General Management – Page 12

February 27, 2006

Adding Some Color (Blue Tone) To The MBA Discussion

David Maister has a great post entitled, "Why Business Schools Cannot Develop Managers". While I generally agree with what David says there, in that business schools can teach primarily only analytical skills, I think that it may be worthwhile to shed some additional light on that subject so that people who are evaluating business school (or those that come from business school backgrounds) can better appreciate the underlying value.

I view business as a bit of a craft and art, so to continue with the color theme, I see the business value of MBA programs as covering three primary color schemes:

Blue – the cold hard facts, the analysis aspects, the language, and theory of business (learning WHAT to do)
Yellow – knowing where the warning lights are, when something is good or bad, going to work or not, and going to incent parties (learning the HOW to do something)
Red – the passion, the leadership, the drive, and the fortitude of business (WANTing to do something)

For now, I will concede that the MBA only works on the "blue tones", and one can’t create a business without other primary colors.

That said, when my one of my kids gets crayons at the local restaurant consisting of black, green, and orange, and my kids want to draw Captain America or Cinderella – I tell them to "please make the best of the situation". You be surprised how creative kids can be with even the wrong tools for the job.

So here’s some perspectives on the "blue aspects" of the MBA:

MBAs Are From Mars and Engineers Are From Venus – Having both MBA and engineering degrees, I can see where parties can misunderstand one another in situations such as capital raising meetings, sales pitches, and executive presentations. The MBA provides a common communication language for business people. Sure there can be too much business-speak going on with MBAs, but I have seen many situations where engineers in start-ups are unable to pitch their stories to angels or venture capitalists because the two are speaking different languages. At the same time, I have seen MBAs better left out of the meetings with venture capitalists because they are just too shallow. All said, recognize that each type of participant has a different communication style and that MBAs add some value. When one tries to do business in Japan, one tries to speak Japanese and not French, right?
MBA Training Is A Portable Skill And Can Facilitate Working Relationships – Just like C/C++/Java programmers follow conventions for putting things in reusable functions or libraries, apply different methodologies for avoiding deadlock or multithreading of executing code, and communicate using different diagramming techniques, MBA have toolkits too. Toolkits may include common frameworks for competitive analysis (such as the 3Cs), profitability analysis (such as 5 Forces), or operational process breakdown (such as ABC or "activity-based cost" analysis). Having these types of frameworks have helped me to quickly interface with other consultants (even ones from other firms), business people, and even overseas folks whom are outsourcing more straightforward MBA activities.
MBA Frameworks As A Way To Make Sure Analysis Is Thorough – One of the common cases covered in business school is one that covers the pricing of a contact lens product for chickens. The purpose of having such an outrageous case is to teach students how to analyze business problems where they may have no prior business experience. Since students can’t leverage past experience and industry-knowledge, the case teaches students to use structured methods for attacking pricing problems. Students are trained to look for things such as cost data, competitive data (such as the market prices of alternative products being used to solve the real business problem at hand – in this case, perhaps the true operational problem is the cost to farmers of losing chickens in a cannibalistic world where chickens kill one other because they can see one another). In the end, students are supposed to get an in-depth look at how pricing can be addressed, e.g., in terms of cost, margin, value, and competition.

A good analysis foundation is invaluable. From that foundation, one can apply other skills to get business "street-smart" and to develop leadership skills. Although I have not pointed out some of the other aspects of the MBA that can help out in these latter areas, I do feel that there are some yellow and red tones to be found in the business schools too. David Maister even goes on to say in his post that the title of his post is perhaps "too pessimistic" on the value of business schools. On this point, I also agree. Perhaps I’ll post more on this subject at a later date if folks are interested.

February 21, 2006

Taking On A Life Of Its Own

I was emptying my refrigerator as I was thinking about a title for this post, but this post really has to do with something that I’ve encountered in certain consulting environments.

To put things in perspective, a few years ago I was working on a consulting project related to a launch of a new business within a large multinational company – a company that is so large that it had the Russian doll (these are the wooden dolls where you unscrew one and then there is another one inside, perhaps seven nested within one another) equivalent in organizational structures, e.g., three levels of CEOs. The company had a long history with legacy organizations and people and wanted to introduce new products in an entrepreneurial-like setting within the larger organization.

