Monthly Archives: September 2012

Making Work-Life Balance Work . . . at Work


I have written before about the changing complexion of work, and the need to adapt corporate environments to be more “millennial friendly.”   Failing to do so may put you at a disadvantage when it comes to attracting and retaining the best talent.

Among the issues we have considered is the vexing question of work-life balance.

This topic really came to the forefront with Anne-Marie Slaughters incredible piece in Atlantic Magazine (see Can Women Have it All?).  While Ms. Slaughter discusses the specific challenges related to balancing work and children this spans a much broader set of questions.

With all of us being tethered to our smart phones, and accessible 24-7  for a myriad of work issues, both males and females are impacted.  While most of us don’t mind attending to a few emails or handling a crisis call from time to time  a growing number of workers feel that in return, employers should grant flexibility when they may need to leave early to take the kids to doctor’s appointment or pick them up at school.

With so many dual income households today, and child care duties being shared, this is an issue impacting both male and female workers everywhere.

It seems that more and more progressive organizations are working to adapt their work rules to permit more flexibility.   It is not always as easy as one might think.  Hannah Seligson just published an interesting piece in the New York Times addressing the backlash from coworkers who feel they are the ones being victimized when co workers bail early, sometimes leaving them to clean up after.

One employee interviewed by Seligson put it this way — “Parents are a special class, and they get special treatment.”   She went on to complain that while she was covering for her former colleagues who were attending to child rearing duties, she sometimes sacrificed her own obligation to take care of her ailing grandparents.

This raises two interesting questions:

What does pursuing work-life balance mean to all of us?  There is an interesting equity question.   While many agree that we should make reasonable allowances to working parents with kids who feel it vital that they be a physical presence in their daily lives, what allowances should we offer empty nesters who might like to take off early to spend a weekend with their kids or sandwich generation families who have serious health issues to face with aging parents?

What happens to office productivity?  So if this is a slippery slope, and everyone gets to balance their work and personal life to according to their own preferences, do we all end up like France, where the normal work week is 35 hours with 8 weeks of vacation?  Sure, many feel that the US is a nation of workaholics (which I am not advocating either). But, what is the right balance?

Is it a zero-sum game at work? At a more tactical level this issue can be an intensely personal one.  If someone on your team takes personal time off in the midst of a crucial project, does it regularly put the remaining team members at a disadvantage?  Yes, some things can be made up later, but missing meetings, client appointments, or simply being gone when the “do-do” hits the fan some afternoon, can be a source of growing frustration and resentment for coworkers.

So there are many HR officers working overtime trying to figure out the broader policy questions. We perhaps we need a new set of standards for personal behavior  (a new way of being polite) in the world of increasingly flexible work hours.

So here are some suggestions:

Avoid Justifications.  It doesn’t really matter at work when you feel you have to justify your impending absence.  We get it, your son has a fever and needs to see the doctor.   When you feel you have to make your excuse seem more important than all the rest of ours, we can resent it.   We all have things we could be doing that are potentially important.  It only builds resentment when your reason trumps all others – especially if we suspect that your excuse is exaggerated or fabricated.   The fact that you need the time off should be enough.  If you are a professional, who respects the rest of the team, there should be no reason to explain further.   All of us face situations that we must prioritize over work.    The issue is not the worthiness of it, but the equity.

Focus on the Work.  You need to leave work for some reason.  Fair enough.   Instead of having the conversation about why, what if instead we talked about what’s happening at work right now, what will be the impact on the team if I leave, and what accommodations can be made to insure all the work gets done?  If people see you care about not leaving others in the lurch, my guess is that most people will be more than accommodating.

Resolve at the team level.  I understand the need to have some corporate guidelines and policies – I suppose. But isn’t this really a question to be solved at a work team level?  Every team is different, and so too is every situation.  There may be times when we can afford to be unusually flexible, so long as when there is a crisis and we need  “all hands on deck,” we can count on each other.  It is hard for me to imagine how one set of corporate guidelines can provide the kind of versatility needed.   At Google, they have a great team orientation.   At team meetings they can discuss all sorts of issues related to team performance and behavior norms.   Some people may want to wear their slippers and PJ’s at work, and some may want to bring their dog to work.   At Google, as long as the team agrees they can do almost anything that they collectively feel makes sense, and is consistent with their goals and mission.

Respect your team colleagues (not just your boss).   This goes along with the previous point.   In some work places, we are conditioned to ask our bosses for permission to depart the office.   In my experience, many bosses don’t want a reputation as a curmudgeon, so they may be inclined to say yes, and without consultation with others.  Here again, we need to respect the team and work out the accommodations in a way that is equitable.   If some team members need time off for attending to personal matters, we also need to consider the needs of the ones who never miss a day and are seldom tardy.  Maybe we sometimes should just let them off early some time with the rest of us covering for them once in a while.

