The Seven-Day Weekend

Ricardo Semler is a bestselling author, but more important than this, he is the CEO (“Chief Enzyme Officer”) of Semco. He is the author of “Maverick: The Success Story Behind the World’s Most Unusual Workplace” and “The Seven-Day Weekend: Changing the Way Work Works.”

In both books Semler tells of extraordinary practices at Semco. The business of the company cannot be described simply. They are into producing water pumps, chewing gum mixers, big scale air conditioners, as well as being involved in the management of buildings and the building of hotels, plants and hospitals. It is extraordinary for a company to have such a wide diversity of businesses. But all these businesses had developed with a set of principles: the business should be complex, their services should be high cost and provide high margins, and they should be in niche markets. Semler questioned all of the common business practices and invented a new model of working when he came to the top position after his father. He made some certain changes: He removed security checks at the gate for the workers; he changed the dress code; everybody was free to choose what to wear and formal dress was only option for business meetings with other gatherings; he removed all individual offices and work stations and converted workplaces into open spaces. He personally moved to a smaller office. He also changed the parking policy. In the new order there were no reserved parking places and everyone operated on a first come first served basis. This way the early birds in the company were rewarded. His human resources policy is quite extraordinary. Semler encouraged his employees to visit 30 nearby factories to openly compare skills, responsibilities and pay checks. He was  prepared to change  conditions based on their research. Instead of paying fixed salaries, all employees share in the profits and employees decide their own profit sharing. These practices reflected in decreasing staff turnover. Many management books favor the concept of self-managed teams. But it is hard to find in practice. At Semco there are real self-managed teams. Semler divided the businesses into  smaller manageable units which really do make their own decisions about everything. He provided autonomy to the units to run their own show. There is no central and coordinated purchasing. Everybody buys whatever he or she wants. It might be computer, a file or any other staff needs; whether it is cheap or expensive it isn’t questioned. The readers of this column might be skeptical in this practice. However, with autonomy comes auto-control. If one employee goes off track with an unreasonable purchase his colleagues are the first to warn him. Semco has strict adherence to the practice of job rotation. Around 20-25 percent of managers are rotated each year. An employee can stay in a position for a minimum of two years and a maximum of five years. This rotation provides skills enhancement and a broader vision for the business. Through this rotation program the organization is depersonalized as there is more than one person for a job. At Semco there is also a unique system of subordinate evaluation of managers. Based on a rating questionnaire which covers both soft and administrative skills, a manager is evaluated by his subordinates. More interesting is that new manager candidates are interviewed by  department employees. The role of the human resources department is only to suggest candidates for the management position but the final decision is made by team. You may be wondering if this company is successful with such unorthodox practices. When I last checked, I saw that their turnover was more than $150 million. Another organization, Whole Foods, has similar practices and it is one of the most successful retail chains in the US with turnover of $20 billion. The “The Seven-Day Weekend: Changing the Way Work Works,” is an extraordinary and revolutionary book that will truly make you think.

Obliquity

We believe that the shortest distance between two points is a straight line; however, sometimes it is a curve. According to John Kay, many goals are achieved when pursued indirectly: The most profitable companies are not the most aggressive in chasing profits, the wealthiest men and women are not the most materialist, and the happiest people do not pursue happiness.

This is the concept of obliquity. John Kay, in his book “Obliquity: Why our goals are best achieved indirectly” tries to evaluate rational thinking processes versus obliquity.

He gives several interesting examples.

Happiness is not achieved through the pursuit of happiness. Mountaineering is one of the most difficult sports, seldom bring medals and often requires much money and effort and sometimes at the cost of one’s life. Raising a child is very similar to mountaineering; 95 percent of the time parents put a lot of effort into dealing with the needs and problems of the children and only 5 percent of the time can they feel the joy of having children.

There are three phases of happiness. The first phase is a momentary feeling. It is like eating the cake, for which the taste is fleeting. The second phase is the state of the mind, like feeling good when you help somebody. In this phase the period of happiness lasts a little longer, however, it is still very short. The third phase is eudaimonia, which is the happiness we feel when we fulfill our potential. It is something akin to being a good parent or climbing a mountain. With reference to this model, an oblique-indirect approach might provide more and long lasting happiness for people. It is best to prefer fishing as an experience rather than the outcome of catching 100 fish because the journey is more important than the destination.

Kay claims that the greatest paintings are not the most accurate representations of their subjects. In the case of Picasso he is right because none of his paintings are accurate representations.

In general, planning is something like drawing a straight line between two points; however, the performance of classic planning is very poor. The oblique way of planning looks much better. Soviet planners managed the economy far less successfully than the adaptive, disorganized processes of market economies.

Most of our objectives are specific. Even if they look good, specific objectives can create limitations. For example, if you plan to eat a fish for dinner and if you cannot eat it you will be disappointed. However, if you only aim to eat dinner, there are unlimited options available to you. The best available meal might be something different and if you insist on the fish, you may end up having to settle for ordinary or low quality fish.

Kay mentions that the consequences of our actions depend on the responses of other people, and these interact. So, in an incident where you might be angry, if you choose to be positive and kind, you will find people might be willing to help you. But in the direct way, if you are angry you become aggressive and it won’t help solve your problem.

According to Kay, in obliquity there are no predictable connections between intentions and outcomes. The caterpillar and the butterfly have nothing in common in their appearances; however, the caterpillar is the starting point of a butterfly.

