Work Matters

  • Three Hallmarks of Good Performance Evaluations

    Phyllis Korkki of the New York Times wrote a piece this Sunday for her Workstation column called Invasion of the Annual Reviews.  It emphasizes the risks and downsides of annual reviews, and she quotes me quite a bit — I didn't realize how much until the piece came out.  But she got it right, as she always does (I have worked with her before, she is very professional and very careful).  As Phyllis had only so many words to work with, and she weaves in the perspectives of others including an interesting clarifying statement from a Yahoo! spokesperson asserting they are not doing forced ranking, but rather "“Our system lets employees understand how they are performing relative to expectations (exceeding, achieving or missing), and there are no hard and fast rules.” 

    I got a couple emails from friends — one congratulatory and the other that disagreed with me — suggesting that the piece meant I was opposed to all annual performance reviews, not just bad performance reviews.  I confess that I have raised the question of if they should be abolished before and two parts of the piece may have helped to fuel this impression:

    This paraphrase from Phyllis:

    Professor Sutton is wary of rankings and yearly evaluations in general. Many organizations, he said, would be better off if they provided continuous feedback, with formal evaluations coming into play mainly if a worker is being eyed for promotion or has shown substandard performance.

    And the closing paragraph:

    “If performance evaluations were a drug, they would not receive F.D.A. approval,” he said, because “they have so many side effects, and so often they fail.”

    These are accurate representations of my perspective.  But I think it is important to make clear that I am not opposed to all performance evaluations, only bad ones. — and unfortunately, they are done badly more often then they are done well.  So, what are the hallmarks of good performance evaluations?  Consider three:

    1. Is what happens during that annual conversation and evaluation woven into the fabric of every day life, or as I was quoted in the piece "“this weird form you fill out every year that has nothing to do with everyday life.”  So if your boss gives you positive feedback all year, or doesn't give you feedback at all over the course of the year, and then you get bad review, the boss isn't doing his or her job.  In organizations that generally do evaluations well, I think of McKinsey and GE, although they do yearly evaluations, there is also an emphasis on teaching and nudging leaders to constantly give their direct reports regular coaching and feedback.  There are two tests here.

    If you are a boss, do people often seem surprised by the feedback you give them during annual reviews?

    Does the review conversation seem uncomfortable and unnatural, something that bears no relationship between the feedback and coaching (or lack of it) that happens throughout the year. 

    2. How is excellent performance defined and measured?  In some firms, even though the goal is to create collaboration and information sharing, "stars" are nonetheless anointed solely on the basis of individual achievements (and for more senior folks, on the basis of their team of department's contribution, not on their contribution to the overall success of the organization).  In too many companies, although leaders hope for cooperation, they reward backstabbing, stomping on others on the way to the top, and other flavors of dysfunctional internal competition.  So the question of "who is a superstar here" is the one I ask leaders all the time, I want to know "are they the people who are great individual performers AND who help others succeed — or are the people that ignore and even undermine their colleagues?"  This is a theme that Jeff Pfeffer and I wrote about in our books on The Knowing-Doing Gap and Hard Facts, and I revisit in Good Boss, Bad Boss. Note also that both GE and McKinsey are usually very careful to anoint the right kind of stars — and so are a lot of other organizations I admire including IDEO, P&G, and the Cleveland Clinic. 

    3. Finally, while I believe strongly in weeding out bad apples and rewarding good behavior, what are the assumptions about the nature of a human organization?  Do leaders believe that there will always be a certain percentage of losers who will need to be weeded out and a certain percentage of amazing performers who deserve the lion's share of rewards.  This is the assumption that drives many stack ranking and one I don't like and that is contrary to the evidence.  It is also contrary to the logic of the quality movement (which weirdly, GE who at least had this system in the past embraced as well).  Imagine a manufacturing system or worse yet a hospital where you assumed that year over that there would be a 10% defect rate, 70% of the work would only be OK, and only 20% would be great.  Unfortunately, that is the implication of how stack ranking is done in some places, even other wise very well managed places.  

    Here is how things can play out when this assumption is implemented in a misguided way.  One senior executive I know had spent years building a great 12 person team.  He hired carefully, he weeded out a few rotten apples, and has the team humming.  Then, the company hired a head of HR who had unwavering faith in firing the bottom 10% each year — he was required to fire one of his people.  In essence, following the logic of Deming and other quality gurus, he had built a system with no defective parts — but was required to throw one away.  He refused to do it and quit — which, as he told them, solved their problem, because now they didn't have to fire a member of his team (which they did anyway, as he "didn't count.") 

