Jim Sebenius has written an interesting new working paper. Sebenius is a negotiations professor at Harvard Business School. Sebenius argues that a good negotiator thinks about the other party's "behind-the-table" barriers. In other words, what challenges may the other party face within their own organization? What pressures are they feeling? How will they be judged by their organization? We can succeed in achieving a successful outcome if we seek to understand the other party's "internal negotiation problem." Why? The other party will be more likely to agree to a negotiated solution if it helps them achieve certain internal goals and overcome certain internal obstacles that they face. What then should a person be doing in the early stages a negotiation process? Learning! You should be trying to understand the other party's internal predicament, constraints, and pressures. Put yourself in their shoes. Try to appreciate the ways in which they will be judged, rewarded, and perhaps punished based on the outcome of this negotiation. Moreover, you should seek to understand how you might help the other side "save face" if the solution involves certain "bitter medicine" for his or her organization.
Monday, October 22, 2012
Thursday, October 18, 2012
Google, Motorola, and Android
Posted on 6:15 AM by Unknown
When Google purchased Motorola's cellphone business, it became vertically integrated. In other words, it now owns produces the mobile phone hardware and the software, much like Apple. We all know that Steve Jobs extolled the benefits of vertical integration in the various businesses in which Apple competes. He believed fervently that one could only produce a "magical" device if you made both the operating system and the hardware.
Vertical integration has many benefits, but it also comes with certain challenges. In particular, it can be quite challenging when you start out competing in one portion of the value chain and then enter a downstream business. Google did so when it began by making Android and then acquired a cellphone maker. In so doing, Google now has entered into competition with its customers. After Google's customers for its Android software include Motorola's competitors: Samsung, HTC, and the like. That competition with customers can be a tricky thing to navigate at times.
According to this article in Fast Company by Farhad Manjoo, Google has chosen to deal this sticky situation by "erecting a firewall between Android and its new Motorola division. The new rules ensure that Motorola's hardware teams get no more access to Android's engineering teams than any other device maker would." Surely, the firewall helps allay customer concerns that Google may be favoring its internal Motorola division over other cellphone makers. On the other hand, such a firewall clearly diminishes the very benefits of vertical integration that presumably drove Google to make the deal in the first place! What's the explanation here? Could Google have underestimated the push-back from customers when they made the acquisition? Or has Google chosen this firewall strategy as a temporary transition mechanism as they work through customer relationship issues? Surely they won't leave the firewall in place forever, will they? If so, then why buy Motorola at all? What value does owning the hardware business bring if you don't make the software and the mobile device work together harmoniously?
Vertical integration has many benefits, but it also comes with certain challenges. In particular, it can be quite challenging when you start out competing in one portion of the value chain and then enter a downstream business. Google did so when it began by making Android and then acquired a cellphone maker. In so doing, Google now has entered into competition with its customers. After Google's customers for its Android software include Motorola's competitors: Samsung, HTC, and the like. That competition with customers can be a tricky thing to navigate at times.
According to this article in Fast Company by Farhad Manjoo, Google has chosen to deal this sticky situation by "erecting a firewall between Android and its new Motorola division. The new rules ensure that Motorola's hardware teams get no more access to Android's engineering teams than any other device maker would." Surely, the firewall helps allay customer concerns that Google may be favoring its internal Motorola division over other cellphone makers. On the other hand, such a firewall clearly diminishes the very benefits of vertical integration that presumably drove Google to make the deal in the first place! What's the explanation here? Could Google have underestimated the push-back from customers when they made the acquisition? Or has Google chosen this firewall strategy as a temporary transition mechanism as they work through customer relationship issues? Surely they won't leave the firewall in place forever, will they? If so, then why buy Motorola at all? What value does owning the hardware business bring if you don't make the software and the mobile device work together harmoniously?