I’m sure there are some positions where having this flexibility is very difficult to accommodate (like if you are in the customer service department, and call volumes are not likely to abate when we need time off).  However, allowing each team to define its own norms seems a reasonable approach.   We need to be capable of having an honest conversation, we need to be flexible, and we need to respect the needs of the team and its mission.  Let us use our own creativity to figure out the best ways to flex.

I’d be curious to hear how some of our reader’s organizations approach this question.   Let us know.

Related Resources

When the Work-Life Scales Are Unequal, by Hannah Seligson, NY Times

Motherlode Blog: In Flexible-Work Debates, Parents Have Unique Position 

Why Women Still Can’t Have it All, Anne-Marie Slaughter, The Atlantic

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Catch them In the Act of Doing Something Right


What is it that makes us focus more sharply on what’s wrong, than what’s right with something  . . . an idea, a business plan, an employee’s suggestion or behavior?    There is something, I think, about how we condition MBA’s to think critically about situations which is at the heart of the case study method.  You see a situation – normally one where storm clouds are brewing.   Don’t we love to analyze what they did wrong?

I think if we are not careful, this mentality carries over into our way of seeing the world (glass half empty) and can impact how we manage people, interact with our spouse, and even raise our kids.

At work, most of us feel pressure to reduce risk as we race in pursuit of the various performance metrics that were created for us and our teams.   As such, we have a bias for PREVENTING mistakes, especially when we feel there is a lot at stake.   This orientation makes it natural for us to find fault with any idea before us – looking for ways to prevent all the possible failure modes.

How sad that we must lead with such negative energy.

There is a story I recall dating back to 1999, when the US women’s soccer team won their first World Cup.  The match was as exciting as you could ever want.    On July 10, 1999, over 90,000 people (the largest ever for a women’s sporting event) filled the Rose Bowl to watch the United States play China in the Final. At the end of play the score remained tied, and it all came down to a nail-biting penalty shootout.   American goal tender Briana Scurry deflected China’s third kick, the score remained tied at 4–4 with only Brandi Chastain left to shoot.  She scored and won the game for the United States. Chastain famously dropped to her knees and whipped off her shirt, celebrating in her sports bra, which later made the cover of Sports Illustrated (see photo at left) and the front pages of newspapers around the country and world.   With this win they emerged onto the world stage and brought significant media attention to women’s soccer and athletics.

Well, the media frenzy was something.   But after the reporters got tired of interviewing the stars like Brandi and Mia Hamm, they finally got around to interrogating their coach, a guy named Tony DiCicco, a soccer star and coach in his own right.  He started with US Women’s soccer team as goaltending coach in 1991, and took over as head coach of the women’s team in 1994.

Anyway, I remember reading one interview with DiCicco where he was asked what it was like coaching women as opposed to men (a relatively new experience for him).  His response stuck with me.

In the beginning, he said, it was the same.  We all know that model either from our own youthful experiences or from countless sports movies.   Sports training was more like Marine boot camp.  When you mess up, the determined coaches yelled or made you run laps in the hope of propelling you to try harder and become better.    But, says DiCicco, it wasn’t working. He said, “The players hated me, weren’t performing up to their potential, and most importantly, we weren’t winning.   After one humiliating loss, I was sitting in a bar (thinking I was going to be fired), knowing I had to do something different.  But what? So I decided in practice next week to back off some, and it seemed to help.   Gradually, I came to see my role as catching them in the act of doing something right . . . and them making a big deal out of it!”

It seemed to help.   Once they started to win, he and the team compiled a record of 103–8–8 (while I’m not expert, that sounds pretty good).

So how about that for management advice?  Use POSITIVE reinforcement instead of constructive criticism.  The whole notion of how many of us approach performance appraisal is based on the latter.   We are trained to point out strengths AND weaknesses (sometimes called areas for improvement).    Every time we sit down for a review, we almost blow by the complements from our boss, waiting for the BUT.

Why not eliminate the weaknesses part altogether (unless your intent is to build a case for termination)?

Leading from positive energy can be a powerful force in your organization.   Check out this clip featuring Nikesh Arora, Google’s President of Global Sales Operations and Business Development as he chats with Reuters’ Chrystia Freeland about creating a positive leadership culture.

Other References

Rewarding Careers Applying Positive Psychological Science to Improve Quality of Work Life, by Steward I. Donaldson, and Michelle C. Bligh

Positive Psychological Capital: Measurement and Relationship with Performance and Satisfaction, by Fred Luthans and Bruce J. Avolio

Accentuate the Positive: Strengths-Based Approach to Performance Reviews, from HCareers

Thoughts on Performance Reviews and Positive Psychology, By Doug Turner

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Bridging the Learning-Doing Gap: Rethinking Corporate Learning and Development


We all remember the concept of the Three R’s, (Reading, wRiting and aRithmetic)?  Well in today’s world of corporate learning and development, these have been replaced with the Four C’s, which stand for today’s new survival skills in business:

  • Critical thinking and problem solving (making decisions based on information, and dealing with risk and uncertainty)
  • Communication (both seeking to understand others, as well as improving your own ability to make a persuasive case)
  • Collaboration (cutting across silos, forging alliances and managing diverse groups toward a common goal)
  • Creativity and innovation (understanding problems better –more deeply–and developing better solutions that are unique and potentially “game changing”)

These four have been researched pretty extensively (see the links at the end of this article), and if your corporate learning strategy isn’t targeting these, you may want to ask yourself why.

