HBR: How Adobe Structures Feedback Conversations

Are you providing yours directs’ feedback on their performance and opportunities to develop their growth?  Are you having a conversation about expectations? Below is a blog from the Harvard Business Review by David Burkus:

How Adobe Structures Feedback Conversations

Providing employees feedback on their performance and opportunities to develop is one of a manager’s most important tasks. As important as it is, however, it can often get pushed down pretty far on the to-do list. Many leaders face a swarm of pressing deadlines; moreover, feedback conversations can be awkward. Even the preparation for such conversations can make managers feel stressed. It’s easy to fall back on the annual performance review to make sure at least one conversation happens. It’s no wonder many employees report getting no other feedback throughout the year.

But giving regular feedback on performance doesn’t have to be difficult. In fact, there are a few relatively simple formats or templates to help guide the conversation and ensure the discussion is meaningful (and hopefully more frequent than once a year).

One of the best examples I’ve noticed is at Adobe, a company that became notable recently for ditching their performance appraisals and replacing them with informal “check-in” conversations. But, as we’ll see, their framework for a check-in conversation works well for any situation where relevant and valuable feedback is the goal.

For Adobe, a good check-in centers around three elements of discussion: expectations, feedback, and growth and development. When each of these areas have been discussed, then managers and subordinates know they’ve had a meaningful conversation.

  1. Expectations refer to the setting, tracking, and reviewing of clear objectives. In addition, expectations also mean that both parties agree on roles and responsibilities for the objective, and also are aligned in how success will be defined. For Adobe, employees were expected to begin the year with a simple, one-page document outlining the year’s objectives in writing. Regular check-ins became opportunities to monitor progress toward those goals and well as review how relevant they might still be in light of recent events. Regardless of what your own team may start the year understanding, taking the time to regularly review what the goals are, how close individuals are to achieving them, and whether or not those goals need to be changed is a vital step in making sure you arrive at the end of the year (or whatever cycle goals are measured by) with everyone in agreement about how successful a period it has been.
  1. Feedback refers to ongoing, reciprocal coaching on a regular basis. Feedback is the logical next step from a discussion about expectations. Once the goals are clear, and how close to meeting them is established, feedback is how employees learn to improve performance and more quickly achieve their goals. For Adobe, it was important to emphasis the reciprocal nature of feedback. Managers were providing performance feedback but also needed to be open to receiving feedback themselves. Specifically, feedback conversations provided answers to two questions: 1) “What does this person do well that makes them effective?” and 2) “What is one thing, looking forward, they could change or do more of that would make them more effective?”
  1. Growth and Development, the final element, refers to the growth in knowledge, skills, and abilities that would help employees perform better in their current role, but also to making sure that managers understood each of their employees’ long-term goals or career growth and worked to align those goals with current objectives and opportunities. Instead of a simple “year in review” approach, inclusion of growth and development as one element of a “Check-In” ensures that the conversation is centered on future development of employees … not just arriving at a score for the previous period. A vital part of making check-ins successful was not just the forward-looking nature, but also the frequency. If you’re checking-in regularly than it’s much easier for both managers and employees so see progress.

And that final piece might be the key to why check-ins work so well. Researchers Teresa Amabile of Harvard Business School and Steve Kramer conducted a multi-year tracking study in which hundreds of knowledge workers were asked to keep a daily diary of activities, emotions, and motivation levels. When they analyzed the results, the pair found that progress was the most important motivator across the board. “On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak,” they wrote of their findings. “On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.” Surprisingly, however, in a separate study of 600 managers, Amabile and Kramer found that managers tended to assume progress was the least potent motivator — citing things like recognition and incentives as stronger motivators.

Looking at the three-elements of a meaningful check-in, it’s easy to see why the system would be more motivating and performance enhancing than the norm. While most performance appraisal systems are backward looking, assigning what is essentially a grade to past performance and spending only minimal time focused on the future, this format centers around highlighting the progress made and the skills and abilities needed to make further progress. Both are mechanisms to provide feedback, but one appears far more motivating.

