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Sunday, April 1, 2012 @ 07:04 AM
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RETHINKING THE FUTURE

RETHINKING BUSINESS, PRINCIPLES, COMPETITION, CONTROL & COMPLEXITY, LEADERSHIP, MARKETS AND THE WORLD

EDITED BY ROWAN GIBSON

NICHOLAS BREARLEY PUBLISHING                        1997

 

Front cover

This book is a meeting place of minds. It provides a unique opportunity to gain insights into tomorrow from today’s most highly regarded business thinkers.

Rethinking The Future brings together a list of luminaries that reads like a ‘hall of fame’ –

Charles Handy, Stephen Covey, Michael Porter, C.K. Prahalad, Gary Hamel,

Michael Hammer, Eli Goldratt, Peter Senge, Warren Bennis, John Kotter, Al Ries and Jack Trout, Philip Kotler, John Naisbitt, Lester Thurow and Kevin Kelly.

Their cutting-edge thinking has helped to guide many thousands of corporations through the changing landscape of business.  Now, in a series of original and inspiring contributions, they define the new paradigm that will revolutionize business and society in the 21st Century.

Everywhere we look today, powerful new forces are reshaping the world that we thought we knew. Traditional boundaries between industries, disciplines and countries are rapidly blurring, and the old rules of management no longer make sense in a post-industrial world.

Rethinking The Future is about a world of increasing uncertainty in which the very nature of work, of organizations and of economics is changing. It is about the move away from traditional hierarchies and the democratization of power. It is about giant nation states and corporations giving way to global networks. Tomorrow’s executives will need to understand business at a far more global and synergistic level than ever before, and to feel comfortable leading people who have learned to manage themselves. This is a book for those executives.

The book looks at how organizations can be redesigned to survive and thrive in tomorrow’s hyper-competitive global environment. How they can learn to adapt to change and dramatically improve their performance. And how they should be ‘managed’, if at all.

Rethinking The Future examines the changing role of the leader and the powerful influence of corporate culture. And it probes the universal principles and values that ultimately govern the success of any leader or organization. It also looks at strategies for creating tomorrow’s competitive advantages and tomorrow’s markets, which will be driven by new demographics, new global structures and new technology.

Most importantly of all, the book gives readers a framework for understanding the big picture. It provides a panoramic perspective that puts all the pieces together in a coherent and easily understandable context. In fact, it represents an entire bookshelf condensed between two covers – a business education for the 21st Century. Rethinking The Future is essential reading for anyone concerned with business success beyond the next quarter.

About the editor

Rowan Gibson is an independent business consultant who works in close association with EURO RSCG – Europe’s largest advertising agency network. He spends most of his time creating international marketing strategies and making top management presentations. Born and educated in London, he lives today with his German wife and two sons near Düsseldorf in Germany.

Foreword by Alvin and Heidi Toffler

Not since the dawn of the Industrial Revolution have managers had more to learn (and unlearn) about the art of business leadership. And seldom have they been offered so much diverse and confusing advice. The reason for the current upheaval in management thinking is the arrival on the world scene of a revolutionary new ‘system for creating wealth’. Historians can slice the past into countless slivers. But in terms of transformational change, there have been only a few true turning points in history, each associated with the emergence of a different system for wealth creation.

The invention of agriculture provided the human race with a new way to convert the earth’s resources into wealth, and almost everywhere launched a ‘First Wave’ of change in civilization that gave rise to peasant-centered economies and eventually supplanted hunting and foraging as the primary means of human subsistence.

Similarly, the Industrial Revolution triggered a ‘Second Wave’ of change that gave us a factory-based system for wealth creation. In turn, this led to mass production, the drive for larger and larger markets, and the need for bigger, ever more bureaucratic business organizations. Until very recently, most of what was taught in management texts and in schools of business reflected ‘Second Wave’ thinking.

Based on assumptions of linearity and equilibrium, and heavily quantified, the dominant management paradigm paralleled the mechanistic assumptions of western economics, which, in turn, attempted to parallel Newtonian physics. This multileveled parallelism – the belief that management ‘science’ fitted perfectly with economic ‘science’ and that both were compatible with what was known about physics – made the industrial management paradigm enormously persuasive.

Indeed, all three of these disciplinary ‘layers’ formed parts of an even larger set of epistemological and philosophical ideas which has elsewhere been described as ‘indust-reality’ – reality as perceived through the eyes of people reared in an industrial culture. In short, the dominant business paradigm of the Second Wave era was part of a much larger architecture of thought.

In 1970, we publicly attacked the prevailing paradigm for the first time in our book Future Shock, and suggested that businesses were going to restructure themselves repeatedly and move ‘beyond bureaucracy’; that they would have to reduce hierarchy and take on the character of what we termed ‘ad-hocracy’. At the time, all this sounded sensationalist to many readers. We had a similar experience in 1972, when we delivered a consulting report to AT&T, then the world’s largest privately held corporation, saying that it would have to break itself up. For years, that report was literally kept hidden from the very managers who needed to prepare the firm for the break-up which, in fact, came 12 years later – the biggest and most excruciating corporate break-up in history. And when in 1980, in our book The Third Wave, we coined the term ‘de-massification’ to describe the coming move beyond mass production, mass distribution, mass media and socioeconomic homogeneity, we again were thought by some to be too visionary.

We suspect that many of the contributors to this volume have faced comparable skepticism. The reason is simple: anyone who attacks a dominant paradigm too early can expect to be regarded with suspicion by the reigning intellectual and academic establishment. But paradigms – including management paradigms – are not permanent. And the industrial era management model, especially in the US, is now blowing its bolts and rivets.

Today’s knowledge revolution, having launched a gigantic ‘Third Wave’ of economic, technical and social change, is forcing businesses to operate in radically new, continually shifting ways that stand Second Wave notions on their head. The industrial faith in such things as vertical integration, synergy, economies of scale and hierarchical, command-and-control organization is giving way to a fresh appreciation of outsourcing, minimization of scale, profit centers, networks and other diverse forms of organization. Every shred of industrial-era thinking is now being rescrutinized and brilliantly reformulated.

It is precisely when an old paradigm crumbles and the new one is not yet fixed in place that we get great bursts of creative thinking. This is such a moment, and some of today’s most innovative thinking about management is reflected in these pages.

Of course, as in any collection, some contributions are better than others, some fresher and more pioneering than others. But the overall thrust of this volume is exciting. It offers us a work-in-progress picture of a new business paradigm in the making.

What is still missing from this paradigm is a strong link between emergent Third Wave management thinking and Third Wave economics. One reason for this is a disparity in the relevant rates of change. While business theorists and management consultants like those in this book are exploring many aspects of the new business reality and rapidly reporting their findings, economists, with some notable exceptions, remain imprisoned by their own previous successes, seldom venturing into Third Wave territory.

A good example of the current disparity has to do with knowledge – the primary factor of production in the new system for wealth creation. An increasing amount of work is being done by consulting firms on questions of knowledge management – the assessment of knowledge assets, new approaches to organizational and individual learning, attempts to create a metric for dealing with knowledge. By contrast, mainstream economists, for the most part, ignore or underestimate knowledge as a factor of production.

If ‘thinking outside the box’ has become a buzzword among smart business people and their advisers, economists do so at far greater risk to their reputations in the profession. As a result, Third Wave economics is still in its pre-natal stage, and the intellectual framework that might unify management theory and economics is not yet in place. The task of creating that framework still lies ahead.

What business practitioners – as well as their economists and advisors – will need, however, is an even more comprehensive model of the oncoming Third Wave reality, not just focusing on economics and management issues, but showing how these must respond to social, technological, political, cultural and religious shocks – of which there will be plenty in the years immediately ahead.

Many of these can be anticipated, as can their impact on business, and they need to be taken into account, since a sudden massive swing in any one could wreak as much havoc on a company or industry as could economic change. Unfortunately, these broader issues still lie outside the frame of reference of most business thinkers and economists alike.

Nevertheless, the distinguished contributors to these pages provide important conceptual components out of which the next business paradigm will be built. The chapters teem with provocative, illuminating ideas, good questions, fresh insights and alternative ways of thinking about the competitive/cooperative combat to come. As the Third Wave system for wealth creation spreads, marked by hypercompetition, successive technological revolutions and social dislocation and conflict, it is creating high unpredictability and non-linear conditions. Business leaders and strategists who wish to flourish in so turbulent and revolutionary an environment will ignore this book at their peril.

Monday, March 26, 2012 @ 04:03 AM
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HARVARD BUSINESS REVIEW

ON WHAT MAKES A LEADER

HARVARD BUSINESS SCHOOL PRESS           1998/2001

 

Back cover

The latest thinking in the field of leadership is collected in this volume. Featuring cutting-edge articles from some of the most renowned names in leadership, this collection is a must have for CEOs and top level managers. This volume also pays special attention to leadership succession issues.

Contents

v  What Makes a Leader? (Daniel Goleman)

v  Narcissistic Leaders: The Incredible Pros, the Inevitable Cons (Michael Maccoby)

v  Leadership That Gets Results (Daniel Goleman)

v  Getting the Attention You Need (Thomas H. Davenport and John C. Beck)

v  The Successor’s Dilemma (Dan Ciampa and Michael Watkins)

v  The Rise and Fall of the J. Peterman Company (John Peterman)

v  Why Should Anyone Be Led by You (Robert Goffee and Gareth Jones)

v  Leading Through Rough Times: An Interview with Novell’s Eric Schmidt (Bronwyn Fryer)

The Harvard Business Review Paperback Series

The series is designed to bring today’s managers and professionals the fundamental information they need to stay competitive in a fast-moving world. From the preeminent thinkers whose work has defined an entire field to the rising stars who will redefine the way we think about business, here are the leading minds and landmark ideas that have established the Harvard Business Review as required reading for ambitious businesspeople in organizations around the globe.

