Will Tim Cook Ever Escape Steve Jobs’s Shadow?

by Roberto Verganti  |   9:47 AM September 10, 2014

Being the successor of a successful leader is one of the toughest challenges. How can you do more? There’s a lot to lose and few chances to win. Should you replicate the winning leadership style of your predecessor? The chances are that you will likely do worse. Should you change and build a new style? You risk destroying a well-tuned machine that works perfectly.

Three years ago Tim Cook accepted such a challenge. After a transient of three years without significant innovative product launches, yesterday he unveiled his first move into a new product category: smartwatches. He announced the Apple Watch with the well-known sentence that Steve Jobs used at the end of his speeches: “One more thing…” Regardless of what you thought of the latest smartwatch, those words are a cause for concern.

Like others’ initial reactions to the Apple Watch, mine are mixed. It has an excellent design. Apple also obviously worked intensively on the user experience. And it provides some delightful features, such as the digital touch that allow a new type of social interactions among people who wear the watch and are next to each other (e.g. by sending your heartbeat to the watch of your lucky friend).

But is the new smartwatch another example of Apple entering an emerging product category late and proposing a new interpretation that offers a more meaningful user experience? I’m not totally convinced. This time Apple seems less bold. It does not really reinvent the category; its differences from other smartwatches already on the market (e.g., Motorola’s Moto, Sony’s SmartWatch, andSamsung’s Gear) are not striking. Some commentators likened this lack of breakthrough features to other Apple copycat moves (e.g., the new iPhone 6’s bigger screens, which follows Samsung’s lead). According to some, this is a sign that Apple has lost its magical touch.

That said, the Apple Watch could be a winner. Customers (and app developers) will ultimately determine its success.

I’m more concerned about the tone of yesterday’s event and what it reveals about Apple’s leadership. The event came across like a replay of a movie I had already seen: the same format used by Steve Jobs — the same staging, colors, lighting, pace, and agenda; (almost) the same faces and voices, with the same magnifying adjectives celebrating the products features; the same “one more thing,” and the same band (U2) closing the event. In some moments, the thin silhouette of Tim Cook even reminded me of Jobs.

Apple loves art. So let me use an art-based analogy to describe my feelings. Yesterday’s extravaganza looked as if Apple’s leadership had entered a Mannerism period: In the 16th century, after the radical changes introduced by Renaissance masters like Leonardo, Raphael, and Michelangelo, many artists found it difficult to blaze a new path and instead copied and exaggerated their predecessors’ styles. It was a more sophisticated but also more artificial way of painting that lost the harmonious and natural dynamics of the Renaissance. In other words, yesterday’s extravaganza came across to me like an exaggerated celebration of Jobs’s style.

For Apple, the risk is Cook is applying a leadership recipe that has run its course. Every organization needs rituals, self-celebration, and stability, of course. But it also needs renewal. Not only because markets and competition change, but also because people in an organization — especially the youngest and freshest members of it — need new causes. They need new rituals and “manners” that they have helped create. This gives them a sense of ownership of the future and fuels new energies. As several innovation and strategy studies show, the most pernicious competitor of a successful organization is not out there in the market; it’s inside. Perhaps the strongest competitor of today’s Apple is Jobs’s Apple.

For Cook, as a leader and as a person, the risk is that by staying on the same path, he will never be “as good as Steve.” The risk is that one day, looking back to these years, he will have a feeling of having been good but never good enough. For sure, Cook’s leadership style has been forged by his closeness to Jobs. And for sure, there is a sense of emotional attachment, a sense of gratitude. But no one is the same. Perhaps Cook’s own style would be good for Apple and allow it to achieve greater heights; perhaps not. But at least he should give his organization and himself a chance to do so.

My hope is now that Tim has proven he can lead Steve’s way, he will feel free to move on and lead Tim’s way.

More blog posts by Roberto Verganti

More on: Apple, Innovation, Leadership, Leadership transitions, Product development

ROBERTO VERGANTI

Roberto Verganti is the author of Design-Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean. He is a professor of management of innovation at Politecnico di Milano and a member of the Design Leadership Board of the European Commission.

