO) of 5.5 million shares of common stock at $15 per share” (Hitt, Ireland and Hoskisson, 2009, p.275). Linking the movie viewing experience to PCs, Netflix made its services technically up to date and more customer friendly (Hitt, Ireland and Hoskisson, 2009, p.276). The basic strategy of the company website has been: Customization and personalization [ensuring] every Netflix member [receives] a unique experience every time they visit the site. This includes the movies they see on each page, the recommendations they receive on movies, and the critical account management tools they use, such as their dynamic queue to order movies (Hitt, Ireland and Hoskisson, 2009, p.276). Considering all the above unique marketing strategies, it can be observed that Jones Soda and Netflix have in common, the boldness to try new and revolutionary things, and develop them into a culture, on their own. All these new innovations were carried out keeping in mind the individualized needs of the customers and resulted in better customization of the product range. References Doole, I. and Lowe, R. (2005) Strategic marketing: Decisions in global markets, London: Cengage Learning EMEA. Hitt, M.A., Ireland, D.I. and Hoskisson, R.E. (2009) Strategic management: Competitiveness and globalization: Cases, London: Cengage Learning. 6. What do the Small Giants have in common? Why is it difficult for large public companies to duplicate their success? The small giants are such companies that have made the choice to become “great instead of big” (Burlingham, 2007; Ramaiah, 2010). These are companies that have overcome the compulsion to grow without any purpose, sense or profit, and instead built themselves into “great companies that are market leaders with values and unparalleled customer focus” (Ramaiah, 2010). Small giant companies always tried to build non-conventional and specific target audiences who display a high level of brand loyalty. The major focus of the company will be on quality rather than quantity. It is through ensuring quality that they commanded a considerable customer loyalty. Burlington (2007) has observed thee companies as having “a quality (…) that was real and recognizable but also frustratingly difficult to define” (p.XXVII). The advantage of small giants over large companies are many. The small giants can maintain a level of customer intimacy that can never be paralleled by big companies (Burlington, 2007, p.23). In the relations with employees and suppliers also, small giants have a manageable population involved and hence can give personalized attention (Burlington, 2007, p.45). The stability is higher for these small giants just because all the stocks are held by a single person or a small group of individuals (p.XVI). Many of the small giants are self made and they have not followed any success model (Burlington, 2007, p.11). All the same, they provide with a self-sample to similar future ventures. These companies get usually emotionally binded to the locality in which they function and also actively engaged with the community there (Burlington, 2007, p.49). This is yet another aspect that cannot be copied by larger enterprises. As the number of employees will be small, there would be more work space intimacy in this category of companies (Burlington, 2007, p.76). References Burlington, B. (2007) Small giants: Companies that choose to be great instead of big, New York: Portfolio Trade. Ramaiah, H. (2010) Book review: Small giants, Money Control, Retrieved from http://www.moneycontrol.com/news/business/book-review-small-giants_440396.html 7. In Robert McDermott’s campaign to transform USAA into a world class customer service organization, what strategies were applied to reduce attrition and enhance employee commitment to the company? USAA is a big insurance company that has 23,000 workers under it (Carney and Getz, 2009, p.21). The company has gained much performance mileage through allowing the employees a free hand to unfold their potential (Carney and Getz, 2009, p.22). USAA was a company that suffered from how management during its early days and Robert McDermott was instrumental in changing this company to a why company (Carney and Getz, 2009, p.78-119). It was almost an acknowledged fact that there was a high percentage of attrition in the company during the how management days (Carney and Getz, 2009, p.181). The new strategy adopted by McDermott faced this challenge through unleashing the motivational creativity of the employees resulting in them growing qualitatively in their career and professional graph (Carney and Getz, 2009, p.183). There was always the risk of employees becoming highly efficient in their profession and moving ahead seeking better opportunities but this potential risk did not dissuade the company from allowing them to grow (Carney and Getz, 2009, p.183). This was an approach that was fraught with a new ethical business culture. McDermott decided that “education would start his employees on a journey of self-discovery that would, in the end, rebound to USAAs benefit” and when implemented, this proposition was found to be true to the core (Carney and Getz, 2009, p.184). A regular training program was started for the employees that gave USAA the image of a “liberated employer” (Carney and Getz, 2009, p.188). Under the leadership of McDermott, USAA “grew from the sixteenth to the fifth largest insurer of private automobiles in the nation and its fourth largest homeowner insurer” (Bolino, 2012, p.130). He also took steps towards “minority hiring and for equalizing wages” (Bolino, 2012, p.131). His new initiatives including establishment of a child care center and “four-day work week” became a boon to working mothers and they were attracted to the company in large numbers (Bolino, 2012, p.131). He also became an active participant in the community activities thereby building more good will for the company (Bolino, 2012, p.131). References Bolino, A.C. (2012) Men of Massachusetts: Bay state contributors to American society, Bloomington: iUniverse. Carney, B.M. And Getz, I. (2009) Freedom, Inc., New York: Crown Business. 8. We covered a lot of ground on this journey together. Along the way did you pick up a nugget or perhaps a new "pearl of wisdom" that you can use? If so, what did you find? What I learned from this journey is that business is all about human relationships. The values and morals of a given society are usually seen as part of literature or politics but they matters the most in business. As I understand now, the beginning of business and commerce in the world was a coming together of people to share things and services. In the process of growth and expansion, this basic purpose was lost somewhere and business became a mode of unequal bargain, and an exercise of unhealthy means to sell and make profit. The workers in a company thus became like parts of the machines in it. The sense of togetherness and a notion of common cause was lost. To regain this sense of togetherness is the need of the hour and the path ahead. This realization dawned upon me as I went through this journey into the corporate society and culture. The future of our society lies in evolving a business culture that sets itself high standards based on human values and morals. Such a business model can become a panacea to almost all problems that humanity faces today. For example, once the industry commits itself to the value of non-exploitation, both nature and all other human stakeholders will stand benefited and their interests protected. Once the value of human creativity is acknowledged, there will no more be draconian rules and exercise of power that suffocate and stunt minds. I believe, a new realm of human relationships in business will emerge through this approach that will make possible a flowering of creativity and a quantum leap in innovation. The workers and the customers will be able to find meaningful associations with companies replacing the mechanical selling and buying equation that exists today. Only then will the industry and business be able to fulfill their social roles in a full-fledged manner. Responsibility towards nature and the society will no more need to be put under a special category like, corporate social responsibility, but the business itself would carry in its spirit, a harmony with humans and nature. Advertising will also return to its initial role of informing, though in a more creative way that suits the aesthetic tastes of our new society, thereby banishing deceitful and exaggerated claims and methods. Ethics will be a way of life in business rather than a mechanical component of economic success. As Taylor and LaBarre (2008) have cited, the Alan Kay quote, “the best way to predict the future is to invent it,” depicts the infinite possibilities in this direction (p.XII). References Taylor, W.C. and LaBarre, P.G. (2008) Mavericks at work: Why the most original minds in business win, New York: Harper. Read More