 

Other books in the series

Harvard Business Review Interviews with CEOs

Harvard Business Review on Brand Management

Harvard Business Review on Breakthrough Thinking

Harvard Business Review on Business and the Environment

Harvard Business Review on the Business Value of IT

Harvard Business Review in Change

Harvard Business Review on Corporate Governance

Harvard Business Review on Corporate Strategy

Harvard Business Review on Crisis Management

Harvard Business Review on Decision Making

Harvard Business Review on Effective Communication

Harvard Business Review on Entrepreneurship

Harvard Business Review on Finding and Keeping the Best People

Harvard Business Review on Innovation

Harvard Business Review on Knowledge Management

Harvard Business Review on Leadership

Harvard Business Review on Managing High-Tech Industries

Harvard Business Review on Managing People

Harvard Business Review on Managing Uncertainty

Harvard Business Review Managing the Value Chain

Harvard Business Review on Measuring Corporate Performance

Harvard Business Review on Mergers and Acquisitions

Harvard Business Review on Negotiation and Conflict Resolution

Harvard Business Review on Nonprofits

Harvard Business Review on Organizational Learning

Harvard Business Review on Strategies for Growth

Harvard Business Review on Turnarounds

Harvard Business Review on Work and Life Balance

Friday, March 16, 2012 @ 05:03 AM
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RESPONSIBLE RESTRUCTURING

CREATIVE AND PROFITABLE ALTERNATIVES TO LAYOFFS

WAYNE F. CASCIO

BERRETT-KOEHLER PUBLISHERS                2002

 

Back cover

DOWNSIZING IS NOT THE ANSWER

RESPONSIBLE RESTRUCTURING IS

Research proves that companies that downsize are not more profitable than those that don’t. Wayne Cascio shows that it makes good business sense to restructure responsibly to avoid downsizing and instead regard employees as assets to be developed rather than as costs to be cut.

Cascio explodes thirteen common myths about downsizing, detailing its negative impact on profitability, productivity, quality, and on the morale, commitment, and even health of survivors. He illustrates his points with real-world examples of successful approaches to responsible restructuring by such firms as Charles Schwab, Motorola, Southwest Airlines, and many others.

Responsible Restructuring provides specific, step-by-step advice on what to do and what not to do when developing and implementing a restructuring strategy that, unlike layoffs, will leave your organization stronger and better able to face the challenges ahead.

“At last, a clear and cogent business case for not laying off large numbers of employees when profits go down. Wayne Cascio blends vivid case examples and careful financial analysis to show why downsizing may be counter-productive, even when economic times are tough. A must-read for any executive who wants to be prepared to cope with tough times.”

Joanne Martin, Merrill Professor of Organizational Behavior,

Graduate School of Business, Stanford University

“Knowledge businesses depend on the engagement of their people to innovate and grow. Cascio makes the point, with compelling evidence, that the responsible management of restructuring can sustain, if not enhance, this level of engagement. Clearly, the more common practice of far less responsible behavior can have a devastating impact on the future of the enterprise. This book provides the needed guidance to know the difference and to take an informed path.”

Debra Engel, former Senior Vice President,

Corporate Services, 3Com

Responsible Restructuring is a thoughtful, responsible, and necessary outline for management at all levels of corporate America. Professor Cascio has, with a short, but powerful book, issued a common-sense blueprint for restructuring in today’s rapidly changing business world.”

Eugene K. Anthony,

Retired U.S. Administrative Law Judge

Front cover

Wayne Cascio draws on the results of an 18-year study of S&P 500 firms to show that firms that restructure through downsizing are not more profitable than those that don’t, and often end up hurting themselves in the long run. Responsible Restructuring proves that it makes good business sense to restructure responsibly, treating employees as assets to be developed, so that they can be in a better position to help the organization achieve its goals. Cascio uses real-life examples from companies such as Compaq, Cisco, Reflexite, and others to illustrate successful approaches to responsible restructuring. Practical tips and step-by-step advice show readers how to develop a responsible plan for restructuring, and how to implement it effectively to make their organizations stronger while positioning them to face the challenges of the future.

“For business, the ‘bottom line’ is usually economic. But as Wayne Cascio shows, it is the human bottom line that is critical for achieving economic goals. Filled with sharp insights and clear guidelines, this book is a must-read for anyone concerned about the future well-being of the work-place.”

Christina Maslach, Ph. D.,

Professor of Psychology and Vice Provost,

University of California, Berkeley

About the author

Wayne F. Cascio has written extensively about employment downsizing and restructuring, and has consulted with a wide variety of firms on six continents. He is past chair of the Human Resources Division of the Academy of Management, past president of the Society for Industrial and Organizational Psychology, and is currently a professor of management at the University of Colorado-Denver.

Preface

This book is about changing manager’s perceptions of employees from costs to be cut to assets to be developed. Almost two million American jobs were lost in 2001. In many cases, these job losses represented conscious decisions by managers to reduce the size of their workforces through layoffs or selling off unprofitable assets. In others, it almost surely was the result of “slash-and-burn” tactics that simply copied what competitors were doing.

Yet not all companies follow these approaches. This book highlights creative and profitable alternatives that some companies take in their approaches to restructuring and cutting costs. Those approaches are termed “responsible restructuring.” The book shows that, especially in knowledge-based organizations, cutting people can often be disastrous, except as a last resort.

Consider this fact. Over the long term, any effort to develop an organization will encounter economic swings both up and down, as well as changes in markets, customers, products, services, and technology. I have found that “preventive planning” is a key difference between organizations that can deal with such changes in a systematic, orderly way, versus those that resort to knee-jerk reactions in order to respond swiftly (often through mass layoffs). Companies like Reflexite and Southwest Airlines (described in Chapters 5 and 6, respectively) are good examples of preventive planners. Each has built a plan for restructuring into the overall economic plan for its business.

  • This book builds on the seminal publication I did in 1995 for the United States Department of Labor, entitled Guide to Responsible Restructuring.

What became obvious to me was that companies differed in terms of how they viewed their employees:

Employees as costs to be cut. These are the downsizers. They constantly ask themselves, “What is the minimum number of employees we need to run this company? What is the irreducible core number of employees the business requires?”

Employees as assets to be developed. These are the responsible restructurers. They constantly ask themselves, “How can we change the way we do business, so that we can use the people we currently have more effectively?”

The downsizers see employees as commodities – like microchips or lightbulbs, interchangeable, substitutable, and disposable, if necessary. In contrast, responsible restructurers see employees as sources of innovation and renewal. They see in employees the potential to grow their businesses. Chapter 1 highlights these differences, puts the issue of restructuring into broad perspective, and examines the consequences of treating employees poorly versus the payoffs from treating them well.

Chapter 2 presents the results of an analysis of the financial consequences of alternative restructuring strategies used by 500 firms (Standard & Poor’s 500, or the S&P 500) from 1982 to 2000. The S&P 500 is one of the most widely used benchmarks of the performance of U.S. equities. The study addressed two questions: “Are firms that downsize more profitable than those that don’t, or more profitable than other firms in their own industries, in the year of the downsizing, as well as up to two years later?” and “Over the same time period, are stockholders better off investing in a portfolio of companies that downsize, as opposed to investing in companies that don’t?” The answer to both questions is no. This is why it is reasonable to question the efficacy of downsizing as the preferred approach to restructuring, and to examine alternative approaches.

Chapter 3 explodes 13 myths about employment downsizing and presents the actual facts, based on systematic research. The myths address issues such as the profitability and productivity effects of employment downsizing; its effects on quality as well as on the morale, workload, and commitment of survivors; the security of jobs at firms that are doing well; and the health consequences of layoffs.

Chapter 4 presents the case for restructuring and the introduction of “high-performance work practices.” The latter include practices such as skills training and continuous learning, information sharing, employee participation in the design and implementation of work processes, flattened organizational structures, labor-management partnerships, compensation linked to employee skills and organizational performance, and customer satisfaction – as defined by customers. The chapter presents compelling evidence to support the conclusion that high-performance work practices have important, meaningful effects on a firm’s financial and nonfinancial performance indicators and that the most effective employment relationships are those in which open-ended inducements provided by employees are balanced by open-ended contributions from employees.

Chapter 5 presents 10 alternative approaches to responsible restructuring, using as illustrations Charles Schwab & Co., Compaq Computer, Cisco, Accenture, Motorola, Reflexite, Intel, Minnesota Mining and Manufacturing Company (3M), ChevronTexaco, Acxiom, Sage Software, Louisiana-Pacific Corporation, Philips Electronics Singapore, and Procter & Gamble. The chapter describes the specific practices these firms use to demonstrate their commitment to their people as assets to be developed rather than as costs to be cut. Even when cuts are necessary, firms such as these use practices that promote goodwill and loyalty, both among those who leave as well as among those who stay.

Chapter 6 highlights a small group of firms, public as well as private, large as well as small, that have implemented no-layoff policies, and it describes specific employment and business practices at three no-layoff companies: Lincoln Electric, SAS Institute, and Southwest Airlines. The chapter emphasizes that there is virtue in the stability of employment and that there is a no-layoff payoff.

Chapter 7 is a capstone chapter that illustrates what to do – and what not to do – when restructuring responsibly. It points out common mistakes that companies make when restructuring, along with advice on how to avoid those mistakes. It is a step-by-step guide to responsible restructuring that builds on all of the research and practical experiences presented elsewhere in the book.

Wayne F. Cascio

Golden, Colorado

June, 2002

Thursday, March 15, 2012 @ 08:03 AM
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LEADERSHIP AND THE QUEST FOR INTEGRITY

JOSEPH L. BADARACCO, JR. & RICHARD R. ELLSWORTH

HARVARD BUSINESS SCHOOL PRESS           1989

 

Back cover

“In its unique synthesis of practical experience and sound conceptual analysis, this book will provide stimulus, insight, and vision even to the accomplished and successful executive.”

Peter F. Drucker

Front cover

What distinguishes leaders from ordinary managers? The conventional answers are charisma, skill at professional management, or the ability to change one’s style to fit the situation.

This book takes a different stance, one that will challenge your personal assumptions about leadership. Drawing on extensive interviews with nationally recognized CEOs, Joseph L. Badaracco and Richard R. Ellsworth explain how certain prejudices can guide managers through the complex, rapidly changing world in which they work. In the opening chapters, they describe three distinct philosophies of leadership: political leadership, directive leadership, and values-driven leadership. Each is a consistent set of ideas about human nature, organizations, and the ways leaders should handle their daily work. But these philosophies contradict each other, forcing you to confront and rethink your own beliefs about leadership.

