Strategies of Effective New Product Team Leaders:
This article looks at work teams in high-technology firms that are responsible for New Product development (NPD). The authors argue that team leaders need to change their behavior and the way they interact with team members. Diversity among the team members and open communication is a requirement for successful NPD teams. Creativity can be weakened due to micro-management, department-specific loyalties, and restricting information on need-to-know basis. Teams in the classic example of linear thinking and how it can lead to "interdepartmental rivalries and to escalated costs and time delays." This article reminds me of the book I am reading right now by Senge, The fifth Discipline: The Art and Practice of the Learning Organization. How system thinking in organizations is important in preventing interdepartmental rivalries and activities that cause symptoms like lack of commitment in team members and stifling creativity.
Monday, March 23, 2009
Monday, March 9, 2009
Sin of Commission
I agree with everything that this article states, that poorly constructed incentive plans can seriously hurt the performance of your company. George Zimmer's comment on "you want incentives to be just large enough but not too large. . ." is a perfect statement. It also needs to help drive the corporate culture and system of the company. The area's I look at when implementing an incentive plan is customer service, keeping the business looking clean and in good condition, sales, expenses, and employee turnover.
What I have stopped agreeing with, that this article states, is that financial incentives are very low on the reason people work where they work. Over the past two months, we have spoke about financial incentives as being a weak reason people work where they work. First, no its not. It’s the top reason people do the work they do, with very few exceptions. There is the story of this person or that person deciding that they want to devote they lives to helping others, and are going to live meakly forever. I would say most of these people have sometime of emotional break that drives them to make this life altering commitment to poverty. The other 99.9% of people work everyday where they do because of the money. They might of decided along time ago that they wanted to be a doctor, an engineer, an artist, social worker, etc. . . but they are where they are because based on the financial compensation they receive, there is no better place for them to work with their given / current professional qualifications. We all try to convince ourselves that we aren't just in it for the money, but in reality, if we weren't working for the money, and really didn't need the money, we would workless, and most likely, if we didn't need to work, we would be sitting on a beach somewhere, swinging a golf club, or floating on a boat having the time of our lives. We might work once in awhile because it makes us feel good about ourselves, but really, people want money so they can buy things that make them feel good about themselves.
What I have stopped agreeing with, that this article states, is that financial incentives are very low on the reason people work where they work. Over the past two months, we have spoke about financial incentives as being a weak reason people work where they work. First, no its not. It’s the top reason people do the work they do, with very few exceptions. There is the story of this person or that person deciding that they want to devote they lives to helping others, and are going to live meakly forever. I would say most of these people have sometime of emotional break that drives them to make this life altering commitment to poverty. The other 99.9% of people work everyday where they do because of the money. They might of decided along time ago that they wanted to be a doctor, an engineer, an artist, social worker, etc. . . but they are where they are because based on the financial compensation they receive, there is no better place for them to work with their given / current professional qualifications. We all try to convince ourselves that we aren't just in it for the money, but in reality, if we weren't working for the money, and really didn't need the money, we would workless, and most likely, if we didn't need to work, we would be sitting on a beach somewhere, swinging a golf club, or floating on a boat having the time of our lives. We might work once in awhile because it makes us feel good about ourselves, but really, people want money so they can buy things that make them feel good about themselves.
Compensation and Performance - Arrow
Fast growing industry with highly profitable sales reps. Industry wide system vs company system. The Arrow can try as they may to keep the salespeople from interacting as W-2 jumpers, but the industry wide system that has developed will keep them from being successful in there fast paced, low company loyalty. It is very often that companies are worried about increasing the paying to their salespeople too fast, that the only option for a salesperson is to leave to another company to keep their salaries up to industry averages. What I don’t understand about the jumping, is if they being compensated properly, then there should be no incentive to jump to another company for purely financial reasons.
CEO is trying to micro manage general managers. Not possible in a company as large as they are now. Kaufman needs to move the HR function down several levels within the Regional VPs of the sales force. I would give the Regional VPs and the general managers more control over their people. It's not possible for the senior management team to know 4,000+ people personally, or know the leading salespeople in market areas that are outside the company. Without that ability, the CEO and HR department can not make an educated decision on the hiring and firing of people.
I think Kaufman is stuck in his idea of what a CEO does in a small company, and the system that he is trying to force the company's employees to function in, is strangling moral. He needs to re-focus his job on not being the HR manager and trust that the middle level managers he has hired can due the job of managing their employees. I think he feels that he has lost his grasp on the individual employee, and thought that EPR's would be the way for him to make sure the managers are doing everything right. Also, he seems to be very concerned that he received a 2 on his evaluation. Finally, sense implementing the EPR's, Operating Income has decreased every year.
CEO is trying to micro manage general managers. Not possible in a company as large as they are now. Kaufman needs to move the HR function down several levels within the Regional VPs of the sales force. I would give the Regional VPs and the general managers more control over their people. It's not possible for the senior management team to know 4,000+ people personally, or know the leading salespeople in market areas that are outside the company. Without that ability, the CEO and HR department can not make an educated decision on the hiring and firing of people.
