The Strategic View

The power of reflection

Eugeny Brychkov — Thu, 27 Mar 2008 16:14:00 GMT

In considering any idea it is important that there’re at least 2 parties involved, one party being a proponent, and another being an opponent. It is very important those individuals or groups to be from different backgrounds, and be subject matter experts in their fields. If one person is evaluating idea, s/he has to play roles of proponent and opponent simultaneously, and I assume that success of idea implementation in this case will be not more than 70%. If proponent and opponent are different individuals with different background as proposed above, time will be spent on making consensus decision and agree on the implementation, but in this case I would estimate success as 95%. However, if we will take more individuals in the loop, it is obvious that at some point probability of success will start decreasing. It can be proven by considering involved parties as stakeholders and by need to respond to their reflections and converge on their opinions.

If we will look at the business, we will see many pairs of individuals who were successful in creating businesses and implementing strategic and operational initiatives. Hewlett and Packard of HP, Knight and Bowerman of Nike, you name them. Look at “singles” – like Michael Dell or Bill Gates – although they are “marketed” alone, their success was dependent on their associates, most of the time there probably was favorite one with complementary character (for example, according to Myer-Briggs classification).

My thoughts are mostly based on assumptions, however what is a value of all said above? The value is in understanding that if you as business person have difficulty and frustration doing something, you need complementer. Are you good in inventing new stuff and inspiring people but feel pain filling forms? Are you excellent in analyzing numbers in financial reports, but not sure how to apply outcomes of analysis? Do you easily see market trends, but afraid of thinking about marketing strategy implementation?

Find a friend, and trustworthy person to talk to. The process is very simple then

You have idea, which appears from your reflection of your experience and environment
You tell it to other individual, who reflects your idea and passes it through his/her own experience and perception of environment
That person tells you his/her idea about your idea. You re-reflect.
Next step is your decision on:

(adjust yourself) you adjust your idea (simple learning) or change your assumptions (double learning)
(persuade) you try to change other individual’s perception of idea through changing his/her perception of environment (e.g. giving more information elaborating on idea) or his/her assumptions

This loop continues until both will have similar representation of idea as it would be implemented. Now both can come to wider audience, present end-to-end solution, and request for proposals or alterations. Trust me – in this case there will be significantly less of them than in the case when reflection and learning would be done by single person.

Last question here: what should be the ratio between “adjusting yourself” and “persuasion” in the loop? Too much adjustment will cause idea drift and possibly diminish its prospective value; too much persuasion will mean insufficient challenge to elaborate the idea. Intuition will help you. Recall Hercules Poirot and Captain Hastings: latter sometimes was expressing some thoughts and he was unable to evaluate their impact onto the investigation, but Poirot, being subject matter expert in the area, reflected and professionally applied these thoughts. Thus here is another requirement: to be able to capitalize on intuition, you need ability to leverage knowledge and experience. However they are not enough. If Captain Hastings would not trust Poirot, he would never express his thoughts. Last necessary ingredient is mutual trust. Actually, Hastings was having his own set of assumptions and perceptions of environment, and his reflections gave Poirot opportunity to see what Poirot did not see through his own set.

We have heard about personalities: Poirot, Gates, Iacocca – those who are public brands. But there are others, who were and are successfully complementing their leadership and supporting idea generation and implementation: David Jones (visionary) and Tony Harman (operational) from DMA Design, Lee Iacocca (change agent at Chrysler) and his supportive wife (adviser and “home front” agent).

Motivation in the Environment of Teamwork

Eugeny Brychkov — Mon, 10 Dec 2007 18:03:00 GMT

Management used to call their people human resources (HR), but some individuals may find this humiliating. Employees are people, those actively participate in the social life of organization and wider environment, and thinking about them as materials will demotivate them. Can we say «customer resources» or «consumer resources» thinking of customers as bags of money? Some call employees a «pool of talent». That’s much better, however why pool? It may negatively highlight lack of structural alignment of «talent» within organization unconsciously scaring potential employees, investors and customers away. In addition, it is hard to believe that organization is having talents only (however it may reveal the way how organization defines the term talent).

Is it good to be too official – telling your people «dear human resource» or «dear employee» on the letter of congratulation or recognition? Do people feel pleased to be like small screws in the big machine and will read the text following «dear employee»?

This is not about how do we label our people, this is more about how do we treat them. We can treat them in humiliating and condescending way, but can think of and treat them in friendly and respectful way. Let HR manager tell senior manager about human resources as a pool of talented individuals, but god forbids line manager referring his team as the pool or resource.

People are got employed to generate value for everyone, including themselves, and these values do not necessarily expressed in monetary terms. And as more a colleague values non-monetary rewards he or she gets through the work, the more he or she is able to contribute to team-working, relationship building and knowledge transfer. And this phenomenon can be seen everywhere – in sales environment, where people are used to be of macho culture, and in customer support, where they used to be of process culture (as per classification of Deal and Kennedy, 1982).

Employee who works only for bonus may be seen as adding less value to the organization’s long-term capabilities and competency building than employee who does also enjoy the work. Working for valuable rewards (like bonus) brings an element of competition: this is very good for the business until this competition crosses implicit threshold when people stop cooperating, stop sharing their knowledge and experience considering them as «personal competitive advantage» in relation to colleagues. For sales people this threshold can be higher than for support people – simply because by default sales culture assumes working in competitive environment (with other sales people or sales people from other organizations).

