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Entrepreneurship: Striking out on your own

Entrepreneurship

EntrepreneurshipEntrepreneurship is like starting a journey, where you know something about where you want to get to, and little about how you’ll get there. And you rarely end up quite where you expected.

Yet in many ways, entrepreneurship is the driving force behind a national economy. It’s a renewing agent that creates wealth – the acme of the capitalist system

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Mind Mapping – Getting Ideas onto a Page

Mind Mapping

Mind MappingLike many of our big ideas, mind mapping was not new. It introduced itself to a huge new audience, with whom it made the breakthrough from a niche idea to big idea.

In our case, mind maps were a gift from British educator, author and personality, Tony Buzan. And what a gift they were.

A mind map is a simple tool that helps with four vital tasks for any professional (or student):

  1. making notes
  2. sorting ideas
  3. creative thinking
  4. memory retention

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Systems Thinking

Systems Thinking

Systems ThinkingSystems thinking is a big idea that’s remarkably… simple.

It’s a simple idea about complex phenomena. And the principle virtue of systems thinking is that it reminds us that the real world is far from simple.

Indeed, when we try to apply simple solutions to complex problems, the solution tends to fail: often spectacularly. And it’s systems thinking that points us in the right direction. We need to think about the whole messy, complex, inter-connected system, if we are to have any chance of finding a solution that makes our problem better.

If only politicians could grasp this simple fact.

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Lateral Thinking – How not to think Vertically

Lateral Thinking

Lateral ThinkingSome big ideas have become commonplace, and everyone understands them. Others have become commonplace terms, which  we often misuse. Lateral Thinking is one example of the latter. Yet it’s had a big impact over the last fifty years and will, I suspect, continue to do so over the next fifty.

Lateral Thinking is the brainchild of Maltese thinker and educator, Edward de Bono. It first appeared in his short 1967 book, ‘The Use of Lateral Thinking’. And it’s currently still in print, as ‘Lateral Thinking: An Introduction’ (US|UK). But since then, he’s written a whole library on this and related topics.

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The Wisdom of the Crowd

The Wisdom of the Crowd
The Wisdom of the Crowd
The Wisdom of the Crowd

Why do many countries have a legal system that favours a jury over a judge to determine guilt or innocence? The answer is that humans have many times discovered the wisdom of the crowd.

In its modern form, crowdsourcing ideas has become fashionable. But written evidence for this big idea goes back a long way. In his ‘Politics’ Aristotle classifies constitutions.

So why are the many wiser than individual experts? 

It turns out that they aren’t always. But they can be. The better question is when are the many wiser than individual experts?

Continue reading The Wisdom of the Crowd

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Rob Goffee and Gareth Jones: Authentic Leadership

Why should anyone be led by you?

It’s a fair question. And here’s another:

Why should anyone work here?

These two strikingly simple and obvious questions have been answered rather well, by two British management thinkers, Rob Goffee and Gareth Jones.

Rob Goffee & Gareth Jones - Authentic Leadership
Rob Goffee & Gareth Jones – Authentic Leadership

Rob Goffee and Gareth Jones

Rob Goffee is Professor of Organisational Behaviour at the London Business School and is a long term academic. Gareth Jones, on the other hand, has alternated between academic and corporate roles, teaching at LBS too, and also the University of East Anglia, Henley, INSEAD, and currently, IE Business School, in Madrid. But he has also held senior HR roles at Polygram and the BBC.

Authentic Leadership

Their first collaboration was a relatively unremarked book, called The Character of a Corporation. But it introduced ideas that they were to return to in their second, breakthrough book, and then again in their recent fourth book.

Their second book was called Why Should Anyone be Led by You? It introduced a mass business audience to the concept of Authentic Leadership. This was emphatically not their creation, tracking back to classical Greek thinking, and the Delphic injunction to first know yourself.

But their articulation struck a chord. It came at the right time and was delivered compellingly. Goffee and Jones argued that companies are led in far too much of a technocratic way, by people acting as managers and bureaucrats. They lack sufficient human connection with their people, and self awareness about their shortcomings.

