GetQuik Blog
Thursday, February 28, 2008
In Other Words
Does business advise from the 60's and 80's apply today?
After reading Peter Drucker's classic "The Effective Executive" (1966) and "In Search of Excellence" (1982) - Thomas J Peters and Robert H. Waterman Jr., I would answer "yes".
First a short review of the two books.
Does business advise from the 60's and 80's apply today?After reading Peter Drucker's classic "The Effective Executive" (1966) and "In Search of Excellence" (1982) - Thomas J Peters and Robert H. Waterman Jr., I would answer "yes".
First a short review of the two books.
Drucker's "Effective Executive":
(disclaimer - Drucker's concepts are simple. Drucker's genius is his ability to present these common sense ideas into startling epiphanies. This review does not do justice to his book.)
- Time Management: Record where your time goes (having someone else record your time is best). Are you satisfied that your time is being spent on essential and high impact activities? If not, find the time wasting activities and delegate or simply quit doing these activities.
- Focus on Contribution: Effective executives focus on results not effort. This point leads back to time management. Just because an executive is working long hours or dilligently, does not ensure he or she is adding significant value to the organization.
- Maximize Strenths: Rather than lamenting an employees mistakes and weaknesses, an effective executive appreciates this employees strengths and finds ways to utilize their strengths accordingly.
- Make a Decision: Effective executives are good at analyzing a problem and then taking decisive action. They do not fall into the analysis-paralysis trap. The worst mistake it inaction.
"In Search of Excellence"
- Close to the Customer: The top performing company have a strong emphasis on listening to their customers in order to innovate and service their customers more effectively.
- Entreneurship: Excellent companies encourage, nurture, and champion innovation. Passionate employees with wild ideas are allowed to experiment and are not chastized or penalized if the project winds up failing.
- People Focused: Excellent companies treat their employees with respect and trust. Rigid controls and procedures are absent from these top performing companies.
- Value-Driven: The top companies have a guiding mission statement, often created by the original founder. The focus is on this mission over all else, including market valuation and profits.
For those looking for more modern version of these business concepts, I found some interesting similarities between these books and other best sellers.
Drucker's "Effective Manager" offers much of the time management ideas found in last year's best seller "4 Hour Workweek" by Tim Ferriss. "4 Hour Workweek" benefits from the fascinating accomplishments of Tim Ferriss.
"Built to Last" (1997) by James Collins and Jerry Porras is extrodinarily similar to "In Search of Excellence". Although Collins and Porras determined their list of excellent companies using a different technique than Peters and Waterman, the list of excellent companies overlapped closely. Both books have in depth profiles on IBM, 3M, and HP. The fact that "Built to Last" and "In Search of Excellence" came to similar conclussions on what makes a great company, lends further weight to the findings of both of these books. For the record, all 4 authors attended Stanford's MBA program. For someone who has not read either of these books, "Built to Last" is considerably more readable and memorable.
Technology, globalization, and communications have dramatically changed over the last 50 years, yet many business concepts remain constant. To turn a phrase, those who study history may learn to benefit from it.
Labels: 4 hour workweek, built to last, in search of excellence, peter drucker, robert waterman jr., the effective executive, thomas peters
¶ 9:34 PM 0 Comments Links to this post
Tuesday, September 4, 2007
Darwin Applied
One of the key findings in "Built to Last" (Porras, Collins) shows that companies who embrace change outperform their peers.
One of the key findings in "Built to Last" (Porras, Collins) shows that companies who embrace change outperform their peers.Once a corporation reaches a certain size, there is a tendency for the company to rest on its laurels and fight to protect the status quo. IBM took one of the biggest risks in business history when it bet the company on the IBM 360 mainframe computer. IBM won its big bet and was able to dominate the computer industry for decades. In the 80's the computer industry was in its formative stages, and IBM was well positioned to dominate. IBM had unmatched sales, operations, distribution and financial strength. The other thing that IBM had was a bloated corporate culture and a sacred cow - the mainframe. IBM survived after Lou Gerstner got Big Blue back on track and focused on transforming IBM into a service-focused organization. The story of the once dynamic company turning into a beauracractic, risk-adverse corporation is familiar. Insert dinosaur or Roman empire analogy here.