I think Kaufman is stuck in his idea of what a CEO does in a small company, and the system that he is trying to force the company's employees to function in, is strangling moral. He needs to re-focus his job on not being the HR manager and trust that the middle level managers he has hired can due the job of managing their employees. I think he feels that he has lost his grasp on the individual employee, and thought that EPR's would be the way for him to make sure the managers are doing everything right. Also, he seems to be very concerned that he received a 2 on his evaluation. Finally, sense implementing the EPR's, Operating Income has decreased every year.
Wednesday, March 4, 2009
Chapter 6 - Extra Readings
Get Rid of the Performance Review!
Samuel Culbert builds a compelling argument against Performance Reviews, but some of his assumptions are weak at best. First, Performance Doesn't Determine Pay is in no way a truisms. In every company I ever worked for, performance within the established system was directly linked to promotions and pay increases, including bonuses. The only place I have seen where performance was not linked to pay was in union shops. Secondly, One Size Does Not Fit All. Well, true, but I am not convinced that it is even remotely beneficial to allow major deviations from the system accepted normal behavior just because not everyone is the same. Companies have certain corporate images that they want their employees to portray the public, and employees that can not, or will not act within the accepted normal behavior of the job, should not have to be tolerated just because the poor person has personal issues at home. Finally, in the section Immorality of Justifying Corporate Improvement, he states that "it's immoral to maintain the façade that annual pay and performance reviews lead to corporate improvement." I think immoral is a strong word, inappropriately used, and inflammatory. Additionally, he states in this section that he feels that "every organization should be considered partially a public entity" which smacks of Fascism.
I guess I just don’t get it, or I am just still fighting some of the ideas and philosophies that are presented on the book and the extra readings. Maybe its that I don’t work with 5,000 highly educated engineers and MBA's at SAS. I understand the theory, but does the theory really work in practice. It makes for a much more employee friendly work place. Disney is a great place where these ideas and theories are put to practice, but do these theories work everywhere on every business.
I believe that if used correctly, performance reviews can be useful for both the employee and the company. I do not think that waiting for 12 months to give any feed back to the employee is wise at all. Open communication and a strategy of positive reinforcements and extinction should be used to guide to workforce proactively. To a lesser degree, punishments should be used prior to firing an employee. I like goal setting and management by objectives, and I liked Culbert's "Alternative." Managing people is not a one time a year evaluation. It’s a constant interaction between manager and employee. I think performance reviews fall short of the mark when weak managers use them as the primary interaction with their workforce.
Samuel Culbert builds a compelling argument against Performance Reviews, but some of his assumptions are weak at best. First, Performance Doesn't Determine Pay is in no way a truisms. In every company I ever worked for, performance within the established system was directly linked to promotions and pay increases, including bonuses. The only place I have seen where performance was not linked to pay was in union shops. Secondly, One Size Does Not Fit All. Well, true, but I am not convinced that it is even remotely beneficial to allow major deviations from the system accepted normal behavior just because not everyone is the same. Companies have certain corporate images that they want their employees to portray the public, and employees that can not, or will not act within the accepted normal behavior of the job, should not have to be tolerated just because the poor person has personal issues at home. Finally, in the section Immorality of Justifying Corporate Improvement, he states that "it's immoral to maintain the façade that annual pay and performance reviews lead to corporate improvement." I think immoral is a strong word, inappropriately used, and inflammatory. Additionally, he states in this section that he feels that "every organization should be considered partially a public entity" which smacks of Fascism.
I guess I just don’t get it, or I am just still fighting some of the ideas and philosophies that are presented on the book and the extra readings. Maybe its that I don’t work with 5,000 highly educated engineers and MBA's at SAS. I understand the theory, but does the theory really work in practice. It makes for a much more employee friendly work place. Disney is a great place where these ideas and theories are put to practice, but do these theories work everywhere on every business.
I believe that if used correctly, performance reviews can be useful for both the employee and the company. I do not think that waiting for 12 months to give any feed back to the employee is wise at all. Open communication and a strategy of positive reinforcements and extinction should be used to guide to workforce proactively. To a lesser degree, punishments should be used prior to firing an employee. I like goal setting and management by objectives, and I liked Culbert's "Alternative." Managing people is not a one time a year evaluation. It’s a constant interaction between manager and employee. I think performance reviews fall short of the mark when weak managers use them as the primary interaction with their workforce.
Saturday, February 28, 2009
Nordstrom (HBS 0-191-002)
Well, Nordstrom’s has raised several generations of sales forces. Just because you have a generation of employees that just don’t know any better, or maybe they know better, but the pay is just too good to risk to saying anything because the gravy train may not come anymore. This is a modern day example of the benefits of Unions, and why they still may be needed in some cases. I am not surprised at all, that the employees ousted the Union. The Union, in trying to protect their rights, was endangering their higher than industry average pay, at least that’s what the employees believed. What is more likely, is that the employees made more because they worked more hours than any other retailers in the country, they just didn’t clock in for the hours. Its companies like Nordstrom that blemish capitalism and make people champion the misguided ideas of socialism. The system that the Nordstrom family has created to increase incentive for their workforce to sale more retail than any other retailer in the country, no long with hold water in the 21st Century. Not only that, but its dangerous for the company to continue to do business like old granddad did in 1901. The system could be easily changed in several small ways to #1 - be more humane, #2 - be more legal, and #3 - less suppressive to their employees.
