Friday, July 20, 2007

Examples Of Strong Corporate Cultures

Corporate culture has become increasingly important to firms in the past 20 years. Despite its intangible nature, its role is meaningful, affecting employees and organizational operations. And while culture is not the only factor guaranteeing success, positive cultures offer significant competitive advantages over rivals.
Corporate culture has become increasingly important to firms in the past 20 years. Despite its intangible nature, its role is meaningful, affecting employees and organizational operations. And while culture is not the only factor guaranteeing success, positive cultures offer significant competitive advantages over rivals.
Dominant set of norms
People come from diverse social, cultural and ethnic backgrounds, with different personalities and experiences. In a work environment, these factors manifest themselves in a wide variety of ways, and over time a dominant set of norms arise which guide the way work is accomplished. Deal and Kennedy popularized the notion of developing positive corporate cultures in their 1982 book Corporate Cultures, and since then the concept is seen playing as a central role in corporate strategy.
Corporate culture has many definitions as it is heavily influenced by the industry in which it operates, geographical location, history, employee personalities, etc. Some formal definitions have arisen, but essentially a corporate culture has several key elements: it offers a clear corporate vision; it is supported by corporate values consistent with the aims of the company and aligned with the personal values of organization members; a high value is placed on employees at all levels and there is extensive employee interaction across many levels; and the culture is adaptable, adjusting to external conditions, and consistent, treating all employees equally and fairly. These characteristics cannot exist without widespread employee support. And even though there may be strong sub-cultures within the company, the dominant culture must be strong enough for sub-culture members to embrace it.
Cultural categories
But how to categorize culture? In 1988 Sonnenfeld defined four types: the academy (exposing members to different jobs so they can move within the organization), the club (which is concerned with people fitting in), the baseball team (with its well-rewarded stars who leave for better opportunities) and the fortress (concerned primarily with survival). Goffee and Jones’ (1996) model takes a different route, suggesting a corporate culture is determined by levels of sociability (friendliness among community members) and solidarity (a community’s ability to pursue shared objectives) and developed a survey that quickly slots companies in on this scale in four categories: networked, mercenary, fragmented and communal.
High-sociability, low-solidarity network culture individuals feel like family and socialize often, with promotions and work achieved by informal networks or internal sub-cultures (similar to Sonnenfeld’s club culture). Mercenary cultures have low sociability and high solidarity, with workers united in support of business aims (like the baseball team). The fragmented culture’s low sociability and solidarity tend to work with office doors shut, like a law firm or a downsizing company (the fortress). A communal organization has high sociability and high solidarity, often seen in small start-up firms, where colleagues are close socially and professionally, identifying closely with the corporate culture (the academy).
Categorizing cultures helps managers in several ways: it gives a better understanding of the pros and cons of that particular culture, helps managers to recruit the most suitable applicants and helps managers determine what cultural changes are necessary.
Cultural benefits
Organizations able to maintain positive cultures enjoy many benefits. Morale is improved, and the work environment more enjoyable, with increased teamwork, openness to new ideas and sharing of information. This activates learning and continuous improvement because of the free flow of information. It also helps attract and retain good employees.
Examples of companies benefiting from the positive effects of corporate culture include:
Wal-Mart. Founder Sam Walton’s concern and respect for staff from the foundation of the company creates an environment of trust that persists to this day. Walton met staff, calling them by their first name and encouraged change to maintain the competitive edge. To this day, staff think about “how Sam would have done it”.
Southwest Airlines. Its relaxed culture can be traced back to unconventional CEO Herb Kelleher, who encourages informality and wants staff to have fun at their jobs. Employees are valued, with Kelleher acknowledging births, marriages and deaths by notes and cards. Staff are encouraged to pitch in and help out, especially at check-in, giving Southwest turnaround times less than half the industry average.
Hewlett Packard. Problems several years ago encouraged HP to change its culture; staff are required to formulate three personal and three professional goals each year, and are encouraged to cheer those that meet them, such as getting away early to be with family. Two years into the program, HP reports no loss in productivity despite staff working shorter hours and there is an increased staff retention rate. The program has been marked by the extent to which managers bought in, and modeled it in their personal lives.
It is obviously easier to model a corporate culture during a firm’s infancy, but in practice culture can be changed for the better. This can be done by surveying employees, meeting staff outside their departments and learning what they really think is going on. This helps managers identify the existing culture and identify areas of improvement.
Then, managers should institute cultural change by modeling the behavior they wish to encourage, then reinforce the desired culture with visionary statements/slogans, celebrating employees’ successes or promotions, distributing newsletters, hiring culture-compatible staff, etc.
Positive corporate culture is now a prerequisite for success rather than a competitive advantage; it allows the hiring and retention of top-quality staff. Ideally established at a company’s infancy, it can be changed over time as the authors’ example show. If a corporate culture is lowering morale, a top-down approach is needed, setting out the vision from the top and demonstrating acceptable behavior. Improving workplace culture makes employees’ experience happier and this in turn leads to improved profitability (or, in the HP example, no reduction in profitability!).
A well-structured study, combining a sound theoretical base with three case studies involving corporate culture change in top US companies, the article is of use both to academics and managers as it charts the concept of corporate culture and its positive and negative effects on organizations.
This is a review of “Developing corporate culture as a competitive advantage,” by Golnaz Sadri and Brian Lees of California State University, which first appeared in the Journal of Management Development, Vol. 20 No. 10, 2001.

