Information Digest: Research on tap

A new game plan for C players

It’s a big driver of business success, but one that executives are loath to talk about: upgrading the talent pool by weeding out “C” players from management. These aren’t the incompetent or unethical managers whom organisations dismiss without a backward glance; C performers deliver results that are acceptable – barely – but they fail to innovate or to inspire the people they lead.

The authors of The War for Talent have studied what it takes to upgrade an organisation’s talent pool. In this article, they explore the hidden costs of tolerating under-performance and acknowledge the reasons why executives may shy away from dealing decisively with C players. They recommend that organisations take an “iron hand in a velvet glove” approach to managing sub-par performers.

The authors outline three ironhanded steps. First, executives must identify C players by evaluating their talents and distributing employee performances along an assessment curve. Second, executives must agree on explicit action plans that articulate the improvements or changes that C performers must achieve within six to 12 months. And third, executives should hold managers accountable for carrying out the action plans. Without such discipline, procrastination, rationalisation, and inaction will prevail.

The authors also emphasise the need for the “velvet glove.” Executives must ensure that low performers are treated with dignity, so they should offer candid feedback, instructive coaching, and generous severance packages and outplacement support. The authors’ approach isn’t about being tough on people; it’s about being relentlessly focused on performance.

Harvard Business Review

Bob’s meltdown
Annette Innella is just coming into the lunchroom at Concord Machines when Bob Dunn starts screaming at her. After throwing his lunch tray against the wall, he stomps out, leaving Annette, the new senior VP for knowledge management, beside herself. She knows her proposal to establish a cross-functional knowledge management committee is progressive thinking for this old-line manufacturer, but Bob’s reaction is totally over the line.c If Bob stays, she goes – that’s all there is to it.

Bob is contrite, but he’s under pressure. The general manager of the Services Group, he’s just returned from a two-week trip around the globe to gear up his troops to beat revenue targets again, despite shrinking budgets and hiring freezes. And he gets back to an e-mail from Annette asking that two of his best people devote half their time to what he calls her “idiotic” Knowledge Protocols Group. He’s carrying the company on his back, and she’s throwing this nonsense at him.

Graphics specialist Paula Chancellor is surprised. Sure, Bob’s gruff, but his staff loves him, and he’s the only one of the big shots who ever talks to her. But HR director Nathan Singer is incensed; Bob’s never been a team player, Singer complains, and it’s time he learned a lesson.

CEO Jay Nguyen is in a bind. Bob brings in all the money. And even though future revenues will have to come from elsewhere, Jay is not totally behind Annette’s initiative in the current business climate. He can’t afford to lose Bob. But if he reins in Annette, it will be seen as condoning Bob’s outburst. What should he do? Four commentators offer advice in this fictional case study.

Harvard Business Review

How Snapple got its juice back
In 1993, Quaker Oats paid $1.7bn for the rapidly growing Snapple brand.

In 1997, it sold the brand to Triarc for a mere $300m. In 2000, Triarc sold it to Cadbury Schweppes for an estimated $1bn. How could so much value be lost and regained so quickly? What did Triarc do with apparent effortless grace that Quaker, with all its resources, could not?

John Deighton’s answer to these questions is one that many marketing professionals are likely to resist: there is a vital interplay, he says, between the challenges that a brand faces and the culture of the corporation that owns it.

From its fabled birth at the back of a pickle store in Queens, New York, Snapple grew quickly through funky ads and an army of small distributors serving thousands of lunch counters and delis. Sales ballooned to $674m when Quaker Oats bought it. But Quaker’s textbook approach – bulk distribution through supermarkets, polished advertising, avoiding controversy – backfired.

Local distributors bolted; the slick ads undercut Snapple’s hip image; sales plummeted.

Enter Triarc. The company repaired relations with disgruntled distributors, restored the funky packaging and adventurous flavours and – most important – revived the anything-goes attitude that first made the brand soar.

