How to have an honest conversation about your business strategy

Too many organizations descend into underperformance because they can't confront the painful gap between their strategy and the reality of their capabilities, their behaviors, and their markets. That's because senior managers don't know how to engage in truthful conversations about the problems that threaten the business--and because lower-level managers are afraid to speak up. These factors lie behind many failures to implement strategy. Indeed, the dynamics in almost any organization are such that it's extremely difficult for senior people to hear the unfiltered truth from managers lower down. Beer and Eisenstat present the methodology they've developed for getting the truth about an organization's problems (and the truth is always embedded within the organization) onto the table in a way that allows senior management to do something useful with it. By assembling a task force of the most effective managers to collect data about strategic and organizational problems, the senior team sends a clear message that it is serious about uncovering the truth. Task force members present their findings to the senior team in the form of a discussion. This conversation needs to move back and forth between advocacy and inquiry; it has to be about the issues that matter most; it has to be collective and public; it has to allow employees to be honest without risking their jobs; and it has to be structured. This direct feedback from a handful of their best people moves senior teams to make changes they otherwise might not have. Senior teams that have engaged in this process have made dramatic changes in how their businesses are organized and managed--and in their bottom-line results. Success that begins with honest conversations begets future conversations that further improve performance.     

Can absence make a team grow stronger?

Some projects have such diverse requirements that they need a variety of specialists to work on them. But often the best-qualified specialists are scattered around the globe, perhaps at several companies. Remarkably, an extensive benchmarking study reveals, it isn't necessary to bring team members together to get their best work. In fact, they can be even more productive if they stay separated and do all their collaborating virtually. The scores of successful virtual teams the authors examined didn't have many of the psychological and practical obstacles that plagued their more traditional, face-to-face counterparts. Team members felt freer to contribute--especially outside their established areas of expertise. The fact that such groups could not assemble easily actually made their projects go faster, as people did not wait for meetings to make decisions, and individuals, in the comfort of their own offices, had full access to their files and the complementary knowledge of their local colleagues. Reaping those advantages, though, demanded shrewd management of a virtual team's work processes and social dynamics. Rather than depend on videoconferencing or e-mail, which could be unwieldy or exclusionary, successful virtual teams made extensive use of sophisticated online team rooms, where everyone could easily see the state of the work in progress, talk about the work in ongoing threaded discussions, and be reminded of decisions, rationales, and commitments. Differences were most effectively hashed out in tele-conferences, which team leaders also used to foster group identity and solidarity. When carefully managed in this way, the clash of perspectives led not to acrimony but, rather, to fundamental solutions, turning distance and diversity into competitive advantage.     

Clueing in customers

Leonard L. Berry and Neeli Bendapudi When customers lack the expertise to judge a company's offerings, they naturally turn detective, scrutinizing people, facilities, and processes for evidence of quality. The Mayo Clinic understands this and carefully manages that evidence to convey a simple, consistent message: The needs of the patient come first. From the way it hires and trains employees to the way it designs its facilities and approaches its care, the Mayo Clinic provides patients and their families concrete evidence of its strengths and values, an approach that has allowed it to build what is arguably the most powerful brand in health care. Marketing professors Leonard Berry and Neeli Bendapudi conducted a five-month study of evidence management at the Mayo Clinic. They interviewed more than 1,000 patients and employees, observed hundreds of doctor visits, traveled in the Mayo helicopter, and stayed in the organization's many hospitals. Their experiences led them to identify best practices applicable to just about any company, in particular those that sell intangible or technically complex products. Essentially, the authors say, companies need to determine what story they want to tell, then ensure that their employees and facilities consistently show customers evidence of that story. At Mayo, the evidence falls into three categories: people, collaboration, and tangibles. The clinic systematically hires people who espouse its values, and its incentive and reward systems promote collaborative care focused on the patient's needs. The physical environment is explicitly designed for its intended effect on the patient experience. In almost every interaction, an organization's message comes through. "Patients first," the Mayo Clinic's message, is not the only story a medical organization could tell, but the way in which Mayo manages evidence to communicate this message is an example to be followed.     

