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									Building Great Organizations –
A Review of Important Literature

By A V Vedpuriswar
Objectives

 Much has been written about organizational excellence. Here, we look at some of
  the most cited works and try to capture the essence.
Part – I
The 4 principles of enduring
success
By Christian Stadler
Harvard Business Review, July - 2007
Defining greatness


     Research by Stadler reveals that in terms of total return for
      shareholders, top companies did 62 times better than the general
      market.
     An investment of $1 in 1953 would be worth $4,077 today.
     By contrast, the comparison companies beat the general market by
      a factor of eight, and $1 would have reaped $713.
Stadler’s four principles of enduring success

 Exploit before you explore.
 Diversify your business portfolio.
 Remember your mistakes.
 Be conservative about change.
Exploit Before You Explore


 To measure exploration, Stadler used R&D spending as a percentage of sales and
  patents issued as a percentage of sales. For exploitation, he used return on equity,
  return on sales, and return on investment.
 Though they did not neglect exploration, as a strategy the winners consistently
  preferred exploitation efforts to exploration initiatives.
 Companies can compensate for insufficient exploration capabilities by being more
  efficient exploiters. But they are not able, over the long run, to make up for a lack
  of exploitation capabilities through better exploration.
 In other words, great companies don’t only innovate. They grow by efficiently
  exploiting the fullest potential of existing innovations.
Glaxo vs Wellcome

 When Henry Wellcome started his business together in 1880, he wanted to make a
  name for himself as a medical pioneer. In pursuit of this aim, he sponsored much
  of the field research then under way in tropical medicine.
 Glaxo’s story was very different. Founder Joseph Edward Nathan, started a new
  subsidiary in 1905 to commercialize a patent he had purchased for manufacturing
  dried milk. Thanks to a well-organized marketing campaign waged by his son Alec,
  the company quickly became Britain’s leading supplier of dried infant milk.
 Seventy-six years later, Glaxo repeated the trick with Zantac, the ulcer
  medication it introduced in 1981. At the time, the leaders were SmithKline,
  Pfizer, and Eli Lilly. Glaxo was a latecomer, launching Zantac five years
  after SmithKline’s best-selling ulcer medication, Tagamet.
 Zantac had no remarkable scientific or medical advantage over Tagamet.
  The only difference was that Zantac was packaged in such a way that fewer
  pills were required each day.
 SmithKline continued to invest heavily in R&D, but Glaxo fared much better
  in terms of sales and profitability so much so that it was eventually able to
  purchase its more innovative competitor in 2000.
Ericsson Vs Nokia

 Ericsson’s strong army of researchers had made the company a pioneer with its
  GPRS wireless data communication and third-generation mobile technology
  standards. Unfortunately, these advances came at a high price: large-scale
  duplication of research efforts, hefty R&D expenditures, and big, risky bets on the
  future direction of mobile technology. When the telecom industry entered into
  recession in 2001, Ericsson was hit hard. It laid off approximately 60,000 people
  and closed many research centers. Eventually it decided to combine its mobile
  business with Sony’s.
 Nokia, on the other hand, focused on exploitation. With margins under pressure in
  the mid-1990s, Nokia streamlined operations, cut inventories, and renegotiated
  component prices and delivery terms. When the telecom industry entered a
  recession, Nokia was far better prepared than Ericsson, and it remains a leading
  global competitor in mobile telephony.
Diversify Your Business Portfolio


 Few people today would dispute that conglomeration is a poor strategy. But firms
  focusing on a single business or set of capabilities too do not seem much better
  when viewed from a long-term perspective.
 Single-business companies perform very well in the short run, but over several
  decades, a different picture emerges.
 Many of the single-business firms simply cease to exist. Once their primary offering
  reaches the end of its life span, the only possible next steps are decline, merger, or
  sale.
 Which is why great companies are as suspicious of focusing too narrowly as they
  are careful about diversifying.
Alliance vs A&M: Product diversification

