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For the exclusive use of H. Nguyen, 2016. 2182 APRIL 11, 2008 ANNE DONNELLON DUN GIFFORD Campbell and Bailyn's Boston Office: Managing The...

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Campbell and Bailyn.pdf

For the exclusive use of H. Nguyen, 2016. 2182
APRIL 11, 2008 ANNE DONNELLON
DUN GIFFORD Campbell and Bailyn’s Boston Office:
Managing The Reorganization
As he stepped off the elevator onto the 25th floor of the Federal Street Office Tower at 7:30 on a
December morning, Ken Winston, regional sales manager for the Boston office of Campbell and
Bailyn (C & B), bumped into Paul Callahan, the top-grossing salesperson in the office. Callahan, his
brow deeply furrowed, was on his way downstairs.
“Leaving so soon, Cal?” joked Winston.
“I just got off the phone with Jim Harrington at Ashland Capital,” said Callahan, referring to one
of his biggest accounts. “He says he wanted to have coffee before the markets open. He would like to
know why I don’t come around as much any more over there. It seems things are more complicated
now for them, not less.”
This was not the first time Winston had heard grumblings recently about some of the changes that
had taken place recently in the Boston office. Much of the discontent could no doubt be attributed to
a meltdown in the mortgage-backed securities market that had rocked the financial world for six
months now—and pushed C & B’s sales force to the limit. The international crisis, triggered by the
collapse of billions of dollars worth of mortgage-backed securities, had left Winston’s sales force
scrambling to help customers minimize losses on their bond portfolios. But even more unsettling had
been the new sales assignments Winston had announced half way through 2007, which were testing
the skills—and patience—of his staff and their customers.
As Winston walked across the trading floor to his glass-walled office, the 16 bond salespeople and
13 support staff he managed were just starting their day, cracking jokes, assessing playoff prospects
for New England’s football team, and predicting interest rate changes at the Federal Reserve. The
daily 7:45 a.m. conference call with the New York research and trading team would be starting soon.
Pulling a laptop out of his briefcase, Winston sat down at his desk to finish the presentation he
was giving the next morning at the annual year-end meeting of the bond division’s leadership team.
Seven regional sales managers from across the country, and three senior bond managers in New
________________________________________________________________________________________________________________
Anne Donnellon, Associate Professor at Babson College, and Dun Gifford prepared this case solely as a basis for class discussion and not as an
endorsement, a source of primary data, or an illustration of effective or ineffective management. The authors would like to acknowledge the
assistance of Angelo Manioudakis, Fixed Income Manager, Oppenheimer Funds (HBS MBA ‘93) in reviewing this case.
This case, though based on real events, is fictionalized, and any resemblance to actual persons or entities is coincidental. There are occasional
references to actual companies in the narration.
Copyright © 2008 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
2182 | Campbell and Bailyn’s Boston Office: Managing The Reorganization York—including the division managing director, the national sales manager, and the national
marketing director—would be meeting in Manhattan to assess progress on several high-profile,
division-wide changes in progress. Winston, whose Boston office was C & B’s largest outside of New
York, had been asked to update the group on two important changes he had overseen in the Boston
office. (See Exhibit 1 for C & B organization chart.) With annual sales twice that of the next largest
office, the Boston sales group was often used as a bellwether not only for new products but also for
new management ideas.
The first topic Winston would address was the new “key account team” (KAT) that he had created
six months earlier (June 2007) in the taxable bond group in Boston. The impetus for the new group
was the difficulty many of the firm’s salespeople were having mastering the steady stream of new
and increasingly complicated debt instruments introduced by the firm. The bond division’s
salespeople tended to be generalists, selling the entire fixed-income product line. But as the division
expanded into the next generation of complicated “synthetic” debt instruments, the sales team, and
the firm’s customers, were having a hard time keeping pace. So Winston, on his own initiative and
with the backing of senior management, had combined five of the top sales generalists into a new key
account team, asked them to pool their customers, and assigned each salesperson a specialty subsegment of the firm’s product offerings.
The second topic he would address was a new division-wide performance management system
for regional sales people that senior management had introduced in January 2007. In an effort to
encourage regional sales offices to work more closely with the product managers, traders, and
researchers in New York, these same New York professionals would provide detailed input on each
regional salesperson’s performance, which would be used to help determine the salesperson’s annual
compensation. While the plan was having its intended effect—forcing the sales team to focus on
higher-margin products—Winston’s independent-minded sales team, and those in other regions
across the country, had expressed some frustration with the new arrangement.
At his desk, Winston was putting the final touches on his presentation. Spread out on his desk
were sales figures for each person in his office, peer reviews from the new management system,
financial results for the group as a whole, and his tattered copy of Bartlett’s Quotations. It was from
the latter that he liked to pull pithy epigrams for his presentations. What, however, was he going to
present the next day at the division meeting?
“Well, that coffee at Ashland Capital sure was fun,” said Callahan, arriving unannounced and
slumping into a chair opposite Winston’s desk. “There is nothing like ‘customer feedback’ to start
your day.”
“Jim Harrington’s point,” Callahan continued, “was that when it comes to bigger trades, having to
work with all of these specialists here gets complicated. He says his analysts are happier, and they are
getting good information from us. But for their in-house traders, it can mean three calls instead of
one.”
“Yes, I know . . .,” began Winston.
“And another thing,” Callahan interjected, getting up to close the office door. “I am starting to
worry about John Oates. Ever since we put him on the corporate debt desk as a specialist, he hasn’t
been himself. You know how much he likes to run his own show. As far as teamwork is concerned,
well, he’s not exactly ‘bonding’ with the New York crew. To be frank, I think he’s considering
jumping ship for another firm.”
“I am not surprised,” Winston said. “But Rome wasn’t built in a day, and we have to give this
thing some time. Speaking of the ancients, listen to this: ‘It is impossible for a man of many trades to
2 BRIEFCASES | HARVARD BUSINESS SCHOOL This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Campbell and Bailyn’s Boston Office: Managing The Reorganization | 2182 do all of them well…of necessity, he who pursues a very specialized task will do it best.’ That’s from
a Greek philosopher.”1
Callahan rolled his eyes, got up to leave, and paused at the doorway. “A Greek philosopher,
huh?” Callahan said. “I don’t know, maybe something from Karl Marx would be more apropos, now
that we’re socializing this sales department.” The Campbell and Bailyn Fixed Income Division
In the 100 years since its founding in the early 1900s, C & B had grown to be one of the five largest
investment banks in the world. The firm, based in New York City, had a strong presence in all
segments of the investment banking industry, including corporate finance, investment management,
mergers and acquisitions, and securities sales and trading. In recent years, the fixed income division
of the sales and trading business had been the fastest growing unit in the company’s portfolio, and in
a good year the division could generate up to 20% of the firm’s profit.
The C & B bond division sold three types of fixed income products: municipal, or tax free
securities; money market securities; and taxable bonds. The taxable group was by far the biggest of the
three segments and sold mortgage-backed securities, high yield corporate debt (junk bonds), bond
futures and options, government securities, and derivative products such as zero-coupon and
interest-only bonds. (See Exhibit 2 for chart explaining securities underwriting and distribution
process.)
Winston, along with the seven other regional sales managers from C & B’s bond offices around the
world, reported to the national sales manager, Paul Trimble, who in turn reported to the managing
director of the C & B bond division, David Cowan. Also under Cowan’s management in New York
were 22 traders, who bought and sold fixed income securities for the regional offices; 10 product
managers, who provided sales support and technical product information; and 30 research
specialists, who produced in-depth reports on each of the fixed-income securities the company
marketed.
Together, the New York staff and regional sales offices marketed the firm’s inventory of fixedincome products to some of the largest and most sophisticated investors in the world. These
customers included local and regional banks, leading mutual fund companies, and major insurance
companies. These institutions, in turn, managed assets of city, county, and state pension funds;
pension funds of corporations; endowments of universities and charitable organizations; and assets
of high-net-worth individuals.
The industry had undergone dramatic change in the last 10 years, witnessing an increase in new
competitors and new products. Many segments of the fixed income brokerage industry had seen
margins narrow drastically, due to the entrance of low-service, low-priced brokers. The result was
that, even though assets under management at client companies were growing rapidly as the babyboom generation began to save, sales commissions at brokerage firms were starting to flatten out,
with the exception of a few fast-growing, high-margin segments. These newer products, such as
futures and options, sold at higher margins but also required considerably more expertise to market
and sell. This was due to the fact that investment firms (customers) were themselves becoming more
specialized, as portfolio managers relied increasingly on the advice of in-house analysts who tracked
esoteric bonds and bond derivatives. 1 Xenophon, cited in “The Ancient Economy,” by M. I. Finley. Penguin books (1992), p. 135. HARVARD BUSINESS SCHOOL | BRIEFCASES 3 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
2182 | Campbell and Bailyn’s Boston Office: Managing The Reorganization It was difficult to recruit bond salespeople. The successful ones were outgoing, extremely selfmotivated, and street smart. Salespeople invested years in building up key customer relationships,
and they nurtured those relationships through social interaction outside of the traditional work
environment (e.g., clubs, sporting events, meals and, of course, golf outings). The Boston Regional Office
Like the other regional offices, the Boston office had three fixed income sales groups: money
market securities, tax-free securities, and taxable securities. The taxable group, by far the largest,
represented 60% of total sales in the office, and included nine salespeople in total: five generalists and
four specialists. Prior to the creation of the KAT in June 2007, the five generalists in the taxable area
each managed their own group of accounts—a total of 60—and sold the full menu of fixed income
products offered at C & B. The generalists were like managers of small independent businesses
within the office; taken together, their accounts represented 75% of total taxable bond sales. The four
taxable bond specialists shared a common group of about 120 small customers, who bought and sold
less frequently, and in much smaller blocks, representing annually about 25% of taxable bond sales.
While cooperation was commonplace and the norm, there was an unspoken pecking order within
the office. The typically hard-driving generalists, focused on making large trades, earned the highest
commissions, and were generally deferred to by others in the office. On a given day, they could be
managing three or four multiproduct trades, which often required the assistance of one or more of
the specialists, as well as numerous office staff members. Generalists had large expense accounts and
spent many evenings entertaining clients at sporting events, social events, and high-priced
restaurants. A top-grossing generalist salesperson could make up to a million dollars in salary and
commission combined, while the specialists made about half that much.
The specialists managed smaller accounts, which had fewer trades in smaller quantities per trade.
Most of these trades could be handled routinely by the New York office, which could sell them out of
inventory or buy them into inventory without excessive risk. On the rare occasion when specialists
needed to execute large trades, they would often call in one of the generalists for support and advice.
Winston himself was a 20-year veteran of bond sales, and at one point had been the highest
grossing salesperson in the office. In 2003, senior management had appointed him regional sales
manager, increasing his salary enough to compensate for the loss in commissions that his new
administrative duties would entail. A master of selling, Winston considered his main role to support
and encourage his team, and his staff jokingly referred to him as “coach.” Winston was widely
admired and liked in the office as fair-minded and willing to listen to the complaints of his staff. The Key Accounts Team in the Boston Taxable-Bonds Group
In the middle part of 2006, Winston began a series of discussions with his generalist team on ways
to address the growing concern that they were losing business to their competitors because of their
lack of detailed product expertise. While most of the staff were reluctant to admit it at first, they came
around when Winston shared some sales figures he had obtained on one of their competitors. Forcing
the question, Winston had explained that something needed to be done to maintain their market
share. Given the choices they had considered—such as new hires, extensive training, and increased
reliance on New York specialists—Winston and his team agreed the best path forward was to create
the key accounts team.
After lengthy discussions with senior managers in New York, and with their agreement, Winston
had introduced the new “key accounts team” in June of 2007. (See Exhibit 3 for chart showing the
Boston office reorganization.) Winston appointed Callahan the nominal head of the group, and
4 BRIEFCASES | HARVARD BUSINESS SCHOOL This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Campbell and Bailyn’s Boston Office: Managing The Reorganization | 2182 hoped his natural enthusiasm for salesmanship would carry over into the specialist’s role. He also
assigned Callahan to the corporate high-yield group, which sold the corporate debt of companies
with less secure financial conditions (often called “junk bonds”). The mortgage-backed segment was
assigned to Jen Ulin, one of the most successful salespeople in the history of the Boston office. John
Oates, a younger, mathematically inclined salesperson, was made specialist in the complex futures
and options area. For the first time in many of their careers, these salespeople would share customers
with each other.
About half of the clients Winston had spoken with indicated they were pleased with the new team
approach. Accustomed to working with generalists—who, as one customer put it, tended to be “jacks
of all trades and masters of none”—these customers found that having experienced salespeople
offering in-depth, technical advice on specific new issues to be invaluable.
The other half, however, were not yet convinced that the change was needed—or even preferable.
Winston believed that some people from these companies felt slighted at having to deal with multiple
salespeople, rather than just one as they were accustomed to. Also, as Callahan had mentioned, they
found that making large, multiproduct trades was now more complicated, given the number of
people that needed to be involved. As one customer put it, “Sure, Callahan would take a while to get
back to us on the pricing of a futures contract, but I know his word is good, and after 15 years, I trust
him.”
And within the Boston office itself, some of the members of the KAT—such as John Oates—
worried that the new structure would force them into a role so specialized that it would limit their
career prospects—and, most important, their compensation. Under the new system, their
commissions would be driven by sales volumes in their area of specialization, rather than the swings
in demand within their client base. Based on prior year’s numbers, the potential commissions from
the specialist roles were roughly equivalent in terms of volume to what the generalists had been
selling to their customer base. So while the possibility for a decrease in their compensation existed, so
did an enormous upside if they were able to increase the sales of their new specialty products.
The New York office had also weighed in on the KAT idea. Product managers favored the
approach, as the Boston sales office was now giving more attention to firm-wide priorities, such as
which high-margin products to be pushing in a given week. While it would be an exaggeration to say
that the sales force could ever toe the marketing line one hundred percent, the KAT—combined with
the new evaluation system (see below)—had increased the frequency of communication between the
two groups.
Last, Winston himself was favorably disposed to the KAT, less because of its effectiveness—the
jury was still out on that—than because it had come just as the sub-prime crisis was emerging. This
meant that one of his best salespeople, Jen Ulin, was focused exclusively on that product line just as
the need for more trading capacity arose within the customer base. The New Performance Management System
In the last two years, senior management in New York had been trying to persuade the regional
sales offices to promote the most profitable fixed income securities the firm carried—even if it meant
lower sales volumes and ultimately commissions and revenues. For example, if C & B was a lead
underwriter on a new bond issue, it was more important for salespeople to close smaller deals with
these high-margin bonds than larger deals with small margins. So, at the beginning of 2007, and in
response to this concern, senior management of the bond division introduced a new “multisource”
performance appraisal system for salespeople in the regional offices. HARVARD BUSINESS SCHOOL | BRIEFCASES 5 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
2182 | Campbell and Bailyn’s Boston Office: Managing The Reorganization Under the previous system, the salesperson’s bonus was almost solely based on annual sales
volume and the regional sales manager’s own assessment of the salesperson’s teamwork and
professionalism. Under the new system, using a new web-based system on C & B’s Intranet, Winston
distributed a confidential questionnaire to gather feedback on each salesperson from traders, product
managers, and researchers in New York. The factors weighed in these peer assessments were “softer”
measures than sales and profit, such as the regional salesperson’s responsiveness to the needs of the
traders in New York, level of motivation in learning about new and more profitable products, and
use of research data to accelerate sales. At the end of the process, the regional manager combined this
input with his or her own observations and the salesperson’s total achieved sales volume in order to
recommend a final annual compensation level to the division’s managers.
The idea was not of Winston’s making, and though he agreed with its goals, he was not sure that
it addressed the problem that most concerned him—the loss of customers due to specialization. There
was no doubt that the plan had gotten the attention of his staff and was having the intended effect, as
the Boston office was generating higher profit per dollar of sales than last year. In fact, Paul Cowan,
the head of the bond division in New York, had called only the week before with the “great news”
that for the year 2007, it looked as if the Boston office was going to have a “major up-tick” in profit
margins versus 2006. So while the new performance management system had come with a personal
cost to him as a manager—he was now spending more time serving as the mediator between Boston
and New York than before—there was evidence it was working. Preparation for the Division Meeting
As he sat at his desk finishing his presentation, Winston thought back over the last 12 months. It
was hard to deny that the two organizational changes he had overseen were having an impact. What
was more difficult to read was whether they were for the better or worse. There was undoubtedly
some confusion within the customer base about his new sales team, and there was noticeable
resentment building up within his sales staff at the increased leverage granted the New York traders
and specialists. What was hard to determine was how much of that could be attributed to recent
market turmoil, which had increased the workload for everybody; how much was natural resistance
to any type of change; and how much was due to a design flaw in the original organizational ideas
themselves. As he sat trying to unravel the question in his mind, looking out at the historic Custom
House tower across from his office, Jen Ulin, the generalist turned mortgage-backed specialist,
appeared at his door.
“What’s up, Jen?” he asked.
“You know, I’d be the last one to give you credit where credit is due,” she said, jokingly. “I just
don’t know if we would have made it through this sub-prime collapse if we had only one specialist
on duty around here. Half the day I’m just trying to calm these customers down, but if that’s what it
takes to keep the trades coming in, I am happy to do it. ”
“Yeah, this idea might pan out after all,” said Winston, sighing. “What do they say— ‘It’s better to
be lucky than good?’”
As if on cue, and without preamble, Callahan appeared at the door, clutching a piece of paper.
“Sorry to interrupt this pow-wow, but I have something for the two of you to ponder over lunch,”
Callahan said. “ ‘It is not, truly speaking, the labor that is divided; but the men: divided into mere segments of 6 BRIEFCASES | HARVARD BUSINESS SCHOOL This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Campbell and Bailyn’s Boston Office: Managing The Reorganization | 2182 men—broken into small fragments and crumbs of life, so that all the little piece of intelligence that is left in a
man is not enough to make a pin.’ That’s John Ruskin. From the British Isles I might add.”2
Winston rolled his eyes and stepped to the window looking out over Boston Harbor and Logan
airport. Callahan, of course, had a point. It could be demeaning to force people into specialized roles
that limited their natural abilities. That was some...