Are Women Smarter Than Men?

From an anatomical perspective, there are more similarities than differences between men and women. Still, you don’t have to search far to find a disperate piece of our anatomy—the brain.Decades of research show that for regular intelligence:∴Men and women have the same average IQ.∴Men tend to score higher on tests of “spatial ability” (the mental manipulation of figures in two or more dimensions).∴Women tend to score higher on tests of reading and verbal skills (including writing, grammar, and spelling).The 1990s introduced landmark brain research that provided a measurable connection between our responses to emotions and their influence on our actions. This concept—now known widely as emotional intelligence—has a tremendous impact on our success at work and in life.In the world of emotional intelligence, things aren’t so equal between the sexes. A worldwide study of more than 500,000 people by TalentSmart® reveals significant differences between men and women in overall emotional intelligence and three of the four emotional intelligence skills.This study, the findings of which were first revealed in The Emotional Intelligence Quick Book, demonstrates that women tend to be:∴More expressive than men.∴More empathetic and sympathetic than men.∴More able to discuss feelings and understand emotional references.Why did men and women score so differently? First, it’s important to consider the one skill in which the sexes received an equal score: self-awareness. This means that men and women have the same ability to understand their emotions. Self-awareness is a reflection of your ability to comprehend your emotions as they surface and grasp their significance across time and situation—your tendencies. The genders possess an equal ability to apply this critical skill, but men don’t do so as often as women.Of the three remaining emotional intelligence skills, women outscore men in all of them. These skills include:1.Self-Management2.Social Awareness3.Relationship ManagementHow smart do you feel?The online edition also provides an opportunity to compare your scores to the worldwide population from the TalentSmart® study. You can see how your scores stack up against different groups based on gender, age, region, job function, and job title.The explanation for women outscoring men in three of the four emotional intelligence skills is open to interpretation. What’s important is learning where you stand—which emotional intelligence skills are your strengths and where you have room to improve.The TalentSmart® study measured emotional intelligence using The Emotional Intelligence Appraisal™, a test that captures your skills in just 10 minutes in Daniel Goleman’s benchmark EQ model. The Emotional Intelligence Appraisal™ is available online, or as a self-scoring booklet. Both versions include action plans that help you develop your emotional intelligence skills and learn from your unique emotional intelligence profile.The online edition also provides an opportunity to compare your scores to the worldwide population from the TalentSmart® study. You can see how your scores stack up against different groups based on gender, age, region, job function, and job title.With Emotional Intelligence Appraisal™ scores responsible for 58% of job performance, there’s only one intelligent action remaining—try the test!

