Sunday, December 15, 2013

Stack-ranking out now: How Microsoft lost a decade

Stack-ranking or forced rating or bell-curving are some of the pet words of HR leaders and Business leaders especially closer to appraisal time. Jack Welch used it to make GE competitive and fit to outperform their own benchmarks! GE had become fat and lazy and had businesses diversified from washing machines to Jet engines. Forced ranking or his 20/70/10 "differentiation" became mantra for weeding out bottom 10 percent of the stack.
The bell-curve ranking system was popularized by GE Chief Executive Jack Welch back in the 1980s being used by many companies, but some of them have dropped it in the last years, including Adobe and Expedia. The main idea of the system is that a company’s employees performance follows a bell-curve, having a small percentage of high performers, a large number of average performers and, at the lower end, another small percentage of underperformers. The system would be used to find and get rid of underperformers in order to improve the overall performance of the workforce and resulting in a smaller standard deviation which corresponds to a more homogeneous company.

Pressure to perform, if maintained below a certain level, can lead to higher performance. However, as the lay-offs take place, constant pressure demoralizes employees, leading to drop in performance. As the bottom performers depart, the rigid distribution of the bell-curve forces managers to categorize a high performer (when compared to the rest of the labor market) as a mediocre. A high performer, unmotivated by such artificial demotion, behaves like a mediocre. Further, in a shrinking company, managers find it difficult to differentiate employees. As a result, they begin to reward visible performance over the actual. Beyond a certain point, the erosion of social capital has the potential to cripple the company.

As the Seattle Times reported, Lisa Brummel, Microsoft’s head of human resources, wrote in a Nov. 12 e-mail to employees:
"No more curve. We will continue to invest in a generous rewards budget, but there will no longer be a pre-determined targeted distribution. Managers and leaders will have flexibility to allocate rewards in the manner that best reflects the performance of their teams and individuals, as long as they stay within their compensation budget."
The stack ranking system was put in place for Microsoft's 2011 performance reviews. Employees received one rating based on their manager's assessment and a calibration process (typically with managers one or two levels above the employee). The rating ranged from 1 (highest) to 5 (lowest). A 3 rating equaled target compensation that was competitive with what was offered in the local job market. Targeted distribution limits the percentage of workers in each rating category.
Stack ranking is still championed at many companies, and in particular at technology firms. Nevertheless, critics refer to it derisively as "rank and yank," meaning that employees who end up in the bottom ranks are often fired or encouraged to leave.
"If you are hiring competent people, what does it say about an organization when 10 percent of those people fail each year?" management consultant Aubrey Daniels commented to SHRM Online. "Rank stacking is punishing to the rater and the ratee. It produces an environment where employees compete with each other more than with competitors in the marketplace."

However, in a Wall Street Journal op-ed published in the wake of Microsoft's announcement, former General Electric CEO Jack Welch, credited with popularizing stack ranking while running GE, defended the process—when it’s done right. "Most experienced business people know that 'rank and yank' is a media-invented, politicized, sledgehammer of a pejorative that perpetuates a myth about a powerfully effective real practice called (more appropriately) differentiation," Welch wrote.
One criticism of stack ranking specifically, and pay differentiation generally, is that it devalues teamwork. Welch responded: "Nonsense. If you want teamwork, you identify it as a value. Then you evaluate and reward people accordingly. You'll get teamwork; I guarantee it."

According to Cliff Stevenson, senior human capital researcher at the Institute for Corporate Productivity (i4cp), Microsoft is right to axe the policy. When i4cp asked companies in 2009 how many of them used stack ranking systems, 49% said yes. By 2011, only 14% used them.

The companies the researchers identified as high-performing had already moved away from the system. Only 7% of high-performing companies used stack ranking in 2009, and only 6% used it in 2011.

Every single one of the big Human Capital Management (HCM) software companies, from Oracle to CornerstoneOnDemand to SuccessFactors, uses ratings as the lynch pin of its platform. These ratings—of overall performance, and of the many competencies that apparently combine to create overall performance—are the raw material for everything else that the company does to and for its people. These ratings feed compensation. They guide succession planning. They pinpoint performance gaps and then trigger the necessary training and learning interventions. 

Stack-ranking as tool to keep people constantly compete against others colleagues is a reflection of competitive environment but that process of competition leaves back many looser, many demotivated, many conspiring and self-promoting, leading to 'save job' culture which is highly safety focused than innovation and performance focused. It is actually cannibalistic. 

Need is to treat performance and reward separately and not mistake sense of fear for drive to perform!

Wednesday, October 2, 2013


If the study of culture has a predominant guru, it would be Edgar H Schein, Professor Emeritus at MIT. Schein, who has studied the elements of culture for over half a century has a simple there-layer model for understanding corporate culture (Schein, 2009). The three levels are:
ü  Artifacts. These are made up of visible structures, processes and behavior. Easy to observe, artifacts are the outermost layer.
ü  Espoused values. These are the strategies and philosophies at play. They include what people focus on and ‘how things get done around here’.
ü  Underlying assumptions. These are the unconscious beliefs and perceptions rooted in the history of the business. This innermost layer is built through collective experiences including past successes and failures.
Corporate culture is as powerful as it is multifaceted. The best way to understand it is to experience it first-hand. Be immersed in both the explicit behavior and implicit beliefs. And it is through culture that each organization gives meaning to leadership.
Typically any new employee goes through a five-stage assimilation process:
ü  Subscription.  All employment relations start here. I need to make a commitment and turn up. I would typically be feeling excited; my adrenaline would be pumping, but my enthusiasm is laced with a shade of trepidation.
ü  Discover. I go through my first few weeks of learning on overdrive. Each day seems like a breakthrough. I gather my first experiences and clarify my assumptions. I am starting to discover the culture of this new workplace. I also meet lots of new people and go through strong emotions such as validation, inclusion, insight and even some disappointment.
ü  Understand. In a few months, I get into a familiar rhythm. I set some personal rules and start to codify how I can be successful here. The rule-book is now clear and I am able to interpret this organization’s culture through every experience. I start forming an early coalition outside my direct team and I am feeling more confident.
ü  Create equity. I am now ready to put my own ideas and strategy into play. There is so much we can improve here. My first successes give me energy to take bigger risks. By now I have built strong alliances through the firm by finding people I can rely on and call upon for advice. My energy levels are high, as are my hopes for success.
ü  Distribute equity. By now, I see the bigger picture and discover new opportunities to contribute, even if indirectly. I know my thoughts and contribution are valued and I feel less insecure about my personal success. I have gathered a sense of wisdom about how to be successful here and am willing to share this with others.
Almost everyone goes through a similar cycle. In some places it could take months, in others several years to arrive at stage five. A lot of factors matter including how new employees are managed, their ability to develop the right skills at the right time and the coaching they receive. But most of all, they need enabling culture that is oriented towards employee’s empowerment and success.

