Leaders Take Responsibility For Communicating

It’s possible that a good communicator can be an ineffective executive. It’s very difficult for someone with poor communication skills to be a consistently effective executive.

In his classic book entitled “The Effective Executive,” Peter Drucker asserts the importance of taking responsibility for communicating:

Effective executives make sure that both their action plans and their information needs are understood. Specifically, this means that they share their plans with and ask for comments from all their colleagues – superiors, subordinates, and peers. (p. XVIII)

Drucker goes on to state that while the information flow from subordinate to boss usually gets the most attention, effective executives pay equal attention to the information needs of everyone at all levels in their network of responsibility. Drucker reminds us of something Chester Barnard stated way back in 1938, that organizations are held together by information rather than by ownership or command.

If your idea of communicating is reminding people that you are the boss and they are not, and that they need to do what you’ve told them to do, you are shirking one of your most important responsibilities as a leader. An investment in understanding your constituents and their information needs in an investment in the success of your action plans for the organization.

What do you think? Please share your thoughts in the comment section below.

 

Effective Executives Think And Say “We”

In his classic book entitled “The Effective Executive,” management giant Peter Drucker asserts that effective executives don’t think and say “I”, they think and say “we.” According to Drucker:

Effective executives know that they have ultimate responsibility, which can neither be shared nor delegated. But they have authority only because they have the trust of the organization. This means that they think of the needs and the opportunities of the organization before they think of their own needs and opportunities. This may sound simple; it isn’t, but it needs to be strictly observed.” (p. xxII)

Drucker first published this classic management book over 45 years ago, in 1967. There is more valuable information about how to be an effective executive in the first thirteen pages of the introduction than there is in most modern management books.

Please don’t miss Drucker’s point – effective executives are not egocentric or narcissistic. They don’t consider themselves “the source”, the oracle from which all organizational wisdom emanates. Effective executives view themselves as a resource of the organization and its purpose.

Whatever stage you are at in your career, do others consider you a resourceful contributor? How do you know? If the ability to help others succeed is not part of your leadership development regimen, then you are neglecting one of the most important skills you will need to be an effective executive.

What do you think? Please share your thoughts in the comment section below!

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What Can We Learn from Occupy Wall Street?

What is your take on the occupy Wall Street movement?  I have been fascinated by it and the ensuing debate regarding the 99% vs. the 1%.  Without clearly stating a goal or taking a political position, this loose confederation of protesters has impacted the conversation in society.  This morning I listened to a politician who said we should not be talking about these issues since it was a challenge to the free enterprise system.   While the politician might not be up for the debate, I have no worries that the free enterprise system can handle the debate.

One of the reasons this debate fascinates me is that it is my job to educate students who might be striving to become part of the 1%.  I haven’t seen a demographic breakdown but I would bet that a fair proportion of the 1% is business owners and business leaders many of whom were educated in business schools.  I wonder what values these leaders learned in business school.

I am currently reading a book titled The Ajax Dilemma: Justice, Fairness, and Rewards written by Paul Woodruff, a philosophy professor at University of Texas, Austin.  While the book does discuss philosophy, it is primarily about leadership.  The Ajax dilemma originates from the Trojan War in Greek mythology and is the story of two great warriors, Ajax and Odysseus, and which one of them should receive the coveted armor of the slain warrior Achilles from King Agamemnon.  Odysseus is the brilliant strategist who was the architect behind the Trojan horse.  Ajax is the workhorse soldier whose exploits on the battlefield are unmatched.  After the award goes to Odysseus, Ajax goes on a rampage and kills himself.  Ajax’s suicide creates deep division in the army.  Woodruff uses the story to frame the debate regarding the division of rewards.  Woodruff clearly uses Ajax to be representative of the 99% and Odysseus representative of the 1%.

When Agamemnon awards the armor to Odysseus almost all agree that Odysseus is more deserving than Ajax because without Odysseus the war could not be won.  Ajax on the other hand is replaceable, although it would take four or five soldiers to replace him.  But while Agamemnon’s decision is “fair,” the decision may have lacked “justice.”  Woodruff writes:

Fairness and justice are truly at war with one another.  Fairness is not wise.  Fairness is following principles wherever they may lead, regardless of people’s feelings.  Fairness is a trap in which justice and compassion die, where members of a team are hurt beyond repair.  Yet fairness has often been thought to be the heart of justice.  That cannot be correct.  The heart of justice is wisdom.

Wisdom is a quality of leaders.  It is not so mysterious as you may think, but it cannot be delivered by a formula.  Being wise, a leader pays attention to others and sets an example for the leaders who report to him.  The sort of action that is wise in one situation may be foolish in another.  A wise leader may have a reason in mind that calls for action today and inaction tomorrow (pg. 62-63).