 The story of the German insurance giant Allianz, is a study in how to build a broad
  customer base. From its creation in 1890, the company had a strategy of
  diversifying its business portfolio.
 On the other hand Aachener und Münchener (A&M), founded in 1824, showed little
  ambition to become a broadly based insurance provider. While Allianz went from
  strength to strength, A&M struggled.
Lafarge vs Ciments Francais: Geographic
diversification
 Geographic diversification is as important as product range, as the contrasting
  experiences of the two leading French cement producers show.
 Lafarge began as a family-controlled cement producer in southern France. Lafarge felt
  that it could not rely on its home market alone and diversified internationally at an early
  date.
 The first step abroad was a large contract to deliver 110,000 tonnes of lime for the
  construction of the Suez Canal in 1864.
 After World War II, Lafarge used the cash generated by post war growth to speed its
  internationalization and diversify into related industries, such as aggregates and ready-
  mix concrete.
 When the first oil crisis ended the building boom in France in 1973, Lafarge was doing
  business in 15 countries. Growth opportunities in the developing world thus
  compensated for the slowdown in France.
 Originally, in 1846, a producer of Portland cement in northern France, Ciments
  Francais operated almost exclusively in France for the next 100 years.
Ericsson vs Nokia: Vendor diversification

 Supply-side diversification also matters. On March 17, 2000, a fire in a Philips
  factory in Albuquerque, New Mexico, disrupted the global mobile-phone supply
  chain.
 Nokia had alternative suppliers in the U.S. and Japan, which were able to deliver
  most of the components destroyed in Albuquerque.
 Ericsson, on the other hand, had no backup suppliers. In an early cost-cutting
  exercise, the company had decided to concentrate on a single supplier – and paid
  the price. While the Albuquerque incident had no lasting negative effect for Nokia,
  it marked the beginning of Ericsson’s steady decline in mobile telephony.
Remember your mistakes

 What really separates the great companies from the good ones is that the great
  companies also remember their mistakes.
 They take learning from mistakes very seriously, taking care not to make the same
  mistake again.
Shell vs BP
 Take the case of Shell. Henri Deterding had led the merger in 1907 of his Royal Dutch
  Petroleum Company with Shell Transport and Trading to form the Royal Dutch/Shell
  Group. Deterding’s strong personality and impressive record gave him a position of
  unchallenged power inside Shell. Unfortunately, it also put him in a position to consider
  financial and moral support for Adolf Hitler, whom Deterding saw as the man most
  likely to preserve Europe from the Communists. Luckily for Shell, he retired in 1936,
  before he could make any commitments that would have embarrassed the company
  later on.
 The company did not forget its narrow escape: Deterding’s successors were never
  allowed to be so powerful. In 1964, the board rejected advice from McKinsey &
  Company to install an American-style chief executive officer, whose official powers
  would have matched those Deterding once wielded. Instead, the board installed a
  Committee of Managing Directors as the top executive authority in the company. Its
  chairman was only marginally more responsible than its other members.
 These arrangements stayed in place for decades, and only recently – following a
  crisis triggered by the company’s overstatement of its proven oil and gas reserves
  – has Shell opted for a classic CEO leadership model. Still, even now, it has
  remained remarkably careful to avoid placing an authoritarian leader at the top.
 BP, in contrast, appears not to have drawn any lessons when in 1951 Iran
  nationalized its assets, which accounted for fully 75% of the company’s oil supply.
 After receiving compensation two years later following a coup, BP failed to diversify
  its asset base significantly in the ensuring decades, ending up heavily dependent
  on a small number of sites in Alaska and the North Sea.
 As oil prices plummeted toward the end of the 1990s, those assets lost value, and
  BP found itself caught short again. BP is now as heavily dependent on sites in
  Russia and other former Soviet states as it was on its Iranian assets.
HSBC vs Standard Chartered
 The Hong Kong and Shanghai Banking Corporation was set up in 1865 by the
  merchant community in Hong Kong to finance international trade. A close
  relationship with the bank’s main customers guaranteed a strong start, but there
  were also drawbacks.
 Financing investments in fixed assets in China turned out to be riskier than
  anticipated, and access to London capital was more complicated for HSBC than it
  was for its UK-based competitors. HSBC was badly affected when a severe
  recession struck in 1873.
 The bank decided to adopt a more balanced management approach.
 In 1876, it established a second executive board in London, creating a balance of
  power between the trade finance business in the East and the capital allocation
  center in London.
 The bank also continued to build up reserves and made sure that senior managers
  no longer had business interests outside the bank.
 Standard Chartered, in contrast, did not learn from its biggest mistake, which was
  creating a centralized London-based management system, which had a limited
  understanding of the China market.
 It lost major business to HSBC on numerous occasions – in the mid-1860s, for
  instance, it lost out because repayment periods for trade bills were shortened by
  London against the advice of local managers.
 Nonetheless, the company stuck to the old system. In the following decades, the
  firm survived despite, not because of, its centralized management. Local branch
  managers simply ignored orders from London, which they saw as unfit.
Be Conservative About Change


