Let's hear it for B players

In the much-heralded war for talent, it's hardly surprising that companies have invested a lot of time, money, and energy in hiring and retaining star performers. For most CEOs, recruiting stars is simply more fun; for one thing, the young A players they interview often remind them of themselves at the same age. For another, A players' brilliance and drive is infectious; you simply want to be in their company. Besides, in these troubled times, when businesses are so vulnerable, people who seem to have what it takes to turn around a company's performance are almost irresistible. But our understandable fascination with star performers can lure us into the dangerous trap of underestimating the vital importance of the supporting actors. It's true that A players can make enormous contributions to performance. Yet, as the authors have found, companies' long-term performance--even survival--depends far more on the unsung commitment and contributions of their B players. These capable, steady performers are the best supporting actors of the corporate world. Companies are routinely blinded to the important role B players serve in saving organizations from themselves. They counter-balance the ambitions of the company's high-performing visionaries, whose much-esteemed strengths, when carried to an extreme, can lead to reckless or volatile behavior. In this sense, B players act as a stabilizing force for charismatic A players who might otherwise destabilize the organization. Unfortunately, organizations rarely learn to value their B players in ways that are gratifying for either the company or these employees. As a result, they see their profits sinking without understanding why. This article will help you to rethink the role of your organization's B players. The authors show how you can mentor and nurture B players to ensure their continued participation in the company.     

How right should the customer be?

If your salespeople aren't sure who their boss is--the district manager? the regional manager? the customer?--it could be a sign that your company's sales force controls are working at cross-purposes and that your sales function is in trouble. Sales force controls are the policies and practices that govern the way you train, supervise, motivate, and evaluate your sales staff. They include the types of compensation you offer your people and the criteria your sales managers use to evaluate the reps' performance. These controls let salespeople know which trade-offs the company would prefer them to make when the inevitable conflicts arise between what they want to do (spend lots of time and money to get a sale) and what they actually can do (use limited resources and still get the sale). When sales force controls aren't aligned--when, say, the system simultaneously encourages reps to be entrepreneurial but also to file detailed call reports and check in frequently with their bosses--individuals become discouraged and unproductive, and they eventually leave the company. The authors' research suggests there are significant differences between the control systems of companies that encourage salespeople to put the customer first-outcome control (OC) systems--and those that encourage reps to put their managers first--behavior control (BC) systems. In this article, they list the characteristics of OC and BC systems, describe the potential fallout from conflicts within these systems, and explain how you can tell which control system is appropriate for your firm. In most cases, the right choice will be a consistent system somewhere in the middle of the OC-BC continuum.     

Building deals on bedrock

The headlines are filled with the sorry tales of companies like Vivendi and AOL Time Warner that tried to use mergers and acquisitions to grow big fast or transform fundamentally weak business models. But, drawing on extensive data and experience, the authors conclude that major deals make sense in only two circumstances: when they reinforce a company's existing basis of competition or when they help a company make the shift, as the industry's competitive base changes. In most stable industries, the authors contend, only one basis--superior cost position, brand power, consumer loyalty, real-asset advantage, or government protection--leads to industry leadership, and companies should do only those deals that bolster a strategy to capitalize on that competitive base. That's what Kellogg did when it acquired Keebler. Rather than bow to price pressures from lesser players, Kellogg sought to strengthen its existing basis of competition--its brand--through Keebler's innovative distribution system. A company coping with a changing industry should embark on a series of acquisitions (most likely coupled with divestitures) aimed at moving the firm to the new competitive basis. That's what Comcast did when changes in government regulations fundamentally altered the broadcast industry. In such cases, speed is essential, the investments required are huge, and half-measures can be worse than nothing at all. Still, the research shows, successful acquirers are not those that try to swallow a single, large, supposedly transformative deal but those that go to the M&A table often and take small bites. Deals can fuel growth--as long as they're anchored in the fundamental way money is made in your industry. Fail to understand that and no amount of integration planning will keep you and your shareholders from bearing the high cost of your mistakes.     