Kay mentions that good decision makers are eclectic and tend to regard consistency as a mark of stubbornness, or ideological blindness, rather than a virtue. Eclectic thinking means connecting and adding different concepts in order to create a better model to solve a problem. In order to solve a problem, a decision maker may use some concepts that seem to be conflicting. Ordinary people might evaluate this approach as irrational; however, at the end it might provide the desired results.

Immunity to change

People and organizations resist change in different ways. Harvard University professors Robert Kegan and Lisa Laskow Lahey have analyzed the sources of resistance and explained the methods to overcome them in their book “Immunity to Change: How to Overcome It and Unlock the Potential in Yourself and Your Organization.”

Kegan and Lahey start the book by referring to a recent study which showed that when doctors told heart patients they would die if they didn’t change their habits, only one in seven patients was able to follow the changes successfully.

The authors make an interesting analysis of mental development, of which they say there are three phases. The first phase is the socialized mind. Even though the word “socialize” has become popular recently, in this book it has a negative meaning. When one is trying to become a part of a group the person tries to take on the characteristics of the group. This person tries to be a team player, a faithful follower -- he tries to align. For instance, if the person is trying to join a group, instead of making his own personal decisions, he adapts his thinking to the group. For example, many drivers swear in traffic: When a polite person sits in the driver’s seat, he becomes a rude person in traffic. Without being aware of it, the person has socialized his mind.

The second phase is the self-authoring mind. This phase looks more individualistic, and it is. In this phase the person becomes a leader and sets his own agenda and solves problems independently. He has his own point of view, instead of aligning with others he expects others to align with him. A typical autocratic leader might be a good example of this mental development phase.

The third and the last mental development phase is the self-transforming mind. In this phase, the person goes beyond the ordinary lines of leadership and discovers that developing and mentoring others is more important than their obedience. The leader in this phase gives a compass to followers instead of orders. The most important characteristic of this phase is multi-framing. Many people spend their lives as if there is only one truth. It is right to advocate your own opinion; what is wrong is to assume that your thoughts and opinions are always true. In the third phase of mental development, even at times when it may appear to be contradictory, the person embraces different thoughts and approaches.

The authors further explain that everybody with immunity to change has two types of commitment: visible commitment and hidden commitment. Visible commitment is what we express as our commitment, while the hidden commitment is our inner desires and our assumptions that support these desires. The third element is the behavior that is working against the change. The authors define this as doing, or sometimes not doing, something. The simplest example to illustrate this theory is weight loss. The visible commitment of somebody is to lose weight. The behavior requiring change is overeating or eating when the person isn’t hungry. If the person wants to lose weight, why does he behave in the opposite way? Because there is a hidden commitment. The person may want to be full of energy, may believe that eating is fun or doesn’t give value to being physically attractive.

The authors argue that people cannot change because of their hidden commitments: If we can think and talk about our hidden commitments and supporting assumptions then, we can keep up with our visible commitments. 19 December 2010

The future of management

Gary Hamel, in his book “Leading the Revolution,” claimed that extraordinary and revolutionary companies would win in the 21st century. Companies like Google, Skype and Facebook did not exist in the 20th century and they came to the business stage unexpectedly.

Hamel, along with Bill Breen, also wrote the book “The Future of Management” in which they talk about the innovation and management models of companies.

According to the authors, management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and by doing so, advances organizational goals.

Hamel describes innovation as a novel management principle, challenging some long-standing orthodoxy; systemic, encompassing a range of processes and methods; part of an ongoing program of rapid invention where progress compounds over time. He says that we have to make innovation everyone’s daily task and we have to create a highly engaging work environment that inspires employees to give the very best of themselves.

There are barriers for innovation in corporations. We have too much management and too little freedom. We have too much hierarchy and too little community. We have too much exhortation, too little purpose.

The authors give the interesting example of Whole Foods. Whole Foods is a hypermarket chain that specializes in providing organic and healthy foods. It is a large company worth billions of dollars. The management is quite revolutionary. All of the food prices are determined in a decentralized way. Each store’s management team makes its own decisions about the prices of foods to be sold in their market. Traditionally in the retail industry prices are set by the company headquarters. There is another interesting point in the human resources field. Each store hires new personnel with the approval of current staff. The team conducts the job interview, they decide on the salary to be offered. Each member of the team has only one vote in the decision process. Moreover, the teams in the stores decide on their own salaries, salary increases and bonuses. Under normal conditions, this approach looks unacceptable because if you give power to the people to determine their own salaries, the sky becomes the limit. However, people act responsibly at Whole Foods. It would be stupid to overpay themselves because everything is transparent and traceable by the headquarters. A sense of fairness is key in democratic organizations.

The famous professional outdoor equipment company Gore Associates, the producer of Gore-Tex Waterproof Fabrics, is another example of a democratic organization.

For Hamel and Breen, democracy and democratic management are the answers for new, innovative organizations. Ideas are produced, not at the top, but across the company. However, there must be systems supporting the concept of democracy within the organization. There should be love, autonomy, egalitarianism, a sense of mission and a sense of community. People should love their company and protect it like they protect their countries. The autonomy and power to take action is very important, otherwise people will not believe that they can control their destiny. Egalitarianism is important, because if there is too much hierarchy, autonomy is not possible. An organization’s existence is dependent on its mission because each organization is created to carry out a mission. Every organization needs a community to serve and protect itself. Without it, we cannot talk about an organization.