Managing multicultural teams

Multicultural teams offer a number of advantages to international firms, including deep knowledge of different product markets, culturally sensitive customer service, and 24-hour work rotations. But those advantages may be outweighed by problems stemming from cultural differences, which can seriously impair the effectiveness of a team or even bring itto a stalemate. How can managers best cope with culture-based challenges? The authors conducted in-depth interviews with managers and members of multicultural teams from all over the world. Drawing on their extensive research on dispute resolution and teamwork and those interviews, they identify four problem categories that can create barriers to a team's success: direct versus indirect communication, trouble with accents and fluency, differing attitudes toward hierarchy and authority, and conflicting norms for decision making. If a manager--or a team member--can pinpoint the root cause of the problem, he or she is likelier to select an appropriate strategy for solving it. The most successful teams and managers, the authors found, dealt with multicultural challenges in one of four ways: adaptation (acknowledging cultural gaps openly and working around them), structural intervention (changing the shape or makeup of the team), managerial intervention (setting norms early or bringing in a higher-level manager), and exit (removing a team member when other options have failed). Which strategy is best depends on the particular circumstances--and each has potential complications. In general, though, managers who intervene early and set norms; teams and managers who try to engage everyone on the team; and teams that can see challenges as stemming from culture, not personality, succeed in solving culture-based problems with good humor and creativity. They are the likeliest to harvest the benefits inherent in multicultural teams.     

How management teams can have a good fight

Top-level managers know that conflict over issues is natural and even necessary. Management teams that challenge one another's thinking develop a more complete understanding of their choices, create a richer range of options, and make better decisions. But the challenge--familiar to anyone who has ever been part of a management team--is to keep constructive conflict over issues from degenerating into interpersonal conflict. From their research on the interplay of conflict, politics, and speed in the decision--making process of management teams, the authors have distilled a set of six tactics characteristic of high-performing teams: They work with more, rather than less, information. They develop multiple alternatives to enrich debate. The establish common goals. They make an effort to inject humor into the workplace. They maintain a balanced corporate power structure. They resolve issues without forcing a consensus. These tactics work because they keep conflict focused on issues; foster collaborative, rather than competitive, relations among team members; and create a sense of fairness in the decision-making process. Without conflict, groups lose their effectiveness. Managers often become withdrawn and only superficially harmonious. The alternative to conflict is not usually agreement but rather apathy and disengagement, which open the doors to a primary cause of major corporate debacles: groupthink.     

Building the emotional intelligence of groups

The management world knows by now that to be effective in the workplace, an individual needs high emotional intelligence. What isn't so well understood is that teams need it, too. Citing such companies as IDEO, Hewlett-Packard, and the Hay Group, the authors show that high emotional intelligence is at the heart of effective teams. These teams behave in ways that build relationships both inside and outside the team and that strengthen their ability to face challenges. High group emotional intelligence may seem like a simple matter of putting a group of emotionally intelligent individuals together. It's not. For a team to have high EI, it needs to create norms that establish mutual trust among members, a sense of group identity, and a sense of group efficacy. These three conditions are essential to a team's effectiveness because they are the foundation of true cooperation and collaboration. Group EI isn't a question of dealing with a necessary evil--catching emotions as they bubble up and promptly suppressing them. It's about bringing emotions deliberately to the surface and understanding how they affect the team's work. Group emotional intelligence is about exploring, embracing, and ultimately relying on the emotions that are at the core of teams.     

The living company

What can explain the longevity gap between a company that survives for centuries--the Swedish company Stora, for example, which is more than 700 years old--and the average corporation, which does not last 20 years? A team at Royal Dutch/Shell Group explored that question. Arie de Geus, a retired Shell executive, writes about the team's findings and describes what he calls living companies-organizations that have beaten the high mortality rate of the average corporation. Many companies die young, de Geus argues, because their policies and practices are based too heavily on the thinking and language of economics. Their managers focus on producing goods and services and forget that the organization is a community of human beings that is in business--any business--to stay alive. In contrast, managers of living companies consider themselves to be stewards of a long-standing enterprise. Their priorities reflect their commitment to the organization's long-term survival in an unpredictable world. Like careful gardeners, they encourage growth and renewal without endangering the plant they are tending. They value profits the same way most people value oxygen: as necessary for life but not the purpose of it. They scuttle assets when necessary to make a dramatic change in the business portfolio. And they constantly search for new ideas. These managers also focus on developing people. They create opportunities for employees to learn from one another. Such organizations are suited for survival in a world in which success depends on the ability to learn, to adapt, and to evolve.     

