Tuesday, June 30, 2009

The Trademark of an "Out of the Box" Strategist

To prevail against a static or an active system, the "Out of the Box" strategist focuses on a balance of indirectness and directness.

One can approach his or her challenge with a balance of efficiency and creativity by using Sunzi's The Art of War and the other Chinese strategic classics as the technical foundation.

A Compass team of implementers begins by assessing the grand picture. Then, they position themselves with a "top down" plan and preparation. Finally, they implementing their Compass plan with the capability to adjust on certain situations.

By using our Compass AE process, you are able to do the following:
  • Focus on the current objective while minding the Tangible Vision (the big picture);
  • Avoid negative circumstances while focusing on positive circumstances;
  • Maximize opportunities;
  • Adjust strategically;
  • Shape the Tangible Vision; and
  • Lead with strategic leadership.
By following your strategic dispositions, you can make better decisions. You will stay on course and complete your goal regardless of the circumstances.

Does your current strategic system enables your team to do that?

If your project teams are not executing and adjusting strategically. Most likely, your profits are not increasing and if you want an new strategic alternative. Contact us at service[aatt] collaboration360[dott]com
. We can give you a better way to profit in the global economy.

Monday, June 29, 2009

Golden Rules of the Information Economy:

The venture capitalists wasted an abundant of cash backing this venture. We can not see how this company will generate any real profit.

Trivia knowledge is usually cheap or free. Skilled Know-How costs.

"A wealth of information creates a poverty of attention."
- Herbert Simon, 1971

In the real world, the "World Class" domain experts provides "exclusive and esoteric knowledge on a need-to-know basis".

# June 28, 2009
Digital Domain

Now All Your Friends Are in the Answer Business

WE love to solicit advice.

Friends and family can be reliable advisers; fortune cookies, maybe less so. The Web in its glorious abundance could guide every imaginable personal decision, but it is guidance from strangers.
Seeing an unmet opportunity, companies are piling into the online advice business.

Last month, Microsoft began marketing Bing, its renamed search engine, as its new Decision Engine.” In fact, however, it’s too timid when it comes to subjective advice. Bing still gives you links to Web sites
you must wade through yourself, when what you often want is the knowledgeable friend who says, emphatically, Buy this one,” or Go here.” Hunch, a start-up that publicly opened its answer service this month, asks users to respond to a succession of questions to find the best choice in its answer database. But it requires a lot of work on the part of the questioner, and its advice is no better than whatever information happens to be in its database.

Ask Bing for a restaurant recommendation best Chinese in Palo Alto” and the first link points not to a recommended place but to a restaurant review site, Yelp. (Google does the same.) Ask Hunch and it flounders: it asks that you clarify your question and provides as possibilities What’s the best laptop for me?” and What’s the best condom for me?” A new service offered by Aardvark (vark.com), however, provides specific recommendations. Its advice is always current, too, obtained on the fly from those we trust, like friends, but whose collective expertise far exceeds that of the relatively few people we happen to know personally.

Founded in 2007 and based in San Francisco, the company has just completed beta testing of its answer service and opened it to the public last week. It begins with the social network that you’ve established elsewhere. Presently, it requires Facebook; other networks will be added, it says.

Once signed up, you submit a question to Aardvark via an instant message or e-mail, and its software looks among your Facebook friends, and friends-of-your-friends, for volunteers to answer it. You can exclude any friends from the potential contact list.
One doesn’t need Aardvark’s help to blast out a plea for guidance to many people online. But when you do, you waste the time of a lot of people,” said Damon Horowitz, one of Aardvark’s four co-founders. Asking a specific person for help isn’t without cost, either. There’s also ‘social capital’ expended when you lean on a person to answer a question,” Mr. Horowitz said. By having Aardvark circulate the question without letting the questioner know who has declined to respond, no feelings are hurt. Aardvark takes that hit,” he said.

Those friends-of-friends may turn out to be a great fountain of hitherto untapped information. For example, none of your 200 Facebook friends” may have recently stayed in Napa and be able to recommend a bed-and-breakfast. But if each of their friends can be tapped, the pool of prospective wine-country authorities jumps from 200 into the tens of thousands. You wouldn’t want to bother those thousands, however, with your question about Napa B.& B.’s. Aardvark has devised ways to drastically narrow the search, asking only those who are most likely to have an answer, and asking only a few of them at a time, protecting your network of volunteers from being asked too often.

The Aardvark system assumes that no single answer will serve for everyone who poses the same question. It uses information about interests supplied by registrants and from outside social networking profiles to match interests, demographic characteristics, common affiliations and other factors. It also checks whether prospective advice-givers are presently signed into one of three instant-messaging services. (The company says an iPhone version is in the works, too.)

If no one is interested in answering, Aardvark sends the question along to another small batch, extending from friends to friends-of-friends, and then their friends, if necessary. If the best matches aren’t online, e-mail messages are sent. On average, we have to contact eight people to get two who are willing and online,” said Nicholas Chim, a senior engineer at Aardvark. But we look at thousands in order to build the list of the top prospects.”

Having humans, not software, supply the advice is important. Max Ventilla, who formerly was at Google and is now Aardvark’s chief executive, said, Often the most useful answers don’t answer the original question. Example: ‘You don’t want to go to the Caribbean now it’s the rainy season you want to go to Hawaii.’ ” ONCE you try Aardvark’s service, you can’t look at Yahoo Answers, the current leader in questions-and-answers, without feeling pity for its now-manifest limitations.

Ask Aardvark the best Chinese in Palo Alto” question, and two good restaurant names arrive within five minutes, fulfilling the service’s aim of supplying answers from two people quickly, though not instantly. Follow-up questions can be dispatched effortlessly to the answerers, and one can also click to learn about their interests, group identities, Facebook profiles and personal Web sites, too.

Ask Yahoo Answers the same Palo Alto question and it instantly displays a stored answer with two recommendations, but it was posted four years ago. (A Yahoo spokesman said that no team member was available for an interview.)
Aardvark may come to be preferred over answer databases and decision engines” if many people want a speedy answer from a fellow human being.

Nathan Stoll, another co-founder, says that there is a common desire for an answer from someone, but not from anyone from a friend, or a friend-of-a-friend from ‘your’ someone.”

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

Sunday, June 28, 2009

The Way of Strategy (2): Using the Art of War as a Tangible Guide

Q: "Do the principles of Sunzi's Art of War (AoW) works?
A: Sunzi's Art of War is a guide that delineates a set of general and tactical principles that have been working for thousands of years.

For centuries, many famous military and political leaders have been using its principles as a strategic framework or inspiration.

How does one employ the Art of War in their life?

One utilizes the principles of AoW by reading and recognizing the possible "forthcoming" situations that can be found in the book. Then he/she delineates a set of general and specific principles that are relevant to the current and the projected circumstance.

The development of the operational plan requires one to establish the priorities and approaches for each micro-situation. Deciding the specific process (and/or methodologies) for completing each priority is always a challenge.

It is important to select an operational approach that is results-proven and that the team is capable of implementing it.

Our strategic experience tells us that a good methodology usually enables the implementers to create their own rules. In future posts, we will discuss more about creating one's own rules into their strategy.

Copying someone's operating plan or model is no guarantee of success.
The conditions are rarely the same. There is always a seasonal change for every marketplace and that the different set of implementers with similar skills and aptitudes is not guaranteed toward success.

The only constant is change. Past results do not guarantee future performance.

Remember, strategic processes and methodologies do not make people productive. People do.

# Note on Six Sigma.
The New Rules

Once upon a time, there was a route to success that corporate America agreed on. But in today's fast-changing landscape, that old formula is getting tired. And a search is on for . . .