    I hope this clarifies my views.  Note that the NYT's piece also talks a bit about Adobe's recent efforts to abolish annual reviews and replace them with frequent check-ins.  Huggy Rao and had in-depth conversations with Donna Morris, the brave executive who led this change, and we talk about the details in our forthcoming book Scaling Up Excellence.  The upshot is that Donna and her colleagues worked on shifting the focus from the mechanics of annual reviews to the nuances of daily interactions between leaders and their teams.

    I am quite interested in the path that Adobe is taking because the result may be that, indeed, there is a better alternative to yearly performance evaluations.  Indeed, note that, in the places that do them well, they are woven into the fabric of everyday life — so perhaps an interesting test of how bad  AND how good your annual performance evaluation is "what would happen if we didn't do them?"  Oddly, if you are doing them really badly, then I would argue that doing nothing might be better.  Just give employees an envelope with their yearly raise and skip that stilted dysfunctional disingenuous yearly conversation.  And if you are doing things really well, then perhaps you will find out that you don't need them after all because people are getting such regular feedback and coaching that the formalities are a waster of time in most cases– think of all the time and money you would save! 

  • Creativity,Inc. by Pixar’s Ed Catmull: One of the Best Business Books of All Time

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    Ed Catmull has been one of my favorite senior executives for a long time.  I admired him from afar after reading about him in David Price's excellent The Pixar Touch.  I admired him even more after talking to people at Pixar about what it was like to work with him (see this story). And then I got to him a little through several interactions I had with him as part of authors' group here in the San Francisco area and also, when Huggy Rao and I interviewed him for Scaling Up Excellence.  

    The most interesting, and I think revealing, interactions I have had with Ed, however, have not been in person — they have come from the process of reading and commenting on an earlier draft of his book, and exchanging emails with him.  And, most recently, reading the finished product.  I won't go through all the twists and turns of the process, but Ed (and obviously his co-writer Amy Wallace, who I did not interact with directly) clearly were dedicated to getting it right,  Even in that early draft, the astounding and intertwined stories of Ed's life and Pixar's development into one of greatest companies on the planet were riveting, as were his insights about building a creative company that run throughout the book. But, as Ed and his Pixar colleagues do, he wasn't just satisfied with just a good book, he took the time and effort, and went through one difficult iteration after another, to make a book that just sings.  You will have trouble putting it down once you pick it up.  And while it may seem like it just rolled out with ease, as with most great things, Ed and Amy wouldn't let it go until it was right. 

    It was privilege to get a few glimpses of how Ed's mind works during the process, especially over the Christmas-New Years break last year when I read the book closely and gave Ed several rounds of comments (I would read a few chapters, and then send him another note). My favorite exchange came at one juncture, after reading the section where Ed describes the sequence of events where he, Steve Jobs, and others were involved in selling Pixar to Disney and announcing it to his people in Emeryville, where Pixar is located and those wonderful movies are made.

     It was pretty deep into the book.  And I finally realized that it had a problem I had never seen in any book written by a successful executive, as I put it to Ed "not enough narcissism."  There wasn't ENOUGH information about the influence he was having, the words he was saying, or about how he turned his considerable wisdom into action. There was plenty about other people, folks like Steve Jobs and John Lasseter that reflected his keep empathy and observational powers.  As I read the final version, I saw that Ed perspective and influence is emphasized just enough for my tastes now — although his trademark modesty persists.

    The book isn't out to until April.  But you should pre-order it now, you will want to read it right away. Here is my blurb — I hope you love this book (and admire Ed's smarts, values, and accomplishments) as much as I did:

    “This is the best book ever written on what it takes to build a creative organization. It is the best because Catmull’s wisdom, modesty, and self-awareness fill every page. He shows how Pixar’s greatness results from connecting the specific little things they do (mostly things that anyone can do in any organization) to the big goal that drives everyone in the company: making films that make them feel proud of one another."

    P.S. Note that I have revised my list of books that every leader should read to include Creativity, Inc.

    P.P.S. When I wrote to Ed how much  I liked the cover, he said something like "well, we have some pretty good artists here." No kidding. Isn't it beautiful? 

  • Scaling Up Excellence: The Problem of More

    This is reprinted from the Harvard Business Review site. A big thanks to Julia Kirby for the wonderful editing.

