A major reason for employees leaving their workplaces is conflict with their bosses. To succeed in today’s fiercely competitive market, organizations need to invest in developing their leadership, such that they further develop their teams by training them on the desired competencies and create a sense of engagement in them.

A big challenge for leaders is getting their employees to believe in the organizational vision. No two personalities have the same viewpoints and aspirations, thus conflict is bound to occur between team members while they interact.

The Thomas-Kilmann Conflict Mode Instrument (TKI), developed by Dr. Ralph H. Kilmann and Dr. Kenneth W. Thomas, is an easy-to-use, online assessment tool to Conflict Management.  Human Resources (HR) and Organizational Design (OD) consultants utilize the TKI tool as a mechanism to initiate discussions on differing topics and facilitate in mediation by learning how conflict-handling modes affect personal, group, and organizational dynamics.

Each of us has a predominant conflict style that we use in a particular situation. The Thomas-Kilmann Conflict Mode Instrument provides a basis to measure a person's behavior in conflict situations, where individuals appear to be unable to get along. The individuals’ behavior in conflict situations encompasses 2 broad dimensions:

• Assertiveness
• Cooperativeness

These behavior dimensions define 5 predominant conflict handling styles (or modes) that we use while responding to conflict situations:

1. Competing
2. Accommodating
3. Avoiding
4. Collaborating
5. Compromising

A thorough understanding of these styles allows for making a conscious decision on how to respond to others and assists in easing conflict and stress.

Let’s now discuss 3 of these conflict handling styles.

Competing

Competing is a power-oriented mode in which individuals use power to win their position, stand up for their rights, and defend a position which they believe is correct. Competing is assertive and uncooperative where a person pursues his own concerns at the other individual's expense.

Individuals using a competitive style consistently are considered aggressive, autocratic, confrontational, and intimidating. Competitors try to gain power and force change at the other person’s expense. This style is appropriate to execute a quick, unpopular decision, or to let others know how important an issue is to you. The major disadvantage of this style is low value for relationships, which can be damaged beyond repair.

Accommodating

Unlike competing, accommodating is unassertive and cooperative. Individuals using this conflict management style neglect or even sacrifice their own concerns to satisfy the concerns of the other person. They may obey other person's order even if they disagree to it, or yield to other’s viewpoint. People who accommodate others forget their own personal needs to please others and to maintain harmony. They have high importance for preserving their relationships. The accommodating style is useful when a person is wrong but you want to minimize losses and preserve relationships.

This habit cannot permanently fix an issue and may induce a feeling of anger or pleasure in the other person. Prolonged use of the accommodating style changes the behavior to competitive, brings down creativity in conflict situations, and enhances power imbalances.

Avoiding

The individuals with an avoiding style of conflict management neither pursue their own concerns nor those of the others. The avoiding style is neither assertive nor cooperative. These people prefer to avoid conflict rather than deal with it, diplomatically bypass or postpone an issue, or simply withdraw from a threatening situation.

Avoiders are considered negligent towards their own or others’ problems. They avoid a problem expecting that it will pass, resolve on its own, or anticipate other people to take care of it. Avoidance is acceptable only in situations where you need time to think of the response, there is little chance of satisfying your needs, or in case confrontation can hurt a relationship. Avoiding a conflict and not dealing with it allows the conflict to flare up and triggers negative sentiments and animosities.

Interested in learning more about the 5 predominant conflict handling styles and how to conduct the TKI Assessment? You can download an editable PowerPoint on Thomas-Kilmann Conflict Mode Instrument here on the Flevy documents marketplace.

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Cost Optimization Programs are hard to manage, sustain, and often tend to fall short of delivering the promised value. The failure could be attributed to many reasons—including lack of clearly delineated objectives, failure to account for the operational difficulties, internal resistance to change, trying to cut corners from everywhere, not paying attention to planning optimal utilization of resources; lack of direction, accountability, and management agreement.

However, the tremendous pace of technological disruption, today, offers new opportunities to transform enterprises by eliminating complexities, transforming the strategy and cost disciplines, streamlining operational capabilities, and consistently innovating.

While transforming the organizational cost bases, leadership should focus on value rather than costs. Cost optimization plans need to consider achieving the more strategic, long-term options. These long-term options include pulling out from unworkable markets, business model innovation, robotic automation, or streamlining processes. These cost initiatives necessitate revisiting the strategy, costs, and, the way they align.

A robust 5-phased cost optimization framework helps businesses sustain competitive relevance and maximize their potential. These steps provide a more informed, systematic, and sustainable approach to Strategic Cost Reduction:

1. Start with the Corporate Strategy
2. Align Costs to Strategy
3. Be Transformational and Aspirational
4. Demonstrate Leadership Support
5. Create a Culture of Cost Management

Let’s talk about the first 3 phases in detail.

Start with the Corporate Strategy

The first phase emphasizes on having a clear view of the Corporate Strategy and ensure that it is consistently understood across the organization. The commencement of strategic cost reduction endeavor demands developing a thorough understanding of the business strategy, operating model, and the investment on and revenues from the operations.

The phase encompasses examining the expenditures and revenues of the business, evaluating the sustainability of the existing ventures; and contemplating the effects of disruption, changing customer needs, and competition from startups. There is also a need to comprehend the interfaces between different units and their associated costs, instead of merely utilizing industry benchmarks to gauge the viability of costs.

Align Costs to Strategy

The second phase signifies differentiating the strategically critical good costs from the non-essential bad costs. It involves segregating the good costs from the bad costs (avoidable expenditures), making informed decisions to improve the good costs, clearly articulating the current skill inventory and knowing the few critical competencies crucial to meet customer expectations and remain profitable.

The phase demands distinguishing high-value priorities for investments, directing investments on creating winning capabilities, and developing plans to minimize bad costs. This can be done by undertaking organization-wide cost analysis to understand the type of projects being executed, their value, the expenditure critical to run the business, the transformation and automation opportunities, and how to realize the potential for improved savings.

Demonstrate Leadership Support

The next phase of the strategic cost reduction approach requires from the senior management to set the strategic direction and demonstrate Leadership support and buy-in. Leaders should treat the cost optimization program as a strategic business transformation initiative. They need to assign dedicated resources to the endeavor, guide teams, devote time, set governance and oversight mechanisms, and engage employees across the organization. It is critical for the leaders to develop ways to encourage organization-wide sense of ownership and partnership.

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The rapidly evolving world necessitates organizations to change quickly to keep pace. Organizations that are able to manage change well flourish, whereas those that don’t risk disruption or closure. Change management varies greatly based on the nature of business and the people involved. It also depends on how well people understand the change process.

Various frameworks and models have been formulated to manage change. Lewin’s Change Management Model is one such framework for understanding and managing organizational change in a simple and easy-to-understand way. Presented in 1947, Kurt Lewin’s approach to Change Management is still widely used by organizations to institute change.

According to Lewin, 3 steps are essential to make change successful. Recognition of these distinct stages of change enable the leaders to effectively plan the execution of desired change:

1. Unfreeze
2. Change (or Transition)
3. Freeze (or Refreeze)

Let’s, now take a deeper look at the 3 stages of change.

1. Unfreeze Stage

The Unfreeze stage encompasses ensuring readiness of change, by preparing the organization to understand and accept the criticality of the need for change. 4 key steps describe the Unfreeze stage:

Ascertain the need for change

The first step during the Unfreeze stage warrants undertaking the Current State Assessment (CSA) of the organization to identify what needs to change and why. The step also warrants breaking down the status quo, challenging the existing behaviors, revising the prevalent practices, and creating new ways of doing business.

Gather support

Next, the leadership needs to draw support for change from key people in management and across the organization through Stakeholder Analysis and Stakeholder Management, and outline it as one of the foremost priority for the enterprise.

Develop the strategy and plan to communicate the need for change

Subsequently, senior management should work on utilizing the organizational vision and strategy to substantiate the communication of the vision for transformation and the need for change across the board. This demands planning and developing persuasive messages and organized sharing mechanisms.

Appreciate and manage any reservations and uncertainties

This step encompasses addressing any employee skepticism and apprehensions towards change by consistently depicting the reasons for discontinuation of existing ways of doing business to enable people embrace the need for change.