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Example 1.pdf

Example 1 Campbell & Baylin's Boston Office: Case Study Presentation Draft 1 Situation Analysis
I am Ken Winston and I am the Regional Sales Manager for the Boston office of Campbell &
Baylin (C&B). A few issues have been recently brought to my attention regarding customer
feedback as well as overall organizational health in my sales group. I am concerned about
the impact resulting of two significant changes that I implemented over the last few months
in the middle of a terrible financial crisis, one being the creating of the Key Account Team
(KAT) and the other, the introduction of a totally new personnel performance evaluation
methodology. Given our importance to the overall company, based on our large volume of
sales, the New York headquarters have requested me to talk about the progress on such
changes in order to assess if those could be subject to company-wide reapplication.
The KAT is made up of 5 specialists (former generalists, each assigned to a customer) that
together sell the wide range of financial products to our customer pool. Even though there
hasn’t been a real impact to compensation, the KAT is having issues with collaboration and
engagement. Right now I’m confused, for example, John Oates, our Futures/Options
specialist, has not been the same since the KAT was created and I’m afraid that he might
leave the company; but on the other hand, our Mortgage specialist, Jennifer Ulin has told
me that had it not been for the KAT structure, it would have been impossible to successfully
deal with the mortgage-backed securities crisis, since this allowed her to focus all her
attention to the needs and concerns of our most important customers. I’m worried about
the mixed messages I’m getting here.
From an outside point of view, some of our customers, specifically the traders, think that
they are now missing a single point of contact (SPOC) for all their investment needs since
they lost their assigned generalists. Now they need more than one call in order to fully
address their investment needs as people are dedicated to a product, not a customer. At the
same time the customers’ analysts love that they get a deeper level of penetration on each
product type with the introduction of the KAT specialists. Again, mixed messages here.
Now, if you add to the equation that we recently started evaluating personnel performance
not only by their volume and profitability of sales but also by the level of interaction and
engagement perceived of them by the New York team, we are talking about a perfect storm
brewing. The introduction of soft factors when so much compensation money is at stake
can turn around and bite us badly. I already see an impact on the group’s morale.
Just like Paul Callahan reminded me this morning, I know that this business is all about
people and as our most valuable asset I need to do something about them.
I think the problem here is that my KAT specialists feel like their roles have been devalued
in the process; the kinds of interactions that they used to have before with their own
customers and the aura of importance conveyed by the rest of the team are no longer there
and I know this is taking a toll on them who at the same time were most likely feeling
constrained to developing expertise one product only. As if it weren’t enough, the fact that
today I’m evaluating their performance not only on how much sales they make but also on how profitable those are and how they are perceived by the New York team is definitely not
making them happy campers exactly. This is an organizational problem that is rooted in the
structure in place and the associated performance evaluation principles. Both of the
changes implemented seemed good ideas at first, and in fact, the results that the Boston
office is delivering are outstanding, but I don’t know if I can sustain them at this pace
because the results are a function of my people’s motivation. Problem Analysis and Diagnosis
The KAT is delivering strong results but I can see this along with the new performance
evaluation system are taking a toll on some of them personally. Paul Callahan who is their
leader is very demotivated and he can’t hide it which I’m afraid will impact the team
soon. John Oates might quit too. Getting good bond salespeople is not easy nowadays.
Our customers are not necessarily thrilled about the specialists either as they feel that they
have lost dedicated attention, a relationship basically. I prefer to keep our customers’
traders happy rather than their analysts.
I firmly believe in the power of trying new approaches but also in taking responsibility for
the consequences. In my presentation to the New York team I will reveal my findings and
feelings about the current state of the Boston office. It is true that I engaged the team in the
development of the KAT concept and they seemed onboard, but I don’t think we knew how
that structure would eventually pan out in terms of personal job satisfaction.
As far as the new performance evaluation system, I deployed it to my organization just like it
was deployed to me; senior management didn’t ask me if I wanted to implement it, they
requested it. On one hand I understand how they want to drive profitability over mere
volume, but the addition of the soft factors, which are very subjective, are constant points of
contention between New York and Boston offices.
I will be very transparent with them that despite our record results this year, the impact I’m
seeing on the team’s morale due to the current structure and performance evaluation
principles will definitely impair the ability to sustain growth in the long term and that in
consequence we need to do something about it. Fixing the short-term has many
unfortunate side-effects in the long term, some which are impossible or very difficult to fix
then. Alternative Solutions
Pros
1) Revert to prior Accountbased generalists structure
and base performance
evaluation on volume of
sales only - Strong customer
relationship
- Proven prior model that
gave good results
- Gives independence and
autonomy to sales rep
- Objective performance
assessment
- Boost morale and mitigate
attrition
- Team sees Winston as an
in-touch manager 2) Engage on an open forum
discussion with the KAT to
identify current issues and
countermeasures needed - Positive outcome of
involving those impacted by
a decision in the resolution
(Group 1 approach)
- People will potentially
better support the team
decision Cons
- Lack of technical depth
which puts back pressure on
the prior specialists
- Compensation based on
sales volume not profit
- Set a precedent on how to
boycott organizational
change
- HQ might not agree with
altering corporate
performance evaluation
method - Potentially lengthier
process
- Might be more difficult to
narrow down the problem
due to multiple perceptions
- Team might demand
unreasonable changes - Morale boost
3) Keep new performance
evaluation approach but
revert to account-based
generalist structure - Strong customer
relationships - Keeps the unsettling
subjective performance
evaluation principle - Compromising on one
item might make the team
- Might not fix tense NYChave a better outlook on the BOS situation
new performance evaluation
- Lack of technical depth
methodology
which puts pressure back on
- Appreciation of manager’s prior specialists
support Solution 1 implies disbanding the KAT and going back to the old performance evaluation
approach. This basically equates to admitting that the organizational structure and performance evaluation changes didn’t have the intended effect and therefore are being
reversed. Everyone goes back to how they used to work before trying to pick up the
customer relationships and selling the entire line of taxable products. Morale of the group is
expected to go back to prior levels very soon and I look like a hero.
Solution 2 requires me to call to a series of meeting where I will lead the group on discussing
the current state of the organization, the feedback received from customers and the rumors
about how this is impacting people personally. This requires a safe-setting, most likely offsite, where we can dedicate our attention to the issues at hand. I would expect the team to
voice all their concerns and rather than defending the company’s position, I will lead them
into a conversation on how to get to a win-win solution. The team will see that I’m taking
their direct input into consideration and making them part of the solution on how to
address the organizational structure and performance evaluation issues at hand.
Lastly, solution 3 is a hybrid approach keeping one of the changes but reverting the other
one. This implies accepting that the KAT approach didn’t work as intended but that
performance evaluation, because it is corporately-mandated, will stay as is. Through an
issue-focused meeting I am hoping to motivate them to improve their relationship with the
New York office now that they can go back to work directly with their specific customer
accounts. I expect to get some resistance but I will highlight that just like I compromised on
one change I expect them to compromise on the other one. This will address the issue of the
organizational structure and hopefully motivate them to get onboard with a partly subjective
performance evaluation method. Recommended Solution
I am opting for Solution 2, which consists on engaging on an open forum discussion with
the KAT to identify current issues and countermeasures needed. I strongly believe that
people support a world they help create. I will get the team together offsite for one or more
sessions as needed in order to let them “vent” first, then reflect together on what exactly is it
that is making people uncomfortable or making them feel demotivated before finally
addressing what will we do to fix the situation, both in terms of the KAT formation and the
performance evaluation criteria now in use, although, who knows, maybe the overall morale
problem is not even related to those two issues at all.
This style of decision-making says a lot about the manager who is not making an autocratic
decision nor delegating one altogether to someone else, but rather, he is actively engaging in
the problem identification and resolution. I expect this approach to buy me even more
credibility and support as the team sees that I am in touch with what they are going through
and that I’m willing to do something about it with their help because I realize that the ones
that are most impacted by any organizational structure and performance evaluation changes
are them.
I believe that this course of action will significantly boost the culture of the organization
giving credit to the fact that I truly believe that this business is all about the people. In this
particular case I’m attempting to improve the overall “fit” of organizational design, people
and task in order to improve performance. With the help of the team I strongly believe that
we will find the right balance between personal, professional and corporate expectations so
that they work in sync with each other, not against each other. [1] I would resort to Peter Drucker’s concepts about managing one-self in order to demonstrate
to them that they are their primary motivators if they can drive themselves through selfreflection. I would begin the offsite meeting with a reflection on what we have accomplished
since the changes were implemented. I will be the first to accept that the organizational
experiment didn’t have the overall outcome I expected, despite the fact that we are having a
record results year but that I know that this is taking a toll on the team. We will reflect on
our personal strengths and think about how all of us can bring those strengths together to
perform well as a team, whether we stay with the KAT structure, we go back to the accountbased structure or decide to try out something totally different altogether. I will stress out
that regardless of the structure we decide on, it is imperative that people realize that they
are personally responsible on managing their relationships, not only with their customers,
but with the overall organization (e.g. the New York team). [2]
As far the Cons identified for this solution above, I can directly manage the timeline for this
to happen, and the sooner, the better. In terms of a potential derailment of the
conversation, I will personally facilitate the discussion and will have to ensure that we stick
to the defined conversation path that I have defined in order to address the motivation issue
identified. Finally, I’m sure that the team might throw one or two requests that are totally
unreasonable, either from a financial, organizational or mere common-sense perspective
and I will manage the conversation to either place them in a parking-lot list or upfront
explain why those requests are totally unviable, as the circumstances present themselves. Implementation Steps
- Send an Outlook invite to the KAT members for specific date and time for off-site meeting
- Prepare introductory remarks about purpose of meeting and expected outcome along with
rules of engagement
- Lead the conversation to talk about how we have performed since organizational structure
and performance evaluation changes were implemented
- Invite team to do self-reflection what they have accomplished individually and as a team;
identify what is keeping them from bringing their best performance to work; how they feel
encouraged or constrained by implemented changes
- Listen to their proposals to improve the situation
- Converge on specific action steps to take and identify who and when
- Agree on specific follow up meeting timing to go over progress
- Have a fun event afterwards to dissipate tension (bowling, happy-hour, etc.)
- Report preliminary outcome of meeting to my immediate manager to gain support and
avoid surprises
- Monitor situation after changes agreed-upon have been implemented and provide
feedback to team about observations from customers and senior management Bibliography
[1] Kainen, T.L. (nd). Session 3A Lecture Notes: Situation Analysis and Management
Decision Making [PDF document]. Retrieved
fromhttps://uml.umassonline.net/bbcswebdav/courses/MGMT.6010.061.SP16/3AAnalysisDecision
Making.pdf
[2] Drucker, P. F. (1999). Managing Oneself. Harvard Business Review, January 2005.