The black swan

When Aise was born, she was 50 centimeters long. When she was 15, she was 150 centimeters tall. In 15 years she grew threefold. When she turns 30, how tall will she be? The answer based on experience is better than the one based on mathematics.

There was a turkey. She used to love Pierre, the farmer. Because Pierre loved the turkey so much, he provided her with the best fodder. He had nourished the turkey with great affection since she hatched. This turkey grew up to become the most beautiful turkey on the farm. All the other turkeys envied the farm’s star turkey, who was the happiest and healthiest turkey of all. One morning, the star turkey got up; the sun was shining and the grass was green; it was a perfect day. The farmer approached the star turkey -- but with a knife in his hand rather than fodder this time. The turkey thought, “He would never chop off my head, I guess he is going to cut some branches from the trees.” This was her final thought.

Nassim Nicholas Taleb in his book “The Black Swan: The Impact of the Highly Improbable” gives interesting examples of unsuccessful induction and reasoning. We have difficulty in understanding what is happening at the actual time; most of the time we understand something only after it has occurred.

In the 1930s none of the French could conceive that Hitler would start a war that would result in more than 50 million casualties. Suppose that farmer Pierre is a happy farmer, visiting the town on his bicycle. Last year’s crop was very good, and Pierre is in good financial condition. Pierre and the turkey have much in common. Both of them think that the future is bright; however, it is not.

Taleb chooses an interesting example -- the black swan -- to describe the improbable. The animal most identified with whiteness is the swan. We suppose that all swans are white. There is no probability of other colors for ordinary people. They have visual evidence -- all of the swans they have ever seen were white. In spite of these experiences, there are black swans in limited numbers in our world, too.

A black swan is improbable, and it turns all of our assumptions upside down. It catches us unprepared. The day the farmer comes with a knife in his hand is the black swan day for the turkey. On that day, the turkey finds out that all of her beliefs were false.

Taleb thinks that Sept. 11 is a black swan moment in world history. There are black swans in every field, such as technology, business and politics, and in our personal lives. The sudden crash of a stock exchange with a trend towards growth was a black swan moment. The bankruptcies of giant corporations in the United States were also black swan instances.

Black swans, however, are not always negative. They are sometimes positive. At the end of World War I, a military officer by the name of Mustafa Kemal founded modern Turkey from the ashes of the Ottoman Empire. It was a black swan moment for the Turkish nation. When everybody was pessimistic about the country’s future, Mustafa Kemal organized the nation and changed its destiny. European countries did not expect any leader from Turkey to be capable of foiling their plans for these lands. Barack Obama is a black swan, too. Nobody in the 20th century could have foreseen that one day an African-American could be the US president. The success of Apple iPhones and Samsung against Nokia are also black swans. Most of the people believed that Nokia was an unshakable giant in the communications market, till it was challenged by Apple and Samsung.

It is a very interesting book full of theories and fascinating stories. Together with this, the author warns us about stories. Although they may be very persuasive, they may be based on insufficient and unreliable data.

Switch - How to change things when change is hard

Read the following sentences and decide whether you agree or disagree with each of them.

1. You are a certain kind of person and there is not much that can be done to really change that.

2. No matter what kind of person you are, you can always change substantially.

3. You can do things differently, but the important parts of who you are cannot really be changed.

4. You can always change basic things about the kind of person you are.

If you agreed with items 1 and 3, you are someone who has a fixed mindset. If you agreed with 2 and 4, you are some who has a growth mindset.

Written by Chip Heath and Dan Heath, “Switch: How to Change Things When Change Is Hard” is a book about personal and corporate change. The Heath brothers use a very effective analogy in their book. This likens the mind to a rider and our body to an elephant. Taking the above exercise into account, if you found that you have a fixed mindset, it means that the elephant in your body is stronger than the rider. In the morning, our minds say we have to get up, but our body tries to lure us to stay in the bed. At dinner our minds say we have to stop eating, while our body tempts us to keep eating. At the office our minds say we have to keep working, whereas our bodies entice us to take a break. The elephant is six tons and the rider is only about 100 kilograms. In this example, it is very difficult to control the elephant for the rider.

The metaphor of rider and the elephant is not limited to personal matters; the same metaphor is also used for organizational issues. Although a customer-focused, agile and democratic organization is far more desirable, it is can be difficult to be transformed such an organization. Acting slowly when making decisions and generally leaving the responsibility of the decision to the boss is much easier and this is what we are usually accustomed to in management.

The Heath brothers give very interesting examples of change in their book.

Milk is the single largest source of saturated fat in a typical American’s diet. In fact, calculations reveal something remarkable: If Americans switched from whole milk to skim or 1 percent milk, the average diet would immediately drop the level of saturated fat to levels recommended by the US Department of Agriculture. So how do you get Americans to start drinking low fat milk?

People will drink whatever is around the house -- a family will plow through low fat milk as fast as whole milk. So, in essence, the problem was even easier than anticipated: You don’t need to change drinking behavior. You need to change purchasing behavior. What behavior do we want to change? We want consumers to buy skim or 1 percent milk. When? The answer is simple: When they’re shopping for groceries.