By Betsy Morris, Fortune senior writer
August 2 2006: 12:08 PM EDT

(FORTUNE Magazine) -- Even now, nearly five years after his retirement from General Electric, Jack Welch commands the spotlight. He is still power-lunching, still making the gossip columns, still the charismatic embodiment of the star CEO. His books are automatic bestsellers.

More than any other single figure, he stands as a model not just for the can-do American executive but for a way of doing business that revived the U.S. corporation in the 1980s and dominated the world's economic landscape for a quarter- century. Just try to find an executive who hasn't been influenced by his teachings.

What came to be known as Jack's Rules are by now the business equivalent of holy writ, bedrock wisdom that has been open to interpretation, perhaps, but not dispute.

But the time has come: Corporate America needs a new playbook. The challenge facing U.S. business leaders is greater than ever before, yet they have less control than ever - and less job security. The volatility of the markets is so unpredictable, the pressure from hedge funds and private-equity investors so relentless, the competition from China and India so intense, that the edicts of the past are starting to feel out of date.

In executive suites across the country, a dramatic rethinking is underway about fundamental assumptions that defined Welch and his era. Is an emphasis on market share really the prime directive? Is a company's near-term stock price - and the quarterly earnings per share that drive it - really the best measure of a CEO's success? In what ways is managing a company to measure of a CEO's success? In what ways is managing a company to please Wall Street bad for competitiveness in the long run?

Jack Welch, needless to say, is having none of it. When FORTUNE caught up with him recently, he was as confident and outspoken as ever. "I'm perfectly prepared to change," says Welch (who co-writes a column in Business Week with his wife, Suzy). "Change is great."

But, he asserts, he sees no reason to back away from the principles by which he and other star CEOs like Roberto Goizueta of Coca-Cola (Charts) managed. If applied correctly, Welch contends, his rules can work forever.

Sorry, Jack, but we don't buy it. The practices that brought Welch, Goizueta, and others such success were developed to battle problems specific to a time and place in history. And they worked.

No one questions today that bloated bureaucracy can kill a business. No one forgets the shareholder - far from it. Yet those threats have receded. And they have been replaced by new ones. The risk we now face is applying old solutions to new problems.

Early on, Welch argued that lagging businesses - those not No. 1 or No. 2 in their markets - should be fixed, sold, or closed. In a 1981 speech titled "Growing Fast in a Slow-Growth Economy," he announced that GE would no longer tolerate low-margin and low-growth units.

GE (Charts), he told analysts at the Pierre Hotel in New York, "will be the locomotive pulling the GNP, not the caboose following it." As much as any other single event, Welch's words marked the dawn of the shareholder-value movement. And GE eventually became its star. No question who was Welch's boss. His report card: the stock price. His goal: consistent earnings growth.

As his ruthlessly efficient strategy wrenched GE into high performance, the company's stock took off. Soon virtually everything Welch said became gospel - often to the extreme. When Welch embraced Six Sigma, the program began to proliferate all over corporate America. He talked about being the leanest and meanest and lowest-cost, and corporate America got out its ax. Welch advocated ranking your players and weeding out your weakest, and HR departments turned Darwinian.

As time went on, the mantra of shareholder value took on a life of its own. Cheered on by academics, consulting firms and investors, more and more companies tried to defy history (and their own reality) to sustain growth and dazzle Wall Street as Welch was doing. Accounting tricks, acquisition mania, outright thievery - executives went overboard.

"It became all about 'real men make their numbers,' " says one CEO. "What were we thinking?"

This, says Harvard Business School's Rakesh Khurana, is the legacy of the Old Rules. Managing to create shareholder value became managed earnings became managing quarter to quarter to please the Street. "That meant a disinvestment in the future," says Khurana, author of Searching for a Corporate Savior. "It was a dramatic reversal of everything that made capitalism strong and the envy of the rest of the world: the willingness of a CEO to forgo dividends and make an investment that wouldn't be realized until one or two CEOs down the road." Now, he believes, "we're at a hinge point of American capitalism."

There is another model. In breathtakingly short order, the rock star of business is no longer the guy atop the FORTUNE 500 (today Rex Tillerson at ExxonMobil (Charts)), but the very guy those FORTUNE 500 types used to love to ridicule: Steve Jobs at Apple (Charts). The biggest feat of the decade is not making the elephant dance, as Lou Gerstner famously did at IBM, but inventing the iPod and transforming an industry.

Dell (Charts) spectacularly upended Compaq and Hewlett-Packard, yet few big companies paid close enough attention to see that new technologies and business models were negating the power of economies of scale in myriad ways. Nobody has proved that more than Google (Charts).

Yet in the corridors of corporate power, the old rules continue to cast an outsized shadow. Many CEOs are following a playbook that has, at best, been distorted by time.

"How do you think about building shareholder value when a lot of people are really just going to hold the share for the moment?" says Jim Collins, a former Stanford Business School professor and the author of Good to Great and Built to Last. "The idea of maximizing shareholder value is a strange idea when [many shareholders] are really share flippers. That's a real change. That does make the notion of building a great company more difficult."

That doesn't mean everything about Welch's era is wrong. Indeed, we named him "manager of the century" in 1999. Were he at GE today, he might well be in the forefront of the current wave of rethinking, as his successor, Jeffrey Immelt, surely is. Still, in the way of all good analogies, we must begin by tearing down the old so that we can really open ourselves to something different.

In that spirit, then, here are seven old rules whose shortcomings have become apparent and seven replacements that point toward a new model for success. Some of the old rules are inspired directly by Welch's teachings; others are not. You may not agree with all of our conclusions (Welch certainly didn't). We welcome the debate. What's most important is to get the discussion started.

Until the very end of the last century, big meant good in the business world. B-schools taught the benefits of economies of scale.The greater your revenue, the more you could spread fixed costs across units sold. With size came dominance-of airwaves, store shelves, supply chains, distribution channels. Until the mid-1990s, a company's market value usually tracked its revenue.

Then strange things started to happen. Microsoft's market cap passed IBM's in 1993, even though Bill Gates' $3 billion in revenue was one-twenty-second that of IBM. Scale didn't insulate GM from near-catastrophic decline. The big dogs seemed to hit a wall. (The median FORTUNE 500 company is now three times the size it was in 1980, in real terms, and thus much harder to manage.)

Citigroup, built through acquisitions by Sandy Weill to deliver consistent earnings, suddenly found the market focused on whatever bad news emerged in Citi's far-flung units instead of on the smoothness of its overall performance.

Big Pharma used to be prized for its unmatched R&D spending; now it is the smaller biotech firms that generate the cutting-edge drugs - and drugmakers Merck, Bristol-Myers, and Eli Lilly all have smaller market caps than biotech Genentech, despite significantly higher revenue and profits.

Technological advances and changing business models have diminished the importance of scale, as outsourcing, partnering, and other alliances with specialty firms (with their own economies of scale) have made it possible to convert fixed costs into variable ones.

Dell, it turned out, was not an anomaly, it was just the beginning - a pioneer at all this, keeping its costs down by outsourcing disk drives, memory chips, monitors, and more, freeing itself to focus on (and clean up in) direct selling and just-in-time assembly.

Nobody wants to be a laggard, of course, and there is much to be said for being the market leader. Nike, Wal-Mart and Exxon certainly don't wish they were anything else. But more and more, market domination is no safety net. Disney's stranglehold on animated films meant nothing once Pixar's digital innovation hit the scene. AOL's established user base couldn't slow down Google.

Look at Coca-Cola, whose still-strong No. 1 position in cola turned out to be not an insurance policy but proof of what consulting firm McKinsey calls the "incumbent's curse." Coke's archrivalry with Pepsi was always about market share - capturing it or defending it by tenths of a percentage point in grocery stores, restaurants, and faraway lands. Coke executives defined their industry as "share of stomach" - that is, the total ounces of liquid an average person consumes in a day and what percentage of it can be filled with Coke. CEO Roberto Goizueta told Jack Welch in a conversation in FORTUNE a decade ago that the soft drink industry wouldn't run out of growth until "that faucet in your kitchen sink is used for what God intended" - dispensing Coke from the tap.