    Start talking about the challenge of “scaling” with people, and you’ll find the term gets used to mean a lot of different things. For example, when entrepreneurs talk about it, they are usually struggling with matters of organization. Take Citrus Lane CEO Mauria Finley, whose company was experiencing some growing pains, appropriately enough; the startup sends monthly packages of great baby products to moms. After raising $5.1 million in capital in 2012, it grew from 6 to 20 employees.

    Back in 2011, in Citrus Lane’s first six months, its small founding team worked in a house and ate lunch together every day around a big table. Any problem or opportunity that arose was dealt with right then and there, lest misunderstandings fester or business prospects slip away. Growing to 20 people working in a more traditional office setting did not strike anyone as extreme change, yet the team found it had to work a lot harder to unearth problems and opportunities. Even more tricky, they had to learn to articulate something that had been tacit: a shared understanding of goals, culture, and what it takes to succeed at Citrus Lane. Today, they constantly remind each other to spend time with newcomers and, as Finley emphasized, not just tell them these things when they are hired or remind them a few times. The scaled-up organization needs to hear about what matters most at Citrus Lane over and over, to live these beliefs every day, and to observe her and other leaders living them, as well. Deliberate effort is required because “it isn’t something that just happens naturally at lunch every day any longer. We are too big now.”

    A growing employee base represents one type of scaling challenge. Since my Stanford colleague Huggy Rao and I decided several years ago to study scaling (it’s the topic of our forthcoming book Scaling Up Excellence), we have heard about many others – so many that we thought, early on, that we might need to put a finer point on which form we hoped to shed light on.

    For example, when leaders of much larger organizations talk about scaling, they’re often talking about something more akin to replication. In a 2001 interview with HBR, UPS’s then CEO Jim Kelly described the growth of the company: “For decades, we’ve been able to grow tremendously simply by expanding our core business geographically. Really, UPS’s first 75 years was spent expanding across the United States: first to 13 states, then to nine additional states, and so forth. We just took our core delivery business and applied for rights in different states.” Today that kind of marketplace scaling often means a more complicated process of global expansion– such as IKEA’s opening stores in China, or Home Depot’s failed efforts to do so.

    And then there are the organizational leaders who use the term scaling to describe their desire to find pockets of excellence in behaviors and beliefs in the organization and spread them further – a different challenge than adding new people and locations. We studied how Wyeth, the large Pharmaceutical firm (now part of Pfizer) made dramatic improvements in cost and quality across its manufacturing operation. It first created pockets of excellence in a few small teams in each of eight plants (calling them “mini-transformations”) and then relied on mentoring and coaching to spread the superior practices throughout each plant, from one team to the next.

    Still another variation on scaling is when better practices are transferred across networks of organizations. Between 2004 and 2006, for example, a Boston-based nonprofit called the Institute for Health Improvement led an effort called the “100,000 Lives Campaign” to raise awareness in U.S. hospitals of the importance of some simple practices (e.g., more frequent and thorough hand-washing) in reducing infection rates. Ultimately, some 3200 hospitals comprising over 70% of U.S. beds participated in the Campaign. There is compelling evidence (including analysis done by members of a Stanford doctoral seminar that Huggy Rao ran about five years ago) that the number of preventable deaths in U.S dropped by about 120,000 during this period. (Other factors probably contributed to that decrease, but the Campaign clearly played a large role.)

    In each of these situations, “scaling” refers to something different. But as we dug deeper into these and other cases, academic studies, and stories, we realized what they shared. Scaling challenges nearly always come down to the same problem: the difficulty of spreading something good from those who have it to those that don’t – or at least don’t yet. It is always, in other words, the problem of more.

    Finley and her team face the problem of more – and the success of her growing organization depends on solving it. The need for more of what was working well also challenged Wyeth, IKEA, and the Institute for Health Improvement. Have their successful efforts come from the same mold in terms of what they are spreading and by what method? No – and yet, we are finding a great deal of commonality in the obstacles that arise and the decisions that must be made. We’ve discovered guiding principles that turn out to apply as other leaders and teams go about building and uncovering pockets of exemplary performance, and spreading those splendid deeds.