To Close a Deal, Find a Champion

by Paul V. Weinstein  |   11:00 AM September 12, 2014

In Greek mythology, Charon is the ferryman who guides souls across the river Styx to the underworld. Those who do not employ his services are forced to wander the shores—lost for a hundred years.

Dealmakers who try to “go it alone” can expect to suffer a similar fate. Closing a major deal with aFortune 2000 company is seldom straightforward. Large organizations are so complicated and diffuse that frequently even the people working there are unclear about what is required to make something of consequence happen. Without a guide, time and effort are squandered and the deal goes nowhere.

In a previous article, I wrote about the triangle of players involved in getting a major project green-lighted: Champions, Blockers, and Decision Makers. Here, I will show how to identify and win over a suitable champion—the crucial sponsor who can help you navigate the labyrinth of opinion, prestige, and politics between you and the approval of your project.

Although champions are not the ultimate decision makers, and they rarely have substantial power within their organization, they have four things that make them irreplaceable in developing and closing the deal: credibility, connections, company intelligence, and motivation.

These were all true of Charlie, a champion I met in 2004 just as the tech world was beginning to show signs of life after the dot com implosion. At the time, Charlie was an internet security specialist at IBM, and I was running business development at a company called Zone Labs.

Zone Labs was an upstart internet security software developer aspiring to disrupt established giants such as Symantec, McAfee, Check Point Software, and Cisco. It had a free consumer product that was downloaded by millions of users as well as a modestly successful premium product that sold online for $49. These assets resulted in roughly $2 million in annual revenue—not bad for a young enterprise. Yet, the real money in the space was being made selling to large IT organizations with significant security concerns. Zone Labs needed a name-brand customer.

Charlie came into our line of sight following a routine product inquiry from IBM. After a few meetings, it was clear that he was a champion who could bring Zone Labs and IBM together. He had credibility—he was a well-respected staffer and a 25-year veteran at IBM. He had connections—he had a deep understanding of how IBM functioned and he knew scores of people in the organization. He also had company intelligence. We learned through Charlie that there was a major undertaking underway at IBM to determine which security-related products they would invest in for the following year. The existing short list was comprised exclusively of large, well-established companies and their marquee products.

Credibility, connections, and company intelligence are the table stakes—they are the attributes that all suitable champions possess. So, how does a dealmaker align with someone in command of these assets and capture their interest? That’s where the fourth element comes in: motivation.

Zone needed a major name to establish its credibility in the marketplace and set it up as a viable alternative to the usual suspects. But what did Charlie need? Figuring out a champion’s motivation can be difficult, but the exercise is compulsory. Why? Because understanding human nature is a primary part of doing the deal. In many cases, it is more closely linked to getting the green light than even financing and business fundamentals.

The champions that I have known, Charlie and numerous others, have been motivated by various (but often overlapping) objectives that can be boiled down to five key words:

• Innovation. Some champions are visionary types with deep domain focus. They want to explore, experiment, and break new ground. I call these champions “the dreamers” because they are motivated by progress and exploration.
• Advantage. Other champions hope to use the deal to improve their company’s competitive position within an industry. These champions are “the lions,” because they are motivated by a desire to advance their company’s competitive position and aggressively dominate an emerging trend or market.
• Advancement. These champions strive to improve their own career prospects. As “the climbers,” they are motivated by opportunities to solidify their position within an organization or gain a lead over a rival individual or business unit.
• Respect. Many champions are seasoned professionals who feel underutilized by their organization. I call these individuals “the loyalists” because they are the heart of every company—valued for their know-how but universally under-celebrated. These champions are motivated by status: they want someone to pay attention to them and value their experience and input.
• Order. Many, many other champions simply want the numbers to work. Deeply rigorous, “the Vulcans” are motivated by logic, evidence, and proof of concept.

Like most champions, Charlie had a mix of motivations. During his lengthy career at IBM he had been consistently passed over for the big jobs (making him a loyalist). Although he knew his potential for advancement was limited, he had a deep desire to gain prestige. Charlie also cared deeply about his work and was looking to bring in new business that would offer IBM something above and beyond what the bigger security players had in-hand. He wanted to help create a competitive advantage (like a lion).