But eventually Coke's monomaniacal focus backfired. When bottled waters like Evian and Poland Spring began to gain traction, Coke didn't pay sufficient attention. Its board vetoed management's proposal to buy Gatorade in 2000 (sending the sports drink into the arms of Pepsi).

Such niche products were viewed as low-volume distractions. Yet last year, in a turnabout that would have been inconceivable a decade ago, soda sales fell, and water, sports drinks, and energy drinks all soared. The jaw dropper: Energy drinks-which boast a profit margin of 85%, according to Bernstein Research-are now expected to outearn every other category of soft drink within three years.

Not everyone missed the opportunity. Out in Corona, Calif., tiny Hansen Natural Corp. didn't care about being No. 1 or No. 2. CEO Rodney Sacks was instead noticing how consumers were migrating from carbonated soft drinks to juices, iced teas, and "functional drinks."

So in the '90s he began moving Hansen beyond its base as a maker of natural sodas (Mandarin Lime, Orange Mango) toward vitamin and energy drinks. Never mind that the energy-drink market was tiny then.

"We look for niches and see how they grow," he says. Since launching an energy drink called Monster four years ago (deftly packaged in a dramatic-looking 16-ounce can adorned with a clawmark), Hansen's sales have quadrupled to $348 million, vaulting its shares to $79 from a split-adjusted $2.

Coke has gotten religion. CEO Neville Isdell's team is pushing an array of new drinks, including a half dozen of its own energy entries that have earned the company a significant stake in the U.S. market. "We believe there is value in those niches," Isdell told FORTUNE this spring. "It will not drive the volume number, but volume is something we've often chased to the detriment of the long-term business."

Starbucks, on the other hand, is a drink-seller that has avoided the incumbent's trap. "We've never said we wanted to be No. 1 or No. 2," says CEO Jim Donald. Starbucks isn't a brand per se; it's more an identity that's morphed from a product (a latte) to a place to get wireless, to a place with music to meet friends.

"If we said we wanted to be the No. 1 coffee company, that's what would be on our mind," Donald says. Instead, the company has kept moving, evolving, trying new things. "It doesn't matter where you end up," says Donald. "It matters that you're the company of choice."

Whenever you ask a CEO about the importance of customers, you hear the requisite platitudes. But in fact, customers have often lost out in the relentless push to maximize shareholder value (as represented by the stock price) and to maximize it immediately. One Bain & Co. study found a huge gap between the perceptions of executives - 80% of whom think they are doing an excellent job of serving customers-and the perceptions of customers themselves: Only 8% of them agree.

Every four years, according to Bain, the average company loses more than half its customers. Aggressive pricing (on hotel phone bills, rental-car gas charges, and credit card fees, to name a few examples) has increased as the profit pressure on companies has mounted, says Bain's Fred Reichheld. Abusing customers this way, says Reichheld, "destroys the future of a business." He believes that such behavior - and not scandals like Enron and Tyco-is why fewer than half of all Americans have a favorable opinion of business today.

This is shareholder-value theory taken to the extreme: the tail wagging the dog. One CEO, who asked not to be named, describes the pressures this way: Businesses became disconnected from their fundamentals, producing "perceived value" instead of real value, because that's what the stock market rewards.

When investor-driven capitalism took over from managerial-driven capitalism, as Harvard's Khurana puts it, CEOs began managing the company by earnings per share instead of focusing on details like new products, service calls, customer-satisfaction scores - all those things that are supposed to produce the earnings per share.

Yet some renegades thumbed their noses at Wall Street and truly kept the consumer experience front and center. Think Apple, which has from inception been predicated on dreaming up what customers want before they know it. Or look at Genentech, whose employees are greeted each day by billboards of the cancer patients who take its drugs, to remind everyone of the importance of their work.

At GE, CEO Immelt has instigated what he calls "dreaming sessions" to brainstorm with key customers. He also requires all businesses to be judged using a metric called Net Promoter Score, developed by Reichheld and his colleagues at Bain, that measures how likely a customer is to have you back.

"When everything is focused on delivering for customers, that makes employees proud," Reichheld says. "They become the powerful engine."

In 1995, Jack Welch "went nuts," as he later put it, over Six Sigma, a set of methods for improving quality - plus a powerful way to reduce costs - that had been developed by Motorola in the '80s.

At GE's annual managers' meeting in Boca Raton the following January, he told his troops that embracing Six Sigma would be the company's most ambitious undertaking ever. GE's "best and the brightest" were redeployed to put the methods into action. And it worked. Welch would later write that Six Sigma helped drive operating margins to 18.9% in 2000 from 14.8% four years earlier.

No wonder that after Welch adopted Six Sigma (to which he devotes a chapter of his book Winning), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic. In fact, of 58 large companies that have announced Six Sigma programs, 91% have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process).

One of the chief problems of Six Sigma, say Holland and other critics, is that it is narrowly designed to fix an existing process, allowing little room for new ideas or an entirely different approach. All that talent - all those best and brightest-were devoted to, say, driving defects down to 3.4 per million and not on coming up with new products or disruptive technologies.

Innovation is "a meta-stable entity," says Vishva Dixit, vice president for research of Genentech, who oversees 800 scientists at a company that has created some of the most revolutionary anticancer drugs on the market. "Nothing will kill it faster than trying to manage it, predict it, and put it on a timeline."

An inward-looking culture can leave firms vulnerable in a business world that is changing at a breakneck pace - whether it's Craigslist stealing classified ads from local newspapers or VoIP threatening to make phone calls virtually free.

"The availability of information and the opening of key markets is exploding," says Clay Christensen, a Harvard Business School professor and the author of The Innovator's Dilemma, "and now you put a few million Chinese and Indian engineers to the test of disrupting us too."

No business can afford to focus its energies on its own navel in that environment. "Getting outside is everything," says GE's Immelt (who still deploys Six Sigma). From the day he took over as CEO, he says, he knew the company would need to be "much more forward-facing in the future than we ever were in the past." He explains: "It's not about change. It's about sudden and abrupt and uncontrollable change. If you're not externally focused in this world, you can really lose your edge."

At GE under Welch, employees were ranked as A, B, or C players, and the bottom group was relentlessly culled. "We're an A-plus company," Welch told his executives in 1997, according to Robert Slater's book, Jack Welch and the GE Way. "We want only A players. Don't spend time trying to get C's to be B's. Move them out early."

Pretty soon places as diverse as Charles Schwab and Ford began ranking employees. But as with Six Sigma, the practice became overdone. Welch's "vitality curve," in the hands of less deft managers, became the "dead man's curve," or "rank and yank." Everybody, it seemed, was expendable.

There was a price to pay. According to a Rutgers and University of Connecticut poll in 2002, 58% of workers believed most top executives put their own self-interest ahead of the company's, while only 33% trusted that their bosses have the firm's best interests at heart.

"All of a sudden, when big companies had to change and respond to the marketplace and move quickly, they found out they couldn't, because they didn't have people engaged and aligned around the corporate mission," says Xerox CEO Anne Mulcahy. "Then being big is a disadvantage. If you're not nimble, there's no advantage to size. It's like a rock."

While studying companies trying to transform themselves, Christopher Bartlett of Harvard Business School and a colleague found the major obstacle was inefficient use of increasingly disenfranchised employees.

"People don't come to work to be No. 1 or No. 2 or to get a 20% net return on assets," Bartlett says. "They want a sense of purpose. They come to work to get meaning from their lives."

Steve Jobs has emphasized that Apple hires only people who are passionate about what they do (something that, to be fair, Welch also talked about). At Genentech, CEO Art Levinson says he actually screens out job applicants who ask too many questions about titles and options, because he wants only people who are driven to make drugs that help patients fight cancer.