These considerations give us an idea that organizations should be careful designing rewarding system within low-competitive environments like customer support, when reward may not be calculated as a percentage of revenue generated. Customer support people may live different values, or at least have different prioritization, and be sensitive to perceived truth and fairness. Variable pay in this environment could be a good stick to control employee performance and satisfaction, however managers should be aware about cultural implications not crossing this «co-operation to competition» threshold – absolute one as well as «relative» (colleague versus colleague).

All this is very interesting, but what’s about practice? Fixed bonuses are not a good way because they do not motivate in long-run, but rather considered as «hygienic factor» (Herzberg et al., 1959; see also presentation by Vikas Singh); variable bonuses or pay are also not a good because you may upset more people in the team than motivate one or two, thus decrease cumulative value of motivation in the team.

In the process cultures you may distinguish a person only if remaining team members agree and support the decision. This can be achieved by different means – by your selection and negotiation with the team, or by letting team select its champions. The main idea of this process is ensuring that team’s beliefs are «we have champions» but at the same time «this is our joint success».

What I am talking about here are two types of motivation, extrinsic - caused by external drivers (like bonus), and intrinsic - caused by internal drivers of the individual. Although we may be limited in applicatioin of extrinsic rewards in the team environment (as well as limited by budgets available), we are free to manage intrinsic states of individuals and team in whole.

Which tools and techniques are available for us to do this uneasy task? One of well-known is Hackman and Oldham's job design (1980), which can be very well related to our classification per the Deal and Kennedy's model.

In the environment of process culture, feedback rate is one of major drivers of individual learning. To boost learning, manager and peers can create conditions to raise rate of feedback, by gathering for informal meetings, getting coach or mentor. There's also another dimension in H&O's model matching D&K's - perceived risk / task significance. When employee understands environment s/he and the team is operating in, s/he can assess the risk and significance of the task being carried out at the individual, team, and even business unit level. These sessions on the organizational strategy and business assessments can also be carried out by the manager at the official regular individual performance appraisal events, but also at the inoffical team meetings and events.

Another highly important value or aspect of work life - autonomy and responsibility – task-related and social. Manager can focus on development of subordinates' skills in adjacent business areas, addressing skill variety job dimension. If team had selected its champion then manager can increase his/her responsibilities (in management science process is called job enlargement) and/or delegate some extent of the authority (job enrichment). Increasing social responsibilities may be in the way of involving champion into peer coaching process (social enlargement), or giving him or her access to «higher powers» setting up mentoring link between senior manager and a champion (social enrichment).

Some managers may consider these proposals as attempts to infringe their powers... but if they think of themselves as a good leaders their subordinates will not even think about intriguing against. Remember - understanding, knowing and positioning yourself is critical in the team environment.

There’s one very important constraint. To play with team and individual motivation you, as a manager, should understand and know yourself, your subordinates, pattern of relationships in the team well. Peer power and influence in the team should be balanced to ensure that there’re no exclusive accumulators, and there’re no withdrawers. You also should ensure that your powers and influential positioning is clearly defined for the team from the beginning, you start your operation as manager with trust and respect, and seen as a friend and opportunity creator rather than limiter and inspector.

Post of Nov 20, 2007

The Strategy – How?

Eugeny Brychkov — Tue, 13 Nov 2007 14:04:00 GMT

Organizational strategy is the subject which was discussed for a long time already and is currently a hot subject targeted by many famous managerial scientists and managers themselves. There’re different schools of definition of strategy, of the ways of its creation and operation. Let me please focus on one of famous articles of Michael E. Porter «What is Strategy?» from Harvard Business Review of November-December 1996’s release. You can buy it, or I found it here available for reading.

I would like to graphically present how I see the theory Porter is describing.

Figure 1. The components of The Strategy

I have composed all the matters Michael Porter is talking about on this slide. Excellent, however question «how do I start?» remains open. And how you start and how you come to this «integrated cloud» is another source of your competitive advantage. Porter is talking of parts and required components of the strategy, thus we assume all them should be considered.

Way 1: Using pyramid of purposes, or market-based approach. You state the (core) mission, fixing starting point in the dimensions of products or services you will be producing, of needs your products will be serving and the way (channels) you will be providing these products and services to the users. Then you go to define the cloud – the vision, how your organizations should be ideally shaped to be profitable around the mission defined. Then you go to rational planning to see which tasks or functions are primary ones, which are supporting ones (using value chain analysis), and create a web. As web starts functioning, you focus on excelling performance and increasing of value produced by primary and secondary activities.

What is an advantage? Community understanding of what it can expect from the organization. Product or service variety is predefined, customer segments are predefined and needs to satisfy of these segmented customers are predefined. Quality is on acceptable level.

What is a disadvantage? If organization is to go for differentiation – how to get new direction consistent with existing mission and vision? How to communicate to customers and employees on what is expected from them now and what is going to be produced and for whom?

What can be a problem here? The order used. Mission and Vision are fundamental at “low-level” and everything is a function of them. And it is possible that it will be hard to change them without revision of all “higher-level” components, without re-structuring of the web, re-evaluating points of value-adding (distinctive features).

Example: At the beginning HP (Hewlett-Packard Co) was producing oscilloscopes; then calculators; then printers and computers. HP states it is an IT company, because all this stuff can form IT infrastructure. Then HP is making digital cameras, and even TVs. Who will vote that TVs are IT equipment? This is better called an element of communication technology. But at present time we see that these technologies converge. Can we consider that HP is setting new meaning for «Information Technology» – as positive process, or HP is doing wrongly differentiating from innate technologies? The answer is that organization should keep pace of the development of sociological mindset, or set new mindsets and standards. HP wants to be the leader in IT, then why it starts making televisions? The exercise of revision of all the parts of The Strategy is essential, but communication of changes is even more critical. HP should overtly state that it is to re-define the term of «Information Technology»!