Understanding his underlying motivations, and knowing that he could help us navigate the mammoth IBM organization, we embraced Charlie as our champion. He got us on the short list (ostensibly to use us as a lever against the more established players). He identified the decision-makers and told us who the deal-blockers would be and why. And he was our inside man—delivering the details about what our competitors were doing. With his help we put together a solid story about why this little company, Zone Labs, was the future and could be trusted with a mission-critical component of a 300,000-person organization.

In this particular case, the decision-makers were a small group of IT professionals headed by Chris Matthews, the then-CIO of IBM. Matthews personally hosted regular visits from the CEOs of Cisco, Symantec, and others who lobbied for IBM’s business. We knew that, if Zone Labs prevailed, its product would need to sit on the computer of every employee next to the products of these competitors and would require additional support effort above and beyond what they were already managing.

In the end, Zone Labs beat out all the usual suspects and got a $1 million+ purchase order, plus a follow-on order for another $1 million for the next-generation of the product which, at the time, hadn’t yet been released. The company also made a strong connection with the service side of IBM, which became a major distributor of its product. Charlie earned lasting prestige within IBM and was credited with finding an unlikely yet extremely high-potential data security solution.

Champions are only one, crucial side of the deal triangle —you also have to align the deal’sblockers and the decision makers. All three must be managed with an understanding that people make decisions based on personal and professional motivations that are often hidden to the rest of the world. But once you get a champion in your corner, you’ve made a major breakthrough. You’re ready to enter the ring.

More blog posts by Paul V. Weinstein

More on: Negotiating, Networking, Sales

PAUL V. WEINSTEIN

Paul V. Weinstein is a Silicon Valley-based advisor to technology, entertainment, and media companies. He has raised hundreds of millions of dollars in capital and been a key player in acquisitions with a total value in the billions.

Why Terrorist Groups Are So Bureaucratic

by Sarah Green  |   12:00 PM September 16, 2014

I typed the words into the pristine white search field, hoping they didn’t land me on the NSA’s no-fly list: “How to manage a terrorist organization.”

There is a lot of academic work out there on what constitutes terrorism; the psychology of terrorists and terrorist acts; and the military precepts of asymmetric warfare. There’s not a lot on the basic management issues faced by your run-of-the-mill al Qaeda cell.

But that’s exactly what Princeton professor and former Naval officer Jacob Shapiro studies. The author of The Terrorist’s Dilemma: Managing Violent Covert Organizations and numerous academic papers on the topic, he examines terrorist groups like al Qaeda, Islamic State (also known as ISIS), and others through an organizational lens. I called him to pick his brain about it. What follows are edited excerpts of our conversation.

HBR: Why look at terrorist groups through a management lens?

Shapiro: One area where it’s very useful is in identifying the constraints terrorist groups face. For instance, one of the things you saw with Islamic State in Iraq in 2007 and 2008 was that most of the foreigners that are coming in to fight for them had very modest levels of education, at least as reported by the group itself, and very few useful skills. They had to invest a lot in training according to recently declassified HR documents.

So you think, “Wow, there were huge numbers of Iraqi men in 2007, 2008, 2009 that had to develop military skills, whether they had to develop them to fight for a particular side or for self-defense. Why do they even need all these unskilled foreigners?” It has to be they’ve had a tough time recruiting Iraqis. So looking at what their “talent pool” was back then can help reveal the constraints the current incarnation, the Islamic State or ISIS, is likely under now, and help you understand where you might clamp down on them.

But why use a business lens rather than, say, compare them to a traditional military structure?

Militaries are exempt from many of the concerns of other kinds of organizations. I think the critical thing that makes terrorist organizations seem more like businesses than militaries is that [in a terrorist group] you don’t have a cadre of people who live their lives within the organization. You don’t have well-defined career paths. What you do have in terrorist groups is a lot of turnover. So the groups that do sustain themselves over time and become a durable threat are the ones that put in place relatively low-cost business practices and coherent succession plans and all the things a business with high personnel turnover would need to sustain itself.

So what makes Islamic State so “successful”? 