Real leaders, they argued, are confident in who they are and what they stand for. They are not afraid to put that on show and constantly act with integrity in the way that they live the values they espouse. They are able to communicate well, and remain true to themselves, whilst still coping with and adapting to rapidly changing events. Consequently, they can inspire people to extraordinary levels of commitment.

Leading Clever People

The next book Goffee and Jones wrote addressed the challenges of leading an organisation or team made of smart, creative people. This is a typical challenge for many of today’s start-up businesses. It is also important for established businesses that want to bring together innovation teams, and for professional service businesses that want to create a great culture. The book is called Clever: Leading Your Smartest, Most Creative People.

A summary of the do’s and don’ts might look like this:

Do

  • Explain and persuade
  • Use expertise
  • Give people space and resources
  • Tell them what
  • Give people time
  • Provide boundaries (simple rules)
  • Give recognition
  • Protect them from the rain
  • Talk straight
  • Give real world challenges with constraints
  • Create a galaxy
  • Conduct and connect
Don’t

  • Tell people what to do
  • Use hierarchy
  • Allow them to burn out
  • Tell them how
  • Interfere
  • Create bureaucracy
  • Give frequent feedback
  • Expose them to politics
  • Use bullsh*t or deceive
  • Build an ivory tower
  • Recruit a star
  • Take the credit as a leader

Creating an Authentic Organisation

Goffee and Jones’ latest book is Why Should Anyone Work Here? It applies many of their earlier ideas to making a great organisation. At its heart is a simple mnemonic that spells out the six ingredients they argue are needed for a ‘dynamic and future-fit’ workplace: DREAMS.

Difference

Diversity increases creativity, which decreases with uniformity. Don’t do diversity because legislation compels you to. Do it because it has a positive impact on the bottom line: more creativity, better decisions, happier workforce.

Radical honesty

(I know – a bit of a fix)

The more open and transparent you are, the happier people will feel. And if being open is likely to expose unfairness that will anger people, radical honesty will compel you to fix the problem, rather than hide it beneath dissembling..

“You need to tell someone the truth before someone else does,” said Jones. “Think of BP’s failure to control information after the [Deepwater Horizon] oil spill. Reputational capital is much more important and much more fragile than we ever thought.”

Extra value

(This acronym-building is tough!)

This is not just about improving the business; it’s about adding value to the people within your business… as a means of improving your business.

Authenticity

There it is… Their earlier work popularised the concept, so its front and centre here too.

But, reflecting on how the ideas have settled in over the years, Goffee and Jones note that in the US, authenticity is too often read as ‘be yourself… find your true north.’ But their view is that an effective leader needs to be ‘yourself more skilfully.’

Meaning

This is about ensuring everyone in the business understands the real purpose behind the tasks they do.

Simple rules

(one last shoe-horn!)

Businesses need systems. But this too easily leads to over-bureaucratisation. Rules need to work for the business and enable staff to do what’s right, not just prevent every single possibility of doing wrong.

 

 

 

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William Gordon and George Prince: Synectics

Creativity is all about having brilliant new ideas.

Go on… Have one now.

Creative ideas don’t just come to us when we want them. The whole process is mysterious, and cannot be called up on demand. Or can it?

Yes, it can. Or so said William Gordon and George Prince. If you know how to, you can find creative solutions when you need them. And their research into the creative process led them to a methodology still used today: Synectics.

George Prince & William Gordon: Synectics
George Prince & William Gordon

William Gordon

William (Bill) Gordon was born in 1919.He attended the University of Pennsylvania, but it is not clear whether he graduated. Between 1950 and 1960, Gordon led the Invention Design Group at consulting firm Arthur D Little & Co. He was, himself, a prolific inventor, with numerous patents to his name.

Synectics had its origins just after the Second World War. Gordon started studying how individuals and groups act creatively. This became more intensive and systematic, leading to him forming the Invention Design Group within Arthur D Little. There, he helped set up synectics groups within several client companies.