Way 2: Starting with distinctive features, or resource-based approach. If you know your organizational strengths and weaknesses, you can build value chain in reversionary way. Create a web adding supporting activities, fit activities to each other and define links of communication between them. Then see which clouds are flying around the system (vision), and identify where this cloud may possibly move in long-term (mission). It is worth noting that the system may fit in multiple clouds, and as you may not be able to operate in all the clouds, this situation requires trade-off decision of choosing which cloud you target (at least initially).

What is advantage? Organization can achieve superior quality in their area of expertise, or within the domain of its distinctive features. All will benefit: organization itself and its customers.

What is disadvantage? Focusing on primary activities of value chain organization may strategically choose to outsource supporting functions, and become a kind of «virtual organization». In this case organization will require strong partner management and collaboration skills not to lose effectiveness in performing supporting functions of value chain.

What is a problem here? Cloud drift. It may easily appear that cloud will drift away, and there will be no need in this superior quality any more. And whole value chain will be useless...

Example: Yamaha Musical Instruments (Nippon Gakki Co). It is an expert in music, and makes all the stuff starting from non-electric string instruments to the electronic audio micro-chips and musical processors of superior quality. They are innate experts in music for many-many years, and this is their competitive advantage. They, as all other Japanese corporations, work in the environment of close relationships and cooperation with «peer» corporations, belonging to one conglomerate organization. It is hard to imagine, but think of the situation if people will stop loving music... What Yamaha Musical Instruments will be doing then?

Way 3: Strategy change or extension. You may argue that Way 2 I described here is not viable and hard to apply to the practice. However this way can be applied to the strategy changes and extensions. Before opting to strategic change, check current fit between activities and identify where strategic competitive advantages lie. Then do the same, using resource-based approach, for new layout. How can we ensure that we do not lose our current advantages by compromising our focus and abandoning them? How can we leverage them for new extended area? How well new extended area fits into current space, and how new activities and competencies from this area can improve current competitive advantages?

I am sure you will see another ways how to create a strategy and then find a way how to improve operational effectiveness of «The Web».

Post of Nov 2, 2007

Talented men leave. Dead wood doesn't

Eugeny Brychkov — Thu, 08 Nov 2007 18:25:00 GMT

I came across of this expression when was researching on the talent management over the online sources in the internet. There’re a number of instances (link1, link2) including the article titled «Why employees leave organizations?». Authorship is ascribed to Mr. Azim Prejmi, CEO of Wipro, however it is not proven (I asked Mr. Prejmi to confirm or deny, but he did not respond yet).

In short, article states that most people leave organizations not because of some organizational problems, but because of relationship problems or conflicts with immediate manager (boss). Final statement is the one I used in the title of my post.

The background of such grievous articles is belief that the boss is everything and there’s no way to get rid of him or her. Yes, this is the case in specific cultures, where power distance is high and respect of authority is a way of life, however with penetration of western companies and work life of these cultures makes status quo changing. I would argue that «dead wood» as phenomenon should appear in large bureaucratic structures, where business performance management systems does not work well, thus I believe it is not right to even guess if there’re more such kinds of managers in western or eastern cultures – the nature of their contribution and rules they play are just different, thus, for example, Japanese manager’s performance would be better judged by native Japanese, as the same French manager to be judged by native French. I think «dead woods» should be a temporary phenomenon – as we are moving to global culture of business, standards of business conduct and personal relationships, we should see less and less people of those profiles in the business.

Now – is it what can only be done on the issue raised – talented men to leave, bad bosses to stay? Can we turn this seemingly bad situation to something good? Yes, we can, if we will say «dead wood to leave, talented men don’t». Let me raise some arguments for as well as constraints to this approach.

First – what is good?

Test your organizational political skills: «power is muscle, organizational politics is exercise». «Dead wood» requires radical removal strategy, and the process should be managed at different levels: your peer and down, and at the levels above the boss. Needless to say these strategies complement each other.

Levels above the boss. Your need is to draw on boss’s superior’s power. How – is contingent of the context of organizational structure and culture. It is important to know that different level of management requires different arguments and level of conclusions. For example, for operational manager it might be enough to prove that «dead wood» is a significant obstacle to team working or customer satisfaction, when VP’s attention should be drawn to the financial impact (primarily because his or her bonuses may really depend on the performance of human resources led and managed by «dead wood»)

Levels of peers and down. This is informal way and can be considered as sabotage, call to revolution and insubordination in worst case, may result in immediate termination or even imprisonment. However it does not diminish the value of peer and organizational coalitions in strive to get «dead wood» out (personally or as an organizational management style). This coalition, a kind of «ad hoc trade union», can be used as significant political power when persuading superiors of the boss

Test the organization: this exercise can be considered as learning cycle for organization as well as mobilization and joining human resources and powers together, thus increasing inter-functional collaboration, which may lead to revised pyramid of purposes of organization (mission, vision, goals, measurements, culture, values etc.), discontinuous innovation and increased organizational performance at operational, as well as at strategic level

Second – constraints and items to be aware of:

Corporate culture: is it ethical to jump over boss’s head to gain power and influence? Is it acceptable to build coalitions or use trade-union-approach within the organization? Extremely important to understand written and assumed rules on how organization operates, how people interact and what is acceptable and what is not. If you have a dilemma – look for trustworthy source for advice. For these reasons some companies set up «line of confidence» for employees’ concerns, which is expected to take all statements seriously, investigate and provide advices to all the parties involved. It should not be a punitive body