Wednesday, October 17, 2012
The Promise and Peril of HR Software
Posted on 7:34 AM by Unknown
Michal Lev-Ram wrote an interesting article this week in Fortune magazine. Lev-Ram examines new HR software systems being sold by the likes of IBM, Oracle, and SAP. These systems, among other things, attempt to improve the performance review process. The systems attempt to make goal-setting and performance review a year-round process, as opposed to an event that occurs once or twice per year. The software includes virtual rewards, as well as methods for distributing real rewards. The systems also enable employees to set goals throughout the year and track progress, as well as to solicit feedback throughout the year.
The key question: Will employees actually USE these types of systems to enhance performance evaluation and constructive feedback? Or, will employees view these tools as cumbersome, time-consuming, and distracting? Such systems only create value if employees invest the time to use them. Moreover, they only help drive talent development if they become more than an evaluative tool. They have to be formative/developmental tools as well. If employees view them as strictly evaluative, they aren't likely to enjoy using the systems. Moreover, they may simply not take the time necessary to obtain optimal value from them.
In the end, talent development and performance evaluation only will improve if such systems are implemented along with a broader systemic change in processes, norms, and leadership behaviors. Without such systemic change, new software alone won't have the desired effect.
The key question: Will employees actually USE these types of systems to enhance performance evaluation and constructive feedback? Or, will employees view these tools as cumbersome, time-consuming, and distracting? Such systems only create value if employees invest the time to use them. Moreover, they only help drive talent development if they become more than an evaluative tool. They have to be formative/developmental tools as well. If employees view them as strictly evaluative, they aren't likely to enjoy using the systems. Moreover, they may simply not take the time necessary to obtain optimal value from them.
In the end, talent development and performance evaluation only will improve if such systems are implemented along with a broader systemic change in processes, norms, and leadership behaviors. Without such systemic change, new software alone won't have the desired effect.
Tuesday, October 16, 2012
Insiders vs. Outsiders: Sweeping Generalizations Don't Make Sense
Posted on 8:32 AM by Unknown
I read an interesting blog post this week on the HBR site. The post consists of an interview with Harvard Professor Gautum Mukunda. Here is an excerpt (video posted below as well):
The finding: The best leaders tend to be outsiders who don’t have a great deal of experience.
The research: Gautam Mukunda studied political, business, and military leaders, categorizing them into two groups: “filtered leaders,” insiders whose careers followed a normal progression; and “unfiltered leaders,” who either were outsiders with little experience or got their jobs through fluke circumstances. He then compared the groups’ effectiveness; for instance, with U.S. presidents, he looked at historians’ rankings from the past 60 years. He discovered that the unfiltered leaders were the most effective—and also the least effective—while highly filtered leaders landed in the middle of the pack.
The challenge: Is searching for a leader with a long, impressive résumé a waste of time? Is experience a predictor of mediocre performance? Professor Mukunda, defend your research.
Mukunda: I was surprised by how unambiguous the data were, but they confirmed what I suspected: If you choose an insider who you know can do the job well, most of the time that person won’t perform any differently from any other top candidate with lots of experience. Such insiders—I call them “filtered leaders”—might be good, but they probably won’t be brilliant. It’s the unfiltered leaders, the outsiders without lots of experience, who perform the very best.
I'm highly skeptical of such a sweeping generalization. I don't think we can argue that outsiders are ALWAYS preferable to insiders, that unfiltered folks are always preferable to experienced individuals. The bottom line is: It depends! Certain circumstances call for an outsider or a person with fresh perspective, while others lend themselves to an insider or someone with deep experience in an industry or company. Each company needs to assess its situation and make the right choice for that organization, given its strategy and culture, AT THAT POINT IN TIME. The right solution for Company XYZ in 2012 may not make sense in 2018, as conditions change. Moreover, the search for that superstar outsider can be a futile one, as I've written about in earlier blog posts. We sometimes become enamored with the outside "star" hire... and then feel very underwhelmed a few years later.
The finding: The best leaders tend to be outsiders who don’t have a great deal of experience.
The research: Gautam Mukunda studied political, business, and military leaders, categorizing them into two groups: “filtered leaders,” insiders whose careers followed a normal progression; and “unfiltered leaders,” who either were outsiders with little experience or got their jobs through fluke circumstances. He then compared the groups’ effectiveness; for instance, with U.S. presidents, he looked at historians’ rankings from the past 60 years. He discovered that the unfiltered leaders were the most effective—and also the least effective—while highly filtered leaders landed in the middle of the pack.
