lørdag, mai 28, 2005

I just finished reading "Winning" written by Jack Welch, one of the worlds most successful leader and former CEO of General Electrics. It's very interesting to relate the experiences of one of the most successful CEOs in the world with my own working experiences. In essence, I think this is one of the keys to learning; reading what smart people have thought and written about issues, and applying their learning and experiences to my life.

If that ultimately leads to happiness is difficult to say, but it allows me to critically evaluate the impressions I get from people and situations in my life. I believe that happiness is different for every person. Happiness for me is a set of people and situations that make me feel happy. This means that I have to maximize the time I spend with the the people(my girl-friend, my family, my friends, my boss) that make me feel happy and repeat the situations(soccer, hiking, travel, learning, teaching) that make me feel good.

I don't know if these thoughts are meaningful, but who really cares. They were thoughts and now they're also written down;) Now to the book:

Attributes of successful companies-- key points and my thoughts

Clear mission
They answer the question "How do we intend to win in this business?". The management of successful companies have an easy-to-understand and clear answer to this question.

My thoughts: At the beginning of my employment at my previous company, the mission was clear. We were going to beat our major competitor on price. Everybody in the company understood it. This was easy. Our major competitor was a behemoth with costs running out of control and we were small, dynamic and quick. As time went by, the competitor was able to reduce its costs and also focus on building company culture from within. This weakened our initial pricing answer. The management of my previous company was not able to convince me on how we were going to win when the price was equal. In order to continue to be successful, I believe they have to come up with a clear answer to the mission question. I could have written alot more here, but I've chosen to relate my comments to the key topics of the book.

Candor (means sincerity, honesty, openness)
They promote and reward candor within the organization. Lack of candor basically blocks smart ideas, fast action, and good people contributing all the stuff they've got. To get candor, you need to reward it, praise it, and talk about it. Make public heros of people who demonstrate it.

At the beginning of my employment, I felt I had a boss that supported me and took care of the political and organizational issues that were caused my candor and my direct approach to internal and external issues. I achieved alot and the results were both visible and measurable. At the same time I now understand that for every action I made, my first boss had to spend some political kapital to defend me. When my first boss left the company, my new boss was dedicated to continuing to defend my direct and sometimes unwise approach. As time went by, this became a tough weight to carry and eventually I felt like I had lost alot of my bosses support. In retrospect I see how my bosses action caused the organization to lose even more candor. At the end it seemed like nobody wanted to discuss the problems that obviously existed. It was easier to just NOT talk about them. The lack of honesty and openness between departments combined with inexperience and lack of skill eventually leads to inaction which in turn hurts the company. Welch also talks about layers of management and how all manager's with a GE leadership style immediately remove as much layers of management as possible. In a company with less than 500 people, it should not be necessary with 4-5 layers of management. I reported to my boss, she reported to a commercial leadership group, which reported to the main leadership group which reported to the CEO. I think Jack Welch immediately would remove the main leadership group.

Companies win when their top managers make a clear and meaningful distinction between top- and bottom-performing businesses and people, when they cultivate the strong and cull the weak. Welch makes a pretty strong argument that differentiation work all over the world(not only in the US).

Welch also focuses on that good companies focus on its people and that the director of HR should be one of the most important people in the company.

At my previous company, there was no incentive plans. This meant that you could work your ass off without reaping any rewards for your hard work. The director of HR had little influence and I met him twice(?)

What good leader do

  1. Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach and build self-confidence.
  2. Leaders make sure people not only see the vision, they live and breathe it.
  3. Leaders get into everyone's skin, exuding positive energy and optimism
  4. Leaders establish trust with candor, transparency, and credit.
  5. Leaders have the courage to make unpopular decisions and gut calls
  6. Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with actions.
  7. Leaders inspire risk taking and learning by setting the example
  8. Leaders celebrate.