Is superior of the boss a «dead wood» too? If it is the case, you may try to get higher, or decide to leave because these types of organizations employing such people will kill themselves from the inside, and I guess you may not want to participate in it

Risks of showing political behavior: before doing anything, it is essential to consider, assess and accept possible risks of calling for power and influence. Carefully built (business) case for requesting superior’s support and tailoring it to his/her interests is the key here

Resistance: «Dead wood» is not really dead! It can very skillfully use its powers to resist your political behavior. Let’s now consider which power options are available to the boss and to you (Source: French and Raven):

Personal characteristics: game is aimed on obtaining written evidence appropriate to cast doubt on characteristics, on motives of the individual compromising organizational interests in favor of personal ones. Boss may use charisma, writing and political skills, you should be basing on registered and proven facts, support of your coalition and your good reputation

*	Control of resources: this is where boss is usually have more power, however there could be arguments brought to illustrate problems in business or team-working due to boss withholding resources

Position: the most interesting source of power. We may think this is exclusive to position holder, however each position holder not only have an authority, but also is expected to use it responsibly, and have specific obligations in front of the superior and the business in overall. Best argument brought here could be boss’s misalignment to the corporate values, damage of corporate vision or reputation, compromising long-term in favor of short term, and unethical behavior. At the same time boss can take attempts to prove your insubordination, negativity to the organization and to his/her personality

Social connections: one of most dangerous of all the power sources for both parties – you and the boss; for each individual it may not be clear which power bases are available to another, and this feeling of uncertainty can damage intensity and even nature of political behavior. Bluffing might be attempted, however I would not recommend to use it simply because if discovered it will damage your reputation and you will definitely lose. This power source is the one which should be prepared before engaging into political behavior – and factor of suddenness is the key

Expertise: this is not about your expertise in tasks you perform – it is your expertise in tasks your boss performs and knowledge of your departmental environment, goals and priorities. Using the same or superior (business) language and facts in defying boss’s inquiries and accusations is a strong advantage

Information: second after social connections, it is also a kind of resource, however it is intangible resource. You may be even more powerful than your boss if you equip yourself with indisputable proven facts against boss’s counter-action, knowing about his/her possible actions and reactions so that you perform risk management and contingency planning. This is very powerful arm which quality, quantity and «damaging force» may not be subject to evaluation until it is used

Let’s now consider possible conditions you may find yourself in during and after the political activities (legal notice: this is not about battles between individuals – this is about politically-oriented debates and contest in internal business environment!):

You Win (make it win for boss too – s/he is an individual who also needs an experience!):

*	Boss gives up by resigning

Boss comes for negotiations or satisfying what you were striving for. If boss is not to resign, it is wise for you to take only what you were requesting for and not more. Never try to «finish him» – this is against business ethics and destructive to the organization and employee morale, as well as to your reputation of being a «corporate killer» – none else will hire you any more. Best position is «we won together»

*	You have a sign from trustworthy superiors about winning condition. At this time you should stop, and seek guidance from this individual. Your battle is won, however this person may have own plans...

You Lose (do not wait until complete loss condition – be able to stop in time!):

*	You feel your coalition is behaving unsupportively. This is early sign of political problems, and if not analyzed and addressed in time will predetermine full loss

*	You have a sign from superior that you have lost. To save your face, immediately go to this superior and ask for feedback – and be prepared for honest comments. Tell yourself and the superior that you use them as learning points and not as personal humiliation. Such mindset is subject to respect

In closing this post, I would like to state the following:

If your reputation is crystal clear, and you are sure you «fight» for the right and good for your coalition above and below the boss, you will definitely win

It is essential to perform preparation for the political behavior (like in war – manoeuvre so that the boss will not notice it – and if s/he does not notice this is his/her another political deficiency), and start a contest keeping it running until winning or losing conditions occur. Be prepared for loss, and targeted for the win. Even if you lose, you get skills and experience, and renown. However, nature of this renown matters, thus take care about your reputation afterwards communicating success and repositioning yourself with new set of powers

Post of Oct 25, 2007

The Manager: a split of personality

Eugeny Brychkov — Mon, 05 Nov 2007 19:17:00 GMT

My friend and colleague Dmitry has been to India some time ago to teach people there on his subject he is an expert in. He told me an interesting feature of how work teams are historically and culturally organized there. Indians organize themselves into the teams by their caste identity – what makes us think that all the people in the team have same «version» of national sub-culture. Second feature of Indian team is that it features two centers of power: first center is team manager, and another is team leader. And this is very interesting: manager does hold power of authority, however has a mindset to consult and comply with team leader’s opinion and guidance. Team leader is having power implicitly given by all the team members, and is the one listened to and asked for advice and guidance. Leader is respected and trusted, and uses his judgment and influence with the group and between different groups to resolve operational and strategic issues.

Figure 1. Distributed roles

What is the classical model employed by most of organizations? This is a model where manager, in addition to his/her administrative role, is expected to be a leader and be competent in the business segment – i.e. manager wears 3 hats simultaneously – administrator’s, team leader’s and business expert’s.