    Sometimes the way to learn more about a subject is to focus in more tightly and become more precise in one’s use of language. But sometimes the challenge itself is big enough – like the basic problem of spreading something good to more people and places without screwing up – that it doesn’t help to narrow its definition. Sometimes, even with the use of a word, it’s better to scale it up

  • James G. March: Organizations aren’t Rigid, They are Impressively Imaginative

    Stanford's James G. March is arguably the most prestigious living organizational theorist.  We are reading his 1981 classic paper "Footnotes to Organizational Change" for my scaling up excellence doctoral class. There is one paragraph in this paper that is especially inspired, in the beautiful style of his, March is explaining (among other things) that what many people (including senior management) see as resistance and rigidity is actually proof of great flexibility and innovation — but the resulting changes are often what any one group actors don't want or expect: 

    What most reports on implementation indicate, however, is not that organizations are rigid and inflexible, but that they are impressively imaginative (Pressman and Wildavsky, 1973; Bardach, 1977). Organizations change in response to their
    environments, but they rarely change in a way that fulfills the intentions of a
    particular group of actors (Attewell and Gerstein,1979; Crozier, 1979). Sometimes
    organizations ignore clear instructions; sometimes they pursue them more
    forcefully than was intended; sometimes they protect policymakers from folly;
    sometimes they do not. The ability to frustrate arbitrary intention, however,
    should not be confused with rigidity; nor should flexibility be confused with
    organizational effectiveness…There is considerable stability in organizations,
    but the changes we observe are substantial enough to suggest that organizations
    are remarkably adaptive, enduring institutions, responding to volatile
    environments routinely and easily, though not always optimally.

    There is so much wisdom — and also so much underlying evidence packed into this statement — that I am going to devote a long time to discussing it with my students later today!  My favorite line is "sometimes they pursue them more forcefully then intended." I once studied a large convenience store chain that spent millions of dollars trying to increase courtesy after the CEO had a temper tantrum about bad service her received in a store — he was pretty shocked when he learned how strongly the company responded, as they rolled out a far larger a program than he expected, wanted, or believed would be useful!

    I've always been interested in situations like this where small signals from powerful people result in much stronger reactions than they intend — the opposite of resistance to change, if you will.   And in this case it led them to scale up a program that was much bigger, expensive, and time-consuming than he ever intended. 

  • Back at HBR, the Joys of Writing, and Continuing the Scaling Conversation

    Earlier in the week, I did my first post at HBR.org in over 2.5 years — my last was in January 2011. I was pretty shocked that it had been so long — my last post was about a story I heard at Pixar on how Ed Catmull and Alvy Ray Smith (Pixar's founders) served as "human shields." In the 1980s, they were under pressure from their (then superiors) at Lucasfilm to do a large layoff in the division that eventually was sold to Steve Jobs and became Pixar. Ed and Alvy did somthing remarkable to protect their people –something that people at Pixar still talk about to this day.

    As the song goes, ain't it funny how time slips away.  But the last few years have required intense focus from Huggy Rao and me to finish Scaling Up Excellence, as we both gave everything we had to the book — it isn't up to us to judge the quality, but I can tell you that I worked longer and harder on this effort than any work project in my life. The last year or so, when people asked me what I was doing, I half-joked "I am trying to type my way out of solitary confinement in my garage."

    To be clear, although I am delighted to have the book finally done, and both Huggy and I sometimes felt pressure to make progress and were troubled when we hit dead ends, part of me is sorry the writing is over. Huggy is a delight to work with (his speed of idea generation is astounding) and, well, the fact is that I am probably happiest when I am alone in a quiet room writing.  So the book gave me a glorious excuse to indulge in something I love. Now, I will turn that love to writing short pieces about scaling and other management and realted behavioral science topics — here and elsewhere. And Huggy is getting cranked up to do so as well — he is a remarkably creative guy, one of the most productive, thoughtful, and prestigious organizational researchers on the planet.

    I will reprint the HBR post here in a week or so — they let me do that after it has been the site for awhile.  The new is called "Scaling:The Problem of More." Julia Kirby, a senior editor at HBR (and a skilled management theorist — see Standing on the Sun) helped me craft a compact summary of how and why we ended-up with such a broad take on the concept of scaling and what it takes to do it well. Here is the key sentence:

    "Scaling challenges nearly always come down to the same problem: the
    difficulty of spreading something good from those who have it to those
    that don’t – or at least don’t yet. It is always, in other words, the problem of more."