 Great companies go through radical change only at very selective moments in their
  history.
 Jumping onto every new management wave is not for them.
 These companies use their core values and principles as guidelines and approach
  change in a culturally sensitive manner that requires patience to work through.
   Siemens
 Siemens took a very deliberate approach to its changes, initiating them only when it
  could see a clear strategic case for restructuring the business portfolio and then taking
  its time over implementation to make the transformation as painless as possible for the
  workforce.
 Change came to Siemens for four reasons, any one of which would on its own have
  provided ample justification.
 First, management recognized that the long-standing separation between its high-
  current (power generation) and low current (telecommunications) technologies was no
  longer appropriate.
 Second, as the group faced pressure to merge these two subsidiaries, management was
  also aware that the company’s long-standing consumer business was fitting less and
  less well with the high- and low-current activities, which were driving growth.
 Third, on top of these strategic considerations was the fear of what would happen when
  then-chairman Ernst von Siemens retired.
 Finally, the German government was preparing legislation that would force the
  corporation to reveal sensitive information about its operations unless it consolidated its
  subsidiaries.
 Siemens was very deliberate in the way it responded to those pressures. It began
  laying the groundwork for the disposition of its consumer businesses in 1957, when it
  brought its radio, TV, and appliances businesses together to create a new subsidiary,
  Siemens Electrogeräte. Over the following years, it closed or sold off the radio and TV
  production businesses, leaving it with a rump appliance business, which it spun off into
  a joint venture with Robert Bosch, a leading appliance maker, in 1967, a full decade
  after it had begun the process. Initially, BSH Bosch und Siemens Hausgeräte was
  hardly more than a joint sales force, and only over the years did it start to integrate
  production.
 The company was no less deliberate in its response to the pressure to integrate the
  low current and high current subsidiaries. Halske and Schuckert. The decision to
  merge them was announced in 1965, but it was not until 1969 that the two subsidiaries
  were formally replaced by six divisions: components, data technology, energy
  technology, installation technology, medical technology, and telecommunications.
 Culturally, the change took even longer. Management left many of the traditional
  arrangements and practices in place for as long as 20 years after the reorganization
  had been formally completed. Arguably, the convergence was not completed until the
  late 1980s, when another transformation process was initiated. In contrast, silver
  medalist AEG took a far hastier and less sensitive approach.
Part – II
Good to Great
By Jim Collins
Good to Great
Jim Collins makes some pertinent observations, in his book, based on extensive
  research:
 Larger-than-life, celebrity leaders who ride in from the outside are negatively
  correlated with taking a company from good to great.
 The good-to-great companies do not focus principally on what to do to become
  great. They focus equally on what not to do and what to stop doing.
 Technology and technology-driven change have virtually nothing to do with the
  transformation from good to great. Technology can accelerate a transformation,
  but cannot cause a transformation.
 Mergers and acquisitions play virtually no role in igniting a transformation from
  good to great. Two big mediocre entities joined together never make one great
  company.
 The good-to-great companies pay scant attention to managing change, motivating
  people, or creating alignment. They create the right conditions so that the
  problems of commitment, alignment, motivation, and change do not have to be
  dealt with separately.
 The good-to-great companies have no name, tag line, launch event, or program to
  signify their transformations. Indeed, some were unaware of the magnitude of the
  transformation at the time. Only later, in retrospect, did it become clear. They
  produced a truly revolutionary leap in results, but not by a revolutionary process.
 The good-to-great companies are not, by and large, in inherently attractive
  industries. In fact, some are in terrible industries. Greatness is not a function of
  circumstances. Greatness, is largely a matter of conscious choice.
 Compared to high-profile leaders with big personalities who make headlines and
  become celebrities, the good-to-great leaders are self-effacing, quiet, reserved,
  even shy. These leaders are a paradoxical blend of personal humility and
  professional will.
 Good-to-great leaders first get the right people on the bus, the wrong people off the
  bus, and the right people in the right seats. Then they figure out where to drive it.
 Every good-to-great company embraces unwavering faith that it will succeed,
  regardless of the difficulties. At the same time, such companies have the discipline
  to confront the hard reality, however unpleasant it might be.
 Going from good to great implies a better understanding of competence. Just
  because something is a company’s core business, or because it has been doing it
  for years does not necessarily mean it can be the best in the world at it. And if it
  cannot be the best in the world in its core business, then its core business cannot
  form the basis of a great company.
 All companies have a culture, some companies have discipline, but few companies
  have a culture of discipline. When there is discipline, hierarchy, bureaucracy and
  excessive controls are not needed. A culture of discipline combined with
  entrepreneurship, leads to great performance.
 Let us examine some of these points in a little more detail.
Level 5 Leadership