Exemplo 2.pdf

Exemplo 2
Situation Analysis
I am Ken Winston, the Regional Sales Manager for the Boston office of Campbell and Bailyn, one of
the country’s foremost investment banks with its corporate headquarters in New York City. I
manage 16 bond sales people and 13 support staff. I have 20 years of investment sales experience,
the last 4 of which have been in charge of the sales and trading unit at C&B with a great team
working under me. Business is going well, with sales and trading being the fastest growing unit of
our company and generating 20% of the firm’s annual profit, but the financial crisis is in its early
stages and my company is already noticing the start of panic in our mortgage investment client
base. My sales people have had to devote significant time to keep their customers calm and
minimize portfolio losses as best we can.
There has been some grumbling in recent months by my sales force and their customers stemming
from recent changes in our sales hierarchy and performance evaluations. Until June 2007, our setup
for our highest earning products (taxable bonds) consisted of five general sales people (generalists)
earning us the majority (75%) of total bond sales from their 60 high-level accounts, working jointly
with our four special account sales people (specialists) whenever their expertise was needed. These
four specialists, themselves, were in charge of our remaining 120 smaller customer accounts,
requiring more infrequent trades but still providing the other 25% of sales. The generalists
informally directed day-to-day operations and made double the salaries of the specialists.
In mid-2006 C&B started to notice declines in our gains to competitor banks due to lack of special
expertise. The previous 10 years had seen an increase in new and more complex products that
required new levels of understanding to market and sell, something my sales force was lacking. I
spoke with corporate in New York as well as my sales people to address how best to increase our
expertise level to retain our market share. We agreed to restructure our organization to create the key
accounts team (KAT) six months ago in June. The KAT consisted of my five unit generalists who
converted into area specialists in charge of the 60 largest customers at the firm, with the remaining
specialist force standing by to assist them in addition to handling the remaining 120 smaller
customers. The KAT specialists were now required to work together with those of different
specialties much more often than before, complicating deals that used to be handled by a single sales
person.
A second change implemented that has my people frustrated is the new performance evaluation
system, which has changed the way annual compensation is determined for each sales
person. Implemented almost a year ago in January 2007, this approach went from the annual sales
volume figures coupled with my own personal assessment of each sales person to calculate their
yearly bonuses to a broader system with confidential questionnaires given to various traders, product
managers and researchers in New York City. Each of these questionnaires focused on sales
knowledge, practices, and responsiveness to the NYC traders which would then be combined with
my input and recommendations as well as their final sales volume numbers to decide yearly
compensation. Essentially, each of my sales force now have multiple supervisors and performance is
not just by the numbers but more a combination of inter-agency relations.
I have a meeting tomorrow where (as the test group for each of these recent initiatives) I have to
provide the Boston offices progress report and subsequent recommendations on these two recent
changes to C&B as well as to the other 6 regional office managers.
Problem Analysis/Diagnosis:
These two new systems incurred by my sales force have been implemented closely together and I am
unsure if they were good choices for this company and the industry. Both of the recent changes have
been met with mixed reviews by the people and myself and I need to plainly state in my presentation whether the company is going in the right direction or if we are making a regrettable mistake and
have to remedy it before it gets worse.
Paul Callahan is my top sales manager and is the head of the KAT. He is the largest voice against
the new system, believing that this industry is about the people and spreading the duties around is a
practice similar to socialism. Grudgingly, Callahan has admitted that the NYC analysts seem happier
and are getting better information with the new system, but the NYC in-house traders are frustrated
as they are often required to make three calls for every one they used to make in the ‘old days’.
John Oates, my futures and options math genius, seems to be against the new changes as he liked to
run his own show as a generalist and doesn’t enjoy the increased and required interaction with the
NYC crews. He also believes that the forced specialization will limit their career prospects (as well
as their pay) in the future. It is rumored that he is considering his resignation to find a job
elsewhere.
Half of the clients I have spoken to have expressed approval of this new system, stating that the
ability to get specialized technical advice on multiple issues has been invaluable. However, the other
half I’ve spoken with seem to miss the old way of simply dealing with one person at the company
instead of three or four. The deals now seem more complicated and less straight-forward to them.
Jen Ulin, my best sales person who specializes in the mortgage-backed investment segments, has told
me that the sub-prime mortgage crisis we are experiencing has been considerably easier to weather
due to the new system of multiple specialists able to simultaneously deal with the nervous
customers. The old way possibly would have left us unprepared for this turn of events. She said this
grudgingly, so I believe her opinion of the new setup is positive and necessary, as this crisis is not yet
showing any signs of abating.
Communication seems to have been increased between my office and NYC and we have already
achieved a higher profit per dollar of sales this year than we had at this time last year under the old
system.
I myself agree that this crisis won’t be over for some time and we are better equipped to deal with it
now than we were under the old method. These changes also increase the possibility for a decrease in
each employee’s compensation, but it could just as easily increase if the sales improve on these new
specialty products. I have heard my sales force as well as those from other regions of C&B complain
about the new performance management system, and I know that I have lost some of my
management authority due to the inclusion of several NYC personnel in each employee’s rating
chain.
The meeting tomorrow is my main opportunity to voice my concerns and criticisms of these two
changes. I am confident I can make a strong case for either continuing with both of these new
methods or reverting back to the old way and C&B will listen. It all depends on which stand I take.
Alternative Solutions:
1. Recommend to keep both changes (the KAT as well as the new performance management
system) but voice all the negative aspects I have witnessed and heard from my people at the
meeting to ensure a fair display of both pros and cons. To address the discontent, I will meet
with the sales force in small groups over the coming months to address reasons for the changes,
show benefits of the new system compared to the old, and continue to seek out feedback and
suggestions for improvement, but also clearly show that the new methods are final and the old
method is not an option.
Pro:
-It is likely too early to decide one way or the other if these changes will work in the long-run. The
hardest part (implementation) is already finished, so as time continues all opinions may improve
when the benefits are seen by my sales force. Reverting back to the old method will confuse customers and could complicate matters more when we instead need to focus on our earnings and
clients.
-All drawbacks will be listed to ensure both sides voiced. This will acknowledge the benefits of
these changes (there are many, listed above) but also satisfy Callahan and Oates and all other
detractors to show that their voices were heard and possibly allow for modifications of the methods
to improve the process in the future. They must also remember that the general consensus was to
start the KAT six months ago.
-The new performance management system is much more comprehensive, is outlined well in its
expectations, and eliminates the evaluations of each member based on just one manager’s comments
(each Regional Manager).
-We are better prepared to deal with the sub-prime mortgage crisis with the current arrangement
(more specialists available for the customers).
-Better communication between my office and corporate in NYC. This will increase the cohesion of
our company and develop my sales force to become team players instead of insisting on doing it all
on their own as they always have done.
Con:
-Oates (and possibly more of my specialists) may depart the company if these methods continue and
good sales people are hard to come by. Is it worth losing some of my best people to competitor
companies?
-Regardless of if the sales people don’t depart, the low morale from these changes may get infectious
and slowly ruin the sales force drive and attitudes. The long-term effects of this could become
irreparable.
-There is a chance that our numbers decrease, annual compensations are worse, and the Boston office
will begin to decline even further in performance. The age-old ‘if it’s not broke, don’t fix it’ may
apply in this case because half of our customers have stated that they miss the old way.
2. Strongly recommend we return back to the old system (disestablish the KAT and
resume old performance appraisals by the regional managers to their employees).
This would eliminate the pseudo-management of my sales force by the NYC traders and get
everyone back to the more familiar ‘old way’.
Pro:
-Ensure retention of key employees (Oates and Callahan) as well as their loyal customers. The
people are the largest asset in this business and their experience is invaluable.
-Easy to revert back to old method at this point, as employees and customers still freshly remember
all details. It would also be easy to explain to customers as a new method we were testing that we
simply chose to discontinue. Two years from now, we won’t be able to shift back to the old way as
easily if the situation continues to decline.
-Employee compensation will become fully based on their results again vice multiple subjective
questionnaires, which may better motivate all to continue to improve and excel.
Con:
-Lose multiple specialists for crisis. This will reduce customer confidence and could lose us several
clients, lots of money, and our reputation.
-Continue the mentality that the generalists are one-person performers and reduce the teamwork and
visibility with NYC. We may continue to thrive as before, but if we do not it will seem fully our
fault with no contribution/liability shared from NYC. The current arrangement includes NYC in our
actions and results and that may help if things continue to decline in the future.
-The gap could continue to widen between us and our competitors as we will revert back to
generalists and not maintain the specialized knowledge on the newly emerged and complex financial instruments that are now on the market (the whole purpose for the restructuring change in the first
place).
3. Hybrid adjustment: Recommend we revert to old method of performance evaluation but keep
sales force restructure of specialists and increased involvement with NYC traders. One of the
changes shows great promise but both changes together are overwhelming my sales force and
could seriously hurt the company if continued unchecked.
Pros:
-Retain multiple specialists for ongoing crisis. Hence, we will retain customer confidence and the
reputation of our company.
-Analysts continue to get better information and communication improves with NYC traders in dayto-day operations.
-Motivate sales people with performance-based appraisals and eliminate subjective evaluation input
from NYC traders. Making myself the manager again will keep the clear hierarchy here and allow
me to give full credit to my employees based on what they’ve done rather than subjective evaluations
from people in a different part of the country.
-Continue to focus on and maintain specialty knowledge that we felt was necessary upon the
implementation of the KAT.
-Still allow the option to revert back to old method in the future, but can continue on this track for the
time being and see if our profit per dollar of sales continues to increase.
-Will eliminate one of the two recent changes and give employees back some sense of ‘normalcy’
and understanding of how evaluations and compensation are calculated. May increase acceptance of
KAT specialized restructuring as a result.
Cons:
-Will possibly continue to alienate those who prefer the old method (Oates and Callahan) and we
could still lose them to competitors.
-Resistance to new method will continue as most of the conflicting opinions seem to result from the
sales force restructuring rather than the performance management system. Negative attitudes may
continue and increase throughout the sales office.
Recommended Solution:
I feel that alternative number 3 is the best option. Retaining the KAT setup that was implemented six
months ago will keep us prepared for the newly encountered sub-prime mortgage crisis and seems to
be promising in many areas of sales. It will also allow our company to become more diverse in its
specialized knowledge and keep our customers satisfied and minimize their losses. The resistance
that has been encountered by my sales people is somewhat unavoidable during the months following
a change in workplace procedures, but the new performance management system encourages too
much negative criticism from the NYC traders. The questionnaires that the traders will complete on
each employee mainly highlight how well my sales force has assisted and responded to the needs of
the NYC traders (their supervisors) more than how my people have helped their customers. I see it
pre-dominantly as a way to compile negative feedback and criticism for my members more than
constructive development feedback to make them better sales people, as the NYC traders are not
sales people. Criticism “makes (people) defensive and therefore unlikely to change.” (Roberts et. al,
1) This new system of evaluation will not help the attitudes of my employees and I foresee that it
will simply increase the disconnect and cynicism of them towards NYC as well as to the recent
changes that have been implemented. Reducing this will eliminate one source of frustration and
allow me to develop my people without unnecessary additional supervisors who are not in a position
to develop and understand what is needed from sales people. Our people definitely comprise a knowledge-based organization and fair process was followed
completely in the establishment of the KAT. The implementation was done over time and with the
input and knowledge of my sales force. Both corporate as well as myself solicited employee input,
gave the reasons for the change, and outlined the new expectations. The resistance to the KAT and
its methods is not unexpected but Callahan and his fellow detractors at least understood the reasoning
and were able to voice their issues appropriately. The involved fair process “(built) trust and
unlock(ed) ideas” and I see this new method necessary for the future success of our company as a
result. (Kim and Mauborgne, 5). In contrast, the new evaluation system was not implemented via
fair process to my sales force and I feel that reverting back to the old method of evaluation and
compensation determination will reduce a significant amount of the negativity and distrust that my
employees are experiencing with the company. Eliminating one change will allow a more successful
implementation of the remaining change and allow C&B to move forward. Implementation Steps
Provided corporate and my regional management counterparts agree with my assessment, I will immediately
announce to my sales force that the performance evaluation and compensation method has reverted back to the
original method. I have most say in the situation, as their manager, and will incorporate all feedback I receive on
each sales person from all entities (including the NYC staff) for my final evaluations.
The KAT system specialization and increased interactions with the NYC traders will continue as it is a very
promising method and we are more diverse and better prepared as a result.
My door will always remain open for any ideas to improve the system, but this new method is to be looked at as the
future of our company with the changing markets. Callahan and the others who do not appreciate the KAT changes
will need to adapt and move forward productively, as they were initially involved with the formation ofthe KAT in
the first place as the best option. Bibliography
1.
2. Roberts, Laura Morgan; Spreitzer, Gretchen; Dutton, Jane; Quinn, Robert; Heaphy, Emily; and Barker,
Brianna. “How to Play to Your Strengths.” Harvard Business Review (January 2005).
Kim, W. Chan and Mauborgne, Renee. “Fair Process, Managing in the Knowledge
Economy.” Harvard Business Review (January 2003).