    It sounds so simple when I re-read those words. But Huggy and I spent seven years wrestling with this challenge — and we aren't done yet!  It would be arrogant — and also not very useful — to claim that we've got all the answers just because the book is done.  As I will discuss in future posts, the book evolved from a process where Huggy and I believed that we would spend a few years gathering evidence, stories, and scaling techniques and then one day unveil the fully formed "truth"  in the book to a more social process.  Our writing was punctuated by interactions where we described parts of what we had learned to people who were knee-deep in scaling, had been in the past, or had other kinds of expertise related to scaling (especially our academic colleagues). Then we would listen to their reactions, stories, evidence, and advice — and update our perspective little by little. 

    Finishing the book is a milestone in this process, but as Huggy likes to say, "the adventure continues."  So please give us your reactions, tell us your scaling stories, and ask us hard questions. As you will see here and elsewhere, we are continuing to collect new studies, stories, and lessons about what it takes to scale up without screwing up.

  • F.M. Cornford’s Complete Principle of the Dangerous Precedent

    I was tried
    to get this out over Twitter, but breaking it into pieces ruins it.  If
    you want to read one of the most spot on, timeless, and funny books about organizational
    politics, check out the F.M. Cornford's 1908 classic MICROCOSMOGRAPHIA
    ACADEMICA: BEING A GUIDE FOR THE YOUNG ACADEMIC POLITICIAN. 
    You can get this short gem here for free.

    And here is
    my favorite bit:

    “The Principle of the Dangerous Precedent is that you should not now do an admittedly
    right action for fear you, or your equally timid successors, should not have
    the courage to do right in some future case, which, ex hypothesi, is essentially different, but superficially resembles the
    present one. Every public action which is not customary, either is wrong, or,
    if it is right, is a dangerous precedent. It follows that nothing should ever
    be done for the first time.”

    It is amazing how over 100 years later, the same principle
    is still applied far too often.  See Daniel Kahneman’s book
    if you want to see some of the main reasons why – thinking is hard work!

    P.S.  Cornford was a famous classicist at
    Cambridge around the turn of the 20th century.

  • Scott Berkun’s The Year Without Pants: Funny Title, Silly Cover, Seriously Well-Crafted Book

    YWP-COVER-FINAL

    Several months back, Scott Berkun's publisher sent me an advanced  copy of "The Year Without Pants" to read; it is a pretty silly title and as you can see, the cover is pretty wild too (I love it).  Scott's last book, Confessions of a Public Speaker, was just splendid, so I thought I would take a look.  I was hooked immediately, as Scott offers a compelling story of the year he spent at WordPress.com, a fast growing and wildly unconventional company where employees work from wherever they wish, there are few meetings and rules, and many of the conventional trappings are removed.  At the same time, because Scott is such a compelling writer and so honest about things, he doesn't whitewash things, he describes the ups and downs and the tensions. 

    And if you read this book, you will also learn that some of the beliefs that people have about the future of work likely won't come true.  Yes, people had enormous freedom and were massively creative — but at the same time — they couldn't escape the constraints of being in an organization.They still needed some hierarchy (Scott was a team leader and he had some bosses too), there were agreements about standard ways to do — and not do — things, and everyone wasn't always delighted with how things unfolded.  His team was unusually functional and creative, the descriptions are wonderful, and the book also is filled with great pictures and other graphics that show the real people and the places they worked, and the kind of work they produced.

    I read, or more accurately, start to read, several business books each week.  Most aren't very good, to tell you the truth.  This is the best book I have read since Adam Grant's Give and Take. If you read this book and Tracy Kidder's classic Soul of a New Machine, you can learn a lot about how work is changing (at least in some places), but also, about how it is still the same too. The technology certainly changes how and where we work, but we are still humans, we are social creatures, we strive for meaning and creativity, and we are all limited (and propelled) by our personal quirks and the attribuites of our species.

    P.S. The Year Without Pants comes out in a few weeks, but I suggest that you preorder it, both because you will want it and because preorders will help this book get the attention it deserves. I am going to preorder my copy right now.

  • Dysfunctional Competition, the Knowing-Doing Gap, and Sears Holdings

    A compelling and instructive story on Sears Holdings appeared in BusinessWeek last month — they own Sears stores, Kmart, Land's End and a host of other brands such as Craftsman tools, Kenmore appliances, and DieHard batteries.  It is written by Mina Kimes and provides a textbook example of how, when people in a company are pitted against each other — rather than pressed and paid to support the greater good — that cooperation evaporates. People treat insiders (rather than outsiders) as enemies.  And even when they know what needs to be done for the effectiveness of the organization as a whole, they often don't do it — because helping others (or contributing to the greater good) undermines their income, stature, and job security.

