Articles

It has become accepted wisdom in the corporate world that at one time or another every business will be forced to make radical changes. In fact, there is a blossoming industry of consultants and advisors who are equipped to help companies execute and survive these inevitable upheavals. But the authors propose that there is a better way to ensure that your company doesn't get ripped apart by radical change: Make sure it never needs it. What CEOs don't realize, say the authors, is that they could prevent their businesses from confronting the risks of wholesale change if they knew enough to identify and make smaller changes before too much friction builds up inside the company. Leaders and their management teams must be alert to -- and willing to confront -- early signs that the company's internal culture is not consistent with how it used to be, or how the leadership thinks of it. Making preemptive moves is never easy, because the signs are subtle and do not show up in traditional financial metrics. Shoring up a company's sagging identity is almost never a financial priority on par with, say, buying a new piece of equipment. The authors explain which indicators CEOs should monitor and take seriously (turnover rates, for example, or changes in the profile of new hires) so that they can make rational decisions as they are warranted, rather than waiting until panic sets in and countless changes are unavoidable. Such incremental shifting poses its own challenges: It's hard to convince others to join the movement when the culture in question looks healthy, but doing so will spare the company from the tough task in the future of having to reinvent itself. Given the choice, wouldn't most leaders prefer a low-level struggle with change rather than a fierce smackdown?

Strategy is a mechanism through which a company makes sense of the world around it. It is a collection of ideas about how the company intends to win, the source code upon which everything else depends. Because strategy can only capture a company's best thinking at a given point in time, the author argues that strategy, much like a software program, needs to be updated and refined as people gain new experience and knowledge. With traditional approaches to strategy development, the author argues, planning is optimized for the original targets; it is difficult to change directions once implementation is under way. Adaptive processes, by contrast, help companies create and adapt strategy quickly and iteratively, so that people can effectively triage issues and allocate resources in changing environments; they are optimized to identify the best ideas and to ensure that individuals throughout the organization have access to the latest version so that everyday actions can be aligned with the most important strategic insights. Since people throughout the organization play roles in the company's strategic success, strategy development needs to tap into ideas from everywhere. This requires opening up the process to people throughout the organization, permitting extensive face-to-face collaboration, and arranging for individuals other than senior executives to facilitate important strategic discussions. Drawing extensive comparisons with software development and using examples from companies including Metrowerks and Shamrock Foods Co., the author focuses on three major themes: having an iterative, or "spiral," approach versus a linear approach; organizing the strategy-making process around people rather than processes; and the recognition that in strategy there is no such thing as a "silver bullet." Most managers operate in settings that are too dynamic and complex for simple success recipes. Instead of seeking long-term sustainable advantage, good managers need to create sustaining advantages on an ongoing basis.

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Media coverage is a key factor in creating a company's reputation, which has been shown to influence both operational and financial performance. Scorecard rankings are a popular form of determining corporate reputations vis-_-vis competitors, yet many executives justifiably consider opinion-poll-style scorecards to be little more than beauty contests. This article discusses two techniques for assessing media coverage in a way that can inform management action: profiling media communication about a company's actions and its products and services, and then examining the various facets of an organization's media reputation profile. Media profiling is an analysis of the specific words and phrases that people and journalists use to describe and evaluate a company. The authors illustrate the use of media profiling results in three exhibits that visually reflect important aspects of corporate reputation at a glance: "media salience," which shows the prominence of a company's media image, and "media tone" and "coverage breakout," which outline different aspects of company reputation. Using the example of Apple Inc., the authors show how media profiling immediately creates a discussion that informs management action. It does so by unpacking "message macrothemes," such as profitability or service, into microthemes that a journalist uses to discuss them. Focusing on microthemes quickly moves the discussion to an expansive language about corporate reputation. Executives and public relations managers can then prioritize their responses to various reputation scenarios. First, they should try to protect and enhance the company's good message themes, then address negative message themes head-on. For mixed message themes, managers should seek to understand both sides of the story.

Scholars of various kinds long have documented the great degree to which people are influenced by similar others. Indeed, the opinions, experiences and behaviors of friends, neighbors and coworkers can provide an invaluable gold mine of persuasive resources. But even savvy executives can fail to appreciate the full power of peer influence -- or they might neglect to anticipate its unintended consequences. Consider, for example, managers who are responsible for shaping or enforcing policy within an organization. They will frequently call attention to a problem behavior, such as supply room theft, by depicting it as regrettably frequent. Although such admonitions might be well-intentioned, the communicators have missed something critically important: Within the lament of "Look at all the people who are doing this undesirable thing" lurks the powerful and undercutting disclosure "Look at all the people who are doing it." And in trying to alert people to the growing occurrence of a problem -- which could be anything from expense account padding to safety violations -- managers can inadvertently make it worse. After the Internal Revenue Service announced that it was going to strengthen the penalties for tax evasion because so many citizens were cheating on their returns, tax fraud actually increased in the following year. But that's not the only type of mistake that managers regularly make. Indeed, a more subtle problem occurs when they fail to recognize how peer influence is affecting their own decisions. Such situations can be particularly dangerous, leading people to do exactly what they shouldn't, all because they inadvertently have listened to the wrong voices. Thus, when trying to solve a problem, managers should resist the tendency (and the conventional wisdom) to start by casting the widest net possible and then later discounting information that isn't relevant. The potential pitfall of that approach is that it inserts the filtering process too late, after any irrelevant data might have already had a subconscious impact on a person's decision making.

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