The conflicts among the philosophies also highlight classic managerial dilemmas – vexing problems that managers face everyday. Should a problem be solved through confrontation or compromise? When setting goals, is clarity or flexibility more important? To what extent should a decision reflect top-down or bottom-up influence? When is the way a problem is resolved more important than the solution itself? When should a leader respond to tangible, immediate pressures, or to less certain, intangible considerations?

In the second part of the book, the authors show that resolving these dilemmas is at bottom a matter of integrity: a daily quest for consistency among one’s personal beliefs, vision for an organization, and behavior. Managers who approach these issues with courage and with certain prejudices – that is, biases to handle these problems in particular ways – are on the surest path to leadership.

The executives interviewed include the current or former chief executive officers of Citicorp, Colgate-Palmolive, Conoco, Du Pont, Johnson & Johnson, Teradyne, and Time Inc. The practical experiences they share and the insights that Leadership and the Quest for Integrity provides give invaluable guidance to managers who must deal with the messy realities and trade-offs of today’s business world.

About the authors

Joseph L. Badaracco, Jr. is Associate Professor of Business Administration at Harvard Business School. Richard R. Ellsworth is Associate Professor of Management at the Claremont Graduate School.

PART I: LEADERSHIP PHILOSOPHIES

Introduction

Why is it so hard for managers to create the kind of teams, departments, and companies that they want? Managers know what an ideal organization is. Its goals are clear, it innovates, attracts high-caliber talent, challenges them with high standards, and promotes on the basis of merit. The ideal organization is immune to bureaucracy. It is ethical and inspiring. Its economic performance is outstanding.

Few managers live and work in this ideal, ethereal realm. For most of them, daily work is a messy reality of trade-offs and dilemmas. The reason is simple. The problems and questions that reach senior managers usually cannot be answered by specialized techniques or skills. Otherwise, they would have been delegated to someone else. In real organizations, the most difficult, anxiety-provoking, and dilemma-ridden problems rise to the top.

In this world of gray areas and judgment calls, managers need guidance – some way of resolving dilemmas – in order to build the kind of organization they want. This book provides such guidance, for it is a book about leadership. It answers the question of what distinguishes the men and women who create extraordinary organizations from workaday professional managers. Managers who build records of achievement do so through the ways in which they resolve dilemmas. These are difficult issues of thought and action that test all managers and separate leaders from capable, dependable managers. They also distinguish bright, idea-driven people who merely dream from hands-on leaders who figure out how, when, and whether something should be done, and then do it.

We argue that managers are much more likely to excel if they approach their dilemmas with certain prejudices. We use “prejudice” in its literal sense. That is, we believe managers should approach dilemmas with preconceived biases toward handling them in certain ways. The rationale for these prejudices is a quest for integrity, an effort that is at once moral, philosophical, and practical – for it strives to achieve coherence among a manager’s daily actions, personal values, and basic aims for his or her organization.

This book differs greatly from much of the conventional wisdom on leadership and management. Many people believe that leadership is essentially a matter of charisma – a rare, elusive, transforming characteristic that sets leaders apart and impels others to follow them. This view is not false, but it is sorely inadequate and misleading. If leadership rests on a barely describable trait of a handful of men and women, then others must resign themselves to simply plodding forward in their appointed tasks. Worse, reducing leadership to charisma ignores the facts. The vast majority of business leaders have succeeded, not through charisma, but through experience, judgment, boldness, tenacity, and hard work. By itself, charisma is neither necessary nor sufficient for business leadership.

  • Another common view is that training in professional management can help managers achieve outstanding results. This idea waxes and wanes.
  • The performance resulting from professional management has often proved disappointing. Instead of leading to outstanding performance, its adoption has paralleled our competitive decline.

Each year, more than 60,000 MBAs graduate, thousands of managers complete executive education programs, business books detailing the latest techniques climb near the top of bestseller lists, companies spend billions of dollars on consulting fees, and thousands of executives migrate among companies. As a result, management techniques are rapidly transferred within an increasingly fluid market – and the advantage gained from applying the latest techniques is, at best, transient.

  • In their preoccupation with technique, many professional managers and business academics have made management so complicated that they miss some obvious yet critical aspects of business leadership.
  • The extraordinary success of In Search of Excellence – one of the bestselling books of all times – is powerful evidence of a certain hollowness in the notion of professional management.
  • The book’s enormous sales were a populist revolt against management theoreticians, academics and professionals.
  • Management technique is useful, sometimes critical, but it is no surrogate for leadership.
  • Along with charisma and professional management, we reject a third commonplace view of outstanding management. It may be summarized in three words: “It all depends.”

In the end, there is a single powerful reason why charisma, professional management, and style are inadequate ways for managers to approach and resolve the dilemmas they face. Resolving dilemmas involves a person’s philosophy of management. Whether they believe it or not, all managers have them. These philosophies are tacit, not explicit. The philosophies involve fundamental assumptions about human nature, about people in organizations, about the work of managers, and the kind of activities that lead to outstanding results. Like a geological deposit, these tacit philosophies build up over many years through the experiences and influences that shape a person’s life. Few managers stop, reflect on, and make explicit their philosophies of management and leadership. But these deep assumptions influence almost everything they do.

The first part of the book describes three of the most common philosophies of management. Each is an internally consistent set of assumptions about human nature, people in organizations, the work of managers, and the ways leaders should work day-by day. Each philosophy reflects traditions of thought that reach back several centuries as well as contemporary ideas raised frequently in the business press and in the MBA classrooms. Yet the philosophies clash with each other and offer conflicting advice to managers.

As you read these philosophies, you will find that they conflict with each other and raise two critical, practical questions: Does one or another of the philosophies offer better guidance to managers? How can the philosophies help managers to resolve the dilemmas they face?

In Part II, we answer these questions by analyzing five of the most important dilemmas that managers face. The first is the tension between general, flexible, open-ended approaches to problems and precise, clear approaches. The second is the top-down and bottom-up influence on important decisions. To what extent, for instance, should managers intervene in their subordinates’ activities? What role should they allow others to play in making decisions?

The third dilemma is the conflict between substance and process. Concentrating on substance means working directly to get the right answer to a problem. Concentrating on process means working on the right way of getting the answer.

The fourth dilemma, between confrontation and compromise, arises whenever conflicts occur in an organization – in other words, daily. Almost anything can be the focus of a conflict: minor issues such as who gets what office as well as major ones such as setting strategic goals.

  • Because it takes so many different forms, the last dilemma is difficult to describe in a single, short phrase. Put most succinctly, it is the tension between tangibles and intangibles.
  • In Part II, we show that managers are much more likely to achieve exceptional results if they approach their dilemmas with certain fundamental prejudices.
  • The notion of “prejudices” acknowledges the intrinsic, inescapable messiness of many of the problems managers face.
  • The prejudices that we advocate in the last part of the book are practical guides to resolving the dilemmas we have described.
  • The notion of prejudices avoids two traps into which much of the writing about business management and leadership has fallen.
  • The first trap is trying to give specific, precise rules for outstanding management.
  • The second trap is oversimplification.

Why are the prejudices we advocate the right approach? What makes them the best guide for resolving dilemmas and for thinking through the conflicting philosophies of leadership that pull managers in different directions? The answer to this question lies in understanding what integrity means for managers.

The word “integrity” is familiar but its meaning is complex. In fact, all of Part II is an explanation of the role that integrity plays in leadership. In essence, integrity is consistency between what a manger believes, how a manager acts, and a manager’s aspiration for his or her organization. But not any consistency will do. An incompetent or corrupt manager can be perfectly consistent. But certain beliefs, actions, and aspirations are much more likely than others to lead to outstanding results. The prejudices we advocate reflect these beliefs. Actions based on the prejudices simply translate these beliefs into practice – in the uncertain, often turbulent life of managers. In short, prejudices are a way of making integrity alive, powerful, and effective in a world of dilemmas and conflicting philosophies of management.

  • This argument is based upon a wide range of evidence and ideas.
  • We tested and refined our conclusions through extensive discussions with seven senior executives, each widely respected for records of achievement.

All of them had reflected on the issues raised and that is why they all contributed so greatly to the ideas in this book. Above all, they helped convince us that thinking about leadership in terms of dilemmas, prejudices, and integrity is a powerful source of guidance for managers who want to make a difference.

Chapter 1: Political Leadership

Chapter 2: Directive Leadership

Chapter 3: Values-Driven Leadership

 

PART II: INTEGRITY AND THE DILEMMAS OF LEADERSHIP

Introduction

Chapter 4: Clarity and Precision versus Flexibility

Chapter 5: Top-Down versus Bottom-Up Influence

Chapter 6: Substance versus Process

Chapter 7: Confrontation versus Compromise

Chapter 8: Tangibles versus Intangibles

Chapter 9: Integrity in Action

Bibliography

Index

Saturday, March 10, 2012 @ 06:03 AM
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LEADING WITH PURPOSE

THE NEW CORPORATE REALITIES

RICHARD R. ELLSWORTH

STANFORD BUSINESS BOOKS              2002

www.sup.org

 

Front cover

“This thoughtful and incredibly ambitious work tackles head-on the enormously important issue of why the corporation exists. Ellsworth creates the kind of provocative framework and well-articulated set of concepts that would drive an intense and powerful classroom learning experience in courses of general management, strategic management, and business policy in business schools everywhere.”

Christopher A. Bartlett, Harvard Business School

This book explores corporate purpose – a company’s expressed overriding purpose for existing – and its effect upon strategy, executive leadership, employees, and, ultimately, on competitive performance. Sharply challenging the conventional wisdom that corporations should be dedicated to shareholder wealth creation, the author presents a compelling argument that the path to competitive advantage and outstanding long-term financial performance lies instead in a customer-focused corporate purpose.

This book is in four parts. Part I shows how corporate purpose exerts a powerful effect on strategy, management, and the meaning employees derive from their work. A customer-focused purpose harmonizes these critical factors and enables leaders to push strategic thinking deeper into the organization and at the same time to grant employees a greater degree of autonomy. In contrast, a goal of maximizing shareholder wealth sows the seeds of conflict among the market-oriented purpose, product-focused strategies, and the individual values of employees.

Part II critiques the logic of “value-based management” and the relationship of the firm to the equity markets. It explores the validity of extending traditional concepts of property rights to share ownership, concluding that the separation of stock ownership from the responsibility for, and managed control over, corporate actions makes traditional property rights arguments inapplicable to the underlying assets of a corporation.