 

Perhaps most importantly, the beauty of a check-in conversation is that it doesn’t automatically mean abandoning all of the other mechanisms required by your organization. Well-intentioned managers can start holding check-ins with or without an overhaul to the performance management system being used. At its core, it’s a helpful tool for having a more meaningful conversation… and using it regularly might even make the annual performance review discussion more meaningful as well. If you’re looking for a way to provide more meaningful feedback and better develop the people on your team, talking about these three things (expectations, feedback, growth and development) is a great start.

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BoF: The Business of Love and Passion 

Are you in the people business? Below is a blog from the Brains on Fire:

The Business of Love and Passion 

At Brains on Fire we believe with all our hearts and souls, it is possible to fall madly and passionately in love with the people you serve. And we believe that it’s possible for those folks to fall in love with you, too; and, yes, for you to become famous and grow your organization because of that love.

That’s exactly what we’ve done to grow our own business over the years. Not only have we fallen in love with our customers, we received the permission and indeed the honor to get to know and care for our customers’ customers. It’s our role as marketing matchmakers to help connect our customers with their employees and customers through shared passions.

Every business owner should be wildly romantic and passionate about your advocates; the employees and customers who help fuel your success.

What does it take to fall in love with your advocates, the customers and employees who are ready, willing and happy to fall in love with you? Start by following these Passion Principles.

  1. Love people. Never leverage people.
    We hate it when we hear companies talk about leveraging fans to tell their story. Think about it: Do you really use people you care about? Absolutely not. You listen to them. You get close to them. You see them frequently. You want to be a meaningful part of their life. You inspire them and in return, they inspire you.

If you want people to be in love with you and talk about you, you must fall in love with them first. Your clients, customers, donors, tribe, employees, advocates—what you call them doesn’t really matter—can and should become beloved heroes in your organizations.

  1. Love takes patience.
    For real and lasting relationships to take hold, you have to be in it for the long haul and not for a one-night stand (perhaps the marketing equivalent of a one-time purchase).

Loving your customers is not something you do for a limited amount of time. It’s something you do every single day. And the value of that effort grows exponentially stronger and deeper with time.

  1. Get people to talk about themselves.
    The passion conversation isn’t about getting people to talk about YOU, the brand. It’s about getting people to talk about themselves. Encourage others talk about themselves, their lives, their hopes and their dreams. Create platforms, online and offline, for the people you serve to share their own stories. Give them opportunities to talk and be willing to listen.

At Brains on Fire, we no longer consider ourselves to be in the marketing business. Instead, we’re in the people business. This makes sense for us because marketing nowadays is more about reframing the work you do in the world to inspire your employees and customers. The most successful word-of-mouth–driven businesses in the world have always been in the business of inspiring people.

Good stuff happens when you’re in the people business. We promise.

 

How To Be A Good Boss

In the book, Radical Candor: Be a Kickass Boss Without Losing Your Humanity by Kim Scott, she explains how to be a highly successful manager. I highly recommend this book to anyone who manages people. Below is an excerpt from the book that you might find useful:

How To Be A Good BossRadical Candor.jpg

Given my line of work, I get asked by almost everyone I meet how to be a better boss/manager/leader. I get questions from the people who worked for me, the CEOs I coached, the people who attended a class I taught or a talk I gave. I get questions from people who are using the management software system that Russ Laraway and I cofounded a company, Candor, Inc., to build. Others have submitted their management dilemmas to our Web site (radicalcandor.com). But questions also come from the harried parent sitting next to me at the school play who doesn’t know how to tell the babysitter not to feed the kids so much sugar; the contractor who is frustrated when his crew doesn’t show up on time; the nurse who’s just been promoted to supervisor and is telling me how bewildering it is-as she takes my blood pressure, I feel I should be taking hers; the business executive who’s speaking with exaggerated patience into his cell phone as we board a plane, snaps it shut, and asks nobody in particular, “Why did I hire that goddamn moron?”; the friend still haunted by the expression on the face of an employee whom she laid off years ago. Regardless of who asks the questions, they tend to reveal an underlying anxiety: many people feel they aren’t as good at management as they are at the “real” part of the job. Often, they fear they are failing the people who report to them.

While I hate to see this kind of stress, I find these conversations productive because I know I can help. By the end of these talks, people feel much more confident that they can be a great boss.

