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  • GM CEO Vows Changes Because of Recalls

    General Motors (GM) Chief Executive Mary Barra says the company will change. It took too long to tell owners to bring the cars in for repairs. The company learned about the ignition switch problems over 10 years ago, but failed to recall the cars. Ms. Barra did not know the details of defective cars until December or January, as she became CEO on January 15. Her first change was to appoint Jeff Boyer as the new global safety chief in charge of recalls and other safety issues. He will meet with her once a month to discuss issues. In addition, she discussed the issue in a news conference, as seen in the video below, and started an internal probe of the problem. Ben W. Heineman, Jr. in a post on HBR blog network questioned why these delays occurred in the first place and recommended that business leaders have "robust systematic processes in place for personally leading or overseeing these threats to people and to the company." He gives the following as an approach to managing this type of health and safety crisis. Preventive systems and testing should be in place to reduce the issues to an absolute minimum. As GM has belatedly done, the CEO should appoint a head of safety and rapid response teams to receive reports of serious harms to persons or property that may be linked to product issues. Just as the general company ombuds system reports concerns to the top of the company about serious commercial, legal or ethical issues, the rapid response team should take any issue of potential consequence to the CEO or other high business leaders. Most importantly, the CEO or top business leaders should then form appropriate multi-functional teams relating to: design problems and solutions; internal personnel and processes; duties to regulators; management of litigation; a communications strategy with various constituencies; and any other relevant functions. The CEO or top business leaders must have prompt, periodic, direct reports until there is a good understanding of the interrelated issues. Then they must make decisions on an appropriate response. On these important safety issues, the CEO should also keep the board informed. Both during formulation of the strategy and after, the CEO or top business leadership must ensure that all communications to all constituencies must be strictly accurate. It is better to say nothing—and develop accurate facts—than to issue deceptive or incomplete statements. Once decisions are made about strategy, the CEO must oversee implementation to make sure, as appropriate, that it is meticulously carried out, changing systems both with respect to specific issues and more broadly as necessary, dealing humanely with people injured, and communicating fully and transparently with regulators, media, and other constituents. Questions: What do you think about the CEO's attempts to become the voice to reassure customers that the crisis will be resolved? Are there ethical issues associated with the company's failure to deal with the ignition problem when it was first discovered? The past GM bankruptcy limits its financial responsibility to compensate victims. Should victims be compensated? How might the CEO make this decision?
  • Two Southwest Airlines' Legends

    ) Happy Birthday! Former Southwest Airlines' chairman, president and CEO, Herb Kelleher, and its present chairman, president and CEO, Gary Kelly, share the same birthday, March 12. In the video above, they sit down together and talk about Southwest, the future, and thoughts on leadership. Southwest has been showing the video to employees at the company’s series of “message to the field” meetings. How should you respond to employees about change? What does leadership mean? What do you think employees think about the video?
  • Make Statistics Interesting

    Quality management gurus, such as W. Edwards Deming, have taught managers to use statistical control methods – not physical inspections alone – to prove that a process is working. Managers are encouraged to make visual pictures or charts of the statistics because employees have a hard time visualizing and understanding anything beyond simple distributions. The point of sharing the video below is not whether you agree or disagree with the information quoted in the video, but to see the way the statistics are presented. This presentation makes boring statistics more interesting. Presenting information in a way that allows employees to hear and see and think is a powerful tool available to managers who'd like to make changes. When presenting statistics, remember that there is always a story behind the statistics. It is far more powerful to show and tell the story than to tell people what to do. As a manager, how will you present information to your employees?
  • The Change Cycle

    Graphic Source: Ann Salerno and Lillie Brock wrote The Change Cycle published by Berrett-Koehler. Change creates emotion, commotion, and stress. Why? People fear loss of control, divorcing themselves from their old habits and ways, dealing with the “new,” questioning their future, and pondering what the New Year will hold. To understand and overcome these fears, the authors explain the six stages of The Change Cycle: Loss - Think about specific losses that change might create. Then, start problem-solving. Doubt - When change hits, it usually comes with information gaps. That is why employees speculate. Discomfort - It is only natural to feel overwhelmed when change arrives. Discomfort opens the door to the upside of upside down. This is an opportunity to learn to work smarter, not harder. Discovery - Working smarter changes your perspective. Play on your strengths. Understanding - What you have learned puts you back in control. Integration - Thriving during changes requires flexibility. How could knowing each stage of change assist you in navigating through the changes in your life? How could it help your employees when you are a manager?
  • J. C. Penney CEO Ron Johnson Resigns Under Pressure