Lift outs: how to acquire a high-functioning team

More and more, expanding companies are hiring high-functioning groups of people who have been working together effectively within one company and can rapidly come up to speed in a new environment. These lifted-out teams don't need to get acquainted with one another or to establish shared values, mutual accountability, or group norms; their long-standing relationships and trust help them make an impact very quickly. Of course, the process is not without risks: A failed lift out can lead to loss of money, opportunity, credibility, and even native talent. Boris Groysberg and Robin Abrahams studied more than 40 high-profile moves and interviewed team leaders in multiple industries and countries to examine the risks and opportunities that lift outs present. They concluded that, regardless of industry, nationality, or size of the team, a successful lift out unfolds over four consecutive, interdependent stages that must be meticulously managed. In the courtship stage, the hiring company and the leader of the targeted team determine whether the proposed move is, in fact, a good idea, and then define their business goals and discuss strategies. At the same time, the team leader discusses the potential move with the other members of his or her group to assess their level of interest and prepare them for the change. The second stage involves the integration of the team leader with the new company's top leadership. This part of the process ensures the team's access to senior executives-the most important factor in a lift out's success. Operational integration is the focus of the third stage. Ideally, teams will start out working with the same or similar clients, vendors, and industry standards. The fourth stage entails full cultural integration. To succeed, the lifted-out team members must be willing to re-earn credibility by proving their value and winning their new colleagues' trust.     

The myth of the top management team

Companies all across the economic spectrum are making use of teams. They go by a variety of names and can be found at all levels. In fact, you are likely to find the group at the very top of an organization professing to be a team. But even in the best of companies, a so-called top team seldom functions as a real team. Real teams must follow a well-defined discipline to achieve their performance potential. And performance is the key issue--not the fostering of "team values" such as empowerment, sensitivity, or involvement. In recent years, the focus on performance was lost in many companies. Even today, CEOs and senior executives often see few gains in performance from their attempts to become more teamlike. Nevertheless, a team effort at the top can be essential to capturing the highest performance results possible--when the conditions are right. Good leadership requires differentiating between team and nonteam opportunities, and then acting accordingly. Three litmus tests must be passed for a team at the top to be effective. First, the team must shape collective work-products--these are tangible performance results that the group can achieve working together that surpass what the team members could have achieved working on their own. Second, the leadership role must shift, depending on the task at hand. And third, the team's members must be mutually accountable for the group's results. When these criteria can be met, senior executives should come together to achieve real team performance. When the criteria cannot be met, they should rely on the individual leadership skills that they have honed over the years.     

Saving your rookie managers from themselves

Most organizations promote employees into managerial positions based on their technical competence. But very often, that kind of competence does not translate into good managerial performance. Many rookie managers fail to grasp how their roles have changed: that their jobs are no longer about personal achievement but about enabling others to achieve, that sometimes driving the bus means taking a backseat, and that building a team is often more important than cutting a deal. Even the best employees have trouble adjusting to these new realities, and that trouble can be exacerbated by the normal insecurities that may make rookie managers hesitant to ask for help. The dynamic unfolds something like this: As rookie managers internalize their stress, their focus, too, becomes increasingly internal. They become insecure and self-focused and cannot properly support their teams. Invariably, trust breaks down, staff members become alienated, and productivity suffers. In this article, coach and management consultant Carol Walker, who works primarily with rookie managers and their supervisors, addresses the five problem areas that rookie managers typically face: delegating, getting support from senior staffers, projecting confidence, thinking strategically, and giving feedback. You may think these elements sound like Management 101, and you'd be right, Walker writes. But these basic elements are also what trip up most managers in the early stages of their careers (and even, she admits, throughout their careers). The bosses of rookie managers have a responsibility to anticipate and address these problems; not doing so will hurt the rookie, the boss, and the company overall.     

Before you make that big decision..

When an executive makes a big bet, he or she typically relies on the judgment of a team that has put together a proposal for a strategic course of action. After all, the team will have delved into the pros and cons much more deeply than the executive has time to do. The problem is, biases invariably creep into any team's reasoning-and often dangerously distort its thinking. A team that has fallen in love with its recommendation, for instance, may subconsciously dismiss evidence that contradicts its theories, give far too much weight to one piece of data, or make faulty comparisons to another business case. That's why, with important decisions, executives need to conduct a careful review not only of the content of recommendations but of the recommendation process. To that end, the authors-Kahneman, who won a Nobel Prize in economics for his work on cognitive biases; Lovallo of the University of Sydney; and Sibony of McKinsey-have put together a 12-question checklist intended to unearth and neutralize defects in teams' thinking. These questions help leaders examine whether a team has explored alternatives appropriately, gathered all the right information, and used well-grounded numbers to support its case. They also highlight considerations such as whether the team might be unduly influenced by self-interest, overconfidence, or attachment to past decisions. By using this practical tool, executives will build decision processes over time that reduce the effects of biases and upgrade the quality of decisions their organizations make. The payoffs can be significant: A recent McKinsey study of more than 1,000 business investments, for instance, showed that when companies worked to reduce the effects of bias, they raised their returns on investment by seven percentage points. Executives need to realize that the judgment of even highly experienced, superbly competent managers can be fallible. A disciplined decision-making process, not individual genius, is the key to good strategy.     

