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Decision Making

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics This is part of an extended course in management.


In understanding decision-making, there are three key things to focus on:

  1. Using a structured process
  2. The role of intuition, gut instinct and hunches
  3. The effects of bias and automatic thinking

Let’s look at each of these in turn.

Structured Decision Making Process

… like the example below.

Structured Decision Process

One of the most important choices in your decision process will be whether to go for an adversarial process of setting the options against one another – perhaps even having advocates for each, competing with one another to win the decision – or to go for a process of inquiry, learning as much as you can before assessing the options.

Intuition

Although Malcolm Gladwell received a lot of attention for his book Blink, his work leans heavily on the research by Gary Klein and his books, The Power of Intuition and the more technical Sources of Power are first rate.  Klein shows how, in domains that are very complex and in which you have extensive experience, your intuition can quickly get you to the right understanding, well ahead of your ability to explain why or how you reached the conclusion you did.  But, if you don’t have sufficient experience, then your hunches are likely to be wrong, due to the existence of…

Bias and Automatic Thinking

Two psychologists, Daniel Kahnemann and Amos Tversky, were responsible for overthrowing the crude assumption that economics is based on rational decisions.  In fact, they showed that many decisions are a result of automatic thinking and biases.  The automatic thinking is a short cut that works well in the domains in which humans evolved, but leads frequently to wrong answers in a modern world context.  An example is the ‘horns and halo effect’ and another is our bias towards noticing examples that confirm what we believe to be true, whilst being blind to counter examples.  Daniel Kahnemann wrote the wonderful ‘Thinking, Fast and Slow’ to summarise a life’s research and it is, without a doubt, one of the most important and stimulating reads of the last few years.

Further Reading

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John Adair’s Four-D System

The Management Pocketbooks Pocket Correspondence Course

Pocketblog is going back to basics. This is part of an extended course in management skills.


Time management is a vital part of your personal effectiveness.  As a manager, you will face greater time challenges than you did as a team member; but you will also have additional resources and greater flexibility in how you use your time.

One of the simplest and most powerful time management approaches is John Adair’s Four-D System.  This is documented in his (now out of print) Handbook of Management and Leadership.

Adair starts with a standard Eisenhower Matrix putting urgency against importance.

Urgent&Important

Adair then identifies starting time management strategy for each class of activities:

  1. Do it now
  2. Delay it until you have some good quality time
  3. Do it quickly
  4. Drop it or Delegate it

Critique

As always, John has identified a powerful model with real practical application.  Yet I can’t help feeling we must modify it a little.  Here are three ways you can make it even more effective still:

Priorities

Although the urgency suggests that box 1 is top priority, this creates a high stress, low sustainability work style.  Prioritise box 2 and you will find yourself planning and preparing ahead of urgency and so find less work falls into box 1.

Drop or delegate… Really?

If it is not worth your time to do it, why is it worth someone else’s time?  Yes it may be important enough for someone else to do it, but don’t just Dump it on someone to avoid an assertive NO.  Indeed, get in the habit of delegating Box 1, 2, and 3 tasks too, to develop the people who work for you.

More Ds…

We’ve already added Dump, but I don’t propose to honour it with emphasis.  But Diminish is a powerful strategy.  Look at the task and ask: ‘do I need to do all of it?’  If you can reduce the work required and still deliver all or most of the value, you will save valuable time.  And there is another D: Decide.  You need to decide which strategy to adopt.  Unless, that is, you Defer your decision.  If you do that as an example of purposive procrastination* it is a sound approach.

Exercise

Make an Eisenhower grid on a whiteboard or on the four panels of a door, or in your notebook.  Use post-it type notes to jot down all the tasks facing you (big for the whiteboard/door or small for your notebook).  Allocate the notes to one of the four quadrants.  If everything is at the top left, re-calibrate your mental scales for importance and urgency.

