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Archive for the ‘Harvard Business School’ Category

The book is set of 10 essays which are about the most enduring ideas on management from Harvard Business Review.

The first essay is about disruption by Clayton Chirstensen. Enough has been written about this person and his research on innovation. It is a repeat of the same. So if one has read his other books then this can be skipped.

The second essay is about how analytics can be used to compete better in the marker by Thomas H. Davenport. The essay is all about how different companies are leveraging data analysis to compete better.

The third essay about managing oneself by Peter F. Drucker. A wonderful essay to say the least. This was the best essay of the lot that is presented in this book. In the essay the author gives tips about how to manage one’s career so that one prospers without getting frustrated.
The first advice that the author offers is that one needs to figure out what is one’s strengths. He says that most people have a very wrong notion of what their strengths are and this is one of the reasons for frustrations in one’s career. The author says that the best way to learn about one’s strengths is by first setting goals to achieve and then to measure one’s progress and success against the set goal. This needs to be a constant process that one follows through one’s career.
With the feedback one should take the following steps:
First, concentrate on the strengths and ensure that one keeps producing results based on the strengths.
Second, work on improving the strengths so that one gets more and more out of the strengths.
Third, “discover where your intellectual arrogance is causing disabling ignorance and overcome it. Far too many people with great expertise in one area – are contemptuous of knowledge in other areas or believe that being bright is substitute for knowledge. First-rate engineers, for instance, take great pride in non knowing anything about people. Human being, they believe, are much too disorderly for the good engineering mind.” The author states that one needs to have a well rounded knowledge base to fully realize one’s potential. So he asks that one go and acquire skills and knowledge in areas where one is weak. At the same time the author also states that it is not necessary to take up activity in these areas where one is weak. One can stay away from taking responsibility in areas which are not one’s strengths.
It is further said that it is important to identify one’s bad habits and correct them. As an example he quotes good planner’s who do not follow their plan and so fail to deliver.
Another essential factor the author stresses upon is manners. Without good manners there is bound to be friction making it difficult for one to achieve one’s goals.

The second advice that the author gives is that one should be aware of “How does one perform or work?”. The author elaborates that it is important for one to know how one processes information. Does not process the information by reading, or hearing others discuss it? How does on learn? Does on learn by writing, or by listening to things being told to you. Answers to these questions need to be answered so that one can accordingly instruct and build people around one. If one is a listener then one needs people who can talk about various matters in one’s presence and offer their opinions, whereas if one is a reader then one will need these people to be writing up something for one to read about rather than listening to them.

The third advice that he offers is one must consider one’s values and try to stick to organizations whose values matches one’s own. If the values of the organization in which one works is very different from one’s own then it becomes difficult for one to continue in the organization and for the organization to continue one’s employment.

The fourth question that one needs to answer is where does one belong? Where can one’s contribution be the best. Which industry, which organization can be benefited the most with one’s skill and in what role can one benefit the community, organization the best? Depending on the answer to the above question one should manoeuvre oneself to a position where ones strengths are leveraged the best.

The fifth and last piece of advice that the essay has to give says that instead of contributing what one has been asked to contribute, ask oneself what should one contribute. Contribute in the area where one is confident and has expertise. It is almost follows from the fourth advice.

While it is important to know oneself, it is equally important to know the one’s around oneself and deal with the person according to the strength of the other person. This becomes important when dealing with managers. It is important for one to know the type of person one’s manager is and interact with him accordingly. This will be mutually beneficial.

The author’s advice to one’s in the knowledge industry is that one should state up front “This is what I am good it at. This is how I work. These are my values. This is the contribution I plan to concentrate on and the results I should be expected to deliver.”. If everyone in the knowledge industry to come up with such clear statements then the industry and its workers would benefit.

The last part of the essay speaks about the second half of one’s working life. The author says that while it is important to strive to be successful in one’s career, one is bound to hit the glass ceiling at some point much before the retirement age. This will mean lack of challenge and lack of motivation to continue along the same lines. Also it is likely that one would reach a state where one has more or less sufficient funds to see through one’s lifetime. At this stage, the author suggests, that one should be ready to start one’s second career. This career could be a more low profile, low return type of a career like a accountant in some community group, or an administrative job in a charity or a teaching job in an NGO or any such job which may not appear lucrative at the very beginning of one’s career. But, the author cautions, that this will be possible only if one has planned and prepared for this second career from earlier on. So if one wishes to join an NGO that teaches the under-privileged from the society then one should start associating with these NGOs from an early point in time. This will help one understand the workings of these organizations and would also help one understand what one can contribute to these organization and how.