 Compared to high-profile leaders with big personalities who make headlines and
  become celebrities, the good-to-great leaders seem to have come from Mars. Self-
  effacing, quiet, reserved, even shy – these leaders are a paradoxical blend of
  personal humility and professional will. They are more like Lincoln and Socrates
  than Patton or Caesar.
First who… Then What.

 Good-to-great leaders first got the right people on the bus, the wrong people off the
  bus, and the right people in the right seats – and then they figured out where to
  drive it.
Confront the Brutal Facts (Yet Never Lose Faith)

Good-to-great companies embrace the Stockdale Paradox.
They maintain unwavering faith that they can and will prevail in the end, regardless
 of the difficulties,
AND
at the same time have the discipline to confront the most brutal facts of their current
  reality, whatever they might be.
The Hedgehog Concept (Simplicity within the Three
Circles)

 To go from good to great requires transcending the curse of competence. Just
 because something is a core business – just because the company has been
 doing it for years or perhaps even decades – does not necessarily mean the
 company can be the best in the world at it.
 And if the company cannot be the best in the world at its core business it
 absolutely cannot from the basis of a great company.
  It must be replaced with a simple concept that reflects deep understanding of three
 intersecting circles.
A Culture of Discipline

 All companies have a culture, some companies have discipline, but few companies
 have a culture of discipline.
 When a company has disciplined people, it does not need hierarchy.
 When there is disciplined thought, bureaucracy is not needed. Disciplined action
 obviates the need for excessive controls.
 A culture of discipline combined with entrepreneurship leads to great performance.
Technology Accelerators

 Good-to-great companies think differently about the role of technology.
 They never use technology as the primary means of igniting a transformation.
 Yet, paradoxically, they are pioneers in the application of carefully selected
 technologies.
The Flywheel and the Doom Loop

 Those who launch revolutions, dramatic change programs, and wrenching
 restructuring are unlikely to succeed.
 No matter how dramatic the end result, the good-to-great transformations never
 happened in one fell swoop.
 There was no single defining action, no grand program, no one killer innovation, no
 solitary lucky break, no miracle moment.
 Rather, the process resembled relentlessly pushing a giant heavy flywheel in one
 direction, turn upon turn, building momentum until a point of breakthrough, and
 beyond.
Part – III
Built to last

