MGT 301 Exam 2

Jeff Bezos Speaking to Princeton grads Regarding Principles from Maxwell

"Tomorrow, in a very real sense, your life - the life you author from scratch on your own - begins. "How will you use your gifts? What choices (Maxwell 1) will you make? 1. Will inertia be your guide, or will you follow your passions? (Maxwell 12) 2. Will you follow dogma, or will you be original? (Maxwell 21) 3. Will you choose a life of ease, or a life of service and adventure? (Maxwell 19) 4. Will you wilt under criticism, or will you follow your convictions? (Maxwell 17) 5. Will you bluff it out when you're wrong, or will you apologize? (Maxwell 20) 6. Will you guard your heart against rejection, or will you act when you fall in love? (Maxwell 15) 7. Will you play it safe, or will you be a little bit swashbuckling? (Maxwell 6) 8. When it's tough, will you give up, or will you be relentless? (Maxwell 3 & 16) 9. Will you be a cynic, or will you be a builder? (Maxwell 14) 10. Will you be clever at the expense of others, or will you be kind? (Maxwell 9) "I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are your choices. (Maxwell 1) Build yourself a great story."

WSJ - Pfizer Considers a Sale or Spinoff off Its Consumer Healthcare Business

**Does the consumer products division of Pfizer synergize with the overall corporation?** Pfizer, Inc. said it is exploring a sale or spin-off of its consumer-health business, the pharmaceutical company's latest move to double down on prescription drug sales and a potential prelude to more deal-making. Pfizer's consumer-health business sells well-known brands like Advil, Centrum vitamins, and ChapStick lip balm. Procees from a sale, which could top $10 billion, would give Pfizer more firepower to acquire other prescription drug-makers. "Although there is a strong connection (i.e. "synergy" which means synthesis of energy so that 1+1>2] between consumer healthcare and elements of our core biopharmaceutical businesses, it is also distinct enough from our core business that there is potential for its value to be more fully realized outside of the company," Chief Executive Ian Read said. 1. "Connection" or "syngergy" is determined by looking for overlapping/shared activities along the value chain... 2. A corporation's "core" business is that which addresses the questions in its Mission Statement (taught in a prior class). 3. "Distinctness" is determined by looking for separation/differences among activities along the value chain. 4. The "value" of a business unit to its parent corporation may be in the profits it generates and/or in the syngergies it shares with other business units. The cash flow and steadily growing sales bolstered Pfizer's earnings during the past few years, while the company was coping with generic competition for some of its top-selling products. **Note: One reason for engaging in a strategy of diversification can be to try to reduce the risks of being in only one line of business. The consumer-health business, which Pfizer acquired as part of its $68 billion takeover of Wyeth in 2009, had become an outlier at a company that had been tightening its focus on prescription drugs by parting ways with animal-health and other noncore units. The company left open the possibility of holding on to the unit, but Pfizer has been cutting ties with non-pharmaceutical businesses, as some rivals have pushed to consolidate in the global consumer-health market. However, other rivals like Bayer, Glaxo, and Sanofi did deals to bulk up their consumer-health businesses. **Note: how intelligent, well-educated, and experienced executives can see the world very differently. All of the consumer-health market leaders could have interest in adding Pfizer's business. So could Swiss food company, Nestle, which has indicated interest in doing deals in markets growing faster than packaged goods like consumer health. That would be an example of unrelated diversification. **Note: that the strategies of focus/concentration, related diversification, and unrelated diversification lie along a sliding scale with gray areas in between. They are not precise categories with strict boundaries.

WSJ - How two Years of Crisis Has Tested Volkswagen's CEO

**Note how the CEO approaches the toughest questions and paradox, how scandal affects a company's reputation, and why VW is trying to run a ride-hailing or car-sharing business** Q: How can you make sure that the leading executives change? A: You're asking the hardest question (we can never be absolutely sure that our decisions will be effective) Q: How would you grade VW's progress so far? A: Overall, I think we have managed the process well (Note lack of concrete numbers) Q: When it comes to changing corporate culture, how far have you come? A: That's very hard to quantify because such a large organization is sluggish (Again, note lack of numbers) Q: Before the scandal, your name was discussed for the CEO's job. A: The whole thing happened within 48 hours. But what do you do? You have to decide. Q: You are a consummate insider, but your job requires that you approach VW as an outsider. How do you do that? A: I'd like to presume that I am a person of integrity. I know the company very well. On the other hand, I have enough distance to resolve problems objectively. (An example of paradoxical balancing required of managers) Q: How do you ensure that your executives aren't constantly suspected of wrongdoing? A: This atmosphere of suspicion is something we are going to have to live with for a while. There is a kind of blanket suspicion; the public thinks the entire company is criminal. The company is not criminal as a whole. Parts of the company engages in criminal behavior. (Just like the lesson we learned from the Equifax article earlier, even if you're doing what is normal, others may still perceive you as doing wrong) Q: Volkswagen is now taking on tech giants. Why does a global auto maker have to run ride-hailing or car-sharing businesses? A: We offer these to avoid the risk of becoming supplier for Google and Uber. If we lose the contact to the customer, that would be the beginning of the end. (This is similar to "The Mantra of the Authentic Leader" that we learned when studying Maxwell 19 previously). Q: Fast forward to the end of your contact in 2020. If you were to leave then, what's the state of the company your successor would inherit? A: It should be a company that has largely dealt with the diesel crisis. The operating issues should be dealt with. It should be a very successful company in a position to secure its core workforce and play a leading role in the new mobility field.