Wish I had read this twenty-five years ago especially the one about the second career.

The Fourth essay is “What makes a leader” by Daniel Goleman. In the essay the author states that most organization tend to promote a highly intelligent and skilled executive to be the leader and the person fails. Mr. Goleman suggests that this is because of the lack of process in the organizations to identify the right person for the leadership role. He says that while technical knowledge (in the specific area) is one aspect that a leader should have, it is more important for a leader to have “Emotional Intelligence”. The author qualifies the following tests to identify the “Emotional Intelligence” of a person. First and foremost is “Self Awareness”. This means that the person should be aware of their strengths, weaknesses, drives, value and impact on others. The second aspect is “Self-Regulation”. This is ability to control or redirect disruptive impulses and moods. This entails not screaming at a team that has botched up an operation and instead to sit with it and analyze what went wrong so that it could be fixed and avoided in the future. The third quality is “Motivation”. This is the ability of the person to persevere despite setbacks to achieve one’s goals. The fourth quality is “Empathy”. This is the ability to understand the others around him or her so that they build a better confidence amongst the one’s with whom they are working and are able to take a better decisions. The last quality is “Social Skills”. This is the ability of the person to manage relationships and to be able to get work done without forcing ones thoughts or ideas, but by being persuasive in the right way and getting things done.
The author also goes on to say that while one may not have a good Emotional Intelligence to begin with, one can improve upon this by soliciting feedback from others around one.
One wishes more of the leaders and one’s appointing these leaders read this up before taking up a leadership role or appointing leaders respectively.

The fifth essay is about “Putting Balance Scorecard to Work” by Robert S. Kaplan and David P. Norton. What I understood from this is that one of the most important aspects of making this work is the ability to quantitatively measure the outcome. This is possibly the key reason why this is not the right fit for the knowledge industries. First it is hard for the management to come out with a really Balanced Scorecard and then to make matters worse it is difficult to quantitatively measure the results in most scenarios.

The sixth essay is about “Innovation: The Classic Traps” by Rosabeth Moss Kanter. In this the author talks about how organizations go through cycles of “Innovations” which aligns with the management change cycles. Each new management generation wishes to come up with some great innovation. According to the author they fail because of the following reasons:
1. Strategy Mistakes: This involves rejecting opportunities because they appear too small. Going after revolutionary changes in a big way without considering the risks, to sticking to very minor changes. The author suggests a judicious mix, dictated by the market, would be a better strategy to succeed rather than a bias to one or the other of the options.
2. Process Mistakes: This involves adopting the existing processes to a new business. The author suggests there needs to be enough flexibility around processes as the process that worked for one may or may not work for another situation.
3. Structure Mistakes: If a company is started out to innovate in a field and the innovations from this organization is expected to flow back into the original company then the company should be structure too faraway from the main organization. Doing so will not benefit either organization. They need to have the right amount interaction while not stifling innovation.
4. Skills Mistakes: Not selecting the right set of people or a wrong set of leaders to lead the organization which is to innovate will also lead to a failure. It is important to select a team which has shown capability of real innovation and put a right leader to head them. Being successful when operating in a strictly process oriented organization does not mean that the person would succeed in an organization which is expected to innovate. One will need a different kind of person to succeed in this kind of an organization.

The seventh essay speaks about “Leading Change” by John P. Kotter. This essay summarizes why transformation efforts fail. The summary is as follows:
1. Not establishing a Great enough sense of urgency.
2. Not forming a Powerful enough Guiding coalition.
3. Lacking a Vision
4. Undercommunicating the Vision by a Factor of Ten
5. Not removing Obstacles to the New Vision
6. Not Systematically Planning for, and Creating, Short-Term Wins
7. Declaring Victory too Soon
8. Not Anchoring Changes in the Corporation’s Culture

The eight essays is “Marketing Myopia” by Theodore Levitt. In this the author wishes to stress that every industry at some point is a “growth industry” and all industries ride this wave and then slowly fall of this wave. It is not upto to the industry to reinvent itself so that it does not become irrelevant. For this it needs to expand its scope and rethink its strategy of marketing rationally.

In the ninth essay Micheal E. Porter answers the question “What is Strategy?”. In this the author argues that while “Operational effectiveness” is necessary it does not amount to strategy or at least not sufficient strategy. Strategy is something that would create a unique and valuable position for the organization, it is something that requires one to make trade-offs in competing-to choose what not to do, and it involves creating “fit” among a company’s various activities.