Figure 2. Consolidated roles

How many times I saw managers trying to play all these 3 roles simultaneously – and many times unsuccessfully! There’re of course professionals who can do it very efficiently and effectively, however most of the time one of these 3 roles prevail:

	Manager as an administrator Managing budgets, monitoring metrics, performing appraisals and driving corrective actions. Most control methods used are direct supervision, technical and administrative controls. Sources of power are position (given authority) and control of resources. Influence method used is «push». High power distance (manager as superior). Administrator controls employees as one of resources: human;
	Manager as a leader Managing social connections within group and outside of the group, defining «soft» team goals – focusing team attention through vision, managing team members’ roles and building trust. Sources of power are social connections and personal characteristics. Influence method used is «pull». Low power distance (manager as a friend). Leader controls employees’ minds and behaviors;
	Manager as an expert Managing workflow, being focal point for concerns on task contents and processes. Sources of power are expertise and information. Influence method used is «persuasion». Medium power distance (manager as an advisor). Expert controls web weaved from processes and people as hubs.

Here we can see the trend for internal personal conflict in the manager’s mindset – it is required to be superior, friend and advisor at the same time! You may say – ok, it is possible, but I will argue – how to switch between them and how to set subordinates’ expectations during and after switching?

Another important question – which management behavior should be a priority? What we can answer here is «it depends» and contingent on the situation of manager and team operation (crisis/business as usual), organizational and national culture (power distance, uncertainty avoidance, individualism and masculinity), manager’s preferable behavior (usually brought from the childhood), experience, predispositions and bias of manager and team members towards each other.

Now let’s consider consequences of manager playing only one role:

	Administrator Subordinates by themselves are forced to reconcile their interests and goals with those set by manager. If it is not possible, employee considers manager as an obstacle, underperforms or leaves. If possible – manager is considered as a tool to achieve employee’s personal goals. There’s no trust – power bargaining takes place in form of political gaming. What is good: individual is well performing in case of individual’s goals, interests and organizational culture fit. Example of successful application: Sales force;
	Leader Individualism is not valued as team performance. Trust is built; goals and interests are collectively reconciled. Emphasis less on where team goes than on how it is going. Team is subject to groupthink and team member self-deskilling in favor of leader. New initiatives should pass the round of negotiations before team is ready to pursue them. Examples of successful application: Call center;
	Expert Individualism is highly valued, however bounded by the area of functional operation of the team. Knowledge is a merit, and employees who can not learn specific expert skills are underperforming or leave. Relationships within the team are considered as network of connection to pass facts through. Presenting facts in persuasive manner is the major skill. Example of successful application: Financial department.

Now let’s return to the story I started with – that Indian culture assumes that manager-administrator is one person, and manager-leader is another person, and leader is having more weight than administrator. Question: who is a manager-expert?

Despite of these questions, the idea of splitting these 3 roles may look as a feasible one – each «manager» is consistent in his/her behavior, uses specific power sources and influence techniques. So far so good, but how these 3 people will reconcile power balance between them? However 3 people will more probable agree with each other than 20...

Funny thing here is that many respected companies start to diminish and discontinue word «management» and «manager» in favor of «leadership» and «leader». You may have seen messages like «Mr. Big is leading his financial department and is responsible for financial strategy of our company» or «Mrs. Small had been in numerous leadership positions and has an extensive background in finances». In these statements we see references to leadership and expertise, however who is going to administer all this stuff? Who is going to manage scarce human resources in case of crisis or tough situation, using power of authority and resource control?

Post of Oct 19, 2007

Welcome to business, Mr. Hacker

Eugeny Brychkov — Thu, 01 Nov 2007 17:44:00 GMT

Who is Mr. Hacker? Is it Mister, Missis or Miss? How is it to employ a hacker and is it good to be this kind of individual?

Before going to discussion about properties of hacker, let's give definition to the leadership and the process of leadership.

Leaders are people who are expected to be and are seen to be influential on important matters. Leadership means the process of influencing other people in the ways which are more or less acceptable for them.

(B713, Open University)

There is a word «influence» in both definitions. Influence is a process when person or a group affects what other person or group does or/and thinks. Inputs for this process are powers. Powers can be sourced from «inside» of the individual, from the disposition or from formally given properties. All these include information, personal characteristics, control over resources, position, social connections, expertise (French and Raven, 1960).

Let's now return to the original subject. Who is a hacker? Sit down for a minute and try to understand or feel what does this term mean for you. I have done some research on descriptions of it, all are taken off the Internet (see Appendix below). I would like to explicitly note at this point that «hacker» is positive term by default. Negative opponent is called «cracker».

Now can we give cumulative definition to the term Hacker? Let me try to do it:

Hacker is an individual who enjoys exploring capabilities of self and others in order to extend those capabilities and manage toward his/her goals successfully, being motivated intrinsically up to the point of obsession. Hacker uses «trial and error» method and respects fast feedback. Hacker is having implicit code of ethics, and does not engage into activities contradicting this code. Hacker can «wear» white hat being creative and constructive, but can change the hat to black and become destructive, however not illegal.

Table 1. What does «Hackership» mean for businesses?

Power type or source	Definition	Meaning
Social Connections	Exploring capabilities of self and others	Working with stakeholders, including self, developing ways to influence them
Personal characteristics	Extending capabilities of self and others	Analytical skills, mentoring, charismatic leadership
	Toward his/her goals	Having strong vision
	Being motivated intrinsically up to the point of obsession	The most powerful type of motivation which strong leaders possess, creating sense of urgency for change projects
	Does not engage into activities contradicting code of ethics	Impact on integrity, trust and respect
Information and expertise	«Trial and error» method and feedback	Boosted learning cycle and experience
Beliefs	Implicit code of ethics	Personal values, strategy, and perception of effectiveness

Thus in business language, Hacker (starting with capital letter) can be described as:

The individual who is having strong personal vision and criterion for effectiveness, successfully influences others using own charisma, intrinsically driven and uses power derived from analytical skills, experience, mentoring, integrity, trust building and mutual respect. This is an individual who learns things quickly when in obsession.