According to the highly touted AMA survey on critical skills, 75% of executives surveyed feel these are of growing importance today because of the increasing pace of change in business today (91%), the increasing need for global competitiveness (86.5%), the changing nature of how work is accomplished today (77.5%), and the way organizations are structured (66.3%).

It is estimated that we spend approximately $60 billion per year in North America alone, on corporate learning and development, which seems like a lot of money being thrown at the problem.  But what is the impact?  (Perhaps before we criticize the effectiveness of K-12 education, we might ask whether we need a corporate version of “No worker left behind”!).

Curriculum’s are Too Broad, and Too Shallow

I believe a lot of the corporate training is poorly conceived, designed and executed . . . a waste of money.   The way many companies approach this is to come to someplace like the Xavier Leadership Center with a list of topics that came from some form of internal needs assessment.  Then a curriculum is designed to cover all the topics for the amount of budget available, with many topics covered only in a superficial way (say a half day program).   Trying to teach communications or critical thinking skills in a ½-day (or even a 2-day) bucket results in only scratching the surface.

Learning Seldom Occurs in a Classroom

We can deliver certain concepts in a class.  Heck, with 40 PowerPoint slides and a couple of readings, you can deliver a lot of content.    But most of us LEARN it when we apply the content by ourselves in our own work environment.  If the outcome is favorable, then we may be inclined to try it a second time, and then gradually it becomes an acquired new behavior.   So forget a 1 day communications skills class.    Instead, follow it up with 3-4 days of coaching so people are challenged to actually practice creating and delivering presentations, writing position papers, or making a persuasive argument.    The coaching piece is the key.   When we try something new and fail, our natural instinct is to go back to the old way of doing things.   If a coach can help re-direct, or refocus you, thereby improving your rate of success, then you will be more encouraged to keep at it.

Sure adding 3-4 days of coaching time is more expensive,   but why not cover fewer topic s in your corporate learning curriculum and go deeper?   Your focus should be not on LEARNING OBJECTIVES but on BEHAVIOR OBJECTIVES.   Who cares if you learned the concepts if you can’t successfully apply them?

Consider Nonconventional Learning Strategies

If you accept the idea that a classroom is not the only place learning can take place, you are almost there.   Think about it, from the moment of birth, we instinctively learn by trial and error, observation, curiosity and personal experiences.   So shouldn’t we leverage ALL of these learning mechanisms?   So have you considered things like:

  • Formal mentoring and coaching experiences. Connect less skilled people with other more practiced individuals to help them develop new skills.
  • Job rotation experiences.  Deliberately assign your new talent to new work assignments that will broaden and deepen their experiences.  Put an operations person in a customer service assignment.  Put an engineering person in a sales assignment.  Make designers take an operations job where they must execute what they designed. They will be transformed. (I had a fantastic boss once who insisted I leave the corporate office and take some assignments as a factory supervisor, materials manager, and CFO.  All these were a stretch for me based upon my formal education as an engineer with an MBA.  However, he knew I would throw myself into each assignment with boundless energy.  While I hated some of these assignments at the time, they all taught me a variety of vital lessons that better prepared me for ultimate general management roles I would one day take on.)
  • On-the-job training.  Be willing to throw people into the deep end of the pool – under the eyes of an experienced person to guide them.  Be willing to accept some mistakes.  Learning-by-doing is very effective.
  • Live Projects.    Teach strategy, when people need to create one.   Teach LEAN when you have identified some processes that urgently need re-thinking.   If you want people to learn collaboration, then make them work with an eclectic group of colleagues who bring different skills to the table from different departments.  Then go back and for the between teaching and doing as the participants do real work. It takes a little more planning on your part, but the impact will be greater.  Here again, the key is to have an experienced facilitator to guide them if they start to get off track.