GE still ranks employees, but Immelt has also added a new system of rating-red, yellow, or green-on five leadership traits (including creativity and external focus). Employees are rated against themselves, not one another. Immelt doesn't talk about jettisoning the bottom 10%. He talks about building a team.

"When you're 18 years old, you say, 'The iPod is neat,' " Immelt explains, "but people don't dream about making a gas turbine. If we can recruit the best 22-year-olds, we can double and triple in size. If not, then we're already way too big. You've got to be pragmatic about what turns people on."

As big shareholders began to throw their weight around in the 1980s, boards sacked their CEOs and named dazzling replacements. And the celebrity CEO was born.

The stars of that era were a varied crew: Jacques Nasser, Lou Gerstner, George Fisher, Michael Armstrong, Jack Welch, Ken Lay, Al Dunlap, Sandy Weill, Carly Fiorina. Some got more credit than they deserved, others more blame. A voracious business press helped burnish (or break) reputations. The bull market fueled the myth that a truly superior CEO could hit earnings targets quarter after quarter and propel the stock price unrelentingly higher.

But the tactics used by this generation of leaders - squeezing costs, deftly managing financial and accounting decisions, using acquisitions to grow - did not always provide long-term solutions. (A McKinsey study of 157 companies that bulked up through acquisition in the '90s found that only 12% grew significantly faster than their peers, and only seven firms generated returns that were above industry-average.)

Today many of those methods have fallen out of favor. Tellingly, one top management tool du jour is the stock buyback, which can buoy share prices and pacify investors-but also indicates that the CEO has no better ideas for deploying capital.

If the celebrity CEO needed a spotlight, then today's leaders need internal fortitude. Of 940 executives surveyed by Boston Consulting Group last year, 90% said organic growth was "essential" to their success. But less than half were happy with the return on their R&D spending. And therein lies the rub: Organic growth is not a quick fix.

Real growth requires placing big bets that probably won't pay off until far into the future - and today's impatient culture offers little incentive. What practically killed Xerox was its leaders' resistance to making the technological leap from analog copying to digital, which was almost guaranteed (as most such changes are) to cut margins.

By the time they were finally forced to, their business was in free fall. The company was eventually charged with improperly accelerating revenues and overstating earnings. (It settled without admitting wrongdoing and paid a $10 million fine.)

"You have to change when you're at the top of your game in terms of profit," says Mulcahy, who cleaned up the mess, made the changes to digital and color, and is now trying to jump-start revenue. "It's hard to do. Your business looks its best. Your margins are at their best. All that makes your job easier. Then you're like, 'Oh, shit, here we go again.' You've got to jump into that risk pool, and once again you're in this mode of 'You know, this could fail.' "

Never before has a CEO more needed to take risks, but rarely has Wall Street been less receptive. A recent Booz Allen study found that a CEO is vulnerable to ouster if his stock price has lagged behind the S&P 500 by an average of 2% since he took the top job.

Cisco Systems CEO John Chambers says he knows a number of colleagues who are planning to step down because of the difficulty of balancing the short-term pressures of the Street with what's in the long-term best interest of the company.

But standing tall is precisely what all those corner-office pros get paid the big bucks for, isn't it? "You have to have the courage of your convictions," says Chambers. Immelt agrees that you must be willing to spend time "in the wilderness with no love."

And directors need some courage too: to resist pressure to judge a CEO by the company's stock price today and get back to harder measures like return on invested capital. Hark back again to that seminal Jack Welch speech in 1981. It hardly took the world by storm - in fact, Welch has talked about how little it seemed to impress analysts that day, barely moving the stock. But leadership is not about following the rules of the past. It is about standing up for what you believe is best, regardless of the consequences.

Today bravado is dangerous. Soft-drink companies became bad guys when they were slow to leave the school lunchroom. Nike got smacked by sweatshop allegations. Try surfing wakeupwalmart.com to see how powerful a critical community of Internet activists can be.

That old notion that has served Goldman Sachs so well is creeping back into vogue: It's okay to be greedy as long as it's "long-term greedy." Says Isdell at Coke: "I do not [agree with] Milton Friedman-that the role of the corporation is solely to make money. Our legitimization in society is a very important part of what we do."

Having a "soul" as a corporation is more than contributing to causes or being transparent about executive compensation or adhering to environmental regulation (though it is certainly all of those things). It is defining a company's vision in a sustainable, long-term way - and to hell with what the hedge funds or other pay-me-now investors say.

CEOs must get better at courting long-term investors - explaining their strategies, saying exactly what they intend to do, avoiding the temptation to sugarcoat.

"There is so much pressure to hit your numbers," says Genentech's Levinson. "I've been very clear with Wall Street since 1995 that if we see an opportunity to make better drugs and more money down the road at a short-term cost, we will do that every time. And you need to know that's the kind of company we are."

That's easier to do, of course, when you're a glamorous, fast-growing little biotech. So it raises the question: Does the rest of corporate America have the moral fiber to defy the present, when needed, and focus on the future? And do shareholders have patience enough to support them? In other words, are they willing to be long-term greedy-or are they just greedy?

FEEDBACK bmorris@fortunemail.com

REPORTER ASSOCIATE Patricia Neering contributed to this article.
Top of page
From the July 24, 2006 issue

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Saturday, June 27, 2009

The Way of The Strategist (1): Bill Walsh

Bill Walsh, one of the greatest innovators in professional football, the grand architect of the "West Coast Offense (WCO)" and the head coach of three Super Bowl Championship teams.

Following are some of my favorite Bill Walsh's strategic focal points:
  • Developing and maintaining high but tangible standards of performance;
  • Scripting a tactical gameplan for each and all endeavors;
  • Focusing on tactical plays that are needed (The ideal ratio for plays practiced and plays needed is 1:1)
  • Performing and producing effectively;
  • Developing a team around a few good playmakers who are great leaders by example;
  • Leading not lagging throughout the game (securing and maintaining the pole position) and
  • Be properly prepared that there is no room for mental mistakes.

  • Scripting the first 25 offensive plays of the game and implementing it
  • Running one or two trick plays early in the game
  • Controlling the clock while moving the ball forward
  • Be Professional in private and public relations
  • Winning with Class

# # #

West Coast Offense Overview

  • Bill Walsh originated it with the San Francisco 49ers.
  • Short pass plays replace the running game to control the ball.
  • A long specific process for the QB to pick-up all the reads and adjustments.
  • The release of all five receivers into the pattern
  • QB has progression read up to five receivers.
  • Take what the defense gives you.
  • Make the defense adjust to you.

Source: WestCoastOffense.com

# # #

Paraphrased thoughts from Coach Walsh:
  • "Preparation Precedes Performance."
  • "Failure to prepare is to prepare to fail. ..."
  • "Beat them to the punch."
  • "Always replace a player (resource) a season sooner than a season later. ..."
  • "Recover quickly once a mistake is made."

# # #

Friday, June 26, 2009

The Way of Strategy (1): A Plan With Metrics is a Tangible Plan

The complete strategic leader usually creates value into their plan
by inserting tangible performance metrics into each objective.

Deciding the metrics and choosing the specific approach toward the measurement and the tracking of the data are two of the most difficult tasks when building the plan.


June 21, 2009
Corner Office

The Divine, Too, Is in the Details

This interview of Jacqueline Kosecoff, chief executive of Prescription Solutions, a UnitedHealth Group company, was conducted and condensed by Adam Bryant.

Q. What’s your approach to leadership?

A. I think a good leader has to do three things. It’s almost like a three-act play. The first act is coming up with the concept for a product or a service to offer. And then you have to make sure that the entire team not just the executive management but the entire team believes in that concept and understands it.

