Saturday, 21 December 2013

Distributed Leadership:towards a new paradigm.

How well do you distribute your authority or power to subordinates in the organisation to enable them carry out their functions?How well do you empower your employees to take ownership of their decisions?Are you the type of leader that wants to have his way all the time,the commander-in-chief  who does not entertain alternative views or opinions however good or sound?Or is it because these views come from a manager you don't like?Or that he may be a threat to your job or that his views make you look incompetent before top management?

Distributed leadership as a relatively new paradigmatic unit of analysis through which leadership can be looked at in a holistic manner(Gronn,2002),rather than as a sum of individual contributions of managers in the organization has gained currency over the years,even though its practice would tend to be more prevalent in the United Kingdom than else where,particularly in the school system.Admittedly,distributed leadership may find limited application in the business arena,it's value as an approach to reframing the leadership question still remains.Spillane and Diamond,(2007b,p:7), state that there are two aspects of the concept-the leader plus aspect and the practice aspect.Whereas,the leader plus aspect involves the activities of all individuals in the organization all contributing towards the realization of the goals of the business,not because of their roles but as employees,the practice aspect however highlights the role of those actually providing managerial leadership.The seeming dichotomy between the two aspects highlight the fact that a distributed leadership is neither monopolistic nor collectivist.Common features of distributed leadership conceptually can be termed ,"collective"(Denis et al,2001),to " shared leadership"(Pearce&Conger,2003a) ,or " collaborative" (Rosenthal,1998) ,the "co-leadership" of (Heenan&Bennis,1999),and the "emergent leadership" by (Beck,1981).