Think Differently About Choosing Your Teachers

There is a difference between teaching (delivering planned content), and facilitating (guiding people in the application of it in an imperfect world).   I have seen many professional “trainers” who consistently receive high marks from participants.   They are engaging, have many great stories, demonstrate enthusiasm, and make learning a vibrant experience.   They have what we call “stage skills.”    While teachers who have these abilities are fantastic at delivering content in effective ways, they may not be experienced in applying the ideas in practice.   Conversely, I have seen some extraordinary facilitators who could coach a group through live project, who are not so impressive in front of a class.   The different skills (teaching and facilitating) are sometimes mutually exclusive.   So my advice is to:

  • Think about what you are trying to accomplish (produce learning or change behavior) and choose our trainer/facilitator wisely.
  • Pay attention to the credentials of the person.   Writing a book about something may demonstrate knowledge, but does not always make you an effective practitioner.   Ask them about their work and consulting experiences and select them in the context of what you are trying to accomplish.
  • Consider that most of us have experiences and knowledge that allow us to teach others.   Sometimes your best teachers/facilitators are not professional educators, but could other employees, managers, or colleagues who bring a wealth of experiences to the table.  Make them a part of your learning and development strategy.

Remember: We Are All Born with the Ability to Learn

It is automatic and instinctive.  So why isn’t learning and development as much about helping design experiences for individuals and fostering interactions among colleagues that produce deep learning, as it is about organizing an array of classes?  We all learn differently, and learning should acknowledge that fact.   The choice is not  about the difference between on-line and in-classroom, but about bridging the learning-doing gap.

Other Resources

Workers of the Future will Need Different Skills than In the Past, by Lisa Quast, Forbes online

Critical Skills for the New Workforce, by Leslie Allan, Toolbox.com

AMA Critical Skills Survey, American Management Association

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Some Paradoxes of Leadership


Leading is about balance.  Effective leaders must intuitively manage the many paradoxes in business.  Short vs. long-term.   Commanding vs. collaborating. Controlling vs. empowering. Individual vs. group needs.  Customer satisfaction vs. profitability. Etc.

Striking the right balance between these often opposing goals is tricky, made even more challenging when you consider the right answer in one circumstance may not be right at a different time or under slightly different situations.  It seems a little daunting doesn’t it?  It’s like playing three-dimensional chess on 4 game boards simultaneously while balancing on a unicycle.

One of my favorite new reads today is a book called Management of the Absurd, by Richard Farson. The book does a deep dive into many intriguing paradoxes of leadership.     He calls into question many beliefs about what we should focus on, but these are often based on flawed perceptions needing more unconventional thinking. Here are some of my favorites to think about:

1)      We think we want creativity or change, but we really don’t.  . .  at least, not when it impacts us.   Our current state is one in which we all derive a sense balance and a definition of who we are, how we fit, and what role we are to play.   Change, then, challenges our identity, and that does not make us comfortable at all.  What we seek is validation for our own sense of identity and personal pride.  We as leaders must learn to reframe our agenda into personalized initiatives that allow people to fulfill their lives by exercising more of what they feel they are already good at.  (Also see item 3 below.)

2)      The opposite of profound truth can also be true.   Almost all actions have intended consequences. Opposites can and usually do exist together.  Empowering others does not diminish your own authority any more than giving away information makes you know less.   Organizations need truth, and sometimes distortion.  (Aren’t tact and diplomacy needed behaviors when we feel that sparing feelings of others is the better than harming ones sometimes delicate sense of self-worth?)

3)      We want for ourselves not what we are missing, but more of what we already have.  Conventional change theorists talk a lot about creating win-win scenarios by suggesting new things that you “get” as a consequence of agreeing to my change project. But what if people aren’t looking for new things, but more of the “good” things they already think they have?

4)      Big changes are easier than small ones.   Seems counterintuitive.   A constant stream of small changes can create feelings of never-ending stress and a sense that the tide is always flowing against you.   In extreme cases such incrementalism can produce resentment. Big changes, especially those born out of crisis, are easier for people to swallow.   They believe that once the big event is past, then things will settle down into a state of normalcy and stability. Never let a good crisis go to waste.  (As for making small changes when these are self-initiated, they work.   Create a culture of celebrating what we at Xavier call MAGIS (Meaning more . . . which is the idea behind continuous improvement).

5)      Planning is a terrible way to bring about change.   In a dynamic environment, most planning is ineffective.   We plan based on looking backward at past lessons, which may not be valid in the future.  We all have blind spots.  We can overreact.  We can focus on what’s trendy.  Leading change needs to be much more organic.  Choose a direction, and start moving along your path.   Then be ready and willing to learn from what happens next and adapt quickly.   You will figure it out as you go.

6)      Every strength is a weakness.  We are training (as in performance appraisals) to think about ourselves and others in terms strengths (what we are good at) and weaknesses (a separate list of skills or attributes) at which we are not.  However, the truth is that every one of our strengths has a flip side and can lead to danger.   Courage can lead to excessive risk-taking.   Being a great visionary may lead to pushing bold change faster than your organization can absorb.  Intelligence can lead to arrogance.  The best strategy is to surround yourself with people able to speak truth to you. Combine that with your own discipline to listen carefully to them and then act in tempered ways.