The second job is execution, and good ideas aren’t as valuable as they might be until you make them into a reality. You often hear people say, The devil’s in the details. I think it’s the divine. And so a lot of time has to be spent making sure the execution works.

The third act is measurement; I’m a great believer in measurement. So before I begin the execution phase of any project, I sit down with my team and we ask ourselves: What are the metrics against which we’re going to measure our success?

We do two things: We measure where we’re succeeding, and where we succeed we celebrate. And we also measure where we’re not succeeding, and where that happens we ask ourselves, Can we go back and fix something? And if so, we do it. And if not, we make sure that we understand where we went wrong, put it into the corporate DNA, so the next project won’t have that flaw.

Another thing I learned was that when you’re involved in a large development project, projects often morph. And when people become advocates of their project, they change some of those metrics so that they can claim success when perhaps it’s not 100 percent legitimate to do so.

So creating the metrics up front, and having a discipline of saying, O.K., this is where we want to go, and if we don’t achieve it it’s O.K., we’ll try in another way to get there, is very helpful. Not just for me, but for the whole team.

Q. You run mentoring programs for women executives. Tell me about those.

A. I started out without mentors, so I’m acutely aware of the value of a good mentor. Often in a company, the people who are high-maintenance get all the attention, rather than the people who are high-performing and high-potential. So I try to make the mentoring program about the high-performing, high-potential people.

One of the things I’ve found is that women often don’t speak financial language as well as they need to in order to go to the next level. So, for example, a lot of our women executives never went on to get an M.B.A., and yet they’re in a big corporation where they need to understand financial matters. They’re a little bit reluctant to go to the guys, as it were, and say: Excuse me, I don’t know how to read a balance sheet. Could you teach me how?

So we actually had classes, taught by women, for women, on how to become financially literate. And people throughout the organization, from the board down, came to these classes. And then, after our earnings call, we would hold a little question-and-answer session: What did you not understand during the earnings call? What did you understand? What do you think I meant when I said this?

Q. Are there messages you find yourself repeating to the women you mentor?

A. The most common thing is to understand what job you want, because I think that often people want a job and they simply don’t understand what it involves.

Second, work is not going to get any easier as you get to the top, so be prepared for what it means to take on a particular position. It’s not just the skill sets that you have, but it’s also the time commitments, the stress you’re going to deal with.

And the third is, perhaps you can’t have it all at once. I think oftentimes the fantasy that’s held is that you can do it all; you can be a parent, and you can be engaged in the community, and you can be the C.E.O., all at the same time. And I think that helping people to plan a life that includes all that, but perhaps more serially, is a useful discussion.

Q. What feedback do you get from your direct reports that you’ve used in setting your own goals as a manager and a leader?

A. In recent years, if I had to distill what I’m hearing most, it’s the importance of listening and responding to people’s concerns. I’ve always thought communication was important, but the older I get the more I realize that you cannot communicate enough, and you need to answer people’s questions and their concerns directly.

I try to answer e-mail within three or four hours. Sometimes my response may be nothing more than: Got this. I’ll be working on it and get back to you. But I want people to know that I’m reading these things, I’m listening to them, that what they say is important, I heard it, I’m paying attention to it.

You may not be able to solve the entire problem at that moment, but just to let them know that you heard it, you understand it, that something’s happening, I think goes a long way to making people feel that there’s an environment of respect for their opinions, their needs, their concerns.

I also think it’s important, sometimes, to communicate no, and to say that in a very clear way and not to leave any ambiguity so that people continue to ask and ask and ask about a decision that’s already been made.

Q. How do you run meetings?

A. I don’t lead meetings. To the extent that it’s possible, I have others lead meetings. Every Friday, we have the senior leadership team come for about an hour-and-a-half operations check, and we have the checklist of items that we need to get to, and we will go through that list, but I will never lead that meeting. Each one of the executives leads the meeting it rotates in alphabetical order and we just go through the list.

First of all, it teaches them how to lead a meeting. It also sends a message that this meeting’s not for me, it’s for us. And it’s been my observation that at a lot of these operations meetings, everyone talks to the C.E.O., not to each other. It also teaches good meeting etiquette. People are much more, I think, respectful of how they behave in a meeting because they’re going to be leading the meeting one day.

We also begin every meeting by asking who needs to be acknowledged in the firm. Who in the company did something that’s extraordinary, and we need to acknowledge them. We decide who should send the letter, and what we should do for that person, and there’s usually about 5 or 10 people at every meeting that we reach out to and acknowledge. That’s how the meeting begins. It ends with any concerns that I have that I need to share with the team.

Q. Any other rules of the road for your meetings?

A. Not so much for meetings, but there are rules of the road for engagement. Silence is consent. If you don’t speak up in the meeting, you can’t later come back and say: I really hated that. I don’t want it to happen. Come to the meeting, let your feelings be heard, and a decision will be made.

Second is, assume positive intent. It’s one of the ways to sort of keep communication on the high road. Perhaps somebody was misunderstood, or they misheard something. You have to go back and ask for the context, and it’s very likely to be simply a misunderstanding. And if you listen, it can be resolved. And it tends to, I think, breed a lot more trust and respect among us if we use those rules.

Q. Let’s talk about hiring. How do you do it?

A. By the time a candidate comes to me they’ve been heavily vetted, and you can pretty much count on the fact that they’ve got the skill set that you need and they have the experience you need.

So basically what I do is I try and explore the person. One of the things I explore is whether they like our company, and that’s important because so often people will come in, particularly from the outside, and their modus operandi is: Everything you do is wrong. It was done better at fill in the blank, from wherever they left and so we need to adopt their methods.

It may be that they’re bringing great best practices to the company, but they have to do it in an environment that’s respectful of both companies.

So I look for people who are going to be able to bring new ideas into the organization in a way that will be quickly absorbed into the organization, rather than in an off-putting way.

I look for people with a lot of energy. I think in almost every environment you can think of, energy’s a very good thing. Passion’s a good thing, and I look for that as well. And I look for people that have integrity.

Q. And how do you get a sense of all that?

A. I usually ask: What was the thing that you’re most proud of in your professional career? And what was the thing that you’re most proud of in your personal career? And I listen very carefully to those answers. And finally, I ask them at the very end: O.K., you’re now sitting with the C.E.O. and you’ve been through all these interviews. What would you like to ask me about the company that you couldn’t have asked these other people? Are there any questions you have?

Q. And what are you listening for?

A. If they have no questions, then I worry that they’re not going to be able to speak up in a meeting. If their question is all about: Well, is the 401(k) funded? I realize that perhaps that’s not the right question to ask the C.E.O. If they sit down and they ask me something that’s hard for me to answer, I like it.

Q. What would you like business school to teach more of, less of?

A. I’ve never been to business school, so I would be very cautious about it. But I guess what I’d say is: more respect for content. There’s a lot of emphasis on the skills of business, like the principles of marketing and accounting. But businesses have content expertise as well, and I think it’s difficult to come into a company and sit down and begin to apply those principles without understanding the content of the company’s business.

Q. Are you a gadget person?

A. I am basically not a gadget person, but when I adopt a gadget I tend to be quite loyal, and I’m a BlackBerry user. One of the things I do that I don’t see my colleagues do too often is read the manuals. In my early days, we used to create software products, and I was constantly trying to figure out how to write manuals that were easy to use. So I became an aficionado of manuals. I actually read the manuals and I usually know that on Page 17 it tells you how to do X, or Y or Z. And whether it’s my car or the BlackBerry, or my GPS system, I read the manuals. Men aren’t allowed to do this, I think; women can read manuals.


Tuesday, June 23, 2009

Protect your Competitve Advantage

One thrives in this global economy by incrementally enhancing their "competitive advantage"

The two must important steps that most people misses are:
  • Defining what is the advantage
  • Determining the protection of the advantage.

