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The latest ideas and fresh thinking from around the worldP. 5
A key topic for management executives right nowP. 1
CORE CAPABILITY IDEAS
Research, intelligence and new findings on innovation capabilitiesP. 8
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KnowledgeBrief identifies the key innovation priorities and the latest in business management for leaders to stay ahead:
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Lead and Manage Change.
Change management can be a catalyst to help organisations react, flex and adapt by reviewing their own mind-set and capabilities about what it takes to make effective change happen.
At this Innovation Day, guest expert Andy Wilkins, Cass Business School, will present key insights to better understand what it takes to embed change, recommend keys steps for teams to consider when leading and managing change, and propose the next steps to embrace change.
We hope you enjoy it.
WELCOME: TO THIS MONTH'S HOT TOPIC
© Copyright KnowledgeBrief 2018
The chances of embedding change rise significantly when using fair processes. In fact, research from guest expert, Andy Wilkins, shows that people care four times more about the fairness of the process through which a change is produced than they do about the outcome itself.
In simple terms, fair process exists where the participants in the decision making process understand the process to be followed and the associated rules and modes of engagement, and perceive them to be fair with respect to all participants.
Fair Process Leadership is a model developed by Prof. van der Heyden to successfully embed fair process and trust into company culture. It involves leaders actively engaging and connecting with people and teams: in effect, listening more, asking more and telling less.
RESEARCH: FAIR PROCESS LEADERSHIP
Review your mindset about what fair process is to you. What capabilities do you have and/or need to implement effective change?
DEEP DIVE: FEATURED TECHNIQUESFurther your understanding on the WCCG Innovation Zone:wccg.kbprofessional.com
Change Leadership Change Management Employee-centred Leadership Style
This model represents an interlinked cycle for decision making, implementation and continuous review. It consists of five steps (5 E’s) and five fair play behaviours (5 C’s) that leaders need to demonstrate throughout these steps:
Engaging, Seeing and Framing
Generating, Exploring and Eliminating Options
Deciding, Explaining and Setting Expectations
Executing, Realising and Rewarding
Evaluating, Learning and Adapting
ConsistencyChangeability (with evidence)
CHECKLIST: FAIR PROCESSES ON INDIVIDUAL, TEAM, AND ORGANISATIONAL LEVEL
Sources: Van der Heyden, L. and Woodward, I.C. (2016) “INVOLVE” – A Toolkit For Fair Process Communication, INSEAD, Jun 9; Woodward, I.C., More, E.A. and Van der Heyden, L. (2016) 'Involve': The Foundation for Fair Process Leadership Communication, SSRN, Feb.
Adopting fair process in teams and organisations is remarkably challenging and surprisingly subtle. Even though fair processes seem to be common sense, fair processes are not common practice. New research has thoroughly explored how to implement the principles of Fair Leadership Process inside the workplace, particularly in larger organisational settings.
To support the implementation of Fair Process Leadership, organisations should adopt three crucial communication
practice areas (the INVOLVE tool kit):
1 – Active listening and constructive dialogue: with an emphasis on inquiry, asking and listening.2 – Agreed communication protocols: mutually developed and transparent communication rules and follow-through. 3 – Accessible connection: useful, convenient and readily available communication activities, formats and media to facilitate far-reaching participation and engagement.
The communication practices do not need to be bureaucratic, but the fact that team members agree on the ways in which they will communicate and engage with one another ahead of activities increases the likelihood of effective interaction with reduced frustration.
Action Point: Apply how to use the three communication practices at individual, team, and organisational level to one
of your projects/programmes using the table below.
e.g. Team members have similar information available to them to be able to explain opinions or decisions to others.
e.g. The organisation has clearly defined communication rules, systems and procedures; yet these are flexible enough to allow teams to adapt to undertaking the fair process steps in their own situations.
1 – Active listening and constructive dialgue
2 – Agreed communication protocols
3 – Accessible connection
e.g. Question asking to develop ideas and understanding.
