Leaders, Go the Back of the Line!

Several days ago, someone reminded me about a book that I read awhile back - “It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy” by Commander Michael Abrashoff.  In the book, the commander describes how he turned around a poor performing ship and helped it become one of the best vessels in the U.S. Navy.   My colleague reminded me of one particular story Abrashoff tells about his first week on the ship.   The commander went to the weekly cookout on the ship, and he noticed that all the officers jumped to the front of the line (cutting in front of the enlisting personnel waiting patiently for their food).  Abrashoff took his tray and went to the back of the line.   His officers got their food and sat down to eat on the upper level, while the sailors sat down on the lower level.  When they noticed the commander at the back of the line, one individual went down to speak with Abrashoff: "Captain, you don't understand. You go to the head of the line."  Abrashoff responded, "That's okay. If we run out of food, I'll be the one to go without."  Abrashoff waited patiently for his food and sat down with the sailors on the lower level.  He did not scream at his officers or reprimand them for his actions.  However, he noticed that the officers did not cut the line the following week, and they chose to sat with the enlisted men. 

Every leader at all levels should read that story and consider whether they lead from the front or the back of the line.  I would submit that far too many leaders choose to cut the line.   Moreover, many leaders who witnessed the cutting in line would choose the verbal reprimand route.  They would fail to recognize that actions often speak louder than words.   

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Corporate Governance and a CEO Search at Avon

Avon recently announced that CEO Andrea Jung would be stepping down, but remaining at the firm as Executive Chairman.  The firm announced that a search for a new CEO would commence immediately.  Today the Wall Street Journal reports that two former Avon CEOs (including Jung's mentor and predecessor) have criticized the decision to have Jung remain as Executive Chairman for at least two years.  According to the Wall Street Journal,

Former Avon CEO James Preston, once one of Ms. Jung's closest mentors, took the unusual step of writing a letter to the board two days after the shake-up. He criticized Ms. Jung's leadership, stressed that departing CEOs should step aside and called on the board to replace her with someone with deep experience in the direct-selling world. "I have long held the belief that once a CEO leaves that position, he or she should make a 'clean break' and not question or second-guess the actions of his successor," wrote Mr. Preston, who ran Avon from 1989 to 1998, in the letter, dated Dec. 15, that was reviewed by The Wall Street Journal. "I have held true to that belief, even though in recent years I have become increasingly concerned—and saddened—by the declining fortunes of the company."

I found the Avon decision puzzling as well.   I wonder whether the decision will make it very difficult for Avon to find a top quality CEO.  What executive would want to take the job, knowing that the former CEO would be looking over their shoulder for the next two years?  It's particularly problematic, given that Avon has struggled lately.  Big changes will have to be made.  Will Jung prevent some of that change from occurring as fast as it should?  

The Board now has a major problem.  The fact that Preston's letter has become public puts pressure on the directors to clarify and justify their rationale for keeping Jung as executive chairman for two years.  They cannot ignore this issue.  They'll have to address it, or they jeopardize their ability to find a high quality CEO.  Moreover, a lack of response will raise more questions about the efficacy of corporate governance at the firm.  That could hurt the share price, as investors may be leery of investing in the company if they perceive governance to be weak. 

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Preventing Analysis Paralysis

The Corporate Executive Board has posted a useful article on Business Week's website regarding how managers can avoid analysis paralysis.   Among their recommendations, they advise the following:


Unclutter dashboards for managers: Even the most relevant and informative survey data won’t get very far in your organization if managers cannot readily access them. Our research shows that managers who transform data into usable information for their teams can increase business performance by 24 percent. So, focus managers on what matters by providing them with personalized views of the data they need to be effective. Streamlined online dashboards provide managers with instant access to aggregate survey results from their team and organization overall. Ideally, they highlight areas of strong performance and opportunities for improvement for each manager, and equip them with the resources to improve.

I agree completely.   Many organizations face metric overload these days.  Senior leaders need to think carefully about the priorities of the organization and communicate those to all the troops.  Then, the dashboards used to run the business must reflect those priorities.   How does one rationalize the metrics and reports being generated? It starts with tying the dashboards closely to senior leadership's priorities.  One can go further though.   I can recall an exercise we undertook when I worked in corporate finance at a major aerospace firm in the early 1990s.  We went out and talked the people who received the reports we generated.   We asked them whether they used our reports, and if so, how.  We also asked them when was the last time that they had examined each report.  It sounds so simple, yet many people who put together dashboards and reports don't actually know how their data are being used.  By connecting the dashboard creator and user more closely, one can identify which metrics are most useful.    