Leaders may need to manage the state of equilibrium of the organizational culture by balancing counteracting forces—different factors that drive or resist change—with the help of “Force Field Analysis.” The Force Field Analysis means a thorough evaluation of the pros and cons of change. If the forces favoring change outweigh the factors resisting it, the change will happen; otherwise, the change agenda may fail.

2. Change (or Transition) Stage

Once people are 'unfrozen' and ready to move towards the desired state, the transition sets in which signifies making the required changes. This time is often difficult for the people, as at this stage they are uncertain about the future, are new to the changes, and need time to grasp and adjust to them.

4 steps are critical to manage the transition (change) stage:

Communicate methodically and consistently

Throughout the planning and implementation of the transition stage, leadership needs to clearly articulate and share the influence, effects, and benefits of transformation across the organization, and prepare everyone for the future.

Dismiss hearsay

The senior leaders should support the people by holding regular sessions to candidly answer their queries, straightaway sort out any issues, and convey the need for change as an operational necessity.

Encourage action

Next, the senior management needs to role model the desired behaviors and mindsets, plan and deliver quick wins to keep the stakeholders motivated, and empower people to come up with solutions to tackle new issues and routine matters.

Engage people

The next step comprises involving the people in the process, allowing them time to shift, and talking to external stakeholders (e.g., employee organizations) if required.

3. Freeze (or Refreeze) Stage

By freezing or refreezing, Kurt Lewin means reinforcing and institutionalizing the desired changes, ensuring they are widely accepted, utilized all the time, and incorporated into the business and the organizational culture. Implementation of the freeze stage instills a new sense of stability in employees, they feel confident, form new relationships, and become comfortable with the new ways of working.

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The number of people working remotely has been increasing progressively across the globe. An employee benefits report narrates that around 60% companies in the US offer telecommuting opportunities. Telecommuting not only benefits people but also presents several advantages for organizations. Research has attributed an increase in savings of around $2000 per employee each year on real estate costs, enhanced productivity, and lower attrition rates to telecommuting. Employees have been found to focus better on work and take less days off while operating remotely.

Building effective teams is difficult, but it can even be more so when these teams are remotely managed. For managers and leaders who constantly deal with virtual teams, it is communication that is one of their biggest concerns, in the absence of face-to-face settings. Some of their other concerns include ensuring all team members are connected and striving towards the same organizational goal, recording accurate hours, assigning appropriate tasks, trust, and teamwork. Therefore, having a Communications Strategy and structure approach becomes critical.

Addressing these challenges and properly managing a virtual team requires the managers to establish clear goals, conduct frequent team meetings, leverage team members’ strengths, and communicate clearly. However, most leaders believe that the increasing sophistication and proliferation of collaborative technologies enable better virtual communication. On the other hand, studies on globally scattered teams relate performance not with technologies but with effective utilization of these technologies.

Research has revealed 5 best practices to enable effective communication between virtual teams. The teams that embraced these communication approaches were found to produce quality deliverables, complete tasks timely, collaborate productively, and meet or exceed their targets:

1. Select Fitting Technology
2. Be Clear
3. Stay in Sync
4. Be Responsive
5. Be Inclusive

Now, let’s take a deeper look at the first 3 approaches to facilitate effective communication with virtual teams.

Select Fitting Technology

To enable proper interaction between virtual teams, leaders need to develop communication protocols and choose appropriate communication technologies. A variety of communication tools are available to teams—e.g., email, chat platforms, web conferencing, and videoconferencing—yet most people prefer those that they are proficient in instead of other better-suited options, which causes problems.

The selection of technology should complement the purpose of communication. Text-based media—e.g., email or chat—should be used to convey routine information, ideas, and to gather simple data. For more complex tasks—including problem solving, negotiations, or to settle arguable interpersonal matters—richer media tools such as web conferencing and videoconferencing should be preferred. Team managers need to arrange proper training of their people to ensure all the team members can use the tools to their best.

Be Clear

A major portion of communication around the globe is text-based. While using email communication, the intentions of the sender are often misunderstood by the recipient, causing assumptions, biases, and disputes that are not destructive for team performance. The reasons for this misinterpretation can be attributed to unintentional negative tone by the sender, absence of nonverbal cues, and difference in perceptions of the sender and recipient.

To avoid misinterpretation, biases, and disputes, virtual teams should try and outline their intentions as clearly as possible in the message, ensure appropriateness of the message tone, use emojis to convey emotions, and emphasize the important information.

Stay in Sync

Virtual teams are more likely to lose track of each other and become out of sync due to a number of reasons. This could be due to the absence of in-person meetings, the inability to tell if the messages have been received and read, unintentional exclusion of certain team members from an email, and the inability to keep the virtual coworkers constantly informed of all in-office events.

Globally dispersed teams can overcome these challenges and effectively in sync with each other by maintaining consistent flow of information to all teammates, avoiding silence, acknowledging the receipt of important messages, clarifying others’ intentions, maintaining a favorable opinion about others, and keeping negativity at bay.

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Inspiring breakthrough innovation in business models and solutions is becoming critical for organizations’ existence, as startups through their innovation have been consistently disrupting large organizations globally. To foster innovation, the key ingredient is creating an organizational culture that encourages innovation in all spheres. Every organization, today, aspires to nurture a culture of innovation where employees are motivated to take initiatives that result in the creation of innovative products. However, the actual execution of this aspiration and developing such a culture baffles many senior executives, and eventually inhibits the success of innovation endeavors.

Senior executives often focus entirely on how to set up an innovative culture. In doing so, they overlook meticulously planning and executing initiatives required to develop an innovation-focused culture.  Corporate Culture is the outcome of collective behaviors, which necessitates the employees to embrace innovative behaviors at the outset. The culture automatically becomes innovation focused when people become more creative.

Research on the most critical element for success reveals “right leadership” and “culture” to be the top priority for CEOs. Other areas of importance in the creation of a culture of innovation include creative potential, readiness to teamwork, and willingness to challenge the status quo. Innovation is slowly becoming a priority for most organizations, so much so that many enterprises now anticipate their employees to assign proper time to generate new ideas.

To instill an Innovation Culture, organizations need to converge their emphasis on shifting the existing behaviors of their people to 5 key behaviors that are critical in creating an Innovation Culture. Widespread adoption of these 5 behaviors is essential for making innovation part of the organizational DNA:

1. Ecosystem-wide Collaboration
2. Support for Intrapreneurs
3. Speed and Agility
4. A Venture Capitalist Mindset
5. Operational Excellence (OpEx) Coupled with Innovation

Now, let’s take a deeper view of the first 3 behaviors critical for creating an innovation culture.

Ecosystem-wide Collaboration

Innovation warrants effective teamwork and strong coordination between discrete departments, specialties, locations, vendors, and partners. To develop an innovative culture and organization-wide collaboration, leaders need to select top people internally and capable partners externally, and mobilize them to integrate like a single team.

Strong external partnerships are just as valuable and provide you the opportunity to utilize the intellect of smart people outside the boundaries of your organization—to create a differential edge over your competitors. Teamwork, inter-departmental partnerships, and external alliances help deliver optimum solutions and breakthrough products.  This also allows for quicker development of business ideas.

Support for Intrapreneurs

Intrapreneurs are internal employees within large organizations who are gifted with an entrepreneurial mindset, which they use—alongside enterprise resources—to turn an idea into a profitable product or solution through assertive risk-taking and innovation. Intrapreneurs should be motivated to qualify opportunities and shape them into high-yielding innovations by providing access to corporate resources and collaboration.

In order to support intrapreneurs to be successful, leadership needs to measure and recognize their innovative potential and accomplishments. For instance, the percentage of employees trained in innovation processes and the magnitude and potency of the collaboration ecosystem. This can also be in the form of number of meaningful ideas in an intrapreneur’s pipeline, stability and robustness of the innovation portfolio, and the prompt pace of commercialization of ideas.

Speed and Agility

Developing an innovation culture necessitates broad readiness to adopt and leverage new technologies effectively and promptly. Adopting agile mindsets and approaches helps organizations take actions quickly to changing trends or circumstances, keep the innovation running, and displace competitors that have significantly more resources. Agile approaches also facilitate in quickly distinguishing and selecting ideas, and commercializing the ideas through prototyping.

Interested in learning more about the 5 key behaviors essential for making innovation part of the organizational DNA? You can download an editable PowerPoint on Innovation Culturehere on the Flevy documents marketplace.