A lot can go wrong during the five stages. Let’s say the culture can’t sustain new ideas, or a direct manager does not support equity development. Then the curve as in the picture could flatten prematurely while the employee still feels dependent. Without a chance to feel interdependent and secure, in a while the employee may choose to physically quit and leave. Even more tragically the person might mentally quit and stay.

Saturday, September 28, 2013

What motivates an employee for high performance

Training Magazine is running a five-part series of articles featuring expert opinions on many of today’s workplace hot topics. The third part of this series was called “Step Up!” focusing on ways to motivate employees to develop their career and improve skills training.

Peter Block provided his expertise on a  range of topics dealing with employee motivation.

Training Mag: What are the pros and cons of using money to motivate when it comes to skills training? What about recognition and competition?

Peter: I have yet to see real evidence that money motivates or changes performance or learning. Period. Money is a medium of exchange to facilitate buying and selling. Employees are not commodities. They must be paid, but cannot be purchased. It is most important that a pay system is transparent and roughly equitable. Recognition is valuable to acknowledge high performance after the fact, but it does not produce that performance. Also, the best forms of recognition focus on teams. Every time an individual is singled out, they are mostly embarrassed. Same with competition. Rank ordering human beings divides them from each other. Competitions create many more losers than winners; most of the effects are punitive.  What kind of workplace does that create? People want to know how they are doing, but that is no reason to pit people against each other.


How best to motivate employees and organizations to work together on career development and skills training.
ARTICLE | MON, 07/15/2013 - 00:00
By Lorri Freifeld

Most employees today wouldn’t turn down a promotion. But many of them are so busy with their ever-increasing workloads that they can’t find the time to take the training necessary to elevate their skills to the next level.

Likewise, most organizations today would love to fill their job vacancies by promoting current employees rather than starting from scratch with new hires. But many of them can’t figure out how to “train up” employees to the skill levels they claim to need.

Complicating matters is the perception—real or imagined—that some Millennials feel they are entitled to promotions rather than earning them, while other generations believe Millennials need to “pay their dues” before moving up the corporate ladder.

This third part of our Skills Gap series is all about motivation: how to motivate employees to take charge of their career development and how to motivate organizations and their leaders to provide a culture that fosters career development and empowerment.

Organizations need to “walk the talk” when it comes to training and development, says Bill Gentry, a senior research associate at the Center for Creative Leadership. “If the organization has a culture of supporting training and development, employees will believe it is important for their own success. So, organizations need to make an array of compelling training and development opportunities available, and executives and managers need to model their importance by taking advantage of these opportunities themselves.”

Development is a two-way street, agrees Marty Nowlin, vice president, Human Resources ManpowerGroup, North America. “The organization and the employee must make development a priority. The organization must be willing to fund it and support a week of the employee’s worklife away from day-to-day responsibilities, for instance. And the employee must be willing to dedicate that week to learning—and disconnecting from the day-to-day tasks to the extent possible.”

Since employees who are committed both to their own growth and development and to increasing their contribution to their team and organization are very critical regarding how they spend their time away from their day-to-day responsibilities, every opportunity for development must be relevant to them personally and to the value they bring to their team and the organization, emphasizes Wayne Davis, director, Corporate Training & Development at Training Top 125er CHG Healthcare Services. “Showing relevance will keep this value proposition front of mind and encourage employees to go through development opportunities. Simply stated, every learning and development opportunity must be outcome (results) driven for both the participant and the organization.”

When people get tired, performance drops, quality issues increase, and employees lose the willingness to chase personal and organizational wins, notes Tim Toterhi, an organizational coach and organizational development and change management specialist. “It’s a real problem, with a two-part solution: First, we all need to increase our mental stamina and agility. Skill training provides knowledge and tools to help us outpace the competition—to keep running when the other guy is sucking wind.”

Second, Toterhi explains, “we need a reason to run. Leaders have to link the training activity to a longer-term objective or a broader vision. Designing a career path that illustrates requirements for different roles can spark employees to prepare themselves before stepping into the next job. Also, it’s vital to have leaders in the classroom. They can lend credibility to the lessons and share stories that aid in knowledge retention.”

Likewise, Nowlin says, the conversations and interactions between the manager and the employee are key as that is when goals and motivations are truly uncovered. “When equipped with that knowledge and insight, leaders and employees can connect skills training or any other development activity to individual goals and motivations.”

Anna Franson, manager, Assessments & Feedback, CHG Healthcare Services, says a Professional Development Plan (PDP), especially when initiated and driven by the employee, serves as the catalyst for the growth and development discussions between an employee and his or her leader. “This provides the action plan or roadmap for the employee’s ongoing progression. It should show the link between the employee’s own development goals and opportunities and the organization’s business goals and mission and vision. When it is utilized as a living document in conjunction with ongoing growth and development discussions between the employee and his or her leader, the PDP maintains the relevance in the cycle of continuous improvement, growth, and development of the employee and the organization.”

