Strategy. Innovation. Brand.
Social Media for Business Leaders
As a marketing guy, I understand (sort of) the marketing aspects of social media. If you can start a conversation — and keep it interesting — you can engage your market in ways that are impossible with “interruption marketing”. You can exchange ideas, gather suggestions, support charities, and engage in positive social activities. Along the way, you can mention your products. You offer something of interest (or utility) and the products tag along for the ride.
But social media is not just about marketing. Executives should be able to use social media to enhance both internal and external communication. Yet, I haven’t found many examples in the literature. Fortunately, McKinsey just published an interesting case study based on GE’s experience. The authors, who are GE leaders themselves, point out that GE is not a “digital native” and its experiences may, therefore, be relevant to a wide range of organizations. They then outline six social media skills that all leaders need to learn. The first three are personal; the last three are strategic or organizational.
Producer — creating compelling content. Digital video tools are now widely available and easy to use. Even busy senior executives can weave them into their communications. As compared to traditional top-down communications, the emphasis shifts from high production quality to authenticity. The goal is to invite participation and collaboration. Speaking plainly and telling stories in an authentic voice invites participation much better than a highly produced video.
Distributor — leveraging dissemination dynamics. Instead of sending a message and expecting it be consumed, you now send a message and expect it to be mashed up. A successful social message will be picked up by people at all levels of the organization, commented on, “recontextualized”, and forwarded along. You want this to happen which means giving up a significant amount of control — not always an easy concept for executives. You also want to build up a followership within the organization long before you need it.
Recipient — managing communication overflow. We’re already drowning in information. Why take on social media? Because it’s more credible than top-down media. By learning to use filters effectively, you can also use social media to manage the flow of information to and from your desk. You should practice when and how to respond to postings and tweets. You don’t need to respond frequently but you do need to respond thoughtfully.
Advisor and orchestrator — driving strategic social media utilization. Fundamentally, executives need to promote the use of social media and guide it to maturity. Your company may be enthusiastic but inexperienced. Or you may have leaders who wish to avoid it altogether. A good leader can harness the enthusiasm of “digital natives” and even use them as “reverse mentors” to build capabilities within the organization.
Architect — creating an enabling organizational infrastructure. On the one hand, you want to encourage collaboration and free exchange. On the other hand, you need some rules. It helps if you have well-established values of integrity, collaboration, and transparency. If your company hasn’t established these values, it’s time to get started. Social media will arise in your organization whether you’re ready or not.
Analyst — staying ahead of the curve. As your organization masters social media, something new will emerge. Perhaps, it’s the Internet of Things. As I’ve noted before, this could help us reduce health care costs. It could also have huge implications for your organization — both good and bad. Better stay awake.
And what do you get if your company’s leaders master these skills? The authors say it best: “We are convinced that organizations that … master … organizational media literacy will have a brighter future. They will be more creative, innovative, and agile. They will attract and retain better talent, as well as tap deeper into the capabilities and ideas of their employees and stakeholders.”
Strategy: Who’s Number 2?
Can we be part of the strategy?
The CEO is clearly the most important executive when it comes to creating and implementing organizational strategy. Who’s the second most important executive for strategy?
The standard answer is probably the Chief Operation Officer — especially in terms of carrying out the strategy. But I’m starting to think that the COO is only the third or fourth most important strategic officer. So, who’s number 2? I’m leaning towards the head of Human Resources. Let’s call him or her the Chief Human Resources Officer or CHRO.
I’m leaning toward the CHRO because I’ve always believed that the soft stuff is hard. It’s not easy to get your culture right or to motivate employees for the long haul. It is all too easy to get your strategy crosswise with your culture. As I’ve noted before , when it’s culture versus strategy, culture always wins.
Similarly, I’ve never seen a company falter because they couldn’t find enough “numbers guys”. Our B-schools just keep churning them out. On the other hand, I have seen companies falter because they couldn’t find good communicators and motivators. Understanding human behavior is much more difficult than understanding the numbers. While we can teach people the “soft arts,” it doesn’t seem to be a popular specialty at university.
What’s really pushing me toward the CHRO as strategy leader is Scott Keller and Colin Price’s book, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage. (Click here for the book or here for a white paper). Keller and Price argue that too many companies pay close attention to performance (“the numbers”) but not nearly enough attention to organizational health. Their “…central message is that focusing on organizational health — the ability of your organization to align, execute, and renew itself faster than the competition — is just as important as focusing on the traditional drivers of business performance.” This has everything to do with the “people-oriented aspects of leading an organization.” In my mind, that means the CHRO better be intimately involved.