It was while leading this team, that Gordon met future Synectics co-founder, George Prince. With two further colleagues, they left Arthur D Little in 1960 to found Synectics Inc. There they pursued further research, developing and selling their model for how to run a creative process.

Also in that year, Gordon wrote ‘Synectics: The Development of Creative Capacity‘.

However, Gordon did not remain at Synectics Inc for long. He left to found Synectics Education Systems, to promote problem‑solving and education based on the use of metaphor.

Gordon died in 2003.

George Prince

George Prince was born in 1918 and grew up in New York State. He attended college at Phillips Exeter Academy and Williams College, graduating in Geology. The second World War saw him serving as a junior officer in the US Navy, in the North Atlantic.

Upon his return, Prince joined an advertising company in Rochester, where he rose to VP. He then learned of the work of Arthur D Little’s Invention Design Group, led by William Gordon. He joined the Arthur D Little company in the 1950s to be a part of that group.

In 1960, he, Gordon and two other colleagues left Arthur D Little to found Synectics Inc (now Synecticsworld). This company researched, developed and promoted their creative problem-solving methodology, Synectics.

Prince remained with the company for most of his, life, as Chairman. In 1970, he wrote ‘The Practice of Creativity‘, which remains in print. He died in 2009.

Synectics

Synectics is a rich methodology for solving problems creatively. However, the principles are easy to grasp:

  • look for alien concepts and things that seem irrelevant, and join them together.
  • Embrace emotions over intellect, and the irrational over the rational.

In applying these principles, Gordon and Prince assumed that the creative process can be described and then taught to others. They also believed that their process, Synectics, will apply widely to different domains of endeavour and can be used by groups and individuals.

They start with a cycling between the ‘operational world’ of routines and procedures, and the ‘innovation world’ of speculation and experimentation. New solutions become more available as we move out of the reality of the operational world, and increasingly embrace fantasy, metaphor, and absurdity.

The process they articulate is at its simplest:

  1. Articulate the task.
  2. Explore options, generating radical ideas that they called ‘Springboards’.
  3. Select the best idea.  Synectics presumes a preference for newness over feasibility at this stage.
  4. Develop that idea, and how it might work in practice.
  5. Put forward your possible solution.

There is a fuller description of the Synectics Problem Solving Process in an earlier article.

Two ideas stick with me from my learning about Synectics many years ago

The first one is the use of ‘How to…’

I love the way Synectics reframes every problem as ‘how to…’ I like it because it presupposes a solution exists and therefor the problem becomes finding it.

And once a selected idea emerges, the emphasis becomes intensely practical. We work on ‘how to make it work’. We constantly articulate the challenges and problems of implementation as ‘how to…’ Each time we solve this, we can modify the trial solution until, with no further issues, we have a possible solution, worthy of putting to the test in the real world.

The second is ‘In and Out Thinking’

Often, when we are in a meeting  particularly a long one that is trying to solve a problem, our minds wander. We have ideas and thoughts that come from ‘inside’, as well as from the meeting: ‘outside’.

We can make best use of these by dividing our notebook page in two – I like to draw a vertical line. On one side, make notes about what you hear or see in the meeting – the Outside thinking. On the other, note down ideas that come from your own thoughts – the Inside thinking. Often these will be connections or distinctions, but sometimes they are seemingly random thoughts. Seemingly, because they are almost certainly triggered by something, but to you, they seem irrelevant, because you are not aware of the link.

Often, these are your Eureka moments.

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W Chan Kim & Renée Mauborgne: Blue Ocean Strategy

So here are your primary strategic choices:

  • Exploit an existing market and beat your competition
    – or –
  • Find a whole new market where there is no competition

These two approaches have been championed by some of the greatest management thinkers and corporate leaders. W Chan Kim & Renée Mauborgne gave these strategies compelling names, and championed the latter in in a phenomenally high-selling book. They called it the Blue Ocean Strategy.