SAS Institute (SGS Case: HR-6A)
Perspective: Reading this case, I had to remind myself that the employees that Goodnight is employing, are highly educated, very well compensated individuals. Their production is also very high, and throwing $25,000+ in annual benefits is a drop in the bucket for the amount of annual production and revenue they produce for the company. When the average salary of an employee is $25,000 or less, it becomes much more cost prohibitive to provide employee benefits as extensive as SAS is providing.
Private vs. Public Companies: Dr. Goodnight is exactly right with his business philosophy of long term profitability vs. short term profitability. SAS Institute has been able to effectively make the long term capital investments necessary to maintain its competitiveness over other companies due to it being a privately held company with no public stockholders demanding steadily increasing quarterly earnings.
Having a Plan: Or should I say the lack of having a plan. Dr. Goodnight’s plan reminds me of the “Invisible Hand.” I would have to say its more of being in the right place at the right time.
I would conclude, that based on the period of time, and the type of industry, SAS Institute hit the “Perfect Storm.”
Private vs. Public Companies: Dr. Goodnight is exactly right with his business philosophy of long term profitability vs. short term profitability. SAS Institute has been able to effectively make the long term capital investments necessary to maintain its competitiveness over other companies due to it being a privately held company with no public stockholders demanding steadily increasing quarterly earnings.
Having a Plan: Or should I say the lack of having a plan. Dr. Goodnight’s plan reminds me of the “Invisible Hand.” I would have to say its more of being in the right place at the right time.
I would conclude, that based on the period of time, and the type of industry, SAS Institute hit the “Perfect Storm.”
Wednesday, February 25, 2009
Specialty Medical Chemicals (Case: HBS-9-399-094)
Dr. Winthrop received over 200 patents in his lifetime. The company was basically built off of his innovations and the day to day management of the company was done by professional business people. He was the creative researcher that built the company. A corporate system of keep to the old seems to have been built into the fabric of the company. Barry Tompkins was just the type of CEO that could build that type of corporate system, and keep it maintainable. Very little creativity seemed to ever be encouraged at SMC.
When looking for a replacement for Tompkins, the board decided to look for a person that would not undo “a lot of what Barry had accomplished.” Not really possible, as Tompkins had built a company that was systematic and steady, not innovative and growth oriented.
The job search landed a biology major with New Product Marketing experience. The problem being that there is little new product development at SMC and Carl has little experience in the other area’s of a pharmaceutical company.
SMC has a corporate system that does not encourage its management to work together. In fact, the system encourages them to be self interested, and greedy with information in order to protect their own needs. The annual “evaluations” continued to mark the VP’s with high marks and top salaries, even when the overall performance of the company was sub par.
Carl needs to step up and communicate with his VP’s on what he wants from them. He is waiting for them to “get it”, but they are all longtime employees of SMC, and are not familiar with the group give-and-take that his previous CEO from Merck had built into his management team. That system needs to be developed, through trust and open communication with the team members, in groups and individually.
The consultant Wells, basically told Carl everything he wanted to hear. He had already know most of what the final evaluations told him. If anything, the whole exercise was a waste of resources and time.
I think all of the management VP’s are motivated to achieve success in their own departments. Carl needs to change the system (carefully) within SMC to redirect the VP’s motivations to be the overall success of the company, and not just the individual departments. I liked his idea of changing the departments to Pharmaceuticals, Biotech, and Generics, as this will require his VP’s to start thinking about all the departments instead of just their own.
When looking for a replacement for Tompkins, the board decided to look for a person that would not undo “a lot of what Barry had accomplished.” Not really possible, as Tompkins had built a company that was systematic and steady, not innovative and growth oriented.
The job search landed a biology major with New Product Marketing experience. The problem being that there is little new product development at SMC and Carl has little experience in the other area’s of a pharmaceutical company.
SMC has a corporate system that does not encourage its management to work together. In fact, the system encourages them to be self interested, and greedy with information in order to protect their own needs. The annual “evaluations” continued to mark the VP’s with high marks and top salaries, even when the overall performance of the company was sub par.
Carl needs to step up and communicate with his VP’s on what he wants from them. He is waiting for them to “get it”, but they are all longtime employees of SMC, and are not familiar with the group give-and-take that his previous CEO from Merck had built into his management team. That system needs to be developed, through trust and open communication with the team members, in groups and individually.
The consultant Wells, basically told Carl everything he wanted to hear. He had already know most of what the final evaluations told him. If anything, the whole exercise was a waste of resources and time.
I think all of the management VP’s are motivated to achieve success in their own departments. Carl needs to change the system (carefully) within SMC to redirect the VP’s motivations to be the overall success of the company, and not just the individual departments. I liked his idea of changing the departments to Pharmaceuticals, Biotech, and Generics, as this will require his VP’s to start thinking about all the departments instead of just their own.
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