Are those kinds articulated inherent to Leaders? Isn't it the person you would like to employ with your business to raise its performance? Maybe yes, however, as I have already emphasized, Hackership as well as Leadership, can be positive («white») and negative («black»). Description above just says that those type of people have high «operational gearing», but does not say how it should be used. Like in financial considerations of break even point (BEP), when «operational gearing» is high, you can gain much more if volume increases, however at the same time you lose much more if volume decreases. The same is with Hackership and Leadership - you gain much more if individual is properly oriented and supported, but you will get global disaster in case s/he will have different point of view onto the business.

These are Musts and Do's when employing Hackers as leaders:

	Leader's vision is coincident with organizational vision. Otherwise leader will be heading to the wrong direction, and finally leader's personal vision will prevail
	Leader supports organizational strategy being pursued and definitions of effectiveness match. Otherwise actions of leader will be destructive to the organization and harmful to other employees
	Employer should consistently follow its code of ethics and obey to formal, informal or psychological contracts. Otherwise leader will be highly intrinsically de-motivated and will wear black hat
	Have «manuals» in place: perform active mentoring of leader. Otherwise you may suffer from consequences of «trial and error» approach
	Give attention to the leader at different managerial levels: focus especially on intrinsic motivational factors. Otherwise leader's prioritization may change

What organization should NOT do:

	Decrease field of exploration (scope) without hacker's active commitment. Leads to conflict of interests;
	Deny access to the power and information sources within organisation. Leads to critical performance drop;
	Request to compromise hacker's code of ethics. Actually organization will get opposite effect;
	Force hacker to do what s/he does not want or motivated to do. In best case it will not be done, in worst - force will be physically removed by higher force.

This is important to note here that Hacker is probably the leader practicing task-oriented leadership style - this means that s/he will be successful only in favourable or unfavourable situations (i.e. tasking for success or tasking in environment of crisis). Another item needs more investigation: organisations not only require leadership, but also management - how well Hackers can manage?

Appendix. Hacker can be described as:

	A person who enjoys exploring the details of computers and how to stretch their capabilities. A malicious or inquisitive meddler who tries to discover information by poking around. A person who enjoys learning the details of programming systems and how to stretch their capabilities, as opposed to most users who prefer to learn on the minimum necessary. (Texas State Library)
	The dictionary defines "hacker" as a slang term describing a person who carries out or manages something successful. A hacker is someone who spends many hours with the computer often successfully operating it by trial and error without first referring to the manual. A hacker is often a technical person in the computer field, such as assembly language programmer or systems programmer. Today the term hacker has taken on a negative meaning. ... (Federation of American Scientists)
	The term 'hacker' has been abused by the media to give a negative connotation - of someone who engages in breaking into computers. In fact 'hacker' within the subculture of computing has a positive connotation, meaning someone who is technologically adept with computers, electronics or any other technical specialism. In the computer subculture those who break into computer systems are referred to as 'crackers'. ... (The Free Range Activism Website)
	1) According to The New Hacker's Dictionary a hacker is a clever computer programmer, who does not necessarily engage in illegal activities. 2) In the media, a Hacker refers to a person who illegally break in or attempts to break into a computer system. See Cracker. (FindLaw)
	Slang term for a technically sophisticated computer user who enjoys exploring computer systems and programs, sometimes to the point of obsession. (Incredible Connection)
	A person who delves into software more deeply than an average PC user. Hackers are often seen as «White hats» or «Black hats». White hat hackers help fix badly written software programs and write new programs for the greater good of the computing community. Black hats modify or create software for criminal purposes such as stealing your passwords, your identity, your bank account or simply to slow the Internet down to no one's amusement but themselves. ... (AOA Forums)
	a programmer for whom computing is its own reward; may enjoy the challenge of breaking into other computers but does no harm; «true hackers subscribe to a code of ethics and look down upon crackers». (Princeton University)

Post of Sep 30, 2007

Quality as a Value

Eugeny Brychkov — Sun, 21 Oct 2007 17:36:00 GMT

We all use word “Quality”, but what does it mean? There’re a lot of descriptions we can find on the web, and this fact stresses that it is not a simple term.

Let us guess that the meaning of the word may depend on the context, and on the position and personality of “appraiser”. Statements about “high quality” or “low quality” may mean nothing to you if you do not understand matters being told about. Consumers used to look for and desire “high quality” and suppliers used to base their competitive advantage on the Quality as one of major distinctions of their products, services and corporate culture. But the good question is - do end user, the customers, need that quality being focused on by suppliers (e.g. do ISO certificates automatically mean that output production is of appropriate Quality as perceived by customers)?

If we would look to the theories of Quality and their applications, we will see that they penetrate all the aspects of our lives: from fully applied for technology products to more sophisticated for services and business management. Another theoretical model in wide use is Quality-gaps model (see p. 10). However, words are nothing if they do not work – thus let’s look at how Quality is articulated and implemented at HP.

At its web site, HP states it is “providing products, services and solutions of the highest quality”. Does quality apply to products, services and solutions only, or is it just an apex of iceberg we are told to look at? To understand, let’s look deeper to the history of HP.