7)      Effective managers are not in control.  Control is a myth.   We can control only one thing in life . . . ourselves.  (And some of us have plenty of trouble with that).   When in your life have you had more control than in the case of your own kids?   You could take away their allowance, ground them, stop their allowance, take the car away, or even physically dominate them (if you chose).   And yet our kids have this amazing ability to be their own unique selves no matter what you want.  While we do not have control, we DO have influence over things and people.   We exercise this through our leadership — through how we act.  For better or worse, what we do influences the way people around us think, feel, and act.  That is what leadership is really about.

8)      The more we communicate, the less we communicate.  Most of us live in a state of information overload.   While we THINK it is important to bring people in on everything, we all reach a saturation point where we don’t read all emails (don’t even open many of them). We tune out in meetings, and even avoid interacting with others.   Organizations are built on TRUST more than information.   When I really trust my boss, I know he or she will share with me what they feel I need to know, and I am quite ok with that.

9)      Praise does not always motivate.   The act of praising others also carries with it a subtle message that you have the ability to “pass judgment” on them.  Many people in our leadership programs have mentioned that they have experienced the praise – criticize – praise again cycle which leads us to always be listening for the “but” in any sentence.   Sure, sincere praise can have some positive impact, but the driving forces are trust and respect.

Leading takes reflection, practice, trial and error, open-mindedness and a willingness to adapt as we go forward, learning from our mistakes.   I believe good leaders are often deep thinkers to whom the paradoxes of leadership are a source not of frustration, but of excitement and positive challenge.   Think deep!

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Leading a Team of Super Heroes


When XLC surveyed visitors to its website with this one question: “What % of your talents are used every day at work?” a full two-thirds replied that their employers were using “less than half” of what they had to give or said  “they have no clue what to do with me.”

Yikes.

To some senior executive groups we teach at XLC, these findings seem hard to believe.  But I would suggest that if you think about it more deeply, these findings are not hard to believe.  It starts with recognizing that the problem has more to do with your leadership than the limitations of your team members.

As a leader, wouldn’t it be great if all on your team were like Super Heroes?  Well this may be more possible than you think.

Consider the graphic below which lists a spectrum of skills that a person has (the darker ones represent areas of strongest ability).   At the same time consider a spectrum of things that you value as important, and overlay the two.

There is an intersection point between what you are good at, and what you feel is important.  This represents for us a point of deep personal pride.   It is the place from which we derive our own sense of self-identity and indeed, self-worth.    As such this runs pretty deep in us.

Let me illustrate with a personal example.

If you were my boss, and criticized me for being “careless with details” that would be an accurate depiction of me.   I’m not really good at that. I admit it.   Instead, I see myself as a “big picture” person . . . a strategic thinker . . . visionary . . . an innovative problem solver.

So if you criticized me for my lack of attention to detail, while true, it wouldn’t really bother me too much.   I don’t really care about that and I absolutely would not aspire to be good at details.  To me, details seem boring.

However, if you criticized me by saying “Len, your business plan lacks vision” or “your solution to that [big problem] seemed very superficial” . . . OUCH!   These criticisms would really sting me because they connect to the essence of how I see my professional self.   I would not see your comments as a criticism of my “plan” or my “solution” but as an attack on me personally.

However, if you came to know me well enough to assess my sense of deep personal pride, and saw your leadership mission as influencing others, you would be in a position of great personal power.   Think about it.   If you really understood what makes me “tick” all you’d have to do would be to approach me something like this:  “Len, we have this critical problem, and I can’t see anyone other than you who would be able to come up with the kind of solution we need now.” THOSE WORDS would be about the most energizing way you could approach me.   It would be the equivalent of injecting me with a mega-dose of caffeine.  I’d be out the door in a second, grabbing my laptop and a flash drive with data and then heading to a room with flip charts and white boards . . . and I’d still be going as strong at 8 P.M.  as I was at 8 A.M. when you gave me the problem.   And for me, it WOULDN’T EVEN SEEM LIKE WORK!

What’s more, I’d likely be thinking about it all weekend – even while I was cutting the grass.   My unconscious mind would be continually on it even while I was asleep, sometimes propelling me to wake up at 1 A.M. to go into my home office and put a few more ideas down.

Have you ever thought it would be a good idea if you could get 120% out of your employees?   Well what I just described is one way to do that.   All you need is:

An understanding of who I am. Leadership is not only about standing up and delivering the inspiring speech, issuing new policies or assigning people to work on aspects of your agenda.   It requires that you consider yourself UNIMPORTANT.   Those you are leading matter . . . not you.  Your job is to serve them and their needs.   This is the essence of “Servant leadership.”  This means you need to invest some personal energy getting to know your team in more than superficial ways.  Talk to them.   Listen to them.   One great exercise we like a lot in this regard is asking people to create and share their “Personal Leadership  Story” (feel free to contact me at XLC to receive the assignment description).