View full source references in KBProfessional
Highly regulated environments can
be innovative with the right business
model. A new study highlights three less constrained business models for firms in regulation-heavy sectors: (1) Fun and games. This model ignores regulations by stating that the product or service is NOT for use that falls within the regulated space. For example, health-monitoring device companies stating: “The service is not intended to diagnose, treat, cure or prevent any disease.” (2) Hide and seek. This model exploits regulatory ambiguities or operates where existing regulations are unenforced. For example, in the United States, the Food and Drug Administration has a practice of not regulating mobile apps as long as they pose a low risk to the public. This allows an app to provide a convenient reminder to, for example, take birth control pills. (3) Carnival rides. In this model companies must pay the price of admission, then continue to pay every time they try something new. This is relevant for companies that seek regulatory approval and compliance while developing new products and services. (EBR)
Use texts to communicate with
your customers. Higher Education is experiencing a communication crisis. Students no longer answer phone calls and they’re not checking their email. Trying to solve this challenge, one college explored the concept of enhancing communication through text. Results showed that using a professional text platform not only boosted communication between students and the school, but it found the more interested the student, the more likely they were to provide their mobile number. The reason is that the phone is no longer right for calls. Many people across generations are not ready to have a conversation and, when somebody calls that is not on their short list, it can almost be considered rude. Text is a much better medium to put people at ease, for example, to inform clients about an upcoming meeting. This experiment might be worth considering also in business. (AMA)
Identify your consumers with
a profitable demand. One foundational issue that has a disproportionate impact on the value a business creates will always be identifying the highest value source or sources of growth. Put differently, there is no doubt that choosing the wrong target, or one of less value, will lower growth and return-on-investment potential. The key is to recognise that some people won’t be interested no matter what, and that’s OK. Find the ones that are. In addition, the highest value source must also be cost effective and easy to reach. Traditionally, this was called “market segmentation” but lately many of the most successful marketers refer to it as “demand landscape mapping”. The first step is to understand the drivers of purchase and select the tactics most likely to affect the desired behaviour. (AMA)
The latest thinking and fresh research from around the world
THE INNOVATION EDGE
Shame can keep your customers
away. For centuries, religions and laws have thrived on the fact that shame can be used to change or motivate some people to change their life or behaviour. However, feeling shame is deeply unpleasant and people will naturally seek to avoid it. For example, experiencing shame in a medical setting can make some people avoid seeing their doctor. Others will lie about the state of their mental or physical health, or lie about their lifestyle. In this case, the use of shaming by public health campaigns runs the risk of making people’s health worse rather than motivating them to live a better lifestyle. The question is, how does this dynamic work in business? Can trying to upscale a client, who, for example, does not have the resources to follow along push them away instead? (CON)
Make hierarchies more likeable with
less power distance. Much research has so far predominantly concentrated on explaining why hierarchy exist. A new survey has taken a different approach and zoomed in on how we can make hierarchies more likable. Overall, the chief complaint is by far that hierarchies have too many bosses between the most junior employee and the CEO. The results highlight four key issues we should focus on: (1) Reduce the perception of distance from decision making by allowing greater opportunities for direct interaction across levels. (2) Reduce perceptions of inequity and status differences by promoting egalitarian norms. (3) Increase delegation where possible, not including legal accountability. (4) Educate people about how they work, why they work the way they do, and their pros and cons. (IK)
Make sure to align “who we are”
and “who we want to be perceived
as”. There is often an assumption that if an organisation is able to build a distinctive message about the organisational self and clearly communicate it to key stakeholders, that message will, in turn, be translated to stakeholders without any alteration. According to a recent study, this is a faulty assumption. On the contrary, the study highlights the importance to proactively establish alignment between communicated and perceived identity. Evidence highlights three key takeaways: (1) Carefully weigh whether to communicate diverse activities depending on history and the composition of key stakeholders. (2) Identity alignment is more likely to be achieved when some community involvement is incorporated into the communicated identity. (3) Key stakeholders construct their perception of a brand from a wide range of sources, many of which cannot be controlled by the organisation. (JBS)
Globalisation was supposed to
benefit all, but is now reviled
almost everywhere. Initially, in the developing countries, many believed that globalisation was “rigged” against them, and global trade agreements were singled out for being particularly unfair. Now a discontent with globalisation is also striving in many advanced economies, led by politicians who claim that the system is unfair to their countries. A professor from Columbia Business School explains three different responses: (1) The Las Vegas strategy. For the past quarter, the bet on globalisation has been doubled down. This response is based on the hope that somehow it will succeed in the future. (2) Trumpism. Hoping to somehow bring back a bygone world by cutting oneself off from globalisation.
