Leadership

Many companies prefer employees with deep motivation, strong commitment, unquestioned loyalty and widely shared values. But the author says that employing such highly involved people can have serious drawbacks for the company. For starters, deeply motivated people can be a challenge for management because they tend to interpret organizational purposes in their own way, sometimes substituting their own purposes for the company objectives without even realizing it. Deeply motivated individuals are also likely to display strong resentment when the organization fails to fulfill the needs or desires they are so imbued with. Not surprisingly, deeply motivated people are not easy to get along with: They don't comply with rules or policies that they don't fully respect; they believe they should have a say in almost everything; and they tend to behave like the owners they are not (but wish they were). Similarly, people who are strongly committed are likely to develop excessive confidence in the face of difficulties. They can be blind to warning signs, which can lead to excessive delays in corrective actions. Strongly committed people are also prone to believing that the end justifies the means, which can lead to unethical behavior. Given such drawbacks, the author contends that companies might be better off with employees who have a moderate -- instead of excessive -- level of motivation, commitment and loyalty.

The health care system in the United States is in crisis, and the implications for businesses and their employees are profound. As employers struggle with unrelenting double-digit health-insurance cost increases, some firms have decided to drop coverage entirely, and many others have shifted costs to employees. Meanwhile, the quality of the health care being paid for by companies and their workers remains highly uneven. On its own, business cannot solve the health care crisis in all its aspects, but that doesn't mean it can't do a lot to improve the system. Some companies are taking more active control over the issue and getting better results on both cost and quality. To learn from such companies and from those who influence and deliver health care services, the authors conducted in-depth interviews with thought leaders in business, health care and related sectors. The overriding lesson from their research: Companies must build bridges to other players in the system to address the systemic problems that transcend even the most powerful corporations. They propose a partnership-based health care agenda for business that will benefit not only companies and employees but also health care overall by strengthening the market mechanism and encouraging fruitful collaboration.

For a firm to succeed over the long term it needs to master both adaptability and alignment -- an attribute sometimes referred to as ambidexterity. The concept is alluring, but the evidence suggests that most companies have struggled to apply it. The standard approach has been to create separate structures for different types of activities. But separation can also lead to isolation, and many R&;D and business development groups have failed because of their lack of linkages to the core businesses. In an attempt to shed new light on the discussion, the authors develop and explore their concept of contextual ambidexterity, which calls for individual employees to make choices between alignment-oriented and adaptation-oriented activities in the context of their day-to-day work. The authors introduce this as a complementary concept to traditional structural ambidexterity. By means of their survey- and interview-based research -- which took place over a three-year period and involved 4,195 respondents across 41 business units in 10 multinational firms -- the authors identify the four behaviors displayed by ambidextrous individuals, each of which involves taking independent, adaptive action in the service of overall company goals. They then present a framework for describing and analyzing which organizational contexts encourage or discourage such behaviors. They link organizational context to ambidexterity and, in turn, ambidexterity to high performance. Finally, the authors describe how companies such as Nokia, Ericsson, Oracle and Renault have been able to create such high performance contexts, and they offer managers guidance on how to create them in their own companies.

Getting more value from knowledge & #8212; especially from a firm’s own hard-won knowledge & #8212; is one of the central challenges facing companies today. Many organizations have approached this problem in recent years by making big investments in IT systems, but the payoff has often been disappointing. Companies would do better to emulate the innovative giants of the Internet & #8212; Google, eBay and Amazon & #8212; whose success has in part derived from their ability to make it easy for customers to find what they are looking for, to browse for products and services, and to evaluate potential purchases. These are exactly the things that are hard to do in most companies. That is, employees find that it is not intuitive to search for information in company repositories; they cannot easily browse within categories of knowledge; and they are not given the context they need in order to evaluate the quality of the knowledge they do find. The authors assert that if organizations apply the basic, proven approaches of the Internet success stories to capture the attention of their employees, they should be able to improve their ROI on sunk IT costs, while increasing knowledge-worker productivity.