Despite the conceptual and definitional problems associated with DL,
as a distinct body of knowledge,we must state that DL has come to hold its own in the theory and praxis of leadership theories,relatively new it's corpus can be.It needs arguing that distributed leadership is descriptive rather than heuristic or normative even as its occurrence has lent itself as a unit of analysis in the leadership firmament. The difficulty of approaching DL as an analytical leadership sub-frame or type has drawn comments from writers(Bolden,R;2011;Timperley,H.S,2005;),the earlier one by Gronn,2000;Bass,1985;which outlined the division of ideas of DL into two camps:"those that consider the consequence of individual agency and those that present it as the result of systems design and role structures(Jaques,1989),to (Northouse,2007(traditional trait situational,style and transformational paradigms of leadership,and Uhl-Bien's (2006),collection of social process from which emerges distributed leadership by interactions of multiple actors. Without belaboring the etymology of distributed leadership,the treatment of which is beyond the scope of this enquiry,we focus instead on DL in organizations and not schools or communities from which much of the DL corpus derives.DL therefore is scoped within the organizational design,structure culture as well as cultural diversity of organizations to see how we'll it fits into the general leadership theories. THE SOLE FOUNTAIN OF KNOWLEDGE OR WHAT? Distributed leadership is the point of inflection on the traditional view or notion of leadership:the leader imparting to followers hip.Without doubt DL enjoys a rich lineage of leadership theories EDGEsome of which we had earlier adumbrated,however as Pearce&conger,2006b; stated,distributed leadership came into its own on the very vestige of the rold and the arrival and rise in cross-functional teams,diversity in work place as well as increased complexity of tasks and the availability of information and knowledge.Blumen,(1966),further suggests that the increasing globalization and interdepedence of international business acts as driving factors that expose the underbelly of the individualistic nature of the traditional leadership view of the philosopher-king as the sole fountain of knowledge in the organization.The traditional leadership typology of the sole man will not surfice for the twenty first century corporation.Leadership therefore must be dispersed down and across the corporation.The contest between leadership agency and structural design of the use of power and authority must first be outlined before we proceed to the issue of the life cycle of leadership theories. The basic thrust of our enquiry is two- fold:(1) the search for the best solution to the use of unchecked power in an organization vis a vis the realization or corporate goals and objectives.For unchecked power is abused power. At the core of this thesis is the need to check and rein in corporate greed and the lust for power through " the distribution of authority and use of checks and balances"(Drucker,1958,p:280;Drucker,1958a,pp31-32),quoted by Maciariello& Linkletter,in Drucker's Lost Art of Management,(2011,p.134).It was Drucker's thesis that organizations need to be structured in such a way as to serve as a counter weight to the "darker forces of human nature". The prescription is distributed leadership which involves the restructuring of the offices of the CEO and board of directors.In consonance of this,the move away from the "Agency" construct of distributed leadership to that of design,lies in the fact that personality,trait and style driven leadership types have failed organizations particularly large corporations. The virtue of self-abnegation which lay at the heart of trait theories will not surfice,for the simple reason that it is assumptive of the innate goodness of a leader,that he will at all times have the good of the organization and his followers hip at heart.Self-abnegation does not take into consideration the very nature of man:his foibles,frailties and the temptations and allure of power and authority;the abuse of which they bring to and with positions.Self-abnegation is unbridled idealism,for which designed distributed leadership has come to correct. Although,virtuousness may be inane in man,it cannot be legislated into being.Rather,"virtuousness" can be created in the organization as a mantra for all levels of leadership.It is my argument that "virtuousness" can be learned and dispersed throughout the organization and practiced for perfection(Bennis&Nanus,1985).Drucker(2002)encapsulates the basic thesis of this note when he states that leadership is about "communicating with people,uniting them behind a shared mission and values and mobilizing energies towards accomplishing the mission or purpose of an organization.It is not about "me or I"but rather "us and we"".In exploding the myth of the leadership cult that has "agency" associated with it,Drucker argued that personality and trait driven leadership is not " magnetic personality nor is it one that lends to glib tongue(charisma) or making friends and influencing people but lifting a person' vision to higher heights; the raising of a Preston's performance to a higher standard,the building of a personality beyond its normal limitations".The second basis of our thesis is that leadership has become more necessary than before due the increasing complexity of the business environment as well as complexities of the modern organization,in the face of scarcity of leadership materials.Hamel,G;(2013),for instance is of the view that the real problem is that leaders often come short of standards of leadership.Where for instance do you get a Steve Jobs(innovation),a Lee Kuan Yew(political skills), a Desmond Tutu (emotional intelligence), all rolled up in one person?A near impossibility,I dare say,Yet the complexities of the times has placed demands on the search for such types of leaders.Howbeit,it is not the individuals that are the problem,but more of the organizational structures,which inhibits systems from throwing up leaders in the organization.Hamel opines that the fault is in,"those traditional pyramidal structures that demand too much of too few and not enough of everyone else" SYNDICATED LEADERSHIP AND DISTRIBUTION OF POWER AND AUTHORITY? Distributed leadership theory though a borrower from the school system in the United Kingdom as we earlier indicated,has grown out of the realization that organizations have concentrated too much power and authority at the top of the pyramid and this concentration has had a deleterious effect on performance.Concentrated power and authority leads to slower feedback from the lower rungs.We also have to deal with poor information flow,lack of authority for decision making by those in the frontline of sales and customer relationship management.Over and above all these,we often have to contend with the episodic outcry over "excessive executive compensation and unethical financial transactions"(Maciariello & Linkletter,2011).This brings to the front burner the question of concentrated power and authority and the effect on the organization when abused. THE EGOCENTRIC IDEOLOGUE VERSUS THE INSTITUTIONAL BUILDER:A Case Study Of Ames And Wallmart. Collins&Porras(2011),detail the contrast between the iconic Wallmart and Ames,in the chain stores retail industry.It is a case between an egocentric ideologue and an institutional builder or what the authors call the clock "builder".Whereas Ames leaders preferred to lead from the top,marshaling and dictating changes from above;detailed in a 'bible',Wallmart or Sam Walton,founder of Wallmart preferred diffusing changes through the organization.Walton valued the three concepts of change "change,experimentation,and constant improvement",instituting organizational mechanisms for the implementation of these values.Wallmart encouraged the nurturing of an Environment where change is induced through suggestions on merchandising,for instance,that would reduce costs,or improve sales and marketing productivity from store to store.In other words,each unit of a store was empowered to take decisions and be rewarded or punished for success or failure respectively,under the "A store within a store" concept.That Sam Walton had personal charm,charisma and flamboyance did not detract from his desire and ability to build an enduring American institution that would outlast his memory generations to come.Sam Walton died in 1992,but his organization,the foundation of which he built on the concept of distributed leadership is stronger today than when he left it at death. Ames on the other land,evinces a load story of an organization with concentrated leadership at the top,which continued to flounder under succeeding generations of CEO's,who inherited the hubris of blind pursuit of market share,"raw growth for growth's sake,with the resultant loss of 388 Zayre stores in one fell swoop(Collins&Porras). It is observed that whereas Walton through his philosophy produced a worthy successor in David Glass,who ran with the waltonian vision,the Gilmans brothers had no such succession plan in place,thus leaving Ames in the hands of corporates outsiders without any institutional memory or underlying vision or philosophy;with the attendant disastrous result in Ames' future trajectory under succeeding CEOs. The underlying organizational lesson is in the contrasting philosophies of the two founders:"Wallmart associates will find a way";"our people are relentless"-a belief in people and their ability to lead(theory X);to Ames'"the real answer and the only issue is market share", a belief in the leader as the sole fountain of knowledge and leadership(theory Y). SUMMARY. Distributed leadership or what Hamel calls "syndicated leadership" has as its core function,the creation of more opportunities for more persons in the organization to exercise leadership albeit without the formal authority to do so. As syndicated leadership,DL is about the redistribution of power and the role of the top team,that is,the board of directors.Distributed leadership as a learned function,must start from the point of stated principles under-girding the philosophy,followed by the goals,meaning the importance of producing leadership at all levels of the organization around measurable values of meritocracy,information management and accountability. Decision making must be moved down the ladder to the front lines of marketing,sales and manufacturing;finally embedding it into the organization.

Tuesday, 17 December 2013


"Nothing went according to plan.We were supposed to face a chain-link fance,but came accross a triple strand razor wire.The competition was not supposed to have 'night vision goggles' but they did,so our system was compromised even before we entered the battlefield.Our communications system was supposed to work ,it didnt..." 