Further Reading


*Purposive Procrastination: putting something off because there will be a better time to tackle it.

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Scientific Management

Scientific Management
Scientific Management
Scientific Management

Scientific Management was the first real revolution in management thinking. And it owes much of its vigour and many of its flaws to its founder, Frederick Winslow Taylor.

In the closing years of the nineteenth century, Taylor was observing inefficiencies in the manufacturing plants of the United States. And he was finding patterns of disincentives, poor work practices, and waste. If only, he thought, the modern workplace could be revolutionised by the Scientific Method. And he was the man to set about it. In so-doing, he created the discipline of Scientific Management.

Continue reading Scientific Management

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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.

Continue reading Lateral Thinking – How not to think Vertically

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The Halo Effect

The Halo Effect
The Halo Effect
The Halo Effect

The thing about cognitive biases is their pervasiveness. They can affect all areas of our thinking. But some have a bigger impact on management, leadership, and business decisions. And one example is the Halo Effect.

The halo effect can take a single example of excellence, and create the impression that we have a star in our midst. This could be company results, an effective middle manager, or a new hire.

With all of these, we have the ability to see something great and assume it is part of a pattern. The evidence for this may be lacking. Indeed, it may be a one-off hot-spot in a field of mediocrity.

Continue reading The Halo Effect

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Management Doers – A Retrospective

When I created the Management Thinkers series of articles, I always intended a proportion of the thinkers to be doers too: entrepreneurs, business leaders, and management practitioners.

In the course of over 160 articles, and nearly 200 eminent individuals, I reckon (because I’ve not counted) around 40 to 50 of them have been active practitioners.

A Range to Choose from

Some of those are pure business-people: entrepreneurs, managers and business leaders. Others have been managers at one stage of their career, and then moved into academic or thought leadership roles. If I were to include all the intellectuals and academics who have monetised their thinking with paid consulting, we’d be up to pretty nearly 100 per cent, I’d guess.

So I have plenty to choose from in selecting my favourites for you.

Next week, we start afresh with a new style of article, so I want you to be able to review my list (if you choose) in good time. This list is therefore as restrained as I could make it.

My Top Pick

And I’m starting with Jane ni Dhulchaointigh. She gets my top place for not just being a massive inspiration and someone I’d not heard of before researching her post. She is also the only entrepreneur, business leader whose product I went out and bought as a result of researching the post. Check out Sugru, if you’ve not heard of it. If you have stuff to fix, or want to adapt things to work a little differently, you need some Sugru in your fridge.

Jane ni Dhulchaointigh

Top Performer, Financially

My next pick is Warren Buffett, legendary chairman of Berkshire Hathaway. I’d buy one of Berkshire Hathaway’s shares if they didn’t cost nearly as much as my house… each. Trading at over a quarter of a million US Dollars ($250,000) per share, you can get a sense of the genius of Buffett and his long-term business partner, Charlie Munger, by looking at the stock price in 1995 ($25,000) and 1965 ($19).

Top Entrepreneurs

Of course, we can learn a lot too from business leaders. I’ll select Jeff Bezos (Amazon), Ingvar Kamprad (IKEA), Mary Kay Ash (Mary Kay), Estee Lauder (Estee Lauder), Walt Disney (Disney), Zhang Yin (Nine Dragons), and George Eastman Kodak), as entrepreneurs who grew massive business empires and who have valuable lessons to teach us.

Top Philanthropists

Eastman was also a philanthropist and ahead of his time in the way he treated his workforce. So too was Robert Owen. His ideas management over pure command and control seem to us now, 160 years on, to be fresh and modern. I knew nothing of Owen before researching the article, and he blew me away.

Top Managers

Among pure managers and business leaders, two names stood out: a classic in Jack Welch (General Electric), and a modern hero in Indra Nooyi (PepsiCo).

Who would you pick?

Take a look at the full list of our Management Thinkers and Doers.

Who would you pick as your favourites, and why?

