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Why The Right Way Is Usually The Hard Way

2024 April 14
by Greg Satell

In an interview he gave to Harvard Business Review, Jerry Seinfeld was asked about whether a consulting firm like McKinsey could make the creative process faster. That’s the assumption that many business leaders make, that every process can be optimized. As much as we like to imagine we’ve evolved, we’re still largely stuck with Frederick Taylor’s 20th century management ideas.

“Who’s McKinsey?” Seinfeld then asked. “Are they funny?” When told no, he said, “If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it—every word, every line, every take, every edit, every casting.”

Anybody who’s been a successful performer, whether as an athlete, an actor or anything else knows what Seinfeld means. While there’s something to be said for honing processes to make them more predictable and efficient,  to create something new you need to do the opposite.  You need to explore to discover and that means being inefficient. Not all who wander are lost.

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Change Always Involves Strategic Conflict. Here’s How You Build Strategies To Win:

2024 April 7
by Greg Satell

Change is often a story told as a hero’s journey. We discover a cause, are called to set out on a mission and seek to bring about some alternative future state. If we are good and true, do all the right things in the right way, and our cause is righteous, we will prevail in the end. Like Luke Skywalker in Star Wars, much of the struggle is internal.

Yet like Star Wars, that story is a fantasy. The true story of change is that of strategic conflict between that alternative future state and the status quo. There are always sources of power keeping the status quo in place and that’s where the battle lies. As long as those sources of power remain, nothing will ever change.

Once you internalize this story, however, you are ready to build an effective strategy. Power always lies in institutions and, by identifying and analyzing those forces at play, you can begin designing actions to influence them.. If you can remove—or even mitigate—the sources of power on which the status quo depends, you can make genuine transformation a reality.

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Pundits Love To Blame Bureaucracy. Here’s Why You Shouldn’t Listen To Them:

2024 March 31
by Greg Satell

When Bill Anderson joined Bayer last June, he knew that the 160-year old firm had its challenges. In addition to high debt and expensive litigation involving the herbicide Roundup, the firm also faces a slew of patent expirations and a faltering development pipeline for new drugs.

Yet Anderson has his eyes set on even a more menacing bugbear. “Bureaucracy has put Bayer in a stranglehold,” he recently wrote in Fortune. “Our internal rules for employees span 1,362 pages. We have excellent people…but they are trapped in 12 levels of hierarchy, which puts unnecessary distance between our teams, our customers, and our products.”

I’m skeptical. While pointing to a nameless, amorphous bureaucracy as the source of all evil may be convenient, it’s not at all clear to me that it’s evidence of a strategy. In fact, middle management is often crucial to enabling organizations to function, playing critical roles in helping to coordinate and execute complex tasks. We need to be careful what we cut.

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Want A True Formula For Success? Prepare For Luck.

2024 March 24
by Greg Satell

One of my favorite podcasts is Derek Thompson’s Plain English and, on a recent episode, he focused on how Stanley water bottles got so popular. It’s a great story that involves a heritage-laden, 166-year-old company, a group of Mormon mothers, astute executives and social media. It’s hard not to listen to the podcast and be inspired to follow in Stanley’s footsteps.

That would be a mistake. As Thompson points out on the podcast and in his book, Hit Makers, runaway successes are unique. They succeed by doing things differently. If everybody followed in the same footsteps, it would be hard for any of them to break away from the pack.

The simple fact is that there is no tried-and-true formula for success. We can compute the odds any way we want, but the truth is that mathematics tells us anything can happen. Take a look at any runaway success and luck played an important part. Yet results aren’t completely random either. We all have luck, both good and bad, the difference is how you prepare for it.

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If You Want To Lead, You Need To Embrace The Basic Human Need For Status

2024 March 17
by Greg Satell

Scientists have long found that our brains evolved to accommodate more social relationships. For example, the British anthropologist Robin Dunbar’s research suggests that the optimal group size for humans is 150, significantly larger than other primates. Throughout history, humans have developed hierarchies to help us to collaborate on complex tasks.

Yet recently, pundits started advocating for flatter organizations. In 2014, Gary Hamel declared that Bureaucracy Must Die in Harvard Business Review. Around the same time, entrepreneur Brian Robertson developed the non-hierarchical Holacracy, that was adopted by firms such as Zappos and Medium.

It hasn’t gone well and the idea of leaderless organizations has largely been discredited. In The Status Game, veteran science reporter Will Storr explains why. Evolution has wired our brains to seek status in order to carve out our identity within and between groups. To lead effectively we need to support, not ignore, the basic human need for identity and status.