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You Gotta Believe - Leaders are Made vs. Born

Each Sunday, the Boston Globe's Uncommon Knowledge section features interesting research findings from the social sciences.  Yesterday, the newspaper described a study by Crystal L. Hoyt, Jeni L. Burnette and Audrey N. Innella.  The researchers examined the impact of individual beliefs regarding leadership on actual behavior.  They compared people who tend to believe leaders are "born" with those who tend to believe leaders are "made."   The scholars conducted two studies.  In the first study, they primed individuals to think about a leadership role model.  Then, they found that the people who believed that leaders are made tended to show more confidence and less anxiety as they performed a leadership task (delivering a speech).  In the second study, they asked some individuals to read an article arguing that leaders are made.  They found that those who read the article tended to show more confidence, exhibit less anxiety, and perform better in the delivery of a speech (as measured by independent judges). 

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Knowing Your Customer - By Channel!

Knowledge @ Wharton has published an article about a new report produced by Wharton’s Jay H. Baker Retailing Center and The Verde Group, a market research firm.   The report emphasizes that companies need to think carefully about the multi-channel shopper.  Retailers clearly have been spending time (appropriately) trying to provide some commonality for the customer regardless of how they shop (online, in store, catalog, etc.).  However, the report reminds retailers that the shopper in each channel has different wants and needs.  Therefore, one has to tailor the experience to suit that customer at that point in time.  The same individual may actually want a different experience in store vs. online - and some of those differences may be quite subtle, yet critical.   Here is a key excerpt from the article:

"Courtney (Paula Courtney, president of The Verde Group) notes that while the emphasis for many retail businesses has been on creating a seamless experience across multiple channels, the reality is that retailers need to spend more time addressing the specific needs of various channel users. “While it’s important to have consistent policies across channels, policies are different from experiences. This [research] suggests that an overriding emphasis on ‘consistent’ channel experiences is misplaced. Different channels attract different types of customers who demand experiences that are specific to their needs and preferences.”

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Lego Tries to Appeal to Girls

Business Week has a story this week about how Lego is trying to appeal more effectively to girls. I don't know if it will work, given the firm's historical image and positioning. However, I am very impressed with the research methodology that they employed before designing a new line of products specifically targeted at girls. Lego invested significant resources in anthropological research, sending researchers into homes to watch how girls play. They learned a great deal about how girls build, value beauty and color, and engage in role play. Here is one fascinating excerpt: Lego confirmed that girls favor role-play, but they also love to build—just not the same way as boys. Whereas boys tend to be “linear”—building rapidly, even against the clock, to finish a kit so it looks just like what’s on the box—girls prefer “stops along the way,” and to begin storytelling and rearranging. Lego has bagged the pieces in Lego Friends boxes so that girls can begin playing various scenarios without finishing the whole model. Lego Friends also introduces six new Lego colors—including Easter-egg-like shades of azure and lavender. (Bright pink was already in the Lego palette.)

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Hasbro Faces Challenging Times in Board Game Business

The Wall Street Journal reports that Hasbro continues to face challenges in its board game business.   Naturally, mobile and social gaming, as well as other forms of entertainment, have threatened the board game industry for some time.  However, the Wall Street Journal reports that, "Sales of Hasbro's games and puzzles dropped 9% over the last three quarters, far more than overall sales of board games, which declined 3% in the same period, according to researcher NPD Group. Hasbro's game sales slid 3% last year, even as industry-wide game sales edged up 1%."   Some observers claim that Hasbro has neglected its board game business as it has tried to become a broader entertainment company.   The company, naturally, rejects such criticisms. 

I decided to take a quick look on the Amazon site.   What the are the most popular board games on Amazon right now?  The top three games are produced by GameWright, MindWare, and PlaSmart.  Each firm appears to be independent (i.e. not owned by a major toy company).  I found this fact quite interesting.  It appears, then, that the board game business may not have substantial barriers to entry, nor economies of scale that provide incumbent players such as Hasbro a formidable advantage.   In fact, these independent firms often use a form of crowdsourcing to generate new games.  That is, in addition to creating games in-house, they solicit game ideas from inventors around the world, and then select the best ideas.   They often build on and expand those ideas to create their games. 

Interestingly, the Wall Street Journal suggests that Hasbro has spent a considerable amount of time trying to modernize its classic board games, rather than emphasizing the development of many new titles.  These independent firms, of course, focus on bringing totally new ideas to market.  Some of Hasbro's modernization attempts have not gone so well, and in fact, have invited some humorous response.  Check out Stephen Colbert's take on a new version of Monopoly that Hasbro introduced recently (start watching at the 5 minute mark):

           

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