CHANGE THE WAY YOU PERSUADE
You call a meeting to try to convince your boss that your company needs to make an important move. Your argument is impassioned, your logic unassailable, your data bulletproof. Two weeks later, though, you learn that your brilliant proposal has been tabled. What went wrong?
It’s likely the proposal wasn’t appropriately geared toward your boss’s decision-making style, say consultants Gary Williams and Robert Miller.
Over the course of several years’ research, the authors have found that executives have a default style of decision making developed early in their careers. That style is reinforced through repeated successes or changed after several failures.
Typically, the authors say, executives fall into one of five categories of decision-making styles: Charismatics are intrigued by new ideas, but experience has taught them to make decisions based on balanced information, not just on emotions. Thinkers are risk-averse and need as much data as possible before coming to decisions. Sceptics are suspicious of data that doesn’t fit their worldview and thus make decisions based on their gut feelings. Followers make decisions based on how other trusted executives, or they themselves, have made similar decisions in the past. And controllers focus on the facts and analytics of decisions because of their own fears and uncertainties.
But most business presentations aren’t designed to acknowledge these different styles – to their detriment. In this article, the authors describe the various subtleties of the five decision-making styles and how best to persuade executives from each group. Knowing executives’ preferences for hearing or seeing certain types of information at specific stages in their decision-making process can substantially improve your ability to tip the outcome in your favour, the authors conclude.
Harvard Business Reviewhttp://www.hbsp.harvard.edu/products/hbr/may02/R0205D.html
DIVESTITURE: STRATEGY’S MISSING LINK
Although most companies dedicate considerable time and attention to acquiring and creating businesses, few devote much effort to divestitures. But, drawing on extensive research into corporate performance over the last decade, McKinsey consultants Lee Dranikoff, Tim Koller, and Antoon Schneider show that an active divestiture strategy is essential to a corporation’s long-term health and profitability. In particular, they say that companies that actively manage their businesses through acquisitions and divestitures create substantially more shareholder value than those that passively hold on to their businesses. Therefore, companies should avoid making divestitures only in response to pressure and instead make them part of a well-thought-out strategy. This article presents a five-step process for doing just that: prepare the organisation, identify the best candidates for divestiture, execute the best deal, communicate the decision, and create new businesses.
As the fifth step suggests, divestiture is not an end in itself. Rather, it is a means to a larger end: building a company that can grow and prosper over the long haul. Wise executives divest so that they can create new businesses and expand existing ones. All of the funds, management time, and support-function capacity that a divestiture frees up should therefore be reinvested in creating shareholder value. In some cases, this will mean returning money to shareholders. But more likely than not, it will mean investing in attractive growth opportunities. In companies as in the marketplace, creation and destruction go hand in hand; neither flourishes without the other.
Harvard Business Review
IS GLOBAL SOFTWARE AN OXYMORON?
Customer satisfaction among software users depends on a number of factors, the relative importance of which varies by country and culture.
Assessing the different needs of local markets may be taken for granted in most industries, but many software firms have taken a more convenient route toward product development. They focus on functionality that they feel will be globally applicable (“internationalisation” in the parlance), and then add language-specific user-interface features for different countries (“localisation”).
But customer satisfaction among software users is dependent on a number of product attributes, not just capability, reports a growing body of research. And the importance of each product attribute changes depending on the geographic market, according to Quality dimensions in e-commerce software tools: an empirical analysis of North American and Japanese markets, a forthcoming paper in the Journal of Organisational Computing and Electronic Commerce.
The paper compares North American and Japanese users of an e-commerce development tool across five variables – capability, usability, performance, reliability and documentation – and reveals differences between the markets that suggest internationalisation does not work. For example, North American customers prize usability as the most important quality attribute, while Japanese customers place a stronger emphasis on capability.
Other differences include the lack of importance of usability and documentation in Japan, which surprised authors M.S. Krishnan, an associate professor of computer and information systems (CIS) at the University of Michigan Business School, and Ramanath Subramanyam, a doctoral candidate in that CIS department. In the US, by contrast, users want the base features but also want software to be easier to use.
But that’s not the only interpretation. It’s also possible, admits Krishnan, that software developers simply have not got localisation right in the Japanese market, so Japanese users are accustomed to poor usability. Still, it suggests an untapped market opportunity.
“Any company approaching a different market should do a similar study,” says Subramanyam, because the precise attributes driving customer satisfaction might differ by country and by software. “Applied to operating systems, there might not be differences,” says Krishnan. “But as you move closer to business applications, the diversity increases.” So he would expect greater differences to emerge with enterprise resource planning or customer-relationship management software.
Sloan Management Review
ISSUE SELLING IN THE ORGANISATION
To turn a great idea into gold, a manager first has to get the boss’s attention – and that’s a scarce commodity. An August 2001 study published in the Academy of Management Journal examines issue selling, the process by which individuals within an organisation bring ideas or concerns, solutions and opportunities together in ways that focus others’ attention and invite action. The process represents the earliest stage of change – that of focusing attention on an issue.
To collect their data, the authors asked 42 mid-level managers at a nonprofit hospital to describe incidents in which they had tried to direct top managers’ attention to a particular issue.
Though the research has limitations (the data comes from a single organisation and consists of retrospective accounts), it reveals what makes a change effort successful and affirms more conventional wisdom about change management.
For example, in the interviewees’ responses, the authors identified three categories of “moves” that managers make in trying to sell an issue: packaging moves (including actively promoting an issue through the logic of a business plan and connecting it to other issues or goals), involvement moves (involving peers and superiors in issue selling formally or informally) and process moves (using formal communication channels; educating oneself on the issue before trying to sell it; and attending to questions of timing).
The interviews also revealed that issue sellers draw on three kinds of knowledge in pitching their ideas to top managers: relational knowledge (who will be affected by the issue, who cares about it and so on), normative knowledge (knowing which kinds of data important people use, how they typically present such data and so forth) and strategic knowledge (understanding the organisation’s goals, how it plans to achieve them, strategic issues and the broader competitive context).
The picture of issue selling that emerges contains some surprises. For instance, it’s not surprising that successful issue sellers present their issues as strategically important, legitimate and relevant to the organisation overall or that they tend to break complex issues into manageable bits and present them incrementally to decision makers. However, packaging moves appear more complex than expected: issue sellers must both provide compelling facts to support their claims and know how to present those facts – something that comes only with normative and strategic knowledge.
The data also suggests that successful issue sellers are conservative; that is, they tone down potentially radical ideas, “warm up” their listeners by introducing issues slowly and tailor their presentations to the organisation’s culture and overall strategy. Moreover, it seems change is continuous, rather than episodic. In other words, organisations consist of a cacophony of complementary and competing change attempts. As in a pluralistic marketplace, mid-level managers “sell” issues, while top managers “buy” those they find most appealing and convincing. Thus the study also challenges the dominant portrait of change agents, which centres on senior executives’ or outside consultants’ heroic efforts to effect change.
Finally, the authors maintain that top managers have their own part to play. Specifically, they must fix those aspects of their organisations that support smooth co-ordination of change (such as delineating responsibilities and priorities) while also allowing great freedom on other aspects. The blend enables organisations to capitalise on middle managers’ unique – and essential – power to put the gears of change in motion.
The study is Moves that matter: issue selling and organisational change by Jane E Dutton and Susan J Ashford, both professors of organisational behaviour and HR management at the University of Michigan Business School; Regina M O’Neill, assistant professor of management at Suffolk University in Boston; and Katherine A Lawrence, a doctoral candidate at the University of Michigan Business School.
Sloan Management Review