WSJ - New Ford Chief is Ready to Start Tinkering Under the Hood

**Note how the new CEO makes decisions, tries to stand out, promotes efficiency, and works for collaboration** Jim Hackett, a former furniture company CEO, was promoted to chief executive of Ford Motor Co. after the board ousted then CEO Mark Fields amid concern about the company's strategy. After spending several months asking questions and strategizing. Mr. Hackett said his travels to Silicon Valley, a place he frequented when running Steelcase for two decades, affect his approach to business. "I did learn and understand the culture out there," he siad. "It's steeped into my thinking, optimism, innovation and questioning the status quo." Just like in the D.A.O.I.D. method of decision-making, he dives deeply into the data at its source He acts as in the mantra of the authentic leader by not just staying in the office but getting out and about to become in touch with key stakeholders. He evidently understands that the purpose of business is to create value for others, and By questioning the status quo, he shows us that to be outstanding, we must stand out, and if we want to make a difference we must be different. Ford's new boss spent the summer touring the auto maker's global operations, brainstorming with his executives on new business concepts and even paying a visit to an electric car maker in Silicon Valley that his predecessor had considered buying. Now, he is ready to start tinkering under the hood - that ability comes only after we invest in the four bullet points above, not before. Under Mr. Hackett, the company's leadership team set up several mini war rooms in conference spaces at Ford's Dearborn, Mich, headquarters, according to the people familiar with the matter. Executives have huddled there to sketch out new concepts - often on sticky notes and sheets of paper stuck to the wall - in an effort to shake up the company's thinking on everything from its culture to branding. Mr. Hackett is expected to show how Ford is streamlining (efficiency) its core business while pursuing futuristic ideas (effectiveness = attaining appropriate goals). He often talks about evaluating Ford's "fitness," a term he uses for efficiency. And in terms of increasing Ford's creativity and innovation, it pays to collaborate with others (see the O in D.A.O.I.D.). "We expect Ford's next strategy to be more open to partnerships, new structures, new entities" a Morgan Stanley analyst wrote. Examples include partnerships with Lyft, India's Mahindra & Mahindra Ltd., and Silicon Valley electric car startup Lucid Motors.

WSJ - How to Land a "Stretch" Job

**Note why some bosses promote people who do not have all the qualifications for a job** Smart leaders have a knack for spotting hidden potential in their employees and suggesting jobs to draw it out. When these leaders tell stories about their own careers, "a consistent theme is that somebody took a chance on them and helped them make a significant leap - without checking all the boxes." This ability requires discernment as taught by Maxwell in Ch. 7. Also, these leaders act in accordance with the Mantra of the Authentic Leader, because they are "a leader who nurtures talent, who spend time with employees and takes an interest in them, asking questions and welcoming honest answers." DowDuPont CFO Howard Ungerleider wants to advance employees who - collaborate with colleagues in different departments (think of Mary Parker Follett) - and look beyond their own jobs toward improving the company's overall results Several years ago Beth Nicholas stood out to him. Mr. Ungerleider advocated for Ms. Nicholas's promotion to global finance directed for Dow's agricultural-products unit. He recently offered Ms. Nicholas another stretch assignment, to become the company's chief tax officer. The job will require especially strong collaboration skills. However, Ms. Nicholas lacks credentials common among corporate tax chiefs - a master's or law degree in taxation. My Ungerleider says what he sees in Ms. Nicholas is the ability to collaborate with others on a company-wide goal of improving global tax strategy. When Mr. Ungerleider offered her the promotion, Ms. Nicholas says, "it was one of those moments where you pause and the tummy turns a little bit." After taking about a week to think it over, she said yes. "You should feel uncomfortable when you take a new job," she says, "because the opportunity to grow is so vast." This is just like one of the key ways that Maxwell teaches on how to cultivate discernment in Chapter 7: "Embrace change, ambiguity, and uncertainty." "You've got to be kidding me!" was Jennifer Roseman's response when her boss Dan Frank suggested that she take over financial management of her unit. Ms. Roseman reluctantly agreed. Mr. Frank says he trusted her to learn the job and excel. What I saw in her was somebody who loved our mission of supporting veterans, he says. She has since been promoted to executive vice president. Ms. Roseman says, "Dan had a knack for understanding what I could do - for seeing things in me that I didn't necessarily see." Note: - her desire for life-long learning. - understanding that the purpose of business & life is to create value for others; it's how we become valuable, - a leader's ability to see what is not necessarily obvious