In an informal setting, our team presented some options in terms of potential product line scopes, and the options ranged from simple to complex. At this point, one of the other consultants to the company, an ex-CXO at Booz Allen Hamilton and a person I admire quite a bit, raised a point that he did not think that it would be wise for the client to undertake one variation of the product line incarnations, even though the financials looked much more attractive than the others. This was sage advice in my mind. He did not want the client to get caught up in a business that could potentially "take on a life of its own". An organization that had not yet proved whether it could walk let alone run in a new entrepreneurial market should be discouraged from pursuing the sexiest product line model of the lot.

Another version of things taking on a life of its own … I can think of at least a few cases where a management consulting firm introduced a methodology for running a certain aspect of the business only to find later that the client readapted the methodologies for other purposes (e.g., other business lines, other functions). In concept, this is great as the company should get mileage out of what had been produced elsewhere. All said, some organizations can forget the original premises and goals of the process and/or methodologies installed. The steps and processes aren’t forgotten though. They are followed to the letter. With the goals and premises long forgotten, the organization may be executing a bunch of processes and bureaucracy while accomplishing close to nothing results-wise.

None of this is to say that the client is stupid. I’m not discouraging the use of consultants either. I’m just saying that things can take on a life of their own in business like things do in one’s refrigerator. It’s a special sauce that you have to watch out for in business.

February 1, 2006

Musings On Surviving The Bends When Moving Between Small and Large Companies

The "bends" refers to decompression sickness and is often associated with divers who surface from a dive too rapidly (e.g., because of an emergency like running out of oxygen) and where the pressure transition of moving from deep to shallow water can be so shocking that it cause gases to bubble out of one’s blood – very painful. Though I haven’t read up on the facts on how many people die from the bends, for one reason or another I often associate the experience as very traumatic experience with a high probability of casualty (which may not be true). In any case, I spent lunch the other day with a successful entrepreneur that I work with (who raised tens of millions of dollars from top VCs in two ventures), and we shared some stories about our own startup and big company experiences, other friends’ experiences, etc. The talk made me reflect upon how people can switch between entrepreneurial ventures and large corporations (both directions) and not get the equivalent of the "bends".

From my vantage point, there seems to be a high probability of people failing to make the transition.

Here are some example sickness conditions that one might find when switching from small company to large company:

getting frustrated with (perceived) excessive processes
failing to recognize sensitivities associated with chain of command or organizational structures
having to hold specialist positions that may not see end-to-end workflow (such as beginning of customer prospecting through contract closing and delivery)
moving from being a big fish in a small pond to a small fish in a big pond (and the associated reduced scope of control)

For this post, I’m going to ignore the positive aspects of switching between small and large company, and I’ll turn to some example sickness conditions that one might find when switching from large company to small company:

having difficulty operating with no to little human resources (e.g., VPs in big companies where they had people working for them and not knowing what to do when they have to deliver on their own)
wanting to expand the organization prematurely (e.g., building up large sales teams before product is even close to alpha)
working with colleagues who may neither have the experience of working with large companies nor speak the same language
getting accosted by management for failing to realize that a small company may have much smaller margins for error

For myself, I found that imagining how life was going to be on a day-to-day basis before I made the switch had helped quite a bit. For example, before I first left the management consulting field to work for an angel-funded startup, I told the CEO something to the effect that I was mentally prepared to scrub toilets and live life by eating only canned beans. I knew that in a transition from a well-paying management consulting job to a bootstrap – well things were going to feel financially different. On the other hand, when I returned back to becoming a management consultant in a large company, I knew that there would be more processes, organization, etc. to work with. Projecting how life would be back in a large company had helped me to make the transition.

What I suggest is an internal readiness testing of sorts.

To digress a bit, I have seen some folks apply interview testing (or sorts) to see whether a large company person would work out in an small company/entrepreneurial setting. The test might have been to have a candidate for a VP of Sales job develop a sales presentation (or revise the startup’s existing sales presentation) and present the deck to the startup management team and board itself.