Organizationally, one thing that is striking about Islamic State, looking at its lineage — from al Qaeda in Iraq to Islamic State in Iraq to ISIL to ISIS to Islamic State today — there is a fair amount of continuity in leadership and management. If you look at the documents that group produced in 2008, 2009, 2010, they were quite structured in how they did things (or at least it looks like they were). They were fairly systematic in tracking personnel, spending, income, all the things you need to track to realize economies of scale in a large organization. That’s something you need to do any time you want to organize large numbers of people to act collectively. Management without record-keeping is really hard. You can’t keep a thousand fighters in your head.

I’m sort of surprised terrorist groups are so bureaucratic.

They seem to use bureaucracy to make sure everyone is toeing the party line and to prevent splinter groups from breaking off. Terrorist groups have disgruntled and disobedient members just like any other organization, so the leaders try to rope people into a particular way of doing things by setting up standard operating procedures and making sure those are followed.

I do remember an example of one captured document in which Ayman al-Zawahiri castigates a Yemeni cell for essentially a sloppy expense report: “Will all due respect, this is not an accounting… you didn’t write any dates, and many of the items are vague.”

He is a notorious micromanager. The thing is, there are a lot of examples like this in the documents that have been captured. For instance, some ISI documents from 2007 sent out to local cells included a standardized form for reporting on your fighters and expenses, along with a set of instructions on how to fill it out. Among these were rules that the fighters had to keep their receipts and obtain two signatures for every expense. Maybe my favorite example is a memo sent out by the ISI media office in 2006 that basically said, “In order to help us produce better martyr videos, please fill out this form, copy it, and send it back. If you don’t have a copy machine, let us know, we’ll get the forms to you.”

I say this somewhat tentatively because this is a serious matter and I don’t want to make light of it. But there is something sort of funny about that. When you talk to people about these issues, is there gallows humor that people can’t resist? There seems to be something almost Monty Python-ish about it – in a way, it’s absurd.

People do react that way a lot, I think to the inherent mundaneness of it. But if you stop and think about what it takes to run one of these organizations, well you realize of course they must do this stuff. Bureaucracy is just endemic to the human endeavor. Writing things down is an incredibly powerful technology for managing complicated stuff.

But the good thing about the bureaucracy is that there is an inherent constraint in how big you can grow as long as someone is paying attention. If you’re facing competent governments, when you get to a certain size you start kicking off a level of information that attracts attention and which government forces can use to target you and degrade your organization.

To understand them, it is useful to think about terrorist groups as normal organizations. You examine them group by group — what is their goal, how do they use violence to advance that goal, and what’s their operational environment? Then you can think about their constraints, and about how would an organization deal with those constraints, if it were staffed and led by extremely committed, but deeply misguided, people.

More blog posts by Sarah Green

More on: Government, Military, Operations

SARAH GREEN

Sarah Green is a senior associate editor at Harvard Business Review. Follow her on Twitter at @skgreen.

Workers Don’t Have the Skills They Need – and They Know It

by James Bessen  |   9:00 AM September 17, 2014

How do workers feel about the adequacy of their skills? Until now, few studies have examined their views. Today, a survey of employees is being released that provides strong confirmation of the notion that employees need better skills to do their jobs well, especially skills related to technology.

Over the past decade, employers have repeatedly reported that they have difficulty finding workers with the skills needed for today’s jobs. But influential voices have challenged this finding. For instance, The New York Times Editorial Board calls the notion of a skills gap “mostly a corporate fiction,” saying “don’t blame the workforce.” They claim that employers just “want schools and, by extension, the government to take on more of the costs of training workers that used to be covered by companies as part of on-the-job employee development.”

The new survey, commissioned by Udemy, a company that provides online training courses, sharply challenges the view that the skills gap is a corporate fiction. Polling 1,000 randomly selected Americans between the ages of 18 and 65, the survey found that 61% of employees also feel that there is a skills gap. Specifically, 54% report that they do not already know everything they need to know in order to do their current jobs. Moreover, about one third of employees report that a lack of skills held them back from making more money; a third also report that inadequate skills caused them to miss a promotion or to not get a job.