WSJ - After Uber and Wells Fargo, Boards Wake Up to Company Culture

**What are the advantages of having a positive culture vs. a toxic one? How can leaders promote a positive culture?** Corporate culture counts. But bad culture can damage three of a company's most valuable resources: its reputation, its results (money!), and its recruitment (people). Strong culture offers "a powerful source of competitive advantage," while companies with weak cultures see far higher levels of misconduct. We define corporate culture as: often intangible, non-verbal signals that show employees what their priorities should be at work. Here are three examples of companies with weak cultures... 1. Uber is grappling with scandals, government probes, and shareholder litigation. CEO Travis Kalanick quit under investor pressure in June. The ride-hailing company declined to comment on a shareholder suit filed in late September that called its corportate culture a "toxic hotbed" threatening its business. 2. Wells Fargo admitted culture problems following a sales-practices scandal that erupted a year ago. The bank said employees opened customer accounts using fictitious or unauthorized information to meet lofty sales goals. The revelation led then-CEO John Stumpf to retire abruptly. His successor, Timothy Sloan, this spring said the bank would conduct a company-wide survey so leaders can "foster an ethical, inclusive, and customer-focused culture." 3. Whirlpool became a target of a U.S. government antitrust investigation into the global compressor industry. As a result of the probe, the company's compressor business based in Brazil agreed in 2010 to plead guilty to price fixing of refrigerant compressors and pay a $91.8 million fine. The article points out seven positive steps that firms can take to foster a positive culture: 1. Citigroup has created an Ethics & Culture Committee in the Board of Directors 2. Emphasize compliance in employee training 3. Conduct culture audits periodically 4. Do frequent worker surveys of culture 5. Evaluate calls made to whistleblower hotlines 6. In employee performance evaluations, pay attention not just to the results they achieved, but also how they achieved those results 7. Be careful about what you are incentivizing with your pay practices

WSJ - A Rare Joint Interview with Microsoft CEO Satya Nadella and Bill Gates

**What do we learn about Microsoft's culture, and about leaders being efficient and effective?** In February 2014, Satya Nadella became the third CEO of Microsoft. Nadella quickly ramped up investment in artificial intelligence and commercial cloud computing. The result has been a remarkable turnaround, featuring major growth in cloud services revenue, a doubling of year-on-year profits, and an all-time stock price high. In his new book, Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone, Nadella explains this corporate transformation, lays out his hopeful vision for technological progress, and recounts his own rich personal history. Gates (who now co-chairs the Bill & Melinda Gates Foundation) lauds Nadella's humility and pragmatism. He recently dropped by Nadella's office to join a discussion that touched on the topic of management "ethos"" (i.e. the spirit, beliefs, and aspirations of managers). Q: Your book argues that cultivating empathy (similar to emotional intelligence, and also the mantra of the authentic leader) will bring out the best in a company. How does empathy fit into your management style? Nadella: Being hard-core and driven is as essential today as it ever was. But there needs to be humility (willingness to learn from anyone). The reason why I use the word empathy is because the business we are in is to meet the unmet, unarticulated needs of customers (the purpose of business). That's what innovation (recall that this involves commercialization - getting others to purchase it - of new ideas) is all about. And there's no way you're going to do that well without having empathy and curiosity (i.e. curiosity about the needs of others.) Gates: I've come to value empathy more over the course of my career. Early on we were speed nuts, staying all night at the office, thinking "Oh, you're five percent slower as a programmer? You don't belong here." It was very hard-core. Steve Jobs, the way he ran the Mac team, he was an extreme example of that where - wow, they got a lot done (efficiency), but within a year nobody was there (not very effective). I think as this industry has matured, so has what's expected of a CEO. Satya has a natural ability to work well with lots of people, to tell people they're wrong in a nice way, and to let feedback come through to him (humility) more than I did. Q: Satya, you write that reading Mindset: The New Psychology of Success, by Stanford University professor Carol Dweck, influenced your effort to reshape Microsoft's corporate culture. What about it spoke to you? Nadella: It changed my life. The book is about fixed mind-sets vs. growth mind-sets - when you have a growth mind-set, you're always willing to learn. I started thinking about what was happening in my head and asked whether as a company we have a learning culture. Do we have curiosity? Do we have the fundamental posture to act on our learning? When I put that out there as CEO, most people felt that this was not simply about Satya's new dogma for us; it was about us as people. Because ultimately, the "learn-it-all" will always do better than the "know-it-all." And that shows up in a variety of ways. You'll be a better parent, spouse, team member, and manager.