The challenge: Is searching for a leader with a long, impressive résumé a waste of time? Is experience a predictor of mediocre performance? Professor Mukunda, defend your research.
Mukunda: I was surprised by how unambiguous the data were, but they confirmed what I suspected: If you choose an insider who you know can do the job well, most of the time that person won’t perform any differently from any other top candidate with lots of experience. Such insiders—I call them “filtered leaders”—might be good, but they probably won’t be brilliant. It’s the unfiltered leaders, the outsiders without lots of experience, who perform the very best.
I'm highly skeptical of such a sweeping generalization. I don't think we can argue that outsiders are ALWAYS preferable to insiders, that unfiltered folks are always preferable to experienced individuals. The bottom line is: It depends! Certain circumstances call for an outsider or a person with fresh perspective, while others lend themselves to an insider or someone with deep experience in an industry or company. Each company needs to assess its situation and make the right choice for that organization, given its strategy and culture, AT THAT POINT IN TIME. The right solution for Company XYZ in 2012 may not make sense in 2018, as conditions change. Moreover, the search for that superstar outsider can be a futile one, as I've written about in earlier blog posts. We sometimes become enamored with the outside "star" hire... and then feel very underwhelmed a few years later.
Monday, October 15, 2012
Struggles at Zynga
Posted on 6:11 AM by Unknown
As many of this blog's readers know, Zynga - the social gaming company - has suffered recently. According to this Fortune magazine article, "Shares are down nearly 74% since its stock market debut. User engagement has dropped 53% in less than three years according to social game analytics firm dystillr." What has happened to the firm?
Several factors explain Zynga's struggles. First, the company's games lack the depth of some traditional console-based video games. Therefore, the games appear to have a limited life span. Many users seem to tire of the games fairly quickly. Here we see a catch-22. Zynga's games don't require the kind of upfront investment to develop that console-based games need. However, the payoff down the road may be more limited - less risk, less return. Second, the company depends upon Facebook a great deal. As Facebook users have shifted toward accessing the social networking site via mobile technology, Zynga user engagement has declined. Zynga appears to make less profit on its mobile games, as opposed to games that users accessed via Facebook on their laptop or desktop.
Beyond that, I think Zynga's difficulties point to a bigger trend in the video game industry. The shift toward mobile and social gaming clearly has disrupted the console-based gaming business. Most of these mobile and social games require much less money to develop. However, they also appear to have a limited lifespan in many cases. Therefore, we have moved to a situation where gaming companies may need to innovate much more quickly. Users appear to require new versions and new experiences much more often now. They enjoy mobile games, but they "consume" them very quickly. The new winners in the video game business will be those firms that can churn out streams of hits.
The question remains: Will those winners be able to develop franchises (a big hit followed by a stream of sequels and spinoffs), or will they have to develop unique new games much more often than in the past? In the movie business, sequels generally make less money than original films. Video games defied that logic for many years. In console-based gaming, sequels proved to be an engine of profitability. Can that happen long term in mobile gaming, or will consumers demand variety and newness to a much higher degree?
Several factors explain Zynga's struggles. First, the company's games lack the depth of some traditional console-based video games. Therefore, the games appear to have a limited life span. Many users seem to tire of the games fairly quickly. Here we see a catch-22. Zynga's games don't require the kind of upfront investment to develop that console-based games need. However, the payoff down the road may be more limited - less risk, less return. Second, the company depends upon Facebook a great deal. As Facebook users have shifted toward accessing the social networking site via mobile technology, Zynga user engagement has declined. Zynga appears to make less profit on its mobile games, as opposed to games that users accessed via Facebook on their laptop or desktop.