There’s often a funny preamble to the questions I get, because most people don’t like the words for their role: “boss” evokes injustice, “manager” sounds bureaucratic, “leader” sounds self-aggrandizing. I prefer the word “boss” because the distinctions between leadership and management tend to define leaders as BSers who don’t actually do anything and managers as petty executors. Also, there’s a problematic hierarchical difference implied in the two words, as if leaders no longer have to manage when they achieve a certain level of success, and brand-new managers don’t have to lead. Richard Tedlow’s biography of Andy Grove, Intel’s lengendary CEO, asserts that management and leadership are like forehand and backhand. You have to be good at both to win. I hope by the end of this book you’ll have a more positive association with all three words: boss, manager, leader. Having dispensed with semantics, the next question is often very basic: what do bosses/managers/leaders do? Go to meetings? Send emails? Tell people what to do? Dream up strategies and expect other people to execute them? It’s tempting to suspect them of doing a whole lot of nothing.

Ultimately, though, bosses are responsible for results. They achieve these results not by doing all the work themselves but by guiding the people on their teams. Bosses guide a team to achieve results.

The questions I get asked next are clustered around each of these three areas of responsibility that managers do have: guidance, team-building, and results.

First, guidance.

Guidance is often called “feedback.” People dread feedback-both the praise, which can feel patronizing, and especially the criticism. What if the person gets defensive? Starts to yell? Threatens to sue? Bursts into tears? What if the person refuses to understand the criticism, or can’t figure out what to do to fix the problem? What if there isn’t any simple way to fix the problem? What should a boss say then? But it’s no better when the problem is really simple and obvious. Why doesn’t the person already know it’s a problem? Do I actually have to say it? Am I too nice? Am I too mean? All these questions loom so large that people often forget they need to solicit guidance from others, and encourage it between them.

Second, team-building.

Building a cohesive team means figuring out the right people for the right roles: hiring, firing, promoting. But once you’ve got the right people in the right jobs, how do you keep them motivated? Particularly in Silicon Valley, the questions sound like this: why does everyone always want the next job when they haven’t even mastered the job they have yet? Why do millennials expect their career to come with instructions like a Lego set? Why do people leave the team as soon as they get up to speed? Why do the wheels keep coming off the bus? Why won’t everyone just do their job and let me do mine?

Third, results.

Many managers are perpetually frustrated that it seems harder than it should be to get things done. We just doubled the size of the team, but the results are not twice as good. In fact, they are worse. What happened? Some-times things move too slowly: the people who work for me would debate forever ifI let them. Why can’t they make a decision? But other times things move too fast: we missed our deadline because the team was totally unwilling to do a little planning-they insisted on just firing willy-nilly, no ready, no aim! Why can’t they think before they act? Or they seem to be on automatic pilot: they are doing exactly the same thing this quarter that they did last quarter, and they failed last quarter. Why do they expect the results to be different?

Guidance, team, and results: these are the responsibilities of any boss. This is equally true for anyone who manages people-CEOs, middle managers, and first-time leaders. CEOs may have broader problems to deal with, but they still have to work with other human beings, with all the quirks and skills and weaknesses just as apparent and relevant to their success in the C Suite as when they got their very first management role. It’s natural that managers who wonder whether they are doing right by the people who report to them want to ask me about these three topics. I’ll address each fully over the course of this book.

JOA: Rethinking Retention

Is your company attracting to quality candidates? Are you hiring for cultural fit? “Employees are always changing, and you can’t assume tomorrow’s will want what today’s do, if you build that nimbleness around how you attract, develop, recruit, promote, and retain, you’re constantly in tune to what your current workforce wants, and then you don’t have to guess.” Retensa’s Chason Hecht said. Below is an article form Journal of Accountancy by Courtney L. Vien:

Rethinking retention

One-size-fits-all initiatives won’t solve your retention problems. The key to retention, according to Retensa’s Chason Hecht, is culture.

Employee retention is — for CPA firms. In fact, according to the 2015 PCPS CPA Firm Top Issues survey, retaining staff is the No. 1 concern of firms that employ 11 or more people. In fiscal year 2015, turnover rates reached 13.4% at firms with revenues of over $10 million, the AICPA and CPA.com’s 2016 National Management of an Accounting Practice survey found, up slightly from 2014.