WSJ - Jeff Wilke: The Amazon Chief Who Obsesses Over Consumers

**What is Amazon's approach to failure?** Amazon is now a retailer, a cloud-services provider, a film studio, a device company, a parcel carrier and a technology giant. **Note: their strategy of unrelated diversification. Jeff Wilke's supervision now spans many of Amazon's core businesses, including retail, operations, technology, and its marketplace and accompanying seller services. Near the beginning of his career there, Mr. Wilke used his manufacturing expertise to help create a more efficient way of running Amazon's warehouses that made its two-day Prime shipping services possible. he has also molded the leadership principles which guide employee behavior. Now Mr. Wilke is in charge of integrating Amazon's new subsidiary, Whole Foods Marketplace and its roughly 87,000 employees. He is also part of the leadership team working on the company's search for a second North American headquarters. Part of the 18-year Amazon veteran's role is to obsess about the wants and needs of the retailer's customers (the purpose of business). He also wears his traditional fourth-quarter flannel shirt, a nod to the more than 250,000 warehouse workers filling holiday orders. Being in touch with your people is the main point of the mantra of the authentic leader. Some excerpts from an interview with WSJ... Q: Amazon encourages employees to fail big. Tell us about a big, fall-on-your-face failure. A: When we were deciding whether to do Kindle, Jeff (Bezos) presented his idea to the board. I thought at the time, "We're a software company that built a retail business. We don't know anything about hardware." I'd come from companies that built hardware, so I knew how complicated it was. I said, "I don't think we should do this." I predicted that yields would be hard, that we might miss our first launch date, etc. Many of the things I predicted ultimately happened. But it didn't matter. Jeff at the time said, "It's the right thing to do for customers." I disagreed and committed, and I'm very glad I did. Q: What did Mr. Bezos say to you after? A: Once we make a decision, we just move on. There are too many opportunities to invent for customers to keep score. All of us have been wrong at various times.

The Seven Types of Organizational Structures (and when to use them)

1. Functional - for a young, single product firm, or one pursuing the concentration/focus strategy. 2. Product - for a firm pursuing a strategy of related diversification like P&G. 3. Divisional - for a firm pursuing a strategy of unrelated diversification, like Berkshire Hathaway. 4. Customer - for firms engaging in a strategy of forward vertical integration and customer service. 5. Geographic - for a firm pursuing a multi-domestic strategy. 6. Matrix - for high-tech firms, and those trying to promote organizational learning by breaking through silos. 7. Team - for highly educated, white collar professionals working on projects. Ex: law firms, consulting firms, advertising agencies, etc.

How to get Employees to be Creative Individually

1. Provide employees with both the opportunity and the ability to take risks. 2. If people take risks, they will sometimes fail. 3. To build creativity, the manager must reward the right kind of failure.

The Three Levels of Planning

1. Strategic plan: addresses whole organization over a three to five year period. 2. Tactical plan: each division within a company generates a plan for a year-long time period. 3. Operating plan: quarterly plan for a department within a division.

Good Failure/Right Kind of Failure

1. The failure did not occur because of laziness. 2. The failure did not occur because of violations of ethics. 3. The employee can explain how and why it happened, so that the employee has learned and changed. 4. The failure is not repeated.

International Expansion: The Multi-Domestic Strategy vs. the Global Strategy

Ask the fundamental question of international business: "To what extent do we customize our products for different national cultures, vs. standardizing our products worldwide for global efficiency?" Multi-Domestic Strategy: customize products in every local culture. This is effective. Global Strategy: strategy of selling the same product everywhere. This is efficient.

What did Mr. C, a healthcare CEO, say about analysis paralysis? (Decision-Making)

Avoid 'analysis paralysis.' That's a youthful phenomenon in which someone who lacks a lot of experience fells they need to know all aspects and factors surrounding a decision. What this means is that you can get so invested in looking for those factors that you never get any closer to making a decision. To deal with this behavior, try to develop a judgment level. Having this level of judgment or 'gut instinct' allows you to move on with a decision with a limited amount of information

Lesley Fox & Wal-Mart

Flawed Decision-making: "Programmed Decision-Making" Lesley Fox, a bank branch manager, saw that many places had an employee of the month program, so she started one too. It did not work as expected. It caused employees to compete against each other, eroding teamwork. She realized that an Employee Hall of Fame would be much better - every employee could be recognized for good work. Wal-Mart tried to export its American-based management methods to other nations, assuming that what worked in the U.S. would work well overseas too. But it did not.