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There isn’t one leadership approach that can guarantee success in every situation.

Leadership necessitates an assortment of methodologies that leaders can use based on the circumstances—ranging from being self-centric to helping the humanity. In order to develop effective teams, inculcate a sense of teamwork, and make a positive impact, leaders need to be aware of the strong points and limitations of their team members and the behaviors that they typically adopt with others. To identify the leadership approach of a leader and their power to inspire, they need to answer, “Whom do they serve?”

Researchers have recognized 6 leadership mindsets based on interviews with top leaders from a range of industries and organizations, and through studies on cognitive leadership and developmental psychology. Typically, leaders display a portfolio of mindsets, which vary from individual to individual. These mindsets guide their judgment and behaviors, and can transform the direction and performance of the enterprise.

The 6 leadership mindsets provide guidance on how people can better comprehend and reorganize their own portfolios (mindsets as well as teams) to become successful:

1. Antisocial
2. Individualist
3. Timeserver
4. Extrovert
5. Initiator
6. Achiever

Let’s take a detailed view of the first 3 mindsets.

Antisocial

The leaders with Antisocial mindset have no regard for anyone except themselves. They exhibit characteristics related to antisocial personality disorder, i.e. lack of compassion and insensibility towards others. They have a captivating personality and are highly effective at manipulating others and the organization. Antisocial personalities can destroy their own and their organization’s reputation by their manipulative behavior.

The individuals with Antisocial mindset display an avid interest in authority, have superiority complex, and consider themselves above the rules. They exist at any level in an organization—e.g., coldblooded bosses who discount others but use them for their own advantage by intimidation and deceit. Their deception gets them promoted, but only transiently. Such personalities have low values and it’s hard to cooperate with them.

Individualist

The leaders with an Individualist dominant mindset always keep their own personal interests first, benefit themselves, and don’t bother about others. They are possessed by a strong desire for power, wealth, and status. Self-promotion rather than exhibiting behaviors benefiting a team is a hallmark of such mindset. These erratic, self-publicist mentalities in top management can wreck the organizational culture—as they prompt the others to take influence from their behavior—weaken collective action, hinder information flow, and destroy teams.

The drive and self-focus of leaders with a strong Individualist mindset can enable them to get ahead, but they often struggle to build a team, as they do little to develop others and try to take all the credit. To counter the Individualist mindset, organizations need to outline goals clearly, monitor performance, and ensure that individual goals are consistent with enterprise goals.

Timeserver

The individuals with a Timeserver or opportunist mindset try to please everyone and in doing so lose credibility among their peers. They keep changing with differing circumstances and groups of people they interact with. The individuals with this mindset are insecure, indecisive, and lack influence on people, yet long to be venerated and strive to cajole people in authority to advance their careers.

Timeservers have a hard time communicating their longstanding beliefs and lack passion in anything they do. If such personalities are made responsible to manage a project, their biggest concern is to make their superiors happy and their incompetence to stand up for their thoughts against any opposition leads the initiative to failure. Timeservers serve anyone who is important, even budding leaders.

Interested in learning more about all 6 leadership mindsets and the ideal leadership profile mix? You can download an editable PowerPoint on the 6 Leadership Mindsets here on the Flevy documents marketplace.

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The pace of digital disruption is putting even large corporations at risk of closure. Startups are using disruption to their benefit by embracing robust approaches and creating unique business models.

This intense competition and disruption warrants organizations to keep evolving in order to thrive. They can do this by creating cutting-edge systems and software, adopting pragmatic methodologies, and embracing an organizational culture that motivates innovation, agility and teamwork.

To develop state-of-the-art systems and software in this disruptive age, waterfall or even the agile methodology isn’t sufficient. These methods work well with small teams. However, for large enterprises and teams these approaches do not match the scale requirements.

In order to apply Lean and Agile practices on a higher scale, the Scaled Agile Framework (SAFe)—a knowledge base of organization and workflow patterns—was developed by Scaled Agile, based on insights and practical experience helping clients address their real-world scaling issues. The approach can be applied to small teams as well as large enterprises comprising of teams of several thousand individuals. The SAFe approach leverages 3 bodies of knowledge: Agile Software Development, Lean Product Development, and Systems Thinking.

The SAFe Project Management philosophy is illustrated by one comprehensive visual, known as the “Big Picture.” There are 2 versions of the “Big Picture”—a 3-level view and a 4-level view.

The 3-level view is suitable for smaller systems, products, and services. The 3 levels are:

1. Portfolio Level
2. Program Level
3. Team Level

The 4-level view—is ideal for organizations implementing and maintaining large, complex solutions that need hundreds of practitioners—entails:

1. Portfolio Level
2. Value Stream Level
3. Program Level
4. Team Level

Now, let's take a deeper look at these levels.

Team Level

SAFe teams define, build, and test stories—small pieces of new functionality—and deliver value in sprints (series of fixed-length iterations). The teams use a common iteration cadence to synchronize their work with other teams and to allow all teams to iterate simultaneously.

Program Level

At this level, SAFe teams are organized into a virtual program structure, known as the Agile Release Train (ART). Each ART is a long-lived, autonomous team of Agile teams and other stakeholders to plan, commit, executive, inspect, and adapt together. The ART aligns teams to a common mission, provide architectural and user experience guidance, facilitate flow, and provide continuous objective evidence of progress.

Value Stream Level

This level supports the development of large and complex solutions—that necessitate multiple, synchronized ARTs—and has a stronger focus on solution intent and solution context. Suppliers and additional stakeholders contribute to the Value Stream level.

Portfolio Level

This level organizes and funds a set of Value Streams. The Value Streams realize a set of solutions, which enable an organization to achieve its strategic mission. This level provides solution development finding through Lean-Agile budgeting, governance, and coordination of larger development initiatives.

In addition, there is a Foundation layer in the SAFe Framework that supports the entire organization in development through 5 key attributes:

• Lean-Agile Leaders
• Core Values
• Lean-Agile Mindset
• Principles
• Practice Communities

Let's now have a look at the first 4 key attributes.

The Lean-Agile Leaders

The successful implementation of SAFe framework entails training of managers in Lean-Agile values, insights, and ways of operating. This necessitates embracing 6 critical leadership principles:

• Urgency for change
• Lifelong learning
• People development
• Inspirational mission and vision
• Decentralized decision making
• Motivation of knowledge workers

SAFe Core Values

SAFe core values are the guiding principles for people to follow, and dictate behaviors and actions key to the framework’s effectiveness. The core values and principles of the Foundation Layer of the SAFe methodology include:

• Alignment
• Built-in Quality
• Transparency
• Program Execution

Lean-Agile Mindset

SAFe leaders understand and embrace the Lean-Agile Mindset, ways of thinking and operating, and impart these to others. The Lean-Agile Mindset is captured by 2 concepts:

• House of Lean
• The Agile Manifesto

SAFe Principles

There are 9 fundamental Principles to Lean-Agile Thinking that we must comprehend and integrate:

• Adopt an economic view
• Apply systems thinking
• Assume variability and preserve options
• Build incrementally with fast, integrated learning cycles
• Base milestones on objective evaluation of working systems
• Visualize and limit WP, Reduce batches’ sizes, and manage queue lengths
• Apply cadence and synchronize with cross-domain planning
• Unlock the intrinsic motivation of knowledge workers
• Decentralize decision making 

Interested in learning more about the SAFe methodology, organizational levels, values, principles, and, most importantly, how to implement it? You can download an editable PowerPoint on the Scaled Agile Framework here on the Flevy documents marketplace.

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In these challenging times, it’s no longer enough to target a few, select purchasers and develop products for that clientele. The key ingredient that most leaders overlook while serving their clients is a thoughtful and planned Customer Strategy.

A robust Customer Strategy entails speaking the language of the customers, knowing how to anticipate their needs, working closely with them, and coming up with solutions to problems that have not been stated yet. This necessitates concentrating on developing long-term value and experiences for the customers, required offerings, channels, operating model, and capabilities.

To be effective and to stay ahead of the curve, leaders need to pay attention to the following 10 principles while developing their Customer Strategy. These 10 principles of Customer Strategy are familiar to most people, yet few observe them with the level of skill required in this age of disruption:

1. Innovate with Speed and Judgment
2. Recognize Your Customers Well
3. Link Customer Strategy to the Organizational Identity
4. Focus on Core Customers
5. Treat Customers as Assets
6. Draw on Your Relationships Network
7. Build an Omnichannel Customer Experience
8. Develop a Delivery Strategy
9. Restructure According to Your Customer
10. Align Culture with the Customer Strategy

Now, let’s take a deeper look at the first 5 principles.