Training Top 125er Wells Fargo encourages team members to think through their career aspirations and plan their development using a 70/20/10 model that blends experiences (70 percent), including stretch assignments, special projects, and community involvement; relationships and feedback (20 percent), and programs and courses (10 percent). Training is delivered through a variety of approaches to make it easy and to motivate team members to complete training and reinforce skills, according to the Wells Fargo Learning & Development team. A few examples:

Interactive quizzes in which team members have an opportunity to complete scenarios that require them to demonstrate skill or knowledge to earn activity points that can be exchanged for merchandise.
Many courses have a “Learning 2.0” site that includes just-in-time performance support tools, videos, and interactive online learning activities to reinforce skills and application. These sites also provide ongoing collaboration opportunities for learners to interact with one another.
Meeting guides that help managers lead team discussions to reinforce training.
Follow-up action planning and check-lists to help managers assess how skills are being applied on the job.
Reinforcing the 70/20/10 model and integrating it with performance and development planning to maximize learning on the job and through others so it becomes part of team members’ day-to-day work activities.
Money as a Motivator

One of the $64,000 questions about motivation always centers on money. So can money motivate employees when it comes to not only taking skills training but retaining what they learn?

Viewpoints run the gamut, but most agree money will not play a big part here. “I have yet to see real evidence that money motivates or changes performance or learning. Period,” stresses Peter Block, founder, Designed Learning: A Peter Block Company. “Money is a medium of exchange to facilitate buying and selling. Employees are not commodities. They must be paid but cannot be purchased. It is most important that a pay system is transparent and roughly equitable.”

Getting a raise, versus a small bonus, can be motivating to some, but there are limits to the capability of most managers/organizations with this system, says Ellen Van Velsor, a senior fellow in Research & Innovation at the Center for Creative Leadership. “And there is potential for employees to play that kind of system, for example, by taking many classes (that may or may not have much to do with their jobs or long-term career goals) to qualify for raises that may not be justified by their job performance.”

Adds Toterhi, “the trouble with linking behavior change solely to monetary rewards is that you have to consistently feed the meter. It’s better to tap into people’s intrinsic motivators—the emotional drivers that make them want to succeed. When you frame skill training as a vehicle for helping people do important work, be the best at a given task, or make a contribution to a larger goal, you’ll get their attention for a longer stretch. Just be cautious about public recognition and individual competition when working internationally as different cultures hold varying views of those motivators.”

Training Top 125er Wequassett Resort and Golf Club recently polled 100 employees on what motivated them. Employee recognition won by a landslide, according to Kara Lachance, director of Learning. “When our employees partake in additional training courses, we celebrate their efforts by affording them some of our guests’ amenities and recognize them at employee events with an ‘Academy Award.’ For example, we took a team of employees on a boat cruise with a special lunch packed for each of them. We have surprised them with a sundae bar in the classroom and conducted full-fledged beach parties and tennis tournaments for the employees. We have themed events once a month to recognize the employees who go above and beyond with their training and customer service…recently, we had a Great Gatsby party withgift baskets that included tickets to the movie.”

Sense of Entitlement?

Much has been written about the fact that Generation Yers have a reputation of having grown up being praised and rewarded and believe they deserve a promotion to the next level even though they may not have the skills to move into that position. Truth or fiction? And if truth, what’s the solution?

According to CCL research (,the top concern managers expressed about their next-generation employees is that they seem to have a sense of entitlement that is out of line with their roles and (lack of) seniority. As one manager said, “They have not yet paid their dues.” While much attention is paid to the sense of entitlement Gen Y employees seem to have, perhaps equal attention needs to be paid to whether the “pay your dues” attitude is the most productive one for more senior people to express, Van Velsor posits. “It hints of an organizational climate in which tenure counts more than the quality of one’s ideas and in which self-confidence is neither expected nor desired when a young person starts out in their professional career.”

Van Velsor adds that “we know younger people want mentoringand development, which does not go along with the idea that all they want is rapid promotion. And cross-generational mentoring can have many benefits both for Gen Yers and their older counterparts. Gen Y employees have skills that people not raised with technology, for example, can readily benefit from.”

Wells Fargo provides coaching and mentoring support through formal and informal programs. “Our commitment to development starts at the top and is reinforced at all levels throughout the company,” the L&D team says. “Our top 100 executives each commit to an 18-month mentoring relationship. Similar formalized programs are offered throughout the company, and tools are available online to allow team members to pursue informal mentoring relationships.”

ManpowerGroup’s Nowlin notes that it is interesting that while many Generation Yers may start with unrealistic expectations, those expectations are quickly level-set when they start looking for an opportunity or begin working in an organization. “They soon see and understand the challenges and uncertainty in the environment and job market. However, they still want to feel they are progressing and growing in their careers. It is important they understand how developing capabilities will help them to meet their goals—whatever they might be. They need to know that they own the development needed to make up the difference. There is sometimes a gap in what they believe is required and what they can do and what is actually required and how they are perceived.”

Nowlin believes organizations and their leaders would be well served to make success factors and individual feedback clear and create an environment that encourages development by creating and supporting learning opportunities.

In today’s “Company Me” workplace culture, it’s easy to hyper-focus on Gen Y’s supposed desire for rapid advancement, Toterhi says. “The drive itself, however, is nothing new. My fellow Gen Xers are no strangers to corporate dogfighting, a skill we learned from our Boomer bosses.”

To engage and retain employees of all ages, Toterhi says, managers must help them remain realistic about corporate advancement. “This means providing honest performance feedback, clarifying what it takes to make the next move, and supporting an ‘earn before you spend’ culture. Once the rules are set, they can encourage employees to acquire skills, raise their level of contribution to the organization, and then and only then, build a business case for their advancement based on proven results.”