W Chan Kim & Renee Mauborgne
W Chan Kim & Renee Mauborgne

W Chan Kim

W Chan Kim was born in Korea, in 1952. After studying at the University of Michigan’s Ross Business School, he joined the faculty, becoming a professor. In 1992, he moved to the prestigious European Business School, INSEAD, in France, where he is The Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management and Co-Director of the INSEAD Blue Ocean Strategy Institute.

Renée Mauborgne

Like Kim, Renée Mauborgne studied and taught at the University of Michigan Ross Business School. They moved together to INSEAD. Mauborgne is an American, born in 1963 (AVGY). The two have been long term collaborators, and their primary work together has been the research and writing about corporate strategy, which led to the concept and book, called Blue Ocean Strategy.

Blue Ocean Strategy

The 2004 HBR article, Blue Ocean Strategy, and the 2005 book of the same name are both best-sellers. The book’s sales are approaching 4 million. So clearly, if you’re a manager with any interest in business strategy, you need to know about this idea.

The concept is disarmingly simple.

A Blue Ocean Strategy sees a business finding a new market that is unexploited, and creating a market space for itself. Kim and Mauborgne’s metaphor is that Oceans represent market spaces.

They contrast new market spaces (blue oceans) with existing markets (red oceans). Companies that adopt a red ocean strategy focus on beating their competition and for this, an understanding of strategic concepts like Porter’s Five Forces will help.

The critique that Kim and Mauborgne level at red ocean strategies is that they often operate in crowded (or overcrowded) markets, offer limited opportunities for growth, and require lower profit margins. The bottom line impact of a red ocean strategy is, at best, conservative.

Instead of this ‘market-competing’ approach, they advocate a ‘market-creating’ strategy, which places an emphasis on ‘value innovation’. This strategy should see customer value increasing, while costs drop, because (in Porter’s terms) you are targeting differentiation, rather than cost leadership. Differentiate yourself, they say, by finding new demand that competitors cannot yet address, and meet it.

As you’d expect from two leading academics, Kim and Mauborgne have created a Blue Ocean Strategy Institute, which they co-direct, and built a suite of analytical tools for companies to draw down on.

Critique of the Blue Ocean Strategy

The first critique could equally be seen as an endorsement. Their idea is not new. Numerous business strategy thinkers have developed and published similar ideas, like Gary Hamel, C K Prahalad, Kenichi Ohmae, and even the venerable Igor Ansoff.

The second critique is harder for Kim and Mauborgne to shake. There is little or no empirical evidence that their strategy works, in the sense of creating lasting competitive advantage through its deliberate application.

Without a doubt, businesses have innovated throughout history, creating new markets from nowhere. And many of them have gone on to maintain dominant positions for many years. You cannot argue with the thesis that finding a Blue Ocean and quickly becoming the top predator there works. Their book is full of modern case studies.

But, who has read the book, decided to launch a blue ocean strategy, applied the tools, found some blue ocean, and created a dominant position?

The counter to this argument is: ‘it’s only been a few years’. But as time goes on, we are waiting for the evidence.

So, what is Blue Ocean Strategy?

Is it an innovative management theory that contains a deep new insight backed by rigorous research?

Or is it a brilliantly packaged re-casting of familiar and self-evident ideas, illustrated by a number of compelling case studies?

I leave you to judge.

 

 

 

 

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Robert Tannenbaum & Warren Schmidt: Leadership Continuum

Among many types of model of leadership is one that is particularly useful to practical day-to-day managers: situational leadership. And by far the best version of this idea was developed by two UCLA professors, Robert Tannenbaum and Warren Schmidt. Their 1958 article (reprinted in 1973) is one of the most reprinted from Harvard Business Review.

Robert Tannenbaum & Warren Schmidt
Robert Tannenbaum & Warren Schmidt

Robert Tannenbaum

Robert Tannenbaum was born in 1916, in Colorado. He studied at The University of Chicago, gaining an AB in Business Administration in 1937, and his MBA in 1938. The following year, he started his PhD in Industrial Relations also at Chicago, but his studies were interrupted by the war.