Instructions - C&B guidelines.pdf

Instructions for Case Analysis, Campbell & Bailyn’s Boston Office
• Base your analysis from the point of view of the manager in this case.
• Each section should have its own sub-heading.
• Do not use sources outside those assigned to date in this course.
Situation Analysis: This is not a re-hash of the case. Selectively identify important facts to
show you fully understand the circumstances that would most influence the manager’s decisionmaking. Your situation analysis is critical to setting up your diagnosis of the problem in the
next section. It also sets the foundation for the rest of the analysis. It should explain where the
problem is coming from and why it is occurring and give insights into possible solutions. A
thorough situation analysis includes observations of the relevant characters in the case, their
roles and relationships, a thorough discussion of what is going on in the case that relates to the
dysfunction. It should include details when possible examples from which to draws some
conclusions. Most importantly, your situation analysis should include enough relevant
information to draw from and support your problem analysis.
Problem Analysis and Diagnosis: Use this section to explain the problem, explain it in detail
and demonstrate your full understanding of it. Identify its causes, symptoms and possible
consequences. I should be able to find the root of these (especially the SYMPTOMS) in your
situation analysis. Take responsibility for making the problem clear. If the presenter and the
reader cannot get past this point together, there is little sense in trying to “muddle through”
what comes after. There would be no common framework or understanding of the
problem…and, therefore, nothing upon which viable solutions could be built. It is your
responsibility to make sure this bridge gets built. End this section with a brief statement (recap)
of the problem—in other words, what it is that you will work on in your alternative solutions
section.
Alternative Solutions: Develop three (3) alternative solutions, ordered 1, 2, and 3 with the
following directions in mind. Make sure that each solution matches the problem as you have
stated it. Each solution must include a brief discussion of what it is and how it would work. Do
not include a discussion of why it is a good solution in this section; save that for your
recommended solution section. Under each solution include a list its PRO’S and CON’S. You
may wish to include this in a table for format for ease of reading. Be careful to use solid pros
and cons. This is what makes the solution viable. Do not favor one solution over another in
this section. These alternatives are the vehicle that proves your objectivity and that objectivity
is what “buys” you the right to make a recommendation in the next section.
Recommended Solution: Choose the solution you think would work best and develop an
argument to support your choice. Do not include a discussion of why one solution will work
better than another. (Remember that each solution must be good enough to solve the problem).
Include how you would overcome the cons connected to this solution. Remember the
“lawyer metaphor”, No matter how impressive the lawyer’s style s/he must still argue the law. A well-presented opinion is not enough. Support your discussion and choice with (2)
concepts from the course materials, fully discussed, applied and cited in your text.
Include a bibliography at the end of your post.
Implementation Steps: It is not necessary to go into a lot of detail. Just layout some kind of
basic plan that identifies the action steps that would probably be involved in making the
solution happen (bullets are OK here).
*************

SOURCE - 3AAnalysisDecisionMaking.pdf

Session 3A Lecture Notes: Situation Analysis and Management
Decision Making:
©Copyright. All rights reserved to Professor Timm L. Kainen. These may not be reproduced or
electronically transferred in any format without permission from the author. The Analytic Process:
In the week 1 introduction I used the example of hiring you to
work in my company, and identified the criteria I would use to select
you. The first criteria I used was: Can you diagnose and analyze
problems? This ability is one of the primary differentiators between a
useful and non-useful manager. It goes to the essence of your “value
added” to my company. The same is true for “individual contributors”
who must coordinate their work with others.
Since the company is always facing new problems it cannot run
on “automatic pilot”. Without problems we don’t need managers to
fix them. Likewise, individual contributors who can’t work around
problems are not as useful to me as those who can. Yet many
managers and individual contributors succumb to complaining about
the company or business unit being “screwed up” or the boss that “just
doesn’t get it”. Once they get into that mindset they are no longer part
of the solution. They are part of the problem. “….When these [bad] things happened did I say
anything? No, because I told myself: ‘this is the
business we have chosen…”
--Hyman Roth to Michael Corleone
The Godfather: Part II
Havana, Cuba hotel scene We have chosen to be managers, or we are learning to be
managers. Some did not set out to do it or learn it, but here we are. In
either case it is what you are doing and the problems are not going to
disappear unless you fix them.
The second criteria I used for you was: Can you act effectively?
Managers are generally “action-biased”. That is, they are oriented
toward making things happen. However, to be effective, they must be
good at developing objective alternative solutions so that others
1 can both see that an objective analysis was completed and
understand the actual solution being proposed. This substantive
“objectivity”, in conjunction with the ability to communicate it, is
what “buys you the right” to make a recommendation.
However, getting “buy-in” does not insure success. As you
attempt to implement your recommended solution you can expect new
obstacles and problems to crop up. It is then that the old temptation to
complain will often reappear. Here your success will once again
depend upon your ability to analyze, plan and adapt.
A primary goal of this course is to make you use the process
outlined above over and over again (within different contexts) and
use it as a way to mold you into stronger managers capable of
functioning at higher levels of responsibility.
A key requirement for functioning at those higher levels was
good “self knowledge” about your preferred approaches to getting
things done. That process begins with an understanding of your
“comfort zones”. That is, how each of you will tend to default to a
certain preferred style of analysis --- the kind of data you are
attracted to, how you like to manipulate that data, and how you
interact with the world in collecting the information and in
communicating your conclusions and recommendations to other
people.
However, one needs to be cautious about these comfort zones.
On one hand (if they have been reinforced by previous success) they
provide a level of experience that keeps us from having to “reinvent
the wheel” every time a decision has to be made. Experience provides
us with good “rules of thumb”. However, beware of the manager who
says: “I have ten years experience. Sometimes s/he
only has one year of experience ten times”
On the other hand, real experience in a variety of different
situations is extremely helpful, especially when it is accompanied by 2 education and mentoring. Why? Mistakes in decision-making are
inevitable. The issue is who can most quickly learn from them. “You need experience to make good decisions.
You get experience by making bad decisions”
--Proverb
Knowing your comfort zone is useful. But, we have to know the
difference between actually “being in the zone” and mistakenly
thinking that we are. When we are required to work outside our
comfort zone by the demands of the problem at hand we must be able
to recognize that and adjust. These out-of-zone experiences push us to
use all of the “inside letters”, not just the two that are our strongest
(on the MBTI test). Some will learn to do it better than others.
Each letter represents a potential “tool” in your bag. Some of
you will use different tools more skillfully than others. However, all
the tools are there for each of us to learn. For example: If your
PERCEPTION SKILLS tend toward “S” rather than “N” you can
still use both. Your more comfortable “S” will help you face the facts,
be realistic, find out exactly what the situation is, what you are doing,
and what other people are doing. You are more naturally capable of
asking yourself how the situation would look to an impartial
bystander.
However, you must also be prepared to use your weaker “N” to
discover all the possibilities --- all the ways in which you might
change the situation, or your handling of it, or other people’s attitudes
toward it.
If you are a strong “N” you can do these things easily, but you
will have to guard against your natural assumption that you have been
doing the one and only right thing all along. Some situations will
require you to step out of this “comfort zone trap” and more
CONSCIOUSLY engage some of the “S” skills outlined above.
Using JUDGEMENT SKILLS (“T” & “F”) effectively
means understanding the value of each, regardless of which one is 3 your is your strongest. The “T” skills allow you to be better at the
impersonal analysis of cause and effect. It allows for a fuller
examination of all the consequences of the alternative solutions --both those that weigh for and against the solution you may prefer.
The “F” skills of analysis allow you to measure how deeply you
feel about the things that will be won or lost by each of the alternative
solutions. This component also allows you to consider how the other
people concerned will feel about the various outcomes, even if you
see them as unreasonable. The “F” allows you to use both your own
and others feelings (in combination with the facts) in making a
determination as to which solution is the most viable for the
circumstances at hand.
Remember, ABILITY is what drives analytic results. We
just need to pay attention to how our style preferences may be
helping or hurting that ability. Decision Making:
With this in mind, let’s now talk about the decision-making
process by using a basic model. The process itself breaks down into
two large “chunks”---problem identification and problem solution.
PROBLEM IDENTIFICATION has the following general
components:
1. assessing the decision environment
2. defining the problem
3. specifying the decision objectives
4. diagnosing the problem
PROBLEM SOLUTION has a different set of components:
1. develop alternative solutions
2. evaluate alternative solutions
3. choose the best solution
4. implement the chosen alternative 4 The above model outlines what is generally referred to as the
RATIONAL, OR CLASSICAL APPROACH TO DECISION
MAKING. It is not unlike the one we all learned in Economics 101.
However, in business environments we do not have all the
luxuries of the classical model. Our problems are not always clearly
defined. We do not always have knowledge of all possible alternatives
and their consequences. And, we cannot always get to the “optimum”
solution before we are required to take managerial action.
To get around this problem we use a “bounded rationality
model.” That is, we make decisions without all the information and
choose “satisfactory” alternatives to drive our managerial actions. We
don’t through out the old model completely. But we do modify it by
combining factual analysis with the intuitive abilities derived from
experience. Decision making in managerial settings, therefore,
becomes a combination of science and art.
This process of searching for “something that works”, while
remaining within the parameters we have set, is generally referred to
as “SATISFICING”. The extent to which it is employed successfully
depends on the style, ability and experience of the individual manager
as well as the parameters of the situation in which he is working.
The situation will tend to determine the standard for success.
For example, where problems are more routine and solutions more
obvious, the standard for successful decision-making is high. In this
instance the decision-making process may feel more like the classical
rational model. In another case, the problem may be routine, but the
solution may not be so immediately obvious. Here the standard is
lower and process itself runs more toward “trial & error”.
In cases where the problem is NOT well defined, but there is a
general agreement that if it could be defined, then the solution would
become fairly routine, the standard is also lower. This allows for the
bargaining and coalition building that produces an agreement on
“what the problem is.” Finally, when both the problem and the
solution are not easily defined, the standard for successful decision is
at the lowest. Here, both the brainstorming for problem identification 5 and the trial & error solution processes combine and interact to make
the process of “finding something that works” more difficult.
Some research shows that ST’s thrive more easily in the first
example, NT’s in the second, SF’s in the third and NF’s in the last.
Although these conclusions have intuitive appeal, they are not yet
fully developed. Comfort Zones and Company “fit”:
If you are an ST working in a company where problems and
solutions (along with structures & processes) are fairly well defined,
you will probably be in your “comfort zone.” The probability of your
being effective in such an environment is good. However, you may
not feel as comfortable if new competition appears and the company
is forced to become more entrepreneurial. I think, from this example,
you could construct a number of scenarios for each type in the 4component indicator test and very quickly understand how personal
style preference and work circumstances combine in the decisionmaking process.
Managerial “fit” is the term often used to identify this
phenomenon. When this “fit” becomes pervasive it creates a shared
set of beliefs about “how things are done”. These shared beliefs can
sometimes harden into a core set of values, which, in turn, can
become the thing we know as corporate culture. When cultures are
well developed, they often bestow a good deal of power upon
individual managers whose style and track record most embody the
core values.
When this culture is well defined, it makes the idea of
“managerial fit” quite powerful. This variable is often applied, either
consciously or unconsciously, in the hiring process. It is
fundamentally grounded in trying to assess your decision-making
processes. Like it, or not, it is one of the main factors in choosing and
promoting managers.
It asks: what is your core style, and how far outside of that
comfort zone can you operate effectively? How much does style affect
your “ability”? Can you do what needs to be done to manage that
6 project or business unit, and can you do it in a way that would be
compatible with this environment? That decision-making environment
may be anything from a vertically structured (“I’ll have to check with
the boss and get back to you”) to a flat structure dominated by teams
and projects that require your active and full participation on a regular
basis.
In the end it’s a “judgment call”. They make a decision about
you that is initially based on skill assessment, but ultimately finetuned around style, fit and decision-making effectiveness. And, much
of this is “from the gut” as Jack Welch says. But, make no mistake.
You are still being considered for your analytical ability---in whatever
form it takes.
INDIVIDUAL DECISION MAKING STYLES:
(Adapted from Vroom & Yetton’s model of “Leadership & Decision Making”) Discussion Questions:
• What is your preferred style?
• How does your style connect to your MBTI score?
• What are the advantages/disadvantages of the various decision-making styles? Decision Style Definition Autocratic 1 Manager makes the decision alone Autocratic 2 Manager requests information from others, but makes the
decision alone. Others may not be informed about what the
problem is. Consultative 1 Manager shares the problem with others, seeks information
and asks for their evaluation of the issues. Manager meets
with individuals and/or pairs (not groups) and then makes
the decision alone. Consultative 2 Manager and others meet as a group to discuss the problem,
but the manager makes the decision. 7 Group 1 Manager and subordinates meet as a group to discuss the
problem, and the group makes the decision. Delegative 1 Manager delegates the problem to others, provides relevant
information, but gives others responsibility for coming up
with a solution. NOTE: Sometimes the situation demands a certain approach and the
manager adjusts her/his style to it. Sometimes s/he has only one way of
doing things—no matter what the circumstances.
©Copyright. All rights reserved to Professor Timm L. Kainen. These may not be reproduced or
electronically transferred without permission from the author. 8