Jiang Tai Gong book "Six Secret Teachings" emphasizes "the importance of protecting one's advantage" regardless of the situation.

King Wen asked Tai Gong:"How does one preserve the state's territory?"

Tai Gong said: "Do not estrange your relatives. Do not neglect the masses. Be concillatory and solicitous towards nearby states and control all that is under you. Do not loan the authority of state to other men. If you loan the authority of state to other men, then you will lose your authority. Do not hurt those of lower position to benefit those of higher position. Do not abandon the fundamental to save those that are inconsequential.

When the sun is at midday, you should dry things. If you grasp a knife, you must cut. If you hold an axe, you must attack."

"If at the height of the day, you do not dry things in the sun, this is termed losing the opportunity.

If you grasp a knife but do not cut anything, you will lose the moment for profits. If you hold an axe and do not attack, enemies will attack instead."

"If trickling streams are not blocked, they will become great rivers. If you do not extinguish the smallest flames, there is nothing much you can do when it turns into great flames.

If you do not eliminate the two-leaf sapling, you might have to use the axe to remove it in future." "For this reason, the ruler must focus on developing wealth within his state. Without material wealth, he has nothing with which to spread beneficence or to bring his relatives together.

If he estranges his relatives it will be harmful. If he loses the common people, he will be defeated. "

"Do not loan sharp weapons to other men. If you loan sharp weapons to other men, you will be hurt by them and will not live out your allotted span of years."
King Wen said:"What do you mean by benevolence and righteousness?"

Tai Gong replied: "Respect the common people, unite your relatives. If you respect the common people, they will be in harmony. And if you unite your relatives, they will be happy. This is the way to implement the essential cords of benevolence and righteousness."

"Do not allow other men to snatch away your awesomeness.
Rely on your wisdom, follow the norm. Those that submit and accord with you, treat them generously and virtuously. Those that oppose you, break with force. If you respect the people and trust, the state will be peaceful and populace submissive." - T’ai Kung Liu-t’ao (Six Secret Teachings)

More on this topic can be found in Dr. Ralph Sawyer's Seven Military Classics of Ancient China.

June 23, 2009
Apple’s Obsession With Secrecy Grows Stronger

SAN FRANCISCO Apple is one of the world’s coolest companies. But there is one cool-company trend it has rejected: chatting with the world through blogs and dropping tidbits of information about its inner workings.

Few companies, indeed, are more secretive than Apple, or as punitive to those who dare violate the company’s rules on keeping tight control over information. Employees have been fired for leaking news tidbits to outsiders, and the company has been known to spread disinformation about product plans to its own workers.

They make everyone super, super paranoid about security,” said Mark Hamblin, who worked on the touch-screen technology for the iPhone and left Apple last year. I have never seen anything else like it at another company.”

But even by Apple’s standards, its handling of news about the health of its chief executive and co-founder, Steven P. Jobs, who has battled pancreatic cancer and recently had a liver transplant while on a leave of absence, is unparalleled.

Mr. Jobs received the liver transplant about two months ago, according to people briefed on the matter by current and former board members. Despite intense interest in Mr. Jobs’s condition among the news media and investors, Apple representatives have declined to address the matter, reciting with maddening discipline only that Mr. Jobs is due back at the company by the end of June.

Mr. Jobs was actually at work on Apple’s sprawling corporate campus on Monday, according to a person who saw him there. Company representatives would not say whether he had returned permanently.

Even senior officials at Apple fear crossing Mr. Jobs. One official, who is normally more open, when asked for a deep-background briefing about Mr. Jobs’s health after the news of the transplant had become public, replied: Just can’t do it. Too sensitive.”

Secrecy at Apple is not just the prevailing communications strategy; it is baked into the corporate culture. Employees working on top-secret projects must pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices, according to one former employee who worked in such areas.

Work spaces are typically monitored by security cameras, this employee said. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful, he said.

Apple employees are often just as surprised about new products as everyone else.

I was at the iPod launch,” said Edward Eigerman, who spent four years as a systems engineer at Apple and now runs his own technology consulting firm. No one that I worked with saw that coming.”

Mr. Eigerman was fired from Apple in 2005 when he was implicated in an incident in which a co-worker leaked a preview of some new software to a business customer as a favor. He said Apple routinely tries to find and fire leakers.

Philip Schiller, Apple’s senior vice president for marketing, has held internal meetings about new products and provided incorrect information about a product’s price or features, according to a former employee who signed an agreement not to discuss internal matters. Apple then tries to track down the source of news reports that include the incorrect details.

Five years ago, Apple took its obsession with secrecy to the courts. It sued several bloggers who had covered the company, arguing that they had violated trade-secret laws and were not entitled to First Amendment protections. A California appeals court ruled for the bloggers, and the company had to pay $700,000 in legal fees.

Apple also sued a blog called Think Secret and settled the case for an undisclosed amount, but as part of the settlement that blog shut down.

Regis McKenna, a well-known Silicon Valley marketing veteran who advised Apple on its media strategy in its early days, said the culture of secrecy had its origin in the release of the first Macintosh, which competitors like Microsoft and Sony knew about before it was unveiled.

It really started around trying to keep the surprise aspect to product launches, which can have a lot of power,” Mr. McKenna said.

He added: But what most people don’t understand is that Steve has always been very personal about his life. He has always kept things close to the vest since I’ve known him, and only confided in relatively few people.”

Apple’s decision to severely limit communication with the news media, shareholders and the public is at odds with the approach taken by many other companies, which are embracing online outlets like blogs and Twitter and generally trying to be more open with shareholders and more responsive to customers.

They don’t communicate. It’s a total black box,” said Gene Munster, an analyst at Piper Jaffray who has covered Apple for the last five years.

Mr. Munster said he jokes with other colleagues covering the company about how Apple routinely jams the frequencies,” or gives them misinformation to throw them off the scent of a new product or other news it hopes to keep confidential. Four years ago, he said, a senior Apple executive directly told him the company had no interest in developing a cheap iPod with no screen. Soon after, the company released just that: the iPod Shuffle.

For corporate governance experts, and perhaps federal regulators, the biggest question is whether Mr. Jobs’s approach has led to violating laws that cover what companies must disclose to the public about the well-being of their chief executive.

On that key issue, the experts are divided. Some believe Apple did not need to disclose Mr. Jobs’s liver transplant because Mr. Jobs was on a leave of absence and had passed responsibility for the day-to-day operations of the company to the chief operating officer, Timothy Cook.

Other governance experts argue that the liver transplant now makes one of Apple’s assertions from January that Mr. Jobs was suffering only from a hormonal imbalance seem like a deliberate mistruth, unless Mr. Jobs’s health condition suddenly deteriorated. Of course, no one knows enough to say definitively.

Most governance experts do seem to agree on one point: that the secrecy that adds surprise and excitement to Apple product announcements is not serving the company well in other areas.

In this environment, where transparency is critical, the more information you give the marketplace the better,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. For a technology company that views itself as innovative, it’s a little odd that they are getting a reputation for lack of transparency.”

Apple’s stock dropped $2.11 to $137.37 on Monday amid a larger market sell-off. And the company did, in fact, have something to reveal: it said it had sold a million units of its new iPhone 3G S over the weekend, well above analysts’ forecasts.

Copyright 2009 The New York Times Company

Following are the two questions that you should always ask yourself:
  • "What is your competitive advantage!?"
  • "What is your approach for protecting it?"

Sunday, June 21, 2009

Risk Management: A View from The Seven Strategy Classics of Ancient China

During the act of assessing or planning, he or she must always consider the risk factor.

"One who abandons what is nearby to plan for what is distant will labor without success. One who abandons the distant to plan for the nearby will be at ease and attain lasting results." - Huang Shek Gong, 9

June 16, 2009
Settling for Par: Pros More Likely to Play It Safe


When PGA Tour golfers from Tiger Woods down to the greenest rookie draw back their putters this week at the United States Open, their scorecards will be sabotaged by a force as human as it is irrational: risk intolerance.