The above scenario is a simulation of a real battlefield situation similar to what happens in the real world of business.It is a contest between a well planned strategy,but trumped by a emergent situation;a situation managerial leaders confront time and time again but which they must respond to whether prepared or not.
Variagated scenarios such as these call into question the leadership skills of business managers;calling into action such elements as the case for change,the idea of where the organization is headed and how it will get there.Emergent scenarios have the habit of throwing well crafted strategic plans off their trajectories.It is therefore in the place of leaders to chart a new course based on their developed views of the four critical leadership precepts,namely ideas,values,edge and energy(Cohen&Tichy,"How Leaders develop leaders";HBR,2011)It is our assumption that leaders are supposed to possess the learning about these views,which we now consider below.
IDEAS: Cohen&Tichy argue that leaders must be able to communicate to stakeholders of the business the idea of the market they are serving and how it will be able to deliver value to customers as well as its owners-individuals and corporate.
VALUES: Values are the glue that hold the mission and vision of the organization together.The leader shapes these values,supports their internalization and articulation;and ultimately their operationalization.For instance,Jack Welch of GE,articulated the value of boundarylessness in order to facilitate speed to market of new products,the mgeneration of new product ideas and the sharing of best practices accross the length and breathe of GE.
Andy Grove propagated the values of constructive conflict to enable Intels achieve faster speed to market for its innovations due to the speed with which innovations in Intels market were changing the chips industry.
EDGE: Emergent battlefield situations abstracted in the opening paragraph of this article presents the environment for bold aggressive leadership.It is about making yes or no decisions in the face of imperfect data.Astute leaders when faced with reality make decisions about people,products,business categories,customers,suppliers,and shareholders.The quality of decisions about these important segments of its stakeholders determines whether it has the winning edge or not.
ENERGY: An energized leadership motivates others because it is motivated to impact the organization it leads.An energized leadership must teach its people about how to energize others through face to face contacts and organizational efforts.In 2002,when Sam Palmisano took over IBM as CEO,much had happened to the BIG BLUE as the company is called.Palmisano used the company's intranet to gather ideas about how its numerous employees viewed their employer.Over a three day period,approximately 50,000 employees of Big Blue including the CEO hinself,participated in the discussion jamboree tagged VALUEJAM;posting nearly 10,000 comments(Hemp&Stewart;'Leading Change When Business is Good';HBR,2011)
It was Palmisano's idea to invigorate the work force with a new set of corporate values after IBM was brought back from a near death situation by Lou Gsrstner in the 1990s'.The lesson learnt under the Palmisano leadership is that it is more rewarding through value-based management to energize people in the organization through the ideas of hope and aspiration than through fear of failure.It is about inspiring people to a common purpose based on values that they can help to shape company wide changes as Palmisano did at IBM.
As was discovered subsequently,value-based enabled vision empowers employees to respond more quickly and creatively to never ending streams of strategic challenges that have become the hallmark of the business environment of the 21st century.

CHANGE MANAGEMENT: Some theoritical considerations.

Value-based change management,it is suggested seeks to re-ecaluate,re-invigorate and re-establish the pyschological contract between the organization and its employees.While we acknowledge the contrarian view of change management which highlights the hypothesis that 'hard factors' rather than 'soft factors'(Sirkin,H;et al) should dominate the attention of the  leader during organizational change it is argued that the soft factors materially drive the hard factors of change.The goals of hard factors are given,namely;financial results,shareholder value,stock price valuation,what (Beer & Nohria) call 'economic value' of change management.According to Sirkin,H;et al,change projects fail to get off the ground because companies neglect the hard factors.On the contrary,the literature emphasizes the need for the soft factors to be the focus of attention for the hard factors to achieve the economic value proposition of organizational change.Why?Although soft factors are less seen and measurable empirically by Wall Street,they lie at the core of change management-employee engagement.Beer&Nohria in their article,"Cracking the Code of Change",HBR,2011,theorize that economic value(also known as theory E) or hard factors and organizational capability(theory O) or soft factors constitute the value based axioms of change management.The authors highlight the merits and demerits of both theories,but state conclusively the ideal of deploying one theory or the other depending on the organizational situation warranting change.They also suggest the simultaneous sequencing of the two concepts if the situation augurs.
Personally,I would argue that where change involving the hard factors(economic incentives,drastic layoffs,downsizing,rightsizing or restructuring have high attrition rates employee wise, it often leads to distrust of managerial leaders who pursue these goals to the exclusion of organizational capability(corporate culture development,human capability through individual and organizational learning).It is also argued that the pay off from hard factor driven organizational change efforts tends to be huge given the length of time it takes for the hard effects to wear off even though pay back times may tend to be short.Advisedly,a cautionary note must be sounded that managerial leaders in change situations need to weigh the trade off between the two concepts situating the course of action to take place within the historicity,values and organizational culture of the firm.
COMING FACE TO FACE WITH HARD AND SOFT FACTORS:General Dynamics,Scott Paper and Champion- a case study. To maximise economic value,Williams A Anders was brought in from outside the firm as CEO of General Dynamics in 1991.Over the next three years,Anders shed 71,000 jobs from the GD payroll ;44,000 of which was through the harvesting of seven businesses and the rest 27,000 through direct lay-offs and natural management attrition.Most American change leaders prefer the economic value strategies of theory E;the downside however in human and organizational cost in the long-run is difficult to quantify. SCOTT PAPER: Al Dunlap in 1994 upon resumption immediately chopped off 11,000 employees,selling off several businesses in the process.His constituency was the shareholders and he made no bones about it.Just to prove it,Dunlap nick-named "chain-saw Al" trippled shareholder value.Scott Paper's share value on Wall street rose from $3billion in 1994 to $9billion in 1995.Wall strret applauded his transformation of Scott Paper but employees did.The cost was high. CHAMPION: In Champion we observe a clash of culture in that Andrew Sigler ,CEO of Champion saw transformation through the lens of theory O or soft factors;that of restructuring through the development of corporate culture around the mantra of the CHAMPION WAY;which sought to get employees committed to doing things differently.Teamwork and open communication lie at the core of this strategy.Hewlett-Packard used this strategy in the 1980s when its performance flagged.But through the strategy of theory O,strongly held values drove performance and commitment to the psychological contract between the organization and its employees ;was responsible for HP's strong rebound to profitability.Human cost was minimal however it took longer for the turn around to mature.Champion's turn around took a decade to achieve,no employees were laid off.Examining the two archtypes or theories of change,we are able to discern certain streams:goals,focus,leadership and process and reward;and on these we comment briefly. GOALS: hard factors or theory E,dwells on the hard measurable goals of shareholder value,profitability and stock value.Turn arounds are built to restructure through layoffs and downsizing.Soft factors on the other hand,use the indirect approach of organizational capability;building this to reach the goals of profitability and shareholder value.Whereas hard factors inspired change can be drastic and painful,soft factor driven change is evolutionary and adaptive,according to Meyerson,D.E. FOCUS: E type inspired organizational change confront the hardware of the organization striving to change the structures and systems.These elements are easy to alter as change seeks to improve financial results through changes at the top echelon,down to the bottom.On the other hand,O type inspired changes wring the course of an organization through its software-culture,behaviour and attitude of the workforce. LEADERSHIP: Leadership typology under theory E is exemplified by the setting of corporate goals from the top without the imput of managers and their subordinates who are going to be affected by the restructuring exercise.Such leaders are seen as commanders-in-chief whose authority brooks no challenge or opinion.Al Dunlap and Jack Welch are prototypes. By contrast,theory O involves the participation of all from top to bottom.The democratic ethos is the hallmark of this approach.An adjunct concept under our review is that of distributed leadership.It is about how authority is dispersed in the organization.Does distributed leadership empower employees to perform better?It is argued that given the proclivity for theory E change leaders to authoritarianism,distributed leadership is less likely to be practiced than under theory O leaders who tend to subscribe to democratic means of changing the course of an organization for the better.Theory O change leaders are more likely to enthrone distributed leadership in organizational change situations . REWARD:A financial incentive tied to clear goals achievement lies at the heart of theory E.Stock options remain the most favourable of financial incentives to reward performance and behavioural change.Conversely,the achievement of what i call 'psychic compensation' hallmarks the goals of theory O inspired change management.Financial incentives are used as supplement to gains sharing and merit based reward system.Compensation usually occured at the evolutionary end of the change process as opposed to those of Theory E which is immediate and tied rigidly to performance outcomes.

