Marina Gorbis's Blog, page 1465

Develop Strategic Thinkers Throughout Your Organization

In study after study, strategic thinkers are found to be among the most highly effective leaders. And while there is an abundance of courses, books, articles and opinions on the process of strategic planning, the focus is typically on an isolated process that might happen once or twice per year. In contrast, a true strategic leader thinks and acts strategically every day.

So is there a way to encourage routine strategic thinking throughout the organization?

I would say yes – and that it’s the most important thing you can do as a leader. In 2013, Management Research Group (MRG) completed a large scale global study addressing this question. We evaluated the leadership practices and effectiveness of 60,000 managers and executives in 140+ countries and 26 industries. Each participant was assessed with the Leadership Effectiveness Analysis (LEA), a 360-degree assessment tool measuring 22 leadership practices and more than 20 measures of effectiveness. Leadership included such practices as innovation, persuasion, communication, and results orientation, while measures of effectiveness included such characteristics as future potential, credibility, business aptitude, and people skills.

We found that a strategic approach to leadership was, on average, 10 times more important to the perception of effectiveness than other behaviors studied. It was twice as important as communication (the second most important behavior) and almost 50 times more important than hands-on tactical behaviors. (This doesn’t mean that tactical behaviors aren’t important, but they don’t differentiate the highly effective leaders from everyone else.)

Strategic leaders take a broad, long-range approach to problem-solving and decision-making that involves objective analysis, thinking ahead, and planning. That means being able to think in multiple time frames, identifying what they are trying to accomplish over time and what has to happen now, in six months, in a year, in three years, to get there. It also means thinking systemically. That is, identifying the impact of their decisions on various segments of the organization—including internal departments, personnel, suppliers and customers.

In our study, the leaders who scored well on those skills were six times more likely to be seen as effective as the leaders that were low on them, independent of any of their other behaviors. They were also four times more likely to be seen as individuals with significant future potential within their organizations.

In a follow-up study, we investigated the “highly desired” leadership profiles produced by 10,000 senior executives charged with setting the leadership development goals for their respective organizations. When asked to select the leadership behaviors most critical to their organizations’ future success, executives chose strategic 97% of the time.

Both the extensive research results and the high priority senior leaders place on strategic leadership practices reinforce the importance of building this skill and mindset in any leadership development endeavor.

So how can organizations develop strategic leaders?

To be sure, it’s not an easy task. Strategic thinking is a difficult leadership skill to acquire because it is as much a mindset as a set of techniques. What’s more, in the workplace tactical responses to immediate demands are often rewarded over long term vision and planning. That said, it’s not impossible to instill strategic thinking skills in managers.  Here are some ways you can foster strategic thinking as part of your management approach:

Encourage managers to set a regular time aside for strategic planning (alone and in meeting with others). A strategic approach takes time. Make it a regular part of their job.
Provide information to your leaders on the market, the industry, customers, competitors and new technologies that influence your business. One of the key prerequisites of strategic leadership is having relevant and broad  business information that helps leaders elevate their thinking beyond the day-to-day.
Keep people informed on what is happening internally. Effective strategy requires information shared across boundaries; cross-functional teams can work on strategic organizational issues, and the results of their thinking and efforts should be published and shared throughout the organization.
Connect managers with a mentor.  One of the most effective ways to develop your strategic skills is to be mentored by someone who is highly strategic. The ideal mentor is someone who is widely known for his/her ability to keep people focused on strategic objectives and the impact of their actions.
Communicate a well-articulated philosophy, mission and goal statement throughout the organization.  Individuals and groups need to understand the broader organizational strategy in order to stay focused and incorporate it into their own plans and strategies.
Reward people for evidence of thinking, not just reacting; wherever possible, organizational culture should encourage anticipating opportunities and avoiding problems, and discourage crisis management. For example, managers are rewarded for being able to quickly generate several solutions to a given problem and identifying the solution with the greatest long-term benefit for the organization.
Promote a future perspective  for employees by incorporating it into training and development programs; teach people what strategic thinking is and encourage them to ask “why” and “when” questions. When a manager suggests course of action, their boss can ask them to consider what underlying strategic goal this action serves, and what the impact will be on internal and external stakeholders. Consistently asking these two questions whenever action is considered will go a long way towards developing strategic leaders.

Developing a strategic approach is not easy, but the result often makes the difference between an average and an exceptional leader.

Comfortable Music Makes You Dream of Comfort

Research participants who browsed tourist accommodations online were 16 times more likely to prefer a hotel room if they were listening to jazz rather than to West African djembe drumming; those who had heard the drums were more likely to choose campsites or youth hostels, according to research reported in the Wall Street Journal. Jazz may stimulate thoughts of comfort, while drumming may trigger visions of the countryside and adventure, the researchers say.