“This Old House” story narrates that Bill Hewlett and Dave Packard were identifying name of HP with Quality, articulating it as one of Values the company is built on. Another source is legendary book “The HP Way” (pp. 121-125). It states that quality of products was essential from the beginning simply because HP was producing testing equipment used to test and benchmark another equipment, thus by default HP had to make products of extraordinary quality, otherwise it would not be able to compete and win DOD’s contracts.

Let’s think for a minute – is quality appears by itself in the output products? No – good quality products can only be built in environment when quality is everywhere, in input materials, in design, in production processes, and in people.

There’re 7 HP Shared Values; they cover many aspects of the work and life of HP employees, as well and other individuals and organizations HP having relationships with. All these values are historically the integral part of The HP Way, which was founded and fostered by Bill and Dave and was recognised as the novel way to manage people and enterprise. These Values underpin current organizational competitive advantage.

Let me please make an attempt and draw on the picture below how I see Quality is penetrating the background of each Value.

Figure 1. The HP Compass

I have put HP Quality in the center. This is symbolical that after merger with Compaq Computer HP is having NYSE symbol of “HPQ” – I interpret it as “HP Quality”. Thus what Quality means if valuing what is depicted?

Value	Quality is delivered through…
Passion for Customers	Recognition of business needs, and providing best products and services in terms of reliability and availability
Trust and Respect for Individuals	Building and maintaining trust within community of employees, with partners and customers, as well as other stakeholders, and respecting their interests and needs
Achievement and Contribution	Processes and procedures allowing involvement of individuals and organizations to contribute and achieve joint success
Results through Teamwork	Ability to work in the teams building up and supporting interpersonal relationships with colleagues, subordinates, bosses internally and relatives, friends, customers etc outside the organization
Speed and Agility	Doing things proactively: if there is a problem identified – prioritize and start solving it as early as possible; if there is an opportunity – take it now!
Meaningful Innovation	Improving things around you, inventing and innovating to your benefit and to the benefit of people around you: do not wait for opportunities to come your way – create them!
Uncompromising Integrity	Being the kind personality, and playing the game by lofty standards. Not many individuals and organizations can allow themselves to be honest, and refuse to compromise integrity pursuing easy gains. Respect yourself!

You may have another vision of application of Quality to the life, IT market, and specific organization, and you are welcome to put your thoughts into the comments.

For your further research: many hi-tech companies explicitly emphasize their commitment to quality – internally and externally – Intel, Microsoft, IBM, SAP.

Post of Sep 5, 2007

HP and IBM: mission possible?

Eugeny Brychkov — Thu, 18 Oct 2007 15:42:00 GMT

We all know that these companies are in competition, but is it the case nowadays? Is there an opportunity for “The Japanese Way”, where rivals cooperate?

The results of marketing research on these two companies were a surprise for me. I am new in marketing, and everything I learn is exciting. My colleague Michael, who is a marketing director at one of the well-known multinational companies, has been my guide for where to get information and how to analyze it. He said what I am doing (and actually did) is called “desk research”, when you are sitting at the desk and using the internet and papers, the opposite to the field research.

I have used only publicly available sources, located at corporate websites: Complete IBM 2006 Annual Report and HP’s 2006 annual report.

Let me describe, in short, what I found, and comment on it. Both companies are Hi-Tech companies, and have a long and successful history: HP was founded in 1939 by William Hewlett and David Packard, and IBM was renamed from Computing-Tabulating-Recording Co. in 1924 featuring charismatic leader Thomas J. Watson Jr.

The descriptions of business differ:

HP is a leading global provider of products, technologies, software, solutions and services to individual consumers, small and medium sized businesses (“SMBs”), large enterprises, including the public and education sectors
IBM is a globally integrated innovation company, serving the needs of enterprises and institutions worldwide

HP positions itself as a provider, IBM emphasizes serving the needs of its target customers, and seeks partnership with the clients. From my points of view, these are 2 different approaches: a good guy with all possible good stuff on hand to offer, and the good guy who wants to be your friend, but with very limited stuff on hand. In considering this analogy, both guys are good – but may serve different purposes, and may have friendship between each other and you.

What distinguishes HP and IBM in terms of market segmentation and competencies? HP has a strong consumer business; IBM spun its own to Lenovo recently. IBM has competencies in business consulting having acquired PriceWaterhouseCoopers’ consulting unit in 2004.

If we will look at financials for fiscal year 2006, we will see that HP made $73b revenue on its products, and $18b on services, but IBM made $48b revenue on services and $40b on products (hardware+software). Cumulative volume of revenue equals. It confirms the official positioning of both companies, however we may guess that HP can do more than $18b on services leveraging its intellectual and human capital. There is one very interesting paper by famous Dr. Robert S. Kaplan (Dr. Kaplan and Dr. Norton developed the balanced scorecard framework, based on research within IBM) titled The Demise of Cost and Profit Centers. It suggests that customer support and other organizations, which used to be considered as pure cost or profit centers by senior managers, can be converted to investment centers, where leaders invest and have a return on investments in terms of finances, reputation, competitive advantage, etc. This change involves modification of mindset and overall culture in the organizations, and change of critical success factors (CSF) layout within organization.

Growth priorities for fiscal year 2007 are:

HP	Focusing on “go-to-market” recognising change of power towards consumer Better selling HP technologies through HP sales force Focusing on channel partners increasing clarity and accountability in how HP serves customers Strategic priority: vehicle marketing Internet
IBM	Focus on high-growth, high-value segments of the IT industry Segment: enterprise computing

Does it mean IBM wishes to get out of small-and-medium business segment too as it did for consumer? Will SMBs (“companies with less than 1000 employees”, p. 19) get required attention next year?