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If You’re Serious About Change, You Need To Be Explicit And Focus On Shared Values

2024 March 10

When Lou Gerstner was chosen to lead IBM in 1993, he was an unlikely revolutionary. A McKinsey consultant and then the successful CEO of RJR Nabisco, he was considered to be a pillar of the establishment. He would, however, turn out to be as subversive as any activist, transforming the company and saving it from near-death.

Yet there was more to what he achieved than simply turning red ink to black. “The Gerstner revolution wasn’t about technology or strategy, it was about transforming our values and our culture to be in greater harmony with the market,” Irving Wladawsky-Berger, one of his chief lieutenants, told me.

Values are essential to culture and how an enterprise honors its mission. They represent choices of what an organization will and will not do, what it rewards and what it punishes and how it defines success and failure. That’s why it’s important to make sure that you are explicit about you values, even before you define your strategy. If not, you will pay the price later.

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Every Revolution Needs To Anticipate Its Own Counterrevolution

2024 March 3
by Greg Satell

In 1954 the economist Paul Samuelson received a postcard about an obscure dissertation. Written in 1900 by a long forgotten mathematician named Louis Bachelier, it implied that market behavior could be predicted using statistical techniques. Based on that foundation, Samuelson pioneered a new era of financial engineering.

As the eminent sociologist Max Weber pointed out, while material interests govern people’s conduct, ideas act like switchmen, determining the tracks that we travel down. Samuelson’s discovery of Bachelier’s paper was a moment when the track was switched. If markets could be engineered, the thinking went, they could be trusted.

We need to be careful about the stories we accept. Once the switchman changes those tracks, a zeitgeist forms and the wheels of society turn to keep the train going. We begin to judge progress on how far and fast we can get the train to go, rarely questioning whether we are on the right track or how we got started in that direction. Inevitably, we miss the backlash.

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We Need To Embrace The Genius Of The Obvious

2024 February 25
by Greg Satell

I’m currently reading Bob Sutton and Huggy Rao’s new book, The Friction Project, which is really a breath of fresh air. I was particularly struck by one passage in the beginning in which they write, “Friction fixers pride themselves in being masters of the obvious. They are mighty skeptical of secret solutions, shocking surprises, and miracle cures.”

It’s a simple truth that humans crave status and taking on an air of sophistication is one way to attain it. We have an urge to inject complexity, to make the case that we see something others don’t. This isn’t a moral failing, but as Will Storr explains in The Status Game, an integral part of how people relate to each other and signal identity.

So the first step toward embracing the genius of the obvious is to recognize that it isn’t something we naturally do. We tend to look for interesting stories involving complex phenomena behind things in our lives, which is why superstitions and conspiracy theories catch on. It takes effort and expertise to filter out complexity and expose the simple core.

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Why GE’s Incredible Turnaround Could Be A Sign Of The Times

2024 February 18
by Greg Satell

When Jack Welch took the helm at General Electric in 1981, it marked the beginning of a new era. Corporations would no longer coddle workers, but would slash costs, close factories and focus on increasing shareholder value. By 1999 he had increased revenues from $26.8 billion to nearly $130 billion and in 2000 he was named “Manager of the Century” by Fortune magazine.

Yet all the success belied serious problems rumbling underneath the surface. As David Gelles explains in, The Man Who Broke Capitalism, Welch increased profits largely by “financializing” the firm and operations suffered. Under his successor, Jeffrey Immelt, GE collapsed and was removed from the Dow index.

Yet while Welch’s rise marked a new era of shareholder capitalism, the new CEO at GE, Larry Culp has taken a different turn. He invests in workers, distributes authority and has refocused the firm on improving manufacturing productivity. The result has been one of the most dramatic turnarounds in industrial history, perhaps signaling a larger shift.

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How “True Believers” Can Undermine Change

2024 February 11
by Greg Satell

Journalist and Puck co-founder Tina Nguyen has been doing the rounds to promote her new book, The Maga Diaries, that chronicles her rise through, as well as her retreat from, the right-wing media ecosystem. What she describes is a carefully constructed culture that identifies, indoctrinates and then promotes ultra-conservative media personalities.

Yet these efforts are prone to failure. As MIT economist Daron Acemoglu and his colleagues have shown, in their effort to create homophily, these types of echo chambers undermine critical thought by creating filter bubbles and diminishing access to information, which makes it hard to be relevant to a wider audience.

The truth is that lasting change is always built on shared values. We can’t just preach to the choir. We need to venture out of the church and mix with the heathens. The best way to identify shared values is to listen to those who oppose what you’re trying to achieve. If you only interact with those who agree with you, you are undermining your own efforts.

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