KaizenBiz-What’s On Your Summer Reading List?

KaizenBiz, Tom Asacker, summer reading, booksWith the slower pace of summer days upon us (although some of the KaizenBiz readers are in winter), you might be thinking about those books you have been meaning to read. As for me, I’m looking at a copy of Resonant leadership : Renewing Yourself and Connecting With Others Through Mindfulness, Hope, and Compassion by Richard Boyatzis. While it is always interesting to read the newest books, sometimes we  have to go back to already-existing list and pick one of those titles.

Speaking of the newest books…

Every year on Small Business Trends, there is a business book contest and the books cover a variety of topics. Here are a few that caught my eye:

Number Sense: How To Use Big Data To Your Advantage by Kaiser Fung- Fung has put a book together that explains  how to look at Big Data and figure out when it is really bad data…or useful

Innovation: How Innovators Think, Act and Change Our World by Kim Chandler McDonald- This is for all the #KaizenFolk who get jazzed about innovation. The books contains interviews with innovators from around the world and shares insights and encouragement.

Culture Without Accountability – WTF? What’s the Fix? by Julie Miller and Brian Bedford- As a big fan of accountability, this book caught my eye. Miller and Bedford put forth a process that supports a company putting an accountability system in place and what could happen without it.

The Business Of Belief: How the World’s Best Marketers, Designers, Salespeople, Coaches, Fundraisers, Educators, Entrepreneurs and Other Leaders Get Us To Believe by Tom Asacker- Since Tom Asacker is one of our KaizenBiz community members, it is good to highlight his sixth book. If you’ve been with us on the chat, Asacker has shared his insights and perspectives so take a look at his book, get more than 140 characters.and discover your assumptions about leadership and how influence works.

Some suggestions from LeadershipNow.com

This site is a great source of books for anyone interested in leadership. Every month, they have a list of books that they recommend. Here a few from the last months:

The Obstacle Is the Way: The Timeless Art of Turning Trials Into Triumph by Ryan Holiday- We all experience adversity and often look for a way to handle it. Holiday presents how using the philosophy of Stoicism can be a tool for overcoming adversity and achieving success.

Essentialism: The Disciplined Pursuit of Less by Greg McKeown- Lots of us talk about having too much to do and too little time. McKeown’s perspective is that we need to follow The Way of Essentialism and do less but create more quality in our lives.

Creativity, Inc.: Overcoming the Unseen Forces Forces That Stand In the Way of True Inspiration by Ed Catmull and Amy Wallace- Catmull is one of the co-founders of Pixar Animation Studios as well as co-writer of this book which focuses on the process Pixar used to create unforgettable animation. Catmull and Wallace explain how companies can use the same creativity process.

These are the ones that caught my eye. What’s on your list for summer reading? Join us on the Twitter chat, #KaizenBiz on Friday, June 27, 2014 and share your recommendations.

How do you choose a “work” book to read? 

What one thing have you learned from a book that moves your business/work forward daily?

What books are you reading right now?

What books are you looking forward to reading over the summer?

 

 

 

 

 

 

 

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Shareholders Aren’t #1 Anymore?

Aspen Institute, shareholder primacy, Steve DenningIt is easy to get into the camp of those who believe that customers should be the primary focus of a business. After all, customers are the ones who spend their money on the products and/or services. Revenue and profit are always good for a company. It seems to be quite fashionable to talk about the customer being the most important person. Yet, you can’t deny the influence Milton Friedmann has had on defining the purpose of a corporation (we touched on it here and it comes up frequently during the live chat). It should be noted that Friedmann’s words have gotten over-simplified to simply state that the sole purpose of any business is to increase its profits. While there is more to his philosophy, there is also the sense that it does not really matter who is running the business as long as customers keep buying and dividends keep getting paid out.

So what are the perspectives on shareholder primacy?

The recent report from the Aspen Institute (worth taking a look at to see the different positions for and against shareholder primacy) lists them.

Arguments for shareholder primacy

  • Restricts powerful senior managers from primarily acting in their own interests
  • Shareholders tend to be long-term investors
  • Stock market is an efficient reporter of information that supports better decision making as it “entails the virtues of simplicity”
  • Everyone benefits when you serve shareholders
  • Provides a useful metric to evaluate corporate performance
  • Acknowledges wide range of owners

Arguments against shareholder primacy

  • Based on two false premises that shareholders are owners and ownership confers a financial obligation
  • Encourages short term decision making and actions
  • May be an outdated and potentially harmful notion in 21st century
  • Majority of shareholders are institutions and thereby not able to provide effective accountability
  • Makes the company the center of the universe
  • Most owners of corporations do not know nor possess the necessary amount of information about the organizations in which they invest
  • A sense of mission creates more wealth than the pursuit of creating more wealth for shareholders
  • Shareholder thinking and behavior does not account for natural complexity

The “world’s dumbest idea”?