By Collins and Porras
Built to last
By Collins and Porras

According to Collins, the Good-to-Great ideas lay the groundwork for the ultimate
  success of the Built to Last ideas.
 Good-to-Great provides the core ideas for getting a flywheel turning from build up
  through breakthrough, while Built to Last outlines the core ideas for keeping a
  flywheel accelerating long into the future and elevating a company to iconic
  stature.
 Each of the Good-to-Great findings enables all four of the key ideas from Built-to-
  Last. Those four key ideas are:
 Clock Building, Not Time Telling. Building an organization that can endure and
  adapt through multiple generation of leaders and multiple product life cycles; as
  opposed to being built around a single great leader or a single great idea.
 Genius of AND. Embracing both extremes on a number of dimensions at the same
  time. Instead of choosing A or B, the built to last companies figure out how to have
  A and B – purpose and profit, continuity and change, freedom and responsibility,
  etc.
 Core Ideology. Instilling core values and core purpose as principles to guide
  decisions and to inspire people throughout the organization over a long period of
  time.
 Preserve the Core/Stimulate Progress. Preserving the core ideology as an anchor
  point while stimulating change, improvement, innovation, and renewal in everything
  else. Change practices and strategies while holding core values and purpose fixed.
  Set and achieve Bhags consistent with the core ideology.
Part – IV
In Search of Excellence

By Peters and Waterman
The 8 attributes of excellent companies

 Peters & Waterman identified eight attributes that characterised excellent,
  innovative companies:
 A bias for action. These companies like to get on with it. Even though these
  companies may be analytical in their approach to decision making, they are not
  paralyzed by endless analysis. In many of these companies the standard operating
  procedure is ”Do it, fix it, try it.“
 Close to the customer. These companies learn from the people they serve. They
  provide unparalleled quality, service, and reliability – things that work and last.
 Autonomy and entrepreneurship. These companies foster many leaders and many
  innovators throughout the organization. They don’t try to hold everyone on so short
  a rein that they can’t be creative. They encourage practical risk taking, and support
  good hires.
 Productivity through people. The excellent companies treat the rank and file as
  the root source of quality and productivity gain. They do not regard capital
  investment as the fundamental source of efficiency improvement.
 Hands-on value driven. CEOs walk the plant floors and regularly visit retail outlets
  and assess them on the factors the company holds dear.
 Stick to the knitting. While there were a few exceptions, the odds for excellent
  performance seem strong to favour those companies that stayed reasonably
  close to businesses they know.
 Simple form, lean staff. The underlying structure, forms and systems in the
  excellent companies are elegantly simple. Top-level staffs are lean.
 Simultaneous loose-tight properties. The excellent companies are both
  centralized and decentralized. Even as they push autonomy down to the shop
  floor or product development team, they are fanatic centralists around the few
  core values they hold dear.
Part – V
Understanding the new paradigm
The Individualised corporation: Ghoshal & Bartlett
Transformation of management roles & tasks
                    Operating level managers                 Senior level managers                 Top level managers


 Changing role       From implementers to                      From controllers to coaches        From resource
                    entrepreneurs                                                                  allocators to institutional
                                                                                                   leaders

 Primary value         Focus on productivity, innovation,      Support and coordinate to bring      Provide a sense of
 added                  growth within frontline units            large company advantage to            direction, commitment
                                                                 independent frontline units           and challenge to people
                                                                                                       throughout the
                                                                                                       organization



 Key activities &      Creating and pursuing new growth        Developing individuals and           Challenging embedded
 tasks                  opportunities                            supporting their activities           assumptions and
                                                                                                       promoting stretch



                       Attracting and developing resources  Linking dispersed knowledge,           Institutionalizing a set of
                        & competencies                      skills       and best practices           norms and values to
                                                            across units                              support cooperation
                                                                                                   and           trust


                       Managing continuous performance         Managing the tension between         Creating an overarching
                        improvement within unit                  short term performance and long       corporate purpose and
                                                                 term ambition                         ambition.
Management competencies for new roles
           Role/Task                        Attitude / Traits      Knowledge / Experience                Skills / Abilities
Operating level entrepreneurs Results-oriented competitor       Detailed operating knowledge           Focuses energy on
                                                                                                         opportunities