Monday, 11 November 2013



I am in the middle of a struggle between enhancing shareholder value(read cash dividend harvesting) which by the way tends to be short term and firm value creation which is long-term,and is a typical entrepreneur's bug-bear.This tussle is between making money at any cost,not minding the needs of the business for growth and expansion;indeed the model for ploughing back earnings into the business for future consolidation.The literature on small business has often emphasized the mortality rate of start-ups;their survival period not more than 3-5 years into their founding.And it is this period that increased funding for either expansion of diversification is more accute.Our firm was faced with this situation;that of accute shortage of funds for expansion.We relied on internal funds for organic growth,even though slower, our capital objectives were largely met.We had no banks breathing down our necks,neither were the shareholders nervy about what management did with their money,at least not then.Its five years into our strategic plan,goals largely met and insync with our view of the furture of the business.Strategic plans however beautifully crafted are merely statements of intent.They hardly pip into the future hence our emergent determinism for the course of action during this period.

Emergent scenarios tend to change the course of strategic plans;the most critical being the entry of refurbished equipment into the industry,thus altering the preponderant balance of equation in their favour,with the concumitant price drop.Needless to say a fierce price war ensued and every body is a loser in this kind of scenario. Marketing literature argues the need to position your offering on the basis of value derivable from the consumption of a product and not on price as the later is often transient and rightly so.Price wars demean profit,erode value,stymies the opportunity for future industry growth,kills in the very long run.

In scenarios such as this,managerial leaders have very few options than to restructure and this consequentially leads to loss of jobs.Herein lies the tussle earlier stated in this article;the tussle between the short-term view (profit taking) and long-term (value creation).This tussle is exercebated   when shareholders are financially illiterate;who are not able to distinguish betwen having cash(liquidity) and growing the firm's balance sheet to hedge against future shocks and down turns which from experience are bound to come given the cyclicality of economics.What we witness is a clash of culture between the trading mentality and the investing one with a longterm view.It is also the perenial tussle between the owners' view of the business and that of managerial view.The former trumps the later.

In our situation,the tussle between the two management tendencies is further sharpened by the lack of an orderly retreat from some of our business segments with the attendant loss of jobs.Managers as operators of the business have insights that must not be taken for granted during restructuring exercises;a given that most business owners take for granted.Rather in ignoring this,business owners bring in from outside "new brooms" which tend to sweep the clean and not so clean aside.
Change management literature has observed the difficulties involved when companies change the direction of businesses more so the people element which lies at the heart of most restructuring exercises.You can retrench equipment,close down units even whole strategic business units,dealing with the people issues is akin to dealing with a heart by pass surgery. Who do you fire?Who do you retain?In firing,care must be taken to retain those that will help the 'new broom' point the restructuring in the right direction.For instance,firing those presumed not amenable to change might contain employees with institutional memories of the business;leaving with these memories mean the new man will start from scratch.You will also contend with resistance to the new ways of doing things as enunciated by the new dictat.Threats of sack,withholding of salaries and entitlements become the order of the day.Retained employees will react to these threats with absenteeism,sit-ins and our right walk aways from their jobs.Human emotions are elastic,but they must not be stretched too far to the point of snapping.Machines on the other hand are inelastic and therefore can be pushed around for as long as their useful life spans can take punishments.