Steve Denning has an interesting discussion about the Aspen Institute report . He’s the one who states that shareholder primacy is the “world’s dumbest idea.” He acknowledges that conventional wisdom puts the emphasis on maximizing shareholder value. If you have read his posts on Forbes, you are probably aware that Denning strongly states that maximizing stakeholder value is misguided and really the customer is where the focus should be.He critiques the report by stating they missed the debate by focusing on “fighting short-termism,”

The substantive debate is not about short-term versus long-term. It’s about whether organizations should operate as money-making machines solely for the benefit of managers and shareholders or as instruments which add value to society.

 

Despite Denning’s advocacy for the end of shareholder primacy…

Wall Street, business schools and conventional wisdom still heavily influence the focus on who benefits from the profits. Shareholders still hold  primacy. Maybe for larger organizations that are publicly traded, there is more pressure to show quarterly earnings. It seems whatever they do, everyone else does. So, are shareholders still number one or is this idea is on its way out?

What do you think? Should shareholders be the primary beneficiaries of wealth and value creation? Is it really “short-termism” that is creating such a problem? Join us on Friday, June 20, 2014 at 5pm GMT/12pm ET/9am PT to see if the purpose of a business is really changing and in what direction.

What is the purpose of a business/corporation? Why?

How does this change our conception of business’ ?

If shareholders still retain the power to hire or fire senior executives, why should the customer’s perspective even matter?

 

 

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The Hidden Side of Negotiation

Negotiations, negotiating, emotions, nonverbal Negotiations are a frequent event in businesses. Ultimately, both parties want to walk out of the process feeling positive about the agreement. However, finding the details that will produce the mutual agreement is often the most challenging aspect of negotiating.

It starts with the handshake

Most business conversations, whether at a networking event or a negotiation, begins with a handshake. There is some interesting research from Harvard Business School that seems to point out that the handshake is a clue to how the participants view one another as well as the willingness to cooperate. Like many conversations, nonverbal cues are key parts of how the negotiation progresses. There may even be more attunement in negotiations because both parties are keeping information back from one another. Being able to get a feel (literally) for the other person can help foster a positive relationship plus clue you in on their emotional state.

Yet, there can be misunderstanding of the actual term, negotiation

Even when you are attuned to the other person, the discussion may take a form that is more like haggling. According to Dictionary.com, the definition of negotiation is “mutual discussion and the arrangement of the terms of a transaction or agreement.” Haggling is defined as “to bargain in a petty, quibbling and contentious manner.”  According to Jeff Weiss, going into a negotiation in an adversarial manner is simply haggling because the focus is on the “win” and downplays the possibility of relationship. Like most things, there is a time and place for everything and haggling (or positional bargaining) is simply one choice. But Weiss says something else about the difference that is interesting,

Positional bargaining rewards stubbornness and deception; it often yields arbitrary outcomes; and it risks doing damage to your relationships. Most importantly, it causes you to miss the opportunity to get more value out of the negotiation than you originally expected. In other words, you won’t be creative and find ways to expand the pie because you’ll be so focused on exactly how to divide it up.

If every bargaining conversation is haggling, you run the risk of alienating customers, potential outside collaborators and colleagues/co-workers. It may be a more difficult discussion because you have to think beyond your own wants, needs and position but the discipline and preparation involved may yield more satisfactory results for everyone. The key is to know when to haggle and when to negotiate.

And then there are those pesky emotions

Weiss’ point about knowing when to haggle and when to negotiate point out how we can let our emotions run our behavior. When the stakes are high, it is much easier to get sidetracked by emotions. Shirli Kopelman goes into more depth about how emotions can work to the mutual benefit of both parties. She writes that positive and negative emotions can inform you about the nonverbal aspects, how they are helping or hindering and if there is any advantage to amplifying them. Interestingly, there seems to be a bias against emotions as there seems to be a perception that they cannot serve you in negotiations. But perhaps it is more of a misunderstanding that anything else. When we describe someone as emotional, we are noticing that they are in the thrall of frustration, sadness, anger or other intense emotions. This will certainly hinder the negotiation process. But even Stuart Diamond, who advocates being dispassionate, acknowledges that empathy and curiosity are powerful emotional tools that can encourage a better discussion and ultimately agreement.