The strong economy is a key reason firms struggle with retention, said Shelly Guzzetta, CPA, manager—Firm Services at the AICPA. “Since the economy has gotten better, people have gotten bolder,” she said. “They feel more comfortable and are willing to take the calculated risk of leaving.” Social media is also a factor, she said, as it’s made it easier for CPAs to find new job opportunities and to get candid opinions on what it’s like to work at different firms.

Given the heavy costs of turnover, it’s no wonder that employers of CPAs are so concerned about retention. When employees leave, their employers must incur the cost of recruiting, hiring, onboarding, and training a new employee, and they’ll likely see a drop in productivity as the new hire gets up to speed. Estimates of the cost of turnover vary widely, but one reliable source, the Society for Human Resource Management, calculates that it can cost anywhere from 50% to 60% of an employee’s salary to replace him or

The challenge firms face is that -informed employees in high demand—such as CPAs—know that they have choices about where they work. And they’re looking for more than just a paycheck and good benefits from an employer. According to retention expert Chason Hecht, employees want to work at jobs they find personally fulfilling and where they connect to the culture. To appeal to the best employees, he said, employers need to rethink the way they approach retention.

DEFINE CULTURE, PROMOTE CONNECTION

Conventional wisdom says that Millennials won’t stay loyal to one employer for long. Hecht, president and founder of human resource consulting firm Retensa, sees things differently.

“There’s very little evidence that Millennials lack loyalty,” he said. “What they lack is a tolerance for boredom. They lack a tolerance for discontentment, disengagement, for feeling disconnected from their peers, community, and society.”

What’s more, he said, it’s no longer just Millennials who feel this way. He believes that we’re all undergoing a fundamental shift in the way we view work—and it’s making employees from all generations more likely to leave work they find unsatisfying.

“If you’re not getting fulfilled, if you’re not challenged and engaged, if you’re not doing things that are meaningful and interesting,” Hecht said, “then it’s at this point that you’ll, like most people in modern society, reflect and consider, ‘How long am I going to do this?’ ”

Consequently, employees who are in demand and enjoy a high degree of mobility—such as CPAs—are more likely to leave jobs where they don’t feel engaged and fulfilled.

Yet, too few organizations think about retention in terms of culture and engagement, Hecht said. Instead, he said, what often happens is that organizations look for — solutions to their retention problems. A company will learn about the latest trend in retention—be it unlimited vacation or nap pods in the break room—and implement it without considering whether it’s what staff really wants. Though employees do value such perks, Hecht said, they’ll be a stopgap solution at best if an organization’s staff and its culture are -matched.

A DIFFERENT KIND OF RETENTION STRATEGY

Hecht advised that, instead, organizations should define their values and culture, then attract and retain staff whose passions align with their

Your first step, Hecht said, should be to determine what aspects of your culture set you apart as an organization—”what you provide, where you excel in supporting, engaging, and delivering to your workforce,” he said. For one firm, that might mean a culture that promotes transparency; for another, it might be a sense of being innovative and cutting-. (To read more about how a firm’s culture can inspire retention, see the sidebar “Brown Smith Wallace: Investing in the Whole Employee.”)

To pin down how employees view your culture, and when and how they want to work, Hecht said, continually solicit feedback from them through a variety of means: surveys, performance management data, -ended suggestions, town halls, and the like. The important thing is to do so continually—an annual survey is not enough, he said. (For a different approach to information gathering, see the sidebar “The Stay Interview.”)

“Employees are always changing, and you can’t assume tomorrow’s will want what today’s do,” he said. “If you build that nimbleness around how you attract, develop, recruit, promote, and retain, you’re constantly in tune to what your current workforce wants, and then you don’t have to guess.”

The next step, Hecht said, is to use the data you continually gather to plan ways to give employees what they value at different points during their tenure. “At each stage of the employee life cycle your workforce is either being engaged and appreciated, developing trust in you—or they’re not,” he observed.

Once you understand what it is about your culture that employees value, Hecht said, you can then create opportunities for people to engage with one another that allow for connectedness and -expression. You can create events, social opportunities, and policies that you know will appeal to them, because they’re not being implemented from the top down, he said. That way, you won’t spend a lot of money to send your staff to a pro football game when they don’t really care for sports, for example.

RETENTION STARTS WITH HIRING

Hecht stressed the fact that organizations that want to retain employees need to start by hiring the right ones.

