Right Attitudes

Ideas for Impact

MBA in a Nutshell

Do Your Employees Feel Safe Enough to Tell You the Truth?

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Do Your Employees Feel Safe Enough to Tell You the Truth? Take any corporate scandal or the Challenger and Columbia disasters, and you’ll find lower-ranking voices that tried to be heard within these organizations to prevent or minimize the consequences of the excesses or the accidents.

Some leaders are too isolated from reality and establish an “all’s-good” guise whereby anything other than affirmative becomes an undesirable—unwelcome even—answer to a performance-related question. Such leaders foster a “good-news culture,” where any truth-teller or devil’s advocate is quickly dismissed. Queries such as the cursory “Is everything okay?” elicit information-free, non-answers like “yes” and “great!”

When leaders are disconnected from reality, they become incontestably right. Employees know the rule of the game is to say what’s safe to say. To not tell the truth. To tell the leader just what she wants to hear. Employees would instead go with the flow rather than speak truth to power.

Consequently, business pressures often lead to shortcuts that go overlooked. Risk is normalized. Leaders who cannot tap into the truth get blindsided when the problems blow up because they didn’t nip the problems in the bud. Leaders have only themselves to blame when things go wrong.

Idea for Impact: Insightful leadership isn’t about the privilege of position but the privilege of information flowing upwards. Wise leaders dare to seek information they don’t want to hear. They know how to ask the right questions, look for revealing details, and set up a culture of openness that makes it easy for employees to tell the truth.

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  3. A Superb Example of Crisis Leadership in Action
  4. Leadership is Being Visible at Times of Crises
  5. What Elon Musk and Jeff Bezos Learn on the Floor

How to Lead Sustainable Change: Vision v Results

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In the Drucker Foundation’s Leader to Leader (1999,) Harvard Business School professor John Kotter proposes one of my favorite visuals on the essence of noticeable results that bear witness to a leader’s vision of change:

How to Lead Sustainable Change: Vision v Results

This illustration encapsulates why some organizational change initiatives succeed while others never get off the ground or break down after a while. Kotter observes,

Results and vision can be plotted on a matrix that has four dimensions. Poor results and weak vision spell sure trouble for any organization. Good short-term results with a weak vision satisfy many organizations—for a while. A compelling vision that produces few results usually is abandoned. Only good short-term results with an effective, aligned vision offer a high probability of sustained success.

Idea for Impact: The only way a leader can produce a well-paced, sustainable, and transformational change is by mobilizing the people around her to appreciate the benefits for them in her vision of the desired future. Ongoing results oblige visibility into progress and will catalyze the organization’s commitments.

Read Kotter’s Leading Change (1996,) an influential missive on change management.

Wondering what to read next?

  1. Don’t Push Employees to Change
  2. A Guide to Your First Management Role // Book Summary of Julie Zhuo’s ‘The Making of a Manager’
  3. General Electric’s Jack Welch Identifies Four Types of Managers
  4. Direction + Autonomy = Engagement
  5. To Inspire, Pay Attention to People: The Hawthorne Effect

Making Tough Decisions with Scant Data

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CDC Grappling with Imperfect Science - Making Tough Decisions with Scant Data Yesterday’s New York Times article highlights the complex tradeoff leaders must often make between indecision and acting on insufficient information:

The Omicron variant is pushing the CDC into issuing recommendations based on what once would have been considered insufficient evidence, amid growing public concern about how these guidelines affect the economy and education. CDC Director Dr. Rochelle Walensky has been commended for short-circuiting a laborious process and taking a pragmatic approach to manage a national emergency, saying she was right to move ahead even when the data was unclear and agency researchers remained unsure. The challenge now for Dr. Walensky is figuring out how to convey this message to the public: “The science is incomplete, and this is our best advice for now.”

The smartest people I know are the ones who understand that they don’t know—can’t know—everything. Yet, they’re ready to act on imperfect information, especially when being slow will be costly.

Idea for Impact: Being able to analyze information is insufficient if you can’t reach decisions.

