"Innovation is CREATIVITY that ships" (Steve Jobs). Not a PowerPoint slidedeck.

Archive for June, 2013

The DNA of “Think Bravely”

Icebreaker

In the Santa Clara Railway decision in 1898, a US court declared in a landmark judgment that the “railway corporation had the rights of a natural person.” This case set the precedence and has been etched in corporate law. It is now part of the collective psyche that “corporations are people.” Industrial era managers such as Henry Ford wanted “pairs of hands” and not “whole human beings.” Regardless of the judgment, it is poignant to reframe our lens and recognize that organizations are made up of people and is a living social system. The heart of the organization goes beyond the balance sheet of the firm, as evidenced by the acclaim accorded to Johnson & Johnson for its handling of the Tylenol crisis.

The vision of the collaboration economy is a boundary-less ecosystem of cemented human connections thriving in a cosmopolitan culture known as World 3.0 (pioneered by Pankaj Ghemawat). A firm’s ability to leverage expertise and interconnections is the foundational logic of value creation in the collaboration economy. In the collaboration economy, we are incrementally reversing the Industrial era mindset that regards employees as “arms and legs.”

The Kellogg premise of Think Bravely is that a “business can be bravely led, passionately collaborative and world changing.” The managerial question for consideration is the following: How do we instill the key behaviors that install the “Think Bravely” connective tissue so that it can become a growth engine of the firm?

Understanding “Think Bravely”

A study of 75 brands by Karen Post, author of Brand Turnaround, revealed that if you “lead them with courage, it can be turned around.” “Think Bravely” co-exists with other behaviors that leaders must display while managing brand bumps and uncertainty that exist in the turbulent environment.

brand turnaround

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courage

Anecdote Time

I enter the elevator in the parking garage of my client site in a prominent brick and mortar building. I see a corporate brochure describing the “notes” (bullet points) of how we should Play to Win. To increase awareness, the same, somewhat bland, banner advertisement is prominently displayed in several locations across the buildings in the corporate campus such as the hallway, entry foyer, cafetaria and conference rooms.

I feel that while people understand the the concept of Play to Win in principle, there is a large variation in how we collectively play to win during project execution at an operational level since this is where most of the value creation occurs (or should occur). Value creation, at an intrinsic level, can occur only if there are win/win interactions between people associated in delivering a project. While this observation may seem trite and somewhat cliche at first glance, it is important to note that for every interaction between two people, there are 3 opportunities for failure (win/lose, lose/win and lose/lose). Imagine the impact on project throughput when n people are trying to work together without a shared frame of reference.

Non-win/win interactions, insulated by a shared sense of detachment, increase the cost of doing business, stifle innovation and install a brittle layer of status quo leadership (SQL) which, in turn, breeds a culture of disempowerment, management by escalation and dysfunction. SQL leadership is engrained in organizational titles, silos and turf wars.

In a SQL regime, for example, a real issue or risk that may jeopardize project success is either (1) “messaged appropriately to the leadership team to avoid airing dirty laundry” (via email) or (2) spun in a positive manner (wordsmithed) in a PowerPoint slidedeck to deflect the project issue or risk. In similar vein, the word “alignment” is sprinkled in conversations or emails to create a perception that everyone is on the “same page” and the problem or issue has evaporated or no longer top of mind. Talent that courageously choose not to subscribe to the devil’s bargain are shown the door. Human resource talent, at a grassroots level, feels squelched and the “art of struggle” for discovering authentic leadership gradually dissipates over time. SQL leadership values get installed (akin to a software program) in both individual and organizational defensive routines.

As David Whyte, author of “Crossing the Unknown Sea: Work as a Pilgrimage of Identity” writes:

“The inherited language of the corporate workplace is far too small for us now. It has too little poetry, too little humanity, and too little good business sense for the world that lies before us. We only have to look at the most important lexicon in the present workplace — manager — to understand its inherent weakness. Manager is derived from the old Italian and French words “maneggio” and “man’ege”, meaning the training, handling and riding a horse.”

“The word manager conjures images of domination, command, and ultimate control, and the taming of potential wild energy. It also implies a basic unwillingness on the part of the people to be managed, a forced to be corralled and reined in.”

SQL leadership is a constraint that cripples the integrity muscle of “Think Bravely” by fueling an atmosphere of fear, uncertainty and doubt (FUD factor) and, as a result, the fragmented firm is not organized for advantage. This results in underperformance, confusion, conflict and spiraling costs. This is a recipe for losing the right to win in the marketplace.

Towards Business as Un-usual

It is time to bury the SQL model of leadership and re-ignite the spark of creativity to create a sense of belonging in a multipolar world, transform the business and eventually the industry using the power of mindfulness. With the economic rise of the BRICS countries, the playing field is being leveled. Managers need to learn how to think and operate in a world of differences. How do we reverse the SQL leadership trend so that we can engage in courageous and thriving conversations, among an array of diverse voices (across economic and demographic realities) at a grassroots level, to compose a musical with a mix of elements — dialogue, songs and story — that provoke an emotional response?