Hire for cultural fit, he said. “Authenticity starts with who you hire and who’s recruited, who’s interviewed, and the filter you create for people who join your organization,” he noted, adding that, naturally, firms in need of help will need to balance cultural fit against their other hiring needs.

Retention is about providing the best client service, but, ultimately, it’s also about finding a balance between maximizing productivity and shaping an organization where your employees want to work. As Hecht pointed out, we spend about a third of our lives at work—so whether we’re happy there matters.

“We win when organizations have the people that want to work there,” he mused. “Can you imagine a country where everybody loves their job and how different that would be?”

HBR: How Smart Managers Build Bridges

How do you manage conflict?  Are you improving your relationships with your directs? Below is a blog from the Harvard Business Review by Charalambos Vlachoutsicos

How Smart Managers Build Bridges

What do you do when the other person simply won’t budge from an entrenched position in which they have a great deal of personal and professional commitment? How do you bridge the gap between your position and his?

Most people try to win the other person over to their point of view by argument. The trouble is, in many cases they don’t have all the facts to fully understand why the other person doesn’t agree. What’s more, the gap may be down to differences in values or cultures that are not particularly amenable to reasoned arguments. Whatever the source of the differences or gaps, when you can’t win by reason, you start to get angry at what you see is the other person’s lack of it, which gets mirrored, and so the gap only gets wider.

The key to avoiding this dynamic is to stop trying to get the person to change and instead get them to open up. The information you get may well encourage you to moderate your own position and thus open the way for a mutually advantageous cooperation. Make them understand your constraints and get them to see what they have to gain by what you propose.

Of course, sometimes, no amount of understanding is going to get the other person to budge and you’re going to have to force progress. At this point, you have to work to bridge the gap in such a way that their main concerns are accommodated so that you can communicate and cooperate productively in spite of and within the limits of your differences. Typically, this involves talking responsibility for the action you wish to make while being prepared to share the payoff and the credit.

Once the gap is actually bridged and you move forward you will pretty soon see that your interactions generate change. Through the give and take of communication, all sides come to feel that at least some of the differences between them are actually smaller and easier to live with than they appeared to begin with.

I built perhaps my first managerial bridge when, fresh out of HBS, I joined our family’s business. Immediately on joining I realized that our warehouse constantly remained out-of-stock of at least five of the thirty-odd products our company carried. This not only caused a loss of sales of the items missing but also had negative repercussions on the sales of all of our products because it drove many customers into our competitors’ arms.

I went to our warehouse and met with the manager who was a very loyal, trustworthy person who had worked with us for many years. He was about 60 years old, knew all our clients personally and had a wide network of potential clients in the market. I asked him why he believed we faced this problem.

He answered that it was because our suppliers took a long time to deliver our orders and, given the global nature of our supply chain, there was nothing we could do about it. I talked to him a little about the notion of forecasting what amount of each product we would need to carry as minimum stock, in order to cover our sales during the time required between the date of placing our order and the date it would reach us.

His reaction was fierce: “If you want predictions go to the Oracle of Delphi,” he told me. “In Greece we do not know what will happen from one day to the next, so we cannot make predictions of how much of each product we will sell.” He would not budge.

Faced with this attitude, I stopped trying to get him to change. Instead, I asked for a worker, some red paint, a brush, and a wooden ladder. I obtained from the accountant the average monthly sales of each product, added a security margin of 20%, converted this quantity to the volume of space required for each product, and drew on the wall a thick red line at the point where the pile would probably be enough to cover sales of the product until our next order arrived.

I assured the manager that I respected his view that predictions in Greece were risky and — this was critical — assured him that the head office would take responsibility for whatever risks were entailed by my attempts to forecast “All you have to do is, whenever you see a red line appearing on the wall behind the stack of any product, is inform me”. Finally, I promised him a bonus for each day our warehouse carried stocks of all our products.

The immediate impact, of course, was fewer stock-outs. But the longer-term and more important benefit from the improvement was that the warehouse manager and I started talking more. He took to visiting me at my Athens office and to ask my opinion on other problems our Piraeus shop faced and to make useful suggestions on how best to address them. Thanks to my action in bridging I had been able to move from talking to the manager to talking with the manager.