Knowing you’ll never know everything shouldn’t prevent you from acting. The ability to reason and reconsider your position on something is an integral part of rational thought.

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  2. What if Something Can’t Be Measured
  3. Smart Folks are Most Susceptible to Overanalyzing and Overthinking
  4. Presenting Facts Can Sometimes Backfire
  5. What Airline Disasters Teach About Cognitive Impairment and Decision-Making Under Stress

Reinvent Everyday

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General Electric supremo Jack Welch’s advice to Indian-American investor and businessman Vivek Paul:

Every time I land in New York after an international business trip, I imagine that I’ve just been appointed chairman and that this is my first day in the role, and the guy before me was a real dud. Every time I think, “What would I do that was different than the guy before? What big changes would I make?”

When you can think about expectations from a more detached point of view, rather than an immersed point of view, you aren’t overly invested in an entrenched pattern of thinking.

A period of rest, entertainment, or exposure to an alternative environment can dissipate fixation and help you gain a fresh perspective. It makes you think big. Subconsciously, you can push yourself harder and go after bigger, loftier, harder goals.

Idea for Impact: Don’t limit yourself by past expectations.

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  3. Four Ideas for Business Improvement Ideas
  4. Making Tough Decisions with Scant Data
  5. One of the Tests of Leadership is the Ability to Sniff out a Fire Quickly

Don’t Try to Convince Every Potential Customer

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Many entrepreneurs believe that their innovation is so unique and valuable that the whole world will want it, and if a potential customer won’t get it within seconds, it’s only a question of hammering it into their heads.

Don’t try to convince every potential customer to buy your product or service. If they get your innovation within, say, three minutes—excellent. If not, move on.

As you go about selling your product or service in the early stages of your business, you may find specific customers who will get what you’re doing. They’ll cheerfully buy your solution if they could be convinced that your solution can solve a problem they have (or if you can help them recognize a problem that they have but don’t see it yet.)

If you’re starting out, such customers will be your early adopters. At this stage, they’re the ones that are your biggest fans (or critics) and can be an enormous asset for gaining traction by word-of-mouth.

Idea for Impact: Instead of misusing your marketing efforts on convincing all those who don’t get it and may never get it, laser-focus on identifying, courting, and engaging the early adopters.

Wondering what to read next?

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  4. The #1 Clue to Disruptive Business Opportunity
  5. Always Be Ready to Discover What You’re Not Looking For

This Hack Will Help You Think Opportunity Costs: Goals and Anti-Goals

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Goals and Anti-Goals---Opportunity Cost Making decisions is all about opportunity costs. For instance, every time you spend money to get something, you should ask yourself what else, perhaps of better value, you could get with that money—now or later.

The problem is, when forced to choose between something immediate and concrete and something else that’s comparatively abstract and distant, the opportunity cost could lack clarity.

Duke University behavioral economist Dan Ariely proposes the notion of “anti-goals” to help examine the trade-offs you’re forced to make. Ariely encourages pairing goals such that if you satisfy one, you’ll impede the other. For example, when choosing to spend $100 on an evening out today, you can consider a tangible anti-goal—say, saving for the family’s summer vacation—that’ll be held back.

Idea for Impact: Thinking about what you want to avoid—the anti-goal—is a potent tool. It allows you to focus on things that really matter.

Wondering what to read next?

  1. Everything in Life Has an Opportunity Cost
  2. The Simple Life, The Good Life // Book Summary of Greg McKeown’s ‘Essentialism’
  3. What Happens When You Talk About Too Many Goals
  4. More from Less // Book Summary of Richard Koch’s ’80/20 Principle’
  5. Everything Takes Longer Than Anticipated: Hofstadter’s Law [Mental Models]

Five Rules for Leadership Success // Summary of Dave Ulrich’s ‘The Leadership Code’

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The key to success in any discipline is to figure out the few things that must be done really well and to get those basics right. But so many leaders fail on the fundamentals—and don’t even realize it.