It has been one year since the restructuring in our company took place;with the attendant expectation that the business will turn around for the better.It has always been my thesis that  leaders are dispensable;what is indispensable is good leadership that is built on sound business ethics,one that looks to the future of the company's survival and prosperity,not that of its operators.The obverse remains the case as the literature of our company reveals.In times of market down turn,astute managers look for ways to generate value for the company's products in four or more ways. You could (a) sell more to your existing customers (market maximization),b) sell more of current products to new customers (customer development), c) sell new products to current customers ( new product development) and last,(d) sell new products to new customers in existing market or new market (diversification to new geography).In this we see a mix of strategic and tactical approaches to a most difficult situation.But we compound the situation by not selecting a CEO that is abreast such knowledge and is forward thinking.Considerations for profit taking (short term) often trump the long term view of things.This came to the fore when a replacement was appointed.One year down the road,upon review what one finds is a massive erosion of value: equipment bought in the course of the previous management's tenure have been sold,customers that were painstakingly cultivated have moved to competitors,sales are being routinely diverted to selves,sales revenues are being diverted into personal accounts and disbursed arbitrarily without documentation,the system that drove the structure has been up turned and returned to the previous era.Leaders come and go,but companies remain as eternal testimonies of eras that are good or bad.The dispensability of leaders lie in the thesis that man is fallible,can be replaced,can die ,just as companies are fallible,can be replaced,can die because they both are mortal. Social and industrial Darwinism ensure that the firmament will continue to be renewed on the cusp of new ideas and their propagation.Also, what remains eternal are the axioms of good management and leadership.Leaders,good or bad are turned over in organizations;their positions must be filled,guaranteed .But what cannot be guaranteed is what their performance will be given the variability of human behaviour in organizations and the consequence of fluctuating fortunes.

Saturday, 2 February 2013

Innovating To grow:ideas as capital

Innovate or die is a growth mantra according to Kanter.Innovation or knowledge derivable is a source of competitive advantage.We view in this article innovation from the entrepreneurial perspective.
The entrepreneur is one who inaugurates innovation,finances and drives the effort to transform an idea into goods and/or services. Start-ups are products of innovation;the entrepreneur having spotted a gap in existing offerings decides to develop a product or service as the case may be,to satisfy the needs in the gap so identified.Schumpeter describes actions such as these as those of the 'Man of Action' or 'Mann der Tat'.The Man of Action does not accept reality as it is .Reality is in creating a demand where non exists,or where one exists,increasing the use of a product through the creation of more uses;making more people want it.

The product/service category which aptly demonstrates this is the IT industry;driven by the arrival of the internet in what is seen as a game changing invention for mankind in all its ramifications.It is one invention which led to the creation of trading and marketing platforms such as Ebay,Amazon,Dell and many others.
For start-ups to grow they must innovate;enabled by learning within the organization and driven by the entrepreneur or CEO.The entrepreneur or CEO is a growth enabler.Growth is spurred by either new product introductions or service offers,either in consumer goods or technology related businesses.This also applies to BtoB.It is however in technology related activities that we have witnessed the explosion in innovation especially in this 21st century.We can rightly for the moment describe the era as the century of innovation.

We enunciate sources and route of innovation in the firm,but first ,sources.We enumerate six sources of innovation amongst others namely:

Consumer products:  through improvements to products due to technological obsolesce,planned or unplanned .
Process innovation:   this is service related
Information technology: this is related to new or existing markets.
New product development :this is targeted towards new markets or geographic locations,new distribution or market channels such as vending machines and self-service outlets.
Financial innovations: this is related to new or existing MBO's derivatives,arbitrage opportunities.

There are several routes to innovation as enunciated below:
Organic innovation: internally growth led with in-house capabilities developed and driven by an 'enabler'.
In-organic innovation:growth through mergers and buy-outs,MBOs,patented acquisitions by the firm from specialized R&D centres.
Distribution/Channel marketing: for example vending machines,online shopping,self-service outlets such as gasoline stations,airline ticketing and check-ins.

Changing competitive landscape brought on by pressure on trade margins through price cutting for example,non-branded products and substitute products.
Changing economic conditions,trends such as economic down turns,demographic changes in the working population,migration of market segments,fragmentation of markets.
Changing social trends and cultures.
Changes in regulatory environment by public authorities in response to societal or health needs.
Consumer shifts in taste,habits and behaviour.
Competitive activity of dominant player(s) or market leader.
Strategic goal of dominance in one's market or geographic market/area.