Researchers Bill Reger and Steve Booth-Butterfield launched a campaign in two communities in West Virginia, running spots on local media outlets (TV, newspaper, radio) for two weeks. In contrast to the bland messages of most public-health campaigns, the 1 percent milk campaign was punchy and specific. One ad trumpeted the fact that one glass of whole milk has the same amount of saturated fat as five strips of bacon. At a press conference, the researchers showed local reporters a tube full of fat -- the equivalent of the amount found in a half-gallon of whole milk. Researchers monitored milk sales data at all eight stores in the intervention area. Before the campaign, the market share of low fat milk was 18 percent. After the campaign, it was 41 percent. Six months later it still held at 35 percent. This brings us to the final part of the pattern that characterizes successful changes: If you want people to change, you must provide crystal-clear direction.

The Heath brothers offer a model of change: To change behavior we have to direct the rider, motivate the elephant and shape the path. We can direct the rider by setting a goal, and we can motivate the elephant by using visual evidence and proof. Finally, we can shape the path by changing procedures. In the case of low fat milk, the target was low fat milk consumption. The motivation factor was the emphasis that “one glass of whole milk has the same amount of saturated fat as five strips of bacon” and the new path was about making low fat milk easily accessible on the shelves at markets. 12 December 2010

How to change the world

Social entrepreneurs are the doctors of society. Since there is a unipolar world and capitalism is the only system we have, there are many side effects no doctor, unfortunately, is able to cure. Social entrepreneurs are creative individuals who question their environment and try to repair the system in their own way.

David Bornstein is the author of “How to Change the World: Social Entrepreneurs and the Power of New Ideas,” and in his book he tells the fascinating stories of remarkable individuals in different parts of the world from Brazil to Hungary, providing examples of positive deviants in the social sector. In South Africa, one woman, Veronica Khosa, developed a home-based care model for AIDS patients that changed government health policy. An American, James Grant, is credited with saving 25 million lives by leading and “marketing” a global campaign for immunization. Another American, Bill Drayton, created the pioneering foundation Ashoka: Innovators for the Public, which has funded and supported these social entrepreneurs and over a thousand like them, leveraging the power of their ideas across the globe. The success stories described in the book are the cases supported by the Ashoka foundation. One of those fascinating stories belongs to Fabio Rosa. In Brazil, Rosa helped bring electricity to hundreds of thousands of remote rural residents. Rosa saw that high water costs were a significant obstacle for local rice farmers in Palmeras and that lowering these costs could improve productivity and wealth. To address high water costs, Rosa understood that there was a need of an invention that would provide low cost electricity. At the time, 70 percent of rural residents in Palmeras were living without electricity. Rosa favored expanding access to electricity through a new invention, which turned out be an inexpensive mono-phase electrification system developed by Professor Ennio Amaral. However, the system did not adhere to certain technical specifications as set forth in Brazilian law. Amaral and Rosa waged a war against the government and big energy companies. With very primitive and insufficient facilities, but a very big heart for villagers, they won the battle. The use of mono-phase technology reduced the costs of electricity for each of these rural households from $7,000 to $400. All of these success stories are the stories of ordinary people. They have extraordinary skills and approaches, but most of them started their journey as an ordinary person. This book is evidence that anybody who has a dream can change the world. Ordinary people -- social entrepreneurs -- are increasingly stepping in to solve problems where governments and bureaucracies have failed. “How to Change the World” shows, as its title suggests, that with determination and innovation, even a single person can make a surprising difference. For anyone seeking to leave a positive mark on the world, this will be both an inspiring read and an invaluable handbook.

‘Freakonomics’

Steven Levitt and Stephen Dubner, the authors of “Freakonomics,” meld pop culture with economics. They study daily life data rather than stock exchange data.

There are very interesting examples in the book. In 1984 Paul Feldman started a bagel company in which he delivered boxes full of bagels to different businesses each morning (I guess there is no such job today). There was also a collection box at each locale, meaning payment was on the honor system. At the end of each day, Feldman collected the boxes and money. The overall payment rate was 87 percent. Small company employees paid more consistently because stealing is easier to detect in close-knit environments. Interestingly, the payment rate of the top executives of a given company was less than for the regular employees. Businesses in which the employees knew and liked Feldman also stole less frequently than those that did not. The most common type of theft was to take bagels without paying. It was very rare for someone to steal the collection box. People cheated more often during bad weather and around stressful holidays like Christmas, Thanksgiving and Valentine’s Day. “Free holidays” like Independence Day and Presidents Day produced the opposite behavior. Morale thus strongly influenced stealing.

Another topic covered by Levitt and Dubner is cheating by teachers. Teachers are alternatively rewarded or punished based on whether their students do well or poorly on standardized tests. There is therefore an incentive for teachers to cheat on these tests, and there are a variety of means for doing so. Teachers will try to cheat standardized tests by privately altering the written answers given by their students. Such a teacher would maximize the effect of their cheating efforts by focusing on changing the answers to the hardest questions, which the largest number of students probably got wrong. This would create an odd score distribution in which a surprising proportion of the hardest questions were “answered” correctly while a seemingly large share of easy questions were answered incorrectly. Students in the cheating teacher’s class would also have unusually high test scores when compared with past and future academic years. The Chicago public school system instituted high-stakes testing in 1996 and found that some student cohorts experienced suspicious one-year gains in scores at various points during their academic careers. Upon the re-testing of the suspect students along with re-testing of a control group of other students for comparison, it was observed that the results were statistically anomalous and a dozen teachers were fired for cheating.