Three Traps: Complacency, Cannibalization, Competency

The Three-Box Solution: A Strategy for Leading Innovation by Vijay Govindarajan is a great book to help leader innovate with simple and proven methods for allocating an organization’s energy, time, and resources across the three boxes:

Box 1: The present—Strengthen the core

Box 2: The past— Let go of the practices that fuel the core business but fail the new one

Box 3: The future—Invent a new business model.

Below is an excerpt on the three behavior traps. How do you manage them to the lead your organization to innovate?

Three TrapsThree Box Solution.jpg

While there were many within IBM who clearly understood the implications of both nonlinear shifts, their insights had difficulty penetrating the entrenched logic of the past. The dominant logic of the past exerts its hold on business cultures and practices in three distinctive but tightly interlocking ways. I think of their dynamic effects as traps that snare the unprepared. All three have common origins in mind-sets that focus excessively on past values, behavior, and beliefs.

The Complacency Trap

Current success conditions a business to suppose that securing the future requires nothing more than repeating what it did to succeed in the past. This is the complacency trap. Complacency shrouds the future in a fog of misplaced confidence, hiding from view a clear understanding of the extent to which the world is changing around you.

IBM’s extraordinary success driving revenues in its Box 1 mainframe business masked difficulties to come. Rather than face up to looming threats to the mainframe business, IBM applied temporary patches. One such patch ‘was to change the revenue model from leasing mainframes to selling them outright. S This produced a pleasing surge in near-term revenues that postponed IBM’s day of reckoning.

The loyalty of successful organizations to the past is often so potent that they become quite ingenious at ignoring the onset of fatigue in the Box 1 business. Instead of building the future day by day, IBM prolonged it’s past with what amounted to an accounting change. The resulting years-long period of bolstered revenues made it easy for the company to think that everything was just fine-four words that fairly summarize complacency.

Another way to understand how IBM fell into the complacency trap is that the company’s continuing Box 1 profitability delayed development of a sense of urgency that might have motivated a more prescient Box 2 judgment: that it was important to invest aggressively in the new enterprise model of client/server computing.

This is the dark side of success. No matter the industry or company, each great innovation spawns a steady accumulation of Box I-based structures, processes, and attitudes of the kind that blinded IBM to its predicament. IBM mainframes were not simply smart machines; they were smart machines that over the years had created at customer work sites whole new layers of enterprise management that had never existed before.

Mainframe computers were island fortresses, secured and operated by a newly empowered IT function and inaccessible, except through IT proxies, to the rest of the enterprise. If a technology can embody a governing philosophy, the mainframe’s philosophy was exactly opposite that of the open, accessible internet that was yet to appear. Even before the internet emerged as a business tool, there were pitched battles within almost every company about making valuable mainframe data accessible to and usable by employees with networked PCs. This increasingly loud demand clashed with the mind-set of IBM’s IT customers, who saw their mission as protecting the security and integrity of corporate data: allowing liberal access would lead to data corruption and to proliferating unreliable versions of the “truth.”

In fact, customers can play an important role in deepening a complacency trap. IBM had collaborated with its customers in creating what became an entrenched system of governance for computerized organizations. That system’s structures and attitudes were a self-reinforcing feedback loop amplified by IBM’s large-enterprise customers.

Ultimately, a more modern version of the mainframe emerged and made peace with the rest of the IT infrastructure. Today’s version powers big data analytics and other applications in many large enterprises. But in the IBM of the 1990s, mainframes cast a long shadow over the emergent model of more open, democratized network computing.

The Cannibalization Trap

The cannibalization trap persuades leaders that new business models based on nonlinear ideas will jeopardize the firm’s present prosperity. So, like antibodies attacking an invading virus, they protect the Box 1 business by resisting ideas that don’t conform to models of the past.

At its heart, the fear of cannibalization reflects a wish to keep the world from changing. It is perhaps easy to understand that wish, but it’s much harder to excuse it. The glib answer to those who suffer from this fear is to remind them that change is inevitable and the world will change either with them or without them. When a business allows worries about cannibalization to interfere with its strategy, it has overinvested in its past and is doomed to undermine its future.

Cannibalization is typically understood-and feared-as a near-term threat. As foresighted as IBM was in developing its personal computer in the early 1980s, forces marshaled within the company to protect the legacy business. Those who feared the PC believed it had the potential to threaten the mainframe computing model, perhaps by feeding the growing appetite to liberate enterprise data or by diverting attention and investment away from the company’s dominant business.

