Introducing New Services at IDEO
- Being playful, try and ask forgiveness
- Fail often succeed soon
- Trial and error succeeds over a planned genius
- Innovation has no bad ideas
- Introduce new customers to your culture slowly
- Don’t accept the facts, challenge embedded assumptions
“The thing that kills most ideas is not that they’re not good ideas, it’s that they are not good ideas organisationally or culturally” Tim Brown CEO, IDEO
Japan: Deficits, Demography and Deflation
- Excess capacity in Japan and the region
- People don’t want to borrow
- Fiscal Ricardian Equivalents
- Debt service 37% of GDP
- No structural changes
Some takeaways from our leading change discussion:
- Don’t expect to be liked
- Listen to the team – understand the issues
- How do use a crisis and burning platform as a catalyst for change. “Don’t waste a good crisis”
- People are not going to hold up the mirror and reflect without some help
- People need to understand how to make the change
- Clarity on timing and the measure of success
- How do you get people to share the vision?
- Don’t declare victory too soon
- Communication, communication, communication
- Foundation is only as strong as your last investment “you need keep investing in it”
- Be honest on the journey
- Be direct
- Use peer pressure
- Don’t have all the answers, let your team fill out some of the spaces
Mistry Architects is organisation in India specialising in “Green” architecture design.
- Lean manufacturing in Japan was driven by raw material stortages
- Necessity is the mother of invention
- Flat structures are consistent in creative organisations
- What is the context for success?
- Service Management – Quality, Efficiency and Monitoring
- Learning to learn from failure
- Organisation’s learning can be divided into:
- the firm
- the industry
Nissan Motor Co
Turning around Nissan Motor Co.
- Most powerful asset that a company controls is the employees’ motivation to contribute
- Need to develop a creditable plan
- People need a sense of ownership in the plan, they will succeed or fail with you
- Public commitment of the goal posts – time and metrics
- Jump on any variations to the plan
- Start with low expectations and grow them
- Empower the people to fix their own problems
- Why did Carlos Ghosn not use consultants? Nissan will be fixed by Nissan
Top down and bottom up change has the greatest impact.
The issue for proactive change is – Do you have the right strategy?
- Asset Bubble
- increase in wealth that was created by inflationary effects
- CPI does not include the asset inflation
- Tax cuts plus low interest rates
- $6 trillion in wealth disappeared across US equity markets
- Crisis had been instrumental in bringing Obama into office
- Current forecast has US GDP growing over the next 3 years by 2-3%
- Issues are Health and Pension systems
- Fiscal deficits remain a problem
- The Diversity of Life – E.O Wilson
- The Prophet of Innovation – T. McCraw
- Economist EIU
- Fed Stats – www.fedstats.gov
Intermountain Health Care
- Toyota – everyone know their job and constantly works on improve it
- Processes change can not be implemented without culture buy-in or change
- How does an organisation create knowledge and absorb it?
- How are process failures handled in the organisation?
- Look forward and reason back
- Luck favor the prepared company
- Why use a social network?
- Cheap communication
- Many to many communication
- Sense of community
- People attribute different value for different services
- Structure holes (connectors) in social networking are important
- How do you value the intangibles that exist in a product or service?
- If you want to get message delivered broadly – weak ties are more effective as strong ties usually represents a close community (Theory of Weak Ties)
- Internet Providers (Google, Youtube, etc.) own discrete information while Social Network Providers (Facebook, Linkedin, etc.) own network information
- Social networking has the possibility of reducing churn and increase cross selling for organisations/products
The Competitive Advantage of Nations, States and Regions
- It is not the field you are in, it is about productivity and the value being added to the product or services for example Italian shoe markers, Germany car markers
- Improving productivity supports higher wages
- You can not just get rich from using your endowments
- Efficiency and effectiveness are important in creating value
- A country’s or region’s compass should be productivity
Determinants of competitiveness:
- Natural endowments
- Macro economics – Social structure and infrastructure policies & Macro economic policies
- Micro economics – Quality of business environment, state of cluster development, organisations strategy and operations
- Countries need:
- A strategy
- A set of priorities
- Sense of urgency
- Need to be organised with the:
- Right people
- Right institutions
- All clusters are good, you need to constantly upgrade them
- You need to determine what assets and resources you have or need to acquire?
- A cluster takes 20+ years to develop
- Your job is to build a strong portfolio of clusters
- As business leader you need to be involved as your company’s competitiveness is shaped by the environment
Wolfgang Keller is returning from Harvard AMP and he needs to determine how he will deal with one of his direct reports?
- Can you change the underlying behavior?
- What are your most important strengths?
- Under what conditions can they becomes weakness?
- How do people experience you?
- How do people experience themselves when they are with you?
- Leader need to have the ability to have self insight
- You have to hear feedback (just don’t transmit all the time)
Why High Potential Executives Derail:
- Over dependence on a single strength or resource
- Difficulty in building an effective team
- Difficulty making transition to broader scope jobs
- Treat people badly
- Strategic differences with top management
- Initial strengths became fatal flaws
Merck Sharp & Dohme Argentina
- Will an organisation survive in the environment if you make changes to its culture?
- Global organisations – culture needs to be the same otherwise it will undermine the core culture
- People remember the little stories that represent the culture and ethics of the company e.g. not accepting 16th applicant (minister’s son) when there was 15 places
- The direct reports should have dealt with the ethical dilemma before seeing the CEO, this would have help them with their learning
Stock value drivers:
- Size of gap separating returns on equity (or capital) from the cost of equity
- Volume of reinvestment opportunity
- Time horizon of excess returns
- How do you create operational and execute on shareholder value based management principles
- Threat of early CEO Replacement via
- Activist shareholders
- Legitimization of boardroom revolts
- Failure of firm
- The need to improve firms competitiveness
- Development of high payoff management incentive systems
- Management buyouts, private equity buyouts
- EVA and other compensation systems
- Aggressive use of equity based incentives
- Professional pride in being a successful manager