Development has a different meaning to each individual employee, regardless of generational perspective, CHG’s Franson adds. “The key is maintaining employee engagement based upon a strong sense of growth and development for the individual employee. While many Generation Yers have been praised and rewarded, their perception of what that means is as individual as they are. Typically, those who have been groomed to believe it means a promotion have been developed that way in cultures where engagement was low and growth and development was only available to the chosen few ‘high potentials.’ Leaders must start defining development at the early stages of an employee’s career. This will broaden their view and engage them in more opportunities, and their development actions will not be based solely on the promotion or monetary reward.”

Stay tuned for Part 4 of the Skills Gap series (September/October issue), which will look at the role technology can play in bridging the skills gap.

Quick Tips

Here are some tips for employees, managers, and organizations, provided by the experts interviewed for this article:

Don’t just assume an employee wants to move up to the next level. Find out from the employee what his or her goals are, both in the short term within the organization and over the longer term. And ask the employee what motivates him or her.
Ask the employee to create a plan for his or her development. Let him or her interview people and do some research on his or her own future.
The manager should discuss one-to-one with the employee current strengths and development needs and the implications of those for what his or her desired next steps are. These “development” conversations, either formally or informally, should be held every quarter (or more often) and not just at each person’s yearly performance appraisal review.
The manager should discuss with the employee the opportunities for present on-the-job development opportunities (e.g., assignments, mentoring) and other options for development, focusing on the skills needed for next steps (e.g., community service, classroom/skills training, leadership development coursework).
The employee and manager should create a plan that they and the organization can support and sign off on. This should include what the employee specifically needs to do to meet his or her goals related to professional and career development.
The organization should provide ongoing support and tools to the employee in the implementation of that plan (e.g., coaching/mentoring, follow-up by his or her manager).
The organization should provide easy access to job information so the employee can explore opportunities and identify the skills he or she need to develop his or her career.
The organization should map a variety of career pathways and clearly define the success factors associated with each opportunity. Once people know what success looks like and the training required to get there, they will be more apt to make the journey.
The organization should align training with the skills or competencies employees need to be successful in their current jobs or to prepare for a future job.
The organization should make learning opportunities easily accessible.
Leaders in the organization should broadly communicate the expectations and capabilities needed for success in all leadership roles. This enables employees in all functions and roles to align training and development activities to meet and acquire them.
The organization must leverage its leadership. Hearing from current position holders can light a fire under future leaders.
Steer Your Career

By George Klemp, Founding Partner, Cambria Consulting (

Many companies overlook an important issue that’s key to unlocking the mystery of how best to motivate employees for new training and skills development.

It’s this: People have a hunger to know what it takes to get ahead in their organizations, but too often they lack a clear roadmap for getting there. What’s more, most employees can turn to few people or resources for solid direction. In fact, it’s not uncommon for even their managers and supervisors to be in the dark about what’s needed for employees to advance up the ladder.

But companies that tie training more directly to career advancement quickly see employees taking the wheel and steering their own training. They also witness how consistently motivated employees are to learn.

Organizations have a lot at stake in making this shift. Despite all the time, effort, and investment involved in hiring the best and the brightest employees, many companies have shockingly high turnover rates. It’s often considered a success to have people still in their jobs a mere two to three years after they’re hired.

One of the biggest reasons people cite for going to work somewhere else? They couldn’t see a way forward at their last employer. Training can bridge that gap for employees and empower them to take a more active role in their own development. Here’s how to make the shift:

Balance performance and advancement. Much training today is aimed at closing gaps in how employees do their current jobs. But people are more motivated about getting to the next level in their career. Most employees want to be seen as good performers in their role today, and also highly competitive for opportunities that surface tomorrow. Training should honor both.

Identify the critical skills for success. Define what’s most important to getting results in the current job. The key: What are the four or five most important responsibilities in every job? And what are the experiences and skills required to be successful? Answering simple, clear questions such as these can help training professionals design essential training—and will motivate people to engage in it.

Make it all transparent. Now make all of this public and accessible. Giving employees and their managers this information about different roles up, down, and across the organization does away with the mystery of what it takes to get from here to there and motivates people to take the training that helps them get ahead.

Is the Millennial Generation Ready to Lead?

By Evan Sinar, Ph.D., Team Leader—Assessment and Selection Analytics, Development Dimensions International, Inc. (DDI)

Generation Y, or the Millennial generation, is growing up, and as the oldest of them enter their 30s, many are in line for (or already holding) supervisory and management positions. But is this group well equipped to assume leadership roles? Or are the images of helicopter parents and their entitled children true depictions—leaving organizations with an acute shortage of talent that is ready to be called “boss”? To examine that question, I turned to our leadership performance data collected over the last decade to compare leadership skills and competencies by generation.

Before I describe the results, I would like to briefly explain how we collect performance data at Development Dimensions International, Inc. (DDI). Over the last 20 years, we have worked with our clients to implement pre-employment assessments for more than 1,000 organizations of various sizes and industries that are used each day to fairly and accurately assess more than 10,000 candidates globally. During our validation of these pre-employment assessments (that is, to connect scores on the assessment to effectiveness on the job), we have accumulated robust, competency-based performance data from more than 4,000 current leaders.

These data about leadership effectiveness focus on eight common competencies performed on the job and reflect critical leadership abilities spanning organizations and industries: adaptability, work standards, decision-making, planning and organizing, customer focus, communication, gaining commitment, and developing others.

Download the graphic below to see how the job performance of those on the first step up on the management ladder—front-line leaders—for the two generations entering the workforce most recently: Millennials (born 1982-2000) and Generation X (born 1965-1981). A data point plotted closer to the center of the graph shows lower performance compared to all leaders, while one plotted toward the outside shows higher performance.

What can we conclude from this comparison?

Of our sample, both generation groups performed reasonably well for front-line leadership competencies (and similarly in overall leadership effectiveness) with a few noted differences.

The Millennial generation performs well compared to Generation X when it comes to adaptability and customer focus, indicating a strong service orientation blended with an ability to positively view and rapidly acclimate to workplace change.
However, the Millennials as a group show some relative weaknesses compared to Generation X when it comes to operational competencies such as decision-making and planning and organizing. Their motivation to set high performance standards for themselves is also lower, as shown by weaker work standards.
Notably, Millennials and Generation Xers are similar in many key interpersonal drivers of leadership effectiveness, including developing others, gaining commitment, and communication.