If the transition can be accomplished successfully, great things can happen. Sometimes business connections and credibility from someone from the big company world can be leveraged quite nicely into a small venture. Soimetimes entrepreneurial attitudes and fresh blood can help with large companies that need a revival. These are just tips of the iceberg in terms of potential benefits.

But transitions can be rocky. The bends exist, and they need to be actively managed before, during, and after a transition. At least, methinks so.

January 14, 2006

Leadership Is An Innate Skill?

I saw a recent post that raised the question as to whether leadership skills are innate (and cannot be learned). Leadership is a bit of an ill-defined term, so I’m not exactly sure about the context of the original discussion triggering the post, but at face value I have to say that innate skills can help but instilling a continuous learning process about one’s own leadership style (and that of others) can also help dramatically. What I share below intends to illustrate not only that one can build knowledge to help with leadership skills but also that one may find little progress on a day-to-day basis until one day when it all comes together

Two areas that created an “ah-ha” for me with respect to helping me recognize my leadership style were related to going to business school and getting support from a client executive to develop the business skills one of his line managers. Had it not been for these two events, I probably would have turned out as an engineer focused on individual contributor work as opposed to a person focused on business within the technology space. While either of the outcomes is perfectly fine, I am happier that I have found the business slant is more the “natural me”.

The first step in going to business school helped me to develop my leadership skills by explicitly forcing me to focus on thinking about and analyzing business issues, as opposed to passively addressing business issues while working on the job. Business school also gave me an extra level of confidence in knowing that I had spent dedicated time to try to improve my knowledge.

The second step may have occurred, in part, by chance. During a management consulting engagement I was involved with, I was sitting in a three-person, executive review meeting with one of the partners of my consulting firm and the president of the company. The upshot of the meeting was that one of the functional managers was not performing too well and both the president and the partner wanted me to coach the functional manager to help him take his management skills up by an order of magnitude or the functional manager would be fired. What followed from there was some behind the scenes work in analyzing how to approach the situation and then direct assistance with the functional manager to improve the business. After that particular client engagement, things started “clicking” for me, and I was able to get into both interim and direct management roles more regularly to foster my leadership skills.

The upshot of all this is that combining knowledge, practice, and a real environment to foster one’s management and leadership skills helped me to breakthrough and reach a new level (one-time, discontinuous improvement as opposed to gradual change). While the process of improvement may have taken many years with slow growth, I was suddenly able to get things to click together.

I have found similar discontinuous improvements in other areas of life. For example, in tennis, I remember going to tennis camp and getting a breakthrough on getting better control with my one-handed backhand. In drumming, I started to study a completely different style of music (jazz fusion instead of just progressive rock music drumming). The knowledge had to sit for awhile, but one day it all clicked and took me up a notch when I least expected it. If I hadn’t prepared for the time when the conditions and environment were right, I wouldn’t have reaped the benefits. Sometimes I think working on leadership skills might be in the same vein.

December 13, 2005

Swearing By Or Swearing At Benchmarking

I thought that I would post something about a perspective that I have on benchmarking that might be somewhat of a minority position as compared to other management consultants. My thoughts were triggered in the context of an operations project where I am working with an ex-Booz Allen Hamilton person.

Benchmarking client company operations against comparable company operations helps to place the client company in the context of competition, quantify areas of differences, and provide a fact-based foundation upon which management decisions can be made.

I totally agree with this in theory. In reality, one can run into a ton of issues, some of which include:

Existing metrics and measurements were collected for a service or product which is not comparable to the service or product of current concern – This is somewhat ill-defined, but as an example, suppose that a operations process related to wireless data service is different from a support process related to broadcast video service.
Client or management pokes a hole in the validity of benchmark and undermines the credibility of your case – May be tied to a variation of the first one, but in any case, think about how strongly one wants to hinge the consultative study on a single benchmark source or data point.
Benchmark information cannot be readily found – Ok, one can go recommend starting a benchmarking study before taking any action as these need not be cost-prohibitive studies to conduct. Consulting firms can also leverage their knowledge bases and networks to bring light to the table. I just caution taking actions that delay progress when other methods for fact-building can be taken (perhaps in parallel with the benchmarking).
Client metrics don’t exist, are questionable, or are not comparable – After jumping through hoops, the client measurement systems may not match the requirements and measurement guidelines used by participants in the benchmarking study …