Scaling Up is a Problem of Both More and Less

Huggy Rao and I like to refer to scaling challenges as the “Problem of More” because they always involve getting some existing seed of excellence to take root in more people and more places. The language of “more” pervades discussions of the topic. Ask any group of executives or nonprofit leaders about scaling, run a web search on “scaling” or “taking to scale,” pore over articles, cases, or research on the topic, you’ll find the dominant words and phrases have to do with addition and multiplication: grow, expand, propagate, replicate, amplify, amass, clone, copy, enlarge, magnify, incubate, accelerate, multiply, roll it out to the masses, and so on.

Venture capitalist Ben Horowitz of Andreessen Horowitz kicks off an inspired post on scaling by quoting the rapper Dorrough, who tells anyone with “a dollar in your pocket, a twenty in your wallet” to focus on one thing: “Get big. Get big. Get big. Get big.”

Yet scaling is also a problem of less. A hallmark of skilled leaders and teams is that, as their organizations grow larger and older, as the footprint of a change program expands, they keep looking for signs of once useful but now unnecessary roles, rules, traditions, processes, products, strategies, and services. To borrow a phrase from author Marshall Goldsmith, they remain vigilant about “what got us here, but won’t get us there.”

A simple example is the all-hands meeting. When an organization is small enough that each member can have a personal relationship with every other, or at least recognize their faces and names, gathering everyone for regular meetings strengthens social bonds and bolsters the feeling that “we are one company.” But an intimate gathering with, say, 500 of your best friends isn’t feasible. My colleague Andy Hargadon noted this when he did an ethnography of the renowned innovation firm IDEO in the 1990s. When the company had 60 or 70 people working at its Palo Alto headquarters, founder and then CEO David Kelley (now Chairman) did a masterful job of orchestrating the “Monday morning,” a weekly 9:00 am gathering. After a brief opening with perhaps some news about the company, a self-deprecating story about himself, or a bit of indiscreet but juicy gossip, Kelley, a skilled facilitator, spent the rest of the meeting calling on people to describe new projects, introducing newcomers, recognizing birthdays, and asking if anyone had seen a good movie or discovered a new technology. Week after week, the field notes revealed that nearly every person in the room contributed at least one comment or joke during these 60-minute gatherings. But once IDEO grew to hundreds of Palo Alto employees, even Kelley couldn’t sustain the intimacy. The Monday all-hands meeting became a vestige of the past and was replaced with smaller gatherings organized around studios and design practices.

As an organization or project grows, and as its challenges change, it not only needs to recognize new priorities, it needs to delete or deemphasize old ones. Scaling becomes a problem of less because humans and human organizations can only handle so much cognitive load. In other words, successful scaling means finding ways to limit the number of things that people are expected to focus on and execute.

A company that Huggy and I have been studying in recent months called BuildDirect uses an intriguing approach to help its people do this. BuildDirect was founded in 1999 by CEO Jeff Booth with his good friend Rob Banks. Booth and Banks each invested $20,000 to start a company that could ship heavy home-improvement products more efficiently. The company has adopted an Amazon-esque strategy; it now owns and operates twelve large warehouses well located to deliver loads of flooring, roofing, and other heavyweight building materials to do-it-yourself homeowners and contractors. The average order size is 1,500 pounds. Early on, BuildDirect had its setbacks and near-death experiences, but in each of the last four years growth has accelerated. Sales doubled in 2013. And after withering down to 40 employees during the 2008 housing crisis, the company now has 175 employees. Just a couple of weeks ago, BuildDirect received $30 million in additional financing led by Venture Capital firm Mohr Davidow. It intends to open two more warehouses and add 300 more employees in 2014.

My conversation with CEO Jeff Booth, and especially, interviews conducted at company headquarters in Vancouver by Stanford graduate student Rebecca Hinds, revealed that BuildDirect uses a dynamic approach to setting priorities. It was inspired by author Steven Covey’s “five rocks” lesson: If you have a fishbowl, five large rocks, sand, and some pebbles, the only way to fit everything in the bowl is to place the five large rocks in first. If you try to fill the bowl with pebbles first, the larger rocks won’t fit on top.

BuildDirect actually displays its “fishbowl” in a central location, so everyone in the organization can be reminded what its five rocks, or key areas of focus, are. These are revisited every two months, and when a new set of rocks is announced, any employee, regardless of the division they are part of, is able to recite the five priorities that should be guiding their thoughts and actions. As Booth explained to Hinds, “Once we make the decision for the five rocks, right or wrong, we’re going to live them for the next 60 days.” (Until 2013, the rocks were reevaluated every 90 days. But BuildDirect’s rapid growth forced a change to that because “90 days was an eternity for us.”)

Each 60-day stretch is followed by a short period of “white space,” including an offsite meeting where employees think strategically and propose new rocks. BuildDirect encourages its people to propose imaginative, off-the-wall, and even downright weird ideas. After all, the company would never have survived the housing crisis if it had been afraid to change its accustomed ways of doing things. Recently, a “white space” brainstorm yielded a clever new idea for marketing, to cobble together a system that could combine customer-behavior insights gained through email, social media, pay-per-click marketing, and other sources. Implementing the model would cost only $100,000 – so the project was quickly declared one of BuildDirect’s five rocks. Based on better customer retention alone, management estimates this innovation has boosted annual revenues by $10 to $20 million.

