Managing your boss
I’m here in Japan in a program that Columbia runs in partnership with the Japan Bank for International Cooperation (JBIC). One of the topics we’re working on has to do with managing your boss - a perennial favorite. Here is the gist of what we covered (with credit to my colleague, Bill Klepper):
The essence of the process is to follow these steps:
#1: Get some insight into your own preferences and your bosses’ preferences. Here at Columbia, we use diagnostic instruments that can give you terrific insights into your learning and social preferences, and ways to understand the same for your boss. An awful lot of boss/subordinate conflict occurs because of different preferences. For example, if your boss is an activist type who likes action, conversation, and excitement, giving that person a thick binder full of details will be a turn-off. Same in reverse. If your boss is a number-details kind of person, talking to them about big picture strategic ideas when you haven’t thought through the story is problematic. So the first challenge is to get a sense of the raw material that you are working with in terms of personalities and preferences.
#2: Understand your bosses’ goals and needs. It’s really vital to try to get a sense of the pressures and priorities that your boss is facing. What’s expected of him/her? What are the short term and long term goals? How will your boss be evaluated?
#3: With that as background, you then need to clarify mutual expectations. What does your boss expect of you (try to get him or her to be specific). What should you and do you expect of your boss? This might involve issues such as performance reviews, access, feedback, and so on. Some people find it helpful to actually put these expectations in writing in a memo of understanding.
#4: Having come to an agreement, keep your promises. Nobody likes to work with someone who is unreliable. That much being said, also try to avoid the temptation to make unrealistic commitments. These can easily lead to relationship disaster when things go wrong later on, particularly if you could have anticipated the issues.
#5: Manage the tension between loyalty and integrity. Do try to help you boss succeed, but don’t cave in on your fundamental values. And of course, if there is any hint of something unethical or illegal, run, do not walk, out of that situation.
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- Posted Rita McGrath on October 24, 2007
Competing with your customers as you grow
A conversation taking place among colleagues over at the Kellogg innovation blog/web forum (http://marketdrivengrowth.blogspot.com) has to do with how you can move into spaces that are occupied to some extent by your customers,with the goal of making the whole pie larger for everyone. The dilemma is that customers can mistrust your motives, but at the same time you need them to get whole ecosystems going or to develop certain kinds of innovation. It’s a point that we often make - you have to create a whole product or solution before anybody will buy anything.
One key issue that has been raised by both Clayton Christensen and Geoffrey Moore is that success of a more or less vertical integration strategy depends heavily on the evolutionary stage of your industry—in new spaces, vertically integrated players tend to win out. In more commoditized spaces, advantage can go to specialists. The shift inevitably causes channel conflict and some dismay.
Here was my response:
One technique we have had good success with is using ‘discovery driven
planning’ to model the possible outcome
of a cooperation and show potential partner/competitors what the outcome
could look like in the event of success. You can also show the
checkpoints at which you could stop further development if things go
adversely for either party.
Somewhat more aggressively, if you can identify low-power partners who
stand to gain more from partnering with you than a better established
player can, you can benefit by leveraging their capability to create a
new space / ecosystem and eventually bring the larger players into your
orbit in the interest of not being locked out of the now-attractive
area.
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- Posted Rita McGrath on October 24, 2007
GPS Technology to end car crashes
Wired magazine features an innovative use of new GPS technology that I thought could be the harbinger of all kinds of opportunities. The system is called “StarChase Pursuit Management System” and it works like this: When a police officer is chasing a suspect’s car, they can launch a laser-sighted homing device with a GPS tracking transmitter from a sort of cannon. The transmitter attaches itself to the fleeing vehicle, and then starts to send real-time location information back to headquarters over a cellular network. The police then automatically know where the car is, and don’t have to engage in those dangerous high speed chases.
The system is being tested now, and the LAPD are going to be adopting it in 2008, they hope.
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- Posted Rita McGrath on October 17, 2007
How fleeting an advantage can be in financial services -
Yesterday, I was teaching in Columbia’s flagship Columbia Senior Executive Program (which we call CSEP for short). We were discussing how difficult it can be to prevent competitive imitation of innovations in financial services, and one of the participants gave a great example. Turns out that he and his colleagues observed the success Bank of America has had with its “keep the change” program. For those of you that don’t know it, keep the change is an innovative idea—if you charge say $1.75 on your debit card, the bank will round up the purchase to $2.00 and put the change in your savings account, providing an easy way to set aside some money. I’m told they got the idea by looking at the way people account for debit card deducations - rather than write down and reconcile accounts to the last penny, they round them up and sort it out at the end of the month. For more info on the program, you can check it out here:
http://www.bankofamerica.com/promos/jump/ktc/. It’s done very well for Bank of America, encouraging new accounts and more loyal accounts.
This struck the participants’ bank (which happened to be based in Singapore) as a really good idea. So good, in fact, that they introduced it in their own environment where it has been a spectacular success.
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- Posted Rita McGrath on October 17, 2007
Venture Capitalists may not be so good at stopping failing projects after all
My colleague, Isin Guler, has just published a fascinating study in one of our more erudite management journals. In an exhaustive look at investments made by venture capital companies, she finds that as funding rounds proceed, expected returns to the investment decline. You would think that a hard-nosed VC would just shut the loser down, wouldn’t you? Turns out, not so. In fact, the likelihood of a venture being terminated as a result of poor performance actually declines as more rounds of financing are completed. Isin (a professor at the University of North Carolina at Chapel Hill) suggests that political agendas, the desire to look good before one’s colleagues, a reluctance to admit defeat and giving too much weight to sunk costs all come into play.
It’s a sobering bit of research for those of us (myself among them) who have said that ruthlessly shutting down uncertain projects that don’t meet their goals is key to containing risk in uncertain investments. You also have to wonder - since VC’s are investment professionals, one might expect companies, in which far greater interference from the forces for escalation are likely to be prevalent - to be far worse at making the tough calls.
For those of you interested in the academic paper, the citation is:
Guler, I. 2007. Throwing good money after bad? Political and institutional influences on sequential decision making in the venture capital industry. Admin. Sci. Quart. 52(2) 248-285.
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- Posted Rita McGrath on October 15, 2007