(3) Social protection without protectionism. This is what the small Nordic Countries did. To remain open, but not expose workers to risk, to build a social contract that helped workers move from old jobs to new and provide some help in the interim. (CBS)
Damp down the competitive
dynamics to decrease chances
of unethical tactics. Men are generally considered to be fiercer, more ruthless competitors than women in the workplace. Yet, if men fight harder at the negotiation table, do they perhaps also fight dirtier? According to a recent study, the answer is yes, and it originates from the elemental quest to find reproductive partners in humankind’s early history. Through experimental manipulations of negotiation games, men lied more often than women did, and the men who lied the most were the ones who believed they were negotiating with an attractive male. In other words, with their competitiveness and mating interest piqued, men were more willing to do anything to win. When negotiating with a woman, neither the attractiveness of the counterparty nor the facial memorisation had any effect. The possible ethical risks of masculine hyper-competitiveness are serious enough to warrant attention from firms. The key for firms is to identify the negotiations most likely to provoke unethical behaviour. (IK)
Not all people who work long hours
are workaholics. We learn A new study about workaholics is one of the first to look at objective health outcomes; actual changes in the body measured by doctors. Interestingly, for the people included in the experiments, simply working long hours alone didn’t lead to poor health. In fact, employees who worked long
managerial role. This early investment can feel like a risk, but when the person makes the transition to leadership, they have a reasonable expectation of succeeding. Overall, companies should aim for someone to enter a new management role with around 70% of the skills associated with true mastery. All too often organisations wait until someone already possesses 80 or 90% of what a role calls for. (KI)
12 Why failing fast fails. Consumer internet businesses, such as Facebook, are about exploiting psychology. In this case, businesses need to fail fast to keep pace with the shifting tastes and desires of consumers. But according to Chamath Palihapitiya, founder of Social Capital, there are many things that the “fail fast” formula doesn’t work for. He is a man of outspoken opinions stating that fast money returns seem to completely decay long-term thinking and sound judgment. Fail fast is not how you solve diabetes. It is not how you use precision medicine to cure cancer. It is not how you educate broad swaths of the world’s population. According to Palihapitiya, moderate growth and moderate compounding is gold. (SBI)
The memory of your uninhibited
behaviour lingers. Temporary-sharing technologies, such as Snapchat and Instagram Stories, are supposed to solve this problem of the internet never forgetting. But, if you think that a probably inappropriate Snapchat selfie is safe from leaking into your professional life because it disappears, then think again. This is because the impression that a temporarily shared selfie makes does not disappear, even though the photo does. The impression from those posts can linger in the mind of an observer, say, a colleague or employer, and “come back to haunt”. However, the
survey shows that the belief of the picture being temporary encourages people to take more risks when they decide to post. The results also demonstrate that this behaviour is not limited to millennials. (HBSWK)
14 Value ultramodern companies by
building flexibility into valuation
models. While there is a widely-accepted toolkit for valuing mature, asset-rich, cash-flow businesses, it can be quite a challenge to try to value non-traditional businesses, especially those in the tech sector. The question is: why is it so hard to agree on the best and most reliable methods? And what can be done about it? Research suggest five key challenges to focus on: (1) Judging how long a company’s rapid-growth phase will last. (2) Gauging how effective its barriers to entry will be and how long they will last. (3) Deciding how to calculate “multiples” – measuring a company's financial wellbeing by dividing one metric by another – in valuations, and whether multiples should be used at all. (4) Spotting which companies are likely to translate first-mover advantage into market power, and which are not. (5) Putting a price on prominent governance issues in the tech sector, such as the absence of voting rights for external shareholders. (LBSR)
hours but were able to mentally “recharge” overnight were not putting their health at risk. It was “only” those who worked long hours and also had a compulsive work mentality where their risk of developing metabolic syndrome significantly increased. The key is to learn to switch off. (KaW)
10 Managers need tangible metrics
to tell meaningful and accurate
stories about the health of their
team. However, coming up with such ROI-style data is easier said than done. The best measure always depends on the context. Here are 10 simple ways managers can better understand the health of their communities. Values alignment: (1) Awareness test, (2) Peer Assessment. Purpose: (3) Use a motivation “pie chart” including plausible reasons to belong to the team and ask members to allocate 100 points across reasons. Engagement: (4) Retention rates, (5) “Alumni” engagement levels can say something about loyalty. Social
ties and relationships: (6) Social Network Analysis examines the ties, direction, and depth of networks, (7) Ask team members about their trust and interaction levels. Impact:
(8) Number of collaborations in the team, (9) Project-based metrics such as common KPI, (10) Quality perception by team members. (IK)
11 Prepare future managers when they
are still in non-management roles.