In contrast, 3M has instituted some ingenious policies in order to avoid this "big = bloated" trap. 3M allows technical workers to devote 15% of their time to their pet projects. Additionally, 3M has a goal that 30% of revenues come from products and services introduced in the previous 4 years. Profit sharing at 3M was introduced to key employees in 1916 and expanded to almost all employees in 1937. If this sounds a lot like the HP Way, this is not a coincidence. 3M was the company that Bill Hewlett admired most and used as a role model for HP. Even HP fell into the beauracracy trap before CEO Mark Hurd brought the company back in line. Today, the evolutionary-based approach to business is being applied at Google.
The keys to the formula:
- Hire the best and brightest (if only the strong survive, begin with a strong team),
- No sacred cows,
- Stimulate experimentation (reward for innovative solutions),
- Accept mistakes during the evolutionary process, and
- Empower your team.
No matter the size of the organization, this formula can produce amazing results. In a startup, bad hires and micromanagement can be fatal. Resources are typically severly stretched, which means that each team member must produce substantially more than an average corporate employee. The only way this can be acheived is to hire talented self-starters and get out of the way. The same formula used at 3M for over a decade. Hopefully the result will be a highly evolved corporation.
OK, I know - beating a dead horse. If you are starting a company or leading a company, read "Built to Last" if you have not already. A word of caution. There is a chapter on companies targeting BHAG (Big Hairy Audicious Goals). I would argue BHAG are more appropriate for larger stable organizations needing a major initiative to provide purpose and break the company out of an overly cautious growth plan. For a startup, the entire enterprise is a risky proposition, so the goal is to realize a more stable business entity and fast. Experimentation and evolution can serve this goal.
Labels: 3m, bhag, big hairy audicious goals, bill hewlett, built to last, collins, google, hp, hp way, porras
¶ 4:33 PM 0 Comments Links to this post
Wednesday, August 22, 2007
AND
"Built to Last" by Jerry Porras and James Collins is one of the most influential business books. This book was first published more than a decade ago (1994). Unlike other business books which get dated after a few years, "Built to Last" is a timeless classic. I am reading this book for the 1st time. The depth of research and the quality of the analysis is impressive.
"Built to Last" by Jerry Porras and James Collins is one of the most influential business books. This book was first published more than a decade ago (1994). Unlike other business books which get dated after a few years, "Built to Last" is a timeless classic. I am reading this book for the 1st time. The depth of research and the quality of the analysis is impressive."Built to Last" uses an ingenious method of analyzing "visionary" companies against their "successful" competitors. For example, IBM is compared to Burroughs; Boeing against McDonald-Douglas; and Merck against Pfizer. The difference in performance between the visionary companies versus the merely successful is startling.
Porras and Collins conclude that "visionary" companies do not settle for the "OR", but instead seek the more challenging "AND".
For example, the visionary companies:
- have purpose AND pursue profits,
- have a clear vision AND are opportunistic and experimental, and
- invest for the long term AND demand short-term performance.
"AND" is hard. The key to "AND" is to establish core values throughout the organization no matter the size. In fact, it is easier to establish "core values" at an early stage in an organization's life. These values are the guiding principles, which in turn attract like minded individuals to the organization. A "visionary" company's passionate employees can produce more and innovate faster than competitors whose teams do not have this "sense of purpose".
The concepts in "Built to Last" are profound and are best left to Porras and Collins. For startup founders, this book is a must read. The thing that you hear time and again from successful entrepreuners and VCs is that in order to succeed, the founding team and early employees must be passionate about the business. "Built to Last" shows how the most successful companies scale and institutionalize this passion.
Labels: and, built to last, collins, or, porras, visionary companies
¶ 9:46 PM 0 Comments Links to this post