Part III examines the functioning of corporate purpose in a global economy. When a firm operates globally, purpose needs to retain its motivational power across national boundaries, which a shareholder-focused purpose does not do.

Part IV explores the implications of corporate purpose for leaders, arguing that infusing an organization with a worthy purpose is an essential responsibility of leadership. Purpose is the foundation for the shared values that define organizational character, raise moral aspirations, and enhance performance. Drawing upon a wide range of thought from the world of business as well as from historical studies, cultural anthropology, philosophy, theology, and psychology, Leading with Purpose is sure to be an essential text as businesses move into the 21st century.

About the author

Richard R. Ellsworth is Professor of Management at the Peter F. Drucker Graduate School of Management at Claremont Graduate University. He is co-author (with Joseph L. Badarocco, Jr.) of Leadership and the Quest for Integrity.

Preface

This is a book about corporate purpose – the organization’s raison d’être – and its effect upon competitive performance, individuals, and executive leadership. It was written for practicing managers and serious students of management who seek to understand the roots of outstanding competitive performance and the leadership required to achieve it.

The concept of corporate purpose has long been central to the ideas of classic and contemporary management thinkers and scholars of leadership, such as Chester Barnard, Christopher Bartlett, Warren Bennis, James MacGregor Burns, Jim Collins, Peter Drucker, Charles Handy, Jerry Porras, Philip Selznick, and Peter Senge. However, despite its importance, corporate purpose has yet to be examined in depth. This book is designed to fill this void.

While the classic management authors generally agree that the corporation’s primary purpose is to produce goods and services, not to maximize profits, most recent authors do not argue one purpose is superior to others. This book does and provides the strategic and human reasons why – supported by examples. The book’s range is broad – spanning from purpose’s effect on the meaning derived from work, strategy, and the way of managing, to the competitive consequences of different ideologies among global competitors, to the philosophical, historical, and cultural roots and psychological effects of different purposes. This comprehensive perspective is designed to aid managers in preventing myopic thinking regarding the purpose of their corporations.

This book represents a confluence of two streams of ideas emanating from my teaching, research, and work as a corporate executive. In essence, I have been concerned about the issues addressed in this book for thirty years. From my work as a corporate treasurer and then as a general manager of a group of business units, I became increasingly aware of how divergent the worlds of the capital markets and product markets can be, and how readily management-imposed financial policies can constrain competitive strategy. From my work on executive leadership, it became clear that central to outstanding leadership is the manager’s responsibility to define the organization’s purpose in such a way as to provide direction to strategy, to bring meaning to the work of others, to infuse the organization with value, and consequently to stimulate commitment and action. From my work on capital markets, financial policies, and competitive strategy, it became evident that there is often conflict between the policies and processes that internalize a purpose of maximizing shareholder wealth and the strategic actions required to provide customers with sustained value and to achieve long-term competitive superiority. Furthermore, the globalization of business has brought intensified competition from competitors who play by very different rules. Corporate purposes vary significantly across countries as differences in the institutional structure, culture and government policies shape the relationship between financial institutions and corporations.

The concerns that have propelled this book have intensified in recent years. Today too many companies give lip service to the customers being their number one priority and employees being their most valuable asset, yet they pursue a purpose of shareholder wealth maximization that subordinates the interest of customers to those of shareholders and treats employees as expendable means to these financial ends. This organizational schizophrenia results in a purpose focused on the capital market (shareholders), which often conflicts with strategies oriented toward product markets and with employees’ values. Consequently, many people experience difficulty finding meaning in their work, and most corporations are failing to realize their potential to make people’s lives better – the lives of the people who use their products, work within their boundaries, and invest in their future. For “employees” the deep longings of the human spirit – the desire for a life rich in meaning, passion, creativity, and a sense of belonging – are being left unsatisfied. The result is a hollowness of work.

Fortunately, pathfinding American firms have shown a better way: harmony and wholeness among a firm’s customer-focused purpose, strategy, and the values of individual employees unleash considerable human energy and creativity that significantly enhance performance. Their leaders recognize the moral dimension of purpose  and the need for courage to make the choices and set the priorities that create strong institutions, even when these acts run counter to prevailing conventional opinion. This book attempts to capture the essence of the thinking behind this pathbreaking way.

The book’s central thesis is that a customer-focused corporate purpose provides the key to outstanding performance and to enhancing the lives of those the company serves and of those who serve it. This will be even truer in the intensely competitive knowledge-based markets of the future. At a time when allegiance to shareholder wealth creation is reaching fad proportions, this book provides compelling strategic, managerial, and moral arguments for moving from a shareholder-focused corporate purpose to one focused on customers.

My over twenty years of experience in teaching at the Harvard Business School and the Peter F. Drucker Graduate School of Management at Claremont Graduate University – particularly teaching executives – have reinforced these concerns. I have witnessed how these issues generate vigorous debate and deeply move people as few other management issues do. Managers resonate strongly with these ideas and conclusions, and they long to find environments in which their work can become more meaningful.

It is my hope that this book will enable readers to lead more effectively through a deepened understanding of why the substantive content of corporate purpose makes such a difference. I hope they come away with a richer appreciation of the reasons alternative formulations of purpose have significantly differing competitive impacts; with an enhanced ability to judge the merits of the arguments underlying each of these different purposes and to appreciate their historical and philosophical roots; and with the ability to constructively challenge the many unquestioned, but erroneous, conventional wisdoms supporting the current prevalent American ideology and to comprehend the often subtle link between valued purposes, meaningful work, motivation, and knowledge creation. Ultimately my hope is that as leaders readers will learn how to develop a sense of purpose within their organization that unleashes human creativity and initiative in the service of a noble cause.

The book is divided into four parts. Part I examines how the substance of an organization’s purpose makes a profound difference to a firm’s competitive performance (Chapter 1) and to the lives of people in the organization. The reasons are grounded in the meaning individuals derive from work that serves valued ends (Chapter 2) and the powerful effect of purpose on strategy (Chapter 3) and the way of managing (Chapter 4). Corporate purpose’s importance rests in the fact that it both expresses the organization’s most fundamental value – why it exists – and is the end to which strategy is directed. Furthermore, the meaning people find in serving a purpose that embodies a noble ideal increases their commitment and loyalty and, as the boundaries between the self and the cause blur, enhances knowledge creation. In a world in which the coin of competition is knowledge, this linkage has profound strategic implications.

To better understand the arguments for a purpose of shareholder wealth maximization, Part II critiques the logic of “shareholder value-based management” and the relationship of the firm to the equity markets (Chapter 5). The validity of extending traditional concepts of property rights to share ownership is explored in Chapter 6, concluding that the separation of stock ownership from the responsibility for and managerial control over corporate actions makes traditional property rights arguments inapplicable to the underlying assets of a corporation. The traditional argument for a share-holder-dominated purpose is based on the assumption it furthers individual autonomy. But in today’s corporation, individual fulfillment and the realization of the ideals of individualism are profoundly influenced by the firm’s  purpose, as shown in Chapter 7. But the people whose sense of self are most affected by the corporation are the employees and customers, rather than the shareholders. Therefore, a constructive individualism rooted in a meaningful customer-focused purpose is advocated – one that enhances self-fulfillment and the creativity and initiative that are the wellsprings of innovation. By challenging many of the conventional wisdoms surrounding the shareholder wealth maximization ideology, the book aids readers in developing their own well-grounded philosophy.

Part III examines the implications of corporate purpose in a global economy, where companies must compete with firms with fundamentally different views of purpose that reflect distinct national histories and philosophical ideas. Chapter 8 explains the realities of U.S. international competitiveness, while Chapter 9 explores the cultural, historical, and philosophical roots of the ideologies that shape the purposes of companies in Germany, Japan, Korea, and other Asian countries. Globalization vastly expanded the playing field, creating a Darwinian struggle for dominance among free-market ideologies. This section helps the reader understand the essence of this struggle and the importance in a global arena of the ability of purpose to retain its significance and motivational power across national boundaries (which a shareholder-focused purpose fails to do).

Part IV explores the implications of corporate purpose for leaders, arguing in Chapter 10 that infusing an organization with a worthy purpose is an essential responsibility of leadership – an act that is at once strategic and moral. In today’s environment, it is often an act of courage. As the organization’s ultimate end value, corporate purpose provides the foundation for the shared values that define organizational character, raise moral aspirations, and enhance performance.

In addressing these issues, ideas are integrated from a wide range of thought: from strategy, management, and executive leadership to history, cultural anthropology, philosophy, theology, and psychology. These ideas are woven together with examples from leading companies to demonstrate the superior value of a customer-focused purpose.

Acknowledgments

Introduction: The New Realities of Corporate Purpose

 

PART I: INFLUENCES ON MEANING, STRATEGY, MANAGING, AND PERFORMANCE

Chapter 1: Purpose and Performance: Leveraging the Essence of a Corporation

Chapter 2: Corporations and Individuals: Creating Meaning and Competitiveness

Chapter 3: Strategy: Defining Corporate Mission, Priorities, and Direction

Chapter 4: Managing: Transforming Purpose into Action

 

PART II: CAPITAL MARKETS, PROPERTY RIGHTS, AND THE INDIVIDUAL

Chapter 5: Capital – Market Relationships: The Myths of Shareholder Wealth Maximization

Chapter 6: Property Rights: The Shareholders’ Rights and Responsibilities

Chapter 7: Individualism: America’s Competitive Advantage

 

PART III: COMPETING PURPOSES IN THE GLOBAL MARKETPLACE

Chapter 8: Purpose and Global Competitiveness: The Realities

Chapter 9: America’s Rivals: Changing the Rules of Competition

 

CONCLUSION: THE LESSONS FOR LEADERSHIP

Chapter 10: Infusing Purpose: A Moral and Strategic Responsibility of Leadership

Notes

Bibliography

Index

 

Monday, March 5, 2012 @ 04:03 AM
posted by admin

THINK AGAIN

WHY GOOD LEADERS MAKE BAD DECISIONS

AND

HOW TO KEEP IT FROM HAPPENING TO YOU

SYDNEY FINKELSTEIN, JO WHITEHEAD, ANDREW CAMPBELL

HARVARD BUSINESS PRESS     2008

 

Front cover

We’ve all watched smart, experienced leaders make flawed – even catastrophic decisions. Some keep believing they have made the right choice, even when the disastrous consequences are staring them in the face. What is the root cause of these failures? How can the risks be reduced? And how can you be sure that you’re making the right decisions?