Keller and Price present a lot of statistical evidence to buttress their case. (They are McKinsey guys, after all). There is a distinct correlation between organizational health and organizational performance. They also present five “frames” for viewing both health and performance during transformation change: 1) Aspire; 2) Assess; 3) Architect; 4) Act; 5) Advance. I’ll write more about these in the future but the bottom line is that you need to use these frames to view both performance and health to develop a sustainable, high performance organization.
While I think the CRHO could and should be a strategy leader, in my experience, it doesn’t happen very often. I’ve seen HR organizations launch very interesting programs but, too often, the programs exist in their own right rather than as strategic enablers. They don’t impede the strategy but they don’t help it either. I also see the numbers guys set the strategy and then turn to the CHRO and say, in effect, “OK, here’s the strategy, now get us the people we need.” (In technology, this happens to CIOs all the time). To be effective, the CHRO really needs to be at the strategy table.
Why wouldn’t the CHRO be invited to the strategy table? Perhaps because they understand the soft stuff but not the business. I’ve seen CHROs (and CIOs) make naive comments in strategy meetings, showing that they clearly don’t understand the business. The result is a bunch of numbers guys rolling their eyeballs and looking vaguely embarrassed. Numbers guys need to learn more about the soft stuff. By the same token, CHROs (and their staffs) need to learn more about the performance side of the business. Perhaps then, they can truly become strategy leaders.
The Anatomy of Debacles
I was satisficing. If only I had known.
What’s a debacle? According to Paul Nutt, it’s “…merely a botched decision that attracts attention and gets a public airing.” Nutt goes on to write that his “…research shows that half of the decisions made in business and related organizations fail.” Actually, it may be higher because, “failed decisions that avoid a public airing are apt to be covered up.”
Remember that I wrote not long ago (click here) that perhaps 70% of change management efforts fail? Now we learn that half — or more — of all business decisions fail. We’re not doing so well. Nutt has studied over 400 debacles — botched decisions that became public disasters — and has created an anatomy of why and how they happen. Nutt’s book, Why Decisions Fail, is a sobering look at how we manage our organizations and, more specifically, our decisions.
Critical thinking should help us avoid botched decisions and public debacles. I’ll be writing about critical thinking over the next several months and, from time to time, will pull ideas from Nutt’s book. Today, let’s set the stage by looking at the basics. Nutt writes that blunders happen because of three broad reasons:
- Failure-prone practices — Nutt claims that two-thirds of business decisions are arrived at via common practices that are known to fail. One of our problems is that we typically don’t analyze the decision-making process itself. We tend to ask, “how can we correct the problem?” rather than “how did our decision-making process lead us astray?” As an example, Nutt notes that “Nearly everyone knows that participation prompts acceptance, but participation is rarely used.”
- Premature commitments — Nutt writes that “Decision makers often jump at the first idea that comes along and then spend years trying to make it work.” In the vocabulary of critical thinking, this is known as satisficing or temporizing — two heuristics that can lead us astray. Nutt concludes that, “A rush to judgment is seductive and deadly and can be headed off.” I’ll write more on how to head it off in future articles.
- Wrong-headed investments — the basic problem here is that we spends lots of time, energy, and money to demonstrate that our decision is correct and the ideas behind it are sound. We call it an evaluation but really, it’s a justification. It’s better to invest our energy in clarifying objectives, discovering issues (and opportunities), and identifying measures of risk and benefit.
Nutt also criticizes contingency theory — the idea that your situation dictates your tactics. For instance, if you’re faced with a community boycott, you should do X; if you’re faced with cost overruns, you should do Y. Nutt concludes that, “Best practices can be followed regardless of the decision to be made or the circumstances surrounding it.” The bulk of his book outlines what those best practices are.
Of course, there’s a lot more to it. I’ll outline the highlights in future posts and put Nutt’s findings in the general context of critical thinking. I hope you’ll follow along. In the meantime, don’t make any premature commitments.
Innovation and the City
I’m looking for a connection.
Let’s say that the city of Groverton has 100,000 residents and produces X number of innovations per year. Down the road, the city of Pecaville has 1,000,000 residents. Since Pecaville has ten times more residents than Groverton, it should produce 10X innovations per year, correct?