Sunday, July 08, 2007

Influence of EI on Performance

The Technical Manual for the Emotional Intelligence Appraisal™ reveals interesting findings from a study of more than 13,000 individuals worldwide. Employees from various job functions, in different organizations and countries, were asked to evaluate their emotional intelligence by answering 28 questions. Job functions included sales, marketing, finance, operations, customer service, human resources, information technology (IT), engineering, business development, manufacturing, and R&D.
The Emotional Intelligence AppraisalTM measures EQ in the four components from Daniel Goleman’s benchmark model. The Data Says:
Contrary to popular belief, EQ scores were consistent across various job functions─except for engineering who scored slightly lower than average. It’s likely that engineers are not rewarded much for effective relationships with others. Especially when compared to jobs like customer service professionals—the only group who scored higher than average.
The stereotype placed on engineers is that they prefer to work alone. It’s unlikely this is always the case, but given their work environment, they are most comfortable and rewarded for detaching from the social arena at work.
Why So Antisocial?
When your interaction with people is minimal, your focus on people is minimal. An engineer’s attention is mainly directed at computers, equipment, or other inanimate objects like project blueprints and specs.

The Four Emotional Intelligence Skills Measured by the Emotional Intelligence Appraisal:
1. Self-Awareness: Your ability to accurately perceive your own emotions and stay aware of them as they happen. This includes keeping on top of how you tend to respond to specific situations and people.
2. Self-Management: Your ability to use awareness of your emotions to stay flexible and positively direct your behavior. This means managing your emotional reactions to all situations and people.
3. Social Awareness: Your ability to accurately pick up on emotions in other people and get what is really going on. This often means understanding what other people are thinking and feeling even if you don’t feel the same way.
4. Relationship Management: Your ability to use your awareness of your emotions and the emotions of others to manage interactions successfully. This includes clear communication and effectively handling conflict.
Most employers forget that a good engineer generates innovative ideas that can drive the success of the company. These ideas will not mature properly in isolation.
What About Personality?
Most engineers given a personality assessment, such as the MBTI or the DISC, gravitate towards introversion. At the same time, engineering is a profession that requires a high degree of cognitive intelligence to succeed. The commonly held assumption is these two traits (i.e. personality and intelligence) must go together.
Smart or not, engineers (and other introverted personalities) deal with another “type” of dilemma. Their quiet, thoughtful, and sometimes sensitive personality can make reaching out to others a chore. When this lack of desire is seen as inability, engineers are left to themselves. The consequences of this situation are dire for the performance of any organization.
Something To Think About
Collaboration with others in the workplace means actively working together to meet target goals. The ability to openly exchange ideas and provide feedback helps people achieve.
Even jobs that require high IQ and isolated work can benefit from emotional intelligence. Take for example, a team of surgeons successfully transplanting a heart, or a group of engineers collectively designing and building a dam that can potentially save millions of lives in China.
Successful group effort toward winning results feels great—regardless of your personality. The victorious heart transplant and life-saving dam are the result of people working in collaboration. The job can sometimes be done alone, but things work better when people work together. The good news is emotional intelligence is a flexible skill that anyone can learn, introvert or not.