Cultivating leaders internally, whilst challenging, has a lot of advantages. Start with the end in mind by, for example, placing people on teams where they have no formal authority, but are nonetheless expected to work collaboratively with others. Or, when a manager leaves for holiday, temporarily provide leadership assignments to a non-manager, rather than a colleague already in a
Companies should aim for someone to enter a new management role with around 70% of the skills associated with true mastery.
Research, intelligence and new findings on innovation capabilities
It is better to disrupt yourself than
to leave the opportunity to others.
Today, initiatives from corporates to connect with start-ups come in various flavours such as incubators, accelerators, labs, start-up competitions, hackathons, etc. Crucial success factors for tapping into the start-up world are: (1) Goal alignment between the sponsor in the established organisation, the management team and the accelerated start-up. (2) Set up the start-up team separately from corporate HQ. The accelerator manager must be able to work in accordance with his/her own judgement. (3) Ensure a large and committed external network to bring experience and domain knowledge about growing a business. (4) Set long-term objectives and measure accordingly. Real success will only be measurable over a seven- to ten-year time span. (5) Turn corporate culture into an increasingly open breeding ground for connecting internal and external innovation. Don’t be afraid of nurturing your own future competitors. (JBS)
Identify the true drivers of reputation:
a company’s influencer landscape.
While measuring why consumers do or do not value a company’s products is clearly a critical marketing and sales exercise, research suggests that a much more important determinant of reputation
is a company’s influencer landscape. All too often we fail to look in this direction to achieve the reward of a good corporate reputation. Companies should think more strategically about how to engage with: (1) Authors of the most commonly cited books and academic papers relevant to their industry, (2) most influential financial analyst in a given sector, (3) most highly regarded and cited reporters and other commentators (consulting and leading industry executives) in the sector, (4) prominent industry boosters and critics, (5) in some industries, highly followed citizen bloggers, and (6) celebrities with a significant online presence and an interest in an industry and its issues. Once the landscape is understood, it is a short step to creating an influencer engagement strategy that is the driver of long-term reputational growth. (JBS)
Imitating successful competitors
can be surprisingly misleading and
ineffective. When we are not sure what the future holds or what the best course of action is, companies look around them and then do what others are doing. Research has provided ample evidence of strategic imitation, studying choices around plant locations, market entry, process management system adoption, product diversification, acquisitions, governance systems and more. But imitating successful competitors can be surprisingly misleading and ineffective,
for three reasons: (1) Successful companies’ practices and decisions are often consequences of their success rather than its causes. (2) The most successful firms in your industry probably just got lucky. (3) Focusing on short-term wins can have negative long-term effects years later. To get a more realistic view, force yourself to analyse what the industry’s bottom performers are doing as well. Also, try to figure out how the top performers’ habits might be causing their success. (LBSR)
Receivers are not really sceptical
about non-disclosed information. This insight plays with the saying, “bad publicity is better than no publicity”. The degree to which a sender withholds information is strongly related to their stated beliefs about receiver actions. And, as expected, their stated beliefs are accurate on average also. Onwards, the actions of the receivers are strongly related to their beliefs and the chain is completed. However, expecting that receivers would be sceptical about non-disclosed information would in some cases let companies share information that they would otherwise withhold. This survey demonstrates that it is possible to increase expected returns by strategically withholding unfavourable information. (SSRN)
THE INNOVATION ENGINE
