Thursday, May 31, 2007

Blame it on the I-Team

Last night I was reading a new book, "X-Teams: How to Build Teams that Lead, Innovate and Succeed" and I got this weird lightness in my stomach, a small vacant feeling just beneath the rib cage. The authors, Deborah Ancona of MIT's Sloan School and Henrik Bresman of INSEAD, were describing a common phenomenon: teams that worked hard to improve their performance had more fun, became happier but often failed miserably at their missions.

The feeling in the pit of my stomach was deja vu. I've been on one of those teams. Back in my EDS days, I worked for a sales VP who studied a lot of Peter Senge's Learning Organization principles and took them to heart. He applied them to our team and to its relationships. We had periodic offsite sessions to create strategy, we "checked in" to meetings, and we built close bonds both inside and outside of work.

Yet we didn't succeed, ultimately. The team was broken up within a year or so. Many of us left the company soon thereafter (me included). What happened? It's something I wondered about for years, and until this book lacked an explanation that made sense to me.

The paradox of great teams, according to Ancona and Bresman, is that they frequently focus internally, on their relationships with teammates and on their assignments, and lose perspective and context. They lose sight of other groups in the company and, most dangerously, of customers' evolving needs. The team begins to work better together, and the problem is compounded--other teams are seen as ineffective, "us vs. them" develops, and at some point external support for the team dissipates. You're left with a high-powered vehicle that can't go anywhere. Call it the "I" (for internal) Team.

And that's what happened to our team. We are still in touch ten years after the breakup. We have good feelings about that year. But in the pit of my stomach, at least, is a twinge of regret about what we could have done.

(Cover photo courtesy of Harvard Business School Press)

Wednesday, May 30, 2007

On referrals

Here's an excellent post from Duct Tape Marketing on why people refer business opportunities and what kinds of companies they refer.

At my last company, the statistics I gathered were as follows: referred business, close rate nearly 50%. Other opportunities (cold calls, RFP responses, trade show leads, etc.), 5%.

On failure

I've been thinking a lot about failure. Don't worry--not about personal failure, but about failure in business and what it means (like here, for example).

Here's what it's typically meant: time to find a new job. And as we watch the person responsible for the ill-fated Project Fiji in his office packing his books and photographs into printer-paper boxes, our self-preservation instincts take over, and tell us, "Don't be like that guy." (At its extreme, we have the pinnacle of self-censorship and risk-avoidance, the bureaucracy.)

Well, all that anxiety about failure is utterly wrong, according to Paul Ormerod, an economic forecaster and founder of Volterra, a business analysis consultancy. Interviewed in June's Harvard Business Review (free link), Mr. Ormerod tells us that failure is the "defining characteristic of biological, social and economic systems."

Statistics he cites bear that view out: 10% of American businesses die each year; only nineteen of the world's largest 100 companies in 1912 were still in that position in 1995.

But rather than viewing failure as, well, failure, Mr. Ormerod asserts that expecting failure and embracing chance hold the key to success in business. Says he:

The companies that are most able to explore and innovate - something akin to random [biological] mutation - and then rapidly and flexibly adapt when an innovation succeeds or fails, will do best.

How well does that describe your organization?

(Photo: petri series 001 by sadsac via stock.xchng)

Tuesday, May 29, 2007

Chevy Volt: automotive revolution or flavor of the month?

I was delighted to read an article about General Motors' emphasis on green technology in today's Wall Street Journal (link - $$). GM has announced that the Chevy Volt, a mostly electric car with a small gas engine to recharge the battery en route, will be the linchpin of its effort to "change the DNA of the automobile." But hidden in the article were a few clues proving that GM's commitment to green technology is paper-thin:

GM executives acknowledge it is unclear whether these advanced-technology vehicles will ever come to market, much less generate a profit. The auto maker, as with companies in other industries, has concluded it can no longer wait and see how the public debate on global warming and the world economy's increasing thirst for oil plays out. A big consideration in this change: GM fears it will sell fewer cars if consumers associate it with gas guzzlers.

"We have to have people think we are part of the solution, not part of the problem," said Lawrence Burns, GM's vice president for research and development and global planning. The rush to produce its electric vehicle, known as the Chevrolet Volt, is in large part an effort to show consumers that "we get it" on climate change, Mr. Burns said. "It's not just words. It's deeds."

In other words, it's a PR stunt. If gas prices plunged tomorrow, the Volt would disappear faster than day-old bread.

It's only been two years since GM's last attempt to reinvent the automobile. Contrast this to Toyota's consistent focus on green technology for more than a decade (here's information on an environmental award the company received in 1998 for the first-generation Prius).

I'm a fan of electric cars (see a previous post on electric power as an essential component of green energy). In fact, I'm hoping to hold onto my eleven-year-old Izusu Trooper until I can replace it with a car that uses mostly electricity.

Will that be the Volt? Time will tell.

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(Photo: our 1996 Trooper)

Friday, May 25, 2007

Missing an opportunity via traditional business planning

Posting about a better way to manage innovation last week reminded me of a story from my days at EDS. In 1996 a colleague and I worked on business plan for a South American wireless clearinghouse. We could see it was good business, but no matter what we did, we just couldn't get those numbers to work out, to get an appropriate level of profit with low enough risk. So the company dropped it. But now of course such a clearinghouse does exist, and I'm guessing it makes money for whoever runs it. Which makes me wonder how things would have been different if we'd used the approaches described in the article.