It is counter-intuitive to state that start-ups striving for growth through innovation must develop a framework of knowledge acquisition in the firm.The entrepreneur must nurture a culture of innovation in the organization ;embedding this within the strategic planning circle.Kenneth Klopp,founder and principal,"The North Face" in his article 'Building your company's innovation strategy',instituted an innovation framework that served the company's growth aspirations;which led to the development of ground breaking products such as the geodesic tent for back packers and the gore-tex water proof breathable clothing.In his five step framework for innovation he suggests:
(a) Develop long range planning framework involving key personnel in R&D(in-house as well as bought in ideas),manufacturing,marketing,product development and finance.
(b) Create culture that rewards risk not punish it
(c) House R&D close to marketing department;close interactions between the two departments help to meet real needs and reduce lead time between product development and speed to market.
(d) Establish a corporate innovation mantra to embody the firm's goals that strive for real differentiation; creating a balance between the pull and push of incremental and break-through ideas.In the last decade,Apple for instance  came to be recognized for its phenomenal growth through its ground breaking innovations under Steve Jobs,co-founder of Apple.Apple's growth has been driven by a combination of innovations in hardware and software;in tweaks and improvements.But more importantly,Jobs had the track record of innovation which allowed him draw people in to his ideas.
(e) Commit to forge strategic partnerships with key suppliers/outside ideas sources.This way ideas bought in could complement,where necessary in-house resources.Having said this,every growth seeking firm in addition to Klopp's five step framework must create a structure to actualize the tenets of the mantra with necessary organizational leadership from top management.
It is not a coincidence that start-ups have been responsible for the huge explosions in innovative activities in the last 20 to 30 years ,accounting for more than 50% of new product and service introductions.It is to their credit that the lessons of innovation have been imbibed by larger firms.It has also led to the establishment of ideas and design boutiques;servicing and complementing in-house capabilities of R&D of large corporations.

Start-ups unable to set up in-house R&D's can use such ideas centres and acquire intellectual property rights for their inventions.Creating an innovation driven atmosphere in the firm is about creating a knowledge legacy which in turn fuels ideas creation.It is about the firm in a continual self-renewal mode in all processes of product and service delivery.Firms with such legacies are those that withstand the vagaries of economic shifts and teutonic changes in consumer tastes and habits and demographics.
The literature on innovation holds the view that in the knowledge driven company,inventing  is not a specialized activity nor is it the sole province of R&D, marketing, or strategic planning for that matter.It should be a way of behaviour;indeed it should be a way of being in which every one is a knowledge worker.That is to say every one should be an entrepreneur in house.The growth seeking entrepreneur must nurture corporate entrepreneurship in the firm for the innovation culture to thrive and its fruits harvested for profitability in a sustainable way.

Thursday, 10 January 2013

Leadership is about changing perspectives in logical progression towards changes in organizational surroundings.


"Leadership theory and methods,it is argued,are not panaceas.
There are organizational limits which hinder positive contributions
in innovative leadership.If organizations are seen as complex
evolutionary systems,then our contemporary views of leadership
continually evolve in adaptive fashion.With a changing perspective
there is a logical progression toward embracing alternative ways of
acting and relating to our surroundings.This inevitably results in
different ways of relating to the working environment.In turn,the new
types of relationships and approaches to work will provide new conditions
for the emergence of adaptive organizational forms"...
Dennis Crossen,Professor.

Studies on leadership have tended to create a dichotomy between managers and leaders in the organization.While the former tends to uphold organizational rules and procedures involved in the day to day decision-transactions the leader however involves himself in higher order things such as strategy,visioning,sharing enduring values;taking followers to where they ought to go rather than where they want to go.It is axiomatic that it is in the nature of man to settle into his comfort zone and will not want any thing to disturb or disrupt him.Change is anathema to man's estate.But it is the only constant in the human social organization.Bass(1985) has created a transactional -transformational continuum whereby the transactional manager can transmute into a transformational leader.It is figured that both traits can be imbued in one person;therefore the term manager and leader are used through this note to mean the same thing.

It is suggested that transformational leadership builds on the transactional.For higher order performance which transformational has come to associate with,Goleman(2000) states that such a leader must possess higher emotional intelligence than his sub-ordinates.The presence of EI in the transformational manager distinguishes him from the transactional manager.Such is the criticality of EI as a differentiator in the leadership typology.