One of the most intriguing studies in the book is about the socioeconomic patterns for naming children. Parent socioeconomic status and education level correlate with the name choices for children. For instance “Taylor,” “Madison” and “Cody” are perfect examples of white names. A set of names (like Taylor and Cody) is preferred among rich whites, and a different set is preferred among poor whites. Names cycle through periods of popularity and disuse. New names continuously enter into the mix and sometimes gain currency. Once a name is popularized among rich parents, lower socioeconomic status parents whose children are born, let’s say, 20 years later, take it up because they associate such a name with success and they want success for their own children. However, this is not the case because someone never becomes successful just because of his/her name. It is more about socioeconomic structure and background. Once the name becomes common, the rich drop it and find a replacement.

In 1958, a New York City father named Robert Lane decided to call his baby son Winner. Three years later, the Lanes had another baby boy. Robert decided to name this boy Loser. Loser Lane did in fact succeed. He went to prep school on a scholarship, graduated from Lafayette College in Pennsylvania and joined the New York Police Department, where he made detective and eventually sergeant. Although he never hid his name, many people were uncomfortable using it. To his police colleagues today, he is known as Lou. The most noteworthy achievement of Winner Lane, on the other hand, now in his late 40s, is the sheer length of his criminal record: more than 30 arrests for burglary, domestic violence, trespassing, resisting arrest and other mayhem

First, break all the rules

Marcus Buckingham and Curt Coffman of The Gallup Organization present the remarkable findings of their massive in-depth study of great managers across a wide variety of situations in their book “First, Break All The Rules: What the World’s Greatest Managers Do Differently.”

Some of the managers were in leadership positions, and other were front line supervisors.

Buckingham and Coffman explain how the best managers select an employee for talent rather than for skills or experience; how they set expectations for him or her -- they define the right outcomes rather than trying to fix his weaknesses; and finally how great managers develop people. They find the right fit for each person, not the next rung on the ladder. This research -- which initially generated thousands of different survey questions on the subject of employee opinion -- finally produced the 12 simple questions that work to distinguish the strongest departments of a company from all the rest.

In my opinion, these 12 questions give a bright insight into how to manage people. I will examine each question one by one.

The first question: “Do I know what is expected of me at work?” People perform their best when they have clear objectives. Without a clear objective, they cannot make progress.

The second question: “Do I have the materials and equipment I need to do my work right?” Every employee should have the necessary materials and equipment so they can have no excuse for failing to do a good job. According to motivation guru Frederick Hertzberg, hygiene factors into the workplace and a lack of sufficient hygiene cause dissatisfaction. The third question: “At work, do I have the opportunity to do what I do best every day?” A person cannot show his ability to drive when s/he has no car. So, one of the most important factors of performance in the workplace is the availability of the opportunity.

The fourth question: “In the last seven days, have I received recognition or praise for doing good work?” The scarcest resource in the workplace is the recognition of employees. People need praise and recognition as much as water and as food. Even a simple “thank you” can motivate people.

The fifth question: “Does my supervisor or someone at work seem to care about me as a person?” We are human beings and we have emotions; we are not machines. So, we want to feel that our managers remember this reality. When making a decision, a manager should consider that we have families and are sensitive creatures.

The sixth question: “Is there someone at work who encourages my development? In my personal view, one of the best motivators is the opportunity for development. People realize that their own development is more important than money and they look for training options and opportunities to gain experience.

The seventh question: “At work, do my opinions seem to count?” The opportunities for personal contribution are very important for many people. This is because, if they can contribute, they feel that they are valuable; if they cannot, they feel they are worthless.

The eighth question: “Does the mission/purpose of my company make me feel my job is important?” James Collins and Jerry Porras, two management gurus, claim that companies’ main goal should be more than profit. The profit is a consequence of a meaningful service. People want to work for companies that have meaningful missions.

The ninth question: “Are my coworkers committed to doing quality work?” The social environment at work is also important. Like minds are best fit for a work environment.

The 10th question is not an unusual one: “Do I have a best friend at work?” If your best friend is at your workplace, it is a place where you want to be. People run home after work because there is a split between their work life and their personal life. The 11th question: “In the last six months, has someone at work talked to me about my progress?” Feedback is very important. Without it we cannot understand how we perform. The final question: “This last year, have I had the opportunity at work to learn and grow?” As I mentioned earlier, people look for opportunities for development, and they want to see evidence of it.

Even the book’s title, “First, Break All the Rules: What the World’s Greatest Managers Do Differently,” does not break any rule in management. Clear goals and objectives, a significant vision, development opportunities, constructive feedback and opportunities to contribute are typical concepts in management. However, what is important in this book is that this management mantra is supported by a survey of 100,000 people

Drive

From Daniel H. Pink, the author of the bestselling “A Whole New Mind: Why Right-Brainers Will Rule the Future,” comes a paradigm-shattering look at what truly motivates us and how we can use that knowledge to work smarter and live better.

It is believed that the best way to motivate ourselves and others is with external rewards like money -- the carrot-and-stick approach. That’s a mistake, Pink says in “Drive: The Surprising Truth About What Motivates Us,” his provocative and persuasive book. According to Pink, the secret to high performance and satisfaction -- at work, at school and at home -- is to give a challenge rather than rewards.

In the first pages of the book, he gives an interesting example of the Harlow Puzzle. Harry Harlow from the University of Wisconsin carried out an experiment with eight monkeys. He prepared a puzzle using a pin, hook and cover. When confronted with this puzzle, the monkeys tried to solve it. They learned how to remove the pin, slide the hook and open the cover. They were not rewarded with food, affection or even quiet applause when they succeeded. They solved the puzzles frequently and quickly; two-thirds of the time they cracked the code in less than 60 seconds.