That’s the outline of the story. But the insights are in the details, and the details teach us this: success in brand management stems from the quality of strategy execution, and successful execution is a matter of temperament. Some strategies are best entrusted to managers with cautious, prudent temperaments; others flourish in the hands of risk takers. So before you commit to a deal, don’t just consider a brand’s sales. Also give some thought to its soul and how it fits with yours.

Harvard Business Review

Branding IT
Tom Dolan had an identity crisis on his hands. In 1995, the executive vice president and CIO of New York-based Cablevision had merged the corporate IS staffs of the company’s cable TV, retail and entertainment venue businesses into a single corporate department. But three years later, hardly anyone in the company saw it as a unified team. There was watercooler talk that his staff was insular, loyal to their old business units – Cablevision’s cable TV service, The Wiz’s electronics stores, venues Madison Square Garden and Radio City Music Hall – and heedless of the greater corporate good. A survey of end users found most had little confidence that IS understood their business needs, much less whom to go to if they wanted a project done.

At New York City-based Viacom, then-CIO Tom Espeland had a similar problem.

In 1994 he brought the IS staffs of two big business units, Showtime and MTV, under the corporate umbrella. As Joe Simon, Viacom’s senior vice president of enterprise services, tells it, Espeland (now CIO of Bertelsmann eCommerce Group) needed to advertise the fact that IS would address enterprise needs while reassuring the individual business units that their needs would not be ignored.

Both men chose an unusual strategy: they branded their IS departments.

While not yet a common practice, marketing experts say that promoting a brand image for IS – and, more broadly, mounting a sustained internal public relations campaign – can help address a host of management challenges, among them business-IT alignment, budget approval and building support for big, company-transforming projects. And trumpeting IT successes can help balance the negative internal press generated by failed projects.

CIO Magazine

Process management and the future of Six Sigma
The quality initiative Six Sigma is sweeping the US. Is it good for whatever ails your company? Consultant Michael Hammer thinks not. He warns that many business leaders, in their quest for operations-performance improvement, fail to distinguish its strengths from its weaknesses. Hammer presents a strategic, holistic approach – business-process management – in which Six Sigma is only one of many useful initiatives.

Certainly, Six Sigma’s ability to unearth root causes of problems is outstanding for narrow cost-saving improvements. But it deploys statistical analytic tools to uncover flaws in the execution of process without asking whether the process itself is flawed. It makes the dangerous assumption that the existing design is fundamentally sound.

For peak performance, companies should position Six Sigma in the context of process management and assign process owners. When a problem is amenable to a Six-Sigma solution, the process owner convenes a project team. If deeper change is needed, then a process-redesign team is organised. Process owners ensure that all performance initiatives (Six Sigma, enterprise resource planning, balanced scorecard, customer-relationship management and so on) are integrated to support strategic goals.

Sloan Management Review Beyond the business case: new approaches to IT investment
New research from MIT’s Center for Information Systems Research and others reveals that successful companies are revolutionising the way IT investments get decided. Investments are no longer justified merely on the basis of making a functional silo more profitable. Today the strategic needs of the whole company come first.

In the last 15 years, write professors Jeanne Ross of MIT’s Sloan School of Management and Cynthia Beath of the University of Texas, a tidal wave of IT-enabled initiatives has elevated the importance of investing strategically.

The opportunities seem limitless, but the resources required – capital, IT expertise, management focus and capacity for change – are not. How to choose?

The authors recommend a new investment approach based on a framework they developed after studying the e-business initiatives and supporting IT investments of 30 enterprises. The framework encourages simultaneous investment in four kinds of IT initiative.

Transformation investments are necessary if a company’s core infrastructure limits its ability to develop applications critical to long-term success.

Renewal investments maintain the infrastructure’s functionality and cost-effectiveness. Process improvements allow business applications to leverage infrastructure by delivering short-term profitability. Experiments enable learning about opportunities and testing the capabilities of new technologies.

The new tools are helping managers grapple with an increasingly complex world.

Sloan Management Review

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