12/16/09: Midweek Look at the Independent Business Blogs

 
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Independent business blogs are blogs that aren't supported by an organization like a magazine, newspaper, company, or business school. Those people provide lots of great content, but they don't need any additional exposure. In this post, every week, I bring you posts of quality from excellent bloggers that don't get as much publicity.

This week, I'm pointing you to posts on who's responsible, management by committee, the Hawthorne Effect, firing people, and courage.

From the Curious Cat: The CEO is Only One Person
"The CEO is important but they are only one person. Rarely do they determine the success of a company."

Wally's Comment: This post is mostly pointers to good articles about the impact of a CEO on performance. But it also includes this comment that far too many people forget far too often: "The management system is far more important than one person." I blogged about it this way: "Put your trust in systems, not in genius." The fact is that great organizations seem to be places where there is ongoing improvement on a basic strategy or system, not where there's a constant hunt for the next best thing.

From the HR Capitalist: Are Committees in Your Company Ever a Good Idea?
"Committees. Are they ever a good idea in your company? Sounds like a good excuse to make a decision to me, but hey, I'm just a type A, for-profit capitalist trying to make a dollar out of 15 cents.  People much smarter than me think they're a good idea, and I'm not talking about the non-profit down the street.  Would it surprise you if I told you that Cisco has more than 60 committees to help run the tech giant?"

Wally's Comment: The opposite of managing by system is probably managing by committee. Cisco has gotten a lot of press for its "new" management by committee approach. Scott Anthony, for example, has written about how it might affect innovation. In this post, Kris Dunn looks at the "system" and wonders if it isn't a thinly veiled power play.

From All Things Workplace: Just Pay Attention To Me
"While the increased lighting no doubt made things brighter and healthier, it was the increase in morale that most impacted improvement in productivity. This became known as the Hawthorne Effect. Most people schooled in management & organization development are well aware of the studies.  However, I'm finding more and more business folks who haven't been exposed to them; I thought it might be a good idea to revisit what is the beginning of the "human relations" movement in management."

Wally's Comment: People, being people, want to be noticed. They want to be appreciated. In short, they want to be treated like people. That's a few of many lessons from the Hawthorne experiments.

From HR Bartender: Terminations
"There are a lot of people who cringe at the thought of terminating someone.  And when I say terminating – I mean firing.  Not a layoff because, in most cases, employees don’t have control over a layoff decision.  But my philosophy is employees play an active role in the decision to get themselves fired."

Wally's Comment: Termination is and should be tough. If you're the boss, you need to separate the people who need training and coaching from those who should be fired for the good of all. You need to give them the opportunity to mend their ways. And you need to make the case for firing if that's what you must do with solid documentation. Sharlyn Lauby knows all that and she points out, quite sensibly, that you aren't firing those people, they're firing themselves with the choices they make.

From Jason Seiden at Work: Practice Courage this Holiday Season
"I had a real life fail here land at my feet tonight that I feel compelled to share. The names are being withheld because everyone involved reads my blog."

Wally's Comment: This post is worth reading and not just for the holidays. Jason Seiden makes the case that simply wringing your hands about bad behavior is a cop-out. You need to confront it and that takes courage.

 

Wally's Working Supervisor's Support Kit is a collection of information and tools to help working supervisors do a better job. It's based on what Wally's learned in over twenty years of supervisory skills training. Click here to check it out.

 

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  • 12/16/2009 10:30 AM Sharlyn Lauby wrote:
    Thank you Wally for including HR Bartender on the list.
    Reply to this
  • 12/16/2009 1:29 PM Michael Leiter wrote:
    Re the CEO as one person.
    It could be that a first-rate CEO is a necessary condition for success, but not a sufficient condition.
    Can companies achieve greatness with an indifferent CEO?

    Michael
    www.workengagement.com
    Reply to this
    1. 12/16/2009 1:57 PM Wally Bock wrote:

      Good question, Michael. I think it's important to realize that companies outlive CEOs. For me that means you can't consider the CEO and company in a single era in isolation. I think the greatest companies also manage to do a good job of developing the next generation of leaders and of assuring that the key systems of the company make it possible to succeed without a superstar CEO in any one era.

       

      Consider that at GE, Welch is as much a product of the system as he is an influence on it for the future. But there are times and situations where a CEO can have a big impact. On the positive side, it's hard to imagine the Southwest Airlines would have become what it is without Herb Kelleher. And on the negative there's the example of the ruination of Delta, once the top airline for business travel, at the hands of Rob Allen or the impact on Home Depot of Bob Nardelli.


      Reply to this
      1. 12/16/2009 8:26 PM Aaron Windeler wrote:
        Research on this subject has found that the CEO accounts for about 10% of the variance of the company's performance (variance is a measure of the average distance between each of a set of data points and their mean value [thanks google] - so in this case CEOs account for 10% of when companies do better or worse than the average). This paper has a good review of the studies done in this area, and conducts a study where the finding is a bit higher than 10% (you may have to go to your college library to actually read it).

        This is fairly large for one person, but not that large compared to how the economy as a whole, or that particular industry is doing.

        So, yes a company can be great w/o a great CEO, but it certainly helps.
        Reply to this
        1. 12/17/2009 8:52 AM Wally Bock wrote:

          Thanks for that Aaron. I disagree with what you said, based on the way it's phrased. You said that studies show that "the CEO accounts for about 10% of the variance of the company's performance."

           

          I don't think that's what they say. The studies you cite describe the impact for the mythical "average company." They describe a reasonable benchmark, but they don't tell us a thing about the potential impact of any given CEO on any specific company and competitive situation.

           

          What a board selection committee is looking for is the hire/promotion that will have a significant and positive impact. In other words, they want Herb Kelleher or Bob Crandall, not the average airline CEO and certainly not Rob Allen. All three men had a greater than ten percent impact on the companies they led through the decisions they made.

           

          From another perspective, consider GE in the period from 1980 to 2000. Would the company have performed as well if John Burlingame or Ed Hood had been selected as chairman instead of Jack Welch? Is it likely that they would have made the same decisions or decisions with an equally powerful impact?

           

          Or consider the history of Toyota. The company was founded by Sakichi Toyoda in the early Twentieth Century as Toyoda Spinning and Weaving Company. In 1929, he sold the production and sales rights to his looms to a British company, Platt Brothers. He took the money from the sale and gave it to his son, Kiichiro to expand the company and to develop new technology for automobiles.

           

          That decision changed the entire course of the company. Later decisions established the production system that has made Toyota successful.


          Reply to this
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