My first boss was a strategic thinker with alot of candor. In relation to me he evaluated, coached and built my self-confidence. He was able to communicate his vision to me, but he did not live and breathe it. He did not get into everybodies skin and he did not exude positive energy and optimism. He established trust with candor, transparancy, and credit with me and some other people, but not with everybody. He had the ability to make unpopular decisions and gut calls. He did cover point 6, 7 and partly 8. My second boss was a nice person with great skills and she is a good diplomat. She delivers good results and she also has the ability to celebrate. She exuded positive energy and optimism. Apart from that I feel that both my previous bosses have room for improvement and I think that together they would be a great team.

Hiring the right people

First you test for integrity, intelligence and maturity, then Welch uses the 4-E framework:
- Positive Energy
- The ability to Energize others
- Edge(the ability to NOT over-analyze all options before making decistions)
- Execution (the ability to "get things done")

In addition to the four E's, you should also look for passion when you hire people. When you become a leader, the rules change. Before, your job was about yourself. Now it's about them.

I understand in retrospect that my passion for the job could be perceived as lack of maturity and arrogance. I need to improve on this and respect everyone. At the same time I do have a lot of the other traits that are described in the book.

When you have the right people..

  1. Elevate HR to a position of power and primacy in the organization
  2. Use a rigorous, nonbureaucratic evaluation system, monitored for integrity
  3. Create effective mechanisms- read: money, recognition, and training - to motivate and retain.
  4. Face straight into charged relationships- with unions, stars, sliders, and disrupters
  5. Fight gravity, and instead of taking the middle 70% for granted, treat them like the heart and soul of the organization.
  6. Design the org. chart to be as flat as possible, with blindingly clear reporting relationships and responsibilities.

Some good advice that needs to be followed!

Crisis management

Assumption 1: The problem is worse than it appears

Assumption 2: There are no secrets in the world, and everyone will eventually find out everything

Assumption 3: You and your organization's handling of the crisis will be portrayed in the worst possible light.

Assumption 4: There will be changes in processes and people. Almost no crisis ends without blood on the floor.

Assumption 5: The organization will survive, ultimately stronger for what happened.

No crisis have occured:)

About competition and strategy

When it comes to strategy, ponder less and do more. If you want to read about NOT to do it, go to page 181 (this is how one of my former employers did it;)

First, come up with a big aha for your business - a smart, realistic, relatively fast way to gain sustainable competitive advantage.

Second, put the right people in the right jobs to drive the big aha forward.

Third, relentlessly seek out the best practices to achieve your big aha, whether inside or out, adapt them, and continually improve them.

Using budgeting and compensation to gain a competive advantage

Answer two basic questions:

  1. How can we beat last years performance?
  2. What is our competition doing, and how can we beat them?

The key is: "Compensation for individuals and businesses is not linked to performance against budget. It is linked primarily to performance against prior year and against the competition, and takes real strategic opportunities and obstacles into account".

Six Sigma

Once you understand the simple maxim "variation is evil", you're 60% of the way to becoming a six sigma expert yourself. The other 40 percent is getting the evil out.

When good people leave..

Every person who leaves goes on to represent your company. They can bad-mouth or praise.

The way you act before, under, and after an employment situations affects your reputation - on both sides. I'm not impressed:)

After a week in Boston, I travelled to Istanbul, Turkey to attend the Champions League final between Liverpool and AC Milan. The game was a blast that Milan set off by scoring in the first minute. After the first half the Italian team were ahead by 3-0. As a Liverpool-fan, I saw no hopes of winning. We had paid a lot of money just to see our favorite team lose to a much better team in the final of the worlds most prestigious club championship. We were disappointed but we sang along when the hardcore Liverpool-fans sang the famous song "You'll never walk alone". It seemed that the song revived the hopes of Steven Gerrard and the other Liverpool-player. The six magical minutes in the second half will stick to my memory for years to come. The game ended 3-3 and Liverpool went ahead to win the penalty shootout. The afterparty was affected by bad logistics planning by the Turkish officials. The roads to and from the game moved very slowly and most of the fans didn't get in to town until 3 am!

søndag, mai 22, 2005

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