So given the issues above (and I have to say in my experience, every operations consulting engagement I’ve been in has run into at least one of these issues), I would suggest that the prospects of using other methods for operations analysis not be discounted too much (and these methods do not require benchmarking as a necessary condition):

Structural analysis – e.g., whether an operations process runs in parallel or serial and whether the processes can be run in parallel versus serial is something that can be factually analyzed and need not necessarily be compared to other companies.
Bottleneck analysis – e.g., when resources are waiting downstream for another resource that is bottlenecked and when this happens with a high statistical certainty, this can indicate that the work structure is not optimal (perhaps flattening of the work structure, cross-training, or better planning is desirable).
Trend analysis – e.g., if costs are going up, cycle-times to respond are getting longer, and customers are getting more upset, these are facts that one can respond to without having to have benchmark data to the nth degree up-front. Many companies may do an OK job at getting static data, but longitudinal data over time can also be very informative.
Consistency analysis – although not as cut and dry, the argument is along the following lines: if a company choses a particular strategy (e.g., being a feature leader versus low-cost provider), then there are some tactics that are inconsistent or less consistent with the strategy (e.g., being a feature leader and running below average R&D investment rates).

So while I will say that I am all for benchmarks, if one finds oneself swearing at benchmarks, then there may also be an opportunity to step back and apply some other principles that do not require as much benchmark information to be readily available. A tremendous amount of value can also be added using analysis methods like the ones I mentioned above. There are many other methods – please feel free to share some of your favorites.

Bonus link: good website covering balanced scorecard information as well as quality functional deployment (QFD) principles (the latter of which I have seen applied more in product management scenarios).

November 9, 2005

Jack Welch – Straight From The Gut … Plus The Soft Stuff Matters

Srinivasan Raghavan has a post that captures some of his perspectives on Jack Welch’s book as well as a Q&A that Welch did at my alma mater. Apparently during the Q&A, Welch said:

"Business schools need to teach more organizational dynamics and human resources …"

I agree with placing additional value there. As I’ve mentioned before, things like negotiations courses and organizational design are way too underrated by students at business schools. To butress my point annecdotally, this Columbia MBA alum also weighs things like negotiations classes very high. Maybe we have skewed opinions having both done business development work, but I could still make a case for rating this type of "soft stuff" as important.

Also as captured by Srinivasan on the topic of career advice,

[Welch] also recommended taking risks. “Be adventuresome,” Welch said.
“You’ve got lots of years to be cautious.” Resiliency is a critical
attribute, he continued. “You’re going to get knocked off the horse at
least five times in the course of a career. Know you’re going to make
mistakes, be humbled by it, learn from it, and get back on the horse.
But don’t be frightened by it, don’t live in fear.”

Very coincidental that I ran into this passage. A prospective MBA student just posed a question to me today on my other blog as to whether I wish I could do something over in my career. In the comments section, I responded by closing with something to the effect of, "I wish I had taken more risks when I was younger."

October 24, 2005

Benefits Of Little Experiments And Figuring Out How People Perceive You

One of the most important lessons I learned from an angel investor in a prior venture I worked with was that of conducting test experiments. This might be as sophisticated as a split-cable marketing study where one delivers one segment or audience one type of message and another segment (randomly split) another type of message. See what results come from each segment. Analyze and come up with hypotheses why things are so. Go back and test and refine things.

What the angel investor taught me, however, was that I could get by with conducting some of this testing in more of an ad-hoc way without having to follow the rigor and statistical nature required in full-blown business experiments learned in business schools, etc. So long as I was disciplined, somewhat systematic, and could rely on my business instincts, this would get me in the ballpark and moving in the right direction.

To change gears a little, one way I have applied the ad-hoc testing technique is to get continuous feedback on myself as a business professional.

What is interesting about the blog world, it that one can get some feedback on how one is perceived by others. Through my blog postings, I have seen people refer to me in online contexts as:

management consultant
entrepreneur
operating manager/executive

In my case, the balance has been weighed more toward the first two in the list as opposed to the third one. It is also interesting because I do not consider myself an entrepreneur. I have supported entrepreneurs and been in entrepreneurial contexts, but I have not yet been that first person in the company to conceive of a business idea. I have had to earn my status in entrepreneurial contexts (e.g., through the earliest sales in an org. or through market guidance).