Some thought about how my spiritual gifts could most benefit your mission.  Once you know the places of greatest personal pride for each of your employees, then, execution planning for you takes on a different complexion.  It now becomes about designing work assignment that tap into the core strengths of your team members.   This means adapting your plan to them, rather than asking them to adapt to it.  Too often we let arbitrary job descriptions get in the way of assigning work to people.   There was I time when I would create an organization chart that made sense to me, and then pushed people into the boxes.   It took me quite a while to figure out that this was completely backwards.

A flexibility to assign work based on my needs. There is  a Jesuit principle called Cura Personalis, which means caring for the WHOLE person with a special appreciation for the OTHER person’s gifts and insights.  In a leadership context, it means we are obliged to lead others NOT the way we think is best or convenient for us . . . but to lead others based on how THEY NEED to be led.   That means it is extremely personal, and uniquely adapted to each of your direct reports.

Leadership should be personal . . . belt-buckle to belt-buckle, eye-to-eye, soul-to-soul.  All you need is to think a little differently about your leadership.

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8 Lessons From Microsoft’s Malaise


In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June 2012, it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list.  As of this June, it is No. 1 in the world, with a market cap of $541 billion.  Today, Apple’s iPhone product line brings in more revenue itself than all of Microsoft.   No kidding.

(At left, a pensive Microsoft CEO, Steve Ballmer – perhaps contemplating his predicament at what was once the largest company on the planet – based on market cap anyway)

What an incredible reversal of fortunes.   How could Microsoft – once one of the coolest places to work – revolutionizing the entire world and breaking even IBM’s iron grasp on the computer industry seem to lose its way so dramatically?

In Vanity Fair’s article Microsoft’s Lost Decade, investigative reporter Kurt Eichenwald offers some insights.

Microsoft was once a lean, mean and hip enterprise led by young visionaries out to change the world.  Over the years (and not so many of them) they seem to have become slow, bureaucratic, arrogant and filled with backstabbing, silos, politics, petty disputes and passive aggression – everything the company founders hated.

Lesson 1 – Be careful about succession planning.   In 1980, the year IBM came to Microsoft to purchase their DOS operating system, the company revenues skyrocketed to stratospheric levels.   While founders Bill Gates and Paul Allen were passionate about their products and vision, they both recognized that they perhaps didn’t have the requisite skills to manage the growth.   While this was arguably a good thing, they turned to another ex-Harvard colleague, who was brilliant, but also loud, boisterous and hard driven, Steve Ballmer.   Gates made Ballmer his “right hand man.”  When he ultimately decided to step aside in 2000, even Allen was caught by surprise as he never saw Ballmer as Bill’s successor.    He sensed Ballmer was not right for the job since he was a finance guy, and dealmaker who did not have a solid grasp on the product and technology side of the business.   And, the executive culture at the company took a decided turn.

Lesson 2 – Even smart people have blinders.   By 1997, Microsoft had a 10-year head start on the world in developing a new product – an electronic device that allowed people to download books magazines and other written content.   While Gates “green lighted” the project, he didn’t like the initial prototype because it didn’t seem “Windows like.”    This led to delays and redesigns.  The e-book development was ultimately transferred from R&D to the operating software unit responsible for meeting quarterly profit goals and their focus was quickly shifted to supporting software products.   So despite their multi-year head start, Microsoft would not be first to market, allowing Amazon and Apple to reap billions of dollars in revenues and profits.

Lesson 3 – Old paradigms can drag you down wrong paths   Once Gates communicated he didn’t like the operator interface, it signaled a pattern of thinking within the company.   Windows was designed to enter information via a keyboard rather than a touch-screen interface.   The initial e-book design within Microsoft was more iPad-like.  But, the Windows and Office operating units were able to dictate the new product development agenda and the Microsoft Reader product ultimately introduced – left most customers “cold” and was a considerable flop.   Microsoft was already beginning to stifle innovation.

Lesson 4 – When old meets new it is not so good.  In the early days of Microsoft, the company grew and stock prices soared.  Microsoft made not only software, but made millionaires as well – relying on a rich program that granted stock options to employees. After Ballmer took over from Gates, the stock price bubble had burst.   The old timers (many millionaires) were now working alongside new employees (millionaire “wannabes”).  When the millionaires came to work talking about the new Bentleys they had just purchased, the younger employees began to resent the disparity, creating an environment of us-vs-them which built mistrust and caused unhealthy internal politics to expand exponentially. In the early days people saw they would achieve wealth by inventing exciting new products.  But today, people see that the only way to wealth is just like it is at General Motors or IBM . . . through promotions.  The bureaucratization of Microsoft was now well under way.