I staged a similar experiment in one of my MBA classes, but this time with students rather than monkeys. I brought a puzzle to class and showed it to the students. All of the students tried to solve it.

As you can guess, the conclusion is that people are motivated when they meet a challenge. One of the most interesting phenomena of the 21st century is Wikipedia. There are more than 200 million contributors to it and all of them do this voluntarily. Even a small feeling of gaining a reputation by contributing to Wikipedia is not possible because the system does not let anyone put their names on articles they edit. So there’s no monetary award, and there is no recognition award. The only thing Wikipedia offers is the feeling of doing something good.

Sometimes monetary awards can do the reverse; they can de-motivate people. Two kids painting fences for fun love what they do. But if you start to pay them for their work, they may lose their motivation. Suppose a group of children play scrabble for fun; when you start to pay them an hourly wage to play, they will start to look at their watches and lose the pleasure they get from playing the game.

Pink claims there are three elements in motivation: autonomy, mastery and purpose. Our default setting is to be autonomous and self-directed. We come to this world with autonomous minds, but we learn to become robots. We need autonomy over the task at hand (what we do), the time (when we do it), the team (who we do it with) and the technique (how we do it).

According to Pink, mastery begins with flow -- optimal experiences when the challenges we face are exquisitely matched to our abilities. We can only master if only we engage. A quote from Albert Einstein articulates Pink’s idea: “It’s not that I’m so smart, it’s just that I stay with problems longer.”

The third element, the purpose, is very important in motivation. Purpose maximization should take the place of profit maximization. If people believe in a purpose, they intrinsically work. But if they don’t believe in the purpose, they give up. The best example of purpose maximization is Wikipedia. When people contribute Wikipedia, they feel they have reached their intrinsic aim.

‘China’s Megatrends: The 8 Pillars of a New Society’

 

John and Doris Naisbitt, longtime China observers, provide an in-depth study of fundamental changes in China’s social, political and economic life in their book “China’s Megatrends: The 8 Pillars of a New Society.”

With extraordinary access, and using the same techniques behind John Naisbitt’s International bestseller “Megatrends,” the Naisbitts have traveled the country, interviewing journalists, entrepreneurs, academics, politicians, artists, dissidents and expatriates. With the help of 28 staff members of the Naisbitt China Institute in Tianjin, they monitored local newspapers in all of China’s provinces to identify the evolving perspectives and deep forces underlying China’s transformation.

Their research reveals that China is not only undergoing fundamental changes but also creating an entirely new social and economic model, what the Naisbitts call a vertical democracy that is changing the rules of global trade and challenging Western democracy as the only acceptable form of government.

The Naisbitts have identified eight pillars as the foundation and drivers of China’s new society. These are the freedom of thought, planning by trial and error, equal opportunity for everybody, creating a climate for entrepreneurship, organizing innovation, balancing top-down with bottom-up, supporting art, improving education and integration with the world economy.

After the Cultural Revolution in 1978, the Chinese administration tried to emancipate the mentality in China. Chinese people started to think for themselves and make their own decisions, and reawakened the Chinese entrepreneurial gene, opening the eyes of the people to all kinds of business opportunities. They decided to establish at the national level high-tech industrial parks with favorable policies to encourage the creation of new and innovative companies. Besides these, China revitalized state-owned enterprises through various strategies, such as “healthy enterprises would carry a sick one,” “privatization is a gradual process” and “‘invite’ global players to help handle non-performing assets.”

Balancing top-down and bottom-up

The most interesting pillar on which the sustainability of the new Chinese society rests is balancing its top-down and bottom-up forces. The evolving Chinese dynamic of top-down government directives and bottom-up citizen initiatives is shaping a new model the authors call “vertical democracy.” The top-down part of decision making is familiar; however, the Chinese type of bottom-up decision making is quite different. Indeed, there is no bottom-up decision making process in the West. We only vote for parties and they make decisions. In China, in spite of a one-party-based government, the government organizes surveys, learns the tendencies of the society and makes decisions based on survey results. The numbers of decisions based on these surveys are probably limited, but they may increase in the future. In my opinion, this practice is much better than in Western democracy-type decision making processes.

Another point that the Naisbitts emphasize is China’s “trial and error” culture. The Chinese government tried some new strategies and retained the successful ones. “Framing the forest and letting the trees grow” was the major strategy in developing innovative Chinese companies. The rules for entrepreneurial and innovative ventures provided for both Chinese and foreign investors. The Naisbitts give one interesting example from history and use it as a metaphor to explain the approach to foreign investments in China.

The Naisbitts retell a third-century Chinese legend. Gen. Zhuge Liang sat on the banks of the Yangtze River facing the enemy army of Cao Cao on the other side. Rather than attack directly, Zhuge sent over various boats packed with straw. Cao Cao’s archers, perceiving an attack, sent a hail of arrows down onto the boats, whereupon Zhuge retrieved the vessels -- and stole his enemy’s ammunition. China employed the same “borrowing arrows” strategy when it invited foreign capital and industry into the country, starting with Volkswagen in 1978. Other large Western firms followed, including Boeing and IBM. In time the Chinese learned to produce cars, computers, planes and so on. It looks like China learns from global corporations while providing an advantageous production environment for them.

