Issue 35, Sunday 25 Feb, 2001
Made in New Zealand - twice winners of the America's Cup
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"Dead time use to be quite important punctuation marks during the day, and now we have far fewer of them. Without punctuation marks, life can become jumbled and incoherent."
Martin Hayward, director of consumer consultancy for The Henley Centre


"My grandfather used to tell me, 'Norman, if you throw a pebble into a pond, physicists will tell you that the lake rises. You'll never see that. You'll just see a ripple.'"
Norman Lear, founder of the Business Enterprise Trust


Award is a free fortnightly email magazine featuring the tools, techniques and best-practices that deliver high performance in the new economy
In this issue
WarmUp – We're back!
Ten Minute MasterClass – Re-purposing leadership and strategy
Part I – smart talk from the Big Apple. Part II – Big Blue
Quick Study® I – Knowledge management
Quick Study® II – Cultural diversity in the global market
FAST FACTS – Rage Against the (Copier) Machine

Sixty Second Snapshots
SSS 1 – Research project, training senior examiners
SSS 2 – Cutting costs Vanguard News January 2001
SSS 3 – CEO Characteristics and TQM Adoption Among Small Manufacturing Firms.

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WarmUp® - We're back!
Our 'southern hemisphere midsummer break' turned out to be a pretty lengthy siesta! But we're back – wondering what happened to the summer, reflecting on 'inflection points' … those over-hyped, infrequent but 'interesting' times when an organization's world shifts on its axis. We think ours has. More on that, maybe, later.
Many of you make good use of the Baldrigeplus.com resources – we get lots of compliments about the case studies, exhibits, and award (writing and assessing) material. Its been two years since some of that first went up, and it's time for a change. We've got some interesting new products coming out of the lab, next quarter … watch that space.
Ten Minute MasterClass® – Strategy and leadership in 2001

Part I
So you're ramping up for a 2001 quality award. Pulling out the stuff on leadership and strategy. Starting to think through the suddenly much more demanding (and important) 'environment, relationships and challenges' requirements of the 2001 Baldrige criteria. Wondering how the events of 2000 have changed your world. Is it just a red-lining exercise, or time to throw out that old stuff and re-purpose?
Let's say it's the latter, and you'd like some context. How are others looking forward? What does '2001' mean to them. Here's what a bunch of big thinkers said (subject to the usual tough summary) at a recent (Feb 15) Manhattan, NY, Fast Talk road show – Winning in Tough and Turbulent Times: http://www.fastcompany.com/ftalk/nyc/survival.html

Moderator: Last year at this time, consumers were spending freely; the economy was growing; optimism was rampant; the signs were green. Suddenly, the game changed. Dotcoms were history. Consumer confidence plunged … now we're not talking about the new economy – we're talking about how to make sense of the economy. Signs are ambiguous. The signal-to-noise ratio is high … what do we think is happening with the economy and where is it headed? Two words:

Nicholas Butterworth, president and CEO, MTVi Group Questioning and consolidation.

Jane Harper, director, Internet technology and operations, IBM It's about people, and it's about nurturing your brand in the new economy

Susan Smith Ellis, executive vice president, Diversified Agency Services, Omnicom Group: Fear and mass behavior.

Jerry Colonna, managing partner, Flatiron Partners FUD: fear, uncertainty, and doubt.

Jason McCabe Calacanis, founder and CEO, Rising Tide Studios Faith and opportunity.

Mary McCormick, president, Fund for the City of New York Hidden opportunity and shakeout.

Marian Salzman, managing partner, Intelligence Partners People are emotionally overloaded instead of being information-overloaded.

Andre Papaleo, vice president, e-business, Carrier Corp A sense of reality and payback time.

Kyle Shannon, chief people officer, Agency.com Nothingness, fog – and maybe a longing for faith and optimism.

Susan Strausberg, CEO, EDGAR Online Inc Empowerment.

Moderator So give us your best advice on what to do next. What's the language inside your organizations? Is it time to lie low, cut back, retrench? Or to bet big?

Nicholas Butterworth You have to focus on your people more in tough times, and you've got to be as creative as possible as fast as you can.

Jane Harper It's all about unleashing the power of your people and creating a place where innovation can thrive … you've still got to give people tools, and technology. Organizations have to flatten out. You can't stop coming up with new ideas. Say good-bye to all the people who took one good idea and thought they'd succeed by extending it 10 or 11 times over.