What HP seems to be doing is excelling its consumer model (selling directly and through channel), and targeting Internet as marketing vehicle of today’s world.

I highlighted the areas for FY07’s rivalry in blue – this is where we would expect to see battles for accounts between HP and IBM, this is where excellent processes will be the key, where best people, including front-office and back-office, should take a lead, where corporate values have the greatest impact on the success.

What we can see – is that the rivals’ officially declared priorities and strategies differ.
Is it good for customers and consumers? Yes. HP is continuing excelling on satisfying consumers with its excellent printing and personal computing products.
Is it good for enterprise and SMB customers? Yes. IBM wants to be a partner, and keen to use its business consulting competencies to improve clients’ businesses.
Is it good for HP and IBM themselves? Again yes. I do believe that IBM spun off PCs to Lenovo not for the sake of this fact, but to have ability to focus on its core business and gain more freedom in choosing consumer product and service suppliers for their clients.

Finally, from my perspective, I see that if IBM is not going to stick with a “not-invented-here” syndrome, why couldn't HP and IBM have beneficial relationships in the future? Imagine a new model of notebook computer “HP IBM Compaq Thinkpad Invent 8200” (smile).

You may just have thought about antitrust laws. I did not research that for this post. However, I believe that if this kind of alliance or cooperation benefits everyone – why not? Why are Japanese companies allowed to gain advantages at national level from rivals’ cooperation, but other countries may not? If you say – this is in their Japanese culture – and I will agree…

(great thanks to Debby for her editorship)
Post of July 25, 2007

What is a Strategy?

Eugeny Brychkov — Tue, 16 Oct 2007 09:19:00 GMT

What is Strategy and do we need all this stuff? First of all, let’s give definition of strategy (find more of them at google):

Strategy is a pattern of activities followed by an organization in pursuit of its long-term purposes

There’re 3 important components (source: B713 Fundamentals of Senior Management (2003), Open University):

Strategy is concerned with the broad pattern of organizational activities, not day-to-day detail
Long term here is a period of time of 3 years and more;
Purposes may change over time as a response to changes in internal and external environment.

I would suggest Strategic would mean something in general, looking forward and at the same time achievable.

We may argue that we do not need strategies – world is changing so fast that we are simply unable to plan our time and actions long-term forward. At some extent this statement is true – we may not be successful with strategy chosen, or someone else can be successful without explicitly stated strategy. This reveals two points:

Strategy is not constant. It is required to review it regularly, and adjust it to the conditions of internal and external environment;
If someone says s/he does not have a strategy – do not believe it! It may be a “trade secret”, as well as being implicit and not realized consciously.

Now why strategies? Do we really need them? Yes, we do. Human nature does not like many things, and one of them is uncertainty. We may be concerned about the future, not even realizing this fact. What helps people to become more self-confident and subsequently successful is a long-term planning of major steps and milestones within their lives. As plan is being executed, people put checkmarks, or if something is not achieved or overachieved – review plan and correct it.

This plan described above could be seen as strategy, with clearly defined final goal, and milestones. You can have developed plan for yourself (e.g. with final goal to get position of CFO and milestones of getting various financial assignments requiring various skills in finance and business – as one my friend did). Family members may create “strategy of growth”, defining milestones when is the best time to replace small house with larger one because of family growth. You may unconsciously create strategies for other people – deciding for your children which education they to take, and which occupation to select. You may be a member of trade union and influence life of co-workers and workers of other organizations, and finally you can be a CEO who is caring about overall strategy of whole enterprise and life-work of thousands people.

Are there different types of strategies exist? I would say so – depending on purposes and strategic (long-term) goals. I see examples as marketing strategy, aiming attracting customers from specific segment towards consuming products or services; operational strategy, highlighting how can operations excelled; financial strategy, aiming profits in commercial organizations and cost efficiency for non-profit organizations; brand and community targeted strategies, seeking increasing value of organizations, creating goodwill and improving loyalty in the community.

Which strategy we all do certainly have? Financial one! And it does not matter if working as entrepreneur, in large corporation or in hospital. We surely plan how wealthy we want and could be in the future. Let me surmise that in our days setting of many other goals and strategies depend on financial strategy, and success is lies in having financial strategy up-to-date.

Which future strategies will be required in our world and what is currently hot? There’re some words appeared in the press and scientific research last decades: information (which is a most required asset and can be of dearness), leadership (technological or behavioral) and talent (a capability to earn millions for Uncle Sam or draw masterpieces). Who knows what they exactly mean? How many definitions did you see? A lot – and you may have your own.

The main prerequisite to successful strategy is clear answer to the question “do you know and understand yourself and others around you well?”. Implication of this question is you looking at yourself from other’s point of view – and learn. As you learn, you apply changes to yourself and to your environment, and statement “you can change the world” becomes true.

Post of July 12, 2007

Hello World!

Eugeny Brychkov — Mon, 15 Oct 2007 16:36:00 GMT

Good morning, day, evening and night,

please let me invite you to my blog named “The Strategic View”. Having searched through google search I realized that there’re not many such blogs, and, as soon as these strategic and analytical matters are of interest for me, make my thoughts and findings public and value-adding for you. My objective is very simple: I would like to share ideas, and get feedback and comments on them. I will be grateful if we all together will support collaborative environment free of harassment and embarrassment, benefiting everyone on the net.

Let's learn together. Have fun! Eugeny