People who fear new technology are usually more right than wrong about its potential to supersede legacy products. The truth is, every Box 1 business has reason to fear, sometimes even hate, whatever shiny new thing is being launched. When Steve Jobs gave a big push to the Macintosh launch toward the end of his first stint at Apple, the group in charge of the incumbent Apple II felt threatened and undercut. It was as if cofounder Jobs had sponsored an insurrection.”

In reality, however, cannibalization should be understood as a long- term benefit. The new Apple Macintosh embodied features that soon enough would make its predecessors obsolete. If Apple hadn’t moved quickly, a competitor-maybe even IBM-would have filled the vacuum. Given its history, IBM’s embrace of microcomputing was unexpected. But it quickly set the standard for PCs and legitimized them as tools for both home and business users. While IBM’s marketing of the PC initially tilted toward home users, the real revenue bonanza came from businesses. Suddenly, at least part of IBM had reason to root for client/ server computing. No matter what anyone in the mainframe business thought about it, the client/server model had the shine of inevitability.

So, while companies must take the fear of cannibalization seriously as a problem to manage, it can’t become a reason not to act with foresight when new nonlinear strategies or business models present an opportunity.

The Competency Trap

The competency trap arises when positive results the current core business encourage the organization to invest mainly in Box 1 competencies and provide little incentive for investing in new and future-oriented competencies. In established companies built around a spectacular success, such as IBM’s industry-defining mainframe computers, it is natural to want to create a workforce whose skills dominantly reflect the legacy success. But a competency trap is a double- edged sword. IBM’s investments in Box 1 competencies helped its mainframe business. But Box 1 logic asks, why invest in skills not vital to the company’s current profitability? That is why Box 2 is necessary.

IBM eventually recognized that the dominant computing model it had exploited to achieve such great success was changing. Yet, despite having made significant investments in a robust R&D function, it was having chronic difficulty incubating new ventures. It struggled to find what IBM insiders called “The Next Big Thing.” The organization appeared to have succumbed to a “four monkeys” value system.

Believing that there were indeed systemic problems, then-CEO Louis Gerstner commissioned an internal inquiry to identify root causes. The inquiry, led by Bruce Harreld, IBM’s head of corporate strategy, confirmed Gerstner’s fears. Looking at a number of recent examples of flawed new-business incubation, Harreld’s team concluded that the company’s dominant Box 1 systems, structures, processes, and culture had:

  • Created a powerful bias for near-term results.
  • Encouraged a focus on existing customers and offerings to the extent that new technologies and nonlinear trends were either underestimated or escaped detection entirely.
  • Burdened new businesses with unreasonably high performance goals-especially damaging to ventures that targeted newer, riskier, but often more promising markets.
  • Motivated an unimaginative approach to market analysis that impaired the company’s ability to understand the sorts of “embryonic markets” most likely to spawn nonlinear Box 3 ideas.
  • Interfered with development of the skills necessary to adaptively transition a new business through its emergent and growth stages until it finally became an established enterprise.
  • Caused assorted failures of execution, many owing to the inflexibility of Box l=driven organizational structures, which leaders of new ventures “were expected to rise above … Voicing concerns over [such challenges], even when they were major barriers to new business initiatives, was seen as a sign of weakness.”

What the report didn’t say is important to note. IBM’s problem was not caused by a lack of research competency. On the contrary, its workforce possessed at least some expertise in a wide array of disciplines and technologies. Among its research projects were some that were quite promising and others that were highly speculative, unproven, and obscure. But for all the reasons listed, even ideas that managed to get traction were being ineptly developed and executed. What IBM needed was a well-designed process for enabling, supporting, and rewarding its maverick monkeys and likewise for managing new ventures onward through their developmental stages.

Such a process typically should incorporate a range of structural, cultural, and leadership remedies. At IBM-first under Gerstner and later Sam Palmisano-these distinctive remedies came together under the emerging business opportunities (EBO) framework, which created new structures, changes to the buttoned-down IBM culture, and more versatile and adaptive leadership behavior.

HBR: How to Speak Up If You See Bias at Work

Does unchecked biased and/or offensive behavior make you uncomfortable at work? Below is a blog from the Harvard Business Review by Amber Lee Williams.