In this fascinating and instructive book, Sydney Finkelstein, Jo Whitehead, and Andrew Campbell – each a distinguished expert on strategy and decision making in corporations – show how the usually beneficial processes of the human mind can become traps: experience and emotion can distort our judgment, even while we’re striving for objectivity, and we fail to spot errors in our thinking.

Think Again provides a new model to help make better decisions. With vivid stories ranging across industries and disciplines, the authors deconstruct bad decisions and identify the forces that have produced them. They go on to show you how to recognize the conditions – red flags – under which good decision making is most likely to falter, and offer a way of selecting safeguards that reduce the risk and ensure better outcomes.

There is no guarantee for perfect decisions. But with Think Again, you can understand the hurdles between you and success, counterbalance their effects, and make better decisions – every day.

 

Introduction

Decision making lies at the heart of our personal and professional lives. Every day we make decisions. Some are small, domestic, and innocuous. Others are more important – decisions that affect people’s lives, livelihoods, and well-being. Inevitably, we make mistakes along the way. We are only human – even when we are at work. Indeed, the daunting reality is that enormously important decisions made by intelligent, responsible people with the best information and intentions sometimes go wrong.

Good leaders make bad decisions. Even great leaders can make bad decisions.

President Kennedy is famous for his blunder over the Bay of Pigs. President Hoover failed to inflate the economy after the great crash of 1929. Margaret Thatcher, the British prime minister, championed a “poll tax” that contributed to her being ousted by her own party. Paul Wolfowitz, the former U.S. deputy secretary of defense, was asked to resign as president of the World Bank because of a pay settlement related to his partner, who also worked at the bank.

And it’s not just politicians and public servants who get it wrong; business leaders, too, are prone to misjudgment. Juergen Schrempp, CEO of Daimler-Benz, led the merger of Chrysler and Daimler-Benz against internal opposition. Nearly ten years later, Daimler was forced to virtually give Chrysler away in a private equity deal. Lee Kun Hee, CEO of Samsung, pushed his company into a disastrous investment in automobiles. As losses mounted, he was forced to sell the car division for a tenth of the billions he had invested. An Wang, founder of the electronics company Wang, insisted on a proprietary operating system for his company’s personal computer, even after it was clear that the IBM PC would become the industry standard. The company is now history.

Whether the decision is a personal one, as in the case of Wolfowitz, or of global importance, as in the case of the U.S. government reaction to the financial crisis in the late 1920s, mistakes happen. But why do good leaders make bad decisions? And how can we reduce the risk of its happening to us?

 

The decisive heart

To find out, we traveled to the heart of decision making in organizations of all shapes and sizes throughout the world. Each of the authors brought his particular perspective to the problem. As one of the world’s leading researchers into corporate strategy, for example, Andrew has been privy to some of the most important decisions made in some of the world’s biggest companies. While, in his research – captured in his best-selling book, Why Smart Executives Fail – Sydney has examined the intricacies of failure. Finally, from his doctoral research on decision making and his years with The Boston Consulting Group, Jo has a unique combination of intellectual rigor and practical experience. What linked all our work and brought us together was a fascination with not just why bad decisions are made, but also what can be done to mitigate the dangers.

This unique combination of backgrounds and perspectives has been supplemented by our joint research. We began by assembling a database of decisions that went wrong. Let’s be clear: we were not looking for decisions that simply turned out badly. We were looking for decisions that were flawed at the time they were made. This is an important point. It isn’t that with twenty-twenty hindsight we identified these decisions as flawed. We sought out decisions in which any clearheaded analysis at the time would have concluded that it was the wrong decision.

Of course, many bad outcomes are due to bad luck or to taking calculated risks. In the business and political worlds in particular, sensible decisions based on considered thinking can turn out badly thanks to the unavoidable risks involved. Sometimes people are just unlucky.

As you can imagine, trying to distinguish between flawed decisions and calculated risks that turned out badly is not easy. For each, we made an assessment. Given the information available at the time, did we think that a reasonably competent person would have made the same decision?

We also looked for dissenting views in the decision-making process. The existence of contrary views is not proof that a decision is wrong. Many decisions have contrary views. But if there were no contrary views at the time, we excluded the decision from our rapidly expanding collection.

We quickly found there are an awful lot of bad decisions out there! Indeed, in unfamiliar circumstances, such as businesses entering new markets or politicians coping with new challenges, flawed decisions abound. We did not find it hard to identify 83 of them (appendix I lists the entire data base of decisions we studied).

We are not claiming that we have a unique ability to spot flawed decisions. Indeed, some of the decisions we examine may be considered by others as wise choices that turned out badly. Fortunately, our argument does not depend on whether our examples are correctly categorized. Our understanding of why flawed decisions are so common comes from the work that has been done by neuroscientists and decision scientists to understand how the brain works when faced with a set of circumstances that require a decision.

Flaws of the jungle

So what did we find in our quest to understand why capable people make errors of judgment? The answers were simpler and more powerful than we were expecting.

Two factors are at play in a flawed decision: an individual or a group of individuals who have made an error of judgment, and a decision process that fails to correct the error. Both have to be present to produce a bad decision. This was an important realization. A bad decision starts with at least one influential person making an error of judgment. But normally, the decision process will save the day: facts will be brought to the table that challenge flawed thinking, or other people with different views will influence the outcome. So the second factor that contributes to a bad decision is the way the decision is managed: for whatever reason, as the decision is being reached, the erroneous views are not exposed and corrected.

As a result, we began to focus our research on how our brains make decisions. Part 1 describes how the brain has been wonderfully designed for decision making – but also how it can be tricked into false judgments.

Part 2 describes the four conditions under which flawed thinking is most likely to happen. We call these red flag conditions because they provide a warning that when these conditions exist, even an experienced decision maker may get it wrong. Complex decisions, involving interpretation and judgment, are difficult to get right. You need debate – but how do you know when you or the other party is arguing from a biased position? You need consensus – but how do you know when your consensus is really groupthink? What is needed is a diagnostic for knowing when the risk of being wrong is at its highest – when the decision makers need to step back and “think again.” Our red flag conditions are a simple, but not simplistic tool to help decision makers to know when to pause for breath – when you need to take special steps to make sure that a decision does not go off the rails.

Part 3 describes what you can do about it. Unlike other writers in this increasingly popular field we believe that it is impractical for us to correct our own mental processes. The brain’s way of working makes this solution particularly difficult. Hence, when there are red flag conditions, we recommend safeguards that are external to the individual. We describe four types of safeguard; each helps to strengthen the decision process, so that the influence of distorted thinking is diluted or challenged.

  • Safeguards reduce the risk that red flag conditions will lead to a bad decision.
  • Safeguards need to be chosen not only with an understanding of the red flag conditions but also with knowledge of the people and the organization, as well as a healthy skepticism of too much bureaucracy.
  • Our red flags and safeguards framework not only helps defend against bad decisions, it also helps cut back on bureaucracy.
  • For decisions where there are no red flags, the decision process can be fast and simple.
  • For decisions with red flags, leaders can design appropriate safeguards that are more likely to be effective and less likely to demotivate or dehumanize the managers involved.
  • We are not recommending more process but more targeted process. In chapter 10 we give guidance on how to do this.
  • Further advice and ideas can be found on our Web site, www.thinkagain-book.com.

If we have one ambition for the book, it is to legitimize more discussion about red flag conditions and to energize people everywhere to feel comfortable raising issues of decision process design. The simple questions “Are there any red flags here?” and “Have we got a good process for this decisions?” should be as common as “What decision are we trying to make?” or “Who is making this decision?”

It won’t guarantee you never make a bad decision again – what book could? – but it will enable you to better understand why decisions go wrong, and help protect yourself and your colleagues from the inevitable errors of judgment you will make.

 

PART ONE: HOW YOUR BRAIN MAKES DECISIONS

Chapter One: In the Eye of the Storm

Chapter Two: Pattern Recognition

Chapter Three: Emotional Tagging

Chapter Four: One Plan at a Time

 

PART TWO: WHY DECISIONS GO WRONG

Chapter Five: Misleading Experiences

Chapter Six: Misleading Prejudgments

Chapter Seven: Inappropriate Self-Interest

Chapter Eight: Inappropriate Attachments

 

PART THREE: RED FLAGS AND SAFEGUARDS

Chapter Nine: Reducing Risks with Safeguards

Chapter Ten: Selecting Safeguards

Chapter Eleven: Leaders Make Good Decisions

 

APPENDIX I: Database of Cases

APPENDIX II: Database of safeguards

Notes

Index

About the Authors

Wednesday, February 29, 2012 @ 05:02 AM
posted by admin

THE WHISTLEBLOWER

CONFESSIONS OF A HEALTHCARE HITMAN

PETER ROST MD

SOFT SKULL PRESS                     2006

www.pgw.com

PART 1

About the author

Peter Rost was a vice president of marketing at Pfizer, the world’s largest pharmaceutical company. Now he reveals the drug industry’s shocking secrets.

“All that is required for evil to triumph is for good men to do nothing.”

Edmund Burke

A study of 233 whistleblower by Donald Soeken of St. Elizabeth’s Hospital in Washington, DC, found that the average whistleblower was a family man in his forties with a strong conscience and high moral values.

After blowing the whistle on fraud, 90% of the whistleblowers were fired or demoted. 27% faced lawsuits, 26% had to seek psychiatric or physical care, 25% suffered alcohol abuse, 17% lost their homes, 15% got divorced, 10% attempted suicide, and 8% were bankrupted. But in spite of all this, only 16% said that they wouldn’t blow the whistle again.

Prologue: Saturday, December 31, 2005

  • My wife didn’t look happy at all. “But this is a David vs. Goliath fight. And we’re going to win.”
  • “Pfizer could’ve fired me tight away when I spoke up. I took a big risk when I did that. I’m taking another big risk with this book.”
  • “People in the drug industry are going to talk about this book. You’ll never work again.”
  • “The complain I filed against Pfizer was sealed by the court, no one was allowed to know, not even Pfizer.”