But obviously, to create space for any new rock, BuildDirect must remove an old rock. In 2013, after people there identified an inefficiency in the order fulfillment process, a plan to automate part of the process was formulated. But the team later determined that implementing the solution would place such a great burden on the small company that it couldn’t be a top priority at that juncture. Without denying that the inefficiency was a problem, BuildDirect decided to take that rock, at least temporarily, out of the fishbowl.

To help more people go about scaling in the way IDEO and BuildDirect have, Huggy and I have created something we call “the subtraction game.” When we do scaling speeches or workshops, we ask people to think (first individually, then in duos or groups) about a few questions: What was once useful but is now in the way? What is adding needless friction? What is scattering your attention? Then we ask them to pick one or two targets that are ripe for subtraction.

We’ve played the subtraction game with groups as small as 16 and as large as 250. These include “high potentials” from a large retail chain, hospital administrators from Norway, and groups of managers and administrators at Stanford University. And while this is just a quick 10- to 15-minute game, we’ve already heard back from teams that followed through. For example, a Fortune 500 company decided to continue it for a month (with the group of 50 executives we initially worked with sending their ideas to the CEO). As a result, many meetings were eliminated and shortened, payment processes were streamlined, redundant work was driven out. On the chance you might try this yourself, I should probably reveal the added motivation, which might have mattered more in a huge company than it would in an entrepreneurial setting. Right before the brainstorming began, the CEO announced that each executive had $5,000 of bonus money riding on what it produced. Evidently it was worth it to him to put a lot of twenties in their wallets to get big. Get big! Get big! Get big!

A big thank you to Rebecca Hinds and Jeff Booth for their help with this post. 

John Cleese Has a Serious Side

The iconic comedian speaks with HBR’s Adi Ignatius about work, life, and, yes, comedy.

Download this podcast

Limit the Time You Spend on Email

Many of us resist the idea of limiting the total amount of time we spend on email. Instead, we allow the volume of email we receive, and the number of messages that require a response, to dictate how much of our day goes to the endless cycle of send and receive.

But letting email set the pace and structure of your working life makes sense only if answering email is the single most important part of your job. Unless you work on the frontlines of customer support, there’s probably a lot of other work that’s more important – even if it doesn’t feel as urgent as the message that just arrived. Committing to a minimum and maximum amount of time you’ll spend on email instead allows you to undertake focused work when you need to – and just as important, to take actual downtime.

The best way to keep email from crowding out the rest of your professional and personal priorities is to set an email budget: a specific amount of time you’ll spend on email, and a plan for how you’ll make the most of that time. Like a financial budget, an email budget helps you make the best use of a limited resource — in this case, your time.

Setting your email budget

Start by determining the total size of your email budget: the amount of time email warrants relative to your other priorities and workload. A good place to start is by looking at how much time you spend on email now, especially if you add up all those quick phone check-ins while you’re in line or on the commuter train, or grabbing a couple of minutes between meetings.  If you reallocated a portion of that time to the incomplete project on your desk, or to the marketing campaign you putting off, or to restorative activities like sleep and exercise, would your professional effectiveness be enhanced or diminished? Use this self-assessment to determine the proportion of your workday that should go to email.

Allocating your email time

Once you’ve determined the size of your email budget, you should divide it up into a series of regular, brief check-ins (10 or 15 minutes maximum) throughout the day along with one or two extended periods of an hour or more per day.  Keep your email program closed (and notifications on your phone off!) outside of your regular email hours and check-ins. Use a note-taking program or a task manager to keep a list of emails you need to send, rather than starting to write each email as it occurs to you, and leaving it open to finish at some later time.

Use the short check-ins to read or reply to time-sensitive items, while immediately deleting anything you don’t need to see at all. During your extended periods of email processing time, tackle messages that will take longer to process — to read or to form a thoughtful response — and try to clear out the day’s accumulation, archiving and sorting through what remains. Recognize that you may not get through every message within the hour you’ve set aside, and allocate your attention accordingly: don’t proceed chronologically through your inbox but rather attack what appear to be the most critical messages first. Also be wary of letting your “email time” go to actual project work: just because you were assigned a task over email doesn’t mean that you should be doing it in your allotted email hour.

Focus on the emails that matter

You will make the most of your limited email time if you spend it actually reading and responding to important messages rather than on the time-consuming task of plowing through a long list of incoming emails that may or may not warrant your attention. That means automating your message triage process in a way that reflects conscious and explicit choices about what kinds of emails you will and won’t read, and when.

Email management tools like Sanebox and Other Inbox offer a quick way to limit the amount of inbound messages you need to scan. You’ll have the greatest control over what hits your inbox if you set up your own set of mail rules or filters, however. This functionality is available in most popular email programs such as Outlook, Gmail, and others; you can find a step-by-step guide to using rules and filters in my latest ebook, Work Smarter: Rule Your Email.