SOURCE - Fair process-managing.pdf

For the exclusive use of H. Nguyen, 2016. www.hbr.org BEST OF HBR
People care about the
decisions you make, but they
care even more about the
process you used along the
way. Fair Process
Managing in the Knowledge Economy
by W. Chan Kim and Renée Mauborgne
• Included with this full-text Harvard Business Review article:
1 Article Summary
The Idea in Brief—the core idea
The Idea in Practice—putting the idea to work
2 Fair Process: Managing in the Knowledge Economy
12 Further Reading
A list of related materials, with annotations to guide further
exploration of the article’s ideas and applications Reprint R0301K This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
BEST OF HBR Fair Process
Managing in the Knowledge Economy The Idea in Brief The Idea in Practice In just months, a model workforce degenerated into a cauldron of mistrust, resistance, and plummeting performance.
Why? Management launched a major
change effort without inviting employees’
input, without explaining the reasons for
the change, and without clarifying new
performance expectations. Fair process isn’t decision by consensus or democracy in the workplace. Its goal is to pursue the
best ideas, not create harmony. Fair process consists of three principles: In other words, the company ignored fair
process—a decision-making approach
that addresses our basic human need to
be valued and respected. When people
feel a decision affecting them was made
fairly, they trust and cooperate with managers. They share ideas and willingly go
beyond the call of duty. Corporate performance soars. COPYRIGHT © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. In knowledge-based organizations—
whose lifeblood consists of employees’
trust, commitment, and ideas—fair process
is essential. It enables companies to channel people’s energy and creativity toward
organizational goals.
The benefits of fair process may seem
obvious—yet most organizations don’t
practice it. Why? Some managers find it
threatening, assuming it will diminish their
power. They keep employees at arm’s
length to avoid challenges to their authority. Others believe employees are concerned only with what’s best for themselves. But evidence shows that most
people will accept outcomes not wholly in
their favor—if they believe the process for
arriving at those outcomes was fair. • Engagement—involving individuals in
decisions by inviting their input and encouraging them to challenge one another’s ideas. Engagement communicates
management’s respect for individuals and
their ideas and builds collective wisdom. It
generates better decisions and greater
commitment from those involved in executing those decisions.
• Explanation—clarifying the thinking behind a final decision. Explanation reassures people that managers have considered their opinions and made the decision
with the company’s overall interests at
heart. Employees trust managers’ intentions—
even if their own ideas were rejected.
• Expectation clarity—stating the new
rules of the game, including performance standards, penalties for failure,
and new responsibilities. By minimizing
political jockeying and favoritism, expectation clarity enables employees to focus on
the job at hand. Example:
Facing decreasing demand, an elevator
manufacturer we’ll call Elco decided to design a more efficient manufacturing system.
It would introduce the system at its Chester
plant, a model operation with such positive
employee relations that it decertified its
own union. Then it would incorporate the
new system at High Park, a strongly unionized plant highly resistant to change.
Seeking minimal workforce disturbance,
managers didn’t involve the Chester employees in the system design process, explain why change was necessary, or clarify
new performance expectations. Soon rumors about layoffs proliferated, trust and
commitment deteriorated, and fights
erupted on the shop floor. Quality sank.
Rattled but wiser, Elco took a different tack
at their High Park site. Managers held ongoing plantwide meetings to explain the
need for the new system, encouraged employees to help design the new process,
and laid out new expectations. The anticipated resistance never came—and trusting
employees embraced the new system. page 1
This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016. People care about the decisions you make, but they care even more
about the process you used along the way. BEST OF HBR Fair Process
Managing in the Knowledge Economy
by W. Chan Kim and Renée Mauborgne COPYRIGHT © 2002 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. When employees don’t trust managers to make
good decisions or to behave with integrity, their
motivation is seriously compromised. Their distrust and its attendant lack of engagement is a
huge, unrecognized problem in most organizations. This issue has always mattered, but it matters now more than ever, because knowledgebased organizations are totally dependent on the
commitment and ideas of their employees.
Unfortunately, neither integrity nor good
judgment can be magically conferred on all the
managers in an organization. But it is possible
for top executives to create processes that help
keep managers honest—and that also help build
employees’ trust. In this article, W. Chan Kim and
Renée Mauborgne describe one such process,
which grew out of their research into the links between trust, idea sharing, and corporate performance. Their central finding is that employees
will commit to a manager’s decision—even one
they disagree with—if they believe that the process the manager used to make the decision was
fair. Sounds simple, but most organizations don’t
practice fair process. And because they don’t, harvard business review • january 2003 they never know what they’ve lost in the way of
ideas and initiatives. A London policeman gave a woman a ticket
for making an illegal turn. When the woman
protested that there was no sign prohibiting
the turn, the policeman pointed to one that
was bent out of shape and difficult to see from
the road. Furious, the woman decided to appeal by going to court. Finally, the day of her
hearing arrived, and she could hardly wait to
speak her piece. But she had just begun to tell
her side of the story when the magistrate
stopped her and summarily ruled in her favor.
How did the woman feel? Vindicated?
Victorious? Satisfied?
No, she was frustrated and deeply unhappy.
“I came for justice,” she complained, “but the
magistrate never let me explain what happened.” In other words, although she liked the
outcome, she didn’t like the process that had
created it.
For the purposes of their theories, economists assume that people are maximizers of page 2 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Fair Process •• •B EST OF HBR utility, driven mainly by rational calculations
of their own self-interest. That is, economists
assume people focus solely on outcomes. That
assumption has migrated into much of management theory and practice. It has, for instance, become embedded in the tools managers traditionally use to control and motivate
employees’ behavior—from incentive systems
to organizational structures. But it is an assumption that managers would do well to reexamine because we all know that in real life it
doesn’t always hold true. People do care about
outcomes, but—like the woman in London—
they also care about the processes that produce
those outcomes. They want to know that they
had their say—that their point of view was
considered even if it was rejected. Outcomes
matter, but no more than the fairness of the
processes that produce them.
Never has the idea of fair process been more
important for managers than it is today. Fair
process turns out to be a powerful management tool for companies struggling to make
the transition from a production-based to a
knowledge-based economy, in which value creation depends increasingly on ideas and innovation. Fair process profoundly influences attitudes and behaviors critical to high
performance. It builds trust and unlocks ideas.
With it, managers can achieve even the most
painful and difficult goals while gaining the
voluntary cooperation of the employees affected. Without fair process, even outcomes
that employees might favor can be difficult to
achieve—as the experience of an elevator manufacturer we’ll call Elco illustrates. Good Outcome, Unfair Process W. Chan Kim is the Boston Consulting
Group Bruce D. Henderson Chair Professor of International Management at
Insead in Fontainebleau, France. Renée
Mauborgne is the Distinguished Fellow
and Affiliate Professor of Strategy and
Management at Insead and the president of ITM, a strategy research group
in Fontainebleau. Their last HBR article,
“Charting Your Company’s Future,” appeared in the June 2002 issue. They can
be reached at [email protected] and
[email protected]
harvard business review • january 2003 In the late 1980s, sales in the elevator industry
headed south as overconstruction of office space
left some large U.S. cities with vacancy rates as
high as 20%. Faced with diminished domestic
demand for its product, Elco knew it had to improve its operations. The company made the
decision to replace its batch-manufacturing system with a cellular approach that would allow
self-directed teams to achieve superior performance. Given the industry’s collapse, top management felt the transformation had to be
made in record time.
Lacking expertise in cellular manufacturing,
Elco retained a consulting firm to design a master plan for the conversion. Elco asked the consultants to work quickly and with minimal dis- turbance to employees. The new manufacturing
system would be installed first at Elco’s Chester
plant, where employee relations were so good
that in 1983 workers had decertified their own
union. Subsequently, Elco would roll the process out to its High Park plant, where a strong
union would probably resist that, or any other,
change.
Under the leadership of a much beloved
plant manager, Chester was in all respects a
model operation. Visiting customers were always impressed by the knowledge and enthusiasm of Chester’s employees, so much so that
the vice president of marketing saw the plant
as one of Elco’s best marketing tools. “Just let
customers talk with Chester employees,” he observed, “and they walk away convinced that
buying an Elco elevator is the smart choice.”
But one day in January of 1991, Chester’s employees arrived at work to discover strangers at
the plant. Who were these people wearing
dark suits, white dress shirts, and ties? They
weren’t customers. They showed up daily and
spoke in low tones to one another. They didn’t
interact with employees. They hovered behind
people’s backs, taking notes and drawing fancy
diagrams. The rumor circulated that after employees went home in the afternoon, these
people would swarm across the plant floor,
snoop around people’s workstations, and have
heated discussions.
During this period, the plant manager was increasingly absent. He was spending more time
at Elco’s head office in meetings with the consultants—sessions deliberately scheduled away
from the plant so as not to distract the employees. But the plant manager’s absence produced
the opposite effect. As people grew anxious,
wondering why the captain of their ship seemed
to be deserting them, the rumor mill moved
into high gear. Everyone became convinced that
the consultants would downsize the plant. They
were sure they were about to lose their jobs.
The fact that the plant manager was always
gone—obviously, he was avoiding them—and
that no explanation was given, could only mean
that management was, they thought, “trying to
pull one over on us.” Trust and commitment at
the Chester plant quickly deteriorated. Soon,
people were bringing in newspaper clippings
about other plants around the country that had
been shut down with the help of consultants.
Employees saw themselves as imminent victims