Actually, no. Other things being equal, Pecaville should produce far more than 10X innovations. In predicting innovation capacity, it’s not the number of people (or nodes) that counts, it’s the number of connections. The million residents of Pecaville have more than ten times the connection opportunities of the residents of sleepy little Groverton. Therefore, they should produce much more than ten times the number of innovations.
In Where Good Ideas Come From, Steven Johnson makes the point that connections are the fundamental unit of innovation. The more connections you can make, the more likely you are to create good ideas. Scale doesn’t matter — more connections are better at a very small scale or a very large scale. This is where cities come in. In terms of innovation, larger cities have multiple advantage over smaller cities, including:
- There are more “spare parts” lying around — Johnson points out that most new ideas are created by combining — or connecting — existing ideas. Existing ideas are “spare parts” that an enterprising “mechanic” can assemble in new ways. (In an earlier post, I referred to this as mashup thinking. Click here.) Cities have more of everything, including more spare parts to fool around with.
- More information spillover — I know a lot about information science. If I keep it to myself, it doesn’t do a lot of good. If I share it with, say some sociologists, we might just come up with something useful. My information spills over to them and vice versa. In Johnson’s terms, the information I share becomes spare parts that the sociologists can plug into their framework. The question is: how likely am I to meet up with a bunch of sociologists? It’s much more likely in a big city than a small town.
- Not only are there more connections, the connections are more varied — if I mainly talk to people who are like me, the chances of something innovative happening are fairly low. It’s when I talk across boundaries — to people who aren’t like me — that interesting ideas begin to emerge. It may happen when I bump into a random sect of sociologists. But if it doesn’t happen then, well… maybe it will happen when I encounter an enclave of entomologists. Or maybe I’ll bump into a bevy of brewers who need to know about information science. In a big city, I’m likely to interact with many more disciplines, opinions, experts, and enthusiasts than I am in a small town.
Does this work in real life? Johnson provides some very interesting anecdotes. More recently, last Friday’s New York Times had an article (click here) on manufacturing and innovation. The article argues that more innovation happens when designers are close to the manufacturing floor. Why? Because of information spillover. Researchers claim that offshore manufacturing reduces our ability to innovate precisely because it reduces information spillover. Connectivity seems to work on the manufacturing floor as much as it does in big cities. Scale doesn’t matter. Bottom line: if you want to be more innovative, get connected.
Three Myths of Change Management
My attention span is less than 12 minutes.
A majority of change management efforts in organizations fail. Indeed, the failure rate may be as high as 70%. As we’ve discussed before (click here), strategy and culture are intertwined. Before you change your strategy, you’ll probably need to change your culture. But, if the failure rate is 70%, is it even worth trying? Not if you believe in myths.
According to Bain & Company, there are three great myths that inhibit the success of change management efforts. Let’s look at each of these today. (For the complete article, click here).
Myth #1: As long as the effect on people is minimized, change will succeed. To change successfully, we all know that the whole organization needs to coalesce around a common vision. That’s easy to say but hard to do. If you’re being disrupted, you may not want to align around somebody else’s vision. So smart change managers identify those employees that are likely to be most disrupted and invite them to co-create the vision. This often takes the form of workshops “that help the leadership team paint a clear picture of what the change will look like when it’s finished.”
Myth #2: So much about change is irrational and hard to predict. Bain & Company has developed a list of 30 specific risks that can disrupt change. The list is not surprising; in fact, it’s very predictable. You can organize the risks into five major categories: 1) Balance ambition; 2) Mobilize leaders; 3) Change behaviors; 4) Shape execution; 5) Extend success. The 30 risk factors occur in “predictable patterns” and only a handful will be disruptive at any given time. By studying the predictable patterns and applying them to your organization, you can create heat maps that help you focus your attention on the right spots at any stage of the change process.
Myth #3: All you need is good leadership and day-to-day management. Once you start a major change process, you put immense stress on your organization. Weird things start to happen. For instance, people in normal business situations may have an attention span of an hour or so. In stressed out organizations, attention spans shrink to about 12 minutes. People may retain only 20% of the information they receive. Stressed employees will tune you out altogether if they think you’re not credible or that you don’t care about them. They’ll decide in roughly 30 seconds whether you’re trustworthy or not. Even the best orators find it difficult to establish trustworthiness in 30 seconds. That’s why it’s so important to deliver high-stress information via sponsors that the audience already trusts. Normal communication doesn’t work in a high stress situation. You need to simplify your message and deliver it through trusted channels. (For more on trusted channels and message cascades, click here).
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