A filter-based triage system sends less-important messages straight to folders, giving the inbox a miss entirely. You can then check those folders as often as you need to — daily for relatively important types of messages, or never for messages you only want to keep on hand for later reference. For example, you might direct all calendar invitations into a scheduling folder that you review at the end of each day, and industry newsletters into a folder that you review once a week. What remains in your primary inbox are just those messages that meet your standard for must-read-now email, a standard you should keep raising until the number of messages in your inbox fits within the email budget you’ve set.

Staying responsive

Setting an email budget doesn’t mean abandoning your commitment to email responsiveness. You’re just focusing on what types of email will get immediate attentions, and identifying some that won’t.

Nonetheless, the very idea of an email budget tends to provoke a range of anxieties. What if I get a message from my boss after after I’ve used up a day’s email time? What if I work in an organization where same-day (same-hour?) turnaround is a universal expectation? What if — worst of all — I miss an important message?

The best way to mitigate these risks is with transparency. Make your plan explicit with colleagues and clients so they know when you’ll respond, and how to reach you in between times. For example, let colleagues know that you always look at your email first thing, or at lunch time, or that you have two hours booked into your schedule every afternoon so that you can focus on email in a meaningful way; that lets them know that they need to email you that memo by 2 pm if they want you to review it.

Even if you communicate your system clearly, living within an email budget is not going to win you any awards for being your company’s fastest or most diligent correspondent. But is that what you want to be known for? Better to set limits that let you be okay at email – and brilliant at the creative, intellectual and leadership work that email would otherwise crowd out.

How Intuit Innovates by Challenging Itself

We know that questioning can trigger innovative thinking. But the key—and challenge—to truly changing the status quo is identifying the right question. In a collaboration to determine just how disruptive leaders find these compelling questions, Professor Clayton Christensen and I conducted nearly 40 interviews with renowned global leaders.

Among these interviews was Brad Smith, president and CEO of Intuit, who shared how he searches for “golden questions” to help uncover a new Grand Challenge—what he defines as “a goal that causes us to step back and think completely different in order to achieve it.”

But how can asking questions in search of a Grand Challenge (and in the subsequent attempt to solve it) translate to a transformative business strategy? What follows is Smith’s questioning journey and the value it has created for Intuit.

An Inquisitive History

Questions were always a part of Smith’s life. In his early childhood, his mother and father allowed him to freely practice his “intense intellectual curiosity” without being judged. Later in life, Scott Cook, Intuit’s founder and one of the most fascinating entrepreneurs of our time, inspired Smith to use questions to get to the heart of what really matters.

“Scott often answers questions with a question—and it’s not deflection,” said Smith. “He’s actually applying the “5 Whys” technique to try to get at what is really behind what you’re answering or asking the question about. I have watched that behavior in other great leaders that I’ve worked with at Pepsi, and I said to myself, ‘There is something here.’”

Disruptive questions change our world, and excel at evoking emotion—or as Smith puts it, “they make your heart beat fast.” This emotional charge lets him know he’s often on the brink of a fascinating discovery — a feeling he reinforced in two recent instances for Intuit:

Grand Challenge #1: 10-Minute Tax Return

 For two decades, Cook dreamed of a 10-minute tax return but it had yet to materialize.

When Smith stepped into the job as CEO, he was committed to moving the company from shrink-wrapped software to cloud-connected services that were social, mobile and global. He flew down to meet with the TurboTax team and talk about this vision. As a result, one of the engineers asked him directly: “What the hell does a mobile phone have to do with taxes?” Smith recognized the value of this question and encouraged the team to find the connection between the two.

Within 18 months, the team figured out a way to photograph your documents using the iPhone camera, let a computer read the data to pre-fill the entire return, and finish the return in less than 10 minutes — what we know as TurboTax’s SnapTax app today. Intuit achieved all of this simply by asking a question that was completely different than anything they had asked in the years before.

Grand Challenge #2: Doubling to 10 Million Active Happy Small Business Customers by 2020

Cook founded Intuit 30 years ago, committed to improving people’s lives. As such, all Intuit work is focused first and foremost on delighting an end-user.

“What are we all about at Intuit?” Cook said. “We are about finding the biggest, most important unsolved problems.  Our mission is to improve people’s lives so profoundly they can’t imagine going back.”

But when Smith asked senior managers “How do we get 20 percent of our revenue outside of the U.S. by 2020?,” he found employees responded with financial logistics instead of concentrating on the customer first. After four years, Smith finally looked in the mirror and realized that he had been asking the wrong question all along.

“Every time I was asking a question about the financials, I was hoping to actually get an answer that was more customer-centered,” Smith told us. “But instead, I was getting the answers to the question that I persistently asked. I had to admit that the questions we ask as leaders set the tone and direction for a company, including Intuit. As leaders, we either cast a false shadow that people aspire to become or we cast a dark shadow that squelches the capability and aspirations of others.”