Leadership in Practice:
No where is reflective leadership as considered here more relevant than in change management.For instance,Lawson&Price(2003) in their article,"The psychology of management" in the Mckinsey Quarterly,suggest that for leaders to achieve the goals of change management there is the need to change the mindsets of people in the organization towards the change imperatives.Transforming the fortunes of an organization on the cusp of poor financial performance requires persuading employees to see the organization in a new perspective different from what it is to what will be.The authors further argue that for employees to change their behaviour towards the organization there is the need to create the  raison de'tat for change in their minds for the shift to take place.Five conditions need to be present for mind shift to take place,and these are: purpose,reinforcement systems,skills required for change,consistent role models,change management outcomes.
Purpose: people must have or achieve cognition of their existence  and experience in the organization.There must be sync between the goals of the firm and their goals and beliefs or what I call goals-belief convergence.Creating a new purpose therefore entails banishing dissonance created by a poorly led organization.
Reinforcement systems:in practice Skinner's theory of motivation states that positive reinforcement conditions people to embrace a course of action.Change management in redirecting the course of a firm towards greater performance needs to appeal to the emotive strings of people.This is explained by Marslow's pyramid of human needs.At the top is the need for self-actualization,to realize and actualize talents,intellect,values ,physical and emotional needs.At the bottom are the needs for security,safety, love; to be  wanted,esteemed.
Organizational theorists hold the view though motivational systems need to be present in the organization for change management to succeed,it also holds true that measures such as structures,management and operational processes,measurement procedures,performance measurement,reward systems(financial and non-financial) are equally of vital importance to change management.The presence of these drivers in the organization determines the extent to which change management measures will achieve the desired goals.
Change management therefore is atmospheric.Inferentially,it is argued that a leader must be true to his or her inner promptings when dealing with people in an organizational setting.His or her actions and decisions must endure time,be eventful and iconic when judged by history.This is what distinguishes transformational leaders from transactional ones.
Skills required for change :new skills it is suggested must be brought into the organization if the desired behavioral modification will be achieved.Telling a sales or marketing team to be customer friendly for instance must be followed by imparting knowledge of how to achieve it to them before performance becomes meaningful.On a personal note,I was confronted with a similar situation in my company.Customer complaints were hardly attended to prior to my arrival in the firm.As a matter of fact,customers to the staff didn't mean anything  since they were receiving their pay checks at the end of the month.But according to Jack Welch,CEO of GE, it is because of the customer that we are and still remain in business.'He moves his money and the business collapses....the customer is our boss".The customer,therefore must be in the middle of organizational foci.Organizational gaze must be on the customer and his needs at all times.
Arising from my interactions with our customers in one on one as well as group meetings,a customer relations framework was instituted for the front and back room offices.Regular CRM weekly lectures were given to the two teams,reinforced with outside training programmes for sales and marketing staff.Measurable performance framework was was instituted to gauge outcomes.Part of this lay in the number of complaints per day ,number of poor/bad prints per day,turn around recorded,time to resolution of complaints,etc,etc.All these at the  end of the year dovetails into the annual appraisal.Annual appraisals it must be emphasized should not become routinized,rather it should be seen as a change management tool for organizational renewal.
Consistent role models: leadership attributes are consistent with role modelling.As a leader you empathize with the follower ship,showing interest in what affects them,what inhibits their performance,seeking ways to assist in overcoming these inhibitions,getting involved in their career goals ,mentoring and coaching.According to Deepak Chopra,leaders,"are often enmeshed in corporate politics and are insulated by immediate aides' ;this he opines prevents them from paying attention to those things that ordinarily should endear them to the followership.He observes the tendency of leaders to lose their ability to look and listen as they rise in power in the organization.The mark of a true leader in the organization is his ability to stay focused on the central issue of change,know the difference between the needs of people and their wants,be good at giving feedback,not monopolizing truth,welcoming criticism and be open.
Behavioural modification in people in the organization in the face of change can be beneficial where role modelling is confirmed and seen by the followership as deep rooted and deeply influencing.
Change management outcomes:it is counter-intuitive to state that it is not easy to turn around the fortunes of a company through change.It is stated so due to the recognized difficulty experienced by practitioners in behaviour modification in employees during corporate turn-around campaigns.It is likened to turning around a super tanker  back to port in the middle of the Panama Canal.The literature recognizes that the innate desire of human beings to develop and grow energizes them. Employee rationalization of their place in the organization's schema is to the extent of their deeper understanding of how and why their contributions matter to the firm.Therefore,it is the leader's role or place to provide the meaning; thus creating the needed connect between employee aspirations and those of the organization.This inter-mediation as a concept goes beyond metrics;it is more art..

Saturday, 5 January 2013

The Leadership Conundrum and productivity in organizations.

 The search for the definitive answers to the leadership question in organizations has prompted hundreds of studies and countless theories according to Charles Handy.Handy(1982) asks whether leadership traits are bred into one or is innate?He further asks whether leadership is about style or task(or its nature) or the situation? Or perhaps it lies in the characteristics of the leader?
In laying the scope of our inquiry Handy likens the search to the quest for the 'Holy Grail' in organizational theory.However,in reviewing the literature on Leadership one comes to the conclusion that while one theory may be valid for a period in particular,it may not be so for another;hence the need to integrate some or all these to provide a holistic view of the leadership question.

Robbins&Judge(2007) came to this conclusion in their summation of their treatise on traits  and behavioral theories as they relate to organizational effectiveness and the role of  leadership.They hypothesize that conscientiousness(trait) may be linked to structure(behavioral),while a considerate executive(also behavioral) may likely be an extrovert(trait). The corollary is that as abundant as these traits and behavioral attributes
 may be imbued in the leader,they are not likely to determine his effectiveness or otherwise.I argue that the situation a leader finds himself or herself in may either negate effectiveness or bring out the leadership qualities in such person."As important as trait theories and behavioural theories are in determining effective versus ineffective leaders,they do not guarantee a leader's success.The context matters too".Robbins & Judge(2007)
For an expanded review on this issue see:Fiedler Model;Hersey  and Blanchard's situational theory;Leader-Member Exchange theory and Path-Goal theory(Robert House);Leader-Participation Model(Victor Vroom and Phillip Yetton)

Whereas research on leadership over the years has broadly been categorized under traits ,style and behavioural as well as contingency,its typology has been built around the Big Five personality framework of:extra version,agreeableness,consciousness, emotional stability,and openness to experience.