A time for growth: an interview with Amgen CEO Kevin Sharer. Interview by Paul Hemp

Fast growth is a nice problem to have--but a hard one to manage well. In this interview, Kevin Sharer, the CEO of biotech giant Amgen, talks about the special challenges leaders face when their companies are on a roll. Sharer, who was also head of marketing at pre-WorldCom MCI and a division head and a staff assistant to Jack Welch at GE, offers insights drawn from his own experience--and from his own self-proclaimed blunders: "I learned the hard way that you need to become credible and enlist support inside the company before you start trying to be a change agent. If you think you're going to make change happen simply by force of personality or position or intellect, you'd better think again." And change there was: Under Sharer's leadership, Amgen overhauled its management team, altered its culture, and launched a couple of blockbuster products. How do chief executives survive in that kind of dizzying environment? "A CEO must always be switching between different altitudes--tasks of different levels of abstraction and specificity," Sharer says. "You might need to spend time working on a redesign of your organizational structure and then quickly switch to drafting a memo to all employees aimed at reinforcing one of the company's values." Having a supportive and capable top team is also key: "A top management team is the most revealing window into a CEO's style, values, and aspirations.... If you don't have the right top team, you won't have the right tiers below them. [The] A players won't work for B players. Maybe with a company like GE, the reputation of the company is so strong that it can attract top people to work for weaker managers. In a new company like Amgen, that won't happen."     

Seven surprises for new CEOs

As a newly minted CEO, you may think you finally have the power to set strategy, the authority to make things happen, and full access to the finer points of your business. But if you expect the job to be as simple as that, you're in for an awakening. Even though you bear full responsibility for your company's well-being, you are a few steps removed from many of the factors that drive results. You have more power than anybody else in the corporation, but you need to use it with extreme caution. In their workshops for new CEOs, held at Harvard Business School in Boston, the authors have discovered that nothing--not even running a large business within the company--fully prepares a person to be the chief executive. The seven most common surprises are: You can't run the company. Giving orders is very costly. It is hard to know what is really going on. You are always sending a message. You are not the boss. Pleasing shareholders is not the goal. You are still only human. These surprises carry some important and subtle lessons. First, you must learn to manage organizational context rather than focus on daily operations. Second, you must recognize that your position does not confer the right to lead, nor does it guarantee the loyalty of the organization. Finally, you must remember that you are subject to a host of limitations, even though others might treat you as omnipotent. How well and how quickly you understand, accept, and confront the seven surprises will have a lot to do with your success or failure as a CEO.     

Selling the brand inside

When you think of marketing, chances are your mind goes right to your customers--how can you persuade more people to buy whatever it is you sell? But there's another "market" that's equally important: your employees. Author Colin Mitchell argues that executives by and large ignore this critical internal audience when developing and executing branding campaigns. As a result, employees end up undermining the expectations set by the company's advertising--either because they don't understand what the ads have promised or because they don't believe in the brand and feel disengaged or, worse, hostile toward the company. Mitchell offers three principles for executing internal branding campaigns--techniques executives can use to make sure employees understand, embrace, and "live" the brand vision companies are selling to the public. First, he says, companies need to market to employees at times when the company is experiencing a fundamental challenge or change, times when employees are seeking direction and are relatively receptive to new initiatives. Second, companies must link their internal and external marketing campaigns; employees should hear the same messages that are being sent to the market-place. And third, internal branding campaigns should bring the brand alive for employees, creating an emotional connection to the company that transcends any one experience. Internal campaigns should introduce and explain the brand messages in new and attention-grabbing ways and then reinforce those messages by weaving them into the fabric of the company. It is a fact of business, writes Mitchell, that if employees do not care about or understand their company's brands, they will ultimately weaken their organizations. It's up to top executives, he says, to give them a reason to care.     