Jerry Colonna … we've been telling people within our firm – and, more important, the people within our portfolio – stick to the basics and try as much as possible to ignore the noise. Just as there was an overreaction on the swing up, there's an overreaction on the swing down. … get back to the core values and principles that define us as a business. The people who stick with businesses that emphasize those values and principles will succeed

Jason McCabe Calacanis … focus and block out the noise. There's a lot of opportunity. At this time a year or two ago, every good idea had 10 competitors, and every bad idea probably had 5 or 6. And all ideas – good or bad – were funded. That drove up customer-acquisition costs. It's also a great time to retrain customers. Companies should force their online users to sit through disruptive advertising like interstitials – just like television – and retrain them to pay for services rendered. And it's a great time to acquire talent. My focus right now is to take all the great salespeople off the streets and put them to work for us.

Marian Salzman There's tremendous opportunity for creativity and for content, content, content. We lost our way trying to go digital with everything … the future is going to involve putting businesses in the right context and looking at marketplaces and market spaces contextually.

Kyle Shannon We're in an environment right now where a tremendous number of people are shell-shocked. We've got to have some patience with that. People are walking around in a fog … our company is full of people who are passionate about the Internet. We can unleash the power of the people by getting back in touch with why they come to work in the morning, with what they're passion about … management teams must recognize that the game changed and turn to their people and say, "What are the new rules? What are your passions? Help us figure things out." Employees should help companies reinvent how to live in this environment.

Susan Strausberg Five years ago, we had a idea to introduce SEC filings to the world. We planned to have subscribers pay us, because they'd recognize that such information added value … we created financial content that people had been buying for a lot of money. And we were able to provide it to them better and faster. We've stayed right on course – we were never sexy! …but we were in a real business … We never lost that focus.

Steve Barrett, vice president, market development, RealNames Corp Patience is critical. One thing that annoys me is the hypocrisy I see among the media, the investment community, and shareholders… who said that too many dotcoms didn't understand brand building or that brand building is a process that takes years, not months [but] they were expecting results in a matter of months. You can't have it both ways. Too many companies were ripping up their business plans every two months, saying, "Well, this isn't working. We've got to try something else." Those companies didn't give any strategy a chance to work. If people could adhere to the patience principle, we'd all be a lot better off, and we could do something smart and stick to a strategy that makes sense.

Part II
OK, so the smart-talking New Yorkers may not connect with where you are … which given our subscriber base, is more likely to be Kuala Lumpur, Christchurch or Haifa than downtown in the Big Apple.
Big Blue may not be 'you' either, but IBM's strategy – their response to the world as they see it – is a long-running story full of big pointers and banner messages.
Other players in their space – Gateway, Hewlett-Packard, even (gasp!) Dell – are sagging under the weight of Q4 sales slumps. But IBM is standing stock-straight and enjoying the view. Earlier this month, their end-of-year earnings report actually exceeded analyst projections. They're doing something right, right? So what's to learn?
In part, says Jane Harper in a Fast Company article, IBM's recent triumphs validate the work of the company's Speed Team, a passionate posse of employees hell-bent on internal velocity and efficiency. What's the Speed Team? … an ad hoc group that came together for a short time for one purpose: to make speed a way of life at IBM. Our strategy, Harper says, was to look at various realities in our organization, weed out the problem spots, and become catalysts for change.
It's not rocket science – improving speed, encouraging teamwork, improving communications … but hard to achieve because in big corporates (and even, what do you think, small ones?) they mean stirring things up and stitching change into the fabric. For six months, the speed team worked as teachers and helpers, putting into place some basic processes to support a faster company. Once the team lit a few fires, it broke up and returned to its day jobs.

The Speed Team's most profound discoveries and changes? You can't achieve great speed without great people. And great people can't make a real difference without powerful leaders to motivate them. … we found many people working at less than 50% of their potential, Harper says, we saw a lot of action, things moving really fast, but we didn't see people conceiving great ideas. We discovered that people didn't feel empowered. They understood the processes, but they didn't feel they had any leverage to change or improve them.
So we taught our leaders how to draw the greatest potential out of their people. We helped them understand that they must unleash the power of their teams to achieve the kind of speed we expected. Make your people feel that anything is possible, and they will blow your mind.

How have the definition and significance of "speed" changed at IBM in the past year? Five years ago, we thought speed was important, Harper said. One year ago, we knew speed was important. Now speed is survival – especially in the war for talent.
IBM doesn't make the rules anymore; the people make the rules. To compete in the talent war, IBM must create a work environment that is completely different than what we had six months ago. People want flexibility, a free flow of information, continuous learning opportunities, and the best projects in the world. And they have no tolerance for bad management.
The great leadership challenge will be creating an environment based on empowerment rather than fear.
On the Speed Team, we found that people were failing to live up to their potential because they were afraid of making a mistake, of looking foolish, of taking an idea all the way. As leaders, we must blow up those speed bumps and ignite passion … great people are not just 2 or 3 times better than average people. They're a 100 times better, and they can make a business move at the speed of light.