Maxwell Ch. 17 (Security)

Four things that showed Margaret Thatcher had security: 1. She was calm under fire. 2. She didn't follow the crowd. 3. She made up her own mind. 4. She continued working hard. Three reasons insecure leaders are dangerous: 1. Because a leadership position amplifies personal flaws. 2. Insecure people are on a continual quest for validation, acknowledgement, and love. Holbein adds, if you feel that you must demand respect from others, you probably do not deserve that respect. 3. You cannot give what you do not have. An effective leader, the kind that others want to follow, makes their followers feel good about themselves, not about the leader. Holbein adds this self-diagnostic test: When your friends are with you, how do they feel about themselves? The Law of Empowerment: Only secure leaders give power to others Three aspects of secure leaders: They aren't arrogant They go out of their way to bring the best people together and build them up When a secure leader's team succeeds, it brings him great joy Balzac said, "Nothing is a greater impediment to being on good terms with others than being ill at ease with yourself. Holbein adds, "If you feel that you must demand respect from others, then you probably do not deserve that respect. Deserving something comes only from having earned it"`

The Concentration/Focus Strategy

Have a single type of product. McDonald's, Wal-Mart, and Coca-Cola became dominant this way. Do "one" thing really well, better than anyone else.

Steve Jobs Video #3: Here's to the Crazy Ones"

Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. But the only thing you can't do is ignore them. Because hey change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do. Albert Einstein Bob Dylan Martin Luther King Jr. Richard Branson John Lennon & Yoko Ono Buckminster Fuller Thomas Edison Muhammad Ali Ted Turner Maria Callas Mahatma Gandhi Amelia Earhart Alfred Hitchcock Martha Graham Jim Henson Frank Lloyd Wright Pablo Picasso A young girl opening her closed eyes to see the possibilities before her All of these people changed the world in ways that many people are well aware of. Some of us may become famous for our contributions to making the world a better place. But certainly, all of us have been endowed with gifts from many others to do good and change the world for the better. You or I may not become as famous as the people listed above, or maybe we will. But each one of us will touch someone. It may just be one person in one moment. To us it may seem small, or even insignificant. But to that other person, it will change the world. Holbein says, "If you want to make a difference, you must be different." And, "To be outstanding, you must stand out."

Maxwell Ch. 8 (Focus)

If you chase two rabbits, both will escape. When the trainer holds the stool with the legs extended toward to the lion's face, the animal tries to focus on all four legs at once. And that paralyzes him. Divided focus always works against you. Holbein adds: All elite performance requires undivided focus.

What did Mr. J, a consumer products CEO, say about intensity? (Focus)

Intensity. People will pursue their work with a very ho-hum lack of intensity, so you can beat them if you are more intent on your work.

Maxwell Ch. 20 (Teachability)

Ironically, lack of teachability is often rooted in achievement. Some people mistakenly believe that if they can accomplish a particular goal, they no longer have to grow. Ray Kroc said, "As long as you're green, you're growing. As soon as you're ripe, you start to rot." Teddy Roosevelt said, "He who makes no mistakes, makes no progress." Remember Holbein learning to ski with his big brother who said, "If you didn't fall all day, you didn't learn anything." Tuff Hedeman, champion bull rider, said, "The bull won't care what I did last week." Maxwell's self diagnostic test: When was the last time you did something for the first time?

Maxwell Ch. 16 (Responsibility)

James Bonham was an example of making a difference due to his responsibility even though his efforts did not seem "successful." Good leaders never embrace a victim mentality. That would be an external locus of control. Self-made millionaires have on thing in common: they work hard. In our society, you work eight hours a day for survival, and if you work only eight hours a day, all you do is survive. Everything over eight hours is an investment in your future. Responsible people never protest, "that's not my job." When an archer misses the mark he turns and looks for the fault within himself. Failure to hit the bull's eye is never the fault of the target. This is an internal locus of control.

Maxwell Ch. 7 (Discernment)

Maxwell says, "Smart leaders believe only half of what they hear. Discerning leaders know which half to believe." What is the challenge that leaders face? "Leaders of large organizations must cope with tremendous chaos and complexity every day." What does discernment allow a person to do? 1. to see a partial picture, and fill in the missing pieces intuitively 2. to find the real heart of a matter 3. to see root causes of difficult problems without having to get every bit of information How does discernment work? 1. It lies in the blend of clearheaded logic and powerful intuition 2. Use both your gut and your head How do we cultivate discernment? 1. Value nontraditional thinking 2. Embrace change, ambiguity, and uncertainty 3. Broaden your horizons

The Content of a Good, Clear Mission Statement

Must address five questions: 1. Who? Who are our customers? 2. Why? Why are we in business? To serve people's needs and wants, this adding value to their lives. That is the point of all organizations, whether for-profit or not-for-profit. 3. What? What products and services do we offer to serve those needs and wants? 4. Where? Where are our operations? 5. How? How will we set ourselves apart from the competition? (As Holbein has taught, "In order to be outstanding, you must stand out." And also, "If you want to make a difference, you must be different.")