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Thursday, May 24, 2007

Silos part 2: the importance of connection

Earlier this week, I posted on an article by Ranjay Gulati of Northwestern University in this month's Harvard Business Review, "Silo Busting: How to Execute on the Promise of Customer Focus" (link - $$). Gulati brings up another area in which companies are adjusting to provide solutions that better fit customer needs: increasing connections between companies.

It's an accepted fact that more and more companies are pursuing alliances to extend their capabilities or to shed noncore functions. Gulati reinforces what often gets lost in all the talk about alliances: these moves occur primarily because it helps companies deliver solutions that customers will buy.

Extended capabilities help fill out solutions that would be incomplete with only the company's own products. Outsourcing helps companies reduce their unit costs, thereby enabling more cost-effective solutions, and allows them to focus more investment and management attention on activities that are more central to serving customers (like account management).

Relying more on partners has a downside. A company can become too dependent on partners and suppliers. It can grow competitors by educating other companies about its business. And managing cooperation is more difficult between two different companies with their own strategies and cultures than it is between different departments of the same company.

But the extended firm is here to stay. If you don't think you can manage alliances, you better get some education quick.

(Photo: "Silo2" by saulinis via stock.xchng)

Wednesday, May 23, 2007

Web 2.0 gives a new meaning to works-in-progress

You can't see it till it's finished
David Byrne, "Artists Only"

There was a time when writers, musicians, artists went "deep in the shed" (search this page for a definition) and emerged, months or years later, with completed masterworks.

No more. Now books, records, presentations, etc., are previewed and assembled online, for all to see. First drafts, alternate endings, even books created with input from the audience are de rigueur. In a recent "Fresh Air," from National Public Radio, drummer Paul Motian remarked on how appalled the late pianist (and perfectionist) Bill Evans would be with the "complete box set" (including alternate takes, restarts, etc.) of the Village Vanguard sessions released in 2005.

In some way, this trend echoes the time-honored academic approach of circulating drafts of scholarly papers among a group of peers for comment. Of course, now the peer group is everybody with an internet connection.

It's another way, I suppose, in which we are more exposed to the world. Our privacy is reduced, at our own initiative. But it's fun, too. Not in an exhibitionistic way, but in a trusting, welcoming way. With more of our foibles, mistakes, and misunderstandings out in the open, perhaps we are more human, and the distance between us shortens a little bit.

(Photo: Talking Heads Japanese newspaper article by artlung via flickr. Creative Commons attribution license)

Tuesday, May 22, 2007

Shop Talk Podcast #1 - Gordon Adams on "Time Kills Deals"

OK, it's time for something new. I've been fascinated by podcasting for a couple of years now, and almost got involved with a podcasting project last fall. So I've been thinking about a regular podcast on this site, and it's time to unveil it.

This was a one-take, unedited interview. I recorded it using an inexpensive conference-calling technology which overcompressed the thing, so as a result I sound like I'm from Chicago (no, Connecticut) and that I have a lisp (also no). Nonetheless it was fun to do and I'd like to do more. They'll improve technically for sure.

Anyway, onto the podcast. My guest is Gordon Adams, Senior Vice President of Sales at Vue Technology, a maker of item-level RFID solutions. (Read Gordon's bio here.)

We're talking about "Time Kills Deals," an expression I first heard from Gordon when I worked with him at EDS in 1995. It's a great, pithy maxim that I've used ever since (and blogged about here). I'd love your comments. Enjoy!

(Please be patient through the 10 seconds of dead air at the beginning of the podcast... ah, the joys of being a beginner!)

Download podcast

Links to companies or products referred to in the podcast:

Holden International
Solution Selling


1. In the podcast, I refer to Gordon's company as "Vue Technologies." It is, of course, Vue Technology.
2. Gordon was the USC starting quarterback for only one year (I implied it was several years).

(Photo: "Vintage 1" by coscurro via stock.xchng)

Monday, May 21, 2007

For solutions providers, Account Management is king

Every product company wants to sell solutions. Packaging products with useful complementary services can elevate a firm above commodity-provider status and provide more value to customers. Customized solutions also are more difficult for competitors to replace than standalone products.

Moving to a solution focus is not easy to do, of course. Ranjay Gulati of Northwestern University takes up the issue in his article, "Silo Busting: How to Execute on the Promise of Customer Focus" (link - $$), in the May Harvard Business Review. Prof. Gulati focuses on issues that most large product companies face when trying to move to a solution orientation--specifically, that solutions typically span multiple groups (or "silos"). Selling and delivering a coordinated solution requires close cooperation between those groups--an unnatural act in most large companies.

What most struck me was his observation that customers worry because the account managers they are assigned don't have the clout to influence the groups contributing to these integrated solutions. And this worry is not misplaced: my experience with large companies indicates that only very senior people can drive coordination among separate business units that manage their own P&L. Writes Gulati of one company that succeeded in selling solutions across division boundaries:

The account management group was staffed with high-ranking officers who had the authority to negotiate the pricing and delivery of [its] solutions, and the experience to help clients with strategic planning.

Dedicating senior people to a strategic account management role is a large investment for companies. But if you want to move from a product focus to an integrated solution focus, it's one you have to make.

(Photo: "Silo2" by saulinis via stock.xchng)