    Jeff Pfeffer and I wrote about this disease in some detail in The Knowing Doing Gap in 2000 and in related articles and posts based on the book, for example, here, here, and here. It has been over a decade since we focused on this problem, but if anything, it has become worse in many companies — as the Sears story shows.  Kimes' detailed article provides many examples of the problems caused by the Sears structure and incentives, where CEO Eddie Lampert has split the company into some 30 warring units, each with "its own president, chief marketing officer, board
    of directors, and, most important, its own profit-and-loss statement."

    Lampert defends this structure as "decentralized," but that confuses a structure where individual units have autonomy to act largely as the please with one where there is no incentive (or worse, a disincentive) to support the company's overall performance.  Google, for example, is quite decentralized, but there have always been both cultural and financial pressures to do what is best for the company as a whole.  Even within the famously competitive and decentralized General Electric, there have been incentives for cooperation for decades and selfish "cowboys" who don't support colleagues and the culture have been banished from the company.

    In contrast, let's take a rather astounding example from the Sears story:

    "At the beginning of 2010, Lampert hired 20-year Wal-Mart Stores veteran Jim Haworth to run Sears and Kmart stores as president of
    retail services. Haworth, an affable, mustachioed Midwesterner, saw
    immediately that Kmart’s food and drugs were more expensive than those
    at Walmart and Target.
    So he met with a few top executives, including Chief Financial Officer
    Mike Collins and operations chief Scott Freidheim, to look into
    discounting goods such as milk and soda.

    That summer the group
    asked the company’s internal research team to study the idea, according
    to eight former executives. The researchers came back with a proposal:
    Cut prices at several dozen Kmarts across the country, bringing the cost
    of items to within 5 percent of Walmart’s. The business unit presidents
    agreed. But when Haworth’s group tried to get them to cough up
    $2 million to fund the project, no one was willing to sacrifice business
    operating profits to increase traffic."

    The reason, according to the story, that no President was willing to cough up any funds was that cutting into their businesses operating profit would, in turn, reduce their bonuses.  The parent company refused to fund the effort as well and the key executives involved in pressing for the proposal are no longer with Sears. In short, it is a nearly perfect example of how — even though everyone knows the right thing to do for the collective good — no one does it because they live in zero-sum, I win and you lose, world. As the article shows, this mindset can create some mighty ugly scenes:

    "The bloodiest battles took place in the marketing meetings, where
    different units sent their CMOs to fight for space in the weekly
    circular. These sessions would often degenerate into screaming matches.
    Marketing chiefs would argue to the point of exhaustion. The result,
    former executives say, was a “Frankenstein” circular with incoherent
    product combinations (think screwdrivers being advertised next to
    lingerie)."

    This me me me mindset might work in situations where there is no need for collaboration, information sharing, or even pooled resources.    But it doesn't work when people and units depend on each other to succeed. 

    I also want to emphasize — despite some suggestion from Lampert and others that cooperation is a form of evil socialism — that many companies have cultures and incentives that generate both competition and collaboration simultaneously (to name five widely varied organizations, McKinsey, IDEO, General Electric, Procter & Gamble, and the Men's Wearhouse all accomplish this one way or another). The trick is that star employees are defined (and trained, groomed, rewarded, and led) as those who do high quality individual work (or, for more senior people, lead top performing teams or businesses) AND who help colleagues (on their team, on different teams, and in different businesses) succeeded as well.  If you don't do both consistently, you aren't a star. In such places, the competitive pressures to HELP others and the
    ORGANIZATION are palpable: People compete against each other by trying
    to be MORE collaborative than their colleagues.  Its like a weird Jedi mind trick, but it works beautifully when done well.

    While I am no fan of forced rankings (I don't believe that every organization must be doomed to have 10%  to 20% defective employees, for example), when people are evaluated, or even ranked, on this dual standard, organizations perform far better than when have you a situation such as at Sears where "As the business unit leaders pursued individual profits, rivalries
    broke out. Former executives say they began to bring laptops with screen
    protectors to meetings so their colleagues couldn’t see what they were
    doing." 

    In short, when I want to know if an organization rewards or punishes cooperation, the diagnostic question I ask is "Who are the superstars around here? Are they the selfish people who stomp on others on the way to the top? Or are they the people who do great work AND who use what they know to lend a helping hand to others?"