How to build your network

Many sensational ideas have faded away into obscurity because they failed to reach the right people. A strong personal network, however, can launch a burgeoning plan into the limelight by delivering private information, access to diverse skill sets, and power. Most executives know that they need to learn about the best ideas and that, in turn, their best ideas must be heard by the rest of the world. But strong personal networks don't just happen around a watercooler or at reunions with old college friends. As Brian Uzzi and Shannon Dunlap explain, networks have to be carefully constructed through relatively high-stakes activities that bring you into contact with a diverse group of people. Most personal networks are highly clustered--that is, your friends are likely to be friends with one another as well. And, if you made those friends by introducing yourself to them, the chances are high that their experiences and perspectives echo your own. Because ideas generated within this type of network circulate among the same people with shared views, though, a potential winner can wither away and die if no one in the group has what it takes to bring that idea to fruition. But what if someone within that cluster knows someone else who belongs to a whole different group? That connection, formed by an information broker, can expose your idea to a new world, filled with fresh opportunities for success. Diversity makes the difference. Uzzi and Dunlap show you how to assess what kind of network you currently have, helping you to identify your super-connectors and demonstrating how you act as an information broker for others. They then explain how to diversify your contacts through shared activities and how to manage your new, more potent, network.     

Is your company ready for one-to-one marketing?

One-to-one marketing, also known as relationship marketing, promises to increase the value of your customer base by establishing a learning relationship with each customer. The customer tells you of some need, and you customize your product or service to meet it. Every interaction and modification improves your ability to fit your product to the particular customer. Eventually, even if a competitor offers the same type of service, your customer won't be able to enjoy the same level of convenience without taking the time to teach your competitor the lessons your company has already learned. Although the theory behind one-to-one marketing is simple, implementation is complex. Too many companies have jumped on the one-to-one band-wagon without proper preparation--mistakenly understanding it as an excuse to badger customers with excessive telemarketing and direct mail campaigns. The authors offer practical advice for implementing a one-to-one marketing program correctly. They describe four key steps: identifying your customers, differentiating among them, interacting with them, and customizing your product or service to meet each customer's needs. And they provide activities and exercises, to be administered to employees and customers, that will help you identify your company's readiness to launch a one-to-one initiative. Although some managers dismiss the possibility of one-to-one marketing as an unattainable goal, even a modest program can produce substantial benefits. This tool kit will help you determine what type of program your company can implement now, what you need to do to position your company for a large-scale initiative, and how to set priorities.     

How (un) ethical are you?

Answer true or false: "I am an ethical manager." If you answered "true," here's an Uncomfortable fact: You're probably wrong. Most of us believe we can objectively size up a job candidate or a venture deal and reach a fair and rational conclusion that's in our, and our organization's, best interests. But more than two decades of psychological research indicates that most of us harbor unconscious biases that are often at odds with our consciously held beliefs. The flawed judgments arising from these biases are ethically problematic and undermine managers' fundamental work--to recruit and retain superior talent, boost individual and team performance, and collaborate effectively with partners. This article explores four related sources of unintentional unethical decision making. If you're surprised that a female colleague has poor people skills, you are displaying implicit bias--judging according to unconscious stereotypes rather than merit. Companies that give bonuses to employees who recommend their friends for open positions are encouraging ingroup bias--favoring people in their own circles. If you think you're better than the average worker in your company (and who doesn't?), you may be displaying the common tendency to overclaim credit. And although many conflicts of interest are overt, many more are subtle. Who knows, for instance, whether the promise of quick and certain payment figures into an attorney's recommendation to settle a winnable case rather than go to trial? How can you counter these biases if they're unconscious? Traditional ethics training is not enough. But by gathering better data, ridding the work environment of stereotypical cues, and broadening your mind-set when you make decisions, you can go a long way toward bringing your unconscious biases to light and submitting them to your conscious will.     

A survival guide for leaders

Let's face it, to lead is to live dangerously. While leadership is often viewed as an exciting and glamorous endeavor, one in which you inspire others to follow you through good times and bad, such a portrayal ignores leadership's dark side: the inevitable attempts to take you out of the game. This is particularly true when a leader must steer an organization through difficult change. When the status quo is upset, people feel a sense of profound loss and dashed expectations. They may need to undergo a period of feeling incompetent or disloyal. It's no wonder they resist the change and often try to eliminate its visible agent. This "survival guide" offers a number of techniques--relatively straightforward in concept but difficult to execute--for protecting yourself as you lead such a change initiative. Adapted from the book Leadership on the Line: Staying Alive Through the Dangers of Leading (Harvard Business School Press, 2002), the article has two main parts. The first looks outward, offering tactical advice about relating to your organization and the people in it. It is designed to protect you from those who would push you aside before you complete your initiatives. The second looks inward, focusing on your own needs and vulnerabilities. It is designed to keep you from bringing yourself down. The hard truth is that it is not possible to experience the rewards and joys of leadership without experiencing the pain as well. But staying in the game and bearing that pain is worth it, not only for the positive changes you can make in the lives of others but also for the meaning it gives your own.     