    When J. C. Penny (JCP) hired Ron Johnson as Chief Executive in June 2011, he was known as a retailing genius. Johnson was Apple's senior vice president of retail before joining J. C. Penney. He wanted to make JCP America's favorite store by offering everyday low prices and shops within a store - a collection of 100 branded shops and specialty boutiques within the store. Sephora and MNG by Mango were successful when he was hired. In an interview with Harvard Business Review , Johnson said, "In retailing, you've got to trust your intuition much more than you trust the data. You can't follow the customer. You've got to lead your customers . . . even before they know what they want." Picture from Wall Street Journal The strategy was implemented without testing. Coupons and regular sales were eliminated. Loyal, discount-minded customers left and shopped elsewhere. Sales continued to decline. Employees lost their jobs. Ron Johnson resigned April 8, 2013. Have you shopped at an Apple store? Why? Have you shopped at J. C. Penney? Why? What is the difference between Apple and JCP? Why wasn't Ron Johnson able to turnaround J.C. Penney?
  • Change and Innovative Questions

    Every organization must plan for change in order to reach its ultimate goal . Effective planning helps a business adapt to change by identifying opportunities and avoiding problems. But, when is it time to change? What should be changed? How can change happen? Sharon Drew Morgen has designed the facilitative questions below to help individuals begin the process of change and innovation decision-making . Use these questions to determine if you are ready to make a change, or ready to become an innovator. Change and Innovation Template (increase box sizes as appropriate) 1.1 Take a look around your environment (home, family, business, personal). What issues do you see ongoing that you have not managed yet? 1.2 What has stopped you from managing them until now? 2.1 What would you need to see/hear/feel to recognize when it was time to do something different? 3.1 What criteria do you use to decide what aspects of the situation need to be changed? 3.2 Which aspects should stay the same? 3.3 What is the difference between the two? 3.4 And how will you know if you've chosen the appropriate elements for each? 4.1 How will you decide who would need to be brought into the 'change' conversation to ensure you have buy-in from interested parties? 4.2 How do you plan on bringing them into the decisions you need to make? 4.3 How will you know that they are indeed supportive of your change issues? 4.4 How will you know if they are not supportive? 4.5 How will you manage the situation if they believe they will be harmed by the change? 5.1 How will you and your decision partners determine all of the aspects that need to be managed? 5.2 What elements of the situation need to be shifted first? 5.3 What elements of the situation need to be shifted second? 5.4 How will you handle differences of opinion? 6.1 How will you monitor your process? 6.2 How will you know if/when you are going off course and need additional support (possibly from the outside)? 6.3 How will you and your decision partners help you in your monitoring? 7.1 What will success look like? 7.2 How can you be sure that the problem will remain solved over time? 8.1 What does follow up and follow through look like? © Sharon Drew Morgen, template/design Alan Chapman 2004-2009 After answering the questions above, reflect on the experience by using the "reflective diary template" produced by Alan Chapman and Sharon Drew Morgen. It is attached. How successful do you think these questions would be in facilitating change? Did you use them to make a change? If so, share your experience.
  • Resistance to Change

    Rapid changes quickly make yesterday's strategy obsolete. The future requires managers with the skills to integrate many unexpected and seemingly diverse events into planning. Thus, managers should be proactive, making change happen instead of reacting to change. But, some managers cling to yesterday's successful product, technology, or customer service instead of embracing something new. Below are some examples of resistance to change. Can you think of others? Add to this list. " Drill for oil? You mean drill into the ground to try and find oil? You're crazy ." --Drillers whom Edwin L. Drake tried to enlist to his project to drill for oil in 1859 " This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us. " --Western Union internal memo, 1876 "Louis Pasteur's theory of germs is ridiculous fiction ". --Pierre Pachet, Professor of Physiology at Toulouse, 1872 " Heavier-than-air flying machines are impossible. " --Lord Kelvin, president, Royal Society, 1895 " Everything that can be invented has been invented. " --Charles H. Duell, Commissioner, U.S. Office of Patents, 1899 " We don't like their sound, and guitar music is on the way out ." --Decca Recording Co. rejecting the Beatles, 1962 " There is no reason anyone would want a computer in their home ." --Ken Olson, president, chairman, and founder of Digital Equipment Corp., 1977 " So we went to Atari and said, 'Hey, we've got this amazing thing, even built with some of your parts, and what do you think about funding us? Or, we'll give it to you. We just want to do it. Pay our salary, we'll come work for you.' And they said, 'No.' So, then, we went to Hewlett-Packard, and they said, 'Hey, we don't need you. You haven't got through college yet .'" --Apple Computer Inc. founder Steve Jobs on attempts to get Atari and HP interested in his and Steve Wozniak's personal computer " 640K ought to be enough for anybody. " -- Bill Gates, 1981 " $100 million dollars is way too much to pay for Microsoft. " -- IBM, 1982
  • JC Penney Transforms