And who did we miss?

I’ll respond to every comment, and maybe do an article on any suggestions that I like.

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Management Thinkers – A Retrospective

Nearly 200 Great Management Minds

For over three years now, we’ve been running an extended series of articles about some of the finest management thinkers (and doers). Over 150 articles representing very nearly 200 great minds. I used to think our 18 month Pocket Correspondence Course series was a big project!

But all things must end. I’ve decided to wrap up this particular series. It isn’t that there are no more management thinkers, business leaders, and entrepreneurs of note.There are plenty. But it’s time to move on.

I may return to this theme for occasional one-offs, but from October, we’ll start something new.

Choosing Favourites

So, before we do, I’d like to highlight a few of my favourites. There’s no rhyme or reason to this list. They aren’t the best thinkers, nor the best articles.

I’ve chosen:

  • some because they taught me something new,
  • some because I liked the ideas,
  • some because I’m proud of the article, and
  • some because reading them again made me smile.

But preparing this was a deep pleasure. I indulged myself in re-reading a lot of content: between 125,000 and 150,00 words. That’s about half the length of Game of Thrones!

Winning the Game

The First Thing I noticed…

Was how many women made it onto my long-list of 30. There were 14, yet in the series overall around 33 percent of the people featured were women. Indeed, with the single thinkers, I set out to maintain a one-in-three ratio throughout.

So here are my selections of my very favourites…

and my reasoning:

Amy Cuddy and Teresa Amabile – because in doing both of these, I found that the work that most interested me of theirs is not the work they are famous for.

Marshall McLuhan because I finally got to learn more than just a slogan, and the Woody Allen clip still makes me smile like it did when I saw Annie Hall in the cinema.

Henri Fayol, Lotte Bailyn, Edgar Schein, Rensis Likert, and Mary Parker Follett, because I knew nothing of their work before I researched them, and what I found blew me away.

Brené Brown and Susan Cain, because they are redefining what it means to be a leader and an innovator in the modern world.

Robert Cialdini, Mihaly Csikszentmihalyi, Philip Tetlock, Nancy Duarte, and Robert Greenleaf, because their work has taught me a whole lot over the years, and I find myself constantly referring to it.

Julia Galef, Amy Edmondson, and Liz Wiseman, because their ideas grabbed me.

That’s 17. Not a magic number, and I’m sorry to have left out 13 from my long-list.

But it’s more than enough.

Between now and next week, read a couple each day, and 7 over the weekend.

Next week, I have my favourites among the managers, business leaders, and entrepreneurs who innovated and led with astonishing insight and efficacy.

Who would you pick?

Take a look at the full list of our Management Thinkers and Doers.

Who would you pick as your favourites, and why?

And who did we miss?

I’ll respond to every comment, and maybe do an article on any suggestions that I like.

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Kenneth Thomas & Ralph Kilmann: Conflict Modes

 

Kenneth Thomas & Ralph Kilmann - Conflict Modes
Kenneth Thomas & Ralph Kilmann – Conflict Modes

Kenneth Thomas

Kenneth Thomas gained his BA from Pomona College in 1968, quickly becoming a research Fellow at Harvard for a year. He then started a PhD in Administrative Sciences at Purdue University, whilst holding a junior teaching position at University of California, Los Angeles. It was at UCLA, that Thomas met Ralph Kilmann, who joined the doctoral program.

Ken Thomas stayed at UCLA until 1977. He then went on to hold a series of academic appointments; Temple University (1977-81), University of Pittsburg (where Kilmann was then teaching) from 1981-6, and then the US Naval Postgraduate School. He retired from academic work in 2004.

Ralph Kilmann

Ralph Kilmann studied for his BS in Graphic Arts Management (graduated 1968) and his MS in Industrial Administration (1970) at Carnegie Mellon University. He then went to UCLA to study for a PhD in Behavioural Science. There, Kenneth Thomas was part of the faculty whilst himself working on a PhD.