Friday, July 06, 2007

Leading Through Technology

When one’s team members are halfway across the world, working together effectively is no small achievement. Start with minimal or no face-to-face interaction, add differences of expertise, geography, time zone, culture, and perhaps language, and one ends up with, to put it mildly, a leadership challenge.
How to navigate those challenges, especially in projects requiring complex innovation, is the subject of a February, 2007, article in the journal Academy of Management Perspectives. “Leading Virtual Teams,” authored by Arvind Malhotra, Ann Majchrzak, and Benson Rosen is a tidy compilation of techniques and suggestions for making distributed teams work well together.
Two of the authors, Malhotra and Rosen, are in close proximity to each other at the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill. The third author, Majchrzak, is across the continent and three time zones away at the Marshall School of Business, of the University of Southern California. Together they constitute a virtual team, so they speak from experience.
Six Ways to Strengthen Ties
When team members are separated by hundreds or thousands of miles, even the simplest of leadership tasks requires careful thinking, as Malhotra, Majchrzak and Rosen discovered through their research. The authors followed a virtual team at Boeing-Rocketdyne through its entire life cycle, and then did a large-scale follow-up study in which they attended meetings of 55 successful virtual teams in 33 different companies and interviewed team leaders. Finally, they boiled down their observations and conclusions into six clusters of recommendations, which are briefly summarized here.
1. Establish and Maintain Trust Through the Use of Communication Technology
Just as in face-to-face teams, two of the biggest trust builders in virtual teams are having members do what they promise and “show up” at the meetings they are expected to attend. But virtual teams require additional up-front maintenance. Project leaders, for example, must establish initial common norms and procedures about how communication technology should be used. In “eRooms” or other electronic discussion forums, team members need a common understanding about what to post, when to post, who owns documents, and how to inform others of documents’ whereabouts; in addition, all members must subscribe to an electronic etiquette and similar “tone of voice.” In audio-conferencing, norms have to be established, such as whether or not members identify themselves before commenting. These up-front norms and procedures may have to be modified as the group members gets used to interacting with each other. For example, e-mail attachments may be OK at the beginning at the project but then become outlawed midstream as members discover that their inboxes start overflowing. “Virtual get-togethers,” such as conference calls or e-mail exchanges, allow members to iron out these minor process issues along the way.
2. Ensure That Team Diversity is Understood, Appreciated, and Leveraged
Team members show up with a diverse array of skills, expertise, and life experiences. A leader can take three actions to make sure this diversity is fully understood and utilized. First, a leader can post an “expertise directory” at the beginning of a project, which could take the form of a skills matrix, collection of C.V.s, or list of articles written by the members. Second, the leader can pair diverse members in common tasks and rotate members throughout the project, both practices that enhance bonding and feed the creative fires. Third, the leader needs to establish an interplay between synchronous and asynchronous communications. Topics brought up during the synchronous, real-time audio-conferences or “webinars” can be later dissected in asynchronous forum discussions or e-mail exchanges. Team members who may be shy about speaking up in the presence of senior team members during conference calls may be more willing to unwind in a later series of written discussions.
3. Manage Virtual Work-Cycle and Meetings
Successful real-time, virtual meetings are, by definition, highly choreographed events. Virtual team leaders must oversee an interlinking set of practices prior to, during, and after the meetings. Time between meetings should be spent on idea divergence and exploration (asynchronous idea generation.) Meetings should be used for idea convergence and conflict resolution (synchronous idea convergence.) Together, these two modes of communicating optimize the work cycle.