“Leadership is a struggle by flawed human beings to make some human values real and effective in the world as it is.” (a quote attributed to Joe Badaraco)

Leadership and the Art of Struggle
Steven Synder

David Whyte envisions that “sometime over the next fifty years or so, the word manager will disappear from our understanding of leadership, and thankfully so. Another word will emerge, more alive with possibility, more helpful, hopefully not decided upon by a committee, which will describe the new role of leadership now emerging. An image of leadership which embraces the attentive, open minded, conversationally based, people-minded person who has not given up on her intellect and can still act and act quickly when needed.”

Fred Newman pioneered the idea of performance activism based on deepened understanding of leadership as a human endeavor and has given rise to the field of social therapeutics. Fred’s work is influenced by Vygotsky’s wisdom that people are capable of creating performances of ourselves continuously if we choose to.

[…] “psychology as well as theatre, is to take what is being destroyed, what is being smashed into a million pieces, and create something with it.”
Fred Newman

“In play it is as though a child is a head taller than he is. Play is a leading factor in development.”
Les Vygotsky

Enactment of the parable that “bold ideas can make a difference” needs to move beyond rhetoric. The notion of “world changing” opens up a world of what of you never thought possible. Perhaps the process to entertain this question starts by engaging in a collective dialogue and playing together as an ensemble to explore what was not possible yesterday that can become possible today. Theatre of Possibility is an avenue for developmental transformation where an individual can perform beyond where (s)he is today without any shackles. The intent is to turn stories into improvised scenes on the spot by incorporating concepts from playback theatre to address situations in a business setting. Recognizing that emotion can be the greatest ally in the creation of lasting change, theatre directors and artists often engage and attend to emotion in newer and deeper ways while delivering performances.

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Performative conversations start by encouraging activism that enable employees co-create through performance something new with what already exists. Even if I am a worker bee in my day job, I can play the role Senior Director or Chief Executive Officer  in a story that describes a situation in a corporate setting. In the ontology of performance activism, people choose to perform their lives. Each of the employee participants in this improv game is able to liberate her (his) potential-in-wait into true potential by releasing their act hunger.

Such a culturally transformative shift requires experimentation, improvisation and theatre in a shared space devoid of stodgy PowerPoint slides, tables and graphs containing “talking points” that were rehearsed, edited, and “blessed” multiple times before the show and tell. A dialogue emerges from more than a few words on a page (email) to a performative conversation, in the moment, between two real people who play, walk in another person’s shoes together, and create an emotionally congruent relationship.

Traditional approaches to organizational change either use (1) ephemeral jargons on a PowerPoint slide, menorandum or townhall meeting or (2) rally employees towards a “burning platform” that needs to be fixed as soon as possible (ASAP). The ASAP model induces stress, creates oppression and erodes employee morale. Performance activism, on the other hands, is an array of improvised performances with a goal to inculcate the key behaviors for “Thinking Bravely” in an organization and make the change succeed.

straight_talk_about_change

The actors in the improv create interactive theatre games so that together, with the audience, they can triage the work related issues that inhibit collaboration (for example) and rehearse the solutions these problems. An actor may choose to describe a range of feelings and make theatrical images, in concert with other participants, that collectively describe a silent, frozen story which vividly portray the truth without embellishment. Recognizing and objectively looking at these frozen images exposes the elephants in the room and helps the management team discuss the undiscussable and (hopefully) cause a visible change in priorities with a positive sense of urgency.

Cops in the Head are internal, discouraging voices inhibiting “Think Bravely” which have taken up residence inside our heads that masquerade as our own voices in our collective psyche. Cops in the head diminish our true potential and is also called the devil’s bargain. Engaging critically with the voices and the intervention from the audience members (spec-actors) activate the anti-bodies to deal with the cops in the head and exorcise them so that we can “Think and Act Bravely.”

play_to_win

The role of an Activist Turnaround Manager (ATM, pun intended) is to facilitate dialogue-knitting performative conversations across a non-linear cascade of strategic choices (as shown above) and compose the music for Playing to Win. The ATM also incorporates the modalities in the Theatre of Possibility in order to live the values of un-SQL leadership (leading with intellectual integrity) and calibrate the organizational behaviors for competing for the future.

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By ritualizing performance activism employees may realize the following benefits:

  • Break out of old rules and old roles
  • Play new roles that may traditionally be outside one’s comfort zone
  • Learn together, inspire each other and enhance their confidence
  • Play together in a theatre setting increases the attention span (while reducing distractions)
  • Increase awareness of “who we are” and “who we are not” at the same time
  • Bust organizational silos and build boundary spanning relationships
  • Develop a sense of trust and a work ethic
  • Work together without the glare of spotlight
  • Learn to adjust to change without getting upset
  • Improve attachment between people (rather than let laptops and smartphones becoming first class citizens

Relief!