Maxwell Ch. 14 (Problem Solving)

No matter what field a leader is in, he will face problems. A leader's work is always messy. Three reasons why: 1. We live in a world of growing complexity and diversity. 2. We interact with people. 3. We cannot control all the situations we face. We can only cope with them. 5 characteristics of excellent problem solvers: 1. They anticipate problems: Dr. Livingstone said, "If you have men who will come only if they know there is a good road, I don't want them. I want men who will come even if there is no road at all. 2. They accept the truth. "In times like these it is good to remember that there has always been times like these." **Note: that all generations believe in three apparent assumptions - 1) we now live in the most uncertain, dynamic, challenging times 2) the rising generation is lost 3) the older generation is clueless 3. They see the big picture: "The majority see the obstacles; the few see the objectives; history records the successes of the latter, while oblivion is the reward for the former." (This is your choice and your opportunity) 4. They handle one thing at a time: "How do you eat an entire elephant? One bite at a time." And, "a journey of 1,000 miles begins with a single step." 5. They don't give up a major goal when they're down.

What did Ms. D, a consumer products CEO, say about plans? (Strategic Planning)

Nothing ever goes according to plan. Never look at a plan and think that you have it all figured out. **Supplementing this, Dwight Eisenhower (who turned the tide of WWII with extensive planning for D-Day) said, "Plans are nothing. But planning is everything." It is the process of going through all the exploring, researching, analyzing, discussing, debating. preparing, etc. that is the greatest benefit more than having the actual plan document itself.

What did Mr. C, a financial services CEO, say about bad decisions? (Creativity & Innovation)

One of the things that makes us successful is our refusal to follow the crowd. We are almost completely contrarian. I urge the same type of attitude in aspiring executives. I blame a herd mentality for many of the bad decisions that are made in the business world.

What did Mr. G, an information technology CEO, say about getting promoted? (Problem Solving)

Organizations promote people who are problem solves. So welcome any opportunity to solve new challenges. If you are successful in that, the rewards and promotions will take care of themselves. **Note: As shown in WSJ article How to Land a Stretch job, If your boss asks that you do work that is beyond your experience and above your current capabilities, consider it an honor.

What did Mr. W, a financial services CEO, say about moving up the ladder? (Work Ethic)

People who work hard will get pushed up the ladder very quickly.

Programmed vs. Non-programmed Decision-making

Programmed: routine, virtually automatic decision making that follows established rules and guidelines where we have made similar decisions before Non-programmed: non-routine decisions that occur in response to unusual, unpredictable and unique circumstances when there are no rules to follow, and where we have uncertain or ambiguous information, thereby requiring us to use our intuition, judgment, and discernment

Satya Nadella from The New York Times Regarding Hiring and Careers - What were the key lessons we learned from his interview?

Q: How do you hire? What questions do you ask? A: I do a kind of 360 review. I will ask the individual to tell me what their manager would say about them, what their peers would say about them, what their direct reports would say about them, and in some cases what their customers or partners may say about them. That particular line of questioning leads into fantastic threads, and I've found that to be a great one for understanding their self-awareness. I also ask, what are you most proud of? Tell me where you feel you've set some standard, and you look back on it and say, "Wow, I really did that." And then, what's the thing that you regret the most, where you felt like you didn't do your best work? How do you reflect on it? Those two lines of questioning help me a lot in terms of being able to figure people out. I fundamentally believe that if you are not self-aware, you're not learning. And if you're not learning, you're not going to do useful things in the future." Lessons: to be successful, you must... 1. Be actively managing your image and reputation among all those people around you 2. Set standards, and strive to live up to them 3. Reflect upon, and learn from your failings 4. Be self-aware, and 5. Be learning at all times

The Chain of Innovation

Security (Maxwell 17) --> Teachability (Maxwell 20) --> Learning (change) --> Creativity (research) --> Innovation (development) Creativity: Developing new or novel ideas. The light-bulb goes off (like the "R" in R&D).