How one is perceived is very useful information to have when selling oneself into a job or consulting gig, say. It is also good to be aware of this in persuation-type situations (e.g., some people may perceive you to be more skilled as an entrepreneur when you really need to position yourself as a management consultant).

To complement the online feedback I’ve processed, in offline settings, I have gotten some feedback over the years on how people perceive me:

From a venture partner, ex-partner at well-known VC fund in South – classic bio and make-up of an entrepreneur, perhaps not naturally inclined but capable to be a position-player in business development
From a CFO – great people facilitator with excellent communication skills, maybe a little weaker on accounting detail than what needed for this engagement
From an entrepreneur – type of person needed for strategic finance issues and operating model considerations
From a CFO – would be good at a controller position in a finance organization because of an ability to tie finance with communication skills, may need to shore up skills in detailed accounting.
From a technical person – personality more of a Kellogg-type than a Chicago-type MBA (ouch?)
From angel investors – a trusted, right-hand man
From a client entrepreneur – significantly stronger on product development/management & business development as compared to online marketing
From an entrepreneur – much more of a corporate-type as opposed to an entrepreneur (little negative?), good at driving structure in an org. though
From a generalist-type executive in a multi-billion dollar firm – you are a generalist and a glue person that holds things together as opposed to being a front-person
From a client/middle-market company – well-suited for change management/management consulting engagements that require working with all levels in an org. (i.e., not just executives but line workers)
From a client/middle-market company – excellent at bringing management consulting-grade analytics and front-end, project management discipline to the table
From a friend – not the makeup of a financial analyst
From an angel investor – a terrible writer, but very good at picking an angle and delivering messages from that context
From strangers – a good go-to resource on management consulting and business schools

What is very funny to me about this list is that I never ever pictured myself in business development (prior to business school), but somehow people perceive me that way and see me in that role.

The bottom-line is that by getting this type of feedback, it becomes easier to know how one stacks up against others in a professional context.

By using this technique, I have made some choices to de-emphasize my efforts in pursuing financial-type endeavors. Continue to focus on opportunities that will require me to interface with all types of people. Defer functional specialization as a general rule but keep watching the trends. Focus more on management consulting, people facilitation, product management, start-up and business development opportunities.

As an aside, in addition to asking others how they perceive me, I have also asked my son how he perceives me. It is a good feeling when he responds, "You’re my buddy." I have to take that feedback and keep life in balance too.

October 13, 2005

Random Stuff On Business Ethics (And Competitive Intelligence)

Some good comments over at my BusinessWeek blog post on "Teaching Ethics In the Business Schools:What Do You Think?". Kathleen also has a post that touches on leadership and ethics here.

When contemplating what my life would be like if I were a full-time competitive intelligence person (as opposed to doing competitive intelligence as part of general startup efforts or management consulting), I found the following PDF (from Competitive Intelligence Review) to be excellent on highlighting some concrete cases of how competitive intelligence can walk a fine line with ethical behavior. Here’s a snip from early on in the article that demonstrates a situation with Marriott:

For example, a 1988 Fortune magazine article outlined Marriott’s practice of using headhunters to interview regional managers from each of five competitors’ economy hotel chains when it was investigating that market. Marriott was able to obtain information regarding salaries, training, and managerial expectations. Some people may view such tactics as unethical. Marriott maintained that they were ethically acceptable because job candidates were told no jobs were currently available, but might be available in the future, and because several of the interviewees were later hired (Dumaine, 1988).

Not making any judgements here, I also have an interesting article that my wife uses in marketing class that outlines how ex-law enforcement agents are used by a company to survey the frozen pizza production capacity of one of the major pizza players and how that intelligence, while it clearly uses deception on the ground floor by the intelligence person, it enabled the vendor to become the #2 player in the market. Company gone bad? Agents gone bad? Or in the spirit of winning the game? Seems like the original PDF I pointed out (did I say it was a good paper?) can help one to decide (and also get a perspective on how one’s opinion may fit within a cross-section of other professionals).