Even the world’s best pros are so consumed with avoiding bogeys that they make putts for birdie discernibly less often than identical-length putts for par, according to a coming paper by two professors at the University of Pennsylvania’s Wharton School. After analyzing laser-precise data on more than 1.6 million Tour putts, they estimated that this preference for avoiding a negative (bogey) more than gaining an equal positive (birdie) known in economics as loss aversion costs the average pro about one stroke per 72-hole tournament, and the top 20 golfers about $1.2 million in prize money a year.

Contrary to most academic studies involving sports, at which athletes typically scoff, a handful of the tour’s top putters did not dispute this finding. Simply put if not putt they admitted to being spooked enough by bogeys that they will ultimately cost themselves strokes to avoid them. Call it the bogeyman.

Par putts just seem to be more critical because if you miss you drop a shot if you miss a birdie putt, it doesn’t seem to have the same effect, said Jim Furyk, one of the tour’s best putters.
Added Justin Leonard: When putting for birdie, you realize that, most of the time, it’s acceptable to make par. When you’re putting for par, there’s probably a greater sense of urgency, so therefore you’re willing to be more aggressive in order not to drop a shot. It makes sense.

Of course, it makes no sense at all: each stroke counts as one on a scorecard, whether for eagle or triple-bogey on any particular hole. The goal is to finish with the fewest strokes, regardless of what each might be artificially termed. All else being equal distance from the cup, one’s proximity to the lead or cut, the course difficulty and so on putts should be handled the same way.

But they are not, according to the study of almost 200 tour professionals from 2004 through 2008. Using data the tour regularly records on every ball’s green location accurate to the nearest inch, the professors found that birdie putts were made about 3 percent less often than otherwise identical putts for par. (In effect, players tell themselves before birdie attempts, Let’s just get close, rather than, I have to make this.) Given that players typically attempt nine birdie putts per round, this cost each golfer about one stroke per tournament which can translate to hundreds of thousands of dollars in prize money.

The professors, Devin Pope and Maurice Schweitzer, seemingly anticipated every But what about? reflex from golf experts. The tendency to miss birdie putts more often existed regardless of the player’s general putting or overall skill; round or hole number; putt length; position with respect to the lead or cut; and more.

As would be expected, the difference decreased on routine short putts and also decreased very far from the hole, where the chance of making the putt is small to begin with. It peaked on putts from about 6 to 12 feet. Even Woods, roundly considered the best putter ever, exhibited the trait at roughly the tour average.

The finding may become significant among behavioral economists, many of whom have suspected that the loss aversion found through contrived experiments might not be demonstrated by actual, expert competitors vying for high stakes. The paper is being submitted this week for publication in an economic journal.

Even experienced professionals playing for high stakes are not rational, Pope said. Tiger Woods, the model of perfection and what an economist would think of as a rational agent, even he exhibits these biases. And if he exhibits these biases, why not business leaders? There are a lot of applications.
Rather than resist any insight from ivory tower academics, several golfers admitted to handling identical birdie and par putts differently and appeared somewhat amused at being found out. Geoff Ogilvy, who made par putts 4.1 percent more often than birdie putts from the same distance, said: A par putt seems more final. It shouldn’t make any difference, should it? And Paul Goydos, who showed the effect at 4.4 percent, said it probably affected him even more on putts for eagle.

If I’ve got a 25-footer for eagle, it seems like I’m more conservative than with a 25-footer for either birdie or par for whatever reason, Goydos said. I think the worst thing you can do is three-putt for par on a par 5. That’s one that drives me more crazy than anything else. Maybe that’s why I’m at the very bottom of the tour in eagles made.

But just as quickly as pro golfers admitted to their costly habit, they dismissed the idea of being able to do much about it. Stewart Cink, who showed a 3.3 percent effect, said that try as he might, he would never be able to convince himself that every putt is the same.

You can’t fool yourself, Cink said. But this is one of the reasons why we use sports psychology, and we try to have a preshot routine so we do the same thing, approach every putt the same way. It’s not always glamorous, and it’s not always possible in reality.
The psychological preference to avoid a perceived penalty (losing a stroke relative to par) rather than go for a perceived gain (gaining a stroke) has some benefit.

Golfers tended to leave their conservatively stroked birdie putts slightly closer to the cup than more aggressively missed pars leading to their making their follow-up shot more often. But that temporary gain was far outweighed by the overall cost in strokes.
The birdie-versus-par effect varies in ways that many golfers would instinctually predict. The tendency to make similar birdie putts less often than pars becomes less prevalent with each tournament round as players are judged more against one another than against par.

The elite tour players generally show less of the trait than marginal ones. And the difference decreases as a player sees himself or his partners handle a particular green.
But the effect is always there, even if a good reason for it is not. A 10-footer for par feels more important than one for birdie, said Goydos, a two-time winner on the tour. The reality is, that’s ridiculous. I can’t explain it in any way other than that it’s subconscious. And pars are O.K. bogeys aren’t.

Larry Dorman contributed reporting.

Copyright 2009 The New York Times Company


Those who are positionally competing in an intensive competition, should remember the following quote from Questions and Replies between T'ang T'ai-tsung and Li Wei-kung.

"According to Fan Li's book, 'If you're last use yin tactics, if you're first then use yang tactics. When you have exhausted the enemy's yang tactics. When you have exhausted the enemy's tactics. When you have exhausted the enemy measures, then expand your yin to the full and seize them.' This then is the subtle mysteriousness of yin and yang according to the strategists."

Thursday, June 18, 2009

The Dao of Strategic Assessment (27): Assessing One's Grand Settings

Assessing the potential alliances and the opposition through the use of Sunzi principles is quite simple.

Gathering "complete" intelligence on the contenders (not the pretenders) is the first step.

The next step is assessing the intelligence in terms of the "Public View", "The Functional View", The Field View", The Organizational View" and the "Definite View

While analyzing their past history and current actions from those different views can be quite taxing,
transforming the intelligence into a top-down plan is the greater challenge.

If you like to know how to transform assessed data into a top down strategic view, please contact us at service [att] collaboration360 [dott] com.


Everyone's on hand

It was pretty stuffy at Wednesday's news conference introducing incoming Police Chief George Gascon -- maybe it was all the egos in the room.

Apparently no one wanted to be left out: City officials nearly outnumbered members of the media at the packed event in the mayor's office. And we couldn't help but notice that most of those elected officials -- some of whom have traded harsh words lately -- have their sights set on higher office.

Of course, Mayor Gavin Newsom is looking to move to Sacramento, and numerous people in attendance are thought to be angling to replace him: Supervisors Ross Mirkarimi and Bevan Dufty, City Attorney Dennis Herrera and Assessor Recorder Phil Ting (who shares a political consultant with Newsom and got a special shout-out towards the end from the mayor).

Incoming Police Chief George Gascon gets a warm welcome from the whole city family Wednesday.
Michael Macor
The Chronicle
Incoming Police Chief George Gascon
gets a warm welcome from the whole city family Wednesday.

But ambition doesn't stop at San Francisco's borders: Attorney General candidate and current District Attorney Kamala Harris was front and center. And her right hand man, Chief Assistant District Attorney Russ Giuntini (who may be looking to become the city's top prosecutor) was also there.

Also in attendance were Board President David Chiu, supervisors Carmen Chu, John Avalos, Eric Mar and David Campos, Public Defender Jeff Adachi (who's gearing up for a budget fight).

Appointed officials were on hand too, including Fire Chief Joanne Hayes-White, Police Commission President Theresa Sparks, Police Commissioner David Onek, Bill Siffermann, San Francisco's juvenile probation chief and Kevin Ryan, director of the Mayor's Office of Criminal Justice.