By changing the focus of the question from revenue to “How will we have 10 million active happy small business customers with some path towards monetization by the year 2020?,” Smith’s teams identified and approached the Grand Challenge completely differently. Before the question switched, for example, Intuit had QuickBooks Online customers  in only five countries. Now they have added 37,000 paying QuickBooks Online customers outside the US along with other customers engaged with some stage of the product in 160 countries.  In fact, on average, a new QuickBooks Online subscriber is now signing up every minute around the globe.

Creating a Question-Centric Culture

While active questioning fosters creative leadership, it does not guarantee creative organizations as a whole. Senior leaders must encourage and create a safe innovation space in order for tomorrow’s decision-makers to carry this imaginative spirit throughout the lifetime of the company. Cook, who considers Intuit a “30-year-old start-up” did exactly this to fuel the billion-dollar business with cutting-edge, innovative ideas.

To embed this philosophy company-wide, Cook and Smith apply a learn-teach culture that invites employees to ask provocative questions and engage in constant experimentation to answer them. To evoke this kind of questioning behavior during boardroom meetings, Smith says a shared understanding of the topic at hand is key. Smith also advises that the positional authority that goes with being a senior leader prompts him to “speak last or simply ask the question that gets the conversation going.”

Interestingly, at the end of every meeting, Intuit leaders ask fellow team members “What was your single biggest learning?”—a question that often surfaces patterns in the organization’s culture and helps them avoid being overly systematic.

Seek Your Grand Challenge

Using Smith’s story as inspiration, I encourage you to ask questions in search of your Grand Challenge—the kind that makes you stop in your tracks and your heart beat faster. By identifying the right query, you’ll ultimately be able to match it to the right answer—and potentially unlock the door to your legacy.

As Smith said, “My personal belief is people want to be a part of something greater than themselves. They want to leave a mark. They want to put a dent in the universe. They want to be remembered.”

So what’s your Grand Challenge going to be?  And more critical, what questions will best help you refine and conquer it?

Make Yourself Sponsor-Worthy

Gauge whether you’re ready for a sponsor by taking this brief assessment.

“I’ve always given 110%,” says Maggie. “Whoever I worked for, I gave them my all, every day, 10 hours a day, weekends and holidays, whatever it took. That endeared me to a lot of powerful men.”

That dedication and loyalty should have made Maggie a star. Yet, although she rose in the organization, because she wasn’t strategic about whom she gave her 110% to, she squandered her gifts on leaders who didn’t invest in her. Without a sponsor to spotlight her attributes, offer her opportunities, and kick her career into high gear for years, she found herself stuck in what she calls “permanent lieutenant syndrome.”

Maggie eventually was fortunate enough to find a sponsor and today is an executive at a global financial advisory firm with 22,000 people reporting to her. But there are thousands of Maggies out there — hardworking, devoted, consistent performers toiling in relative obscurity. How can you break out of the pack and attract a sponsor?

Rather than hoping for a lucky break, focus your energies by making yourself sponsor-worthy. To begin with, you must come through on two obvious fronts: performance and loyalty.

When asked how she had built great relationships with three different sponsors, Sian McIntyre, head of Legal at Lloyd’s Banking Group, says simply, “I’ve delivered.” She hit her targets and deadlines, executed brilliantly on her assignments, and produced outstanding bottom-line results. “They all felt the benefit of that,” McIntyre notes, “and wanted me on board for subsequent projects.”

Loyalty manifests in many different ways: trust that’s earned through repeated demonstration of a dedicated work ethic, commitment to a shared mission, and allegiance to the firm. Winning a sponsor’s trust doesn’t require becoming a toady. On the contrary, showing that you can ultimately be entrusted with a leadership position depends on demonstrating that you will stand up to him or her when necessary.

Tiger Tyagarajan, CEO of Genpact, attributes his success to the bond he cultivated with Pramod Bhasin, his boss and sponsor for 17 years. Because of a deep trust built on shared values, Bhasin would listen when Tiger pushed back. “I’d say, ‘Here’s my logic on this,’ and show him that I understood his logic but also show him why it wouldn’t work. He was amenable to that as long as I kept it private,” Tiger recalls. “We had very different styles, and sometimes we simply agreed to disagree. But in the end, I think that what he valued in me was the very thing that complemented him.”

But performance and loyalty are not enough to get a sponsor’s notice, let alone convince him to invest in you. You’ll need to differentiate yourself from your peers. You’ll need to develop and deploy a personal brand. You’ll need to do something or be someone who can extend a sponsor’s reach and influence by adding distinct value.

What do you bring to the table?