Performance measurement and managerial teams

Organisations increasingly face greater competition and uncertainty. One important organisational development is the creation of inter- and intra-departmental teams that improve both the speed and quality of an organisation’s response. Successful teams require the empowerment of team members, an adequate information base, rewards for team performance, and the requisite abilities in team members. Management accounting systems can provide an integral part of the information base necessary for decision-making and rewarding performance. We investigate the incidence and importance of performance measurement for team performance. Team performance is positively associated with the variety and comprehensiveness of performance measures used. This relationship is enhanced if members participate in setting performance targets. Further, team performance is enhanced when team performance is given a greater weight in compensation. Finally, these effects are mutually reinforcing, such that team performance is substantially better when comprehensive performance measurement is combined with the participation of team members and a larger weight for team performance in their compensation.     

Workers' comp derailment: expectations not met

Two years ago RIMS formed the Risk Management Roundtable to identify trends and issues affecting the field and to develop mechanisms to broadly disseminate views and concerns. In March 1990 Risk Management published the Roundtable's first article, "The 1990s: The Decade of Risk Management," developed by its "new risk team." Focusing on how the risk management function is performed and how it is perceived, particularly by senior management, the article generated ample discussion. In this issue the Roundtable's workers' compensation team explains how the system's original intent has been eroded. The team also offers advice on how various players, including workers, employers, doctors, lawyers, insurers, regulators and legislators, can help cure the system.(ABSTRACT TRUNCATED AT 250 WORDS)     

高管团队内部网络与并购绩效

近年来,高管外部社会网络特征对企业决策的影响受到学术界的广泛关注。与以往研究侧重点不同,本文探究高管团队内部网络结构对企业决策是否产生重大影响,并构建了上市公司高管团队内部网络结构指标。基于社会网络和信息不对称等相关理论,本文实证检验了高管团队内部网络对企业并购决策绩效的影响。结果显示,高管团队内部网络结构密度越高,高管成员之间的沟通越有效,公司并购绩效越好。进一步地分析发现,当并购的复杂度和风险较高、企业所在地区制度环境较差以及高管任职时间较短时,高管团队网络密度对于并购绩效的影响更为明显。最后,本文还发现高管团队内部网络密度高的企业并购后,公司的会计业绩和市场业绩也优于其他公司。     

Stop wasting valuable time

Companies routinely squander their most precious resource--the time of their top executives. In the typical company, senior executives meet to discuss strategy for only three hours a month. And that time is poorly spent in diffuse discussions never even meant to result in any decision. The price of misused executive time is high. Delayed strategic decisions lead to overlooked waste and high costs, harmful cost reductions, missed new product and business development opportunities, and poor long-term investments. But a few deceptively simple changes in the way top management teams set agendas and structure team meetings can make an enormous difference in their effectiveness. Efficient companies use seven techniques to make the most of the time their top executives spend together. They keep strategy meetings separate from meetings focused on operations. They explore issues through written communications before they meet, so that meeting time is used solely for reaching decisions. In setting agendas, they rank the importance of each item according to its potential to create value for the company. They seek to get issues not only on, but also off, the agenda quickly, keeping to a clear implementation timetable. They make sure they have considered all viable alternatives before deciding a course of action. They use a common language and methodology for reaching decisions. And they insist that, once a decision is made, they stick to it--that there be no more debate or mere grudging compliance. Once leadership teams get the basics right, they can make more fundamental changes in the way they work together. Strategy making can be transformed from a series of fragmented and unproductive events into a streamlined, effective, and continuing management dialogue. In companies that have done this, management meetings aren't a necessary evil; they're a source of real competitive advantage.     

Accounting students' approaches to group-work

Employers and universities emphasize the need for students to be able to work in groups and be good team members, yet there is often limited understanding of what this involves and how it might be developed. This paper examines how students studying an accounting for management subject made sense of working in a group. Six different approaches to group-work are found. They range from a view that group-work gets in the way of learning to a view that the group provides a collaborative mechanism which ensures knowledge grows and develops through interactive debate and stimulation. The paper considers the implications for teaching accounting through groupwork.     