of yet another management fad and resented it. page 3 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Fair Process •• •B EST OF HBR In fact, Elco managers had no intention of
closing the plant. They wanted to cut out
waste, freeing people to enhance quality and
produce elevators for new international markets. But plant employees could not have
known that.
The Master Plan. In March 1991, management gathered the Chester employees in a
large room. Three months after the consultants had first appeared, they were formally introduced. At the same time, management unveiled to employees the master plan for
change at the Chester plant. In a meeting that
lasted only 30 minutes, employees heard how
their time-honored way of working would be
abolished and replaced by something called
“cellular manufacturing.” No one explained
why the change was needed, nor did anyone
say exactly what would be expected of employees under the new approach. The managers
didn’t mean to skirt the issues; they just didn’t
feel they had the time to go into details.
The employees sat in stunned silence, which
the managers mistook for acceptance, forgetting how many months it had taken them as
leaders to get comfortable with the idea of cellular manufacturing and the changes it entailed. The managers felt good when the meeting was over, believing the employees were on
board. With such a terrific staff, they thought,
implementation of the new system was bound
to go well.
Master plan in hand, management quickly
began rearranging the plant. When employees
asked what the new layout aimed to achieve,
the response was “efficiency gains.” The managers didn’t have time to explain why efficiency needed to be improved and didn’t want
to worry employees. But lacking an intellectual understanding of what was happening to
them, some employees literally began feeling
sick when they came to work.
Managers informed employees that they
would no longer be judged on individual performance but rather on the performance of the
cell. They said quicker or more experienced
employees would have to pick up the slack for
slower or less experienced colleagues. But they
didn’t elaborate. How the new system was supposed to work, management didn’t make clear.
In fact, the new cell design offered tremendous benefits to employees, making vacations
easier to schedule, for example, and giving them
the opportunity to broaden their skills and en- harvard business review • january 2003 gage in a greater variety of work. But lacking
trust in the change process, employees could see
only its negative side. They began taking out
their fears and anger on one another. Fights
erupted on the plant floor as employees refused
to help those they called “lazy people who can’t
finish their own jobs” or interpreted offers of
help as meddling, responding with, “This is my
job. You keep to your own workstation.”
Chester’s model workforce was falling apart.
For the first time in the plant manager’s career,
employees refused to do as they were asked,
turning down assignments “even if you fire
me.” They felt they could no longer trust the
once popular plant manager, so they began to
go around him, taking their complaints directly to his boss at the head office.
The plant manager then announced that the
new cell design would allow employees to act
as self-directed teams and that the role of the
supervisor would be abolished. He expected
people to react with excitement to his vision of
Chester as the epitome of the factory of the future, where employees are empowered as entrepreneurial agents. Instead, they were simply
confused. They had no idea how to succeed in
this new environment. Without supervisors,
what would they do if stock ran short or machines broke down? Did empowerment mean
that the teams could self-authorize overtime,
address quality problems such as rework, or
purchase new machine tools? Unclear about
how to succeed, employees felt set up to fail.
Time Out. By the summer of 1991, both cost
and quality performance were in a free fall.
Employees were talking about bringing the
union back. Finally, in despair, the plant manager phoned Elco’s industrial psychologist. “I
need your help,” he said. “I have lost control.”
The psychologist conducted an employee
opinion survey to learn what had gone wrong.
Employees complained, “Management doesn’t
care about our ideas or our input.” They felt
that the company had scant respect for them
as individuals, treating them as if they were
not worthy of knowing about business conditions: “They don’t bother to tell us where we
are going and what this means to us.” And they
were deeply confused and mistrustful: “We
don’t know exactly what management expects
of us in this new cell.” What Is Fair Process?
The theme of justice has preoccupied writers page 4 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Fair Process •• •B EST OF HBR and philosophers throughout the ages, but the
systematic study of fair process emerged only
in the mid-1970s, when two social scientists,
John W. Thibaut and Laurens Walker, combined their interest in the psychology of justice with the study of process. Focusing their
attention on legal settings, they sought to understand what makes people trust a legal system so that they will comply with laws without
being coerced into doing so. Their research established that people care as much about the
fairness of the process through which an outcome is produced as they do about the outcome itself. Subsequent researchers such as
Tom R. Tyler and E. Allan Lind demonstrated the power of fair process across diverse cultures and social settings.
We discovered the managerial relevance of fair
process more than a decade ago, during a study
of strategic decision making in multinational
corporations. Many top executives in those corporations were frustrated—and baffled—by the
way the senior managers of their local subsidiaries behaved. Why did those managers so
often fail to share information and ideas with
the executives? Why did they sabotage the execution of plans they had agreed to carry out?
In the 19 companies we studied, we found a direct link between processes, attitudes, and behavior. Managers who believed the company’s Making Sense of Irrational Behavior at VW and Siemens-Nixdorf
Economic theories do a good job of explaining the rational side of human behavior, but
they fall short in explaining why people can
act negatively in the face of positive outcomes. Fair process offers managers a theory of behavior that explains—or might help
predict—what would otherwise appear to
be bewilderingly noneconomic, or irrational, behavior.
Consider what happened to Volkswagen.
In 1992, the German carmaker was in the
midst of expanding its manufacturing facility in Puebla, Mexico, its only production
site in North America. The appreciation of
the deutsche mark against the U.S. dollar
was pricing Volkswagen out of the U.S. market. But after the North American Free
Trade Agreement (NAFTA) became law in
1992, Volkswagen’s cost-efficient Mexican facility was well positioned to reconquer the
large North American market.
In the summer of 1992, a new labor agreement had to be hammered out. The accord
VW signed with the union’s secretary-general
included a generous 20% pay raise for employees. VW thought the workers would be
pleased.
But the union’s leaders had not involved
the employees in discussions about the contract’s terms; they did a poor job of communicating what the new agreement would
mean to employees and why a number of
work-rule changes were necessary. Workers
did not understand the basis for the decisions
their leaders had taken. They felt betrayed.
harvard business review • january 2003 VW’s management was completely caught
off guard when, on July 21, the employees
started a massive walkout that cost the
company as much as an estimated $10 million per day. On August 21, about 300 protesters were attacked by police dogs. The government was forced to step in to end the violence.
Volkswagen’s plans for the U.S. market were
in disarray, and its performance was devastated.
In contrast, consider the turnaround of
Siemens-Nixdorf Informationssysteme (SNI),
the largest European supplier of information
technology. Created in 1990 when Siemens
acquired the troubled Nixdorf Computer
Company, SNI had cut head count from
52,000 to 35,000 by 1994. Anxiety and fear
were rampant at the company.
In 1994, Gerhard Schulmeyer, the newly
appointed CEO, went out to talk to as many
employees as he could. In a series of meetings large and small with a total of more than
11,000 people, Schulmeyer shared his crusading mission to engage everyone in turning
the company around. He began by painting a
bleakly honest picture of SNI’s situation: The
company was losing money despite recent efforts to slash costs. Deeper cuts were needed,
and every business would have to demonstrate its viability or be eliminated. Schulmeyer set clear but tough rules about how decisions would be made. He then asked for
volunteers to come up with ideas.
Within three months, the initial group of
30 volunteers grew to encompass an additional 75 SNI executives and 300 employees. These 405 change agents soon turned into
1,000, then 3,000, then 9,000, as they progressively recruited others to help save the
company. Throughout the process, ideas
were solicited from managers and employees
alike concerning decisions that affected
them, and they all understood how decisions
would be made. Ideas would be auctioned off
to executives willing to champion and finance them. If no executive bought a proposal on its merits, the idea would not be
pursued. Although 20% to 30% of their proposals were rejected, employees thought the
process was fair.
People voluntarily pitched in—mostly after
business hours, often until midnight. In just
over two years, SNI has achieved a transformation notable in European corporate history. Despite accumulated losses of DM 2 billion, by 1995 SNI was already operating in
the black. In the same period, employee satisfaction almost doubled, despite the radical
and difficult changes under way.
Why did employees of Volkswagen revolt,
despite their upbeat economic circumstances? How, in the face of such demoralizing economic conditions, could SNI turn
around its performance? What is at issue is
not what the two companies did but how they
did it. The cases illustrate the tremendous
power of fair process—fairness in the process
of making and executing decisions. Fair process profoundly influences attitudes and behavior critical to high performance. page 5 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Fair Process •• •B EST OF HBR processes were fair displayed a high level of
trust and commitment, which, in turn, engendered active cooperation. Conversely, when
managers felt fair process was absent, they
hoarded ideas and dragged their feet.
In subsequent field research, we explored the
relevance of fair process in other business contexts—for example, in companies in the midst
of transformations, in teams engaged in product innovation, and in company-supplier partnerships. (See the sidebar “Making Sense of Irrational Behavior at VW and Siemens-Nixdorf.”)
For companies seeking to harness the energy
and creativity of committed managers and employees, the central idea that emerges from our
fair-process research is this: Individuals are
most likely to trust and cooperate freely with
systems—whether they themselves win or lose
by those systems—when fair process is observed.
Fair process responds to a basic human
need. All of us, whatever our role in a company, want to be valued as human beings and
not as “personnel” or “human assets.” We want
others to respect our intelligence. We want our
ideas to be taken seriously. And we want to understand the rationale behind specific decisions. People are sensitive to the signals conveyed through a company’s decision-making
processes. Such processes can reveal a c...