Kilmann rapidly became interested in Thomas’ research into conflict and conflict modes. They shared a dissatisfaction with the methodology of Blake and Mouton’s version, though they liked the underlying styles and structure. Kilmann focused his studies on the methodologies for creating a robust assessment.

Publishing the Thomas Kilmann Conflict Mode Inventory

Together, they published their work in 1974. Partly by luck and partly good judgement, they chose not to include their 30-question assessment inventory in the academic paper they published. Instead, they took it to a publisher, who made it a widely-used tool. It is still published by the successor (by acquisition) of that original publisher.

Over the years, they have worked with their publisher to use the vast data sets now available to increase the reliability of the instrument, and extend its use to multiple cultures.

The questionnaire has 30 pairs of statements, of equal social desirability, from which you would select one that best represents what you would do. It takes around 15 minutes to complete. It is not a psychometric and requires no qualification to administer and interpret. So, it can be readily used to support training and coaching interventions around conflict with groups and individuals.

The Thomas Kilmann Conflict Mode Inventory

Kenneth Thomas and Ralph Kilmann are neither the first nor last to categorise your possible responses but, measured by popularity, they are by far the most successful. Like Jay Hall before them and Ron Kraybill later, their model looks at our responses on two axes.

The first axis is ‘Assertiveness’, or the extent to which we focus on our own agenda. The second is ‘Cooperation’, or our focus on our relationship with the other person.

 

Thomas Kilmann Conflict Modes
Thomas Kilmann Conflict Modes

The Five Conflict Modes

As with other models, there are five Thomas-Kilmann Conflict Modes.

Competing

A high degree of assertive behaviour, with little focus on the relationship, is referred to as Competing. In this mode, we seek to win above all else. It is a suitable style when success is vital, you know you are right, and there is a time pressure.

Accommodating

The opposite extreme is Accommodating. Highly cooperative and non-assertive behaviour is useful when you realise the other person is right, or when preserving the relationship or building emotional credit is foremost in your strategy.

Avoiding

When we want to invest little effort in the conflict, we use the Avoiding mode. With no effort deployed in either getting what we want or building a relationship, this is appropriate for trivial conflicts, or when we judge it is the wrong time to deal with the conflict. This may be due to hot tempers or a lack of sufficient preparation.

Compromising

The good old 50-50 solution is Compromising. When you and I give up equal portions of our objectives, neither gets what we want, but it seems fair. Likewise, whilst our relationship is not optimised, neither is it much harmed. Compromise suits a wide range of scenarios.

Collaborating

What can be better than compromise? When the matter is sufficiently important, it is worth putting in the time and effort to really get what you want … and build your relationship at the same time. This is the Collaborating mode, sometimes called “win-win”. Reserve it for when the outcomes justify the investment it takes.

Critique of the Thomas Kilmann Conflict Mode Inventory

The Thomas Kilmann Instrument has its critics. Many users find the forced choice questionnaire frustrating – sometimes wanting to select both options; sometimes neither. There are also concerns about applying the examples to users’ real-world contexts. Unlike the Kraybill tool it lacks distinction between normal and stress conditions.

Accepting these weaknesses, the model finds a range of useful applications, even beyond conflict; in team development, change management and negotiation, to name three. Above all, consider it because most users value the insights it gives them.

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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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Tom Peters & Robert Waterman: In Search of Excellence

Management literature is chock-full of books about the best companies and how to emulate them. Arguably the best of all these books is Tom Peters’ and Robert Waterman’s In Search of Excellence.

After 35 years, the book remains in print and, while some of its exemplars have not proved to show such enduring excellence, the ideas persist.

