Preston Smalley

I recently read the article Evidence-Based Management (HBR Jan 06) which outlines an emerging movement which applies the scientific approach long used in medicine to the practice of management.

A number of factors inhibit managers’ ability to make good decisions including:

• specialty bias (e.g. marketers tend to recommend marketing as a solution)
• hype (e.g. managers taken by the latest pop management theory)
• dogma (e.g. managers who know that people really only click on items “above the fold”)
• casual benchmarking (e.g. Shuttle by United’s attempt to copy Southwest)

Evidence-based management aims to avoid these pitfalls by:

• Investing in Analytics – In order to make sound decisions you must have the sound underlying evidence upon which to do so. This often means a large investment in metrics and analytics.
• Asking Questions – Recognize gaps in logic and misuse of inference. Often the positive effect touted is unrelated to the claimed cause. Demand that proposals be backed by sound data.
• Performing A/B Testing – Rather than make an uneducated decision, create a test for your hypothesis. eBay and other internet companies have been doing this for years and it is amazing all that you can learn from it.
• Showing Humility – By admitting what you don’t know you’ve taken the first step toward learning something. Celebrate mistakes and a means to learning about your business.

Having worked at companies that employ this management theory I think we must pay close attention to each decision made. A poor decision can be made under the guise of what looks like evidence-based management but is in fact not (see pitfalls above).

Want to know more?

• Pfeffer & Sutton (Stanford) site: http://www.evidence-basedmanagement.com/
• Article: Evidence-Based Management (HBR Jan 06 by Pfeffer & Sutton)
• Wikipedia on Evidence-Based Management

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In the article How to Play to Your Strengths I learned about a career planning technique that focuses on 100% positive feedback—that’s right no “constructive feedback”.

The article outlines that it’s human nature to focus on the negatives (when asked people remember four negative memories for every single positive one). And yet far too often, we as managers focus on developing weaknesses in ourselves and our teams. I’m a firm believer in the philosophy put forward by Gallup Researchers Buckingham and Clifton in Now, Discover Your Strengths which, as the title suggests, focuses on the positive qualities in yourself and your teams.

Reflected Best Self (RBS) Exercise

Unlike most performance exercises, this one focuses entirely on positive feedback—no negative or “constructive” comments. Here are the four steps to this process:

1. Identify Respondents and Ask for Feedback
   Gather feedback from a broad set of sources, including people you don’t currently work with (e.g. family members, friends, teachers). Avoid conducting it alongside traditional evaluation methods which include a negative focus
2. Recognize Patterns
   While the sources of input will be varied, try to identify common themes.
3. Compose your Self-Portrait
   Take the patterns that emerged and your own self-observations and write a prose narrative that describes “When I am at my best, I…”.
4. Redesign Your Job
   Based on what you learn about yourself you may change how you work and what tasks you delegate to your team.

The self-portrait developed out of this exercise seems like a useful tool to motivate and align one’s efforts at work.

Want to know more?

• Article: How to Play to Your Strengths [$] (HBR Jan 05)
• Assessment: Reflected Best Self Exercise [$] (Univ. Michigan)
• Book & Assessment: Now, Discover Your Strengths (Buckingham, Clifton)

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Peter Drucker is a firm believer in “feedback analysis”, the process of comparing your past expectations with the actual results. In his article Managing Oneself I learned that this approach was actually popularized by John Calvin and Ignatius Loyola in the 16^th Century and helped contributed to the success of the Calvinist and Jesuit movements. The concept of feedback analysis has four elements:

1. Concentrate on your strengths
2. Improve your strengths
3. Overcome intellectual arrogance
4. Avoid areas of weakness

Understanding how I perform and learn
Drucker first asks whether you are a reader or a listener? I’ve known for years that I’m a reader and visual learner. He also asks whether you perform best as a decision maker or an advisor. For me I excel in the advising role and love all the analysis and preparation that goes into a recommendation for a decision maker. Drucker would recommend that I focus on honing that ability rather than assume that I would also be good at decision making saying also that it is very difficult to change oneself. Many people over the years in the Number 2 role fail when promoted to the Number 1 position.

Understanding your values
If you are working somewhere whose organizational values are in direct conflict with your own values, then you will constantly be frustrated in your role there. Some examples:

• Short vs. long-run company goals
• Hiring philosophy (promote within vs. hire outside)
• Quantity vs. Quality

Hense the importance of knowing your strengths.

On Being Ready
What Jack Welch calls “luck” and Guiliani calls “being ready”, Drucker points out how to be successful we must be prepared for opportunities:

“Successful careers are not planned. They develop when people are prepared for opportunties because they know their strengths, their method of work, and their values. Knowing where one belongs can transform an ordinary person—hard-working and competent but otherwise mediocre-into an outstanding performer.” – Peter Drucker

Which leads us to Drucker’s important question which resonated with me: “What should my contribution be?” In today’s society this is not dicated to you as it once was perhaps 100 years ago. We must choose our path and ideally that path is a natural fit with our strengths and values.

Want to know more?

• Article: Managing Oneself [$] (Drucker, HBR Jan 2005)
• Book: The Effective Executive (Drucker 2006)

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This morning I’m preparing for my marketing class on Saturday and decided I’d look into eBay’s new Marketplace president, John Donahoe’s background. So I started with Bain & Company where he was their Worldwide Managing Director. Here are some articles that jumped out at me…

• The decision driven organization (Paul Rogers, Bain & Company)
  Several points jumped out at me. The need for clear decision makers, well defined roles, aligned goals and structure. This gives me some insight as to what John Donahoe has in mind for eBay. This diagram shows the 5 steps needed:
  

• The Last Legacy of the Dotcom Era (John Donahoe et al, Bain & Company)
  Discusses how to properly fund ventures within the corporation. How to decide what adjacent markets and opportunities into which you should move.

• Putting your leaders where it counts (Bain & Company)
  This is an exciting way to reward and leverage your organization’s leaders. It discusses how executives want to develop their leaders and yet they don’t spend enough time. Bain argues that putting your leaders to good use and developing them is a critical task.

In summary Bain & Company looks like an exciting and interesting place to work.

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