CREATING VALUE AT A CONGLOMERATE: THE CASE OF THE GODREJ GROUP

This discussion with the chairman of the Godrej Group, a well-known India-based conglomerate, begins by exploring the issue of diversification versus a single-industry focus, particularly in developing countries. Mr. Godrej observes that the capital and managerial talent provided by a corporate parent can be invaluable resources in a developing economy, where such commodities are likely to be in relatively short supply. On the other hand, he notes, a conglomerate must have some underlying strategic rationale in order to create value, and a diversified company will work only "when each of its businesses is run with clear and focused accountability."
To that end, the Godrej Group recently instituted the EVA performance management framework in six of its key businesses. In particular, the management teams running those businesses are rewarded according to the terms of an EVA-based incentive plan. Each business has since seen significant improvements in capital efficiency, market share, and overall performance. The stock price of the Godrej Group's publicly held entity has more than doubled (in a flat market), and the vast majority of the employees believe that the EVA implementation has been the company's most important recent initiative. Management teams are said now to look much more carefully at options for outsourcing, contract manufacturing, eliminating bottlenecks, and even reusing old equipment at new facilities.
Perhaps the most significant change, however, is that the "improved rigor and discipline of our EVA-based capital allocation system" has permitted Godrej family members to move from operationsoriented, owner-manager functions to a broader leadership role. The EVA system has allowed them to feel more comfortable in decentralizing day-to-day decision-making because they are confident that managers and employees are all working in the shareholders' interests.     

e‐Government in the Irish Revenue: The Revenue On‐Line Service (ROS): A Success Story?

The Revenue Online Service (ROS) is one of the first e‐government initiatives introduced in Ireland. The primary purpose of this paper is to examine this reform initiative in the Irish Revenue, assess it through the lens of the New Public Management (NPM) and e‐government literatures and to critically assess whether its implementation can be deemed ‘a success story’. Many of the components of NPM were evident in the introduction of ROS which facilitated its implementation: decentralisation, the use of private sector styles of management, an emphasis on performance measurement and a search for efficiencies. ROS has, inter alia, transformed both access to taxation information for taxpayers and their agents, and the system of tax payment and filing in Ireland. Assessing its implementation in terms of the objectives of an e‐government initiative, ROS is ‘a success story’, and the Irish Revenue organisation has clearly benefited from its introduction in many ways. Indeed, there is evidence to suggest that tax/accounting practitioners are also beneficiaries of this e‐government initiative. However, a critical analysis of the findings of this study contests the idea that ROS is an unqualified success story.     

高管团队内部网络与并购绩效

近年来,高管外部社会网络特征对企业决策的影响受到学术界的广泛关注。与以往研究侧重点不同,本文探究高管团队内部网络结构对企业决策是否产生重大影响,并构建了上市公司高管团队内部网络结构指标。基于社会网络和信息不对称等相关理论,本文实证检验了高管团队内部网络对企业并购决策绩效的影响。结果显示,高管团队内部网络结构密度越高,高管成员之间的沟通越有效,公司并购绩效越好。进一步地分析发现,当并购的复杂度和风险较高、企业所在地区制度环境较差以及高管任职时间较短时,高管团队网络密度对于并购绩效的影响更为明显。最后,本文还发现高管团队内部网络密度高的企业并购后,公司的会计业绩和市场业绩也优于其他公司。     

Virtuoso teams

Managing a traditional team seems pretty straightforward: Gather up whoever's available, give them time and space to do their jobs, and make sure they all play nicely together. But these teams produce results that are often as unremarkable as the teams themselves. When big change and high performance are required, a virtuoso team is far more likely to deliver outstanding and innovative results. Virtuoso teams are fundamentally different from the garden-variety work groups that most organizations form to pursue more modest goals. They comprise the top experts in their particular fields, are specially convened for ambitious projects, work with frenetic rhythm, and emanate a discernible energy. Not surprisingly, however, the superstars who make up these teams are renowned for being elitist, temperamental, egocentric, and difficult to work with. As a result, many managers fear that if they force such people to interact on a high-stakes project, the group just might implode. In this article, Bill Fischer and Andy Boynton put the inner workings of highly successful virtuoso teams on full display through three examples: the creative group behind West Side Story, the team of writers for Sid Caesar's 1950s-era television hit Your Show of Shows, and the high-powered technologists who averted an investor-relations crisis for Norsk Hydro, the Norwegian energy giant. Each of these teams accomplished enormous goals and changed their businesses, their customers, even their industries. And they did so by breaking all the conventional rules of collaboration--from the way they recruited the best members to the way they enforced their unusual processes, and from the high expectations they held to the exceptional results they produced.