The tenth and the last essay is about “The Core Competence of the Corporation” by C. K. Prahalad and Gary Hamel. In this the authors stress on the fact that each organization has to identify its own “Core Competency” and more importantly the requirement/importance of this “Competency” for it to succeed in the market. Having a competency which will not help the organization address the needs of a market is a waste. The authors urge that it is important to grow this competency. At the same time they warn the organizations not to create “business units” with Chinese walls between them. This they say will encourage the “business units” to hide talent and thus reducing the benefit of such talent to the organization as a whole. And lastly they state that it is important to identify next-generation competencies so that the organization continues to remain relevant in the new markets.

The Innovator's DilemmaThe Innovator’s Dilemma by Clayton M. Christensen
My rating: 3 of 5 stars

This is one book that will keep coming up whenever one comes across the topic of innovation. It is considered by many as some sort of Bible for innovation. I picked up the book with a very wrong idea in that it is about how to innovate. The book is about how to innovate, but it is from a manager’s perspective. It is not for a person who wishes to innovate, but for people who wish to encourage innovation. I should have guessed it better considering that Clayton Christensen is a professor in the Harvard Business School.
The book is a study of how large businesses have failed to innovate or have found it difficult to innovate, despite having the resources, the wherewithal and the knowledge to innovate. Clayton Christensen indicates that a business is driven by two forces; the force of the investors and the force of the customers. The Investors are looking for returns on their investments and the customers are looking forward to their desires being satiated. Given this the path for the company is straight forward. Study and understand what the customers want and deliver it to them to earn the revenues that will provide the investors their return on investment.
Seems a straightforward thing to do and how this is to be achieved is what is taught in the Business Schools. As a result when the company has to do something that is not asked for by its customers it goes against its principle, it defies all logic and most companies shy away from it. The companies that dare to find it difficult to justify the cost of this to its customers and to its investors. This blinkered vision and straight-jacketed existence is what prevents large companies from making disruptive innovations.
The above the is gist of the book. Mr. Christensen extensively studied the growth of technologies in the Hard Disk industry and along with it the rise and fall of the fortunes of the various disk manufacturers. This study is what led him to believe what has been stated above. The Disk industry moved from the 14″ drives required for the mainframes to the 8″ drives initially required for the mini computers, to the 5 1/4″ drives initially required for the Desktops to the 3 1/2″ drives initially required for the laptops to the 2 1/5″ drives initially required for heart monitors to 1.8″ drives required initially for the PDAs.
Read the above sentence again and note the use of the word “initially”. Every reduction in the disk size addressed a market which was smaller or different than the market that was being addressed by the manufacturers of the larger disk. This meant that their customers never said that they needed the other drive. This led to the companies staying away from manufacturing those drives. These smaller drives over a period of time became more robust and the same customers that refused to look at the smaller drives because of their smaller capacities started to want the very same drives as they now wished to either address their market which was looking for a smaller equipment or were looking at something that was more reliable (Note that smaller the drive the more reliable the drive is as the degree of movement of the disk with respect to the head that reads it will less in smaller drives. In the larger disks even a small vibration can cause the disk to collide with the heads towards the edge of the disks causing physical damage to the disks.)
Mr. Christensen’s sites the following reasons for companies to be not innovative.
1. Companies depend on customers and investors for resources
2. Small Markets don’t solve the growth needs of large companies
3. Markets that don’t exist can’t be analyzed.
4. An Organization’s capabilities define its disabilities
5. Technology Supply may not equal market demand

The following are identified as parameters which determine the success or failure of a company
1. Resources. These are the people that constitute the organization. The people can be trained to learn new technology and to adapt to new environment.
2. Processes: Every organization has a set of processes and these processes need to be specific to the problem they solve. Not all processes used for solving one problem will be reusable in other scenarios. Processes can be changed and adapted if there is a will.
3. Culture: This is an undefined way the organization works. This is the most difficult to change. Unless this suited for the problem that is being solved it will be difficult for the company to succeed.

Larger companies tend to be steeped in Processes and Culture which suit the current problem they are addressing it is difficult for them to groom within these parameters a disruptive innovation. Added to this problem is the fact that the market for these innovations will either be unknown or small at best and it will be difficult to justify the cost of innovation to the investors and to the customers who sustain the business.

Mr. Christensen concludes that the only way a company can foster innovation and stay ahead in the race is by

1. Sponsoring a company that is in the field and ensure that it prospers so that it can be integrated into the bigger company at a later stage when the technology and market are more mature and can now appeal to the customers and the investors.
2. Spawning an independent arm within the company with a new set of empowered managers and allowing them to define their own set of rules and processes. In short by making them independent of the main company.

The books will provide enough food for thought to managers who are in charge of running companies are are looking out for opportunities to invest in new innovations in their business.

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