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SOURCE - Managing Oneself.pdf

For the exclusive use of H. Nguyen, 2016. www.hbr.org BEST OF HBR 1999
Success in the knowledge
economy comes to those who
know themselves—their
strengths, their values, and
how they best perform. Managing Oneself
by Peter F Drucker
.
• Included with this full-text Harvard Business Review article:
1 Article Summary
The Idea in Brief—the core idea
The Idea in Practice—putting the idea to work
2 Managing Oneself
12 Further Reading
A list of related materials, with annotations to guide further
exploration of the article’s ideas and applications Reprint R0501K This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
BEST OF HBR 1999 Managing Oneself The Idea in Brief The Idea in Practice We live in an age of unprecedented opportunity: If you’ve got ambition, drive, and
smarts, you can rise to the top of your chosen profession—regardless of where you
started out. But with opportunity comes responsibility. Companies today aren’t managing their knowledge workers’ careers.
Rather, we must each be our own chief executive officer. To build a life of excellence, begin by asking yourself these questions: Simply put, it’s up to you to carve out your
place in the work world and know when to
change course. And it’s up to you to keep
yourself engaged and productive during a
work life that may span some 50 years. COPYRIGHT © 2004 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. To do all of these things well, you’ll need to
cultivate a deep understanding of yourself.
What are your most valuable strengths and
most dangerous weaknesses? Equally important, how do you learn and work with
others? What are your most deeply held values? And in what type of work environment
can you make the greatest contribution?
The implication is clear: Only when you operate from a combination of your strengths
and self-knowledge can you achieve true—
and lasting—excellence. “What are my strengths?”
To accurately identify your strengths, use
feedback analysis. Every time you make a key
decision, write down the outcome you expect. Several months later, compare the actual
results with your expected results. Look for
patterns in what you’re seeing: What results
are you skilled at generating? What abilities do
you need to enhance in order to get the results you want? What unproductive habits are
preventing you from creating the outcomes
you desire? In identifying opportunities for improvement, don’t waste time cultivating skill
areas where you have little competence. Instead, concentrate on—and build on—your
strengths.
“How do I work?”
In what ways do you work best? Do you process information most effectively by reading
it, or by hearing others discuss it? Do you
accomplish the most by working with other
people, or by working alone? Do you perform best while making decisions, or while
advising others on key matters? Are you in
top form when things get stressful, or do
you function optimally in a highly predictable environment? “What are my values?”
What are your ethics? What do you see as your
most important responsibilities for living a
worthy, ethical life? Do your organization’s
ethics resonate with your own values? If not,
your career will likely be marked by frustration
and poor performance.
“Where do I belong?”
Consider your strengths, preferred work style,
and values. Based on these qualities, in what
kind of work environment would you fit in
best? Find the perfect fit, and you’ll transform
yourself from a merely acceptable employee
into a star performer.
“What can I contribute?”
In earlier eras, companies told businesspeople
what their contribution should be. Today, you
have choices. To decide how you can best enhance your organization’s performance, first
ask what the situation requires. Based on your
strengths, work style, and values, how might
you make the greatest contribution to your
organization’s efforts? page 1 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016. Success in the knowledge economy comes to those who know
themselves—their strengths, their values, and how they best perform. B E S T O F HB R 1 9 9 9 Managing Oneself
by Peter F Drucker
. COPYRIGHT © 2004 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. We live in an age of unprecedented opportunity:
If you’ve got ambition and smarts, you can rise to
the top of your chosen profession, regardless of
where you started out.
But with opportunity comes responsibility.
Companies today aren’t managing their employees’ careers; knowledge workers must, effectively, be their own chief executive officers. It’s up
to you to carve out your place, to know when to
change course, and to keep yourself engaged and
productive during a work life that may span
some 50 years. To do those things well, you’ll
need to cultivate a deep understanding of yourself—not only what your strengths and weaknesses are but also how you learn, how you work
with others, what your values are, and where you
can make the greatest contribution. Because only
when you operate from strengths can you
achieve true excellence. History’s great achievers—a Napoléon, a da
Vinci, a Mozart—have always managed themselves. That, in large measure, is what makes
them great achievers. But they are rare excep- harvard business review • january 2005 tions, so unusual both in their talents and
their accomplishments as to be considered
outside the boundaries of ordinary human existence. Now, most of us, even those of us with
modest endowments, will have to learn to
manage ourselves. We will have to learn to develop ourselves. We will have to place ourselves where we can make the greatest contribution. And we will have to stay mentally alert
and engaged during a 50-year working life,
which means knowing how and when to
change the work we do. What Are My Strengths?
Most people think they know what they are
good at. They are usually wrong. More often,
people know what they are not good at—and
even then more people are wrong than right.
And yet, a person can perform only from
strength. One cannot build performance on
weaknesses, let alone on something one cannot do at all.
Throughout history, people had little
need to know their strengths. A person was page 2 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Managing Oneself •• •B EST OF HBR 1999 Peter F. Drucker is the Marie Rankin
Clarke Professor of Social Science and
Management (Emeritus) at Claremont
Graduate University in Claremont, California. This article is an excerpt from his
book Management Challenges for the
21st Century (HarperCollins, 1999). harvard business review • january 2005 born into a position and a line of work: The
peasant’s son would also be a peasant; the artisan’s daughter, an artisan’s wife; and so on.
But now people have choices. We need to
know our strengths in order to know where
we belong.
The only way to discover your strengths is
through feedback analysis. Whenever you
make a key decision or take a key action, write
down what you expect will happen. Nine or 12
months later, compare the actual results with
your expectations. I have been practicing this
method for 15 to 20 years now, and every time
I do it, I am surprised. The feedback analysis
showed me, for instance—and to my great surprise—that I have an intuitive understanding
of technical people, whether they are engineers or accountants or market researchers. It
also showed me that I don’t really resonate
with generalists.
Feedback analysis is by no means new. It
was invented sometime in the fourteenth century by an otherwise totally obscure German
theologian and picked up quite independently,
some 150 years later, by John Calvin and Ignatius of Loyola, each of whom incorporated it
into the practice of his followers. In fact, the
steadfast focus on performance and results
that this habit produces explains why the institutions these two men founded, the Calvinist
church and the Jesuit order, came to dominate
Europe within 30 years.
Practiced consistently, this simple method
will show you within a fairly short period of
time, maybe two or three years, where your
strengths lie—and this is the most important
thing to know. The method will show you
what you are doing or failing to do that deprives you of the full benefits of your
strengths. It will show you where you are not
particularly competent. And finally, it will
show you where you have no strengths and
cannot perform.
Several implications for action follow from
feedback analysis. First and foremost, concentrate on your strengths. Put yourself where
your strengths can produce results.
Second, work on improving your strengths.
Analysis will rapidly show where you need to
improve skills or acquire new ones. It will also
show the gaps in your knowledge—and those
can usually be filled. Mathematicians are born,
but everyone can learn trigonometry.
Third, discover where your intellectual arro- gance is causing disabling ignorance and overcome it. Far too many people—especially people with great expertise in one area—are
contemptuous of knowledge in other areas or
believe that being bright is a substitute for
knowledge. First-rate engineers, for instance,
tend to take pride in not knowing anything
about people. Human beings, they believe, are
much too disorderly for the good engineering
mind. Human resources professionals, by contrast, often pride themselves on their ignorance of elementary accounting or of quantitative methods altogether. But taking pride in
such ignorance is self-defeating. Go to work on
acquiring the skills and knowledge you need to
fully realize your strengths.
It is equally essential to remedy your bad
habits—the things you do or fail to do that inhibit your effectiveness and performance. Such
habits will quickly show up in the feedback.
For example, a planner may find that his beautiful plans fail because he does not follow
through on them. Like so many brilliant people, he believes that ideas move mountains.
But bulldozers move mountains; ideas show
where the bulldozers should go to work. This
planner will have to learn that the work does
not stop when the plan is completed. He must
find people to carry out the plan and explain it
to them. He must adapt and change it as he
puts it into action. And finally, he must decide
when to stop pushing the plan.
At the same time, feedback will also reveal
when the problem is a lack of manners. Manners are the lubricating oil of an organization.
It is a law of nature that two moving bodies in
contact with each other create friction. This is
as true for human beings as it is for inanimate
objects. Manners—simple things like saying
“please” and “thank you” and knowing a person’s name or asking after her family—enable
two people to work together whether they
like each other or not. Bright people, especially bright young people, often do not understand this. If analysis shows that someone’s brilliant work fails again and again as
soon as cooperation from others is required, it
probably indicates a lack of courtesy—that is,
a lack of manners.
Comparing your expectations with your results also indicates what not to do. We all
have a vast number of areas in which we have
no talent or skill and little chance of becoming even mediocre. In those areas a person— page 3 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Managing Oneself •• •B EST OF HBR 1999 and especially a knowledge worker—should
not take on work, jobs, and assignments. One
should waste as little effort as possible on improving areas of low competence. It takes far
more energy and work to improve from incompetence to mediocrity than it takes to improve from first-rate performance to excellence. And yet most people—especially most
teachers and most organizations—concentrate on making incompetent performers into
mediocre ones. Energy, resources, and time
should go instead to making a competent person into a star performer. How Do I Perform? It takes far more energy
to improve from
incompetence to
mediocrity than to
improve from first-rate
performance to
excellence. harvard business review • january 2005 Amazingly few people know how they get
things done. Indeed, most of us do not even
know that different people work and perform
differently. Too many people work in ways that
are not their ways, and that almost guarantees
nonperformance. For knowledge workers, How
do I perform? may be an even more important
question than What are my strengths?
Like one’s strengths, how one performs is
unique. It is a matter of personality. Whether
personality be a matter of nature or nurture, it
surely is formed long before a person goes to
work. And how a person performs is a given,
just as what a person is good at or not good at
is a given. A person’s way of performing can be
slightly modified, but it is unlikely to be completely changed—and certainly not easily. Just
as people achieve results by doing what they
are good at, they also achieve results by working in ways that they best perform. A few common personality traits usually determine how
a person performs.
Am I a reader or a listener? The first thing
to know is whether you are a reader or a listener. Far too few people even know that
there are readers and listeners and that people are rarely both. Even fewer know which
of the two they themselves are. But some examples will show how damaging such ignorance can be.
When Dwight Eisenhower was Supreme
Commander of the Allied forces in Europe, he
was the darling of the press. His press conferences were famous for their style—General
Eisenhower showed total command of whatever question he was asked, and he was able to
describe a situation and explain a policy in two
or three beautifully polished and elegant sentences. Ten years later, the same journalists who had been his admirers held President
Eisenhower in open contempt. He never addressed the questions, they complained, but
rambled on endlessly about something else.
And they constantly ridiculed him for butchering the King’s English in incoherent and ungrammatical answers.
Eisenhower apparently did not know that
he was a reader, not a listener. When he was
Supreme Commander in Europe, his aides
made sure that every question from the press
was presented in writing at least half an hour
before a conference was to begin. And then
Eisenhower was in total command. When he
became president, he succeeded two listeners,
Franklin D. Roosevelt and Harry Truman. Both
men knew themselves to be listeners and both
enjoyed free-for-all press conferences. Eisenhower may have felt that he had to do what his
two predecessors had done. As a result, he
never even heard the questions journalists
asked. And Eisenhower is not even an extreme
case of a nonlistener.
A few years later, Lyndon Johnson destroyed
his presidency, in large measure, by not knowing that he was a listener. His predecessor,
John Kennedy, was a reader who had assembled a brilliant group of writers as his assistants, making sure that they wrote to him before discussing their memos in person. Johnson
kept these people on his staff—and they kept
on writing. He never, apparently, understood
one word of what they wrote. Yet as a senator,
Johnson had been superb; for parliamentarians have to be, above all, listeners.
Few listeners can be made, or can make
themselves, into competent readers—and vice
versa. The listener who tries to be a reader will,
therefore, suffer the fate of Lyndon Johnson,
whereas the reader who tries to be a listener
will suffer the fate of Dwight Eisenhower. They
will not perform or achieve.
How do I learn? The second thing to know
about how one performs is to know how one
learns. Many first-class writers—Winston
Churchill is but one example—do poorly in
school. They tend to remember their schooling as pure torture. Yet few of their classmates
remember it the same way. They may not have
enjoyed the school very much, but the worst
they suffered was boredom. The explanation is
that writers do not, as a rule, learn by listening
and reading. They learn by writing. Because
schools do not allow them to learn this way, page 4 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Managing Oneself •• •B EST OF HBR 1999 Do not try to change
yourself—you are
unlikely to succeed. Work
to improve the way you
perform. harvard business review • january 2005 they get poor grades.
Schools everywhere are organized on the assumption that there is only one right way to
learn and that it is the same way for everybody.
But to be forced to learn the way a school
teaches is sheer hell for students who learn differently. Indeed, there are probably half a
dozen different ways to learn.
There are people, like Churchill, who learn
by writing. Some people learn by taking copious notes. Beethoven, for example, left behind
an enormous number of sketchbooks, yet he
said he never actually looked at them when he
composed. Asked why he kept them, he is reported to have replied, “If I don’t write it down
immediately, I forget it right away. If I put it
into a sketchbook, I never forget it and I never
have to look it up again.” Some people learn by
doing. Others learn by hearing themselves talk.
A chief executive I know who converted a
small and mediocre family business into the
leading company in its industry was one of
those people who learn by talking. He was in
the habit of calling his entire senior staff into
his office once a week and then talking at them
for two or three hours. He would raise policy
issues and argue three different positions on
each one. He rarely asked his associates for
comments or questions; he simply needed an
audience to hear himself talk. That’s how he
learned. And although he is a fairly extreme
case, learning through talking is by no means
an unusual method. Successful trial lawyers
learn the same way, as do many medical diagnosticians (and so do I).
Of all the important pieces of self-knowledge,
understanding how you learn is the easiest to
acquire. When I ask people, “How do you
learn?” most of them know the answer. But
when I ask, “Do you act on this knowledge?”
few answer yes. And yet, acting on this knowledge is the key to performance; or rather, not
acting on this knowledge condemns one to
nonperformance.
Am I a reader or a listener? and How do I
learn? are the first questions to ask. But they
are by no means the only ones. To manage
yourself effectively, you also have to ask, Do I
work well with people, or am I a loner? And if
you do work well with people, you then must
ask, In what relationship?
Some people work best as subordinates. General George Patton, the great American military
hero of World War II, is a prime example. Patton was America’s top troop commander. Yet when
he was proposed for an independent command,
General George Marshall, the U.S. chief of
staff—and probably the most successful picker
of men in U.S. history—said, “Patton is the best
subordinate the American army has ever produced, but he would be the worst commander.”
Some people work best as team members.
Others work best alone. Some are exceptionally talented as coaches and mentors; others
are simply incompetent as mentors.
Another crucial question is, Do I produce results as a decision maker or as an adviser? A
great many people perform best as advisers
but cannot take the burden and pressure of
making the decision. A good many other people, by contrast, need an adviser to force themselves to think; then they can make decisions
and act on them with speed, self-confidence,
and courage.
This is a reason, by the way, that the number two person in an organization often fails
when promoted to the number one position.
The top spot requires a decision maker. Strong
decision makers often put somebody they trust
into the number two spot as their adviser—
and in that position the person is outstanding.
But in the number one spot, the same person
fails. He or she knows what the decision should
be but cannot accept the responsibility of actually making it.
Other important questions to ask include,
Do I perform well under stress, or do I need a
highly structured and predictable environment? Do I work best in a big organization or
a small one? Few people work well in all
kinds of environments. Again and again, I
have seen people who were very successful in
large organizations flounder miserably when
they moved into smaller ones. And the reverse is equally true.
The conclusion bears repeating: Do not try
to change yourself—you are unlikely to succeed. But work hard to improve the way you
perform. And try not to take on work you cannot perform or will only perform poorly. What Are My Values?
To be able to manage yourself, you finally
have to ask, What are my values? This is not a
question of ethics. With respect to ethics, the
rules are the same for everybody, and the test
is a simple one. I call it the “mirror test.”
In the early years of this century, the most page 5 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
Managing Oneself •• •B EST OF HBR 1999 highly respected diplomat of all the great powers was the German ambassador in London.
He was clearly destined for great things—to
become his country’s foreign minister, at least,
if not its federal chancellor. Yet in 1906 he
abruptly resigned rather than preside over a
dinner given by the diplomatic corps for Edward VII. The king was a notorious womanizer
and made it clear what kind of dinner he
wanted. The ambassador is reported to have
said, “I refuse to see a pimp in the mirror in the
morning when I shave.”
That is the mirror test. Ethics requires that
you ask yourself, What kind of person do I
want to see in the mirror in the morning?
What is ethical behavior in one kind of organization or situation is ethical behavior in another. But ethics is only part of a value system—especially of an organization’s value
system.
To work in an organization whose value system is unacceptable or incompatible with one’s
own condemns a person both to frustration
and to nonperformance.
Consider the experience of a highly successful human resources executive whose company was acquired by a bigger organization.
After the acquisition, she was promoted to do
the kind of work she did best, which included
selecting people for important positions. The
executive deeply believed that a company
should hire people for such positions from the
outside only after exhausting all the inside possibilities. But her new company believed in
first looking outside “to bring in fresh blood.”
There is something to be said for both approaches—in my experience, the proper one is
to do some of both. They are, however, fundamentally incompatible—not as policies but as
values. They bespeak different views of the relationship between organizations and people;
different views of the responsibility of an organization to its people and their development;
and different views of a person’s most important contribution to an enterprise. After several years of frustration, the executive quit—at
considerable financial loss. Her values and the
values of the organization simply were not
compatible.
Similarly, whether a pharmaceutical company tries to obtain results by making constant,
small improvements or by achieving occasional, highly expensive, and risky “breakthroughs” is not primarily an economic ques- harvard business review • january 2005 tion. The results of either strategy may be
pretty much the same. At bottom, there is a
conflict between a value system that sees the
company’s contribution in terms of helping
physicians do better what they already do and a
value system that is oriented toward making
scientific discoveries.
Whether a business should be run for shortterm results or with a focus on the long term is
likewise a question of values. Financial analysts believe that businesses can be run for
both simultaneously. Successful businesspeople know better. To be sure, every company
has to produce short-term results. But in any
conflict between short-term resu...