Some protégés add value through their technical expertise or social media savvy. Others derive an enduring identity through fluency in another language or culture. Consider acquiring skills that your job doesn’t require but which set you apart — and make you a stronger contributor to a team. For example, Tiger Tyagarajan had a special ability to build teams from scratch and coach raw talent — an invaluable asset that was key as the firm transitioned from a start-up into a multinational info-tech giant. One 25-year-old sales rep, noting her potential sponsor “wasn’t exactly current in terms of the internet,” took pains to brief her on job candidates whose resumes bristled with technical jargon and references to social media innovation that she simply couldn’t understand, let along assess for relevance. “I just helped educate her so she didn’t come off as some kind of dinosaur,” says the rep, whose tactful teaching gained her a powerful promoter.

Lastly, don’t be shy about your successes. Alert potential sponsors to your valuable assets. Since it can be difficult to toot your own horn, work with peers to sing each other’s praises. A VP at Merrill Lynch described how she and three other women, all high-potential leaders in different divisions of the firm, would meet monthly for lunch to update each other on their projects and accomplishments. The idea was to be ready to talk each other up, should an occasion arise. “So if my boss were to complain about some problem he’s struggling to solve, I could say, ‘You know, you should talk to Lisa in global equities, because she’s had a lot of experience with that,’” this VP explained. “It turned out to be a really effective tactic, because we could be quite compelling about each other’s accomplishments.” In short order, all four women acquired sponsors and were promoted.

Finding the right person to highlight your accomplishments and push you to the top is a hard task, but it’s necessary if you want to break out of the “permanent lieutenant” doldrums. Just doing good work isn’t enough. Take the first step and make yourself not only a hard worker, but an emerging leader worthy of a sponsor.

Gauge whether you’re ready for a sponsor by taking this brief assessment.

Why the X Games Won’t Dethrone the Olympics

A “new model for how winter sports are done” that “feeds an audience hunger for life-treating daredevilry” and drives “high market penetration and . . . high dollars.” Yes, that’s a collection of phrases describing the X Games, a series of athletic competitions created by cable giant ESPN. With the Winter Olympics set to start this week, is it just a matter of time before we can add “disruptor” to the list of words used to describe the upstart?

ESPN started the X Games almost 20 years ago as an effort to reach younger consumers that seemed to be turning away from more traditional sports. We don’t know enough of its finances to know precisely how successful it has been, but with tens of millions of viewers and sponsorship packages north of $2 million, it is a good bet that ESPN has done well on its bet.

Is the X games different? For sure. The brand, set of events, and entire experience has noticeable differences from the Olympics. Does that mean the Olympic organizers ought to wake in a cold sweat worrying if they will join the list of organizations such as Kodak, Blockbuster, and Sears that stumbled in the face of disruptive change?

I don’t think so. The reason why serves as a good reminder of how to assess the full impact of a potentially disruptive innovation.

The process of disruption follows a predictable pattern. An innovator develops a solution that trades off raw performance (the way it historically was defined at least) in the name of simplicity, accessibility, or affordability. The disruptive innovator first targets a market segment that embraces those tradeoffs and builds a business model around simplicity and affordability. The innovator progressively improves its solution, broadening its appeal to wider groups of customers. At some point the historical market leader has to deal with a competitor that provides acceptable quality on old dimensions of performance, far superior performance on new ones, and utilizes a now difficult-to-replicate business model.

So, there are three moments of truth in the life of a disruptive idea:

First, will the idea find a foothold among customers that aren’t well served by existing solutions? The X Games clearly succeed here.

Next, can the disruptive idea improve to move into broader market segments? The X Games has had some success here, experimenting with different types of sports, bringing the brand to different types of competition, and expanding globally.

The final moment of truth — and the one that gives me pause before placing the disruptive stamp on the X Games  —  is how the incumbent responds to an incursion from the upstart.

In a classically disruptive circumstance the disruptor takes advantage of what we dubbed asymmetries of motivation (a phrase borrowed from some great research by Tuck Professor Ron Adner) in Seeing What’s Next. That is, the attacker is motivated to serve markets that are uninteresting to the market leader. As the attacker progresses the incumbent is motivated to retreat to serve more profitable customers. During its up-march, the disruptor continues to sharpen a distinct business model that makes incumbent response increasingly difficult.

There are parts of the X Games model that are certainly difficult for the Olympics to match, most notably its annual schedule. Some of the events that the X Games features are likely to never be adopted by the Olympics. But others certainly are. Snowboarding of course crossed over. This year slopestyle makes the leap.

The truth is, the essence of the X Games — a global athletic competition that awards gold, silver, and bronze medals and makes money through sponsorship and advertising — is not markedly different from the Olympics. The Olympics has smartly kept its eyes on the X Games and other global athletic competitions and jiggered its roster of events in response.

There is no reason to expect anything other than a long co-existence of the X Games and the Olympics. That’s not to say the X Games are a failure in any sense. Using a different approach to create a reasonably big offering is a wonderful thing. But different is not disruptive.

Clayton Christensen always said he regretted describing the phenomena he observed in the hard disk drive industry and summarized in The Innovator’s Dilemma with the word disruptive. The word has so many common meanings that it is easy for people to use it to describe anything big or novel. If you are looking for Christensen-style disruption, carefully look for an innovation that brings simplicity, convenience, or affordable to a historically unsatisfied market, has a path to progress up-market, and does so in a way that is discordant to the market leader. Those are the circumstances when the upstart has the best chances of earning disruptive gold.