Are you in with the in crowd?

At the core of your company, there is a group of people who seem to call the shots--or, rather, all the shots seem to be called for their benefit. This core group can't be found on any organization chart. It exists in people's hearts and minds. It comprises the people whose perceived interests and needs are taken into account as decisions are made throughout the organization. In most companies, talking explicitly about this group is taboo; its existence seems to contradict the vital corporate premise that we all have a common stake in the firm's success. In the best organizations, the core group can be a resource: Members represent the unique values and knowledge that distinguish their companies. When core groups display independence, creativity, and power, the rest of the company follows. Such behavior on the part of the company, in turn, creates value for shareholders, especially over the long term. But because of the core group's enormous power, members need to make themselves aware of the signals they send, both intended and unintended. For better and for worse, the core group reinforces whatever it pays attention to. A core group member who casually mentions a product might well discover three weeks later that someone has spent $1 million introducing it. If you do not know who constitutes the core group in your organization, or what the members stand for, you may find that leading will be extremely difficult--even if you are ostensibly the person in charge. If you want to move the organization in a new direction, you may need to explicitly challenge the core group. Otherwise the rest of the organization will not go along.     

The surprising economics of a "people business"

When people are your most important asset, some standard performance measures and management practices become misleading or irrelevant. This is a danger for any business whose people costs are greater than its capital costs-that is, businesses in most industries. But it is particularly true for what the authors call "people businesses": operations with high employee costs, low capital investment, and limited spending on activities, such as R&D, that are aimed at generating future revenue. If you run a people business-or a company that includes one or more of them how do you measure its true performance? Avoid the trap of relying on capital-oriented metrics, such as return on assets and return on equity. They won't help much, as they'll tend to mask weak performance or indicate volatility where it doesn't exist. Replace them with financially rigorous people-oriented metrics-for example, a reformulation of a conventional calculation of economic profit, such as EVA, so that you gauge people, rather than capital, productivity. Once you have assessed the business's true performance, you need to enhance it operationally (be aware that relatively small changes in productivity can have a major impact on shareholder returns); reward it appropriately (push performance-related variable compensation schemes down into the organization); and price it advantageously (because economies of scale and experience tend to be less significant in people businesses, price products or services in ways that capture a share of the additional value created for customers).     

A smarter way to network

The adage "It's not what you know, it's who you know" is true. The right social network can have a huge impact on your success. But many people have misguided ideas about what makes a network strong: They believe the key is having a large circle filled with high-powered contacts. That's not the right approach, say Cross, of UVA's McIntire School of Commerce, and Thomas, of the Accenture Institute for High Performance. The authors, who have spent years researching how organizations can capitalize on employees' social networks, have seen that the happiest, highest-performing executives have a different kind of network: select but diverse, made up of high-quality relationships with people who come from varying spheres and from up and down the corporate ladder. Effective networks typically range in size from 12 to 18 people. They help managers learn, make decisions with less bias, and grow personally. Cross and Thomas have found that they include six critical kinds of connections: people who provide information, ideas, or expertise; formally and informally powerful people, who offer mentoring and political support; people who give developmental feedback; people who lend personal support; people who increase your sense of purpose or worth; and people who promote work/life balance. Moreover, the best kind of connections are "energizers"--positive, trustworthy individuals who enjoy other people and always see opportunities, even in challenging situations. If your network doesn't look like this, you can follow a four-step process to improve it. You'll need to identify who your connections are and what they offer you, back away from redundant and energy-draining connections, fill holes in your network with the right kind of people, and work to make the most of your contacts. Do this, and in due course, you'll have a network that steers the best opportunities, ideas, and talent your way.     