Innovate with Speed and Judgment

With scientific breakthroughs becoming a norm, efficient companies are persistently piloting innovative ideas to provide creative solutions and first-rate service to their customers. Digital and mobile technologies are constantly changing the customer interaction and likes/dislikes—making it more important for companies to anticipate and manage technology related risks properly. Before introducing new offerings, companies need to prudently decide about the innovative technologies that may fascinate their clients, to foster customer loyalty.

When anticipating emerging technologies, the ability to beat competition rests on consistently analyzing the technology arena, deciding which technologies will be of most significance in future, and testing new stuff and examining the outcomes.

Recognize Your Customers Well

Quantitative customer segmentation is the thing of the past now; market leaders know their customers at a granular level. They gauge customer segmentation and insights as a critical factor in developing their customer strategy and routinely perform advanced customer analysis.

To carry out their customer analysis, business leaders draw from sources including customer behavior and psychographic data collected online and offline, real-time information, and geographic and mapping data. They then utilize these insights into their internal decision making process, develop business platforms, initiate actionable growth initiatives, or evolve their business models.

Link Customer Strategy to Organizational Identity

Quality value proposition is the hallmark of thriving businesses. They are able to serve their customers in a way that is unmatched by their rivals. To maintain their edge over competition, they build distinct capabilities and a diverse portfolio of products and services. A coherent consolidation of value proposition, capabilities, and offerings dovetail into a firm’s identity—which is evident through its customer experience: the way people interact with it and appreciate it.

However, creating a strong organizational identity isn’t a routine ritual. Most companies do not really know what they represent. They tend to mimic their competitors’ moves, play defensive, and tweak their value proposition based on the rivals’ offerings. They lack a clear focus on what’s unique about them and what they do well—i.e., aligning their organizational identity to their value proposition.

Focus on Core Customers

Organizations that have a strong identity do not compete everywhere. It is prudent for them to only venture in markets that offer reasonable chances of success—in other words a right to win. The right to win facilitates in limiting the value proposition that the organization offers, making it easier to specialize in, and serving a select group of customers satisfactorily instead of trying to reach a mass market.

Attempting to succeed in a market where a firm does not have the right to win puts significant time, efforts, and resources at risk.

Treat Customers as Assets

For a customer strategy to be effective, it is imperative to nurture long-term customer relationships and considering customers as assets that have tremendous potential to grow in value. Leading firms do their best to manage their customer relationships, though it goes against important first steps that they generally take—e.g., calculating the short-term ROI to acquire new customers, or the lifetime cost of a customer relationship at the individual or segment level.

Market leaders evaluate the customers’ purchase journey to gather insights to grow and tailor relationships, invest in meeting the evolving needs of the customers, and consistently add new features based on customers’ insights.

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The use of behavioral competencies in appraising the skills and potential of leaders is a norm in organizations large and small. The competency models are omnipresent owing to several reasons—a shared vocabulary to convey the expectations from people, a basis for Performance Management planning, and a means to express the parameters for career advancement. However, problems surface when competencies are considered the only factor in evaluating the leaders’ potential.

There are few limitations that bring criticism for the utilization of competency models in assessing leaders’ potential. These include their extensive reliance on past behaviors rather than future potential - where relevant experience is deemed a critical element in establishing a leader’s competence - complexity of execution, and clash of behavioral traits required under various competencies with one another. These shortcomings and complexities warrant a different approach to assess the leadership potential of executives.

The Leadership Competency Model is a newer, more robust competency assessment framework that not only evaluates the skills and abilities of leaders, but also examines their potential based on psychometric data of global leaders, neuro-psychological research, and past studies on successful managers.

The Leadership Competency Model is comprised of 2 distinct elements:

1. Leadership Competencies
2. Leadership Potential

First, let's take a look at the Leadership Competencies.

Leadership Competencies

The Leadership Competencies are learned factors which are attained, developed, change over time, and indicate what a leader is capable of doing. The leadership competency model encompasses 4 leadership competencies (each of which is further comprised of 2 Core Competencies):

1. People Leadership
2. Relationship Leadership
3. Business Leadership
4. Entrepreneurial leadership

People Leadership

The People Leadership competency involves 2 core competencies:

• Inspirational Leadership: That entails establishing leadership impact by projecting confidence, expertise, and authority to energize and motivate people to support you.
• Execution: Entails driving execution and achieving results through other people by tracking team performance, building and aligning capabilities, and motivating teams.

Relationship Leadership

Relationship leaders develop knowledge and skills to inspire people and develop strategic relationships. The Relationship Leadership competency involves 2 core competencies:

• Influence: Entails influencing people with varying perspectives and interests using interpersonal persuasion approaches, and getting their agreement to support key endeavors.
• Collaboration: Entails creating an ecosystem of team work, by generating support from people across the enterprise, and recognizing and capturing synergies internally and externally.

Business Leadership

At the top maturity level of Business Leadership, leaders develop competencies to set future vision and make decisions that deliver shareholder value. The Business Leadership competency involves 2 core competencies:

• Direction: Entails setting clear direction and priorities for cross-functional teams, creating a shared purpose and objective, and keeping teams focused on one vision.
• Business Judgment: Entails making decisions related to effective resource utilization and maximizing commercial return.

Entrepreneurial Leadership

At the top maturity level for entrepreneurial leadership, leaders champion innovation and build and sustain enterprise capabilities. The Entrepreneurial Leadership competency involves 2 core competencies:

• Competitive Edge: Entails driving change by improving existing practices, inspiring new ideas, and creating an ecosystem for people to innovate.
• Building Talent: Entails building abilities to gain competitive advantage by developing the team and providing opportunities for diverse high performers to grow.

The second part of the Leadership Competency Model framework provides the dimensions of Leadership Potential.  

Leadership Potential

These are hardwired or inherent factors which are hard to develop, stable over time and indicate how the person is. The Leadership Potential has 4 major components:

1. Change Potential
2. Intellectual Potential
3. People Potential
4. Motivational Potential

Are you interested in understanding more about the 4 Leadership Potentials? To learn more about developing the Leadership Potential as well as Leadership Competencies, you can download a detailed editable PowerPoint on the Leadership Competency Model here on the Flevy documents marketplace.

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Business Transformationinitiatives are complex undertakings that aren’t easy to manage. In fact, data suggests most transformation efforts globally to have ended up in failure.

That’s predominantly because organizations find it challenging to make their people accept change. Most of the large-scale change initiatives are typically executed without focusing much on the human element—bolstering the people’s faith in the transformation program, eliminating or minimizing any resistance to change, and gaining across the board commitment from the workforce. These priorities seem pretty straightforward but are most likely to be missed out on during the hue and cry of the transformation endeavor.

The “Influence Model” for Change is a systematic approach to implement Change Management. The model entails 4 key actions that transformation programs should focus on to shift the mindsets and behaviors of the workforce, in order to stimulate real change. Introduced by McKinsey & Company in 2003, the Influence Model is backed by academic research as well as practical experience.

The 4 key actions or “building blocks” of the Influence Model are derived from formal organizational practices and mechanisms that work best for transformation:

1. Understanding
2. Reinforcement
3. Skills for Change
4. Role Modeling

Employing all the 4 building blocks of the model collectively creates a broader positive impact on transformation.

Now, let’s take a look at the first 2 building blocks of the Influence Model.

Understanding

The first building block warrants the employees to believe in the rationale and efficacy of change in order to inspire them to embrace change, shift their mindsets, and support the transformation efforts. Research suggests that people want similarities between their thinking and actions—thus they are more likely to change their mindsets if the purpose for change aligns with their thoughts.

Senior leaders are often under the notion that the intention and purpose of change are known to everyone in the organization. This assumption is a common human tendency—recognized as the “false consensus effect” and the “curse of knowledge phenomenon”—where individuals find it hard to expect that others don’t know something that they know. Because of this tendency leaders don’t concentrate enough on propagating the need for change.

To enable transformation, the leadership needs to create a change story—to clearly convey the necessity, vision, and benefits of the transformed course—and establish feedback mechanisms to identify the perceptions of employees towards change.

