Intelligence + Maturity = Better Leaders – Court Chilton

MIT Sloan Senior Lecturer Court Chilton

MIT Sloan Senior Lecturer Court Chilton

From Xconomy

There are plenty of smart executives in the world, but they often make poor leaders. That’s because it takes both intelligence and maturity to excel at leadership. And when I say maturity, I don’t necessarily mean age, although generally more life experience is helpful. Maturity is the ability to manage oneself in challenging situations and to balance inquiry and advocacy about how to move forward.

It’s pretty easy these days to find examples of smart business leaders who lack maturity. Look at the irresponsible, off-the-cuff comments of Donald Trump and the messy wake his business dealings have left behind. Or, on the other side of the political aisle, Alan Grayson, who has been asked by other U.S. senators to end his bid for a Florida senate seat.

For a long time, researchers at MIT Sloan have talked about a 4-Capabilities Model of Leadership. The gist was that good leaders need to be able to do four things: visioning, relating, inventing, and sense-making. Visioning means providing direction and strategy; relating means connecting with people; inventing means creating processes, systems, and structures that enable execution; and sense-making is about understanding the world as a complex, dynamic place and trying to map it out with others.

Read More »

“Taken for granted” is not the new customer service norm – Lou Shipley

MIT Sloan Lecturer Lou Shipley

MIT Sloan Lecturer Lou Shipley

It’s been an extremely rough 30 days for three of the US airline industry’s largest carriers – United, American and Delta – whose rude and brutish treatment of customers was captured in smart phone videos that not surprisingly went viral.

In United’s case, the damage control was anything but as CEO Oscar Munoz immediately delivered a tone deaf, blame-the-victim response. His belated apology for United’s execrable behavior was of little help.

Friendly skies? Not so much.

The three high-profile airline debacles are stark examples of ham-fisted customer disregard and have given rise to the question: In an increasingly automated and technology-driven world, is being taken for granted the new customer-service norm?

Emphatically, no.  In fact, there’s ample evidence that it’s quite the opposite.

Savvy companies – global industry brands around the world – are investing in, listening to, and learning from customers because they realize that a relentless focus on their customers drives success and growth.

There are many excellent examples of companies that are putting a premium on delivering a consistently great customer experience to increase both revenue and customer loyalty.

Good examples of businesses that are both highly successful and customer-experience focused include Amazon, Netflix, UPS, Trader Joe’s, and the giant insurance provider USAA.

These thriving enterprises are in highly competitive markets and all of them are using customer service as a differentiator.

Read More »

The surprising way to come up with your next business idea — Hal Gregersen

Hal Gregersen, Executive Director of the MIT Leadership Center

Hal Gregersen, Executive Director of the MIT Leadership Center

From Fortune

Scott Cook, founder and CEO of Intuit INTU -0.43% , didn’t come up with his concept for the popular Quicken money management software sitting behind the desk or spit-balling ideas in a brainstorming session. He first conceived of it while watching his wife grow increasingly frustrated preparing the family’s finances. From a single observation, combined with Cook’s understanding of computers, one of the world’s most successful financial software companies was born.

Consider all of the times you’ve asked yourself: “Why didn’t I think of that?” Indeed, the world’s next pioneering innovation could be sitting in plain view for anyone to discover. But what is it that inspires some people to take the next step on something overlooked by others?

Our research of high-impact leaders shows about one-third of them fall into the camp of observers –carefully observing the world around them with all of their senses, and identifying common threads across often unconnected data to provoke unique business ideas. Observation has transformative power. Yet, in today’s 24/7 culture, many of us operate on autopilot, starving our brain’s creative capacity. Here are three ways to tune this critical discovery skill and increase the odds that your next observation adds up to great innovation.

Schedule It

The most obvious way to become a great observer is to actively observe. Take a page from Cook’s book and watch your spouse or child perform a task. Schedule observation excursions; pick a company to follow, or set aside 10 minutes to observe something intensely. Following observation periods, think about how that might lead to a new strategy, product service or production process.

Read the full post at Fortune.

Hal Gregersen is Executive Director of the MIT Leadership Center and a Senior Lecturer in Leadership and Innovation at the MIT Sloan School of Management.

Can corporate America afford to walk away from President Trump? – Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From The Conversation

After campaigning as the candidate best able to work with business, President Donald Trump has shown he is anything but.

stream of resignations from high-level business counsels hit a crescendo recently when Trump was forced to disband two executive councils. The widespread and public defections were in protest over his unwillingness to unequivocally condemn racism and intolerance over the violence in Charlottesville, Virginia.

As an expert in organizational communication and leadership, I saw the dismissal of the councils as a dramatic and important moment in the relationship between top business leaders and the president. But does it spell the demise of the often difficult partnership between President Trump and corporate America?

A permanent breach?

CEOs like Merck’s Ken Frazier rightly voted their conscience when they began to abandon Trump’s American Manufacturing Council and the Strategic and Policy Forum. Frazier, the first to resign, said he felt “a responsibility to take a stand against intolerance and extremism.”

The Wall Street Journal, however, was quick to point out that many companies have stopped short of saying they would refuse to work with the White House in the future.

Indeed, despite the heated rhetoric, one thing is clear: Corporate America wants and needs to work with the administration, while the president benefits from a healthy relationship with America’s CEOs.

So if they both need each other, the question becomes how this increasingly tenuous relationship will play out.

Read More »

How We Rank The Most Innovative Companies 2017 – Jeff Dyer and Hal Gregersen

Jeff Dyer, Horace Beesley Professor of Strategy at the Marriott School of Management at Brigham Young University

Hal Gregersen, Executive Director of the MIT Leadership Center

Hal Gregersen, Executive Director of the MIT Leadership Center

From Forbes

Most innovation rankings are popularity contests based on past performance or editorial whims. We set out to create something very different with the World’s Most Innovative Companies list, using the wisdom of the crowd. Our method relies on investors’ ability to identify firms they expect to be innovative now and in the future. You can learn more about our research on innovation at The Innovator’s DNA website.

Companies are ranked by their innovation premium: the difference between their market capitalization and the net present value of cash flows from existing businesses (based on a proprietary algorithm from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.

To be included, firms need seven years of public financial data and $10 billion in market cap. (Facebook, for example, would rank high on the list if we used only the data since they went public.) We include only industries that are known to invest in innovation, excluding industries that have no measurable investment in R&D, so banks and other financial services don’t make the list. Nor do energy and mining firms, whose market value is tied more to commodity prices than innovation. Big caveat: Our picks do not correlate with subsequent investor returns. To the extent that today’s share price embeds high-growth expectations, one might even anticipate low returns to investors, as these expectations may be difficult to meet.

We use something called the Innovation Premium to compile our list. It is calculated first by projecting the cash flows a company produces from its existing businesses without any growth and look at the net present value (NPV) of those cash flows. We compare this base value of the existing business with the company’s current total Enterprise Value (EV): Companies with an EV above their base value have an innovation premium built into their stock price. You can read a more detailed explanation of our work around innovative companies and leaders in our book The Innovator’s DNA (Harvard Business Press, 2011), written with Harvard Business School professor Clayton Christensen. The following steps outline this approach in greater detail:

Read More »