Management Quotes

we used to endorse character and integrity, but today the business ethic that reigns is achievement. And whenever you establish the worth of someone based on what they can do and not on who they are, you have created the environment for fraud.
— Barry Minkow

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Perhaps a lot of traditional insights can still be exploited if we are willing simply to abandon the idea of a solution, an endgame. Not because it does not exist or does not matter, but simply because it is unknowable, at least for now. Perhaps we need to redefine strategy as the art of surviving rapid transition, something like log-rolling or surfing. Strategy as direction rather than strategy as solution. And if this sounds tactical, so be it: There have been many eras in military history when tactics mattered more than generals drawing arrows on maps.

We can use the same principle to redefine the goal of strategy: Success is survival into the next round of the game. Successful strategies generate options. This does not imply the irrelevance of cash flow (as many thought until recently), but it does diminish the value of cash versus that of the right to play in an uncertain future. Indeed, finance theory tells us that the greater the uncertainty, the lower is the value of expected cash flows (because we discount them more aggressively) but the greater is the value of an option.
— Philip Evans

No Comments » Posted by Administrator / Strategy

The New Economy liberated competencies from the core. The technologies of Silicon Valley (to take one of the purest examples) belong largely to the community, not to any individual firm. Personal networks, fluid labor markets, and sophisticated venture capital communities transplant much of that knowhow from one firm to another, despite the efforts of every constituent firm to prevent it. But in the New Economy everyone gains from everyone else’s leaky competencies. And it turns out that the gains from all that promiscuity outweigh the dilution of individual paternity.

…Competencies rule more than ever, but no longer are they the definers of corporate shape. Open business models, open standards, technology sharing, strategic partnering, and a massive fluidity of money, people, and ideas render the boundaries of the firm porous to the point of indeterminacy.
— Philip Evans

No Comments » Posted by Administrator / Strategy

The Internet undermines the premises of competitive analysis. Porter’s “five forces” framework presumed that the definitions of the firm, industry, suppliers, customers, and new entrants were given and obvious. But the Internet destroys these neat categories. The definition of the business, competitors, suppliers, etc. is now the essence of the question, not a premise of the answer. Compound this with the well-known prevalence of increasing returns when businesses are defined by information systems, intellectual assets, or networks, and the whole logic of microeconomic Optimization crumbles. In this environment, fine tuning gives way to big bets. Resources become chips to be shuffled and deployed; planning becomes gambling; winner takes all. Poker replaces Pareto as the paradigm of competition.
— Philip Evans

No Comments » Posted by Administrator / Strategy

There may well be differences in the brains of males and females that equip them to excel at different things. But the error of universities and other prestigious institutions has been to construct its (sic) hierarchy of excellence on the mastery of skills that come most easily to males.
— Mary Dejevsky

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Innovation is driven primarily by tacit knowledge. It draws on highly subjective insights, intuitions and hunches that form an integral part of tacit knowledge. These factors are soft and qualitative and therefore defy traditional mechanistic management approaches. Therein lies the managerial challenge. It involves building the requisite social capital and putting in place appropriate integration mechanisms that enable people with ideas and experience to connect with others and exchange anecdotes. The manager’s challenge lies in creating the proper organisational context and inter-functional climate for knowledge creation.
— Stefan Odenthal, George Tovstiga, Himanshu Tambe and Frederik Van Oene

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If all your information is tailored to what you want to know, you may miss that which you don’t know you want to know, and should.
— John Seely Brown

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What’s fascinating about so many of the governance reformers is not that they are cynical about the role of boards, but that they are so idealistic. The notion that independent directors can, on a part-time basis, simultaneously and successfully formulate strategy, hire and fire senior executives, ensure rigid compliance with myriad global procedures, detect fraud, appropriately incentivize managerial performance, and oversee metrics for organizational performance, all without any actionable conflicts of interest, strikes me as exceedingly optimistic.
— Michael Schrage

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For most leaders, the great challenge is not understanding the practice of leadership: It is practicing their understanding of leadership.
— Marshall Goldsmith and Howard Morgan

No Comments » Posted by Administrator / Leadership

The cult of innovation seems healthy on the face of it. In a free market, after all, innovation underpins competitive advantage, which in turn undergirds profitability. Being indistinguishable from everyone else means operating with a microthin profit margin, if not outright losses. So why not try to innovate everywhere — to let, as Chairman Mao famously put it, a thousand flowers bloom?

Here’s why not: For every thousand flowers, you get a million weeds. Innovation is by its very nature wasteful. It demands experimentation, speculative investment, and failure, all of which entail high costs and risks. Indeed, it is innovation’s intrinsic uncertainty that gives it its value. High risks and costs form the barriers to competition that give successful innovators their edge. If innovation were a sure thing, everyone would do it equally well, and its strategic value would be neutralized. It would become just another cost of doing business.

But the high costs and risks also make discretion and prudence paramount. The most successful companies know when to take a chance on innovation, but they also know when to take the less glamorous but far safer route of imitation. Although imitation is often viewed as innovation’s homely sibling, it’s every bit as central to business success. Indeed, it’s what makes innovation economically feasible.
— Nicholas G. Carr

No Comments » Posted by Administrator / Innovation