How Microsoft Avoided the Peter Principle with Nadella

In one of the most widely scrutinized CEO successions ever, Microsoft directors selected insider Satya Nadella to run the company, only their third CEO pick in the firm’s nearly 40-year history.  His challenges will be enormous. For starters, he will be running a $75 billion+ enterprise with some 100,000 employees, an army of software engineers and many moving parts. For finishers, he will have to change its treads—redirect it strategy—while barreling down a highway with no map for what lies ahead.

Microsoft’s board had considered a revolving roster of candidates over the past several months, from Nokia’s former CEO Stephen Elop (now back at Microsoft) to Ford’s CEO Alan Mulally. In betting on 22-year Microsoft veteran Nadella, the board has wagered the house: Right pick, Microsoft stays competitive with the likes of Apple, Google, and Oracle; Wrong pick, Microsoft is stuck in 2nd gear, or worse.

The vital—though not-soon-to-be answered—question is whether Mr. Nadella brings the right leadership talents not only to run the show but also to grow the enterprise at the center of one of most turbulent and competitive frays on earth.  And that question is likely to be answered in the affirmative if the directors have managed to avoid the Peter Principle.

Those who have been around a bit will remember a book of that name by Laurence J. Peter.  He argued with plenty of supporting material that sometimes companies, having promoted executives to what they were really good at, elevate them one time too many. Great at mid-level, the managers were not game-ready for the next level.

Moreover, reaching the ultimate level of chief executive is not just another move up the corporate ladder. It is a “jump shift,” as Procter & Gamble chairman A.G. Lafley has described it. Prior jobs cannot totally prepare one for the elevated reality, especially when it now requires running the whole show. The stakes rise exponentially when the final level is the corner office because, unlike lesser destinations, the entire enterprise can be put at risk with the wrong choice.

Fortunately, history is not destiny, and that is no doubt why the Microsoft board, under the guidance of lead director John Thompson, devoted so many months to vetting their twenty-some finalists. And what was critical here, in our view, or at any major enterprise for that matter, is for the directors to take the time to watch the candidates in action and to drill down with bottoms up data. An apples-to-apples comparison of the finalists can be vital as well.

Consider the CEO succession process at pharmaceutical giant GlaxoSmithKline beginning in 2004 when chief executive Jean-Pierre Garnier said he would be exiting in three years. That gave the directors plenty of time, and with that luxury, they methodically narrowed the field to three strong successors, all on the inside. During the final year, they added three paths to gather a last round of data:

1) The CEO and directors assigned a year-long CEO-level project to each of the three finalists. The projects all touched on areas of great strategic concern to the company, and the directors required each of the candidates to report their appraisals and plans to the board.

2) The CEO and directors conducted a “450-degree” assessment of each of the candidates, an expansion of the traditional “360” to include an extra “90” degrees:  They asked fourteen executives who had worked with all three finalists to privately compare their strengths for the top job at hand.

3) They arranged for a one-on-one lunch or dinner for each of the three candidates with each of the company’s sixteen directors.

No one piece of evidence yielded a killer conclusion, but the three sources taken together led to the appointment of dark-horse candidate Andrew Witty as the next CEO.  Even the sitting CEO who knew the three finalists as well as anybody was surprised.

By way of underscoring the power of the bottom-up appraisal, America’s special forces have utilized a similar method in selecting those who will join the nation’s most elite missions. Gathering appraisals from other special-forces personnel on the final candidates—from fellow service members who have seen the finalists on the ground or even in combat—has proven a telling source.

Or consider managed-health care provider Humana’s decision in 2013 to recruit an outsider as its next chief executive. William J. McDonald, who chaired the board’s committee that led the succession process, explained why it had gone to the outside. “I think one of the biggest mistakes boards make is to assess people only in the context of their current jobs.” Becoming a CEO is a far more expansive and demanding job, and he and his fellow directors worried whether the inside talent was then ready for the catapult upward.  “People can change dramatically when they get the brass ring,” he warned.

Most CEO candidates for large companies—like Satya Nadella at Microsoft—emerge from within, and that by definition can give the board the time it needs to vet the candidates in these several ways. But even if insiders are not yet ready, Humana’s McDonald explained that succession is all about “lead time, lead time, lead time.”

Plenty of time also gives the CEO and directors an opportunity to ensure that the eventual insider finalists are given a chance to master the additional skills required for moving up, for transcending any Peter Principle limitations.

Here learn-by-doing can be essential, especially in acquiring an experience-informed ability to work with the directors, investors, analysts, and reporters.  And that extends as well to rounding out the candidates’ personal familiarity with a firm’s far-flung geography and its many technical functions.  Mentoring by the CEO and lead director can be vital here, as can service on another board or two.  When George Buckley served as CEO for innovative manufacturer 3M, he actively encouraged rising stars at the company to serve on outside boards, join quarterly analyst calls, and work directly with the media.