Before a meeting begins, team pre-planning is crucial. Have electronic discussions before the meeting and post these discussion threads. Identify areas of disagreement to discuss during the meeting. Circulate a clear agenda in advance with time allocations. Post progress on the repository, linking them with project timelines, action items, and responsibility charts.
During the meeting, ensure through "check-ins" that everyone is engaged and heard from. Electronic voting is one way to quickly take a group’s pulse, with results displayed instantly on screen. Some teams reported using "minutes on the go" during the meeting, that is, rough minutes logged in a virtual room side window. Only results are recorded, not debates and discussion.
At the end of the meeting, make sure the final polished minutes and future work plans are posted to the team repository. Also, between meetings, encourage idea generation divergence and discussions through threads, instant messaging, e-mail exchanges, and auto-notification of postings.
4. Monitor Team Progress Through the Use of Technology
Team leaders found it helpful to scrutinize asynchronous and synchronous communications closely to monitor team progress. That progress was made visible to team members through shared project timelines and balanced scorecard measures, in a simplified dashboard or one-page summary format – another helpful practice.
Leaders frequently reported their monitoring of technology and procedures evolved over time. One team leader put it this way:
Our database matured. We initially had a discussion database. Then we added IM. Then we added change request capability. Then we added a call tracking database. Then we added an issue log. Then we created a view called “management view” with schedule, costs spent to date, and project status. Then we added a working section view just for the team. We tried videoconferencing but stopped using it when the team did not find it helpful.
While not all leaders may be comfortable with this rapidly changing management style, such fluid evolution of oversight was a common story among virtual team leaders.
5. Enhance External Visibility of the Team and Its Members
The study’s authors observed that leading a virtual team requires parallel processing. While focusing on internal activities, team leaders also had to continuously and clearly represent the team’s work to external stakeholders including project sponsors, local executives, and internal and external customers.
This external reporting function was handled in a variety of ways. One leader organized a steering committee of departmental managers and client organizations and then regularly briefed this committee. Another leader expected each team member to “report out” to his or her sponsoring manager. Regardless of which approach was used, leaders usually asked team members to approve reports intended for managers and external audiences to encourage buy-in for the report-out process.
6. Ensure Individuals Benefit from Participating in Virtual Teams
Part of any good leader’s job is making sure team members get the rewards and recognition they deserve. Virtual leaders had the same goals, although they achieved them in different ways, including:
Having virtual reward ceremonies, including sending gifts to each individual;
Starting each virtual meeting with recognition of specific successes;
Suggesting to high level executives pleased with team members’ briefings to pass on the good word to the members’ respective managers.
Some team members respond more to intellectual challenge and fun, so it’s important to provide them with opportunities for lectures, conferences, and other avenues for personal growth. The key is to understand what makes each individual tick.
Concluding Observation
Imagine a carbon-epoxy jetliner with gracefully curved wings slipping through the clear blue sky at 35,000 feet. Contented passengers are sipping their beverages and tapping softly on their laptops. The pilots are chatting quietly about World Cup soccer in a serene cockpit brimming with sophisticated avionics. This scene is from a jetliner project with effective virtual teams.
Contrast this scene with another jetliner project literally stranded on the ground. It’s over budget, past deadline, and hopelessly mired in controversy. Engineers from two different continents are scratching their heads over why body module components made in twenty-five different countries don’t fit together and why the wiring panels don’t match. Discussions in the back offices are getting heated and loud. The managers of this project have yet to master the art of leading distributed technical teams.
When innovation and creativity are called for, the crucial factors for success are increasingly the virtual ties that bind.