So what does this mean? Are Millennials ready to lead? Based on our research data, yes, individuals born in the Millennial generation are a viable talent pool for your open leadership positions. Of course, each individual within a population will have different strengths and weaknesses, but the general assumption that Millennials lack what it takes to develop and motivate others is not supported by our data. Furthermore, such assumptions do not recognize some of their key strengths relative to the prior generation, Generation X.

Because the strengths of Millennial and Generation X leaders often complement each other, it’s also beneficial for organizations to create opportunities for leaders of different ages to work together and learn from one another, such as on a project team or task force, targeted networking, or in a mentoring relationship.

In considering these generational data, it’s worth pointing out that an individual’s readiness to lead must be evaluated in the context of your specific role and specific business situation, with processes to define and assess for competencies, knowledge, experience, and personal attributes before entry into the role, and to focus development efforts on the individual’s growth areas once he or she is in the job. My conclusion, based on our performance data, is that individuals from the Millennial generation do possess some key and unique strengths alongside a few relative weaknesses. Most importantly, they achieve similar overall effectiveness levels and are nearly identical to their predecessors in the foundational interpersonal skills that are so essential to high-quality leaders today and in the future.

Monday, July 22, 2013


The book that shows how to get the job done and deliver results . . . whether you’re running an entire company or in your first management job. Execution is a discipline and integral to strategy.
Execution is the major job of the business leader.
Execution must be a core element of an organisation’s culture.
Much has been written about Jack Welch’s style of management—specially his toughness and bluntness, which some people call ruthlessness. He forced realism into all of GE’s management processes, making it a model of execution culture.
Execution After a long, stellar career with General Electric, Larry Bossidy transformed AlliedSignal into one of the world’s most admired companies and was named CEO of the year in 1998 by Chief Executive magazine.
In July 2001 Larry Bossidy was asked by the board of directors of Honeywell International (it had merged with AlliedSignal) to return and get the company back on track. He’s been putting the ideas he writes about in Execution to work in real time.

Typically the CEO and his senior management team allot less than half a day each year to review the plans—people, strategy and operations. Typically too the reviews are not particularly interactive. People sit passively watching PowerPoint presentations. They don’t ask questions.
They don’t debate, and as a result they don’t get much useful outcome. People leave with no commitments to the action plans they have helped create. This is a formula for failure.
Only a leader can ask tough questions that everyone needs to answer. Dialogue is the core of culture and basic unit of work. How people talk to each other will determine how well organisation will function.

Is the dialogue stilted, politicised, fragmented and butt-covering?
Far too many leaders avoid debating about people openly in group settings. That’s no way to lead.
Micromanaging is a big mistake. It diminishes people’s self confidence, saps their initiative and stifles their ability to think for themselves.
But there is enormous difference between leading an organisation and presiding over it. The leader who executes often does not even have to tell people what to do; she asks questions so they can figure out what they need to do. In this way she coaches them, passing on her experience as a leader and educating them to think in ways they never thought before.
All leaders like Jack, Sam and Herb are good communicators but communication can be more boilerplate, or it can mean something.
All these leaders practice ‘management by walking around’. They are passionate about getting results. These leaders energise by the example they set.
Even at the end of his career, Jack was not presiding. He was leading by being actively involved.
Execution has to be embedded in the reward systems and in the norms of behaviour that everyone practices. One way get a handle on execution is to think of it as akin to the six sigma processes for continual improvement.  People practicing this methodologies look for deviations from desired tolerances.
Like six sigma, the discipline of execution doesn’t work unless people are schooled in it and practice it constantly. It does not work if only a few people in the system practice it.
The real problem is that execution just doesn’t sound very sexy. It’s the stuff a leader delegates.
Nobel Prize winners succeed because they execute the details of a proof that other people can replicate, verify, or do something with. They test and discover patterns, connections and linkages that nobody saw before.

“Unless I make this plan happen, it’s not going to matter. “ But the selection, training and development of leaders doesn’t focus on this reality.
Leaders are articulate conceptualisers, very good at grasping strategies and explaining them. They are not interested in “how” of getting things done; that’s for somebody else to think about.

Many don’t realise what needs to be done to convert a vision into specific tasks, because their high-level thinking is too broad. They don’t follow through and get things done; the details bore them. They don’t crystallise thoughts or anticipate roadblocks.
Leader’s communications are just not down to earth messages but a tool for changing attitudes. They made the company goals, issues and new leadership style clear to the employees. The talk is straightforward, even blunt, designed to elicit truth and coach people in the behaviour Leader expects his managers. “Intense candour”, Dick Brown, CEO of EDS calls it, “a balance of optimism and motivation with realism.

What exactly does a leader who’s in charge of execution do? How does he keep from being a micromanager, caught up in the details of running the business?
1.         Know your people and your business.
2.        Insist on realism.
3.        Set clear goals and priorities.
4.        Follow through.
5.        Reward the doers.
6.        Expand people’s capabilities.
7.        Know yourself.

When going to meet people, prepare well. Learn about stars and set up time with them. Acknowledge their good work and Leave them with a couple of thoughts she didn’t have.
Larry asked why his quality staff reported to manufacturing. “That’s like putting the fox in charge of guarding the chicken coop.” He wanted quality to analyse manufacturing.
Realism is the heart of execution, but many organisations are full of people who are trying avoiding or shading reality. Why? It makes life uncomfortable. People don’t want to open Pandora’s Box. They want to hide mistakes, or buy time to figure out a solution rather than admit they don’t have an answer at the moment. They want to avoid confrontations. Nobody wants to be the messenger who gets shot or the troublemaker, who challenges the authority of her superiors. Sometimes the leaders are simply in denial.
Was it realistic for AT&T to acquire a bunch of cable businesses it didn’t know how to run? The record shows it wasn’t. Was it realistic for Richard Thoman to simultaneously launch two sweeping initiatives at Xerox without being able to install the critical leaders? Clearly not.