The most important skills that employees are missing are computer and technical skills. Of those reporting that they needed skills for their current job, 33% reported lacking technical skills, including computer skills. Management skills were second most important.

The skills gap is not mainly about too little schooling. Survey respondents made clear that the skills learned in school differ from those required on the job; so while schooling is important, it’s not sufficient preparation for success at work. Of survey respondents who went to college, only 41% reported that knowledge learned in college helps them succeed in their current job. Seventy-two percent of respondents report that they needed to learn new skills for their current job. More generally, respondents reported acquiring those new skills in a variety of ways: some took formal, in-person classes, some took online courses, and many relied on informal learning from colleagues and other sources.

According to the survey, employers generally play an important role in helping workers learn. Employers paid for the majority of workers who reported taking paid online or in-person courses. And 30% reported that employers are very helpful at helping them gain new job skills; another 46% report that employers were somewhat helpful.

The overall picture is consistent with the view that new technology — especially information technology — is raising the skill level needed to thrive in the workplace. Schools don’t teach all of these skills and consequently on-the-job learning is very important. Employers aren’t the only ones who recognize this challenge. Employees know the skills gap is real, and they’re trying to close it.

More blog posts by James Bessen

More on: Economy, Education, Human resources

JAMES BESSEN

James Bessen, an economist at Boston University School of Law, is currently writing a book about technology and jobs. You can follow him on Twitter.

3 Terrible Strategies for Companies Seeking Growth

by Umair Haque  |   9:00 AM October 6, 2014

Some call it a depression. Some call it a never-ending recession. Some call it a disconnect or a decoupling. Some call it a not-quite recovery.

Here’s the truth. Econ doesn’t have a word for whatever we’re in…because whatever we’re in flouts the so-called laws of economics. Quarterly results look great; job growth is “up;” and financial markets are ebullient. So why are so many still worse off than they were before? Why hasn’t all this “growth” actually translated into a real feeling of prosperity? And – as so many CEOs would like to know – is there any way to make money in this era of perma-semi-stagnation?

Most leaders seem to think they have three choices:

Option 1: Shine it with gold and sell it to the super rich. Make it a “luxury”! Rebrand! Make the logo platinum! Add a fleet of maids and an entire army of butlers to it, if you have to!

Witness the rise of the ten thousand dollar cocktail, the million-dollar pair of jeans, luxury doggy spas (Wagsworth Manor: “a luxury retreat for the furry elite”). Nokia tried it with phones—and went down in flames. The UK tried it with an entire economy, turning the once great city of London into a ghost town of global oligarchs who own entire blocks, but spend barely a few weeks there. It’s a strategy of appeasement: trying hardest to placate the strongest.

Why doesn’t the gambit of merely trying more and more desperately to please the every idle whim of the super-rich work? After all, they’re the people who still have money left, right? It doesn’t work well for a simple reason: there simply aren’t enough of them, and they simply can’t spend enoughon consumption, to make up for the world’s falling middle classes. Your profit margins might rise, temporarily, but soon you’ll be furiously adding another platoon of maids or regiment of butlers, daubing platinum gilding on top of the gold leaf. It’s a losing game played more and more desperately for a shrinking prize.

Option 2: Sell to the rising global “middle classes” instead! Forget appeasement…let’s flee! To the very edges of the world, if we have to.

Except when you think about it, that doesn’t work either. The rising “middle classes” are significantly poorer than the ones that are falling. A middle class person in India makes maybe $10k a year and a middle class person in America used to make $50K. So sure: you can flog the same junk to the so-called rising global middle classes. But before that’s a valid strategy, they’ll have to rise a lot faster and a lot further than they probably can, given a stagnating global economy.

Option 3: Fleece the falling. After all, it’s true that they might be falling — but they’ve got credit cards and home equity. And on the back of that debt, says the most desperate junior vice president at Useless Widget Co, we can grow our profits! It’s the story of the “growth industries” of the last decade. The pawnshop economy. Casinos, payday lenders, private prisons, insta-on-demand-McWorkers serving everyone else who can barely afford them five dollar triplex mega soy mocha latteccinos. Fine print clauses in impossibly long contracts to hit people with hidden fees.