Talent has been a long-running priority for IBM … you talk about your Extreme Blue program for recruiting top college graduates. What's the update on IBM recruiting? Attracting great talent is one thing: Question is, how do you unleash their potential? How do you get great Internet technology developed and into your customers' hands fast? IBM's answer – Blue Works – a program that will help smart, ambitious recruits start developing leading-edge Internet applications and solutions for our customers. Last year, the focus was internal. Now, Harper says, we are letting our speed loose on our customers.
We think, she says, Extreme Blue will attract people to IBM, but we also think it will keep them excited about their jobs. Young graduates want to know that their projects will be exciting and fast-paced.

What are the coolest projects looming on IBM's horizon? They're about helping customers become premier e-businesses. That's IBM's vision. Period. How? Two words - open standards. Business is no longer about working in a little cocoon, creating your technology in secret, and letting it leak out little by little. The new economy requires a completely different mind-set of openness.
For the next six months, IBM will be focusing on the idea of Web services as a way of sharing and integrating applications. The Web isn't going to be people talking to servers anymore; it's going to be servers talking to servers. Making it easier to complete transactions between servers makes all of our lives easier.
Web services is an exciting area that IBM plans to participate in heavily – working to create open standards during this crucial, early stage. IBM knows it can compete on customer service and quality. Now it's going to create an open environment where its competitive strengths can really shine.

Recap
Does that bring you back to 'Baldrige'? Or whatever your year 2001 rethink has been motivated by? Go look at the new leadership category wording (at www.baldrige.org) … think about phrases like … creating and balancing value for customers and other stakeholders … an environment for empowerment, innovation, organizational agility, and organizational and employee learning … organizational performance review findings … deployed … to suppliers/partners and key customers ... to ensure organizational alignment.
In there, maybe a key to all that, is more than a hint of 'open standards'. What goes around comes around. How's that for the cornerstone of a leadership and strategy re-purpose!?
Make it the subject of your next brainstorm session.
Put away the highlighter … throw out that old document and start from the beginning.
Quick Study® I – Knowledge management
EMERALD NOW - FEBRUARY 2001 - EDITORIAL - Km has moved high up the management agenda, but there is still confusion over what it is. The very intangibility of knowledge surely has something to do with this confusion, as does its definition. The Concise Oxford Dictionary, for example, offers no fewer than four.
Read the editorial at: http://www.mcb.co.uk/emrld/now/editorial.htm INTERVIEW – Professor Paul Quintas on the concept of knowledge management and its development, and his role and research in the field, at http://www.mcb.co.uk/emrld/now/spotlight.htm

Quick Study® II – Cultural diversity in the global market
EMERALD NOW - JANUARY 2001 - EDITORIAL – The world is getting ever smaller - metaphorically speaking. But, from a marketing point of view, cultural diversity is as challenging as it has ever been. While high tech communications have undoubtedly reduced the impact of geography and have drawn nations and individuals closer together, and common tastes are emerging, many differences persist - within countries as well as continents.
Read the editorial at: http://www.mcb.co.uk/emrld/now/editorial.htm INTERVIEW – Vern Terpstra, Professor of International Business, Emeritus, of the University of Michigan, talks to Spotlight editor Sarah Powell about the major developments and challenges in the marketing field. Read the full interview at: http://www.mcb.co.uk/emrld/now/spotlight.htm
FAST FACTS: Rage Against the (Copier) Machine
Americans who say stress-induced physical violence has occurred in their workplace: 10%
... have experienced yelling and verbal abuse in their workplace: 42%
... sometimes have to work more than 12 hours a day: 52%
... it's time for their employer to redecorate: 26%
Source: Integra Realty Resources
Sixty second snapshots®
Brutally short summaries of material too valuable to junk