After serving as a Lieutenant in the US Navy, he returned to his PhD, which he defended in 1948. From there, he went to teach at the UCLA’s Anderson School of Management, where he remained until his retirement in 1977.

Warren H Schmidt

Warren Schmidt was born in 1920, in Detroit, and took a Bachelor’s degree in Journalism at Wayne State University. He then became ordained as a Lutheran minister.

He changed direction again, and after gaining his PhD in Psychology at Washington University, he went to teach at the University of Southern California and UCLA’s Anderson School of Management, where he met Tannenbaum.

By the by, Schmidt is the first of our Management Thinkers and Doers who has won an Oscar. In 1969, he wrote an Op Ed piece for the LA times, titled ‘Is it Always Right to be Right’. This was well received and turned into a short animated movie, narrated by Orson Welles. It won the Academy Award for Best Short Animated Film in 1970.

The Leadership Behaviours Continuum

In what is regarded as a classic 1958 Harvard Business Review article, ‘How to Choose a Leadership Pattern‘, Robert Tannenbaum and Warren H Schmidt set out a range of leadership behaviours.  They set out seven distinct stages on a continuum, which vary from telling team members their decision, through selling their idea and consulting on the problem, to handing over decision-making.

Tannenbaum & Schmidt - Leadership Behaviour Continuum
Tannenbaum & Schmidt – Leadership Behaviour Continuum
A range of behaviours from the purely authoritarian ‘Manager makes a decision and announces it’ through five intermediate styles, to the most democratic ‘Manager allows group to make a decision’ within appropriate constraints.

Equally valuable is their assessment of how a manager can decide how to lead and choose which of the styles will work best.  They argue you must consider three forces:

  • Forces in the manager
    Your values and style, and your assessment of the risk
  • Forces in the team-members
    Your assessment of their readiness and enthusiasm to assume responsibility
  • Forces in the situation
    Time pressure, the group’s effectiveness, organisational culture

This article is a foundation for what is now known as ‘Situational Leadership, and the two trademarked models developed by Paul Hersey and Kenneth Blanchard.

The Seven Leadership Behaviours

1. Manager makes the decision and announces it
This is a purely authoritarian style of leadership, with no consideration given to other points of view. Most appropriate in a crisis, the manager sets clear instructions and expectations.

2. Manager ‘sells’ their decision
The manager takes  the role of decision-maker but advocates their decision, appealing to  benefits to the group. Valuable when you need the group’s support.

3. Manager presents their decision and invites questions
The manager is still in control, but allows the group to explore the ideas to better understand the decision. The manager answers to their team, without committing to honour their opinions.

4. Manager presents a tentative decision, subject to change
Now the group’s opinions can count. The manager identifies and resolves the problem, but consults their team before making their own decision.

5. Manager presents the problem, gets suggestions and then makes a decision
Still the manager retains ultimate decision-making authority. But now, they share responsibility for finding the solution with the group, who can influence the final decision.

6. Manager defines the limits within which the group makes the decision
Now decision-making sits with the team. The manager defines the problem and sets boundaries within which the group can operate, which may constrain the final decision.

7. Manager allows group to make decision, subject to organisational constraints
The group has as much freedom as the manager is able to grant them. The manager may help the group and again, commits to respect the decision the group arrives at.

For More Information

This model is fully described, with analysis, in The Management Models Pocketbook.

 

GAC RIP 2/5/2010

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Hirotaka Takeuchi & Ikujiro Nonaka: Scrum Development

Hirotaka Takeuchi and Ikujiro Nonaka have featured in an earlier Pocketblog, which was focused on Nonaka and the work  he led on how knowledge can transform organisations.

Arguably, it is how Nonaka and Takeuchi took some of their thinking forward that has led to a far bigger transformation. In 1985, they co-wrote an article for the January 1986 edition of Harvard Business Review. Called ‘The New New Product Development Game’, this article was instrumental in revolutionising the discipline of Project Management.