Can you earn a few extra pennies by fleecing people? Sure you can, Scarface. But here’s what you can’t earn: an organization worth building. Consider the sad, predictable story of embattled payday lender Wonga. Your customers will despise you. Your employees will hate working for you. Society (or at least Germany, Sweden, Australia, and Canada) will fight you. You’ll be vilified…and sooner or later, the regulators will force you to change. It’s a losing battle; one fought merely for marginal pennies of short-term gain that are already shrinking.

Finding cleverer, crueler ways to turn a more poisonous profit?

That’s not what strategy’s about at all.

Strategy is about building an institution that can compete. Competitiveness isn’t merely short-term profitability. It is about all the things that underlie lasting, healthy prosperity. It means having not just a “vision statement” but a passion. Not just a mission but a point. It’s about doing something that matters.

Appeasing, fleeing, and fleecing are precisely the wrong strategies for an age of stagnation—because if you employ them, what are you, really? Just another agent of stagnation. And so, sooner or later, your destiny will inevitably be stagnation.

More blog posts by Umair Haque

More on: Economy, Strategy

UMAIR HAQUE

Umair Haque is Director of Havas Media Labs and author of Betterness: Economics for Humans and The New Capitalist Manifesto: Building a Disruptively Better Business. He is ranked one of the world's most influential management thinkers by Thinkers50. Follow him on twitter @umairh.

Research: More Than Half of Top Female Execs Were College Athletes

by Nanette Fondas  |   9:51 AM October 9, 2014

All managers want to hire people with discipline, determination, and drive. Women executives are no different.

And according to a newly-released study, women executives who once played competitive sports, in college or elsewhere, prefer to hire other people with athletics in their background.

The study by EY Women Athletes Business Network and espnW surveyed more than 400 female executives in five countries (20% were U.S. women). Half are C-Suite level executives, meaning that they serve as CEO, CFO, COO or the board of directors at a company. Of these top executives, over half (52%) played a sport at the college or university level. Only 3% did not participate in sports at any point in their lives.

Three out of four of the C-suite women executives said that candidates’ involvement in sport influences their hiring decisions, because they believe people who have played sports make good professionals. These executives attribute participation in athletics to qualities like a commitment tobringing projects to completion and greater abilities in motivating others. These intangible skills are hard to learn in a classroom, says Beth Brooke-Marciniak, EY’s Global Vice Chair for Public Policy. The executive women also put a premium on the discipline honed by sports, which they see translating to a person’s determination and work ethic.

But even more important are two other strengths: competitiveness and teamwork. Both are critical to success in today’s marketplace. Donna de Varona, Olympic Champion and adviser to EY’s Women Athletes Business Network, put it this way to me:

If you try out for a basketball team but quit in the middle of the first game, or if you choose not to pass the ball to your talented teammate because you don’t like her, or if you are unwilling to spend extra hours to work on a weakness, you aren’t going to get very far. Sports teaches fundamentals for success and that is why both men and women executives like to hire athletes. C-suite executives hire these women because they share a common bond and know when the pressure is on they will not be let down.

It’s been over 40 years since Title IX passed, compelling American high schools to spend on women’s sports in equal amounts to their spending on men’s. Its supporters dreamed of the day that participation levels would also be equal. We still have a ways to go. Betsey Stevenson’s analysis of national data shows that the median state has a 17 percentage point difference between the ratio of male athletes to male students and that ratio for girls. In fact, according to the Women’s Sports Foundation, the gap between male and female athletic participation at the high school levelhas grown in the past five years. When sportswomen become hiring executives, and favor candidates for the qualities that athletics engenders, they send a valuable signal that participation in sports is not only a right – it can offer many rewards.

More blog posts by Nanette Fondas

More on: Gender, Hiring, Leadership development

NANETTE FONDAS

Nanette Fondas, co-author of The Custom-Fit Workplace, writes about business, work, and family issues. Her articles have appeared in The Atlantic, Slate, Psychology Today, Ms., HuffingtonPost, and scholarly journals. Follow her on Twitter @NanetteFondas.