SSS 1 – Research project, training senior examiners
We've had a call from Hamdy Youssef, (h_youssef@email.msn.com) a quality manager at OCLI, grad student at Sonoma State University, California, and senior examiner for the California Award for Performance Excellence (the State 'Baby Baldrige').
“In an effort to improve senior examiners' ability to guide, facilitate and mentor their teams during the examination process” (and to satisfy the requirement for his Masters program) he's about to study how to improve the state award process – specifically, to help senior examiners do a better job of training new recruits, in the interests of helping applicant organizations improve.
My goal is to identify facilitation/mentoring/leadership techniques and behaviors, which can then be taught to senior examiners in the formal training to teach them how to improve their skills.
I propose the following research questions, Hamdy says:
How do these Senior examiners help their new and returning examiners learn? What do these examiners do to help examiners learn ? How and why do these techniques help examiners learn? What motivate seniors to do what they do? Is what examiners feel senior examiners do to help them learn what senior examiners intend? How do examiner understandings of what helps them learn differ from senior examiner understandings?
“Can you help,” He asked, “I'm seeking volunteers for a telephone interview or to reply to my research questions.” Call him at: h_youssef@msn.com (try them both)

SSS 2 – Cutting costs
Vanguard News January 2001
Managers are adept at cutting costs. It's easy; just take a look at the budget line items and decide which ones to cut by what percentage. But of course this often CAUSES costs, in as much as flow can be damaged - causing re-work, duplication of effort and other forms of waste.
The cost in any process consists of basic two elements: flow efficiency and functional efficiency. Any true reduction of cost should show in improvement to flow, for flow is end-to-end. In the Toyota Production System costs associated with flow are given priority over costs associated with functions.
Of course few of our organisations have measures of flow. So here are the Vanguard tips on establishing measures of flow:
Look outside-in; let the transactions you have with your customers dictate your core processes. Ask 'what is the purpose of this process?' from the customers' point of view. Measure the process end-to-end against the purpose. Now any improvement in achievement of purpose will result in a reduction in costs. Any proposals to reduce functional costs can now be assessed from an understanding of the impact on flow.
For much more on establishing measures for improvement (that won't damage your capability) see The Vanguard Guide to Using Measures for Performance Improvement at www.lean-service.com/5-1.htm

SSS 3 – CEO Characteristics and TQM Adoption Among Small Manufacturing Firms.
Back in December, Thomas Box emailed a research proposal that Award subbies may find interesting. He began:
”I really enjoy Award. It is thought provoking, interesting and extremely well written. I teach in the areas of strategy, Entrepreneurship and TQM and I have a request. A couple of years ago, we researched manufacturing firms in Kansas and found, among other things, that leaders of firms who were quality proponents had many of the same characteristics as successful entrepreneurs. I am wondering if you know anyone in your neck of the woods who might be interested in replicating our study.”

Here's the abstract of the original study:
CEO Characteristics and TQM Adoption Among Small Manufacturing Firms Journal of Business and Entrepreneurship 7(1) March, 1995 Thomas M Box (Pittsburg State University) Larry R Watts (Stephen F Austin State University)
Abstract: A mail survey was conducted among the 256 manufacturing firms in twelve southeast Kansas counties. The purpose of the survey was to determine what CEO characteristics were related to the adoption of TQM.  It was found that CEOs who had adopted TQM had a higher nACH, an 'internal' LOC and engaged in extensive environmental scanning.

I asked! Tom explained: nACH is David McClelland's Need for Achievement and LOC is JB Rotter's Locus of Control. Both are fairly well known measures of Individual Differences in Psychology.

Interested? Contact Thomas M. Box, Pittsburg State University, Pittsburg, KS 66762. Voice: 316-235-4582. Fax: 316-235-4513. Web Site: http://www.pittstate.edu/mgmkt/tbox.html
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We'd like, as always, to remind you about EDGE FIRST, our companion eZine dedicated to leaders and leadership - a fortnightly serving of provocative thinking about what it means to be a leader, and the tools, techniques and best-practices that drive leadership improvement. If you haven't seen it, click here for a complimentary issue.

In recent issues
Competing for the future - Hamel is THE MAN, embrace innovation!
Women and leadership - for real progress ... give men the nappies
Quick case study/Jennifer White - on picking winning teams
tompeters! - new economy DNA. Flaky? Irresistable! The survival kit
Snapshots of the new economy - from Seybold to Subramanian
eStrategy - best, first, fastest, lastest ... just watch out for Wal-Mart
A better way - but don't try this at home
Gen II - who wants to be a CEO
>> Next issue January 25, 2001 - reader contributions warmly received
>> Copyright © 2001, Macpherson Publishing
>> All rights reserved. But if you found this eZine useful we strongly encourage you to email it intact to associates, friends or acquaintances
>> Award and EDGE FIRST are trademarks of Macpherson Publishing
>> Contact us at macalex1@xtra.co.nz
>> Visit our web site at www.baldrigeplus.com

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