And, of course, Police Officer's Association president Gary Delagnes, who never fails to give a great quote. Case in point-- when Delagnes was asked what challenges Gascon will face, he had this gem:
"Politics. San Francisco (is) unlike Los Angeles or any other city in America. To learn the players on the police commission, to learn the players on the board of supervisors, the mayors office, the command staff, the media," Delagnes said. "He's got to see where the knives are coming from and the knives are coming from day one. They already started today."

Posted By: Marisa Lagos (Email) | June 17 2009 at 03:30 PM

Tuesday, June 16, 2009

The Dao of Strategic Assessment (26): Assess One's Grand Settings

From the late 60's to the early 80's, the Red Wings went on a losing slump in which they only made the playoffs twice, winning one series.

In 1983, the Red Wings organization changed to a new owner who brought his own management team. Their first set of objective was to assess their global settings and determined what was their overall philosophy in terms of organizational leadership, talent, game style. Once they built and connected to their strategic overview (
Tangible Vision). The Red Wings used their Tangible Vision as their guide and started to search for the best global hockey talent that fit their game philosophy of puck control, speed teamwork and quickness. They immediately began to win. Between 1988 to present, the Red Wings won four Stanley cups, six Conference championships and 14 Division championships

During 2004-2005 season, the economic state of the US professional hockey game changed. The Red Wings and other hockey teams were forced to modify its contracts system and displaced some of its high-priced players. Concurrently, they were also forced to re-think their gameplay approach. In some of their games, they noticed that the stronger opponents were out-muscling them in close games.

The Red Wings management decided to maintain their emphasis on puck control and game speed. However, they adjusted their game by focusing
its European players to play more physically aggressive and go into corners after pucks. It worked quite well that they won the Stanley Cup in 2007-2008 and were playing in the NHL Stanley Cup Finals this past season.


In NHL, Detroit Turns to Imports

As Motor City Slumps, Red Wings Thrive With European Players; Swedes Rejoice


As the ailing Motor City rallies around the Detroit Red Wings, who face the Pittsburgh Penguins on Friday in Game 7 of the Stanley Cup Finals, there is one tiny bit of irony: Michigan’s top team is powered more than ever by European imports.

Less than half the Red Wings’ roster comes from North America. The rest, and most of the team’s top talent, hail from Sweden, the Czech Republic, Russia and Finland. In all, five players are from the U.S. Years ago, when the Big Three auto makers were allowing overseas competitors to pull ahead, the world was getting flat inside Joe Louis Arena. Starting in the 1980s, the Red Wings began building a dynasty by recruiting talent from Russia and adopting a new, European style of hockey.

The Red Wings’ success—they have won four Stanley Cups since 1997–paved the way for the rest of the league to follow. Today 30% of the NHL’s players hail from outside North America. The Red Wings are still the most international team, with 54% of their players hailing from overseas. This season, more than 80% of the Red Wings’ goals were scored by players born outside North America, up from 41.5% in the 1996-1997 season.

At the same time, the pool of available talent at home seems to be thinning. In Michigan, one of the nation’s top junior-hockey states, the struggling economy—and the high cost of junior hockey—is taking a toll on participation. USA Hockey says youth participation in the state has fallen 14% in the past three seasons.

In many ways, the Red Wings are a case study in harnessing globalization. Team scouts travel the world in search of new talent and new ideas. Instead of an employee-training program, the team uses its farm team, the Grand Rapids Griffins of the American Hockey League, to develop talent.

“It’s a global sports market now,” says Michael Maroone, the chief operating officer of AutoNation and part owner of the NHL’s Florida Panthers. “Detroit was certainly out in front on the hockey side. It reminds me of Toyota, honestly.”

Giving Away Cars

In the 1980s, Red Wings owner Mike Ilitch had to give away cars at every home game to persuade fans to watch the beleaguered “Dead Things,” which hadn’t won a championship since 1955.

Team officials Jimmy Devellano and Ken Holland set out on a radical mission: to draft and sign European players who played a brand of hockey completely different from what was common in North America. The Wings drafted Russian Sergei Fedorov and Swede Nicklas Lidstrom in 1989 . Players then switched to a cleaner, faster, less pugnacious puck-control style of hockey that eventually led the team to championships in 1997, 1998 and 2002.

After the lockout in 2004-2005, the team found itself in a bind. It had a payroll of $75 million that had to be shrunk to $39 million. To make room for the new salary cap, Detroit chose fast and talented European players and got rid of many of its beloved North American stars.

The team had mild success, but was knocked out of the playoffs in the first round by Edmonton in 2006. Next the team considered trading in some of its European stars for North Americans who could hit and fight and were more popular with the fans. “Maybe a little more North American—away from our philosophy a bit,” says Mr. Holland.

After much discussion, the team decided to stick with its original plan and instead teach its European players to play more physically and go into corners after pucks. It worked. The team won the Stanley Cup by 2008 and is now one game away from winning two years in a row with a team buttressed by Europeans like Sweden’s Johan Franzen and Russia’s Pavel Datsyuk. Together they won the team another championship last season. “You’re not really going to Europe looking for toughness,” says Mr. Holland.

The NHL and the Red Wings say they’re making an effort to boost development programs in the U.S. and North America. This past fall, the NHL upped the money available to USA Hockey, the country’s governing body, to $8 million from $1 million. In part, the money is going to support initiatives like the American Development Model, a national set of standards based on international best practices in developing athletic talent. The program costs about $2 million annually.

No matter how the team is composed, Detroiters show no lack of support for the Red Wings—and have proven especially devoted this season.

“You would think if there was a town that would not grasp on to an international team, it might be Detroit, because of the ‘buy American’ thing and patriotic feelings,” says Michael Robinet, vice president of vehicle forecasts for consulting firm CSM Worldwide. “It shows Detroit is willing to think outside of the box and has embraced this team.

John Cooney, a stay-at-home dad from Livonia, Mich. Says he’s all for the Red Wings’ foreign roster. “I think that it’s important to search the four corners of the earth for talent,” he said.

Auto-industry experts are quick to note that the auto makers are not by any means unaware of foreign markets, especially Europe. General Motors says it actually has more employees outside the United States than in, and that it sells more vehicles abroad. Many global suppliers have added a presence in Detroit, bringing in workers from all over the world and making the city more global.

The only difference is the level of success they’ve had bringing European ideas to North America.

“Detroit has had to move from its domestic focus of 30 to 40 years ago to one where their survival depends on going global,” says Mr. Robinet of CSM. “That’s how the Red Wings saw things before many, many other teams,” he says.

Bruce Belzowski, assistant research scientist at University of Michigan’s Transportation Research Institute says the auto makers would have certainly taken a page from the Detroit Red Wings, had it been that simple. “I think it’s a lot easier to go out and scout for four or five good players than it is to turn huge companies around.”

Global Auto Makers

Shawn Morgan, spokeswoman for Chrysler Group says that in a global marketplace, the auto industry has been working hard to be prepared, “which is very similar to what the Wings have done,” she says. “Just like the Ilitches have made a great team, I think we’re putting together a great team.” A Ford spokesman says nobody is more supportive of the team than the company’s Swedish employees. “We’re an international auto maker based in Detroit,” he says.

The Red Wings, for their part, say they hope a Stanley Cup would serve as a respite from a wave of terrible news. “Times are difficult in Detroit and the State of Michigan,” a spokesman said. “We’re just trying to do our part to give the fans something to be proud of and to feel good about.”

Michigan governor Jennifer Granholm puts a different spin on the issue. “Having Swedish roots myself, I get a kick out of the Red Wings having Swedes on their roster—nearly a third of their lineup,” she says. “The Wings are a diverse team, and that diversity is reflective of Michigan.”

—Andrew Grossman contributed to this article.

Write to Reed Albergotti at Reed.Albergotti@wsj.com