Company Boards: Key Findings

Purpose of the board: "To steer the company in the right direction". A board has focus on making sure that the company is making the right strategy and more importantly it is obligatory for the board to ensure that the day to day management is the right management to have. 

Two main things: 

1. Have the right top management

2. Ensure that the capital of the company is secure

Usually the trick part is how to make a good board. There are no scientific performance evaluation criteria, but usually there is a good understanding if the management is good and if they are listening. So its almost like  putting up a good team together. 

Annual cycle: 5-7 meetings per year. 

If you are an international company, you should have an international board. Of course having the knowledge of the company is more important than the nationality. Particularly only national companies do not really need an international experience. 

Employee elected members usually help the board when the company is in trouble. In this situation, these people know what is wrong and that is good input. However, when there are good times then there is not so much value add to the board work to have employee elected presentation. 

In most cases the motivation for the board is to maintain their own reputation. 

Who steps into the board room: Someone who have had a real bottom line experience as a bottom line manager, and then has done something to be higher than the middle managers. Then is when you enter the board room. 

Sometimes you need to be at the right place at the right time to reach the right level. 

Ref: Agnete Raaschou

The fate of parasitic businesses

Recently Google announced that they are binning their google reader. As the news went out, the world went into a fury. B2B customers who were practically running their businesses based on Google reader estimate millions in loses. B2C customers are more worried about the millions of news feeds that they had painstakingly saved. 

http://www.economist.com/blogs/babbage/2013/03/end-google-reader

This act of Google is like a reaffirmation to people on how important originality of thought is. Basing businesses on Google, Facebook or any other company is not entirely wrong, because this can simply be viewed as a Supply Chain where one business caters to the needs of the second. However what is important to note here is that in a typical supplier-buyer relationship, there are contractual agreements to safeguard the interests of both parties. However lately, within the new web-world, such contracts have taken a back seat. Clearly there is no incentive for Google or for Facebook or others to continue providing any of their service, and they are likely to shed off their dying service the moment it stops making money for them, leaving other parasitic businesses gasping for breath. 

More importantly what worried me about this behavior from Google was their indifference to their own customers. This is little less known behavior, because even though there are no contracts between customers and businesses, businesses usually pay a lot of attention to fulfilling their customer's requirements. Having said this, it seems that google well knows that its customers are linked to it via multitudes of product propositions, and so binning one will not create a major loss for the giant. It is also an amazing realisation that humans adapt very fast, and so it is quite likely that people will find new ways to get to their favorite reads and will stay with Google. 

The worst hit, though, are the parasitic businesses, who have not just lost their business engine, but also have lost their customers. 

Trust is all that matters

When two people talk for the first time in a workplace, or otherwise, the relationship has just started to peep its head out from the nest and look for longer flights in the future. Flights that will be coupled with high winds (and may be storms), with strength, with will power, with pain and with trust. 

Sometimes a peculiar characteristic emerges from such relations. Situation 1: If in such a relation, I see person 1 always dominating over person 2, what strikes me is - Is person 2 stupid? Is there something like always? Is there something that is always not making sense when person 2 says it? Why is person 1 always saying the right things and dominates? 

As complicated as it is, studies of people's behavior is complicated. In more than often cases, person 2 is a better leader as he is not leading from his/her ego point. He/She lets the person 1 to ride the high wave on purpose. The danger of doing and accepting this behaviour in long run, however, is that in such cases, one: many good ideas are never brought forward or smashed, two: person 2 might as well lose confidence. And this is the point where the trust starts to deplete. 

Its interesting how all the studies teach managers that trust is essentially the most vital element of any relationship in the workplace, yet people revert to their ways of chiding each other, and operating from their egos to run such relationships. 

Business Basics

"I want to ... express the principles which we in our company have endeavored to live up to.... Here is how it·sums up: We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been." - MERCK

An accident prone spouse is not so bad ;D

In 1921, Earle Dickson was working for J&J and happily married to wife Josephine. She normally had lots of cuts and burns from housekeeping. Dickson modified the large surgical dressings then available from J&J, fixing the small pieces of gauge that he used to cut from the dressing with adhesive tapes to whichever part of his accident-prone spouse has recently injured. Tired of creating these on ad-hoc basis, he started to make them in quantity, covering the adhesive-strip with crinoline fabric so that the adhesive tapes stayed fresh.

James Johnson, the company’s president once saw him wear one of these home-made bandages on his own finger, and was so impressed by the product simplicity and convenience that mass production of Band-Aids soon followed.

Ref: 

"DEVELOPING NEW BUSINESS IDEAS"

-By Andrew and Mary Braff (2005)

Leadership and Team Simulation: Everest

This morning when I had set out for the Organizational Behavior and Decision Making class, I did not quite know how fulfilling my day would be.