Reinforcement

The second step of the Influence Model underscores the alignment of organizational structure, technologies, processes, and systems (e.g., rewards and recognition) with the desired behaviors. Evidence from psychology suggests that behaviors develop from relationship and reinforcement. For example, Ivan Pavlov’s research showed that a consistent linkage between two stimuli—sounding a bell and arrival of food—resulted in dogs to begin expecting food by salivating upon hearing the bell.

In the same vein, Skinner’s theories of “conditioning and positive reinforcement” indicate that combining positive reinforcements with desired behavior can be used to teach individuals to complete tasks. Incentivizing commission based sales people by paying them more for working harder is one of the applications of the theories of conditioning and positive reinforcement.

Likewise, the Expectancy Theory by Victor Vroom emphasizes that individuals’ tendency to adopt desired behavior is based on hopes that the effort will cause the desired performance, which will be rewarded with desirable incentive.

For the change endeavors to thrive, it is important for the senior management to uncover employees’ desired extrinsic (i.e., pay raise or promotion) or intrinsic (i.e., satisfaction) rewards, their coaching needs, and fulfill their commitment and people’s expectations toward rewards.

Interested in learning more about what the other building blocks of the Influence Model for Change entail? You can learn more and download an editable PowerPoint on the Influence Model for Change here on the Flevy documents marketplace.

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Appraising the potential of executives to reach the top is a tedious task for HR professionals as well as the top management. The characteristics and competence of leaders isn’t something etched in stone. It is a matter of great interest for organizations to identify the attributes that make their managers and senior managers successful.

To explore the key traits of successful leaders, a 2-stage leadership profiling study of over 1500 international managers was conducted by Deloitte. The study was aimed at revealing:

• The key attributes of personality, reasoning, and business mindset of a leader
• The noteworthy differences in personality and psychology of leaders who consistently demonstrated success throughout their career versus those who couldn’t.

The study explored the relationship between the personality, reasoning abilities, business and leadership capabilities of an executive with the potential to reaching a senior position and being successful there. The study utilized a series of 5 psychometric tests to assess the personality and reasoning process of senior managers and managers. The evaluation also utilized standardized repertory grid interviews to evaluate the extent of manager’s business and leadership competence.

The following 5 personality tests were used in the leadership study to assess the personalities of leaders:

• NEO PI-R
• Myers Briggs Type Indicator
• GMA(A)
• Watson Glaser Critical Thinking Appraisal (W-GCTA)
• Consequences

Now, let’s take a bit deeper look at the psychometric tests employed.

NEO PI-R

A 240-item personality inventory that examines a person’s 5 personality traits: Neuroticism, Extraversion, Openness to Experience, Agreeableness, and Conscientiousness.

Myers Briggs Type Indicator

A self-report questionnaire to profile an individual’s psychological type on 4 elements of psychological functions: Extraversion-Introversion, Sensing-Intuition, Thinking-Feeling, and Judging-Perception.

GMA(A)

The Graduate and Managerial Assessment Abstract test assesses an individual’s strategic thinking, new and changing patterns identification capability, and flexibility to devise new methods and analyze information at different levels.

Watson Glaser Critical Thinking Appraisal (W-GCTA)

The analytical reasoning skills test based on 80 reading passages presenting problems, statements, arguments to measure 5 aspects of critical thinking: Drawing Inferences, Recognizing Assumptions, Deductive Reasoning, Logical Interpretation, and Argument Evaluation.

Consequences Test

A test of divergent thinking which elicits originality and measures the creative potential of individuals in problem-solving situations.

The Study Approach—Step 1

The leadership personality study was carried out in two steps: The first step compared all senior managers (sample size 899) with other managers/supervisors (sample size 668)—14% women and 86% men—to see whether there were any differences at this level.

The objective of the first step of the study was to identify whether the senior managers were any different from managers on personality, reasoning, business and leadership facets. The managers represented a wide range of sectors, industries, functions, and nationalities.

Key Takeaways—Step 1

The results showed that senior managers notably differed from managers on a number of personality, reasoning, and business and leadership aspects. The senior managers scored higher on extraversion and drive, and lower on neuroticism. They were also better on analytical and creative thinking, business and leadership skills than managers and supervisors; and were observed to be more driven, assertive, dependable, open, intuitive, and emotionally balanced. Click here to find out more about the detailed scores on individual psychometric tests.

The Study Approach—Step 2

The second part of the leadership profiling study focused only on a small group of senior managers whose performance was observed for several years. The group was segregated into 2 sub-groups; the first one encompassed senior managers with a consistent track record of success, whereas the second group included those with an uneven track record.

The sample encompassed 101 senior managers from a range of sectors, representing 12 distinct functions and 9 nationalities. Altogether, there were 51 consistently successful leaders and 50 not so successful leaders. The two groups were then compared using the same tests, as in the first study.

Key Takeaways—Step 2

The results indicated that the senior managers with consistently successful track record scored higher in almost all aspects of personality and psychology. They were found to be significantly more extravert, open, agreeable, and conscientious, yet less neurotic. In terms of logic and intelligence, they were better creative thinkers and innovators. The consistently successful leaders were also observed to have more advanced business and leadership acumen than senior managers with inconsistent track records. To find out more about both groups’ scores on individual psychometric tests, click here.

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Creative ideas—such as Innovation, Process Improvement initiatives, or Growth Strategy opportunities—drive businesses. It’s every executive’s dream to manage a team that is creative enough to come up with innovative ideas perpetually. Traditional brainstorming is the conventional method utilized by teams to generate new ideas globally.

The conventional brainstorming sessions, however, often falls short of generating innovative ideas. These stints are typically unstructured, attended passively by a group of people trying to pay attention to a moderator who requests the team to think outside the box. The participants, mainly, remain quiet during the workshop, while a few take control of the session with their mundane ideas. They believe the sessions take up their precious time, and yearn to get back to their routine work. The few ideas generated during the workshop are seldom put to test after the session.

A more pragmatic and productive approach to idea generation commences by developing and asking intelligent questions from the participants. The Question-based Brainstorming approach necessitates more planning and organization than traditional brainstorming, but delivers better ideas for effective business problem solving and tackling various business situations.

This practical, question-based approach to brainstorming entails 7 key steps:

1. Understand the Organization's Decision Making Criteria
2. Ask the Right Questions
3. Pick People Who Can Answer the Questions
4. Hold Focused Idea Generation Sessions
5. Set the Brainstorming Expectations
6. Have Subgroups Determine Their Leading Ideas
7. Follow up Quickly

Let's take a deeper dive into the first 3 steps to brainstorming.

Understand the Organization's Decision Making Criteria

The first step to effective brainstorming entails acquiring a thorough understanding of the organization's decision making criteria. Most organizations are too rigid and afraid of trying out new insights and ideas. They trust that their existing policies and procedures must be strictly adhered to no matter what. Thus any creative ideas if generated go largely unimplemented.

Senior executives aiming to trigger innovative ideas in their people need to comprehend, quantitatively outline, and possibly influence the criteria their organizations utilize to make decisions about the ideas developed. The team needs to know the limitations that should not be surpassed before engaging into any brainstorming sessions.

Ask the Right Questions

Traditional brainstorming focuses on the quantity of ideas; the more the better. A more structured approach to idea generation exploits organized probing to generate insightful viewpoints. The senior managers generate a string of carefully constructed questions, which should then be rigorously analyzed by the participants in small groups during a series of idea generation sessions. The probing should make the respondents think in new ways, control the thought dimensions that the team will analyze, yet it should not restrict the attendees to specific answers.

Pick People Who Can Answer the Questions

Traditional brainstorming sessions select workshop attendees based on their ranks in the hierarchy, and not because of their valuable insights. However, leaders aiming to inspiring creative brainstorming should choose workshop participants who possess deep “hands-on” knowledge on the subject, and have the ability to express themselves clearly.

Interested in learning more about the other steps to Brainstorming? You can learn more and download an editable PowerPoint on the 7 Steps to Brainstorming here on the Flevy documents marketplace.

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To succeed in a market or industry, organizations need to objectively analyze the underlying forces, attractiveness, and other success factors. They often seek outsiders’ assistance to bring fresh perspective, insights, and recommendations. The external contractors commence the engagement by carrying out a detailed industry analysis.