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For the exclusive use of H. Nguyen, 2016. www.hbr.org You may have more to gain by
developing your gifts and
leveraging your natural skills
than by trying to repair your
weaknesses. Here is a
systematic way to discover
who you are at your very best. How to Play to Your
Strengths
by Laura Morgan Roberts, Gretchen Spreitzer,
Jane Dutton, Robert Quinn, Emily Heaphy, and
Brianna Barker Reprint R0501G This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016. You may have more to gain by developing your gifts and leveraging
your natural skills than by trying to repair your weaknesses. Here is a
systematic way to discover who you are at your very best. How to Play to Your
Strengths COPYRIGHT © 2004 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. by Laura Morgan Roberts, Gretchen Spreitzer,
Jane Dutton, Robert Quinn, Emily Heaphy, and
Brianna Barker Most feedback accentuates the negative. During formal employee evaluations, discussions
invariably focus on “opportunities for improvement,” even if the overall evaluation is
laudatory. Informally, the sting of criticism
lasts longer than the balm of praise. Multiple
studies have shown that people pay keen attention to negative information. For example,
when asked to recall important emotional
events, people remember four negative memories for every positive one. No wonder most
executives give and receive performance reviews with all the enthusiasm of a child on the
way to the dentist.
Traditional, corrective feedback has its
place, of course; every organization must filter
out failing employees and ensure that everyone performs at an expected level of competence. Unfortunately, feedback that ferrets out
flaws can lead otherwise talented managers to
overinvest in shoring up or papering over their
perceived weaknesses, or forcing themselves
onto an ill-fitting template. Ironically, such a
focus on problem areas prevents companies harvard business review • managing yourself • january 2005 from reaping the best performance from its
people. After all, it’s a rare baseball player who
is equally good at every position. Why should a
natural third baseman labor to develop his
skills as a right fielder?
The alternative, as the Gallup Organization
researchers Marcus Buckingham, Donald Clifton, and others have suggested, is to foster excellence in the third baseman by identifying
and harnessing his unique strengths. It is a paradox of human psychology that while people
remember criticism, they respond to praise.
The former makes them defensive and therefore unlikely to change, while the latter produces confidence and the desire to perform better. Managers who build up their strengths can
reach their highest potential. This positive approach does not pretend to ignore or deny the
problems that traditional feedback mechanisms identify. Rather, it offers a separate and
unique feedback experience that counterbalances negative input. It allows managers to tap
into strengths they may or may not be aware of
and so contribute more to their organizations. page 1 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
How to Play to Your Strengths Laura Morgan Roberts ([email protected]
hbs.edu) is an assistant professor of
organizational behavior at Harvard
Business School in Boston. Gretchen
Spreitzer ([email protected]),
Jane Dutton ([email protected]),
Robert Quinn ([email protected])
are professors of management and organization at the Stephen M. Ross
School of Business at the University of
Michigan in Ann Arbor. Emily Heaphy
([email protected]) is a PhD candidate in management and organization
at the Ross School of Business, and
Brianna Barker ([email protected]
edu) is a PhD candidate in organizational psychology at the University
of Michigan. During the past few years, we have developed a powerful tool to help people understand and leverage their individual talents.
Called the Reflected Best Self (RBS) exercise,
our method allows managers to develop a
sense of their “personal best” in order to increase their future potential. The RBS exercise
is but one example of new approaches springing from an area of research called positive organizational scholarship (POS). Just as psychologists know that people respond better to
praise than to criticism, organizational behavior scholars are finding that when companies
focus on positive attributes such as resilience
and trust, they can reap impressive bottom-line
returns. (For more on this research, see the
sidebar “The Positive Organization.”) Thousands of executives, as well as tomorrow’s leaders enrolled in business schools around the
world, have completed the RBS exercise.
In this article, we will walk you through
the RBS exercise step-by-step and describe
the insights and results it can yield. Before we
proceed, however, a few caveats are in order.
First, understand that the tool is not designed
to stroke your ego; its purpose is to assist you
in developing a plan for more effective action.
(Without such a plan, you’ll keep running in
place.) Second, the lessons generated from
the RBS exercise can elude you if you don’t
pay sincere attention to them. If you are too
burdened by time pressures and job demands,
you may just file the information away and
forget about it. To be effective, the exercise requires commitment, diligence, and followthrough. It may even be helpful to have a
coach keep you on task. Third, it’s important
to conduct the RBS exercise at a different
time of year than the traditional performance
review so that negative feedback from traditional mechanisms doesn’t interfere with the
results of the exercise.
Used correctly, the RBS exercise can help
you tap into unrecognized and unexplored
areas of potential. Armed with a constructive,
systematic process for gathering and analyzing
data about your best self, you can burnish your
performance at work. Step 1
Identify Respondents and Ask for
Feedback
The first task in the exercise is to collect feedback from a variety of people inside and out- harvard business review • managing yourself • january 2005 side work. By gathering input from a variety of
sources—family members, past and present
colleagues, friends, teachers, and so on—you
can develop a much broader and richer understanding of yourself than you can from a standard performance evaluation.
As we describe the process of the Reflected
Best Self exercise, we will highlight the experience of Robert Duggan (not his real name),
whose self-discovery process is typical of the
managers we’ve observed. Having retired from
a successful career in the military at a fairly
young age and earned an MBA from a top
business school, Robert accepted a midlevel
management position at an IT services firm.
Despite strong credentials and leadership experience, Robert remained stuck in the same position year after year. His performance evaluations were generally good but not strong
enough to put him on the high-potential track.
Disengaged, frustrated, and disheartened, Robert grew increasingly stressed and disillusioned
with his company. His workday felt more and
more like an episode of Survivor.
Seeking to improve his performance, Robert enrolled in an executive education program
and took the RBS exercise. As part of the exercise, Robert gathered feedback from 11 individuals from his past and present who knew him
well. He selected a diverse but balanced
group—his wife and two other family members, two friends from his MBA program, two
colleagues from his time in the army, and four
current colleagues.
Robert then asked these individuals to provide information about his strengths, accompanied by specific examples of moments
when Robert used those strengths in ways
that were meaningful to them, to their families or teams, or to their organizations. Many
people—Robert among them—feel uncomfortable asking for exclusively positive feedback, particularly from colleagues. Accustomed to hearing about their strengths and
weaknesses simultaneously, many executives
imagine any positive feedback will be unrealistic, even false. Some also worry that respondents might construe the request as presumptuous or egotistical. But once managers
accept that the exercise will help them improve their performance, they tend to dive in.
Within ten days, Robert received e-mail responses from all 11 people describing specific
instances when he had made important contri- page 2 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
How to Play to Your Strengths butions—including pushing for high quality
under a tight deadline, being inclusive in communicating with a diverse group, and digging
for critical information. The answers he received surprised him. As a military veteran and
a technical person holding an MBA, Robert
rarely yielded to his emotions. But in reading
story after story from his respondents, Robert
found himself deeply moved—as if he were listening to appreciative speeches at a party
thrown in his honor. The stories were also surprisingly convincing. He had more strengths
than he knew. (For more on Step 1, refer to the
exhibit “Gathering Feedback.”) Step 2
Recognize Patterns
In this step, Robert searched for common
themes among the feedback, adding to the examples with observations of his own, then organizing all the input into a table. (To view The Positive Organization
Positive organizational scholarship
(POS) is an area of organizational behavior research that focuses on the positive dynamics (such as strength, resilience, vitality, trust, and so on) that lead
to positive effects (like improved productivity and performance) in individuals and organizations. The word “positive” refers to the discipline’s affirmative
bias, “organizational” focuses on the
processes and conditions that occur in
group contexts, and “scholarship” reflects the rigor, theory, scientific procedures, and precise definition in which
the approach is grounded.
The premise of POS research is that
by understanding the drivers of positive
behavior in the workplace, organizations
can rise to new levels of achievement.
For example, research by Marcial Losada
and Emily Heaphy at the University of
Michigan suggests that when individuals or teams hear five positive comments to every negative one, they unleash a level of positive energy that fuels
higher levels of individual and group
performance. Kim Cameron, a POS researcher, has demonstrated how this positive approach has helped the workers at Rocky Flats, a nuclear site in Colorado, tackle difficult and dangerous work
in record time. Begun in 1995 and estimated to take 70 years and $36 billion,
the Rocky Flats cleanup project is now
slated for completion in ten years, with a
price tag of less than $7 billion. KaiserHill, the company in charge of the
cleanup, replaced a culture of denial
with one that fostered employee flexibility and celebrated achievements. The result was that employees developed new
procedures that were fast, smart, and
safe.
POS does not adopt one particular
theory or framework but draws from the
full spectrum of organizational theories
to explain and predict high performance. To that end, a core part of the
POS mission is to create cases, tools, and
assessments that can help organizations
improve their practices. The Reflected
Best Self exercise is just one example of
the kinds of practice tools available from
POS. (For more information about POS,
see the University of Michigan’s Web
site at www.bus.umich.edu/positive/.) harvard business review • managing yourself • january 2005 parts of Robert’s table, see the exhibit “Finding
Common Themes.”) Like many who participate in the RBS exercise, Robert expected that,
given the diversity of respondents, the comments he received would be inconsistent or
even competing. Instead, he was struck by
their uniformity. The comments from his wife
and family members were similar to those
from his army buddies and work colleagues.
Everyone took note of Robert’s courage under
pressure, high ethical standards, perseverance,
curiosity, adaptability, respect for diversity,
and team-building skills. Robert suddenly realized that even his small, unconscious behaviors had made a huge impression on others. In
many cases, he had forgotten about the specific examples cited until he read the feedback,
because his behavior in those situations had
felt like second nature to him.
The RBS exercise confirmed Robert’s sense
of himself, but for those who are unaware of
their strengths, the exercise can be truly illuminating. Edward, for example, was a recently
minted MBA executive in an automotive firm.
His colleagues and subordinates were older
and more experienced than he, and he felt uncomfortable disagreeing with them. But he
learned through the RBS exercise that his
peers appreciated his candid alternative views
and respected the diplomatic and respectful
manner with which he made his assertions. As
a result, Edward grew bolder in making the
case for his ideas, knowing that his boss and
colleagues listened to him, learned from him,
and appreciated what he had to say.
Other times, the RBS exercise sheds a
more nuanced light on the skills one takes
for granted. Beth, for example, was a lawyer
who negotiated on behalf of nonprofit organizations. Throughout her life, Beth had
been told she was a good listener, but her exercise respondents noted that the interactive, empathetic, and insightful manner in
which she listened made her particularly
effective. The specificity of the feedback
encouraged Beth to take the lead in future
negotiations that required delicate and diplomatic communications.
For naturally analytical people, the analysis
portion of the exercise serves both to integrate
the feedback and develop a larger picture of
their capabilities. Janet, an engineer, thought
she could study her feedback as she would a
technical drawing of a suspension bridge. She page 3 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
How to Play to Your Strengths saw her “reflected best self” as something to interrogate and improve. But as she read the remarks from family, friends, and colleagues, she
saw herself in a broader and more human context. Over time, the stories she read about her
enthusiasm and love of design helped her rethink her career path toward more managerial
roles in which she might lead and motivate
others. Step 3
Compose Your Self-Portrait
The next step is to write a description of yourself that summarizes and distills the accumulated information. The description should
weave themes from the feedback together
with your self-observations into a composite
of who you are at your best. The self-portrait is
not designed to be a complete psychological
and cognitive profile. Rather, it should be an
insightful image that you can use as a reminder of your previous contributions and as
a guide for future action. The portrait itself Gathering Feedback
A critical step in the Reflected Best Self exercise involves soliciting feedback from
family, friends, teachers, and colleagues. E-mail is an effective way of doing this, not
only because it’s comfortable and fast but also because it’s easy to cut and paste responses into an analysis table such as the one in the main body of this article.
Below is the feedback Robert, a manager we observed, received from a current
colleague and from a former coworker in the army.
From: Amy Chen
To: Robert Duggan
Subject: Re: Request for feedback
Dear Robert,
One of the greatest ways that you add value is that you stand for doing the right
thing. For example, I think of the time that we were behind on a project for a major
client and quality began to slip. You called a meeting and suggested that we had a
choice: We could either pull a C by satisfying the basic requirements, or we could
pull an A by doing excellent work. You reminded us that we could contribute to a better outcome. In the end, we met our deadline, and the client was very happy with the
result.
From: Mike Bruno
To: Robert Duggan
Subject: Re: Request for feedback
One of the greatest ways you add value is that you persist in the face of adversity. I
remember the time that we were both leading troops under tight security. We were
getting conflicting information from the ground and from headquarters. You pushed
to get the ground and HQ folks to talk to each other despite the tight time pressure.
That information saved all of our lives. You never lost your calm, and you never
stopped expecting or demanding the best from everyone involved. harvard business review • managing yourself • january 2005 should not be a set of bullet points but rather
a prose composition beginning with the
phrase, “When I am at my best, I…” The process of writing out a two- to four-paragraph
narrative cements the image of your best self
in your consciousness. The narrative form also
helps you draw connections between the
themes in your life that may previously have
seemed disjointed or unrelated. Composing
the portrait takes time and demands careful
consideration, but at the end of this process,
you should come away with a rejuvenated
image of who you are.
In developing his self-portrait, Robert drew
on the actual words that others used to describe him, rounding out the picture with his
own sense of himself at his best. He excised
competencies that felt off the mark. This didn’t
mean he discounted them, but he wanted to
assure that the overall portrait felt authentic
and powerful. “When I am at my best,” Robert
wrote,
I stand by my values and can get others
to understand why doing so is important. I
choose the harder right over the easier wrong.
I enjoy setting an example. When I am in learning mode and am curious and passionate
about a project, I can work intensely and untiringly. I enjoy taking things on that others
might be afraid of or see as too difficult. I’m
able to set limits and find alternatives when a
current approach is not working. I don’t always
assume that I am right or know best, which
engenders respect from others. I try to empower and give credit to others. I am tolerant
and open to differences.
As Robert developed his portrait, he began
to understand why he hadn’t performed his
best at work: He lacked a sense of mission. In
the army, he drew satisfaction from the
knowledge that the safety of the men and
women he led, as well as the nation he
served, depended on the quality of his work.
He enjoyed the sense of teamwork and variety of problems to be solved. But as an IT
manager in charge of routine maintenance on
new hardware products, he felt bored and isolated from other people.
The portrait-writing process also helped
Robert create a more vivid and elaborate sense
of what psychologists would call his “possible
self”—not just the person he is in his day-today job but the person he might be in completely different contexts. Organizational re- page 4 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
How to Play to Your Strengths searchers have shown that when we develop a
sense of our best possible self, we are better
able make positive changes in our lives. Step 4
Redesign Your Job
Having pinpointed his strengths, Robert’s next
step was to redesign his personal job description to build on what he was good at. Given
the fact that routine maintenance work left
him cold, Robert’s challenge was to create a
better fit between his work and his best self.
Like most RBS participants, Robert found that
the strengths the exercise identified could be
put into play in his current position. This involved making small changes in the way he
worked, in the composition of his team, and in
the way he spent his time. (Most jobs have degrees of freedom in all three of these areas; the
trick is operating within the fixed constraints
of your job to redesign work at the margins,
allowing you to better play to your strengths.)
Robert began by scheduling meetings with
systems designers and engineers who told him
they were having trouble getting timely information flowing between their groups and Robert’s maintenance team. If communication im- proved, Robert believed, new products would
not continue to be saddled with the serious
and costly maintenance issues seen in the past.
Armed with a carefully documented history of
those maintenance problems as well as a new
understanding of his naturally analytical and
creative team-building skills, Robert began
meeting regularly with the designers and engineers to brainstorm better ways to prevent
problems with new products. The meetings
satisfied two of Robert’s deepest best-self
needs: He was interacting with more people at
work, and he was actively learning about systems design and engineering.
Robert’s efforts did not go unnoticed. Key
executives remarked on his initiative and his
ability to collaborate across functions, as well
as on the critical role he played in making new
products more reliable. They also saw how he
gave credit to others. In less than nine months,
Robert’s hard work paid off, and he was promoted to program manager. In addition to receiving more pay and higher visibility, Robert
enjoyed his work more. His passion was reignited; he felt intensely alive and authentic.
Whenever he felt down or lacking in energy,
he reread the original e-mail feedback he had Creating a table helps you make sense of the feedback you collect. By clustering
examples, you can more easily compare responses and identify common themes. Common theme Examples given Possible interpretation Ethics, values,
and courage • I take • I am at a stand when superiors and peers cross
the boundaries of ethical behavior. my best when I choose the harder right
over the easier wrong. I derive even more satisfaction when I am able to teach others. I am
professionally courageous. • I am not afraid to stand up for what I believe in. I confront people who litter or who yell at
their kids in public. Curiosity and
perseverance • I gave up a promising career in the military • I like meeting new challenges. I take to get my MBA. risks and persevere despite obstacles. • I investigated and solved a security breach though an innovative approach. Ability to build
teams • In high school, I assembled a team of students that helped improve the school’s academic
standards.
• I am flexible and willing to learn from others, and I give credit where credit is due.
harvard business review • managing yourself • january 2005 • I thrive when working closely with others. Copyright © 2004 Harvard Business School Publishing Corporation. All rights reserved. >>Finding Common Themes page 5 This document is authorized for use only by Harry Nguyen in Managing Org Change On-campus spring 2016 taught by Diane Vacarra, University of Massachusetts - Lowell from January 2016
to April 2016. For the exclusive use of H. Nguyen, 2016.
How to Play to Your Strengths Why should a natural
third baseman labor to
develop his skills as a
right fielder? received. In difficult situations, the e-mail messages helped him feel more resilient.
Robert was able to leverage his strengths to
perform better, but there are cases in which
RBS findings conflict with the realities of a person’s job. This was true for James, a sales executive who told us he was “in a world of hurt”
over his work situation. Unable to meet his
ambitious sales goals, tired of flying around the
globe to fight fires, his family life on the verge
of collapse, James had suffered enough. The
RBS exercise revealed that James was at his
best when managing people and leading
change, but these natural skills did not and
could not come into play in his current job.
Not long after he did the exercise, he quit his
high-stress position and started his own successful company.
Other times, the findings help managers
aim for undreamed-of positions in their own
organizations. Sarah, a high-level administrator at a university, shared her best-self portrait
with key colleagues, asking them to help her
identify ways to better exploit her strengths
and talents. They suggested that she would be
an ideal candidate for a new executive position. Previously, she would never have considered applying for the job, believing herself unqualified. To her surprise,...

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