Awareness is the hidden side of negotiations

The handshake, noticing emotions and paying attention to the type of discussion you are having with your counterpart are important ingredients to learning the hidden side of negotiations. It is significant that those lists of tips on how to negotiate better all say something about managing the “soft side” of the discussion. It may be the right time to haggle. It may be the right time to explore more about what is most desired from the negotiation (it may not be the final financial agreement). The awareness is the best tool you can bring into a negotiation.

What do you think? How well do we understand the hidden side of negotiations?  Join us on the Twitter chat, #KaizenBiz on Friday, June 13, 2014 at 5pm GMT/12pm ET/9am PT to add your insights and expertise to our conversation.

 

What is the biggest challenge in a negotiation?

To what degree should you focus on building a relationship before you begin negotiating terms?

How important is cooperation in negotiations? Why or Why not?

What are the risks involved in acting more relationally or authentically during negotiations?

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No Customer Engagement, Workplace Sexism & Arguing With Friedman

Twitter, Twitter chat, KaizenBizAbout once a month, we do something different on the Twitter chat, #KaizenBiz. It’s “Bring Your Own Headline”. It tends to be much more wide ranging and quick conversations about business ideas, events or news. What are you reading or viewing that made you stop and think? This week, we are going to move from topic to topic and see what big ideas are popping up. So, check out these stories and bring your own this Friday to the live Twitter chat, #KaizenBiz at 5pm GMT/12pm ET/9am.

Customers don’t want to engage?

Gregory Ciotti has a provocative post on Entrepreneur.com, “The Shocking Truth: Customers Don’t Want to Engage With Your Company.” Ciotti writes that customers don’t want to have conversations with companies and that a recent Corporate Executive Board study reveals three myths:

  • Myth #1: Most consumers want to have a relationship with your brand.
  • Myth #2: Interactions build relationships
  • Myth #3: The more interaction the better

But…but…but…many marketers tell you to converse with customers on blogs and other social media platforms. However, the research is telling us otherwise. Consumers think with their pocketbooks and values. Ciotti explains that creating brand loyalty comes from understanding what does drive customers to purchase, recommend and repeat. The two biggest driver is the sense of shared values (think Toms Shoes or Harley Davidson). The premise is that consumers will identify with a shared idea or belief and buy.

If customers can suffer from information overload, how much interaction is enough?

Ciotti recommends “making an enemy.’ To what degree do brands invoke a sense of group identity?

Is brand loyalty more likely to occur if a customer receives a discount and/or a sense of money well spent?

 Sexism is more underground?

With the firing of Jill Abramson from The New York Times, there has been discussion about women, gender expectations and the workplace.The conversation never really goes away and Sheryl Sandberg’s book, Lean In has stirred things up as well. According to Rosalind Barnett of Brandeis University, there is a soft war against women going on around us. Fast Company has a recent group of posts that look at various ways women are penalized in the workplace for being…well..women. From the Mommy Tax to entrenched biases discovered through research, it seems that this tension is likely to remain a part of the workplace for the forseeable future.

How are gender roles expressed in the workplace?

What underlies the discomfort when a person acts outside of gender role expectations?

How do traditional gender roles benefit the workplace?

Arguing with Milton Friedman

Economics is one of those subjects that most people consider dry and esoteric. Yet, when we talk about corporate responsiblity, fostering start ups or which regulations should enacted and/or enforced, we are applying economics. Milton Friedman was an avid advocate for capitalism and free markets. He explained in 1970 that “There is one and only one social responsibility of business — to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.””There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” In practice, this means that a company can operate and comply with best practices and laws but not necessarily engage in corporate social responsibility.

According to Roger Martin, there is a problem with the logic of Friedman’s argument. Martin writes that the trade-offs  that Friedman objected to are unfounded and that “100% focus on shareholder value to the exclusion of other societal factors actually produces measurably higher value for shareholders.”  Instead,  Martin offers an Aristotlian perspective that shareholders get greater value when businesses offer excellent customer service, create positive work environments and engage with the community in a sincere and socially responsible way. There may be a straw man in Martin’s argument but there are many questions since the global recession about how free markets should be and if pure capitalism truly benefits all.

According to Friedman, increasing profits within the rules of the game is the one responsibility of business. How is this still true?

What are the advantages of free markets? Disadvantages?

To what degree must corporations live a “virtuous life” or is this more about individuals living this way?

How is our understanding of living a “virtuous life” changing capitalism in 21st century?

Time for your suggestions

The above topics are my suggestions for our lighting roundtable discussion on the Twitter chat, #KaizenBiz. If something caught your attention this week, bring it the discussion on Friday, June 6, 2014 at 5pm GMT/12pm ET/9am PT. Remember to include the link and even  a discussion question.

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