To move up a notch in the ladder from “good to great,” it is ultimately a choice issue. Organizations may choose one of the following profiles:

  • Stay relevant in the game and be ready for growth
  • Remain strategically adrift or distracted

BRICS_bank

The blueprint for the collaboration economy in a multipolar world (BRICS: Brazil, Russia, India, China, South Africa and other countries) requires an unswerving organizational commitment to engage in performance activism in order to enhance value co-creation, unleash innovation and sustain operational excellence by design. Plotting the symbolic course from here to there is a constant community visioning exercise. This is the essence of the play to win strategy.

Send Off

Northwestern University’s American Music Theatre project drives home the tangible benefits of adopting and practicing performance activism in both Wall Street and Main Street.

Senior David Corlew, a theater major from Murfreesboro, Tenn., compares the experience of shaping a new musical to riding a roller coaster. “Working with new material lends itself to a wonderful sense of play throughout the process,” he says. “One day new lines will come in that change our understanding of a character. Another day we’ll have to say goodbye to a scene that we really loved. And another day some of those lines will be back again! There’s something about the interaction between the actors and the changing text that makes the room feel electrically vibrant.”

Should performance activism be deemed out of scope for a corporation, it will remain a sorely missing competency that is orphaned in the individual and group consciousness during office hours.

Moneyball and Hedge Fund Activism

Moneyball is a gaming strategy for an underperforming sports team to scout and analyze players using an objective, data-driven approach and raise the performance to a new level. Recently, sports teams, such as the New York Yankees, New York Mets, Boston Red Sox, Seattle Mariners, Los Angeles Angels of Anaheim, with at least one MVP player have chosen, after weighing options, to negotiate long-term lucrative deals with prominent sports networks (via ownership stake). For brevity, this is labeled the moneyball strategy of a sports business.

The logic of value creation of the Moneyball strategic alliance of a sports business is to focus on brand building that cements the emotional connections between the players and the fans into a sustainable relationship that contributes economic returns. The deal structure enables the realization of the following benefits:

  • Increasing sports network’s rating for their advertisers
  • Increasing spectator’s purchasing and viewing decisions to watch the game live
  • Increasing franchise value, sports content rights fee and subscribers’ license fees
  • Increasing value of players and value of sports content and talent retention with sports team and amplifying sports brand

moneyball

Strategic Elements of Sports as a Business

Moneyball_creately

  • Moneyball
    • Create a cadre of miracle winners (not Average Joes)
    • Includes players, coach and management
    • Risk sharing with cable companies to deliver sports programming and sports team valuation
  • Manoeuvering
    • Budgetary process
    • Organizational structure
    • Review process
    • Personal rewards
    • Sanctions
    • Ownership
  • Marketing
    • Sponsorship levels
    • Halo effects of the brand
  • Talent
    • How they play
    • Focus on players
    • Recruitment
    • Talent retention

Hedge Fund Activism

The creative conversation to revive bankrupt sports teams or relocate a sports team to a different metropolitan area gets more interesting, and sometimes rather controversial, when hedge fund investors, who have a passion for sports, get engaged. In my view, a subset of the hedge fund investors have an activist mindset along multiple dimensions as illustrated below.

Hedge fund activism eschews conventional wisdom of passive stock picking. It unlocks shareholder value and outperforms passive investing while even adjusting for undervaluation and underperformance. Research data from at least 78 activist investments has revealed that hedge fund-led activist investments have outperformed passive investments by earning 20% over two months, 3.8% greater returns and, over two years, they earn 18.4% greater returns.

root_activism

Board Room Activism

board room

Business Strategy Activism

biz strategy

M&A Activism

M and A

Sales Activism

sales

Capital Structure Activism

capital structure

Corporate Governance Activism

corporate governance

Key Takeaway

Everybody likes having FUN. We can learn a lot from sports teams who always have a bias for Thinking Bravely with a world class, face-to-face mindset. While there is no silver bullet, integrating the twin perspectives of hedge fund activism and the Moneyball mindset can be a really cool and powerful throughput operating strategy for both business as a sport and sports as a business.