Creating & pursuing               Creative, intuitive         Knowledge of business’s         Ability to recognize potential
opportunities                                                   technical, competitive and       and make commitments
                                                                customer characteristics
Attracting and utilizing scarce   Persuasive, engaging        Knowledge of internal &         Ability to motivate and drive
skills & resources                                              external resources               people
Managing continuous               Competitive Persistent      Detailed understanding of the Ability to sustain organizational
performance improvement                                         business operations            energy around demanding
                                                                                               objectives
        Senior management          People-Oriented Integrator         Broad Organizational           Develops People and
            developers                                                       Experience                   Relationships
Reviewing, developing,          Supportive, patient           Knowledge of people as        Ability to delegate, develop and
supporting individuals and their                                individuals and understanding empower
initiatives                                                     how to influence them
Linking dispersed knowledge, Integrative, Flexible            Understanding of the          Ability to develop relationships
skills and practices                                            interpersonal dynamics among & build teams
                                                                diverse groups
Managing short term and long Perceptive, demanding            Ability to link short term    Ability to reconcile differences
term pressures                                                  priorities and long term goals while maintaining tension
       Top level leaders            Institution-Minded Visionary Understanding company in its       Balances alignment and
                                                                           context                        challenge
Challenging embedded              Challenging Stretching      Grounded understanding of the   Ability to create an exciting,
assumptions & setting stretch                                   company, its businesses &        demanding work environment
targets                                                         operations
Building a context of             Open minded, fair           Understanding of the            Ability to inspire confidence and
cooperation and trust                                           organization as a system of      belief in the institution and its
                                                                structures, processes and        management
                                                                cultures
Creating an over arching sense Insightful, inspiring          Broad knowledge of different    Ability to combine conceptual
of corporate purpose & ambition                                 companies, industries and        insight with motivational
                                                                societies                        challenges
Part – VI
Getting into action mode
The importance of purposeful action: Creating a
bias for action: Ghoshal & Bruch

 Most managers know roughly if not exactly what is to be done but few get around
  to action mode.
 People who exhibit purposeful action possess two critical traits: energy and focus.
 Energy implies a high level of personal involvement and effort, engaged, and self-
  driven behavior.
 Focus requires discipline to resist distraction, overcome problems and persist in
  the face of unanticipated setbacks.
Four kinds of managerial behaviour

 The Frenzied: They are highly energetic but very unfocused and appear to others
  as frenzied, desperate, and hasty.
 The Procrastinators: They postpone the work that really matters to the organization
  because they lack both energy and focus. They often feel insecure and fear failure.
 The Detached: They are disengaged or detached from their work altogether. They
  are focused but lack energy and often seem aloof, tense, and apathetic.
 The Purposeful: They get the job done. They are highly focused and energetic and
  come across as reflective and calm, amidst chaos.
Motivation and Willpower

 Motivation might suffice in helping managers sustain organizational routines. But
  the more important tasks are usually complex and require creativity and innovation.
  When dealing with ambitious goals, high uncertainty and extreme opposition,
  managers have to rely on a different force, the power of their will.
 Willpower goes beyond motivation. It enables managers to execute disciplined
  action, even when they are disinclined to do something, uninspired by the work, or
  tempted by other opportunities. Willpower gives managers an insatiable need to
  produce results.
 Willpower enables managers to overcome barriers, deal with setbacks, and
  persevere to the end. Wilful managers resolve to achieve their intention, no matter
  what.
The Three Traps of Nonaction

The trap of overwhelming demands
The trap of unbearable constraints.
The trap of unexplored choices.
The trap of overwhelming demands.

Purposeful action-takers manage their demands by:
 developing an explicit personal agenda
 practicing slow management
 structuring contact time
 shaping demands and managing expectations.
The trap of unbearable constraints.