Leadership In Organizations:
We now may ask how do these theories correlate with productivity and organizational effectiveness under a leader?My reading of the literature points to a bi-forcation of the roles of managers and those of leaders in the organization.Prior to this time we have referred to leaders and managers in the leadership question.Under the purview of this discourse both concepts are used interchangeably.Whereas the manager is seeming transactional in behaviour as demanded of his position,being to see to the day to day execution of plans and strategies set forth by the leader.The leader on the other hand,sets the vision,tone and direction of the organization for the manager to ensure conformance .The leader   structures,supports ,guides and emplaces a shared vision of the organization and the rest of the firm to buy into hence his transformational role.
The conundrum in the leadership question lies in Fiedler's contingency theory which states that 'organizations could do more to help the individual leader by either(a)structuring the task(b)improving the formal power vis-a-vi his group or (c) changing the composition of the group in order to give the leader more favorable climate to work in".Implicit in Fiedler's assertion is the fact that leaders can be found at various levels of the organization.What it then would mean is that the organizational environment must conduce to producing leaders.We see therefore the convergence of the traits theories with the contingency theories as well as that of the Big Five.I  argue that the transactional as well as the transformational attributes of leadership can be situated in an individual at various levels.Organizational climate which encourages intra-preneurial and entrepreneurial behaviour and learning  brings about such attributes.
What Bennis,W.G; and Thomas,R.J; in their article "Crucibles of Leadership(2002)" called learning from crucibles... and they take many forms...'some are events,others are more prosaic episodes of self-doubt.......but the important thing is that leaders take away vital lessons from these episodic events and transform themselves into models of exceptional behavior in the organization'.
The authors cite the example of Sidney Hamman,CEO,Hamman Kardon(now Hamman International)who as a transactional manager went through a crucible of event in his organization that changed his world view.He subsequently enthroned a participative management style in the organization.Hamman transmuted into a transformational leader.One posits therefore a transactional-transformational continuum in organizational effectiveness which can take place when the right learning is attained.

Leadership and Intelligence:
Beyond the various theories and research studies on leadership under review,one takes the view that leadership attributes go beyond the availability of traits,styles and situations to shape leadership.For a leader to enhance his performance he must possess characteristics other than those above mentioned. Goleman,D;(1995) argues that leadership goes beyond crunching numbers;but that achieving organizational goals requires having inter-personal skills to be able to function and be productive .While intelligence Quotient has traditionally been used to test an individual's intelligence,being able to function and be productive requires more than this.Goleman coined the term 'Emotional Intelligence' which basically means been able to manage once emotions.And how relevant is this to leadership effectiveness?In Goleman's view the IQ is the brain power,the EQ on the other hand,is the emotional power.A leader must have a combination of the two to make the difference.Good decisions he states,are based on a balancing of rational(IQ) and emotional(EQ) rather than one without the other.It is intuitive to state therefore that managers who have over the years learned to manage their emotions have learnt to manage their behaviour and relationships better than those
that havent.The effective leader under the Goleman construct is one with both IQ and EQ with good social skills or better still social intelligence.

In conclusion,the leadership question will continue to resonate through the ages for as long organizations as social organisms exist to cater to the needs of people and the society.Organizational effectiveness is
predicated on how leaders in the organization function within the context of the various theories earlier elucidated The assumption  being that leaders are effective because they are imbued with traits,are bound to behavior in specific ways,are to respond in a characteristic manner because of the situation they find themselves in and that behavior is contingent on events that shape their view of the world.The totality of all these is that no one theory satisfactorily answers the leadership question .

End Note:Handy,C;(1982),'Understanding Organizations',2nd Edition,Penguin,London
                Robbins,S.P.,& Judge,T.A.;(2007),'Organizational Behavior,12th Edition,Prentice Hall
                 Bennis,W.G,& Thomas,R,J,(2002),'Crucibles of Leadership',Harvard Business Review.
                Golemsn,D,(1995),'Emotional Intelligence',Batam Press,New York.

Surviving under a fierce price war.

Ever since i took over the reins of the management of our company i never could imagine that in so short a time we would be confronted with a price war so fierce in our industry.This has been exacerbated by the entrance of refurbished cheap equipment into the market by those who believed there was a gold mine in the digital imaging business.Alas,i had predicted the slump sometime in 2009,but never in this magnitude.Change management texts often talk about responding to events in the external environment through adaptation and innovation in products and processes.However,nothing prepares us sometime for the magnitude of developments in the market place,something one would liken to a 'tsunami' and yet MBA curricular always try to lay emphasis on 'strategic outlining' of responses to changes in the environment.This strategic blueprints fail to live up to their billings.A case in point is our personal experience within our industry.Based on my prediction we outlined possible responses to the likely variegated scenarios  in the market and aggregated our strategic position visa-a-vis the outcomes.A price war was not anticipated,rather we postulated price upward movement.We were wrong and hugely too;the industry reels under very severe margin erosion.Before now margins were in the region of 25%-30%  before tax.Now it has dropped to less than 9% after tax.

We had considered exiting the market but the cost of doing that outweighs the cost of staying.Two,we also considered staff retrenchment in a harsh economic environment and felt less inclined to doing that.What to do then? Diversification into new categories?Create new line in existing market? Diversify into new geographic markets or region? We chose the later and it paid off in the first year.Sustaining it is the problem.Because no sooner than you settle down to harvesting your investment new threats will surface in the form of rivals entrying the region.Sounds familiar?

Which reminds me of that Harvard classic "What they did not Teach You at Harvard". Nothing prepares you for what to expect in the real world away from the classroom stuff Professors ram down .Its been a useful lesson this past five years;as i have indeed graduated with 'honours' from C.K.Prahalad's school of real life learning.Nothing is more rewarding than this .

End Note: This is has been a five year excursion of turning around the fortunes of a company newly started but badly run.It is said that the average life span of small businesses is three to five years.One needed to operate with that mind set in other not to let our situation become a self-fulfilling prophesy.The company is in its sixth year and growing.