How to Speak Up If You See Bias at Work

Many people can recall a time when they were exposed to workplace behavior that made them or others uncomfortable. Can you think of a time someone in a meeting joked about another group of people, evoking laughter from everyone else in the room? Or have you worked on a team in which the men seemed to get better projects even though female colleagues were equally or better suited for the work?

And the big question: Did you speak up?

There is no question that objecting to such situations is difficult. The person who decides to raise the issue could damage their relationship with the person making the comments or assigning the work, which could adversely impact the objector’s career opportunities. This is especially true when the comments or behavior aren’t technically illegal. It takes courage to be the one, perhaps the only one, who calls out the behavior as unhelpful to a productive work environment.

So why take the risk? Why not simply ignore the behavior — especially if you’re not the target of it? First, failure to acknowledge and address bias or offensive behavior validates the conduct and may create an impression that the behavior is acceptable, and even to be expected, in the workplace. Moreover, normalizing offensive conduct in this subtle manner tends to have a chilling effect on other potential dissenters, and communicates to those who are offended, regardless of whether they are targets of the behavior, that their perspectives and voices are not valued. Remember that just because people laugh at an offensive joke doesn’t mean they agree with it — or weren’t offended themselves. They might be laughing to cover their discomfort or fit in with the group. In such an environment, employees who are would-be dissenters but are fearful of speaking up may find it difficult to fully engage with their coworkers and leaders and may become less productive.

The bottom line is that patterns of unchecked biased and offensive behavior in the workplace have the potential to erode full employee participation and take a toll on organizational effectiveness.

Given the risks and challenges, how can you draw attention to the bias or offensiveness without putting the other person on the defensive? What are some approaches most likely to limit unintended adverse consequences? There is no one answer or approach that will work for everyone in every situation. Nonetheless, you do have the power to manage how, when, and to whom to raise concerns in ways that will encourage positive change in your environment.

Choose your audience carefully. Sometimes the person you perceive as the offender is not the audience to whom you should address your concerns. If the person making an off-color or offensive joke is a peer or subordinate, it can be effective to directly — but respectfully and privately — address the issue with them. However, in the instance of a person who appears to be assigning work in a discriminatory manner, if the person is a superior or has more power than you do, it may be more prudent to identify a trusted ally in your organization — someone who can provide support, help to identify the right person to speak with about the issue, or maybe even raise the issue on your behalf.

Keep a cool head. Whether you are discussing the issue directly with the person whose conduct is offensive or sharing the situation with an ally, it is important to remain calm. It is not unusual for a person who has observed or been targeted by biased or offensive behavior to feel emotional about the situation. However, sometimes an emotional response to a difficult situation inadvertently shifts the focus of a discussion from problematic behavior to other person’s response to that behavior, which then impedes their ability to address and correct the conduct. It is worth stepping back, working through your emotions, and taking the time to plan what you want to communicate to ensure that the content of your message is not undermined by its delivery.

Create the opportunity for dialogue. You do not have to be provocative or accusatory to raise a concern about discriminatory and offensive conduct. At its core, biased and offensive language and conduct are disrespectful. If the goal is to create a different dynamic, it is counterproductive to attack, demean, and disrespect a person who says or does something offensive. A better approach is to model the behavior you want to see.

For instance, instead of calling someone sexist for giving the plum assignments to the men on the team, you might mention a qualified female colleague who would be an asset to the team. If the supervisor questions the colleague’s qualifications or readiness, point out how participating on the team could further develop her skills, and offer to mentor her.

For the colleague who makes off-color jokes, if you decide to address them directly, you might privately share with the person that their comments make you uncomfortable and suggest the person discontinue the language. If the person asks why you’re uncomfortable, you can share that you do not think it’s appropriate to make jokes at the expense of other groups and that the behavior is offensive and distracting.

Be willing to listen to the other person’s side (e.g., they were only making a joke, you’re being too sensitive, words don’t hurt anyone) — even if you do not agree. Listening to others’ perspectives is essential for creating an environment where all voices are heard and respected.

It takes courage to address biased and offensive language and conduct in the workplace. Relationships and career opportunities potentially hang in the balance. But isn’t it worth it to consider taking the risk in order to achieve full employee engagement and organizational effectiveness?