 

Chapter 1: Vultures at the Gates

Everyone remembers where they were when they heard about the terrorist attack of September 11. Most know what they were doing when they first learned about the devastation and flooding after the hurricane in New Orleans. Those who are old enough can still picture the moment when they saw the first man walk on the moon. Those were life-altering events to a generation of people. Few people, however, will remember when the drug company Pharmacia disappeared. That is, except for the people working for this pharmaceutical corporation. For them, a day in July 2002 became etched in their minds more clearly than any of the events described above when they discovered that Pfizer would take over their company.

  • As a vice president of marketing at Pharmacia I was responsible not only for U.S. marketing of Genotropin, a human growth hormone, but also for global marketing of the same product.
  • I was far away when I learned that we were being bought by Pfizer. I dialed the office number on my cell phone to retrieve my voicemail messages.

 

The Surprise

  • The first message was from our CEO, Fred Hassan who had saved Pharmacia when he became CEO back in 1997.
  • Fred had moved Pharmacia’s headquarters from London to New Jersey, and consummated a dramatic, $37 billion merger with Monsanto, giving him Celebrex, a pain and arthritis drug for which Monsanto had signed a co-promotion deal with Pfizer.

This deal may also have sealed Pharmacia’s fate, since Pfizer has a penchant for devouring companies when the products they co-promote start selling too well. This was a major factor in Pfizer’s take-over of Warner-Lambert, which gave them Lipitor, a cholesterol-lowering agent that eventually created sales of $11 billion per year.

  • Fred’s stern message startled me. Pfizer had made a great offer, which would result in an almost 40% premium over Pharmacia’s current share price.
  • Pfizer had developed a fearsome reputation for what they did to employees of the companies they bought. They fired them.

 

Successful beyond belief

When Pfizer made the decision to buy Pharmacia, they were the most successful drug company in the entire pharmaceutical business. They had grown from$3 billion in sales in 1990 to $26 billion in 2001 – much faster than any other major drug company. Their U.S. sales force was number one in productivity, and the Pharmacia acquisition would vault them into the number one position in size, with $50 billion in sales.

  • Pfizer employees were considered by industry-watchers to be the most arrogant in the business.

 

Mounting concerns

  • Pharmacia’s employees had the Pfizer/Warner Lambert merger to look to as assign of things to come.
  • Fred Hassan appeared on television to say that he had taken Pfizer’s offer to Pharmacia’s board of directors who had accepted the offer.
  • He undoubtedly sensed the unease among his audience, because as he looked into the television camera he tried to convince everyone that we would be fine.

 

The bloodbath

  • In the year following the acquisition, Pfizer terminated 11,596 Pharmacia employees – more than half the U.S. employees. During the same period only 1,452 Pfizer employees were let go. Over the following two years Pfizer fired thousands more.

 

McKinnell’s choice

At this point in time, only one man really knew what would happen to Pharmacia’s employees. His name was Hank McKinnel, CEO of Pfizer, and he had a scary track record in this area.

  • We had two small boys, one of them only a year old, the other six. Things could get dicey if my job disappeared, so I knew I had to work hard on impressing the people from Pfizer.

 

Chapter 2: The Conquerors

  • Pharmacia didn’t feel like a stuffy old corporation, like many of its competitors. People were happy and energetic, frequently arriving as early as seven and often not leaving until the same time in the evening. In exchange for their efforts, these people were well taken care of.

 

Preparation for takeover

  • The positive atmosphere vanished quickly in the wake of the news of the take-over.
  • Pharmacia’s employees worked hard and willingly shared as much information as they could, hoping this would reassure and appease their future masters.
  • I participated as much as anyone in this exercise, though I couldn’t help but think of cattle on their way through a slaughter chute.

 

An uncomfortable question

On one memorable occasion, Pfizer’s entire senior team visited Parmacia. Fred Hassan, our CEO, opened up the floor to questions that hadn’t been prescreened. I wrote on my little white question card, “If you hadn’t agreed to a friendly acquisition, would this have been a hostile takeover?” As the question was read, Fred’s face froze, then darkened. “No comment,” he said abruptly, and pouted with his lower lip.

  • At a third meeting, when pressed with more pointed questions, she yelled to the packed room, “You should realize that it is Pfizer taking over you and not the other way round.”
  • The wolf had just dropped her sheep’s clothing.

 

An early offer

In December 2002, the first Pharmacia employees started getting job offers from Pfizer.

  • Isadora was, understandably excited when she heard that Pfizer was interested in her, but became concerned when she got her offer letter.
  • What she might not have realized was that Pfizer was a company where senior employees often had toiled for 10, 20, or 30 years with minimal raises, resulting in a pay that was 20% lower than what Pharmacia offered. Salary compression.
  • She did what any good businessperson would do; she e-mailed her prospective boss at Pfizer and asked a few polite questions.

 

Never ask questions

  • On Monday, January 13, 2003, Pfizer retracted their job offer.
  • Isadora was good, smart, and decisive. She knew that not only was she one of the best marketing people Pharmacia had ever hired, Pfizer really needed her if they wanted continuity in the launch preparations for this important new drug. And now, she was being canned because she asked questions?

 

Isadora’s response

She stayed cool and professional. In her mind, Pfizer had finally shown its true face, but she knew she mustn’t overreact. So she waited a couple of days before writing back to Harry Otter. She spoke her mind, and to make sure  everyone got the message, she copied a number of people.

Isadora didn’t hold back any punches. After having calmly recapped the events leading up to the retraction of her job offer, she couldn’t contain herself any more and wrote, “As I said, I respect decisions, even bad ones. At least they allow people to move forward. But my God, could you not have come to this determination earlier? How did this offer and retraction fiasco happen? You only want people who will jump blindly to you?”

  • The news of Isadora’s fate swept through Pharmacia like a prairie fire. Everyone was talking about the fact that if you ask questions when you get an offer from Pfizer, they will retract it.
  • It certainly reminded us of Fred’s words – and our fear – about “the other horror stories about what happened to Warner-Lambert.”
  • It is worth noting that Pfizer later went on to launch the drug Isadora was going to put on the market without help from anyone on her marketing team. The launch turned out to be a complete and utter disaster, with the drug not selling half of Pfizer’s forecasts.

 

Selling out

Meanwhile, according to a revised employment contract for top Pharmacia officers, filed December 20, 2002, with the SEC, Fred and his direct reports had agreed to an unsavory pact with Pfizer, promising not to hire any employees from Pharmacia in return for three years’ base salary and bonus. This meant that if our top management, including Fred, started work at another company, they wouldn’t be able to bring aboard any of their old colleagues or subordinates until such a person had left Pfizer, or until two years had passed.

  • Pharmacia’s managers were told they were forbidden to give references to employees who were leaving the company.
  • Abiding by this edict would make it all but impossible for anyone to get a new job.

I found it reprehensible that the people in charge of the company first negotiated golden severance packages for themselves and then stuck it to rank and file employees. So I decided to write a response to Adrian Hoffman, Pharmacia’s Senior Vice President of Human Resources. I told him that enforcement of this policy could result in employees being locked out of the job market. And I ended my e-mail message suggesting, “You can retract the policy on references. Or you can issue an additional policy, saying that Pharmacia and Pfizer forbid the use of any personal references when hiring new employees.”

After clicking on the “send” button, I printed out a copy of my letter and took it to my boss, Darren McAllister. He read it in silence, then looked up at me. He had only one question. “Did you already send this, Peter? He wasn’t smiling.

In the end, my letter had no impact on the “no reference” policy.

Chapter 3: The Art of Firing People

 

Tuesday, February 21, 2012 @ 03:02 AM
posted by admin

HANDBOOK FOR THE POSITIVE REVOLUTION

EDWARD DE BONO

PENGUIN BOOKS              1991

PART II

The Positive Revolution

A stool has three legs and is stable on rough ground. A chair with four legs is only stable on smooth ground. A revolution has to work under difficult conditions – everything is not always smooth.

The positive revolution has three supporting legs:

  1. Principles: The basic principles are the guidelines for thinking. The basic principles set the direction for thinking and for decisions. In the positive revolution we design rather than destroy and for ‘design’ there must be a direction.
  2. Methods: A painter uses a paintbrush to paint. A cook uses a frying-pan to cook. A carpenter uses a saw to cut wood. What are the methods and mechanisms of the positive revolution?
  3. Power: The positive revolution does not use the power of violence. It uses the power of perception, of information and of effectiveness. These powers can be used much more widely than violence.

 

The principles

There are five basic principles of the positive revolution:

  1. Effectiveness: Without effectiveness there are only dreams. Effectiveness means setting out to do something and doing it. Effectiveness is the ‘thumb’ on the hand, because without the thumb the hand is useless.
  2. Constructive: The direction of the revolution is positive not negative, constructive not destructive. This is represented by the index finger because that is the finger you use to point out the direction and the way to go.
  3. Respect: Respect covers the way you behave towards all other human beings. Respect covers human values and human feelings. A revolution is by people but also for people – so respect is essential. This is represented by the second finger because this finger is the longest finger of the hand and respect is the most important principle of all. If you cannot be positive towards fellow human beings what is the point of being positive?
  4. Self improvement: Every individual has the right, and duty, to make himself or herself better. This is both the energy of the revolution and also its purpose. A machine cannot make itself better but a human being can. This is the third finger. We do not notice this finger much – but it is there all the time. So self-improvement must also be there.
  5. Contribution: Contribution is the essence of the positive revolution. Not what you can expect or demand, but what can you contribute. If ‘contribution’ is so very important why does it just have the little finger on the hand? To remind us that we can contribute even if the contribution is very small. Eventually, small contributions add up to big effects.

 

Constructive

We must deal with the direction first because without a direction there is no revolution – just energy and grumbling.

  • Constructive means action, building, making things happen – but always in the positive sense.
  • Traditional revolutions are destructive. The positive revolution is constructive – there are things to be built.
  • The positive revolution says: ‘You have been playing a game which has not contributed enough; now there is a different games: do you want to use your talent to take part in the new game?’
  • Humour is a key part of the positive revolution.

 

Design

The positive revolution puts design instead of criticism. Instead of saying what is wrong with something we try to say: ‘How could this be done better?’

  • Design needs the creative and constructive thinking we never teach in schools or universities because we are too busy teaching knowledge, criticism and analysis.
  • As not every action is equally effective, we need to think carefully about the design of our actions.
  • Design is a way of focusing constructive energies on to a target. The consideration of alternatives, of objectives, of priorities and of resources available is all part of the design process.