Surviving your new CEO

Almost 50% of the largest American firms will have a new CEO within the next four years; your company could very well be next. Senior executives know that a CEO transition means they're in for a round of firings, organizational reshuffles, and other unwelcome career changes. When your career suddenly depends on the views of a person you may not know, how worried should you be? According to the authors--very. They investigated the 2002-2004 CEO turnover rates of the top 1,000 U.S. companies and interviewed more than a dozen CEOs, each of whom had taken over at least one very large organization. Their study reveals that when a new CEO takes charge, remaining top managers are more likely than not to be shown the door. Those who leave often land in a lower position at a new company, work in a much smaller firm, or retire altogether. The news is not all grim, however. The interviewees offer some pointers on how to create a good impression and maximize your chances of survival and success under the new regime. Some of that advice may surprise you. One CEO pointed out, for instance, that "managers do not realize how much the CEO is looking for teammates on day one. I am amazed at how few people come through the door and say, 'I want to help. I may not be perfect, but I buy into your vision:" Other recommendations are more intuitive, such as learning the new CEO's working style, understanding her agenda, and helping her look good in her new position by achieving positive operating results--and soon. Along with the inevitable stresses, the authors point out, CEO transitions can provide opportunities. Whether you reinvigorate your career within your company or find fulfillment elsewhere, the key lies in deciding what you want to do--and then doing it right.     

Realizing what you're made of

A ruptured disk pressed against Glenn Mangurian's spinal cord several years ago, leaving the lower half of his body permanently paralyzed. One minute, Mangurian was healthy and secure in his career as a management consultant; the next, his life was transformed and filled with uncertainty. The injury has taught him volumes about resilience and leadership. In this first-person account, he explains how people can create a new future after a crisis hits--and how, even if they're simply tackling everyday challenges, they can prepare themselves for the worst. Mangurian identifies resilience as one of the key qualities desired in business leaders today, but he says that many people confuse it with toughness. Toughness certainly can be an advantage in business, because it enables you to separate emotion from the negative consequences of difficult choices. But it can also be a disadvantage, because it can cut you off from many of the resources you'll need to bounce back after a crisis. Resilience, by contrast, is mostly about absorbing challenges--not deflecting them--and rebounding stronger than before. The author has learned a number of lessons about leadership in the face of adversity. For instance, although crisis distorts reality by reinforcing your fears, it also puts an emphasis on what matters right now; it highlights what's important to you and what you're capable of. Another major lesson is that loss amplifies the value of what remains, pushing you to take stock of what you have and to celebrate your assets. Perhaps most important, you can't know what will happen tomorrow--and it's better that way, because it's far more rewarding to engage with the present than just to prevent bad things from happening.     

Success that lasts

Pursuing success can feel like shooting in a landscape of moving targets: Every time you hit one, five more pop up from another direction. We are under constant pressure to do more, get more, be more. But is that really what success is all about? Laura Nash and Howard Stevenson interviewed and surveyed hundreds of professionals to study the assumptions behind the idea of success. They then built a practical framework for a new way of thinking about success--a way that leads to personal and professional fulfillment instead of feelings of anxiety and stress. The authors' research uncovered four irreducible components of success: happiness (feelings of pleasure or contentment about your life); achievement (accomplishments that compare favorably against similar goals others have strived for); significance (the sense that you've made a positive impact on people you care about); and legacy (a way to establish your values or accomplishments so as to help others find future success). Unless you hit on all four categories with regularity, any one win will fail to satisfy. People who achieve lasting success, the authors learned, tend to rely on a kaleidoscope strategy to structure their aspirations and activities. This article explains how to build your own kaleidoscope framework. The process can help you determine which tasks you should undertake to fulfill the different components of success and uncover areas where there are holes. It can also help you make better choices about what you spend your time on and the level of energy you put into each activity. According to Nash and Stevenson, successful people who experience real satisfaction achieve it through the deliberate imposition of limits. Cultivating your sense of "just enough" can help you set reachable goals, tally up more true wins, and enjoy lasting success.     

Taking the stress out of stressful conversations.