How do you make realism a priority?  You start by being realistic yourself. Then you make sure realism is the goal of all dialogues in the organisation.
A leader who says, “I have got tem priorities” does not know what he is talking about—he doesn’t know himself what the most important things are. Set clear and simple goals.
Clear and simple goals mean nothing if nobody takes them seriously. The failure to follow through is widespread in business, and a major cause of poor execution.
If you want people to produce specific results, you reward them accordingly.

The most effective way to coach is to observe a person in action and then provide specific useful feedback.

The skill of the coach is the art of questioning. Asking incisive questions forces people to think, to discover, to search.
Energize people:  Some leaders create energy in their people.  Others drain it.  Day-to-day energy focused on immediate goals.  That’s what gets things done. 
•Are deeply involved in all aspects of their area … curious … tireless … never finish a conversation without summarizing the actions to be taken. 
Are decisive on tough issues:  “Some leaders simply do not have the emotional fortitude to confront the tough ones.  When they don’t, everybody in the business knows they are wavering, procrastinating, and avoiding reality.”  (See Good to Great.) 
Get things done through others: Workaholics who micromanage can’t cut it in the long run.  Neither can hands-off and big-picture-only folks. 
Follow-through:  Ensure that people do what they committed to per time-table.  Synchronize through specificity.  When circumstances de-rail the train, move quickly to lay alternative tracks.

What’s to be done 
By whom 
When and how 
With what resources 
When, how, and with whom to be reviewed. 
•Never launch an initiative without personal commitment to follow through until it is simply part of “how we do things.” 

•Focus on what they did and why (priority setting) 
•Does she naturally focus on the people who were assigned to her and how they contributed to the result? 
•Does her career history, from school on, give evidence or energy, enthusiasm, and a delight in accomplishments?  (You can know this when you do CIDS interviewing)
•Does she tend to wander into strategy and theory repeatedly? 
•Did he meet commitments in ways that strengthened or weakened the people involved and the organization as a whole? 

“Nowhere is candid dialogue more important than in the people process.  If people can't speak forthrightly when evaluating others, then the evaluation is worthless – to the organization and to the person who needs the feedback?”

Everyone pays lip service to the idea that leading an organisation requires strength of character. In execution it’s absolutely critical. You need ‘emotional fortitude’ to be honest in thought, action and belief.
Psychologists know that some people are limited, even crippled, by emotional blockages that prevent them from doing things that leadership requires. Such blockages may lead them to avoid unpleasant situations by ducking conflicts, procrastinations on decisions, or delegating with no follow –through.
Emotional Fortitude comes from self-discovery and self-mastery.
Leaders know intuitively that they have a problem and will often acknowledge it as well but alarmingly majority of them do not do anything to fix the problem.

At Baxter International, for example, HR is central both to a rigorous process of assessing, developing, and promoting people and to the company’s strategic planning. They established teams to flesh out the details of exactly what was needed, what capabilities they had and what they needed to do to fill the gap.
Organizational Hardware: 
•Organizational Structure 
•Design of rewards 
•Compensation and sanctions 
•Financial reports and their flow 
•Communication systems 
•Hierarchical distribution of power 
Assignment of tasks 
Budget level approvals 
Social Software: 

•Norms of behaviour 
•Everything else that isn’t hardware
CEO of the Year 2013
David M. Cote, Chairman and CEO, Honeywell

 "David took on an enormous challenge and just hit it out of the park, creating one Honeywell.  He's often said the trick is in the doing and David has done it, both internally at the company and externally in the strong statesman role he's playing to help our country."
- Jim Turley, Chairman and CEO, Ernst and Young and 2013 CEO of the Year selection committee member
 Chief Executive Magazine’s “CEO of the Year,” award recognizes an outstanding corporate leader nominated and selected by peers. Under Dave’s leadership for more than a decade, Honeywell has:

• Increased sales by 71% to $37.7 billion
• Increased EPS* by 197% to $4.48
• Delivered a total shareowner return of 240%, consistently outperforming the S&P 500 
• Transformed Honeywell into a global company, with 54% of sales coming from outside the U.S.   Versus 41% 10 years ago
• Oversaw more than 75 acquisitions and 50 divestitures
(Nominations for CEO of the Year were garnered from Chief Executive Magazine’s 124,000 readers. The ten most frequently cited nominations were evaluated and a winner was voted upon by a peer Selection Committee consisting of CEOs from leading global corporations. )

The Leadership Behaviours of “One Hon”
To fix Honeywell’s fragmented culture, David Cote identified 12 key behaviours that ultimately became the basis of the Honeywell Operating System—more colloquially known as One Hon:

1.         Growth and Customer Focus
2.        Leadership Impact
3.        Gets Results
4.        Makes People Better
5.        Champions Change
6.        Fosters Teamwork and Diversity
7.        Global Mindset
8.        Intelligent Risk Taking
9.        Self-Aware/Learner
10.      Effective Communicator
11.        Integrative Thinker
12.      Technical or Functional Excellence



Thursday, July 18, 2013

Happy Teachers' Day?-July 17-Prof. crushes students, Headmistress kills 27 with poisonous mid-day meal!

It was Teachers' day with a message from hell, for students! Jul 17, 2013....
This is Bangalore---
Prof Charmaine Jerome, behind wheels of her Santro car, crushes 4 students in broad day light at Mount Carmel College (MCC) gate yesterday! Multiple fractures, serious injuries! Hell broke loose at 8.20 am..

Come down to  small town Chapra, yes, it is in Bihar where Nitish rules after Laloo..27 kids killed by feeding them poisonous mid-day meal. Headmistress Meena Devi is at large! Food is cooked by school and grocery is collected every day from Meena's residence. Grocery is bought from Meena's husband's grocery shop. It is suspected the Mustard Oil was poisonous! Education minister is calling it a political conspiracy against Nitish's susaasan (good governance)! Hell broke on poor kids and parents and draconian government is shamelessly calling it a conspiracy!
Earlier Mid-day meal was supplied by NGOs and later a self-governing local body was formed and here enters the political monster into people's food and bleeds their lives out.

