Emerging Management Paradigms

In Delivering Happiness, Tony Hsieh gives a narrative on the path that he took from starting his own web consultancy to selling Zappos for 1.2 billion dollars to Amazon. He candidly talks about his time at Oracle, how he started LinkExchange, and then finally how he took all that he learned to build Zappos. On his journey to the top, Tony reflects on three critical aspects of business that he feels are the key to success: customer service, culture, and employee training and development. These three points culminate in Zappos, and that is why he believes he can deliver happiness to his customers through his company.

What really struck me when I read this book is how even when Tony achieved success by modern day standards he still was not fulfilled. He wanted to build a company that fit his ideals. He sold off LinkExchange for 265 million dollars, but the whole narrative found a 20-something year old Tony that was aloof and disinterested. LinkExchange found its beginnings with a close band of 20 friends or so that stuck together, liked each other, and lived life together.  Everyone wanted LinkExchange to succeed at all costs for the collective. However, nearing the end of the sale the company became something quite different. LinkExchange disregarded their tight-knit culture in order to hire as many people they could in order to grow. Consequently new employees had a different agenda than the original members: they wanted stock options to make money at the sale of the company, or wanted to join as a resume builder for a few years, and so on. This was completely against the close knit, caring community that Tony envisioned and took for granted at the beginning of LinkExchange. So when Tony sold off the company, it was more of a sigh of relief rather than excitement: he was so disinterested that he left money on the table by quitting LinkExchange before the contract dictated that he could leave. This is why culture is one of those critical aspects of business: the culture of a company could have more bearing on what is perceived as success than what its stock price could ever show.

-Kay

The book “The India Way” explains the sources of Indian success and how a country with a lot of challenges with transparency, efficiency, grinding poverty and adult literacy managed to make a huge progress in last decades.

The India Way is about survival, winning against the odds, about ‘jugaad’ (manage in spite of lack of resources) and ‘adjust kar lenge’ (adjust and accommodate)

The message from Indian leaders to the world is surprisingly “human” and explains:

• How to engage with employees in a holistic way
• How to improvise and adapt
• Identifying products with compelling value
• Broad mission and purpose (beyond profit)

Can this model be adopted elsewhere? Most likely not. The authors express these doubts themselves – these concepts are deeply rooted in the culture however American leaders should at least take a few lessons from “The India Way” – limit the excess of their model and learn to act more responsible towards the society.

I must say I really like the India way and this book completely changed my view on Indian society and companies. The world would definitely be a better place if leaders allover the World listened to the advice from India and used it.

Leslaw

The book ‘Good Boss, Bad Boss’ reinforced my thoughts about the negative impact that bad bosses have in companies and positive effect that good bosses can have. Here are some key takeaways from the book:

• There are 21-38 million bosses
• Bosses matter most to direct subordinates
• People do not quit bad companies, they quit bad bosses
• Immediate bosses have much more importance on an employee’s performance than the company in which they work
• A leader sets a tone which reverberates throughout an organization
• Attention is directed up the organization hierarchy, but people in power tend to become oblivious to followers
• Bosses get an inordinate amount of the credit or blame with respect to what they can actually control or accomplish
• Wise bosses have strong opinions that are weakly held

Over the past couple of weeks, I’ve listened to interviews with Steve Jobs’ biographer Walter Isaacson who described Jobs’ bossing as occasionally ‘mean’. The author of ‘Good Boss, Bad Boss’, Robert Sutton, posits that a boss that runs a successful company but treats his employees poorly is not a good boss. That said, is Apple an exception to the rule?

-Samuel Tokheim

Willpower: Rediscovering the Greatest Human Strength, by Roy Baumeister and John Tierney, is not a business book.  It is a book about psychology of willpower.

According to Baumeister’s research and supported anecdotally by Tierney, willpower is a quantifiable and scarce resource in human beings.  It is “used up” when we resist temptation or make difficult decisions that involve trade-offs.  It is restored by raising levels of glucose.  It can be strengthened by training–like repeatedly sitting up straight when one notices bad posture.

This is shown in a number of experiments that involve testing whether people are able to make decisions, maintain a strenuous activity, or resist temptation under various conditions.  The book also talks about figures like David Blaine and Henry Morton Stanley.

What does this mean for business?

If we accept the premise that knowledge work is demanding of willpower, then Baumeister’s research is relevant to the design of the workplace.  Does a workplace have many distractions?  Maybe it is better to let people work from home where they can focus.  Alternatively, it makes sense to provide workers with food in the office, as this will allow them to restore their glucose levels when their willpower is running low.  Providing benefits like health insurance could ease worker’s concerns in their private life, which would leave them with more willpower for when they are working.

Workplace technology that aids in decision-making or requires less concentration is widely considered to be “labor saving.”  What’s novel is the connection between ‘labor’ and willpower, which implies that even activities that aren’t work per se can deplete our ability to do work.  Treating employees in a way that is sensitive to these limitations and relying on intrinsic motivation could lead to more and higher quality work and a more cooperative workplace.

This is the article in HBR that outlines a compelling argument for “do well and do good” companies. Really worth reading. (it is free, as I write these words…).

http://hbr.org/2011/11/how-great-companies-think-differently/ar/2

Here is a review of one of the books on “how” to balance. The author argues that the balance is a myth and that we need to look for satisfaction in both. The summary review gets at this.

http://www.leadershipnow.com/leadingblog/2011/10/worklife_balance.html

Many Silicon Valley companies are known for their strict hiring standards, which include only hiring from a short-list of the top schools. Some companies have created a new strategy that circumvents this old method along with the costly salaries. IGN Entertainment is one of the first companies to spearhead a program, Code Foo, that looks beyond the resume to find potentially successful programmers. Read more about it here: Silicon Valley’s New Hiring Strategy. While this method does level-out the playing field for individuals who are self-taught, it seems to be a better fit for left-brained skills like programming.

kristine

There are plenty of coffee roasters and retailers doing “well” by selling coffee at a premium price with a Fair Trade USA label claiming that it is also doing good.

Fair Trade USA, led by Haas graduate Paul Rice, has recently broken off from FLO (the international Fair Trade Labeling Organization) in order to widen its ability to certify large scale farms and domestic buyers. Many see this move to capture greater market share at the expense of the cooperative based values of fair trade. The argument is that as soon as large players like Starbucks get exceptions to operate below the FLO standards, and large scale farms become certified, the true value of a Fair Trade label as proof of doing good is devalued and diluted.

Yet, it is still the label of choice of so many consumers willing to pay more for socially responsible coffee, has the Fair Trade label become a marketing ploy to do well without real social benefits to back it up?

http://www.coffeehabitat.com/2011/09/fair-trade-usa-muddies-the-waters/