Beyond that, I think Zynga's difficulties point to a bigger trend in the video game industry. The shift toward mobile and social gaming clearly has disrupted the console-based gaming business. Most of these mobile and social games require much less money to develop. However, they also appear to have a limited lifespan in many cases. Therefore, we have moved to a situation where gaming companies may need to innovate much more quickly. Users appear to require new versions and new experiences much more often now. They enjoy mobile games, but they "consume" them very quickly. The new winners in the video game business will be those firms that can churn out streams of hits.
The question remains: Will those winners be able to develop franchises (a big hit followed by a stream of sequels and spinoffs), or will they have to develop unique new games much more often than in the past? In the movie business, sequels generally make less money than original films. Video games defied that logic for many years. In console-based gaming, sequels proved to be an engine of profitability. Can that happen long term in mobile gaming, or will consumers demand variety and newness to a much higher degree?
Friday, October 12, 2012
How Big Companies Act Like Startups
Posted on 5:21 PM by Unknown
Soren Kaplan wrote a terrific article recently for Fast Company. Kaplan explained how some large companies try to act more like startups in an effort to jumpstart innovation. He outlines four key practices/principles that invigorate innovation:
1. Follow customers home: In other words, conduct anthropological research. Go into customer homes and observe them in their natural settings using various products and services.
2. Tap outside collaborators: Bring in experts and innovators from outside the firm to bring fresh perspectives, explain their research, and educate folks about how things are done elsewhere.
3. Stay small: Don't think in terms of bet-the-company type projects. Think instead in terms of low cost, rapid experimentation.
4. Use the best, invent the rest: Creating a new product or service doesn't mean inventing the entire thing from scratch. Often, you can combine off-the-shelf components with proprietary innovations to develop a unique new product.
1. Follow customers home: In other words, conduct anthropological research. Go into customer homes and observe them in their natural settings using various products and services.
2. Tap outside collaborators: Bring in experts and innovators from outside the firm to bring fresh perspectives, explain their research, and educate folks about how things are done elsewhere.
3. Stay small: Don't think in terms of bet-the-company type projects. Think instead in terms of low cost, rapid experimentation.
4. Use the best, invent the rest: Creating a new product or service doesn't mean inventing the entire thing from scratch. Often, you can combine off-the-shelf components with proprietary innovations to develop a unique new product.
Do We Grow More Creative As We Age?
Posted on 5:11 PM by Unknown
The conventional wisdom suggests that we generate fewer breakthrough ideas as we grow older. An article in Psychology Today challenges that notion. In the short essay, Dr. Gary Small, Director of the UCLA Center on Aging, offers an interesting perspective. He says, "There are neuro-circuitry factors that can favor age in terms of innovation". Small emphasizes that empathy plays a major role in creativity, and we tend to become more empathetic later in life. I found that point quite fascinating, given that design thinking stresses the importance of observing users in their natural setting and then empathizing with users - their problems, struggles, and needs.
In addition, Dr. Small argues that we become better at pattern recognition as we age. That makes some sense too. After all, intuition does play a major role in the creative process. Intuition essentially is the ability to recognize patterns based on deep expertise in a particular domain. We refine our pattern recognition ability through a breadth and depth of experiences over time.
Having said all that, I have written previously on this blog about research showing that scholarly productivity in many fields does decline with age, though the peak performance differs based on the field of research. Thus, we want to take this particular article with a bit of grain of salt. The argument, though, that empathy and pattern recognition improve with age, makes a good deal of sense. It suggests that innovation teams may want a good balance of young and old members, rather than simply stacking the groups with "the best and brightest young minds."
In addition, Dr. Small argues that we become better at pattern recognition as we age. That makes some sense too. After all, intuition does play a major role in the creative process. Intuition essentially is the ability to recognize patterns based on deep expertise in a particular domain. We refine our pattern recognition ability through a breadth and depth of experiences over time.
Having said all that, I have written previously on this blog about research showing that scholarly productivity in many fields does decline with age, though the peak performance differs based on the field of research. Thus, we want to take this particular article with a bit of grain of salt. The argument, though, that empathy and pattern recognition improve with age, makes a good deal of sense. It suggests that innovation teams may want a good balance of young and old members, rather than simply stacking the groups with "the best and brightest young minds."
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