This is culpable homicide and calls for quick trial and corporal punishment! This case is an alarm bell!
Food, health and transport (accidents), poor buildings, including schools and housing are some of the killers in the form of 'transformers'! The 'transformers' which look like cars and turn out to be monsters, create mayhem and we see death and destruction all around!
The susaasan government shall look into all disasters in waiting, all transformers who can turn into monsters and all conspiracies that can kill people and destabilize their government!

I pity, what our IAS officers do in this country, other than sucking up and building illegal asset for progeny!
I am not blaming all but the rest, who are not corrupt, have given up against those, who suck up! This is no less a suck up! This is even bad as the corrupt plunder shamelessly and sit back on their golden chairs with vodka, uninhibited!
For all reasons, if we leave our lives in the hands of politicians and their private governments, we are no less than slaves!

I believe, if you check for how Prof.Charmaine got her driving licence, you would find that she just bought one! It is also a reminder for the MCC to check how many of their Professors and staff are in right mental balance! Send them for a thorough medical check up and review their behavior!

Wednesday, July 17, 2013

Tom Peters and Robert H Waterman Jr - In Search Of Excellence summary

Tom Peters and Robert H Waterman Jr - In Search Of Excellence summary

The seminal management book In Search of Excellence, by Tom Peters and Robert Waterman, was published in 1982, and remains one of the one of the biggest selling and widely read business books ever. Peters said finally in his 2001 interview that were he to write In Search of Excellence today, he would not tamper with any of the eight themes, but he would add to them: capabilities concerning ideas, liberation, and speed.

Here is a summary of the 'In Search of Excellence' eight themes, which also form the eight chapters of the book.

In Search of Excellence - the eight themes-

1.       A bias for action, active decision making - 'getting on with it'.
2.       Close to the customer - learning from the people served by the business.
3.       Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'.
4.       Productivity through people - treating rank and file employees as a source of quality.
5.       Hands-on, value-driven - management philosophy that guides everyday practice - management showing its commitment.
6.       Stick to the knitting - stay with the business that you know.
7.       Simple form, lean staff - some of the best companies have minimal HQ staff.
8.       Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralized values.

In Search Of Excellence summary
Peters and Waterman found eight common themes which they argued were responsible for the success of the chosen corporations, which have become pointers for managers ever since. In Search of Excellence didn't start out as a book, as Tom Peters explained when interviewed in 2001 to mark the 20th anniversary of In Search of Excellence: Peters and Waterman were both consultants on the margins of McKinsey, based in the San Francisco office. In 1977 McKinsey director Ron Daniel launched two projects; the first and major one, the Business Strategy project, was allocated to top consultants at McKinsey's New York corporate HQ and was given star billing. Nothing came of it. The second 'weak-sister' project (as Peters called it) concerned Organisation - structure and people. The Organisation project was seen as less important, and was allocated to Peters and Waterman at San Francisco. Peters travelled the world on an infinite budget, with licence to talk to as many interesting business people he could find about teams and organisations in business. He had no particular aim or theory in mind. In 1979 McKinsey's Munich office requested Peters to present his findings to Siemens, which provided the spur for Peters to create a 700-slide two-day presentation. Word of the meeting reached the US and Peters was invited to present also to PepsiCo, but unlike the hyper-organised Siemens, the PepsiCo management required a tighter format than 700 slides, so Peters produced the eight themes.

The platform for Peters and Waterman, onto which the In Search Of Excellence research and theorising was built, was the McKinsey 7-S model:
McKinsey 7-S model elements
  1. structure
  2. strategy
  3. systems
  4. style of management
  5. skills - corporate strengths
  6. staff
  7. shared values

Peters and Waterman examined 43 of Fortune 500's top performing companies. They started with a list of 62 of the best performing McKinsey clients and then applied performance measures to weed out what they thought to be the weaker companies. General Electric was one of the casualties which failed to make the cut. Peters says that one of his personal drivers in carrying out his research was to prove that certain established methods - particularly heavily systemised philosophies and practices - were wrong, notably those used by Xerox, and advocated by Peter Drucker and Robert McNamara. Peters says that he wanted - with a passion - to prove how crucial people are to business success, and to release business from the 'tyranny of the bean counters'.
As Peters explained in 2001: 'Start with Taylorism, add a layer of Druckerism and a dose of McNamaraism, and by the late 1970's you had the great American corporation that was being run by bean counters...'
(Bean counter: A person, typically an accountant or bureaucrat, perceived as placing excessive emphasis on controlling expenditure.)
Contrast this with what Peters says became the essential message of In Search of Excellence, simply:
·         People
·         Customers
·         Action
Peters says that In Search of Excellence turned these 'soft' factors into hard ones, when previously the only 'hard factors were considered to be the 'numbers'.
Peters also said in 2001 that other than certain wrong companies highlighted - Atari and Wang for instance - In Search of Excellence 'absolutely nailed the eight points of the compass for business at that time' (1982), but that its central flaw was in suggesting that these points would apply for ever, when they most certainly have not.
Illustrating some other practical aspects of ‘In Search of Excellence’ below-

EXCELLENCE. Now. EXCELLENCE. Always.--Tom Peters

People first, second, third, fourth …
The “business” of leaders is people: to inspire/engage/provide a trajectory of opportunity—enterprise of every size and type as “cathedral” for human development.
"When I hire someone, that's when I go to work for them.” —John DiJulius