Click-The magical connection

 

Ori Brafman and Rom Brafman’s book “Click” is about the instant connections between people. The book starts with a “love at first sight” story. When two people with very different personalities meet there’s conflict, but then they fall in love and get married.

The authors report that “love at first sight” marriages surprisingly have more endurance than traditional marriages. In the second example, Jim West, one of the first African-Americans to earn a Ph.D. in physics in the US, and Gerhard Sessler, a World War II emigrant and scientist, meet. Though they both come from very different backgrounds, they click and become a powerful team that invents the microphone and solves many difficult technical problems.

The term “click” refers to a magical moment, which is euphoric, energizing and thrilling. By clicking, people have a quick-set intimacy with a special person. As the authors explain: “In other contexts, the words quick and instant don’t necessarily sound like positive descriptions (think instant coffee or quick TV dinners). But when it comes to human relationships, the bonds formed by quick-set intimacy can be surprisingly strong and create a tenor in the relationship that may be lifelong.”

The Brafman brothers explain the research on clicking in their book. The first factor in clicking is vulnerability. Under normal conditions, people try to look self-assured and as perfect as possible. However, even though a lot of authors and specialists claim that self-confidence is very important in human relationships, vulnerability seems to be more important than self-confidence. When people talk about their weakest points, they are more clickable. I think there is something that looks contradictory, but works in harmony. Self-confidence and vulnerability are two sides of the same coin. If one has self-confidence, that means he can be vulnerable. Being open in personal matters is a kind of authenticity that invites other people to become closer to you. When you tell somebody that you were not good at being a father or you lived in poverty as a child, people think that you are a reachable person.

Proximity is one of the surprising concepts of the book. People used to think that the popularity of a person was based on his/her personality. However, the Brafmans’ book argues that popularity is a function of place. The best friends in the schools are the students who sit together coincidentally on the first day of class or live in the same dormitory room. Proximity creates a click between these people. People in the heart of a network are the most popular people within this network because of location, not personality. According to the researchers, the most popular students in MIT dormitories stay in rooms in the middle of the dormitory.

Another point that the Brafman brothers uncover in their book is joint adversity. People who have experienced difficult times together click with each other. People who suffered the oppressions of a war, survivors of a shipwreck, or even members of the same Boy Scout troop might easily click. The Brafmans talk about high self-monitors that act as network hubs. Some people have fluid personalities that can easily modulate their emotional expressions and quickly incorporate norms.

What can we do with the concept of click in the business world? People can use these concepts for networking. Managers can create teams by considering click factors; I marketing, we can click with our customers. The readers of the book can begin a journey full of questions: How can our company become vulnerable? How can we train people to become self-monitors? How can we use the principle of “proximity” in business life?

The power of positive deviance

  

Well-known researchers Richard Pascale, Jerry Sternin and Monique Sternin’s newest book, “The Power of Positive Deviance,” is a great tool for social change.

Even at times of great crises and complex problems, there is at least one person somewhere in a company or a community who has already solved the problem. This person is called the “positive deviant” by the authors. Positive deviants are individuals who live and work under the same constraints as everyone else, yet find a way to succeed against all odds.

The first and very powerful example in the book is the solution to the malnutrition problem of Vietnamese children. One of the authors of the book, Jerry Sternin, arrived in Vietnam as a malnutrition expert, but the welcome was rather chilly. He was supposed to help solve the malnutrition problem. However, as a foreigner and an expert having almost no budget, he had nothing to do. The general conditions in regions where children suffered from malnutrition were dreadful. Although most of the children were dying from malnutrition, a very small percentage was healthy. Jerry Sternin decided to find these children who were positive deviants. If he could understand how these children received proper nutrition, it could be a benchmark for all other children in the region. The mothers of healthy children were cooking rice but adding some sweet potato leaves. The food was not delicious, but it was nutritious. Moreover, when these mothers found some crabs as protein resources, they also added them to the meal. The portions were small but frequent; instead of three times a day, children were having meals six times a day. Therefore, the model was clear; if this type of nutritional information could be disseminated to the mothers of the suffering children, it would cure the problem, but how would he spread this info? Leaflets or flyers wouldn’t work in rural areas, and seminars or conferences would be meaningless. Jerry Sternin figured out that change should start within the community. With the support of some local organizations, he tried to create opportunities where model mothers and the other mothers could gather. All of the mothers talked about the malnutrition problem, and the model mothers cooked rice with sweet potato and shared their success story in these gatherings. In the end, there was a great decrease in malnutrition in the region.

All around the world, there are chronic problems in communities and organizations. The authors claim that the positive deviance approach might help to solve these chronic problems. The theory is simple; there is always a positive deviance statistically. Every city has a rich person who has earned money legally, every country has a very successful student who has succeeded despite facing totally negative conditions. Any company must have at least one successful sales district in spite of harsh competition. In any macro crisis there are always some winners. So, what we have to do is to discover these positive deviants, understand the model and then diffuse the information. The first and second steps are easy. The first step requires research and the second diligent observation. The most difficult step is the diffusion of knowledge. In the Positive Deviance system, for the toughest problems you have to organize people to share information. This might be easier for a company, but more difficult for communities.

“The Power of Positive Deviance” looks like it is a great approach for companies and communities who want to start bottom-up change, not top-down change.

The starfish and the spide

A starfish is one of the most interesting marine animals. When an arm is lost, a new one soon grows in its place. More surprising than this, if you cut off one of the arms and leave it in the sea, the arm regenerates an entire starfish. It is an animal that you cannot kill by cutting off its head because it has no head.