So where does Woodruff take us with this reasoning?  Does he provide us an answer as to how we should divide up the wealth between the 99% and the 1%?  No he does not.  But what he does do is show us very clearly that leadership requires wisdom.  A leader who is not wise and whose decisions lack justice will risk destroying a community.

This is the type of story that I like to discuss with my MBA students.  It is my belief that becoming an integrated and wise leader requires that you are connected to the world around you. Being connected means you need to pay attention to not just what is going on in your field but also what is going in the arts and humanities, in politics, in science and religion, etc.  So I admire the occupy Wall Street protesters not because I think they are right, or because that I think they are wrong, but because they have asked me to pay closer attention to an important issue and to clarify my thinking on it.

James A. Sundali, Ph.D.

James Sundali is associate professor of strategic management. He received his Ph.D. from the University of Arizona and his MBA and bachelor’s degree in economics from California Polytechnic State University, San Luis Obispo. He has been at the University of Nevada, Reno since 1997 and has taught strategic management, corporate finance, game theory, bargaining and negotiation, individual choice behavior, organizations and the natural environment, the psychology of gaming, and managerial and leadership insights from film and literature.

In 2006 he was awarded the B.J. Fuller Excellence in Teaching Award and in 2008 the Graduate Faculty Excellence in Teaching Award. In the last few years he has been involved in teaching abroad with classes in London, New York City, and Bilbao, Spain. His research is focused on experimental economics, behavioral game theory, behavioral finance, and individual choice behavior.

Best Practices For Software Application Packages

The phrase ‘best practices’ as applied to software applications is relatively new. In the twenty years I was associated with the software industry, first as a programmer, then as an analyst and eventually as consultant and product manager, I never used or heard the phrase. There were good reasons for this, but before I can explain them, I need to establish some background.

If you thought about the title of this post, you might well ask yourself, “What do you mean – practices? What does that have to do with software? You mean – written the best way? Or – the most bells and whistles?

What the phrase ‘best practices’ alludes to in relation to a software package is something that I stress in my MBA classes because it surprises many people – the fact that ‘practices’ – business processes the dictate what your company’s employees will do and when they’ll do it – are ‘baked into’ any non-trivial piece of software. When you buy a software application – let’s say your company has decided it could benefit from a Customer Relationship Management (CRM) package –  then you are locked into the processes, the practices that are built into the software. If you use the package, then you WILL feed it the information it needs, in the format it requires it and in the sequence it wants it. This is so whether or not you work that way now, whether or not you currently have the required information available and whether or not the process fits your company’s culture.

Well, you say, software can be modified, right? Right – for a price. The first price you pay when you modify COTS (common off the shelf) software is that you defeat the reason you bought the package in the first place – it was written, debugged and ready to use. The second price is Yankee dollars, lots and lot of them. It is widely known that the cost of consulting and modification for most ERP (enterprise resource planning) installations is greater than the multi-million dollar cost of the software itself.

Thus, it is critical to the success of a software package installation to thoroughly investigate the practices built into the application before you buy; and this brings us back to the notion of ‘best practices.’ Almost no software is developed, even by very large software companies such as Oracle or SAP, without a client. The client supplies the specifications for the application – the screens it should show, the information it needs, the reports it should produce and so on.  Of necessity, the software mirrors the processes needed to satisfy the requirements. Because the early clients of a newly developed software application are typically large, successful organizations, the marketing arms of large software companies began, about fifteen years ago, to promote these ‘baked in’ processes as ‘the best practices of the best corporations.’ Applications developers are thus able to develop the software once and sell it multiple times – a very profitable undertaking.  To understand the marketing coup that this was, it is necessary to understand the many circumstances under which ‘best practices’ are actually a detriment.

What is wrong with doing my inventory the way Mercedes Benz does it, you may ask. Or, why shouldn’t I want to handle my accounts receivable the way Nestle does? First, issues can arise due to disparities of size between your organization and Mercedes. Organizational size breeds process complexity, complexity that leads to high cost and long learning curves for software to support it and likely to a multitude of reports and functions that smaller companies will never use. Even more importantly, standard processes make it impossible to achieve sustainable strategic advantage from your software enabled process. A highly advanced, non-standard logistics process is what gives Wal-Mart a strategic advantage over competitors and the ability to grow market share and sustain growth.  A very non-standard computer supported order fulfillment process is exactly what has enabled Amazon to become a major player in multiple retail marketplaces.  As you may have already surmised, the software that supports Amazon and Wal-Mart, at least in the critical areas mentioned, is (and has to be) as non-standard as the processes themselves.

