HBR on Corporate Culture Design

I had a chance to work for companies with very different corporate cultures. In my experience culture does not just happen. Instead, it should be deliberately designed and reinforced. So I found this Harvard Business Review article relevant and insightful:

Think carefully about each of these four elements:

  • Incentives are a basic element of doing good work. People should be paid fairly and competitively for their roles, and increases in compensation should be a predictable process. In addition to pay, the culture should work to reward results generated versus hours worked. Employees shouldn’t feel anxious about how visible they are in the office or on projects, and strict timekeeping can create a sense of mistrust between teams and management. Lastly, and this is something we care about a lot, good failure should not result in career suicide.
  • Context and rules will determine what rituals and processes allow people to do great work. If initiative is punished instead of rewarded, people will feel less compelled to push new ideas internally. The ability to make quick judgment calls and move decisions forward will outpace any lengthy or cumbersome internal approvals process. The same goes for autonomy and flexibility—do you trust your teams to lead while you get out of the way? Are teams allowed to participate in flexible work options that encourage their productivity? Your teams need the right tools and resources to do their job—are they spending more time fighting for what they need? If access to those resources is limited, individuals will be less inclined to take part in initiatives with so many blockers in front of them.
  • People are the core of a great organization and the processes and systems you use to hire, promote, and reward them can be both enablers and blockers. Bob Sutton’s famous “no asshole rule” is an important factor when hiring people for your company, especially if they’re “star performers”. Sutton believes that star performers who are demeaning can wreak havoc on organizations. You just can’t compromise your business on people like that.
  • Leadership has to play a role in the culture if the whole organization is to transform. And leading by example is a pivotal component of management enablers (and blockers: leadership can lead by poor example as well, of course). If leadership exhibits the behaviors expected of teams and individuals, then people in the organization will follow suit.

“How Google Works” by Eric Schmidt notes

How Google Works” by Eric Schmidt, despite being quite self-congratulatory and maybe even prone to confirmation bias, is full of inspirational ideas and bids of practical wisdom to learn from. I took a few (ok, quite a few) notes on smart creatives, decision making, hiring, innovation, strategy, career, management and even managing email.

On smart creatives:

“And who, exactly, is this smart creative? A smart creative has deep technical knowledge in how to use the tools of her trade and plenty of hands-on experience. In our industry, that means she is most likely a computer scientist, or at least understands the tenets and structure of the systems behind the magic you see on your screens every day. But in other industries she may be a doctor, designer, scientist, filmmaker, engineer, chef, or mathematician. She is an expert in doing. She doesn’t just design concepts, she builds prototypes. She is analytically smart. She is comfortable with data and can use it to make decisions. She also understands its fallacies and is wary of endless analysis. Let data decide, she believes, but don’t let it take over.

She is business smart. She sees a direct line from technical expertise to product excellence to business success, and understands the value of all three. She is competitive smart. Her stock-in-trade starts with innovation, but it also includes a lot of work. She is driven to be great, and that doesn’t happen 9-to-5. She is user smart. No matter the industry, she understands her “get it right the next time around. She is self-directed creative. She doesn’t wait to be told what to do and sometimes ignores direction if she doesn’t agree with it. She takes action based on her own initiative, which is considerable.

She is open creative. She freely collaborates, and judges ideas and analyses on their merits and not their provenance. If she were into needlepoint, she would sew a pillow that said, “If I give you a penny, then you’re a penny richer and I’m a penny poorer, but if I give you an idea, then you will have a new idea but I’ll have it too.” Then she would figure out a way to make the pillow fly around the room and shoot lasers.

She is thorough creative. She is always on and can recite the details, not because she studies and memorizes, but because she knows them. They are her details. She is communicative creative. She is funny and expresses herself with flair and even charisma, either one-to-one or one-to-many.”

 

HIPPOs:

“Hippopotamuses are among the deadliest animals, faster than you think and capable of crushing (or biting in half) any enemy in their path. Hippos are dangerous in companies too, where they take the form of the Highest-Paid Person’s Opinion. When it comes to the quality of decision-making, pay level is intrinsically irrelevant and experience is valuable only if it is used to frame a winning argument. Unfortunately, in most companies experience is the winning argument. We call these places “tenurocracies,” because power derives from tenure, not merit. It reminds us of our favorite quote from Jim Barksdale, erstwhile CEO of Netscape: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”

When you stop listening to the hippos, you start creating a meritocracy, which our colleague Shona Brown concisely describes as a place where “it is the quality of the idea that matters, not who suggests it.” Sounds easy, but of course it isn’t. Creating a meritocracy requires equal participation by both the hippo, who could rule the day by fiat, and the brave smart creative, who risks getting trampled as she stands up for quality and merit.”

 

On technical insights as a driver of innovation:

“Bet on technical insights, not market research. Product leaders create product plans, but those product plans often (usually!) lack the most important component: What is the technical insight upon which those new features, products, or platforms will be built? A technical insight is a new way of applying technology or design that either drives down the cost or increases the functions and usability of the product by a significant factor. The result is something that is better than the competition in a fundamental way. The improvement is often obvious; it doesn’t take a lot of marketing for customers to figure out that this product is different from everything else.