What Leaders Forget to Do

When people become a boss for the first time, they usually screw it up badly. Too often people think being the boss means "doing what I used to do except, except on a larger scale, and now I've got people I can order around."
Both parts of that definition are wrong. Leaders often fail to recognize they are no longer workers. You may be working hard, harder than ever, but now you work through other people. When you're under stress, it's easy to fall back on your comfort zone. This happens to a lot of bosses; the first time things get difficult, they want to roll up their sleeves and go back to the talents that got them in that leadership position in the first place. But as you move up, the most important decisions become the decisions of who you are going to hire or promote, and how you're going to develop them. That may require set of skills very different from the ones you're used to using. You have to be patient, deciding when, for example, to refrain from doing something you're good at, because John or Jane need to learn to do it themselves.
As Linda Hill, a Harvard Business School professor, has written, the biggest shock for first-time managers is that they're not the boss. They may have worked with spreadsheets or widgets before, but now they work with people, and people are much less tractable. They are messy and complicated, and that makes for difficult work.. One of the terrible facts is that most first-rung and or even second-rung managers have very little power.
An analogous thing happens when you become CEO. Michael Porter, Jay Lorsch and Nitin Nohria wrote in an article several years for Harvard Business Review, entitled "Seven Surprises for New CEOs." The first surprise is "You are not the boss." For a CEO, of course, the board is the boss, but the point of the article is more subtle and profound. We think of bosses as people who give orders. But as Porter, Lorsch, and Nohria point out, giving orders is very costly; it uses up a lot of political capital. The right to lead has to be won regularly. You get some legitimacy when you are named leader, but organizations have all kinds of ways of ignoring you if they feel you are no longer legitimate. As Jack Welch once said to me, "Too many people think the high point of their career is the day they become CEO." You have to be constantly earning it.
The Test of Failure
One of the gravest tests a leader faces is the test of failure. If you are any good, you're going to make mistakes, and not just once. Each time you goof, it will be on a slightly larger scale, with slightly larger consequences. The test of failure is three-fold.
First, how do you handle the actual crisis? In particular, what do you do to minimize the damage your misjudgments have inflicted on the people around you? When the crisis comes, you're either going to gain immeasurable amounts of organizational capital, or you're going to lose it and never get it back.
Second, what are you going to learn from your failure? Think about John F. Kennedy and the Bay of Pigs. When he came into the White House, plans for an invasion of Cuba were well underway, in spite mounting evidence that it wouldn't be successful. The process had all the hallmarks of classic group think, including a lack of diversity of inputs; Bobby Kennedy took the tough guy role of quelling dissent, precisely so his brother wouldn't hear things he didn't want to hear. And, as events proved, the naysayers were right; the invasion was a debacle.
A couple of years later came the Cuban Missile Crisis. In this case, the president learned to protect his dissenter, Adlai Stevenson. Kennedy's other men were saying, "Get this pacifist out of the room," but in the end the policies Kennedy adopted grew out of Stevenson's thinking. So Kennedy protected dissent, made sure he had a diverse team, did not move too quickly to make up his mind—and showed he had learned from his earlier mistake.
The last part of the failure test is whether you make a comeback. As Jeff Sonnenfeld and Andrew Ward put it, you have got to rediscover your heroic mission. That is the stage of saying, "I screwed up, but I'm not done yet." You can still prove your mettle to yourself and the world.
The Test of Reinvention
When you apply for a job, you've usually got a plan, with maybe 10 things on a to-do list. You come in saying, "I know exactly what we're going to do; I know exactly how this asset is underutilized." Three or four years later, you've done five of those items on your list; you tried to do two other things and failed; and three of them are no longer relevant, because the world changed. Now what?
One of the most difficult tests for a leader is the act of reinvention. There's a reason why people have a seven-year itch. In the Episcopal Church, if you've been a rector of a parish for seven years, they send you off to a special retreat where you learn how to be a long-lived leader.
That kind of reinvention is extraordinarily difficult, because it involves a certain amount of stepping outside yourself. At the same time, leaders are always being watched. Everything you do sends a message. There's a joke at GE, that if the CEO asks for a cup of coffee, somebody might go out and buy Brazil. It's hard to say, "I have a crazy idea." In a way reinvention is the hardest test: Can you run a leadership marathon rather than just a leadership sprint?
Questions for the Mirror
At the end of the day, you come to the test that only a leader can put to him or herself: Can you tell yourself the truth? As Robert Kaplan, former vice-chairman of Goldman Sachs, points out, the higher you get in an organization, the harder it is to hear the truth. So you have to be able to tell it to yourself. The leader needs to be able to look in the mirror and ask:
o What are my visions and priorities? Do I have a vision? Do I communicate it? How do I manage my time? What is the cognitive dissonance between my vision and my Outlook?
o Feedback: Do I do it well, or is it messy? Do I have several people around me who will tell me the truth or do I live in a bubble?
o Have I identified my successors? If so, have I done anything about it? Am I building them up? Does anyone else know my plan?
o If I were starting this company from scratch, would I organize it the way it is now? What would the clean sheet of paper look like?
o How do I react to stress? Do I bully? Do I quail? Do I go out and have a drink?
o Staying true to myself: When I get to the office, do I feel like I have to zip my lip and be politically correct all the time? Am I the person I want to be?
That's the ultimate test of the leader: whether or not a leader can look at him or herself and see authenticity there. Because that's what's communicated to others and that's what makes organizations work.
Copyright 2007 Harvard Business School Publishing. Reprinted by permission.
Author's Note: Thomas Stewart is the editor and managing director of the Harvard Business Review and author of Intellectual Capital: The New Wealth of Organizations and The Wealth of Knowledge: Intellectual Capital and the Twenty-First-Century Organization.
ALSO FROM THE LEADERSHIP CONFERENCE: Knowledge@Wharton reported on the presentation at the Wharton Leadership Conference of Tim O'Toole, the managing director and chief executive of the London Underground, "Turning Around the London Subway System: From Terrorism to the Olympics," Knowledge@Wharton, June 27, 2007