    P.S. The recent structural changes at Microsoft — long infamous for its nasty internal competition — provide an interesting counterpoint. They are not only becoming more centralized and streamlined ala Apple, as The New York Times reports "The goal is to get thousands of employees to collaborate more closely,
    to avoid some duplication and, as a result, to build their products to
    work more harmoniously together." Microsoft has a long history and ingrained habits to overcome, but this strikes me as a step in the right direction.

  • Delta Airlines Shows How to Apologize

    Please forgive my months of silence.  I appreciate all the folks who have asked if I am OK (I am fine!) and who have urged me to start blogging again.  You will start hearing more here about what I've been doing the last six months.  The short story is that Huggy Rao and I have been working like crazy on Scaling Up Excellence, our book that will be published in early 2014. We just have a few finishing touches after putting seven years or so into this project. Then I will start talking about it — this book has been quite an adventure and we are already talking to a lot of different groups about the main ideas.

    Meanwhile, I was moved to do a post because, as we have written the book, one of the themes that has moved center stage, and I've blogged about before, is accountability: How it is a hallmark of organizations that spread and sustain excellence (and its absence of a hallmark of bad ones).  This problem was especially evident in United Airlines' poor treatment of my friend's young daughter last summer.  As counterpoint, a friend sent me this note of apology he got from Delta. Note I have removed his name and account number.  Obviously, airlines can't control things like the weather and other systemic delays — but when leaders step-up and do this kind of thing, it creates a lot of goodwill — and is evidence that they are taking responsibility and trying to fix things. 

     

     

    Please Accept Our
    Apology

     

     

     

     

    Dear _____________,

    On behalf of Delta Air Lines, I would like to extend my personal apology for
    the inconvenience you experienced as a result of the delay of Flight DL1505
    on July 06, 2013.

    I am truly sorry your travel was adversely affected by our service failure.
    Please know that within the industry, we have earned a solid reputation for
    our commitment to operational integrity. To that end, each flight
    irregularity is thoroughly reviewed to prevent a similar occurrence. I pledge
    to you that we are dedicated to providing the safe, reliable transportation
    you expect and deserve.

    We value you as a customer and sincerely appreciate your support of Delta. To
    demonstrate our commitment to service excellence, as a gesture of apology I
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    It is our goal to provide exceptional service on every occasion, and I hope
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  • 12 Books Every Leader Should Read:Updated

    I first posted this in 2011, but I update it now and then.  Note I have removed two from the list: Men and Women of the Corporation and Who Says that Elephants Can't Dance?  They are both great books, but I am trying to stick to 12 books and the two new ones below edge them out. Here goes:

    I was looking through the books on Amazon to find something that struck my fancy, and instead, I started thinking about the books that have taught me much about people, teams, and organizations — while at the same time — provide useful guidance (if sometimes only indirectly) about what it takes to lead well versus badly.  The 12 books below are the result. 

    Most are research based, and none are a quick read (except for Orbiting the Giant Hairball). I guess this reflects my bias.  I like books that have real substance beneath them.  This runs counter the belief in the business book world at the moment that all books have to be both short and simple.  So, if your kind of business book is The One Minute Manager (which frankly, I like too… but you can read the whole thing in 20 or 30 minutes), then you probably won't like most of these books at all.

    1. The Progress Principle by Teresa Amabile and Steven Kramer.  A masterpiece of evidence-based management — the strongest argument I know that "the big things are the little things." 

    2. Influence by Robert Cialdini the now classic book about how to persuade people to do things, how to defend against persuasion attempts, and the underlying evidence.  I have been using this in class at Stanford for over 20 years, and I have had dozens of students say to me years later "I don't remember much else about the class, but I still use and think about that Cialdini book."

    3.Made to Stick Chip and Dan Heath.  A modern masterpiece, the definition of an instant classic.  How to design ideas that people will remember and act on.   I still look at it a couple times a month and I buy two or three copies at a time because people are always borrowing it from me.  I often tell them to keep it because they rarely give it back anyway. 

    4. Thinking, Fast and Slow Daniel Kahneman.  Even though the guy won the Nobel Prize, this book is surprisingly readable.  A book about how we humans really think, and although it isn't designed to do this, Kahneman also shows how much of the stuff you read in the business press is crap.

    5. Collaboration by Morten Hansen.  He has that hot bestseller now with Jim Collins called Great By Choice, which I need to read. This is a book I have read three times and is — by far — the best book ever written about what it takes to build an organization where people share information, cooperate, and help each other succeed.