1A. Customer comes 2nd/ If you want to best “Wow!” customers, then you must first Wow! those who serve the customers.
"If you want staff to give great service, give great service to staff.”—Ari Weinzweig, Zingerman's/
“You have to treat your employees like customers.” —Herb Kelleher, on his #1 “secret to success.”
1B. Manager’s sole raison d’être: Make each of my team members successful!
1C. Effective organizations: No bit players!
1D. Appreciation.  Acknowledgement. “The deepest human need is the need to be appreciated.” — Believe it!  A few kind words are often remembered for years!
1E. 1st line supervisors. Every organization’s … most important … leadership cadre. Productivity is largely determined by the caliber of the 1st line boss.
 Selection and development of your “sergeants” must become an “obsession”—almost all do a half-assed job. 
1F. Weird/ There are no “normals” in the history books! /Insure a healthy supply of oddballs/Diversity of every flavor = Fresh perspectives! Better decisions!
1G. Memories That Matter. And don’t. / “People stuff” sticks with you: You’ll look back on the handful of people you developed who proceeded to change the world—and the multitude (if you’ve earned it) who say, “I grew most when I worked with you.” Ever seen a tombstone engraved with the deceased’s net worth?
2. You/me: Businesses no longer coddle. You’re in charge! / “Brand you”—stand out for something valuable, or else; learn something new every day, or else! /“Distinct or Extinct!”

3. Organizations Exist to Serve. PERIOD.

4. EXECUTION/ “Don’t forget to tuck the shower curtain into the bath tub.” —Conrad Hilton on his “sweat the details” obsession and #1 “success secret”/
“Execution is strategy.” —Fred Malek
“Execution is the leader’s job #1.”—Larry Bossidy

4A. “They do … ONE BIG THING at a time.” —Drucker on successful managers’ #1 trait.
4B. Resilience circa 2011:  Understand it. Hire for it.  Promote for it. Obsess on it.

5. MBWA/Managing By Wandering Around/ Starbucks’Schultz visits 25 stores a week/ “In touch” is “not optional”/You = Your calendar/Calendars never lie!
5A. Listening per se = Candidate for Core Value #1/Listening per se is a profession. /“If you don’t listen, you don’t sell anything.”/Docs interrupt patients after
      … 18 seconds. And you? 

5B. “What do you think?” “How can I help?” —MBWA
      8/Eight words, repeated like a mantra while “wandering around,” that unlock engagement/ success for multitudes.
5C. Innovate by “Hanging out” /“You are what you eat.”/ “You will become like the five people you associate with the most —a blessing or a curse.”/

      Want “cool”? Expose yourself to cool! /Manage “hanging out” zealously-formally —with customers, interesting outsiders, etc.
5D. K = R = P (Kindness = Repeat business = Profit.)
      “Hard is soft. Soft is hard.” —#1 finding In Search of Excellence.   Kindness is “hard”—and pays off in $$$$.
5E. Apology Power—Awesome power: 3-minute “I’m sorry” call heals anything—do it religiously! /”Over- the-top” response to even small booboo strengthens customer relationships!
6. “Little BIG Things”/Focus on “multipliers”: Wal*Mart goes to big shopping cart = +50% “big stuff” sales boost! /“Wash your Hands” —save thousands of lives P.A. in hospitals!
6A. “Little BIG Things”: SMEs bedrock of all economies. Nurture them. SME’s battle cry per George Whalin: “Be the best. It’s the only market that’s not crowded.”
7.  Apple > Exxon in market cap courtesy … DESIGN! /The big “Duh”: “Cool beats un- cool!”/Design candidate for “best way to differentiate goods-services in competitive markets.”
7A. TGRs/Things Gone Right.  Wagon Wheel restaurants, Gill MA—clean restroom with fresh flowers.—we remember such touches more or less forever/      Manage-measure TGRs.
7B. Scintillating Experiences.  Howard Schultz on Starbucks: “At our core, we’re a coffee company, but the opportunity we have to extend the brand is beyond coffee; it’s entertainment.”
8. WOMEN Buy! WOMEN Rule! WOMEN’s World!  Women buy 80% of everything—$28T world market/“Why Warren   Buffett Invests Like a Girl”—e.g., studies harder-holds longer-less frenzied buying and selling/Women’s leadership style fits  21st century less-hierarchical enterprise./Evidence clear—
Women well on the way to 21st century economic domination!  Brazil’s President Dilma Rousseff at UN: “the century of women.”

9. Web-Social Media/ “Everyone becomes our valued partner, a member of our community—and watchdog”/The Power of Co-creation —my “Top Biz
    Book for 2010”/SM can be lynchpin of transformative strategy—for organizations of every shape and size!

10. Value added via transformation from “Customer satisfaction” to “customer success” —huge difference- opportunity! /E.g., IBM Global Services, from      afterthought to $60B/UPS Logistics/MasterCard Advisors/ IDEO, help clients create “culture of innovation”/“The Geek Squad”—Best Buy’s #1 strategic      point of differentiation.

11. Innovation “secret” #1: “Most tries wins.” / “A Bias for Action”—excellence trait #1, In Search of Excellence/“Ready. Fire! Aim.” —Ross Perot//
“Instead of trying to figure out the best way to do something and sticking to it, just try out an approach and keep fixing it.” —Bert Rutan
11A. Try a lot = Fail a lot /“Fail. Forward. Fast.”/ “Fail faster, succeed sooner”—David Kelley /
“Reward excellent failures, punish mediocre successes”/Whoever Makes the Most Mistakes Wins —Richard Farson
11B. “You miss 100% of the shots you never take.”  —Wayne Gretzky

 12. Live WOW! /Zappos creed … “WOW Customers”/ eBay 14,000 employees, Amazon 20,000  employees, Craig’s List 30 employees; regardless of issue,  Where’s your “Wild and Wooly Craig’s List Option”?/ Final point in superstar adman Kevin  Roberts’ Credo: “Avoid moderation!”

13. EXCELLENCE is a personal choice … not an institutional choice!
     EXCELLENCE is not an “aspiration” —it’s the next five minutes!
13A. EXCELLENCE. Always.  If not EXCELLENCE, What? If not EXCELLENCE Now, When?