Till yesterday night, all I knew was that we will play an online game called ‘Everest’ (made available by Harvard Business School). I also knew that I am playing the role of a team leader for a group of 5 people. So late in the night I was sitting and listening through the various videos and preparation material available on Harvard’s website. I had an idea about what this game is trying to bring forth to us, so I did pay attention to the key aspects, leadership style and technical know-how for the game in the night (KNOW THE RULES). One of my key goals was to avoid group conflict.

As part of the game, we had decided to start at Base Camp, and the game simulation was not too far from the real time everest climbing. The team would gather at Base Camp with food and supplies and ascent to Camp 5 in 5 days. We had an extra 1 day as buffer.

A view of Everest southeast ridge base camp. The Khumbu Icefall can be seen in the left. In the center are the remnants of a helicopter that crashed in 2003.

Ref: http://en.wikipedia.org/wiki/File:Everest_base_camp.jpg

The team consisted of 4 more people – a marathoner, a photographer, a photographer and a physician. Each of the team members had their personal goals and also team goals (common). It was up to the teams and largely to the team leader to ensure that the goals are met  in the best possible way.

This morning, I reached the class and by 9:30 our group (G1) had collected around a table with their systems ready. It was interesting from here on how the team dynamics evolved.

Base Camp 1: The team openly discussed their common goals followed by their team goals. There was an initial conflict within the team about whether they should focus on accomplishing team goals or personal goals. However we decided early on that we prioritize our common goal (Avoid Rescue) and made an additional goal for our team G1 – Stay together and get as many people to the top as possible.

Observations:

• Being honest in a team is a big virtue. This helps understand that all goals cannot be achieved 100% so a trade off is important.
• With trust in place, it is important to agree on a clear goal and strategy early in time.
• Knowing the rules of the game and sharing knowledge is crucial to ensuring a Win-Win situation.

Base Camp 2: Reaching to Base Camp 2 was easy. At this point, we made a quick team-check and checked on heath, weather prediction, frost-bite dangers, supplies, speed and food. We realized that our environmentalist was weak at Camp 2. When asked about what help she needs, she could not analyze (based on information available) about what help she needs. So we decided to move on.

• Working with information that you have is important. Make the best out of what you have.
• Regular performance check is important characteristics of good leadership.
• Communication is the key. As a leader, it is important to be a good listener and a good facilitator of information.
• Trust and Honesty is the key.

Base Camp 3: The moment I proceeded to Camp 3, it was pleasantly surprising that all the team members were worried if the environmentalist is doing fine. The team was FORMED already.  This was very satisfying feeling.

We found that actually the environmentalist was critical. She had asthma and she couldn’t move further. She still didn’t know what she can do to improve her health. At this stage, I was about to send our environmentalist back, when the photographer came with an invaluable piece of information – “If the physician gives inhaler to the environmentalist, she will be ok”. BINGO!!

We now realized what the game was doing to us. It gave us different information. All of a sudden the online simulation became a common risk to us and we all paid extra attention to the information we had, ensuring that the information is correctly communicated.

However, the challenge was not gone even after the inhaler. The environmentalist was still critical. All the other team was in good health, and some team members though one option could be to split up. However, we looked back our goals and decided to stay one day with the environmentalist at Camp 3.

• Working with information that you have is important. Make the best out of what you have.
• It is important to revisit your team goals and take a good strategic decision.
• The key to keep going in tough conditions is to keep the team motivation high.
• Group cohesiveness is a great motivation for the group to succeed.
• In crisis situations, team members need to have the best possible levels of psychological safety feeling.

Base Camp 3 (Day 2): The next day the environmentalist’s health improved, however the photographer and the leader’s health became critical. I knew that I had 15 years of mountaineering experience so I could survive. I decided to move on. When I asked about what the photographer feels, he echoed my thoughts. An important challenge here was to decide how much oxygen canisters everyone gets. So after some calculations, we arrived at the distribution. With the canisters and some extra load on our backs, we proceeded to Camp 4.

• Regular performance checks are important to keep the teams going
• Analyzing information is important to avoid failure
• Knowledge sharing is the key.
• Leader needs to show strength to keep the teams motivated.

Base Camp 4: Surprisingly at Base Camp 4 we were all in good shape. Some of us were weak but not critical. This immediately had a huge impact on the team morale. We again made a check of the weather (ensured we had at least a 24 hour window of good weather), checked on health and decided to move to Camp 5. Wow, we are close  .

• Regular performance check is important characteristics of good leadership.
• Good strategy made early on in the teams increase team’s performance potential immensely.

Base Camp 5: We all successfully reached the SUMMIT !!
(Overall Team Goals Achieved: 94%
Leadership Goals Achieved: 100%)

• It was amazing to see how this  online simulation could impact teams and people.
• At the summit, when actually we were really feeling we had reached the top, we clapped and laughed for almost 2 min.

Final Take: Understanding Team Dynamics, Accepting changes as they come, Analyzing available information, Predictive Decision Making and Effective Communication are the magic rules behind successful teams.