The real implication of leadership has been buried deep over the years: leadership isn’t about the position but about who you are and the responsibility you can undertake. Leadership consultants Dave Ulrich, Norm Smallwood, and Kate Sweetman’s The Leadership Code: Five Rules to Lead By (2009) argues that everything you ever need to know about leadership comes down to five straightforward rules.

If you understand these rules and put them into practice, you can’t fail to spur others and enrich teams, organizations, or communities.

'The Leadership Code' by Dave Ulrich (ISBN 1422119017) Rule 1: Be A Strategist. Deliberate leaders answer the question “Where are we going?” and mull over multiple time frames. They institute a great enough sense of urgency and remove impediments to the new vision. They anticipate the future and work with others to determine how to advance from the present to the desired future. Shape the future.

Rule 2: Be an Executor. The “executor” aspect of leadership focuses on the question, “How will we make sure we get to where we are going?” Effective leaders understand how to make change happen, assign accountability, assess plans, coordinate efforts, and share information that should be incorporated into strategies. Make things happen.

Rule 3: Be a Talent Manager. Leaders who engage talent now answer the question, “Who goes with us on our business journey?” They select the right people for the right job and ensure that people have the right tools and autonomy to succeed. Leaders foster an inviting organization, create a high level of performance and passion, and continuously monitor problems that need to be fixed. Engage today’s talent.

Rule 4: Be a Human Capital Developer. Leaders who are talent developers answer the question, “Who stays and sustains the organization for the next generation?” Leaders take the time to become aware of how future trends could affect their organizations. They position their teams to win by bearing in mind the longer-term competencies required for future strategic success. Build the next generation.

Rule 5: Be Proficient. Leadership demands are more daunting than ever, and the pressure to perform is relentless. Create regular timeouts to review where you invest your time and energy to ensure that you remain capable of self-managing your personal strengths and weaknesses and generating new behaviors to deal with new challenges. Invest in yourself.

As with most “rules-for-success” books, the authors tout their assessment of “hundreds of studies, frameworks, and tools.” But their work is no more than a distillation of notable leadership thinkers’ experiences. Nonetheless, the rules sound right. The five rules are simple, but they aren’t easy. They are sensible and practicable. They’re what you can focus your effort on for maximum return.

Recommendation: Quick read The Leadership Code. It makes a great early book choice for new leaders. It provides a grounded approach to the fundamentals.

Never underestimate the power of key leadership principles that can be well executed. Complement The Leadership Code with Peter Drucker’s The Practice of Management (1954; my summary) and Julie Zhuo’s The Making of a Manager (2019; my summary.)

Wondering what to read next?

  1. A Guide to Your First Management Role // Book Summary of Julie Zhuo’s ‘The Making of a Manager’
  2. How to Manage Smart, Powerful Leaders // Book Summary of Jeswald Salacuse’s ‘Leading Leaders’
  3. A Sense of Urgency
  4. To Inspire, Pay Attention to People: The Hawthorne Effect
  5. You Too Can (and Must) Become Effective // Summary of Peter Drucker’s The Effective Executive

What Elon Musk and Jeff Bezos Learn on the Floor

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The Frontline Advantage

What Leaders can Learn

Leaders can learn a great deal on the frontlines, not only about the inner workings of the products they produce and the services they offer but also about their employees:

  • Tesla CEO Elon Musk sees being on the production line and understanding it an integral part of his job. Musk famously declared, “I have a sleeping bag in a conference room adjacent to the production line, which I use quite frequently.” He has helped his California factory hit its production goals—even “real-time triaging cars at the end of the line trying to get to the root cause of what the issues were.”
  • Amazon requires its deskbound managers to attend two days of call-center training. CEO Jeff Bezos said in 2007, “Every new employee, no matter how senior or junior, has to go spend time in our fulfillment centers within the first year of employment. Every two years they do two days of customer service. Everyone has to be able to work in a call center. … I just got recertified about six months ago. The fact that I did a lot of customer service in the first two years has not exempted me.”
  • Subway Restaurants’ chief development officer Don Fertman appeared incognito as a “sandwich artist” for a week on the popular CBS Undercover Boss reality TV show in 2010. Fertman remarked that this ground-level perspective offered managerial empathy and led to better decisions. Subway’s senior-level executives are now required to spend a week every year in the field, becoming aware of how their choices influence franchisees and customers.