The key to determining whether the ‘best practices’ of a software application package are really the best for you lies in understanding what aspects of your business model are core competencies, activities that distinguish your business from others in the same marketplace.  A close second in importance is performing a process audit during the purchase cycle of any large software package in order to determine just how different the embedded ‘best practice’ is from your current processes.  The need to make large adjustments to existing processes in order to accommodate a new software application is one of the most widely acknowledged sources of installation failure.

William L. Kuechler, Jr., Ph.D.

William Kuechler is professor of information systems and chair of the information systems discipline at the University of Nevada, Reno. He holds a bachelor’s degree in electrical engineering from Drexel University, and a Ph.D. in computer information systems from Georgia State University.

His academic career follows a successful industry career in information systems development and consulting. His work experience brings insight to his teaching of both IS management and technical material and brings a wealth of practical background to his research. Kuechler’s two primary research themes are the cognitive bases of IS use, development and education, and design science research in IS. He is on the editorial advisory board for the Journal of Information Systems Education and is an associate editor for the Journal of Information

 

The Cultural Context of Business and Management Practices

Undoubtedly, companies around the world operate in a global context. In his highly successful book, The World is Flat, Thomas Friedman highlights the processes underlying globalization and discusses the implications of the increasing interdependence of countries and companies. He points out that, in addition to considering the economic, political, and technological components of the global business environment, understanding cultural characteristics and their impact on business and management practices is critical to effectively operating in a global context.

For example, many Americans might think that the cultural differences between Germany and the U.S. are relatively small. However, the differences are substantial enough to result in significant differences in management and business practices. An American company that recently created a joint venture with a German company has been facing numerous challenges in integrating the two companies. Most of the challenges are a result of the cultural differences between the two countries. Among others, the American company identified the following issues:

 

–        Structure – German firms typically have a much more rigid organizational structure and hierarchy than American firms. The need to follow the hierarchical lines for communication and decision-making is cumbersome and causes inefficiencies.

–        Technical Emphasis – German employees emphasize the technical aspect of everything. Although technical aspects do play a primary role in the U.S., Germans consider technical issues as most important to the exclusion of everything else.

–        Timelines – In the U.S. “time is money” and decisions must be made as quickly and efficiently as possible. The primary concern is with speed as opposed to quality and effectiveness. Hence, American customers have much less “patience” with respect to delivery times, communications, and service issues than German customers

These three challenges can be attributed to cultural differences between Germany and the U.S. with respect to expectations about risk-taking and the need to avoid uncertainty. As opposed to the American culture, the German culture is characterized by a relatively high level of uncertainty avoidance. Societies high in this cultural characteristic tend to create processes, rules, and systems that increase the predictability of behaviors and outcomes. High uncertainty avoidance cultures, such as Germany and Japan, place a strong emphasis on quality and technical aspects of products in order to minimize the potential for unexpected results at all cost. Similarly, rigid organizational structures require employees to follow preset procedures and rules that provide guidance and must be adhered to by all. Finally, the time required for making decisions is much longer in high uncertainty cultures than in low uncertainty cultures as in high uncertainty cultures all possible options and potential consequences must be considered before a course of action can be chosen.

Although some commentators on globalization have promoted the idea of cultural convergence among countries, the evidence does not seem to support this idea. Norms and values are deeply rooted and are the foundation on which societies are built; they give them their identity. I do not believe that cultural convergence and, hence, common management and business practices will become reality in the foreseeable future. However, I do agree that on the macro-level rather than on the micro-, the interpersonal, level similarities are prevalent. These similarities are driven by the global legal and technological conditions. Therefore, companies in different countries may have similar technological processes (macro-level) but the impact on behaviors in the work environment (micro-level) will continue to differ by culture.

In conclusion, knowing and understanding cultural differences will facilitate effective international business endeavors by allowing companies to anticipate and effectively address issues with their global business partners.

Yvonne Stedham, Ph.D.

Yvonne Stedham is professor of management, a 2010 University of Nevada, Reno foundation professor, and co-director of the Center for Corporate Governance and Business Ethics in the College of Business. She received a Ph.D. in business and an MBA from the University of Kansas, Lawrence, Kansas and undergraduate degrees in economics and business from the Rheinische Friedrich Wilhelms University, Bonn, Germany. She teaches undergraduate and graduate courses in international management and human resource management at the University of Nevada, Reno and the School of Management in Ingolstadt, Germany.

Her research focuses on cross-cultural aspects of management and business ethics. Stedham serves on the State Council for the Society for Human Resource Management (SHRM) as well as on the Nevada World Trade Council (NEWTRAC). She provides consulting and training services to many companies, locally, nationally, and internationally.