The industry analysis facilitates in identifying potential opportunities, threats, and the current and future scenarios of the industry. The consultants use this tool to help their clients with valuable insights needed to acquire, maintain, and improve their position in the market. Industry analysis is a critical part of strategic planning and it should be taken very seriously as it has a strong impact on the reputation of the consultants.

Incorrect Approach to Industry Analysis

Some consultants, however, do not give due emphasis to industry analysis, fall short of putting the required efforts into the engagement, and believe that they can simply “wing it” based on their experience. They tend to coast on their past credentials and their years spent with a major consulting firm. Here is a list of a few common mistakes that these consultants make:

• Evading the desired level of research on the subject
• Plagiarizing reports available online
• Summarizing the content in a flashy PowerPoint presentation
• Presenting the deck to the client under their own name

Structured Approach to Industry Analysis

The consultants who do not put in much effort in undertaking the industry analysis should realize that making a summary of the reports available online could point to outdated and erroneous market analysis, and that every analysis has a message that can’t be interpreted by the audience on their own. It is the job of the consultant to interpret, communicate, and present it to the client in an organized manner.

This is where a structured approach to industry analysis helps. First and foremost, it entails knowing what is required from the engagement and finding the “objective function”—i.e., analyzing trends in order to uncover solutions to questions that are to be answered. For instance, for a Corporate Strategy & Transformation study, the objective function could be understanding the leading trend shaping the region that should be responded to. The consultants should then figure out whether the trend will impact the demand side or supply side. Next, a storyboard needs to be developed to present the trends and their impact in a professional manner.

Deliverables

The industry analysis exercise is incomplete without desktop analysis and extensive internal and external stakeholder interviews (external interviews should be approved by the client upfront to avoid any hassle later on). The elements that the consultants should investigate through the interviews and desktop research include the forces shaping the market, potential challenges, value chains, key drivers impacting the industry, suppliers, and competitors’ strategies and tactics.

Key Takeaways

Some of the key takeaways from the industry analysis are:

• The industry analysis assignment should be taken seriously.
• Don’t rely merely on your credentials and past experience at top consulting firms.
• Never settle for anything mediocre or low quality.
• An industry analysis done by just copying and condensing other’s external reports, and presenting them to the client in a flashy presentation is simply unethical.
• Innovative ideas and approaches initiate from original work.

Interested in knowing more about how to go about the Industry Analysis? You can learn more and download an editable PowerPoint on the Industry Analysis for Consultants hereon the Flevy documents marketplace.

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One of the major necessities of this information age involves developing leadership that is capable of guiding organizations through challenging times. A vast majority of executives at most organizations are exceptional in handling routine operations; however, finding leaders proficient in transforming the ways of doing business and tackling unique problems is not easy.

The paucity of leaders in-house triggers hiring of external talent, which does not help in transformation, as successful change dictates leading from within. This scarcity of leaders often goes under the radar, which further aggravates the situation, as it is difficult to distinguish strategic inadequacies in an organization’s senior leadership. It comes to light only in case of a major setback when the organization realizes the inadequacies of the current leadership.

Strategic leadership capabilities can be developed, but this merits revamping the management, cultural, employee development, and promotion practices. The 10 Principles to Strategic Leadership involve a combination of organizational systems and individual capabilities that when implemented collectively facilitate in attracting, developing, and retaining strategic leaders.

The 10 Principles of Strategic Leadership fall under 3 distinct groups. The first group includes approaches to decision making, transparency, and innovation. The second group encompasses unconventional ways of thinking about assessments, hiring, and training. The last group comprises of principles designed for the potential strategic leaders themselves.

Systems and Structures

1. Distribute responsibility
2. Make information open and accessible
3. Promote innovative thinking

People, Policies, and Practices

1. Develop a culture that accepts failure
2. Foster collaboration among strategists
3. Promote experience-based learning
4. Hire for Transformation

Self Improvement

1. Bring your whole self to work
2. Dedicate time for self reflection
3. Know Leadership developing is ongoing

Now, let's take a deeper dive into the first 3 principles of Strategic Leadership related to Systems and Structures.

1. Distribute Responsibility

Strategic leadership capability can be built through practice and a bit of authority. It is important for the top management to delegate authority and empower employees across the organization to take risks and make decisions. Often, there are people in the lower ranks that are of immense help in finding viable solutions to intricate problems, if only they are given the opportunity to shine by delegating responsibility and showing confidence in them.

2. Make Information Open and Accessible

Transparency and organized sharing of information is critical for inculcating strategic leadership. The traditional management structure has been derived from the military, which intrinsically limits the flow of information and makes it available to certain people only when needed. This limited flow of information leaves the executives to make decisions without sufficient data—relying on conjecture only—and precludes them from sharing creative ideas that clash with that of their superiors.

3. Promote Innovative Thinking

At traditional organizations, managers decide the fate of any new idea by their teams—appreciating its value or suppressing it from being analyzed. Suppressing the idea also quashes the innovator’s excitement. The ability to generate and share creative ideas is essential for strategic leaders. Organizations need to encourage innovation by allowing employees to email the leadership directly and by holding weekly meetings for employees of all ranks to approach leaders openly.

Interested in knowing more about the principles of strategic leadership and the essential traits of strategists? You can learn more and download an editable PowerPoint on the 10 Principles of Strategic Leadership here on the Flevy documents marketplace.

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Almost every other day, startups emerge and disrupt established companies because of their innovative ideas and business models. This disruption is, primarily, due to the reluctance of big companies to implement a series of strategic and organizational practices required to organize and inspire creativity.

Large firms are, generally, better at implementation rather than innovation due to their long-established ways of doing business and other cultural elements. Their success is owing to optimization of existing business instead of due to ingenuity. However, several large corporations are successfully innovating, by adopting certain unique attributes and approaches.

To uncover those attributes and approaches, McKinsey & Company conducted a multi-year study—encompassing detailed interviews, workshops, and surveys—of over 2,500 executives in over 300 companies. The study revealed 8 critical attributes that were present at each large enterprise found successful in innovation (product, process, or business model related). 

These critical attributes—also referred to as the 8 Pillars of Innovation—help the organizations set the foundation required for Innovation Management to flourish and become leading innovators:

1. Aspire
2. Choose
3. Discover
4. Evolve
5. Accelerate
6. Scale
7. Extend
8. Mobilize

Now, let's take a look into the first 5 pillars:

Aspire

In the corporate world, the CEO’s inspiring words are far from adequate to encourage innovation. It is the individuals’ aspirations that drive them to innovate. A realistic, long-term vision and strategic plan that triggers action is a facilitator to aspire. High level aspirations (vision) should be defined, made a part of the strategic plans, and linked with estimates of value (financial targets) that innovation should generate. These financial targets should be apportioned to all business stakeholders through performance targets.

Choose

New ideas are priceless. Many organizations, however, get into trouble not from the scarcity of innovative insights but from irrational decisions in ascertaining the right ideas to nurture and scale.

Identifying and scoping these potential opportunities involves insightful visioning of the future and meticulous strategic analyses. Companies should choose promising opportunities to explore concomitantly, carefully plan and execute the most viable options, and drop the ones deemed impractical.

Discover

The insights discovery attribute is the essence of innovation. It is one of the chief concerns for the organizations to know how they can develop new ideas and insights. Analytical assessment of 3 crucial elements—a valuable problem to solve, the technology that enables a solution, and the business model that generates money from it—is of great help in generating valuable insights and ideas.

Evolve

Organizations need to consistently evolve their businesses before they are overthrown by technology driven startups. However, they are often reluctant to pursue Business Model Innovation (BMI) due to the various complexities involved—such as optimizing the value chain, expanding profit centers, or changing delivery models. Leading companies fight this trend by improving their market intelligence, establish separate budgets for new businesses, relentlessly assess their value chain, and deliberate on improved delivery mechanisms. They are always eager to test new offerings and operating models against environmental threats and competitors’ responses.

Accelerate

Organizations often inhibit innovation from flourishing in their culture, unintentionally. Several factors discourage innovation, such as, restricted governance processes, stifling bureaucracies, slow approval process, and lack of teamwork.

To accelerate innovation, it is important for organizations to investigate the validity of a promising idea by running it through end users early on during the development phase to gather valuable customer feedback. They also need to work on deploying empowered cross-functional project teams, curbing bureaucracies, and outlining well-defined decision making processes.