For example, at that time Google was experimenting in applying some of our expertise from online advertising to other advertising markets, including print, radio, and TV. These were clever efforts, supported by smart people, but they lacked that fundamental technical insight that would shift the cost-performance curve non-incrementally and provide significant differentiation. All three ultimately failed. And when we look back at other Google products that didn’t make it (iGoogle, Desktop, Notebook, Sidewiki, Knol, Health, even the popular Reader), they all either lacked underlying technical insights from the outset, or the insights upon which they were based became dated as the Internet evolved.”

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Mental Math: Years to Double an Investment

Sharing a very simple, but handy mental math rule that was mentioned in quite a few of our MBA classes, such as Investment Styles and Strategies, Designing Financial Models that Work and others:

If you want to quickly ballpark the # of years it will approximately take for an investment to double, then just divide 72 by the annual growth rate. For example, if your investment grows 7% a year, it will take slightly more than 10 years for it to double (72/7). But if it grows 36% a year, it will only take about two years to double (72/36). 

You can read more about this “Rule of 72” on Wikipedia. Now, you now you can come across as a math genius without much effort 😉

Information diet, news and content filters

I have been struggling to figure out the optimal way to inform myself about the news for quite a while. There is a million of issues here: negativity, irrelevance, lack of proper filters, biased views of certain journalists/newspapers and noise, noise, noise. So, it is not easy at all to maintain a conscious sensible information diet without completely stopping reading any news. But in this case it is not easy to remain a well-rounded and well-informed individual with own vision and interpretation of world’s events and trends.

Long story short. I recently found couple of startups that try to tackle this issue and make it at least a little bit easier to get through all the noise.

In addition to strictly curated collection of blogs I read with Feedly (~60%, the main source of content and probably, the best alternative to discontinued Google Reader) and to imperfect social filters, such as Facebook (~20%) here is what I have been experimenting with recently (~20%):

1. Quartz.com daily briefs to stay in the loop (email, no RSS, unfortunately)
It is a curated selection of headlines sent each morning with links to longer articles. I like that headlines are formulated to be informative, not to seduce you to click and read full article. It is mostly focused on business and key events around the globe.

2. Vox.com “understand the news” section to research a given topic
I use it occasionally (rarely?) to get a quick first, but superficial understanding of a given issue that I know nothing of, but do not want to spend a ton of time researching. I like that Vox strives to be impartial.

3. Tweeted times for a couple of headlines popular among my Twitter friends
Daily newspapers are populated with content based on links posted by your Twitter friends and friends of friends. The more people post a certain link the higher it will rank. Assuming that you follow people with similar interests and/or whose judgment you trust, it should be relevant.

4. 10 things to know by BI for tech news (in Feedly)

I usually just skim the above from time to time, certainly not daily. Even this is too much and I would love most of these services to have “top 10 weekly” editions or some custom way to limit the number of items. I also wish most of them went for shorter articles with more data (think The Economist Facebook charts and infographics). New Yorker style long-reads are obsolete in most cases these days, at least as a main type.

Would love to hear your thoughts! How do you stay informed of the most important and relevant stories in the shortest time possible?

PS Related to this. An interesting Quora thread about the reasons why most personalized news startups failed.

How to win any negotiation: summary of “Getting to Yes” by William Ury

I listened to Getting to Yes by William Ury who is probably the most recognized negotiations expert few months ago.

If you never heard about William Ury, short TED talk might be the best way to get to know about his impressive career:

And here are the notes that I wrote down while reading it. Probably they will be of some use for you as well:

1. Always set a goal of negotiation form the very beginning: “You want to sell at the higher price and I want to buy at the lower price. Let’s find the fair price that can both agree upon.”
2. Always try to understand interests behind a position. How did you arrive at that price? Why do you consider it just?
3. Always repeat the position of another side: “Correct me if I’m wrong. Do I understand correctly that you consider this price to be just because…”
4. Always set a principle, external standard to judge the agreement. E.g. fair solution.
5. Separate a person from a problem. “We are very grateful for everything you did for us but it’s very important for us to arrive at the fair solution.”
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Business model generation

Business model generation book that I’m currently reading is a brilliant example of how complicated topic can be structured and explained visually so simple that even a kid would understand it.

Here is the 72 pages free preview of the book provided by businessmodelgeneration.com.

CONS
It should be noted that it doesn’t go into much deep granularity level, doesn’t give you numbers, formulas or ready-to-use solutions.

PROS
However, it does give you food for thought, important questions to ask and what’s more even more important a great thinking framework that can also be used for brainstorming and collaboration.

Available on Amazon.

What Would Google Do by Jeff Jarvis, personal & business lessons

Recently I finished reading What Would Google Do by Jeff Jarvis. Judging by title I didn’t really expect lots of insights from the book but it appeared to be truly visionary and smart. It even made me kind of regret choosing Economics&Business major over Computer Science 7 years ago…

WWGD appeared not to be about Google itself but about the way business, economics, relationships and world in whole change as the result of technologies wide spread and simplification. So, in fact the book covers quite wide range of topics. From Google’s PageRank, to Facebook, new media, customized solutions, customer relations, blogging, Twitter, context advertising, search engine optimization, online communities management, government policies and many other.

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