To unshackle themselves from this trap, purposeful action-takers adopt strategies
  like:
 Mapping relevant constraints
 Accepting trade-offs
 Selectively breaking rules
 Tolerating conflicts and ambiguity
The trap of unexplored choices

 The third trap of non action is unexplored choices.
 Many managers concentrate on immediate needs and requirements.
 They do not perceive or exploit their freedom to make choices about what they
  would do and how they would do it.
Unleashing Organizational Energy for Collective
Action

The real challenge for most organizations is to tap their energy and channelise it into
  purposeful action.
Comfort Zone

 Corporations that have succeeded for long periods in a relatively stable
 environment often settle into the comfort zone.
 Characterized by weak but positive emotions such as calm and contentedness,
 they lack the internal vitality, alertness, and emotional tension necessary for
 initiating bold, new strategic initiatives.
 Inertia stems from the belief that they have found the ultimate success formula.
Resignation zone


 Companies in the resignation zone have the same low-energy intensity as those in
  the comfort zone.
 But these people find themselves in the grip of weak emotions, such as frustration
  and disappointment.
 Typically, they suffer from low levels of emotional commitment, alertness, and
  effort.
 Persistent mediocrity makes people lose their confidence in dealing with problems
  or challenges.
 Believing that nothing they can do would make any difference, they passively
  resign themselves to their fate.
 Companies in the resignation zone believe that they are simply not good enough to
  succeed.
Corrosion Zone


 Companies in the corrosion zone show a high degree of energy, intense levels of
  activity and emotional involvement.
 They draw that intensity from strong emotions, such as anger, fear, or hate.
 The interplay of high energy and destructive responses is one of the most
  debilitating energy states in which a company can find itself.
 With much of the company’s energy dedicated to internal conflicts, rumors,
  micropolitics, or other destructive activities, the effort needed to cope with fear,
  suspicion, and rivalry drains people’s vitality and stamina, leaving little left for
  productive work.
Productive Zone


 Unlike companies in the corrosive, resignation and comfort zones, those in the
  productive zone display high emotional tension, alertness, and activity.
 Employees work with a sense of urgency, driven by enthusiasm, positive
  excitement, joy, and pride in their work rather than anger, fear, or internal rivalry.
 Typically, these companies strive for challenges that surpass the routine, the
  obvious, and the normal.
 While low-energy companies look for standardization and institutionalization,
  avoiding surprises and risks whenever possible, companies in the productive
  zone thrive on surprises, the excitement of the unknown, and novel
  opportunities.
 A sense of urgency and alertness, allows them to process information and
  mobilize resources rapidly.
 Inevitably, these organizations also have leaders who direct their people toward
  shared purposes, channeling the company’s potential by aligning its collective
  perception, emotions, and activities to pursue business-critical activities.
Slaying the dragon and Winning the princess

 Companies that achieve truly radical change have leaders who adopt one of three
  approaches for focusing the energy of their organizations and moving them into the
  productive zone.
 Some adopt the slaying-the-dragon strategy, driving their people out of the comfort
  zone by focusing their emotion, attention, and action on a crisis or a threat to
  overcome.
 Others pursue a winning-the princess strategy, moving their organizations into the
  productive zone by building people’s enthusiasm for realizing a specific, motivating
  dream.
 A few others use a combination of these strategies
Strategies for summoning willpower

There are six strategies that leaders can use to help managers summon their will
  power
 Strategy 1: Help managers visualize their intention
 Strategy 2: Prepare managers for obstacles
 Strategy 3: Encourage managers to confront their ambivalence
 Strategy 4: Develop a climate of choice
 Strategy 5: Build a self-regulating system
 Strategy 6: Create a desire for the sea
Building employee loyalty

 Broad loyalty to an organization is increasingly difficult to achieve and sustain.
 Besides, such general commitment, even if achieved, does not necessarily lead to
  purposeful action on specific tasks.
 A diffused sense of organizational loyalty often creates a taken-for-granted kind of
  relationship between managers and the company that actually dulls the edge of
  execution.
 The best way leaders can build effective organizational commitment, is through a
  bottom-up style that emphasizes personal ownership and commitment to specific
  initiatives and goals.

								
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