Interested in learning more about the other Pillars of Innovation in detail? You can learn more and download an editable PowerPoint on the 8 Pillars of Innovation here on the Flevy documents marketplace.

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Functional areas in an organization are often marred with ambiguities--some process related and other role related. The Responsibility Assignment Matrix or RACI Charting is a simple technique to resolve these ambiguities. It works collaboratively to clearly identify functional areas and roles and responsibilities in order to complete a desired activity.

The RACI Acronym stands for:

• Responsible - The individual responsible to complete an activity.
• Accountable - The person who is ultimately answerable for the activity, and has the final authority.
• Consulted - The person (often subject matter expert) who needs to be consulted before any action, and has to provide input to the activity.
• Informed - The individual(s) who needs to be informed after a decision has been made, for them to take action as a result of the outcome.

The RACI matrix ensures that accountability lies with the person who can be really held accountable for a specific task and resolves the doubts and differences in cross-functional environments. The matrix enables managers from different organizational levels to hold systematic discussions about critical activities and actions.

Applications of RACI Charting

RACI charting and analysis is useful in numerous ways and has many applications. These include:

• Assesses workload, quickly identify overburdened versus underutilized departments or individuals.
• Ensures that all the key functions and processes are accounted for. RACI charting helps track fault(s) in a substandard process.
• Assists in orientation of new employees to let them understand their roles and responsibilities easily.
• Allows redistribution of work between groups and individuals.
• Aids in project management, provides flexibility in matrix structures, appropriately balancing between line and project accountabilities.
• Affords a medium for debate and interdepartmental conflict resolution.
• Documents the current roles and responsibilities (the status quo).
• Prevents confusion among the team members regarding their responsibilities.
• Curbs negativity from creeping in teams owing to issues like blaming others for not accomplishing a task.

RACI Matrix Development

RACI matrix or chart development involves the following steps:

• First off, identify all project tasks, starting with the description of high impact activities, and documenting them horizontally over the RACI matrix clearly.
• List down all the stakeholders or roles on the top of the chart, on the right side.
• Assign responsibilities against each task, in appropriate RACI codes.
• Gather input and modify the chart based on feedback from all stakeholders.

While developing the RACI matrix, the project teams should make sure to avoid generic activities and use action verbs for all activities, and make only one individual accountable and responsible for an activity.

RACI Matrix – Horizontal & Vertical Analyses

After the development of a chart, the project team needs to conduct horizontal and vertical analysis. The horizontal analysis entails careful scrutiny of each row of the RACI matrix to check the viability of the activity/ task. This analysis reveals signs of confusion, gaps, outdated processes, duplication, need for reorganization, and overloaded and underutilized resources. The horizontal analysis brings to light any of these scenarios:

• The chart shows No R's in rows: The team needs to see who is responsible for the task, or are there too many roles waiting to be approved, consulted or informed.
• Too many R's: There is a need to examine whether the activity is dependent on too many individuals for completion.
• Shows no A's: There is a problem here. Necessitates reviewing the distribution of responsibilities for the particular activity. Someone should be accountable for this.
• Reveals too many A's: This can cause misunderstandings, as every individual with accountability feels they have the final word on how to go about the task.
• Too few A's and R's in the chart: This represents an outdated process, which needs to be streamlined.
• Every box of the chart filled in: The team should analyze whether all the activities need to be consulted. Is this just to complete the chart, or are there any reasonable benefits in consulting all the roles?
• A lot of C’s and I’s in the matrix: The stakeholders should question whether all these tasks need to be routinely consulted, involve these many people, or to do that only under certain conditions. Too many people in the loop causes unnecessary delays.

Likewise, the vertical analysis requires careful inspection of each column to validate the role of each stakeholder, and to assess overburdened versus underutilized team members.

Interested in learning more about how to develop a RACI Matrix and carry out Vertical and Horizontal Analysis? You can learn more and download an editable PowerPoint about the RACI Charting & Analysis here on the Flevy documents marketplace.

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Innovative technologies are sweeping away everything: organizations, work practices, offerings, hierarchies, and even business models. Those days are long past when business models used to stay static for years to no end. They are now under threat more so than anything else, since any technology-driven entrant can knock an established business model down in no time.

In order to stay in the game, organizations need to evolve their business models tenaciously.  Business Model Design is grounded on tacit industry beliefs around Value Creation. These rigid underlying industry beliefs become widespread opinions and are deemed unchallengeable. For instance, in the telecom sector, success relies on customer retention and average revenue per user, whereas views and hits trigger profitability in the media business.

Incumbent companies are able to displace conventional business practices and current approaches of value creation by reassessing and challenging the widespread, hindering beliefs that support them. But such business model innovation is not as simple as it seems.

Approach to Business Model Innovation (BMI)

The approach to displace conventional business practices and methods of value creation commences by ascertaining the most significant beliefs or ideas about value creation in the industry, and clarifying the notions that trigger these beliefs.

The approach to Business Model Innovation (BMI) comprises the following 5 steps:

1. Identify Existing Business Model
2. Determine Foundational Beliefs
3. Challenge Underlying Belief
4. Sanity Test Our Reframe
5. Formulate New Business Model

Let's take a deeper look at the 5 steps to the BMI Approach.

Identify Existing Business Model

The first step requires delineating the dominant business model in the relevant industry and determining the long-established beliefs regarding their value creation method.

Determine Foundational Beliefs

The next step is to reveal the supporting notions that help establish that belief—i.e., notions about customer needs, technology, laws, costs, and ways of doing business. For instance, financial service providers have a strong belief that customers desire economical, yet scalable automated systems. This assumption is based on the advantages that economy of scale of IT products offers to them.

Challenge Underlying Belief

This step entails challenging the foundational belief and creating a radical new premise that no one currently in the industry wants to believe. For example, challenge the minimum IT systems’ scale requirement belief of the financial service operators, i.e., what if IT could be based almost entirely in the cloud, diminishing the need for minimum economic scale.

Sanity Test Our Reframe

A newly established (reframed) belief or idea may or may not work. It is important to test the reframed belief first. Applying a reframe that is industry proven, even if it is from a different industry, may work. Innovative business models can be utilized in varied industries.

Formulate New Business Model

The last step entails translating the reframed belief into your industry’s new business model. Once companies reach a reframe, they begin to test and adopt new mechanisms for creating value—e.g., new ways to communicate with clients, operating model, or resource allocation.

4 Areas of Business Model Innovation

Implementation of a new business model necessitates analytical evaluation of 4 main areas of the existing business model. There are opportunities for rethinking and innovation present within each of these 4 components, regardless of location:

1. Customer Relationships
2. Key Activities
3. Strategic Resources
4. Cost Structures

Digitization is a common factor in these 4 areas, which disrupts customer interactions, business activities, resources deployment, and economic models.

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Financial downturns and intense competition has put a lot of strain over boards and directors to perform better. The effectiveness of the board of directors varies from organization to organization.

An accomplished chairman can make the board more constructive and practical by establishing high standards and helping members improve their participation.

In 2013, McKinsey & Company carried out empirical research to uncover effective board practices. The study analyzed 772 corporate directors, representing both public and private owned businesses globally, from a broad range of industries.  The objective was to unearth the practices, traits, time allocation, devotion, and strategic priorities that differentiate between an effective versus unproductive board of directors.

The research revealed stark differences in the way directors distributed their time in boardroom activities and towards the efficacy of their boards. Differentiated based on the range of issues directors handled and the time they dedicated, the directors assessed the impact of their work and their board’s competitiveness as:

1. Low Impact Board
2. Moderate Impact Board
3. High Performance Board

Let's take a deeper diver into the 3 board types.

Low Impact Boards

The directors in the low impact boards are observed to execute—at the basic level—functions, such as assuring compliance, evaluating financial reports, and analyzing portfolio expansion options. The low impact boards focus on eliminating biasness from their decisions. Only a minority of directors in this group practice human resource rationalization, deliberation on strategic alternatives, portfolio synergies creation, and strategic alignment.

Moderate Impact Boards

Boards with a moderate impact are observed incorporating trends and adapting to changing environmental conditions. The focus of moderate impact boards is on analyzing strategic alternatives. Majority of directors in these boards practice adjusting strategy based on environment, staying ahead of trends, engaging in innovation, and analyzing portfolio diversification options.