The authors argue that contemporary management education does a disservice by standardizing content, focusing on business functions (instead of managing practices) and training specialists (rather than general managers). Working with several major international universities, the authors have developed a vision of management education that grounds MBA programs in practical experiences, shared insights and reflection. They suggest that management education be limited to working managers nominated by their companies, thus allowing them to apply their knowledge directly and immediately to actual management practice. They assert that business schools must make management education more directly applicable to a manager's own experiences, shaping the curriculum through interaction between instructor and student. They also recommend that managers be encouraged to share with their work colleagues specific lessons derived from their education. The goal of this reshaping of management education, say the authors, is for business schools to fully integrate experience, theory and reflection, encouraging managers to incorporate this philosophy directly into the daily functioning of their workplaces.

Groups devoted to learning must take steps to avoid stagnation.

More than 15 years ago, Peter Drucker heralded the beginning of the knowledge era. Since then, companies have made many attempts to leverage what they know and to increase their workers' productivity. To bring together vast amounts of explicit knowledge, they have invested large sums in content repositories; to help people track down others with tacit expertise, they have experimented with open offices, mobile technologies and online directories. Much of this has been a waste of resources. In fact, five years ago Drucker likened our current understanding of knowledge- worker productivity to our understanding of manual-labor productivity in 1900. Translation: We've got a long way to go. To reorient managers more fruitfully, SMR asked three leading management thinkers to explain what we've learned and how we can do better in the future. For Hammer, the focus should be not on the worker but on work processes and eliminating non-value-adding work. Leonard contends that companies should foster master-apprentice relationships to get the most out of their knowledge. And Davenport urges companies not just to experiment with ways of improving knowledge-worker productivity (as many already do), but to carefully measure the results of their experiments in order to learn what works and what doesn't.

Today's managers acknowledge the importance of customer focus. Yet the costly customer efforts they usually implement rarely bring the promised gains. The reason? A superficial understanding of what customer focus really means. True customer focus involves comprehensive organizational change. As Baxter Healthcare, LexisNexis, IBM and BP are learning, the kind of customer focus that creates an advantage competitors have great difficulty copying calls for companywide transformation. The author's in-depth research over many years shows how 10 breakthroughs in thinking, remarkably consistent across industries, improve growth and profitability more effectively than customer-relationship-management software, loyalty programs or satisfaction surveys. She describes how, for example, the manager of Baxter Healthcare Corp. Germany got employees thinking of themselves as doing postoperative "home-recovery enhancement" instead of merely providing postoperative nutritional products to hospitals--and how that ultimately led to Baxter becoming indispensable to customers. When deep customer focus gets rooted in employee behavior, people at all levels become innovators.

In recent years, a "postcompany" school of business experts has argued that leaps in information technology have made possible a new world of seamless collaboration among businesses, one that will bring enormous gains in efficiency and flexibility. Indeed, the experts counsel, executives should look for opportunities to tear down the "walls" around their organizations, merging their companies into amorphous "enterprise networks" or "business webs." The author concedes that the universal IT infrastructure that has been developed over the past decade does create pressures to homogenize business processes and organizations. But he warns that it is dangerous for companies to assume that the "death of distance" brought about by new communications technologies will mean the death of the company. New technologies will never conquer cutthroat competition, and managers need to be wary of alliances, outsourcing contracts and specialization initiatives that foreclose opportunities for advantage and put long-term profitability at risk. Companies will always need the walls they have so carefully erected over the years to protect their advantages.

For the past couple of decades, companies have focused on creating strong leaders of business units and influential heads of functions & #8212; men and women responsible for achieving results in one corner of an organization. But they have not paid as much attention to a more important challenge: developing leaders who see the enterprise as a whole and act for its greater good. And that perspective has become increasingly necessary as companies seek to provide not just products but broad-based customer solutions. The author explores the three key questions that companies must answer in order to link strategy to leadership development: What are the key elements of the enterprise leader’s job? Why is learning to lead at the enterprise level such a difficult challenge? And what can companies do to identify and develop enterprise leaders? He illustrates his points with examples from PricewaterhouseCoopers, Canada’s RBC Financial Group, IBM and others.