Lesson 5 – When financial engineering replaces real engineering, you are in trouble.  As the tech bubble burst, and stock price woes intensified, it was natural that company execs began focusing more on managing financial results.   More meetings were created, committees were established to approve things (like what to spend money on) and people began worrying about budgets more than they did about product innovation.   This always creates a short-term focus.   When the attention turns to cost cutting and budget management, the market has a way of passing you by (especially in a marketplace where the pace of change is great.)  Microsoft initially has a lead on some of their key competitors in the smart phone business with their Windows CE operating system.  But like in the case of the Microsoft e-book reader, this too was squandered – all due to the crushing weight of Microsoft’s burgeoning bureaucracy.

Lesson 6 – The generation gap can impact every company.  Many of Microsoft’s middle (and upper level) managers were initially recruited in their 20s during the 1980s.   Today they are in their late 40s and higher.   As the millennial generation started to swarm into the junior ranks, they saw a different world of consumer behaviors than their bosses did.  As happens at many companies, the suggestions of the younger generation were brushed aside by the older generation managers who seemed out of touch with the market – adding to the resentment and feelings of frustration.   Case in point – Microsoft’s MSN Messenger product was introduced as a competitor to AOL’s AIM product – a pre-cursor to the social media phenomenon we now know as Facebook.  As was the case with Microsoft Reader and Windows CE, the MSN Messenger product lacked many of the features that younger users coveted.  Microsoft managers – said one company software developer –  “just didn’t get it.”

Lesson 7 – Don’t steal management concepts from others that don’t fit your culture.   One of the more controversial inventions of GE’s Jack Welch was the dreaded ABC system where all managers were forced to grade their subordinates on a bell curve.  So no matter how good they were, you had to classify 10% as under-performing “C players.”  While this may have worked for Welch, when introduced at Microsoft, it was immediately despised by the masses, furthering a culture of internal competition that one exec called “management by character assassination.”  Another software development manager recalled “People [would] openly sabotage other people’s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the [employee] rankings.”

Lesson 8 – Don’t get mad or try to get even.  As the bureaucracy issues became more prevalent, a lot of talented people were being lured away to other companies like Google – the emerging new “cool” place to work.   When one of Ballmer’s key technical specialists told him he was leaving for Google, Ballmer reportedly had a meltdown throwing a chair and threatening to “bury” Google.  This passion for revenge apparently motivated the development of BING, Microsoft’s third less than stellar entry in to the search market, which one engineer described as being developed by a bloated team that was not focused on innovating new features, but bringing out something fast to gain market share and hurt Google.   Reports are that Microsoft has so far lost $6 billion on the search venture.  While Microsoft has gained market share, it has done so by displacing other Yahoo search customers.   Google has also been gaining share.

It is hard to know where Microsoft will turn next, or if Mr. Ballmer will be able to turn things around.   But the main point for us all is that all companies everywhere are potentially governed by the same laws of human behavior and company culture.  Thinking you are immune is the first big mistake.

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How Businesses Lose Their Way


(Note:   This is the first of a 2-part series on one of the most interesting stories of corporate decline in my lifetime.  While the entire corporate history is not fully written yet, mighty Microsoft seems to find itself at either a crossroads or a precipice.   Below is a model taught in many business schools explaining the natural cycle of business growth and decay.   In the model – about half way through – some companies are able to reinvent themselves launching new patterns of growth, while others wither, and yes . . . sometimes die.      This series tries to get us thinking about what prevents some organizations from finding a second (or third) “youth” period choosing instead, a path to oblivion.  Our story begins a long way from Redmond, Washington. )

When I arrived in Detroit, Michigan in 1985, having purchased my first company (a tech supplier of high-frequency powers systems for welding and induction heating) the auto industry was a pretty exciting place.  The new technologies were impressive, the new car programs were countless, and the scope of each project was mammoth.  For an engineer, I was at my dream job, and the possibilities seemed endless.

But over the years, I had a front-row seat for what was arguably the decline and fall of an industry that was once dominant virtually across the planet.    Detroit taught the world how to design engines and powertrains and how to create marketing hype that would bring people into showrooms, year after year.

Attending the Detroit Auto Show was something I came to eagerly anticipate throughout the time that I owned that business.   Cars DO look sexy, exciting, novel and inventive.  Styling was an art form worthy of a museum.  (If you have never been to the Henry Ford Museum in Dearborn, Michigan it is worth the trip.)

Year after year, though, the atmosphere was changing.  The Japanese automakers (initially a joke in Detroit) were gaining market share, initially in small cars.    Detroit responded as if they didn’t really care about small cars, because they made their money on trucks, luxury cars (like Cadillac and Lincoln) and later SUV’s and mini-vans.   I heard one overconfident Detroit exec once remark that “they [Japanese] could have the small car market.  It didn’t really matter.”   Even though the US carmakers were not able to make money in the small and economy market segments, it turns out that segment was important.     The Japanese had to learn how to make money-making small cars with low-sticker prices.  The cost efficiencies they discovered made them that much more formidable when they entered the higher end of the market making two times the  margin as did the so-called “Big 3” on comparable higher priced products.