High Performance Boards

A large majority of directors in this group are seen actively taking part in performing all the key functions in their board practice. High impact boards have an even richer set of strategic priorities than the low or moderate impact boards. In performance management, for example, more involved boards conduct regular performance discussions with the CEO, examine leading indicators, and aspire to review robust nonfinancial metrics.

High performing boards look inward, analyze value drivers, discuss alternative strategies, and evaluate the distribution of resources. More engaged boards do not limit a CEOs’ right to set a company’s direction, in fact, they are supportive of management.

High Performance Boards – Key Traits and Commitment Requirements 

• High performance board necessitates dedicated and committed directors who can allocate sufficient time to their job. McKinsey survey revealed that directors on high performance boards spend about 40 days a year on their boards, whereas individuals from the low or moderate impact boards work only 19 days a year, on average.
• Higher-impact board members devote around 8 extra workdays a year on strategy related tasks.
• They build a better perception of their companies and help senior management test their strategies.
• The directors serving high performance boards are more effective and more satisfied with their work.
• High performance boards spend more time on Enterprise Performance Management, M&A, Organizational Health, and Risk Management activities.

Interested in learning more about how to improve the effectiveness of your board?  You can learn more and download an editable PowerPoint about the High Performance Boards hereon the Flevy documents marketplace.

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New market entry provides potential opportunities for organizations to grow. But penetrating a market and establishing a new business is fraught with complications and failure. Attempts at entering a new market often fail, in fact, research suggests that for every successful market entry about 4 fail. The reasons for such high failure rates involve timing, scale, competition, capabilities, and predominantly irrational decision making.

The decision to successfully enter a market necessitates detailed analysis. These critical decisions often get flawed by Cognitive Biases—the systematic errors in the way people process information—resulting in huge financial implications.

Cognitive biases distort executives’ perception regarding their firm’s capabilities, potential market, and competition. These biases trigger misleading beliefs in executives—such as, their existing capabilities are in line with what’s required in the future, or that the market entry move will go unnoticed by the competitors. Removing biases out of decision making is an arduous task, as not many executives are able to identify the biases that manipulate their planning and decision making processes.

Cognitive biases damage a firm’s market entry planning and decision making processes. Market entry analysis requires a robust methodology. A 2-step methodical approach helps executives understand the Psychology of Market Entry Analysis and eliminate cognitive biases from their crucial market entry decisions: 

1. Develop a Reference Class
2. Remove Bias from Decisions

Develop a Reference Class

While making such critical decisions, most executives count on their gut and consider only their company’s inside view. This approach is misleading and prevents them from developing an outside perspective based on previous market entry experiences, and assessing opportunities against certain success parameters.

Executives can utilize a reference class—group of similar decisions that other firms have taken in the past that provide valuable benchmarks for decision making. A reference class of should be thoroughly evaluated in terms of circumstances that warranted those decisions and the outcomes that those decisions leveraged, to generate empirical predictors of success.

The approach saves the decision makers from falling into the “confirmation trap,” which urges them to seek information that confirms to their hypotheses only. It also drives the analysts to explore more options and data. Companies in various sectors understand the importance of drawing a reference class, while some don’t consider looking at the experience of outside companies worthwhile and encounter failures as a result.

In preparing a reference class, executives need to explicitly review 6 key factors that serve as predictors of successful market entry. These predictors of market entry success help the executives decide whether to go ahead or drop their entry decision.

1. Size of entry relative to minimum efficient scale
2. Relatedness of the market entered
3. Complementary assets
4. Order of entry
5. Industry lifecycle stage (more on this can be found here: Consolidation-Endgame Curve)
6. Degree of technological innovation

Remove Bias from Decisions

Biases in corporate decisions are a product of behavior, training, culture, and human nature. These biases deviate the executives from thinking rationally, and prevent them from organizing and analyzing data properly. Executives need to work on identifying, labeling, and eliminating biases from their decision making process.

Removing cognitive biases objectively leverages improved chances of success for the organizations; this entails targeting the following 5 core issues:

1. Value Proposition
2. Market Size
3. Competition
4. Market Share and Revenue
5. Costs

Interested in learning more about removing Cognitive Biases in Market Entry Analysis? You can learn more and download an editable PowerPoint about the Psychology of Market Entry Analysis here on the Flevy documents marketplace.

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Transformation programs targeted towards boosting organizational performance have been prevalent for quite a while now. But, such initiatives aren’t easy to manage. The foremost challenge for the senior leadership is to motivate people to modify their behaviors and practices.

For the transformation to be successful, it is critical for the top management to establish the magnitude of change necessary to realize the required business results, before initiating performance improvement projects. They can select from the 3 levels of change. The first level is where firms operate directly to achieve results, without altering the work practices of their people. At the second level, people are compelled to alter their ways in line with their current behaviors in order to achieve a new target. The third level involves a fundamental cultural transformation, changing the mindsets of the whole organization—e.g., from reactive to proactive, strong tiered to forthcoming, inward focused to external focused.

Senior management can get valuable insights from psychology to understand the attitudes, personality types, and thought processes of individuals to improve performance. Utilizing these insights several enterprises have generated amazing, deeply embedded shifts in the mindsets of people. Transformation initiatives that employed psychological developments related to the ways people contemplate and perform are more likely to revolutionize work practices, shift behaviors, and generate improved results.

Change will only be acceptable to employees if they are inspired to think about their responsibilities in a different way. This entails understanding the 4 core conditions of Psychology of Change Management that are essential to alter the existing mindsets of people to the desired mindsets:

1. Belief in a Purpose
2. Reinforcement Systems
3. Ability to Change
4. Consistent Role Models

Let's take a deeper dive into the 4 core conditions to alter the mindsets of people. 

Belief in a Purpose

The first condition to bring about transformation is for the people to have faith in the rationale for change. As per Leon Festinger’s theory of cognitive dissonance, a distressing mental state occurs in individuals when they find that their beliefs are contradicting their actions. Festinger observed that it is necessary to eliminate cognitive dissonance in people by changing either their actions or their beliefs.

It is critical for the people to believe in the overall purpose of the transformation initiatives that the organization has, or is planning to initiate, and understand the part that their jobs can play in the company’s growth. 

Reinforcement Systems

Psychologists interested in encouraging organizational human resources adopted B. F. Skinner’s theories of conditioning and positive reinforcement. Just as the subjects of Skinner’s experiments were inspired to accomplish the dull task of traversing a maze by providing the right incentives, organizational designers accept that the right incentives and reinforcement systems constructively influence people to do their jobs efficiently. These reinforcement systems include reporting structures, operational processes, and procedures—setting targets, measuring performance, and presenting rewards.

Ability to Change

Change initiatives often tend to urge people to act differently without training them on the ways to adjust broad guidelines as per their specific circumstances. For instance, change initiatives may require people to become “customer-centric,” but if the organization did not focus on customers earlier, the people will have no clue as to how to implement this value and what would entail a successful result in this case.

As substantiated by David Kolb’s four-phase adult learning cycle, to make adults learn they need much more than listening to instructions about a subject in one session. They need time.

Consistent Role Models

Consistent role modeling is as important in changing the behavior of adults as the 3 other core conditions collectively. Individuals, just like children, choose different role models—personalities in positions of influence, such as a partner, director, a union rep—whose behaviors and actions they mimic. Sustainable change in behaviors warrants top management’s full alignment with the new methods of doing business as well as making role models’ backing up their words with action.

The approaches that the role models employ differ from person to person, however, their behaviors should be in accordance with the guiding principles. You can learn more about the 4 core conditions to shifting mindsets alongside some real-life, practical examples here.

Transpersonal Psychology Workshops

Simply understanding the rationale for change—its importance for the company—does not influence people to adopt the desired behaviors. It necessitates a profound belief that it will be beneficial for their own development and progression. As corroborated by Transpersonal Psychology, the intrinsic craving to develop and grow instills human beings with energy. Leaders need to create an emotional connection for the employees with the new behavior to prompt that change. Transpersonal psychology workshops are of significant assistance in changing mindsets by creating such emotional connections and assigning change a specific value for individuals.

Interested in learning more about the value that transpersonal psychology workshops generate and how to actually organize them? You can learn more about the Psychology of Change Management and download an editable PowerPoint about here on the Flevy documents marketplace.

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