Steve Jobs Video #2: 2005 at Stanford

Story 1: Connecting the Dots He had no idea what he was going to do with his life. So he dropped in on curiosity. That is priceless. What fascinates you? What are you intrigued with? Where are you curious? Follow it! Story 2: Love and Loss He was fired from the company he created! He was a public failure. But, he discovered the "lightness" of being a beginner all over again. Story 3: Death Discover what is truly important. You must clarify your true values and priorities. "Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose." "You are already naked. There is no reason not to follow your heart." "Don't be trapped by other people's thinking (dogma). Stay hungry. Stay foolish." Notice the following... Curiosity: How badly do you want to learn regardless of your grades and degree? Practical application: Learning calligraphy had no use in his life at that time, but 10 years later, "it came back to me!" Connecting the dots looking forward: It is impossible. So trust that all will work out okay. Holbein says, "If you consistently and persistently do what is good and right today, there is no way that you will end up in a bad place." Being a beginner: "I got fired." Remember good failure. "It was the best thing that ever happened to me. True values and priorities: Have you determined what is truly important? What would a person be like who has not determined what matters most, some, less, least, and not at all? The trap of dogma (someone else's thinking): living someone else's life.

What did Mr. T, a manufacturing CEO, say about big thinking? (Vision & Big Picture)

Strive for the ability and willingness to think big.

The Classical vs. The Administrative Methods/Models of Decision-making

The Classical Method/Model: assumes that we can... - identify all possible alternatives - evaluate all possible alternatives using pure logic - forecast the consequences of every alternative - be perfectly rational, logical and analytical in choosing the one best course of action The Administrative Method/Model: foor a world that is uncertain, risky, messy. Assumes that: - we are limited in our ability to be perfectly rational and logical: limits of time, money, brain power. This is called "bounded raitonality" - we have incomplete, ambiguous (differing interpretations) information - So therefore, instead of being perfectly rational, logical, and analytical in choosing the best option, we engage in satisficing: the first good enough alternative

What did Mr. J, a manufacturing CEO, say about the source of creativity? (Creativity & Innovation)

The greatest contribution that a leader can give any employee is the openness to think and be creative without the fear of making a mistake. We've all made mistakes, and we learn from those mistakes, and from mistakes comes our creativity.

The Definition of Decision-making

The process by which people respond to opportunities and threats by analyzing options, choosing goals, and selecting courses of action.

What did Mr. D, a financial services CEO, say about strategic management? (Strategic Planning)

To completely understand and master strategic management is a difficult, complex task. Realistically, this may be more of an unattainable goal - like chasing a rainbow. You can come close to the source of the image - the mist in the air and the sunlight that refracts to form the brilliant colors - but you can never actually reach the rainbow."

The Thumbtack

To make effective decisions, we must become like The Thumbtack - broad & human, AND sharp & focused. The broad top represents Chapter 7 (Discernment) in Maxwell, while the sharp point represents Chapter 8 (Focus) in Maxwell. We must be broad in order to interact with a wide variety of people, and thereby to see much more than we could otherwise and get things done effectively. We must be sharp in order to know many facts, numbers and details so that we can get things done efficiently. Memorization is a power.

Forward and Backward Vertical Integration

Vertical integration: illustrated by the value chain diagram's 6 ways that we can create value for potential customers and thus earn money from them. P: procuring (getting stuff no one else has) T: transforming (like assembling a car, or refining oil) H: holding (keeping items in inventory) P: promoting (marketing, advertising, selling) D: distributing (customers pay more for convenience) S: servicing Forward vertical integration is toward the customer Backward vertical integration is toward the raw materials

Steve Jobs Video #1: 1980

We see in real life Jobs' examples of all the following nine leadership principles: 1. A desire to serve others: He just wanted to help friends build computers. That's how it all started. 2. Faith to trust without seeing: "Did you know what this would become?" I had no idea what people would do with it all. But I had some feeling that we are on to something. 3. Genuine excitement & enthusiasm: They got financing for the parts to build 100 computers after 50 were ordered only on the basis of our enthusiasm. 4. A sense of wonder and awe: VisiCalc is incredible, remarkable! Look at what these kids are doing with our machines! 5. Curiosity: This industry did not even exist 3-4 years ago. What intrigues and fascinates you? Pursue it! 6. Solving people's problems: Just like the bicycle boosts the efficiency of locomotion, man as a toolmaker is meant to build "tools" to amplify human ability in all our endeavors. 7. A philosophical base centered on one principle: Their real contribution is to allow people to use computers without having to know how to program them, and to make computing a different, personal one-on-one experience with your computer. 8. One-on-one interaction: He loved being right with the school kids, and Apple had to be in retail so that it could be interactive with individuals (just like the mantra of the authentic leader) 9. "Why go beyond?": When people say, "We're just fine. We are good enough, fast enough," you move on to solve new problems and remove even more barriers. We must be continuously striving to change, grow, develop, serve even better than we are now.