Tom Peters & Robert Waterman - In Search of Excellence
Tom Peters & Robert Waterman – In Search of Excellence

Tom Peters

We have covered Tom Peters in some depth in an earlier Pocketblog. He was born in 1942 and went to Cornell University on a US Navy scholarship. He earned a bachelor’s degree in Civil Engineering and served for four years in the US Navy. Following that, he got a PhD in Organisational Behaviour from Stanford University.

In 1974, he joined US management consulting firm McKinsey in their San Fransisco office, quickly becoming a partner. There, he took on a major research project looking at the organisational and implementation aspects of companies, while colleagues in the New York office got the plum research project around strategy.

As Peter’s project matured, long-serving McKinsey colleague, Robert Waterman, became involved, and their work morphed into the McKinsey 7S Model and then into the book, In Search of Excellence.

Robert Waterman

Robert Waterman grew up in the US during the war and attended the Colorado School of Mines, where he graduated in 1958 with a Bachelor’s degree in Geophysics. He then went on to gain an MBA from Stanford University in 1961.

He joined McKinsey in 1964 and remained with the firm until 1985, leaving as a senior director and a member of the Firm’s Executive Committee. He working in Australia and the San Francisco office. It was in the latter that he met and started to work with Tom Peters on the project that would become the book, In Search of Excellence.

When Peters was fired from McKinsey for an article that was read as denigrating strategy in favour of operations and implementation, Waterman remained with the firm. Peters was granted 50 per cent of the royalties of the book the two were working on. McKinsey retained the 50per cent share for Waterman’s half.

Eventually, this hard line rankled and Waterman left the firm. He co-founded energy firm AES, and served on a number of corporate boards. Increasingly his non-executive roles focus on not-for-profits.

The McKinsey 7S Model

In researching ‘cool’ companies, Peter began to assemble a humanistic set of criteria for what made them work well. He was working against the paradigm of rigid strategic planning and financial focus. This theme would be picked up again ten years later by Kaplan and Norton.

Working with Waterman and Julien Phillips, they synthesised his findings into seven mutually interacting areas of business focus that need to be addressed and co-ordinated.

McKinsey 7-S Framework
McKinsey 7-S Framework

We have written more fully about this framework in an earlier article.

In Search of Excellence

In Search of Excellence evolved from unstructured research into a two-day, 700-slide seminar that Peters gave in Germany, to Siemens. Invited to do the same for PepsiCo, Peters was requested to trim down and focus his presentation. The result was eight key lessons he drew from his research.

These eight lessons were to become the core eight chapters of In Search of Excellence:

  1. A bias for action
    ‘Getting on with doing the job’. Rapid decision-making unhampered by bureaucracy. This has since morphed into the concept of ‘Agility’.
  2. Close to the customer
    Trying to serve each customer as an individual. This has since become business orthodoxy.
  3. Autonomy and entrepreneurship
    Each part of the business acts as an entrepreneurial centre, rather than as a part of a machine. This creates greater innovation. Now, of course, entrepreneurialism is part of the zeitgeist.
  4. Productivity through people
    Individual contributors are the source of quality. Peters and Waterman were fundamentally in the humanist management tradition.
  5. Hands-on, value-driven
    The 7-S framework started with shared vales. These need to guide everyday practice.
  6. Stick to the knitting
    Stay with the business that you know; your core competencies. Diversification carries big risks.
  7. Simple form, lean staff
    Some of the best companies have small headquarters and simple process. What company or public authority has escaped the ‘Lean’ revolution?
  8. Simultaneous loose-tight properties
    Centralised values, but autonomous operational choices combine the stability of a large organisation with the adaptability of a small one. Many start-ups are seeing the same challenge as they grow, from the opposite direction to Peters’ and Waterman’s large corporations.

After the Search

Both Peters and Waterman followed up the book with their own takes on what next and, in particular, addressing the shortcomings of their earlier research. But apart from one fascinating interview, I don’t think they have worked together since the two or three years of touring, following the release of their book.

That’s a shame. Two remarkable minds came together and, arguably, each did their best work in collaboration with the other.

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