Finally, we appreciate from the experience of many firms that CEO succession should focus on candidates who are top-ranked not only for past performance but also for future challenges. Making that “strategic fit” was surely a factor in Microsoft’s selection of Mr. Nadella, who evidently brings a special appreciation for cloud computing and mobile devices, a new world that the next CEO has to face even if his predecessors had belatedly done so.

Microsoft investors, customers, and employees are all hoping that John Thompson and his board got it right, and that they have managed to avoid Peter’s pitfall to select the leadership that Microsoft requires in the years ahead.

Great Brands Never Have to “Give Back”

A recent headline, “JCPenney Releases 2013 Sustainability Report,” reads like the punch line to a bad joke.  Apparently the struggling department store company, which is closing 33 underperforming stores and incurred a net loss of nearly $500 million in its last reported quarter, felt it was important to promote a report detailing its sustainability activities.  What JCPenney probably intended as a reassuring message about the company came off more like an effort to distract people from the realities of its fundamental business problems.

This is only one of countless examples of the problem with most corporate social responsibility (CSR) efforts these days.  A few years ago the West Coast hamburger chain Carl’s Jr. launched a “Pink Star Campaign” to raise funds for the National Breast Cancer Foundation.  What sounded on the surface like a noble effort to show the company’s concern for women, however, failed to square with the chain’s long-standing advertising strategy of appealing to young men by portraying scantily-clad females suggestively eating its products.

Companies seem to be using CSR efforts to counteract or distract attention from the negative toll they exert on society through poor treatment of their workers, poor stewardship of the earth’s resources, poor management of investors’ dollars, or, even simply, poor customer service.  It’s as if giving back could make up for taking something away in the first place.

Consumers aren’t falling for the trick. The Reputation Institute reports that the 100 companies which comprise its RepTrakTM index spend millions of dollars per year on CSR activities, but only 6% of consumers consider those companies to be acting as strong and good corporate citizens — and 60% of consumers say they’re not sure if the companies are to be trusted.

Even well-run, well-intentioned companies get it wrong.  They choose to support external programs and to donate to charitable organizations instead of considering how they themselves could become a force for positive social change.

But a different development is emerging in the area traditionally known as CSR.  One that is exemplified by efforts like GE’s Ecomagination project, which involves developing alternative-fuel engines and other products that address today’s environmental crisis and drive economic growth. Or Starbucks’ community stores which serve as hubs of community service and training programs for their neighborhoods.  And Coca-Cola’s 5by20 initiative which empowers female entrepreneurs in developing countries to operate neighborhood stores that sell its products and create an upward spiral of economic development.

These and other great brands are making positive social change without engaging in typical CSR activities. To make a significant, sustainable positive impact on society, they are re-examining their business models, re-designing their supply chains, re-inventing products, and re-thinking what they sell and how they sell it.  They are looking for ways to create value for everyone who’s involved with their business – customers, employees, suppliers, communities, and shareholders.  They’re redefining CSR as CSV: creating shared value.

For great brands, CSV doesn’t simply draw upon the company’s innovation capabilities.  CSV uses the power of the company’s brand to inspire change and produce an overall beneficial impact on society.  Great brands seek to create shared value by establishing brand relevance in a diverse and increasingly resonant set of areas – from industry to community to target customer, brand positioning, and ultimately values.  The outcome is increased brand salience and resonance on multiple levels with multiple stakeholder groups.

Doing well by doing good is not a new idea. What is new is the brand integrity with which it is now being pursued by leading brands.  Great brands such as IKEA explore the societal and cultural relevance of their brands to identify ways to create shared value.

From its humble beginnings in post–World War II Sweden, IKEA, the home furnishings retailer, has been on a brand mission to improve people’s lives.  Widespread accessibility through low prices is a key element of fulfilling this mission.   So instead of using design to justify higher prices as most companies do, IKEA operates in exactly the opposite way.  IKEA designers start their design process with a functional need and a target price and then use innovative, low-cost manufacturing processes to create the products.  IKEA’s design philosophy extends to distribution, where it designs products so they can be transported and stored in flat packs which lower prices even further.  And its self-serve stores save labor costs.  By innovating throughout many aspects of its operations, IKEA fulfills its brand vision of providing products can be purchased and enjoyed by as many people as possible.

Like other great brands, IKEA doesn’t think about adopting socially beneficial practices as obligations, activities that every respectable business is expected to do.  It seeks out opportunities, strategies it wants to implement because they are good for everyone involved in the business. And it uses a different decision filter about how to make a positive impact, from taking on responsibilities, discrete initiatives that are to be completed, to achieving relevance, ways to nurture and sustain valuable connections with all its stakeholders.

Great brands are ushering in a new age by aligning their social efforts with their brand strategies and business operations. That way, they don’t need to take with one hand and give back with the other.