Ori Brafman and Rod A. Beckstrom make an interesting analysis of decentralized organizations of the 21st century in their book “The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations.” Using the metaphors of the starfish and the spider, they define the organizations with heads and without heads. The spider resembles a traditional organization that has a head and the starfish resembles a modern organization that is decentralized.

The Internet is the most decentralized organization of today’s world. Brafman and Beckstrom give an interesting example of the war between mp3 song downloading systems and record companies. When a record company sues and has one mp3 downloading site closed, the first company becomes two new companies; and they start to provide new mp3 downloading programs and sites. They are like starfish; if you try to destroy one of them, you will only double the number of these companies.

Brafman and Beckstrom tell the story of Aztecs and Incas. Spanish commanders with very small troops followed a simple strategy against the Aztecs and Incas, which had armies a thousand times bigger than theirs. Spanish commanders first approached Inca and Aztec kings, offering gifts, and were able to capture them. When Inca and Aztec armies lost their chiefs, they did not know what to do and lost the war. However, the same game did not work against the Apaches to the north. When Spanish armies tried to conquer North America, they couldn’t cope with them because the Apaches consisted of self-organized groups without formal leaders.

In today’s business environment, Wikipedia, iPhone applications, blogs, and some other products and services can be defined as “starfish organizations.” Take Wikipedia, for example: 200 million people contribute to and write articles for Wikipedia and it has no formal leader. It is the same for Facebook. The founders of these organizations are not the leaders of these societies. However, Mark Zuckerberg and Jimmy Wales can be described as system providers or catalysts. Instead of leading, they provide operational systems and people act freely on these structures.

Steve Jobs of iPhone, iPad and iPod is a bit different than the above examples. Everybody is free to write an application for the iPhone, but you have to use the Apple Store in order to buy or sell these applications. And when you use the Apple Store, Steve Jobs earns money. In the iPhone example, the sweet spot is not in the totally decentralized organizations, it is in between the centralized and decentralized organizations. Wikipedia is totally decentralized and it doesn’t generate a big amount of money when compared to Apple’s iPhone. The iPhone apparatus and applications are based on an organization which has a head, Jobs. On the other hand they also monitor the application business, which is independent and decentralized.

“The Starfish and the Spider” is the most thought-provoking book of the past 10 years, in my opinion. There are only a few books in the field of management that leave questions in your mind, and this book is one of them. Since I read the book, I have been thinking about my small training company and its leader, which is me. I understand that somehow I have to kill the leader of the company and find a way to provide voluntary contributions from my customers. Even though it is not mentioned in the book, I have to underline that one new but indirect concept of the book is the death of customer focus. This book proves that it is the era of customer participation in production and operations and that the era of customer focus is over. I definitely advise you to read and discuss the approaches in the book, especially within your own organization.

Outliers-The story of success

 

In his latest book “Outliers,” Malcolm Gladwell deals with factors contributing to high levels of success. He notes that “the biggest misconception about success is that we do it solely on our smarts, ambition, hustle and hard work.”

In “Outliers,” he hopes to show that there are a lot more variables involved in an individual’s success than society cares to admit, and he wants people to “move away from the notion that everything that happens to a person is up to that person.” Gladwell notes that although there is little that can be done with regards to a person’s fate, society can still impact the “man”-affected part of an individual’s success. In other words, someone being in the right place at the right time can become successful.

The book offers examples including Bill Gates, founder of Microsoft, and Steve Jobs, founder of Apple. The author thinks that they were part of a very special experience that made them successful. Both were born in the 1950s. Both spent more than a year with one of the first programmable computers. At that time, there were only three programmable computers in the world, and four people who spent the most time in front of these computers became the founders of the software industry. One of these four computers was in the high school Bill Gates attended. Gates used another one when he attended Washington State University. This special experience subsequently led Bill Gates to become the architect of the most popular software.

A common theme that appears throughout “Outliers” is the “10,000-Hour Rule.” Gladwell thinks that if you spend 6,000 hours playing a violin, you will become an average violinist, while 8,000 hours will make you a good one. To be considered a great violinist, you should practice for 10,000 hours. This is something true in all areas of life including authorship, computer programming, musicianship, piloting and oratory. The more investment you make in a specific subject, the more payback you will get.

Gladwell continuously reminds the reader that genius is not the only or even the most important thing when determining a person’s success. Using an anecdote to illustrate his claim, he discusses the story of Christopher Langan, a man who ended up working on a horse farm in rural Missouri despite having an IQ of 195 (Einstein’s was 150). Gladwell points out that Langan has not achieved a high level of success because of the environment he grew up in. With no one in Langan’s life and nothing in his background to help him take advantage of his exceptional gifts, he had to find success by himself. “No one -- not rock stars, not professional athletes, not software billionaires and not even geniuses -- ever makes it alone,” writes Gladwell. Later, he compares Langan with Oppenheimer, the father of the atomic bomb. Noting that they typify innate natural abilities that should have helped them both succeed in life, he argues that Oppenheimer’s upbringing made a pivotal difference. Oppenheimer grew up in one of the wealthiest neighborhoods in Manhattan, was the son of a successful businessman and painter, attended the Ethical Culture Fieldston School on Central Park West and was afforded a childhood of concerted cultivation. “Outliers” argues that these opportunities gave Oppenheimer the chance to develop the practical intelligence necessary for success.