 

Contribution

  • When you pick up a few pieces of paper in the street, how constructive are you being?
  • You are helping yourself by practicing the attitude and discipline of contribution. You are setting an example that can spread to other people.
  • The biggest difficulty with the principle of contribution is that everyone says: ‘I am not in a position of power so what can I do?’
  • One of the most important roles of the positive revolution is that of the ‘work packager’. There is nothing worse than having people with the time and energy to contribute but not knowing what to do.
  • A catalogue of the different ways in which ordinary people can contribute can be put together by a group that specifically sets out to design valuable forms of contribution.

The catalogue could include such things as: Collecting and passing on information; Bringing people together for a purpose. Explaining regulations to people and helping to fill in forms. Micro-education in teaching things to people willing to learn. Helping people who are sick or handicapped. Stopping environmental pollution. Cleaning places up and making them more attractive. Preventing crime. Adding to the catalogue on a local level or a wider level. Encouraging a constructive attitude in others. Devaluing negativity and passivity. Passing on the message of this handbook to others. Setting up a project group or joining a project group.

Constructive achievement can become a hobby. Setting out to do something and then doing it gives a great sense of joy. It is this idea of achievement as a hobby that is the basis of the E-Clubs (‘E’ for effectiveness) that are described later in this handbook.

Circles of Concern

Imagine three circles, one inside the other. The innermost circle represents your self. The next represents your family, friends and community. The third circle represents the country and the world.

  1. SELF: What are you contributing to yourself? This includes skills, education, training, experience. It also includes a positive attitude, a constructive attitude, and the discipline of contributions. Self-improvement is one of the five basic principles of the positive revolution so it is an important area of contribution.
  2. LOCAL: I could have suggested one circle to represent your family and your friends and another circle to represent the local community in which you live and also the community of the people with whom you work. I did not want to do this because there is already too much of a gap between family and friends and the local community. So the circle includes family and friends and the local community and the work community. Your family will always be special for you and this single circle also makes your community special. There is no boundary between your family and your community.
  3. COUNTRY AND WORLD: This is a big area but each country is made up of its people and the world is made up of many countries. How you vote in elections, what signals you send to politicians, how you try to make the country work, these are all matters in this third area. If you learn to read and write, that is a contribution to your country as well as yourself. If you grow more crops, that is also a contribution to the country. If there is a reduction in crime, that contributes both to the community and to the country.

These three circles can also become another symbol of the positive revolution.

Of any action we can ask: Is this action constructive? To which area or areas does this action contribute?

Special Talent and Positions

Saturday, February 18, 2012 @ 07:02 AM
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THE LEADERSHIP GENIUS OF ALFRED P. SLOAN

INVALUABLE LESSONS ON BUSINESS, MANAGEMENT, AND LEADERSHIP FOR TODAY’S MANAGER

ALLYN FREEMAN

McGRAW-HILL                  2005

 

Front cover

Visionary business leader Alfred P. Sloan (1875-1965) revolutionized the world of the American corporation like no else had ever done before him – or would ever do again. From his groundbreaking approaches for leadership by consensus, encouraging dissent, employing facts and data, and managing consumers, Sloan not only created the General Motors powerhouse during his 30-year tenure – his brilliance as CEO there is legendary – but he also influenced the strategic vision, leadership style, and operational discipline of today’s most successful companies.

In The Leadership Genius of Alfred P. Sloan, Allyn Freeman explains why Sloan’s principles have stood the test of time, remaining the basic building blocks of effective managerial leadership in organizations large or small. He demonstrates how these innovative principles are playing out in business today, taking you through their successful application at GM and distilling lessons that all managers can use as guideposts in their business.

Freeman also provides illustrative examples from top companies across a wide range of industries – from Coca-Cola, Marian Labs, and Nike to the Smithsonian, Heinz, and Hallmark – to demonstrate how they are effectively implementing Sloan’s concepts.

You’ll learn how to duplicate Sloan’s methods and reap the benefits of:

v  Implementing and controlling dissent and disagreement within your organization

v  Offering customers the right amount of choices

v  Using only facts and statistics for decision making

v  Selecting the right people for a brilliant, enterprising staff

v  Starting or acquiring complementary businesses

v  Developing a strong corporate image through smart, memorable promotion

v  Capitalizing on doing business internationally

Delivering proven advice that continues to shape the way business works, The Leadership Genius of Alfred P. Sloan is the ultimate rulebook for companies who want to achieve high levels of success.

Preface by Allyn I. Freeman

Too often we fail to recognize and pay tribute to the creative spirit.

Alfred P. Sloan, Jr.

At the completion of a television program on the Public Broadcasting System, the credit states: “Sponsored by the Alfred P. Sloan Foundation.” Who is this Alfred P. Sloan who amassed such large sums that he, along with well-known wealthy families like the Rockefellers and Carnegies, could fund an entire PBS documentary?

To answer that question you might go to the www.sloan.org Web site to discover that the foundation started in 1934 and its philanthropic work covers a range of science, economic, educational, and cultural areas. At the end of 2003, the current value of its assets totaled an astounding $1.3 billion.

More research indicates that Sloan cofounded the Memorial Sloan-Kettering Cancer Center in New York City in 1946, one of the world’s leading cancer care and research centers. He is the same man who endowed the prestigious Sloan School of Management at the Massachusetts Institute of Technology. Finally, the list ends with the Alfred P. Sloan Museum – Flint, Michigan’s center for historic automobiles and regional history.

In the Web site’s biographical section, it is revealed that Alfred P. Sloan, Jr., generated all his money as an employee while serving as president and chief executive officer of General Motors Corporation during most of six decades at GM. His accomplishments are universally considered the pinnacle of managerial and leadership achievements, a corporate career success unparalleled in the 20th century of American business.

The elemental truth is that when Alfred P. Sloan, Jr., took the reins of General Motors, he transformed the concept of the modern corporate organization forever.

 

Format of this book

This work is composed of two elements: the managerial intelligence of Alfred P. Sloan, Jr., arranged in distinct chapters, and numerous examples of other companies and organizations, large and small, that have demonstrated the wisdom of his instructive and innovative practices.

Sloan’s leadership and managerial lessons – derived from his two autobiographies and from other writings, most notably, by management guru Peter Drucker – provide a history of the first successful applications of the modern American corporation. These are basic, commonsense Sloan solutions to general and specific organizational and business situations of the past that can be applied today.

The case histories come from a wide range of diverse companies and organizations that reinforce or highlight some aspect of Sloan’s particular business lesson. These actual cases demonstrate the success of adhering to one of Sloan’s business concepts. Further, a few of these examples illustrate what happened when the Sloan principle was ignored.

Alfred P. Sloan, Jr., provided a dynamic new vision of how to lead and operate the modern corporation; and he did it with insights and rare good judgment. This book’s contention is that a look at the historical Sloan GM experience represents a study in practical and logical thinking that can instruct a manager on the path to success.

Chapter 1: The Great Accomplishment: The Sloan System

Alfred P. Sloan, Jr. (1875-1965) changed the manufacturing methods, organizational structure, marketing, sales, distribution, financing, and advertising used in the automotive industry – in short, every aspect of U.S. automobile manufacture and production. Moreover, in this dramatic conversion, this complete industry makeover, he also revolutionized the world of the American corporation like no one had done before him or may ever do again.

In the beginning of his second autobiography, My Years with General Motors, published in 1963, in the chapter “The Great Opportunity – I,” Sloan wrote about the two men who invented the American system of automobile marketing and car manufacture: “Mr. Durant (GM) and Mr. Ford had unusual vision, courage, daring imagination, and foresight. They injected their personalities without the discipline of management by method and objective facts.”

The essence of Sloan’s future transformation of the corporate world was the need for discipline, method, and facts. He was ready when the opportunity occurred to put into effect the “Sloan system.” When he assumed the presidency of General Motors in 1923, he stated that “it was clear to me long before this time there was a real opportunity for great accomplishment.”

The story of Alfred P. Sloan, Jr., of General Motors is the story of leadership and managerial skill unsurpassed in the annals of American business.

Meeting Sloan

The Sloan system – an overview

General Motor’s dramatic rise to unprecedented growth, profitability, and unparalleled industry dominance occurred as a direct result of Sloan’s managerial stewardship, beginning in 1920 as vice-president of operations and continuing until his retirement as CEO in 1946 and his retirement as chairman of the board in 1956. (He retained the title of honorary chairman of the board until his death in 1966.)

In Sloan’s case, the right idea was not an invention or revolutionary discovery like Henry Ford’s automobile assembly-line Model –T car or Bill Gates’s Microsoft DOS computer operating system. Sloan’s idea was a groundbreaking practice of corporate organization, a workable and democratic method to create an effective and decentralized system with centralized authority to run a large, diverse corporation efficiently. He wrote of that early period: “In those days when the industry was new and expanding explosively, its future was shaped by a small number of individuals who took leading positions; as often is not, the capital went to these men rather than the men to the capital.”

  • Sloan’s General Motors success stretched beyond automobiles into refrigerators, locomotives, trucks, busses, auto components, and car accessories.
  • The innovation of assisting consumers in financing car purchases reaped enormous profits and generated billions of dollars for GM.

 

The new breed of corporate manager

Sloan was one of the first of the university graduates (M.I.T. class of 1895), a small but up-and-coming group of college-educated men who would start the 20th century tradition that only people with a college degree demonstrated the intelligence to be a  corporate executive.

  • Sloan perceived himself as being a new breed of manager in the growing category of self-made, educated men.

 

The lessons of his planning genius

These are the key elements in Sloan’s revolutionary system:

v   Facts and data are the main and only determinants of decision making

v  The company should encourage dissent and differences of opinion

v  Organize via committees a decentralized system with centralized power and control

v  Staff with the most competent people without thought to friendship

v  The president or CEO acts as the absolute ruler through consensus

  • Sloan despaired of the old system of despotic authority, of management decisions by intuition, and of hiring by cronyism.

Sloan demanded that the new corporate order be guided by two main principles: granting independent authority to the heads of divisions within the corporation for decision making, but also requiring them to report to a central authority for financial endorsement and guidance in the macroeconomic areas of business.