Takeuchi and Nonaka gave us a new way of thinking about how to develop products and deliver projects. And they coined an evocative sporting metaphor for their process, which has stuck: Scrum.

Hirotaka Takeuchi & Ikujiro Nonaka
Hirotaka Takeuchi & Ikujiro Nonaka

Ikujiro Nonaka

Born in 1935, Ikujiro Nonaka gained a BS in political science at Waseda University, then started work at Fuji Electric, where he created their management programme. Nonaka left Fuji in 1967, to study at the University of California, Berkeley. He was awarded his MBA in 1968, and his PhD in Business Administration, in 1972. He took posts at US universities, before returning to Japan, as a professor at the Graduate School of International Corporate Strategy, Hitotsubashi University.

Hirotaka Takeushi

Born in 1946, Hirotaka Takeuchi got his BA from the International Christian University, Tokyo. After a short spell working at McCann-Erickson, he went to the University of California, Berkeley, where he got his MBA in 1971, and his PhD in 1977. During his time at Berkeley, he also worked summers for McKinsey & Company in Tokyo and, more important, met Nonaka.

Takeushi took a lectureship at Harvard in 1976 until 1983, when he joined Hitotsubashi University School of Commerce, where he became a full professor and Dean of the Graduate School of International Corporate Strategy. He stayed until 2010, when he returned to Harvard, as Professor of Management Practice, where he is now.

The New New Product Development Game.

In January 1986, Harvard Business Review published ‘The New New Product Development Game‘ by Takeuchi and Nonaka. This was about a new way to do New Product Development, or NPD. They drew on the idea of ‘ba’ – a Japanese coinage of Nonaka’s, meaning a meeting place for minds and the energy that draws out knowledge and creates new ideas.

They also took a look at the Toyota idea of teams coming together to solve problems. They introduced a sporting metaphor from the game of Rugby; that of the scrum. They used scrum to denote the way teams work together intensively when the ball goes out of play. In a work environment that demands creativity and innovative problem solving, this is just what is needed.

They followed this article up with a 1995 book, ‘The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation‘. This looks at the way Japan became a major economic power, especially in the automotive and electronics industries. they argue that Japanese firms are successful because they create new knowledge to produce successful products and technologies.

Scrum Teams

The model they created for Scrum Teams is of a cross functional group that can work autonomously to resolve its own problems. Their organisation is ’emergent’ meaning there is no assigned leadership or structure; it just emerges from the effective collaboration of its members.

To work best, a Scrum Team needs to be co-located, and work together full-time. This allows a high level of cross-fertilisation of ideas, and a dedication to working on their shared problems, tasks, and initiatives.

Scrum as an Agile Project Management Methodology

Agile project management seeks to avoid the all-or-nothing approach to projects that used to characterise traditional approaches – especially when done in a way that slavishly follows a set of ‘rules’. Although good project managers have always incorporated a lot of plan-do-review (the Deming Cycle), the growth of software development projects demanded an increase focus on agility and incrementalism.

This was the basis of the Agile movement and today the single most widely used Agile methodology takes its name and guiding principles from Takeuchi and Nonaka’s metaphor: Scrum.

In Scrum projects, a Product Owner is responsible for detailing the business requirements and ensuring that the business gets a good return on its product development investment (RoI). The Scrum Team, led by a Scrum Master, selects one subset of functionality from a product backlog of undeveloped functions, divides it into tasks, and works intensively on developing the outputs for a fixed time, known as a Sprint, which is usually 30 days.

Each day, the team gets together for a daily Scrum Meeting to share learning, report progress, discuss challenges, and solve problems. At the end of the sprint, the team should produce a working product that is stable and useful. After a reflection and learning process, the team then works with the product owner to define the subset of functionality it will work on in the next sprint.

The team continues like this until the Product Owner concludes that the next sprint would not create enough additional value to justify the incremental cost.

The Scrum Project Management Lifecycle
The Scrum Project Management Lifecycle

 

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