Idea for Impact: The frontlines offer leaders unfiltered information

Leaders, don’t risk the ego trap of losing touch with the frontline experience.

Venture out of the office and work directly with frontline employees. Even do the work of those they lead for a while. You’ll break down the hierarchy and glean a valuable new perspective.

Don’t forgo the frontline advantage—that’s where problems are discovered, and solutions are born.

Wondering what to read next?

  1. Lessons from Toyota: Genchi Genbutsu
  2. How Smart Companies Get Smarter: Seek and Solve Systemic Deficiencies
  3. Learning from the World’s Best Learning Organization // Book Summary of ‘The Toyota Way’
  4. Do Your Employees Feel Safe Enough to Tell You the Truth?
  5. Making Tough Decisions with Scant Data

Fail Cheaply

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E-Fan X wind tunnel test model (Courtesy: Airbus)

One way to accelerate innovation is to undertake low-risk experiments.

Failures in the innovation process can be costly and time-consuming. It’s often wiser to try low-risk, low-cost, high-payoff experiments than ruminating endlessly.

Make your experiments cheaper. You don’t need to create a full-scale concept to test it. Find low-cost ways to test your assumptions. It may take time and iteration to find what works for you.

  • Engineers often use surrogate modeling techniques that use simple prototypes and mock-ups that are as representative as possible.
  • Counter to the phrase “it takes money to make money,” shrewd entrepreneurs know how to experiment multiple ways for minimal cost. Next, they scale up one or two experiments that have given them favorable results. The losses are small, and the potential gains much larger.

Idea for Impact: The worst way to fail is slow and big. Don’t eliminate failure. Only reduce the cost of failure.

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  2. Your Product May Be Excellent, But Is There A Market For It?
  3. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”
  4. The #1 Clue to Disruptive Business Opportunity
  5. Finding Potential Problems & Risk Analysis: A Case Study on ‘The Three Faces of Eve’

Avoid Being the Low-Priced Competitor

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In determining how much you’ll charge for your products and services, explore the “price umbrella”—how others are charging for competitive or comparable products.

The key to pricing is knowing how much your service is worth for your client. Charge too little, and you’re short-changing yourself and making your client speculate, “If she’s decent, why does she charge so little?”

Avoid being a low-price competitor. It’s a terrible habit. Don’t announce, “I’m new. I’m trying to get established. Therefore, I’m offering my service for less than the existing players. Please buy from me.”

Avoid Being the Low-priced Competitor Jim Price, an entrepreneurship lecturer at the University of Michigan-Ann Arbor and author of The Launch Lens: 20 Questions Every Entrepreneur Should Ask (2018,) calls this “apologetic pricing.”

Instead, consider the “proud pricing” approach: “We’re launching this business because we firmly believe in our unique value proposition; we look forward to explaining that to customers and charging a premium price for a superior product.”

Positioning yourself as the low-price market offering is a competitive strategy that tends to only work for large, undifferentiated retailers and similar businesses, and it is a poor prescription for entrepreneurial startup success.

Being the low-priced competitor tends to require massive operational and financial scale and often results in an undifferentiated product or service offering and a business with very narrow profit margins.

Idea for Impact: Don’t get stuck in the race to the bottom to be cheaper. Marketing expert Seth Godin has reminded, “Cheaper is the last refuge of the marketer unable to invent a better product and tell a better story.”

Wondering what to read next?

  1. Leo Burnett on Meaning and Purpose
  2. Fail Cheaply
  3. Don’t Try to Convince Every Potential Customer
  4. Clever Marketing Exploits the Anchoring Bias
  5. Beware of Key-Person Dependency Risk