The lessons of his genius in practical matters

In addition to the reorganization, Sloan introduced practical business decisions that are the hallmark of his genius:

v  Offer wide customer choices.

v  Promote a positive corporate image through institutional advertising and public relations.

v  Realize the need for international sales and marketing through overseas manufacturing or export.

v  Find ancillary businesses beyond the corporation’s core product or service.

Sloan’s legacy in print

Sloan for the ages

Guide for the book

Here is a helpful guide to the most frequently cited names and companies….

Chapter 2: Dissent, Disagreement, and Conflict

Chapter 3: Offering the Customer Choices

Chapter 4: Facts Determine Decisions

Chapter 5: The Need for International Business

Chapter 6: Building a Professional Staff

Chapter 7: Complementary and Ancillary Businesses

Chapter 8: The Decentralized Organization and Financial Controls

Chapter 9: Dealers and Distribution

Chapter 10: Corporate Image: Advertising and Public Relations

Chapter 11: Doing the Right Thing: The Sloan Way

Notes

Bibliography

Index

Thursday, February 16, 2012 @ 03:02 AM
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HANDBOOK FOR THE POSITIVE REVOLUTION

EDWARD DE BONO

PENGUIN BOOKS              1991

PART I

Back cover

When Edward de Bono pioneered the concept of ‘lateral thinking’ he started a quiet revolution in thinking that has now spread across the world. He was twenty years ahead of the times when he put forward the idea of the brain as a self-organizing information system in 1969. This is now mainstream thinking.

It is all too easy to complain, protest, grumble, criticize and attack. Traditional revolutions define an enemy and seek to overthrow that enemy. When you have got rid of the bad things then all is supposed to turn out well.

There are many people who have always felt that negativity is not enough. They see the need to be constructive, to be creative and to contribute towards making things happen. These are the people who will welcome the Positive Revolution. Edward de Bono’s challenging new book provides a practical framework for a serious revolution which has no enemies but seeks to make things better.

The hand symbolizes the five basic principles of the Positive Revolution: thumb for effectiveness, index finger to point the constructive way forward, middle finger for human values, ring finger for self-improvement and little finger for contribution – to remind us that even a small contribution is better than endless criticism.

About the author

Dr Edward de Bono has written thirty-two books some of which have been translated into twenty-four languages including Russian, Japanese, Chinese, Korean, Arabic, Hebrew, Urdu, Bahasa, etc. He has been invited to lecture in forty-five different countries and has a world-wide reputation as the leading authority in both creative thinking and the direct teaching of thinking skills. He is the originator of the term ‘lateral thinking’ which now has an entry in the Oxford dictionary.

Dr de Bono was a Rhodes Scholar at Oxford and has held faculty appointments at the universities of Oxford, Cambridge, London and Harvard.

Dr de Bono’s original background was in medicine where he investigated the complex inter-active systems of the body, and in psychology. His work with computers made him particularly interested in the thinking that computers could not do: the perceptual and creative aspects of thinking and methods for improving human thinking. His main contribution has been to work upwards from the behaviour of self-organizing systems to devise simple methods for improving human thinking: for example the word ‘po’ and the deliberate provocative techniques of lateral thinking.

Dr de Bono’s course for the direct teaching of thinking in schools (CoRT) is now in use with millions of school-children around the world. Some countries have made it compulsory in every school. His instruction in thinking has also been sought by governments and by the world’s largest corporations such as Exxon, NTT (Japan), IBM, Du Pont. His ‘six hat’ method is now very widely used in businesses as elsewhere.

The key features of the thinking of Dr de Bono are constructive, creative and positive. Dr de Bono also focuses on the perception side of thinking which is the most important part outside technical areas. It is these concerns that force him to challenge traditional thinking with its double emphasis on critical negativity and logic. As a result his ideas often upset some of the more old-fashioned thinkers.

Although the background may be complex, Dr de Bono seeks to design methods and habits that are very simple, very practical and easy to use. That is why his work has spread so widely.

Dr de Bono has also made three TV series which have been shown to millions of viewers.

Author’s note

Why bother? This is a sensible phrase to cover a sensible strategy. Go your own way. Do your own thing. Carve out a little niche in the complex world and then be happy and content in that niche. Being worried about the rest of the world is too futile and too difficult a task. Let those who are motivated to change the world work on that task.  The world will always last long enough to see out your lifetime.

I am not going to disagree with this point of view but to side-step it in order to write for those who know that they are inseparably part of the world in which they live: their own internal world, the local community world and the world at large. Let the others munch contentedly like cows in the field – happy that there is grass today.

My concern has always been with human thinking because this seems to me to play so central a role in human happiness and development both from moment to moment and also over the long term. I believe that we have done relatively little about thinking but have been content with a fluency of argument and the ability to attack and defend positions. This sort of thinking unfortunately lacks the creative, constructive and design energies that we really need in order to go forward. Indeed, our absurd emphasis on negativity seriously impedes such progress.

This particular book is not, however, about thinking habits and methods. This book is about the fundamental background and setting in which we would use our thinking skills. If we are disposed to be negative then our thinking skills will help us to be negative. If we are disposed to be positive then our thinking skills will take us in that direction. This is more than a moment to moment emotional bias – it is the fundamental attitude of our being.

There are far too many people who believe that natural evolution controlled by critical negativity will form the ideas that we need – just as Darwinian evolution perfected a variety of life forms. This is a dangerous fallacy. Evolution is very slow, very messy, very wasteful and is incapable of making the best use of available resources. Inadequate – but not disastrous – ideas and institutions will survive, perfect and defend themselves thus preventing the more effective use of resources. That has always been the logical basis for revolution.

This book is intended for those who see this logical need.

There is a useful place for negativity in changing values: in providing shaping pressures; in curbing excesses; in removing defects in order to improve an idea; and in forming the conscience of society. But the constructive and creative energies have to be there in order to get the steady, step by step progress that is the basis of the positive revolution. How we generate these constructive energies is what the positive revolution is about.

Introduction

This is a serious revolutionary handbook. The greatest strength of this serious revolution is that it will not be taken seriously. There is no greater power than to be effective and not be taken seriously. That way you can quietly get on with things without the fuss and friction or resistance from those who feel threatened.

In the positive revolution there are no enemies. Traditional revolutions are negative and derive their energy from being against things. The only energy of the Marxist revolution was derived from its struggle against capitalism. Where that struggle was successful the new system eventually died of inertia when it became only an ancestral memory.

Is it possible to have a revolution without the rage, hatred and passion of being ‘against’ something? Is it possible to have a revolution without the sense of mission and focused energy that an ‘enemy’ provides? Many would say that it is not possible. Such people are locked into that old-fashioned and tiresome habit of thinking based on ‘I am right – you are wrong.’

Righteousness is indeed a traditional source of energy. A simplistic view of an enemy does give the cohesion, shared views and camaraderie of professional revolutionaries. But the positive revolution is not for professional revolutionaries but for ordinary people – for those amateurs who can make a difference, inch by inch. A positive revolution is not the mighty clash of the ‘rock logic’ of brutally arrogant ideologies but the slow and steady power of ‘water logic’ with ability to surround and infiltrate.

  • The weapons of the positive revolution are not bullets and bombs but simple human perceptions.
  • Bullets and bombs may offer physical power but eventually will only work if they change perceptions and values.
  • Why not go the direct route and work with perceptions and values?
  • With the positive revolution there are no enemies – even those who want to enjoy being enemies need to be denied this legitimate pleasure.
  • There are a few who will join the positive revolution immediately. There are those who will join later when it is fashionable.
  • There are many, including the enemies, who will be quietly by-passed. Most will not notice it is happening until it is far advanced.

I finished writing my book I am Right – You are Wrong one sunny summer morning at nine o’clock. Half an hour later I had started this book. This book is the short practical handbook for the positive revolution. The other book provides the intellectual basis and seeks to show why our traditional clash system of thinking is insufficiently constructive.

  • This practical handbook was originally written for Brazil, which so badly needs a revolution but whose intellectuals are much too old-fashioned to design one.
  • The positive revolution is needed everywhere, particularly in the United Kingdom where negativity has so often been the means by which a club of mediocrity holds on to power.
  • After reading this book, or the preceding one, some thinkers may come to see negativity not as the highest exercise of intelligence but as the squalling of a baby who has no better means of getting attention and is incapable of other action.
  • If you want to spread the positive revolution buy a few copies of the book for your friends – or encourage them to buy the book for themselves. It is not so much a book for reading as a book for working from.

 

Effectiveness and Action

If I had to design a system in which it was impossible for intelligent people to be effective, then I would design the following system:

  1. People in positions of power would use their intelligence to defend their positions of power and to survive.
  2. Intelligent people mainly use their intelligence to attack, criticize and blame others.
  3. Everyone else is intelligent enough to be passive and to assume that their occasional vote is a sufficient contribution to local and world affairs.

 

Every piece of iron can be considered to be made up of thousands of tiny magnets. All these tiny magnets are pointing in different directions – so the overall effect is zero. If, however, all the tiny magnets can be lined up to point in the same direction then the piece of iron acquires the mysterious power of a magnet.

  • Traditional negative revolutions are led by the power group and everyone else has to follow.
  • Is it possible to start a revolution the other way round? Is it possible to have a general shift in mood and action first?
  • I believe it is if the weapons are perceptions rather than bullets and bombs.

 

Negative Revolutions

In a traditional negative revolution there is an enemy to be hated. It is this hatred which gives cohesion to the revolution and provides a sharp sense of purpose.

Traditional negative revolutions are defined by what they are attacking.

  • When the struggle has succeeded there is too little experience needed to build and run society.
  • It might be better to start off with a positive revolution.

A positive revolution may be contrasted with a negative one.

Instead of attack there is construction.

Instead of criticism there is design.

Instead of change through violence there is change through perception.

Instead of the power of guns there is the power of information.

Instead of the hard edges of ‘rock logic’ there is the flow of ‘water logic’.

Instead of ideology to provide the direction there is a humour to allow changes in direction.

Instead of a centrally organized system there is a self-organizing system.

Although the positive revolution is non-violent is by no means passive. On the contrary the emphasis is on action and effectiveness.

The revolution of Karl Marx was inspired by the unfairness of the steam-engine technology of the industrial revolution. The positive revolution is inspired by the opportunities offered by the electronic age of information.

The Positive Revolution