    On 2.1.12 JC Penney began its transformation. It replaced its promotion-driven prices with everyday prices (an average of about 40 percent lower) that are supplemented with month-long values and the best prices (sales on the first and third Fridays of each month). Its new CEO Ron Johnson, formerly of Apple, announced the transformation plans at a launch event in New York City. Johnson talked about the history of JC Penney. For the first 10 years of over 100-hundred-years of being in existence, JC Penney was named "The Golden Rule." The department store is returning to its core value, "Treat others as you want to be treated." He analyzed the transformation with six Ps - Product, Place, Price, Promotion, Personality, and Presentation. Product will be transformed by improving quality, bringing back a trend perspective, and restoring integrity to a great iconic American brand. The assortments will align with consumer expectations. Place will update the tired stores and make them innovative. Price strategy will be "fair and square" pricing. Everyday prices will be set at what the customer wants to pay. The lowest prices will be offered twice a month. Promotion cadence will be monthly with 12 events. For example, the month long value in August will feature "Back to school"; November will be "Get ready for holidays"; December will be gifts; and January will be the New Year. The product will be presented in a compelling way with stories to inspire cross shopping through the book and through the store, as well as through digital (smartphones and tablets). Personality will update the new logo of J.C. Penney. The brand is a living asset that will be brought to life across every possible touchpoint with the customer. The brandmark is a frame with jcp in top left-hand corner. It is distinctly American - a red frame, small blue square with white jcp. It is intended to communicate and unite a consumer facing messaging with honesty, simplicity, relevancy, and inspiration. Presentation is trimming the 400 current brands to 100 branded shops, similar to Sephora and MNG by Mango. Shops will be added each month and by 2015, stores will have 100 total shops with a "town square" in the middle. Changes at JC Penney began today, February 1. Management is calling this a complete transformation. There is a new logo, a new pricing strategy, and partnership with designers. What do you think? Will this differentiate JC Penney from other department stores? Will more people shop more often at JC Penney? Explain. Watch the launch at'S-TRANSFORMATION-PLANS-REVEALED-AT-LAUNCH-EVENT-IN-NEW-YORK-CITY .
  • Big Can Change

    The mission of Samuel J. Palmisano as Chief Executive Officer (CEO) of IBM (March 2002 to December 2011) was to make IBM a great company. "During his tenure, I.B.M. has been a textbook case of how to drive change in a big company - when so much of the study of business innovation focuses on start-ups and entrepreneurs." At the beginning of his tenure, Mr. Palmisanp formulated four questions to focus managers' strategic thinking. "Why would someone spend their money with you - so what is unique about you?" "Why would somebody work for you?" "Why would society allow you to operate in their defined geography - their country?" "And why would somebody invest their money with you?" As a result of using these four questions, IBM changed from a company selling computers to an innovative technology services company. IBM "solves societal challenges." See the attached IBM "five year road map." Mr. Palmisano says, "The hardest thing is answering those four questions. You've got to answer all four and work at answering all four to really execute with excellence." How could answering Mr. Palmisano's four questions help you and your career? Source: Steve Lohr, "Even a Giant Can Learn to Run," The New York Times , December 31, 2011,
  • The Management 2.0 M-Prize First Phase Winners

    The Management 2.0 challenge is cosponsored by McKinsey , the Harvard Business Review , and Gary Hamel’s Management Innovation eXchange (MIX). In the first phase, entrants were asked, ‘How are Web 2.0 tools and technologies changing management? The contest found that Web 2.0 is improving communication among employees at all levels. Furthermore, “ the winners share is a concern with ensuring that even employees on the front line can contribute to organizational strategy and innovation.” Below are the topics of each winning entry. 1. Sharing common resources more efficiently 2. Making self-management work at scale 3. Reaching consensus on complicated issues 4. Improving global training with local expertise 5. Taking feedback from the front line to senior managers 6. Building a better idea market 7. Using communities of interest to manage globally You can read the complete winning entries at the MIX site. Which of the winning entry topics do you think are most important in making “management more adaptable, innovative, inspiring, and accountable”?
  • Gary Hamel: Reinventing the Technology of Human Accomplishment

    Gary Hamel, author and co-founder of the Management Innovation eXchange (MIX), believes management for the 21st century must be reinvented. Today’s businesses are challenged by accelerating change, hyper competition, and shared knowledge. To be successful, businesses must be adaptive and innovative, while engaging employees. The Internet has impacted business models. (A business model is a method by which a company makes money.) For example, Dell revolutionized the personal computer business with an aggressive direct purchase business model and early adoption of the Internet. Yet, the Internet has had little effect on management models. Hamel says the future of management can be seen on the Web, which is adaptable, innovative and engaging. The values of the Web include openness, flexibility, and collaboration. User-driven online services which rely on user collaboration are known as Web 2.0. They include peer-to-peer networking, blogs, podcasts, and online social networks. In this excerpt from the University of Phoenix Distinguished Guest Video Lecture Series, Hamel discusses "what it means to build organizations that are fundamentally fit for the future—and genuinely fit for human beings." How can managers use the tools of the Web to create engaging places to work?