Stressful conversations are unavoidable in life. In business, they can run the gamut from firing a subordinate to, curiously enough, receiving praise. But whatever the context, stressful conversations carry a heavy emotional load. Indeed, stressful conversations cause such anxiety that most people simply avoid them. Yet it can be extremely costly to dodge issues, appease difficult people, and smooth over antagonisms; avoidance usually only worsens a problem or a relationship. Using vivid examples of the three basic stressful conversations that people bump up against most often in the workplace, the author explains how managers can improve those interactions unilaterally. To begin with, they should approach the situations with greater self-awareness. Awareness building is not about endless self-analysis; much of it simply involves making tacit knowledge about oneself more explicit. It is important for those who are vulnerable to hostility, for example, to know how they react to it. Do they clam up or do they retaliate? Knowing how you react in a stressful situation will teach you a lot about your trouble areas and can help you master stressful situations. The author also recommends rehearsing difficult conversations in advance to fine-tune your phrasing and tone. And the best way to keep from being thrown off balance by difficult conversations that crop up unexpectedly is to develop a few hip-pocket phrases that you can pull out on the spot. We all know from past experience what kinds of conversations and people we handle badly. The trick is to have prepared conversational tactics to address those situations.     

Managing authenticity: the paradox of great leadership

Leaders and followers both associate authenticity with sincerity, honesty, and integrity. It's the real thing--the attribute that uniquely defines great managers. But while the expression of a genuine self is necessary for great leadership, the concept of authenticity is often misunderstood, not least by leaders themselves. They often assume that authenticity is an innate quality--that a person is either genuine or not. In fact, the authors say, authenticity is largely defined by what other people see in you and, as such, can to a great extent be controlled by you. In this article, the authors explore the qualities of authentic leadership. To illustrate their points, they recount the experiences of some of the authentic leaders they have known and studied, including the BBC's Greg Dyke, Nestlé's Peter Brabeck-Letmathe, and Marks & Spencer's Jean Tomlin. Establishing your authenticity as a leader is a two-part challenge. You have to consistently match your words and deeds; otherwise, followers will never accept you as authentic. But it is not enough just to practice what you preach. To get people to follow you, you also have to get them to relate to you. This means presenting different faces to different audiences--a requirement that many people find hard to square with authenticity. But authenticity is not the product of manipulation. It accurately reflects aspects of the leader's inner self, so it can't be an act. Authentic leaders seem to know which personality traits they should reveal to whom, and when. Highly attuned to their environments, authentic leaders rely on an intuition born of formative, sometimes harsh experiences to understand the expectations and concerns of the people they seek to influence. They retain their distinctiveness as individuals, yet they know how to win acceptance in strong corporate and social cultures and how to use elements of those cultures as a basis for radical change.     

Managing Middlescence

They make up more than half your workforce. They work longer hours than anyone else in your company. From their ranks come most of your top managers. They're your midcareer employees, the solid citizens between the ages of 35 and 55 whom you bank on for their loyalty and commitment. And they're not happy. In fact, they're burned out, bored, and bottlenecked, new research reveals. Only 33% of the 7700 workers the authors surveyed feel energized by their work; 36% say they're in dead-end jobs. One in three is not satisfied with his or her job. One in five is looking for another. Welcome to middlescence. Like adolescence, it can be a time of frustration, confusion, and alienation. But it can also be a time of self-discovery, new direction, and fresh beginnings. Today, millions of midcareer men and women are wrestling with middlescence-looking for ways to balance work, family, and leisure while hoping to find new meaning in theirjobs. The question is, Will they find it in your organization or elsewhere? Companies are ill prepared to manage middlescence because it is so pervasive, largely invisible, and culturally uncharted. That neglect is bad for business: Many companies risk losing some of their best people or-even worse-ending up with an army of disaffected people who stay. The best way to engage middlescents is to tap into their hunger for renewal and help them launch into more meaningful roles. Perhaps managers can't grant a promotion to everyone who merits one in today's flat organizations, but you may be able to offer new training, fresh assignments, mentoring opportunities, even sabbaticals or entirely new career paths within your own company. Millions of midcareer men and women would like nothing better than to convert their restlessness into fresh energy. They just need the occasion-and perhaps a little assistance-to unleash and channel all that potential.