Hedge Fund Activist Investor Mindset

Strategic Briefing

Strategy Briefing for Activist Hedge Fund

Similar to the Great Depression, paving the path to renewal in this economic crisis requires resilience and perspiration (not just inspiration).

american recovery and reinvestment act

Towards Understanding the Cybersecurity Challenge

Below is a Pixar pitch of the cybersecurity challenge:

Once upon a time anonymous adversaries exploited the rich interconnectivity provided by cyberspace and wreaked havoc on the global interconnected finacial system. Everyday they were able to penetrate systems with weaker defenses, deface home pages, disrupt supply chains, stealing private and sensitive data and causing chaos and economic harm. Many nations struggled to work together due to the prevailing atmosphere of mistrust, eroding partnerships and preferred to play the zero-sum game. A powerful guiding coalition of businesses and nations made a shared commitment to work together to tackle the cybersecurity challenge head-on. One day, after an arduous Hero’s Journey that stood the test of time, everything had transformed. Every business and nation had organically learned how to anticipate and prevent cyberattacks, limit cyberattacks and recover to trusted states. Because of that immersion, everybody experienced a value shift and learned the ABCs of building and nurturing trust and the art of building a resilient cyber ecosystem. Until finally, everyone finally realized that the power of two is the recipe for financial and social stability in a volatile, uncertain, chaotic and uncertain environment.

Anonymous computer hackers have been recently targeting several technology companies such as Foxconn, among others, and wreaked havoc in the global financial system. The 2013 Data Breach Investigations Report analyzes more than 47,000 reported security incidents and 621 confirmed data breaches from the past year. In addition, according to Werbach, “every mobile app is a potential security risk.”

We have to work together to solve this wicked problem which sometimes gets warped in a state of confrontation. A solution has a technical side and a social side. The best minds are actively working on this problem globally on the technical side. We need to build greater traction and sustain momentum on the social side by understanding the cybersecurity challenge via dialogue-knitting conversations.

“We estimate that the overall damage to the Chinese economy exceeded Rmb5.36bn, affecting 110.8m Chinese users and 1.1m websites in 2011” due to cybersecurity breaches and cyberespionage.
(paper published by Gu Lion, Zhuge Jianwei, Duan Haixin, 2012)
cited in Financial Times, May 20, 2013

redlines

meaning of redlines

repurcussions

governance

political considerations

risk disclosure

Although the world is flat, today we live in a world of differences, as illustrated by BRICS (*), where people need to inculcate a new way of thinking in order for a firm to create a strategic identity, a community of shared values, and trust-based relationships with employees, customers, community, and investors. ( * BRICS :: Brazil, Russia, India, China, South Africa and other countries)

“It is strange that many people perceive the rise of China and India only as a threat. The idea that these countries’ ascent is a zero-sum game — it can occur only at everyone’s expense — defies economic logic.”
Tarun Khanna. China + India: The Power of Two. Harvard Business Review, Dec 2007.

The key takeaway from the “power of two” example is that during every interaction, while there is one opportunity for success (win/win), there are three opportunities for failure (win/lose, lose/lose, lose/win). The broader challenge to achieve win/win outcomes scales in complexity when there is an n-party interaction (think BRICS). If achieving win/win were viewed as corporate center profitability, then 1.5 + 1.5 = 3 because the individual business units is outperforming (1.5 vs 1) in their markets that have a walled garden of cybersecurity-proofing with a grounded philosophy that “ethics pays.”

The value creation premise that “ethics pays” is an “ethic-onomic” yardstick that calls for a rich repertoire of reasoning skills that can be harnessed through improvisation, dialogue and deliberation with actors who may have had a history of tense relationships, misunderstandings and “sticking points”. The resilience to tackle of the challenges of cybersecurity requires a shared, long-term commitment and coup d’oeil to navigate the “Hero’s Journey” where ethics and economics are intertwined in a dynamic dance to spark a new level of consciousness, revise out-of-date mental maps and nurture trust. Sustaining resilience means overcoming active inertia of self-delusions (“we don’t need cybersecurity”), avoiding the trap of playing the blame game or deflecting naysayers (“it’s beyond our authority to manage the cybersecurity challenge”).

Building a resilient cybersecure ecosystem is an art and science and there is no silver bullet. In concert with software developers, we need to assemble an orchestra of talent from diverse fields to tackle the cybersecurity security challenge that grows in complexity everyday. Viewed through my crystal ball, I envision the traditional role of FTE to morph as a three-legged stool — Fraud Prevention, Turnaround Management, and Entrepreneurship. This FTE will maintain an excruciating mission focus in:

  • Serving as an on demand, tactical resource in assisting businesses implement cybersecurity measures and a software assurance infrastructure
  • Assisting businesses in defining and achieving operational excellence
  • Actively contributing in the co-creation of a world of purpose called S@SFO (Sustainability using Art and Therapy (@) for achieving Solution Focused Outcomes)

S@SFO resonates with Silicon Valley innovation and, using the cybersecurity challenge as a powerful frame of reference, we can seize this not-to-miss opportunity to incorporate this mindset and solve an array of economic and social challenges (“wicked problems”) akin to Palantir.

Palantir

(This is a living blog in progress.)