    6. Orbiting the Giant Hairball by Gordon MacKenzie.  It is hard to explain, sort of like trying to tell a stranger about rock and roll as the old song goes.  But it is the best creativity book ever written, possibly the business book related to business ever written.  Gordon's voice and love creativity and self-expression — and how to make it happen despite the obstacles that unwittingly heartless organizations put in the way — make this book a joy.

    7. The Pixar Touch by David Price.  After reading this book, my main conclusion was that it seems impossible that Pixar exists. Read how Ed Catmull along with other amazing characters– after amazing setbacks, weird moments, and one strange twist after another — realized Ed's dream after working on it for decades.  Ed is working on his own book right now, I can hardly wait to see that.  When I think of Ed and so many others I have met at Pixar like Brad Bird, I know it is possible to be a creative person without being an asshole.  In fact, at least if the gossip I keep hearing from Pixar people is true, Jobs was rarely rude or obnoxious in his dealings with people at Pixar because he knew they knew more than him — and even he was infected by Pixar's norm of civility.

    8. Creativity,Inc. by Ed Catmull. Price's book is fantastic, but this is one of the best business/leadership/organization design books ever written.  As I wrote in my blurb — and this is no B.S.- "“This is the best book ever written on what it takes to build a creative organization. It is the best because Catmull’s wisdom, modesty, and self-awareness fill every page. He shows how Pixar’s greatness results from connecting the specific little things they do (mostly things that anyone can do in any organization) to the big goal that drives everyone in the company: making films that make them feel proud of one another.”  Note also that Catmull has a chapter on Steve Jobs that offers a different perspective than anyone else I have seen –and they worked together for decades.

    9. The Laws of Subtraction by Matthew May.   This 2012 book has more great ideas about how to get rid of what you don't need and how to keep — and add — what you do need than any book ever written.  Matt has as engaging a writing style as I have ever encountered and he uses it to teach one great principle after another, from "what isn't there can trump what is" to "doing something isn't always better than doing nothing."  Then each principle is followed with five or six very short — and well-edited pieces — from renowned and interesting people of all kinds ranging from executives, to researchers, to artists.  It is as fun and useful as non-fiction book can be and is useful for designing every part of your life, not just workplaces.

    10. Leading Teams by J. Richard Hackman.  When it comes to the topic of groups or teams, there is Hackman and there is everyone else.   If you want a light feel good romp that isn't very evidence-based, read The Wisdom of Teams.  If want to know how teams really work and what it really takes to build, sustain, and lead them from a man who has been immersed in the problem as a researcher, coach, consultant, and designer for over 40 years, this is the book for you.

    11. Give and Take by Adam Grant. Adam is the hottest organizational researcher of his generation.  When I read the pre-publication version, I was so blown away by how useful, important, and interesting that Give and Take was that I gave it the most enthusiastic blurb of my life: “Give and Take just might be the most important book of this young century. As insightful and entertaining as Malcolm Gladwell at his best, this book has profound implications for how we manage our careers, deal with our friends and relatives, raise our children, and design our institutions. This gem is a joy to read, and it shatters the myth that greed is the path to success."  In other words, Adam shows how and why you don't need to be a selfish asshole to succeed in this life. America — and the world — would be a better place if all of memorized and applied Adam's worldview.

    12. The Path Between the Seas by historian David McCullough. On building the Panama Canal.  This is a great story of how creativity happens at a really big scale. It is messy. Things go wrong. People get hurt. But they also triumph and do astounding things.  I also like this book because it is the antidote to those who believe that great innovations all come from start-ups and little companies (although there are some wild examples of entrepreneurship in the story — especially the French guy who designs Panama's revolution — including a new flag and declaration of independence as I recall — from his suite in the Waldorf Astoria in New York, and successfully sells the idea to Teddy Roosevelt ).  As my Stanford colleague Jim Adams points out, the Panama Canal, the Pyramids, and putting a man on moon are just a few examples of great human innovations that were led by governments.  

    I would love to know of your favorites — and if want a systematic approach to this question, don't forget The 100 Best Business Books of All Time.

    P.S. Also, for self-defense, I recommend that we all read Isaacson's Steve Jobs — I still keep going places — cocktail parties, family gatherings, talks I give and attend, and even the grocery store where people start talking about Jobs and especially arguing about him.  As I explained in Wired and Good Boss, Bad Boss I have come to believe that whatever Jobs was in life, in death he has become a Rorschach test — we all just project our beliefs and values on him.