What did Mr. B, a manufacturing CEO, say about programmed decision-making? (Strategic Planning)

When making strategic decisions, it is the job of the strategic manager to think logically, but to think in a different way. (Think Maxwell 21 regarding discernment). This is how companies gain competitive advantage. Do not get set in your ways. Just because a strategy worked in one situation does not mean that strategy will work in another." (Think of Lesley Fox and Wal-Mart failing through programmed decision making).

What did Mr. S, a healthcare CEO, say about beginning your career? (Work Ethic)

When you begin your career, the first thing you must do is prove that you are willing to work hard. Your co-workers, boss, and clients will all respect you and you will be able to earn their trust if you work hard.

What did Mr. L, a healthcare CEO, say about hard work? (Work Ethic)

Work hard and be diligent. Many times luck plays a large role in management, but I have never seen anyone who does not work hard run into a great deal of luck. I believe that you create luck for yourself by working hard and putting yourself in a position to be lucky. There is no substitute for hard work. **Note: professional golfer Gary Player said, "The more I practice, the luckier I get." AND CONSIDER that when many people say, "Don't work harder, work smarter," the only way to work smarter is to first work harder.

What did Mr. T, a consumer products CEO, say about job satisfaction? (Work Ethic)

Work hard. There's nothing more gratifying than reaping the rewards that most often come as a result of hard work. That's job satisfaction... So if someone says, "Do what you love, and you'll never have to work a day in your life," remember that work is very beneficial for us. It gives us strength, purpose, meaning, learning, and a way to add value to the world.

What did Mr. R, an entertainment & media CEO, say about numbers? (Decision-Making)

You've got to know your numbers, no getting around that. You've got to know them better than your boss does. Numbers are clear and unquestionable items of authority. If you are an expert with them, you can become unquestionable. It is an invaluable skill to gain the respect and credibility of your superiors. **Memorization is power**

Groupthink: How to Break Through it

1. Increase diversity of the group (both demographic and cognitive), and 2. Devil's advocacy: - one person is appointed as the devil's advocate. their job is to... point out problems with the selection of options, defend unpopular or opposing options, and critique the process of choosing solutions. In the movie Twelve Angry Men, Henry Fonda played an effective devil's advocate.

Maxwell Ch. 21 (vision)

An early CEO of Coca-Cola had grand visions for the company: Robert Woodruff "wanted Coca-Cola to be available to every American serviceman around the world for five cents, no matter what it cost the company." Later, he "wanted every person in the world to have tasted Coca-Cola." Today, Coke is the most famous brand in the world, more than McDonald's, Apple, or any other. Know the story of Walt Disney: The cartoonist's disappointment inspired him with a grand vision. His motto was, "No chipped paint, all the horses jump." The fact that Walt Disney's disappointment inspired him with a grand vision is a REAL LIFE EXAMPLE of what we learned earlier about successful entrepreneurs having a negative affect - they see what is wrong and want to make it better. Vision is everything for a leader... Because vision leads the leader. Show me a leader without vision, and I'll show you someone who is traveling in circles. You can't buy, beg, or borrow vision. It has to come from the inside. Just like an internal locus of control. And if it (your vision) has real value, it does more than just include others; it adds value to them. If you have vision that doesn't serve others, it's probably too small. One of the most valuable benefits of vision is that it acts like a magnet - attracting, challenging, and uniting people. Two "voices" help us see our vision: 1. The inner voice is what out to be, what stirs your heart. 2. The unhappy voice helps us find our vision... "discontent with the status quo is a great catalyst for vision." Just like with Walt Disney. When you find your vision, do two things to make it real: 1. Write it down. 2. Talk to several key people - your personal board of directors.

Centralized vs. De-centralized Decision Making

Centralized decision making: when the boss makes decisions; associated with a formal structure. A formal organizational structure is more efficient than a flexible structure. An example was the Disney CEO, Michael Eisney, who wanted to make decisions about the furnishings and decor on Disney cruise ships. De-centralized decision making: when workers make decisions; associated with a flexible structure. A flexible organizational structure is more effective than a formal structure.

What did Mr. C, a financial services CEO, say about fear? (Mistakes & Failure)

Eliminate fear. Most uncertainty that any business leader faces is internal and illusionary, because we are afraid of failure. The biggest problem is us. Fear is a terrible motivator because it compels action to reduce the fear rather than actions that are truly best.

What did Mr. M, a utilities CEO, say about tough decisions? (Decision-Making)

Every day you are faced with tough and difficult decisions that will have high effect on the company. The answer isn't always right there in front of you in a textbook. Most of the time you have to go with your gut instinct to make a decision, and that decision may not always be right.

Related and Unrelated Diversification

Related diversification: producing and selling products that are similar to each other. Procter & Gamble is a good example of this. Unrelated diversification: producing and selling products that are not at all similar to each other. Berkshire Hathaway is a good example of this. The point is to reduce the variability of returns by spreading out risks.