Eventually, the Japanese entered each of those high-end segments Detroit saw as important, and Detroit found itself with more plants than it needed to meet demand, bloated bureaucracies, and thereby were able to produce “great lakes” of red ink.

I distinctly remember being in one meeting at GM’s tech center in Warren, Michigan in the mid 1990s when the supplier community was called in to be told that it “wasn’t doing enough” to help drive improvements in the industry and that they needed to “step up.”   One VP who was addressing the group actually stated boldly before the assemblage in response to a question, “We can put Toyota OUT OF BUSINESS any time we want!”

I could scarcely believe my ears.   No one in the room was foolish enough to ask how exactly the then number one automaker could do that.

What still interests me about that episode was that while everyone in the audience seemed to know that GM was losing its dominance in the industry, that VP seemed absolutely sure that this was not the case.  I doubt he was alone among the army of GM employees at the time.   How could so many be in such denial in the face of a decade’s worth of data to the contrary?

The ARROGANCE was stunning.      

Sometimes I believe the WORST thing that can happen to any business is to be successful.   This produces pride, which is no doubt deserved.   But, you really start to believe your own press releases about how good you are, and how exciting your new products will be.   Then you become complacent. After all, things are going well . . . aren’t they?  (You are making money at least.)  Then your complacency causes your focus to be more internal than external, paying less attention to your customers, and dismissing the competitive actions of the rest of the players in the industry.  Success caused them (and, I think – all of us) to see ourselves as smart, better, experienced and powerful.

What legacy would be left?

Throughout this era, my business had its ups and downs, including its own near-death experience that managed to catalyze us into action producing innovation and change that helped us survive, and even grow.  We expanded our customer base, moved overseas, and developed many new technologies.  (Some good luck didn’t hurt either.)

Now there was a time when I had imagined that one or both of my sons would someday inherit the company and build a family legacy. But, neither of them ever felt the desire to follow in my footsteps.    I can’t say I blame them actually.  Truth be told , both of them pursued their own visions for themselves, are making great lives and careers, and I am deeply proud of each of them.

I can recall a trip with my oldest son who, on his first trip to Silicon Valley (we were doing a college visitation) was absolutely mesmerized by the area.  Every building was a crystal palace, shimmering in the California sun.   All buildings, streets, and homes were brand new.  The corporate edifices had boldly displayed  names on their sides – Cisco, Microsoft, Adobe, Intel, Microsoft, Google, Apple, Hewlett-Packard, Compaq, Amazon, SUN Microsystems . . . they were all there.

The people we met and heard about were young, optimistic and excited to be a part of this amazing concoction of talented people transforming the way we all work and play.   (Much like I imagine Detroit must have seemed in the 1950s and 60s)

Is a new era dawning?

My son, whose path led him to Palo Alto, once shared with me that he felt that this place was the future!   He argued that information age corporations in the 21st century could create value by means other than accumulating bricks and mortar as they did in my world.    A new day was dawning… it seemed.  Amazon’s stock was already trading at stratospheric levels even though they had yet to make a profit!    It seemed like the world (even Wall Street) were capable of operating to a new set of realities.   While he stopped short of calling me a dinosaur, that was kind of how I felt at the time.

But it was exciting, and we all have admired the stories of the tech industry giants and mavens.  We especially enjoyed the ones who started in a garage (as was the case with Bill Hewlett and Dave Packard as well as Jobs and Wozniak) or in a dorm room (as was the case with Michael Dell).

Sure there were some missteps (like the countless ones at befuddled HP) but mostly the success stories just kept coming.  Maybe we have all gotten smarter.  Maybe the ability to capture and leverage information as never before in recorded history could make us smarter and better.

So fast-forward to 2012.   An interesting new story is playing out.

After 26 years of redefining how we live, work, play and think, the first shoe has finally dropped for the company that ushered in the PC age.

The once wildly profitable Microsoft just posted its first-ever quarterly loss as a public company — to the tune of $492 million. Granted, this was due in large part to taking a $6.2 billion write-down on its failed online ad business, aQuantive…  but still it is an event worth noting.

In the August issue of Vanity Fair, there is a fascinating expose by Kurt Eichenwald called Microsoft’s Lost Decade.  This 7,700-word case study delves into exactly “How Microsoft Lost its Mojo.”   It is a story I expect will be taught in business schools around the world.

From my reading of it, the story is hauntingly familiar to the things I observed in Detroit.    One former Microsoft executive Bill Hill mentioned in the article remarked: “They used to point their finger at IBM and laugh.  Now they’ve become the thing they despised.”  He refers to how the early Microsoft employees used to marvel at how slow, bureaucratic and “stupid” IBM seemed to be.    So how does it come to pass that their company slowly became all of those same things?

In part 2 of this series, I will share some of the high (or low) lights.

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