Try something else. In today’s business world, where agility is at a premium, what made you successful could be the same thing that can keep you from succeeding in the future. A Professor in Organisational Behaviour from London Business School challenge the fallacy that people change from the inside out. Rather, we need an outside-in approach: (1) Redefine your job. Plunge into new projects and activities, interact with different kinds of people and experiment with unfamiliar ways of getting things done. New experiences don’t just change how you think – they change who you become. (2) Network across and out. If your network isn’t growing, you’re not going to grow. (3) Be more playful. Change how you do what you do. Don’t attempt to change the essence of who you are today. Instead, think, “What if I just try this?” It’s about altering your habits. (LBSR)
Use satisfaction surveys as an effective
tool, but be careful with detrimental
effects over time. Service companies frequently contact customers after a transaction to get feedback and assess satisfaction with the service experience. Satisfaction surveys provide both valuable customer feedback and information relevant for marketing strategies and are used frequently. However, how these cumulative effects influence customer purchase behaviour is not clear. Findings from a new survey reveal that repeatedly asking for customer feedback may have detrimental cumulative effects on purchase amount and interpurchase time. Results indicate that we should think carefully over the long-term effects of constantly asking customers for feedback. (JSR)
What will it take to play offense and
defence in tomorrow’s ecosystems? According to McKinsey, in a world of sectors without borders, the following four priorities are critical for business: (1) Job one for many companies is to broaden their view of competitors and opportunities so that it is truly multi-sectoral. (2) A critical goal is data diversity, achieved, in part, through partnerships, which will enable companies to pursue ever-finer micro segmentation. (3) If blurring sector boundaries are turning data into currency, customer ownership is becoming the ultimate price. Being able to solve customer pain points is an important piece in building emotional connections with customers. (4) Change your partnership paradigm by asking what white spaces you need to fill, what partners can best help with those gaps, and what “gives” and “gets” might be mutually beneficial. (MQ)
Harness the message: all is not
already lost. A new survey reveals that the public in 38 countries have deeply inaccurate views about important social issues. For example, only 19% think deaths from terrorist attacks are lower in the past 15 years compared to the 15 years before that. Overall, however, they are around half the level they were. This is not just the result of random guessing. There is a systematic pattern to our errors: we tend to think things are worse than they are. In addition, this causes us to feel overwhelmed by the sense that nothing can be done. Interestingly, this is the same mechanism that causes many fundraising campaigns to fail. The need to deal with not just one case of poverty but millions affects our belief that big challenges can’t be tackled at all. What we can learn from the survey is, the greater need is to encourage action by countering the sense that all is already lost. (CON)
Allow the positive effects of inspiration
to be extended from various domains.
It is presently unknown whether inspiration extends across different domains. For example, can a salesperson be inspired by a successful athlete? A new study has investigated whether inspirational content must be relevant to a subsequent task to improve performance and is the first to show that the benefits of inspiration reach beyond the domain defined by the inspiring event. This opens up new, creative opportunities for where to collect inspiration for employees and teams. (JASP)
Going slower to listen better allows
us to finish our meetings faster.
Listening and communication strengths in one-on-one meetings are skills that most leaders need, many leaders think they have, but few practice well. To listen slowly and carefully consider four-steps: (1) Pay attention to what’s being said. Take margin notes in meetings to park your own ideas that may interfere with your listening. (2) Interpret what’s been said. Consider what is being said means, based on the purpose of your discussion, what the speaker cares most about, or what’s been said before. Ask questions if you need more details. (3) Verify what’s been said. Don’t assume you understand, confirm what was said. This can be as simple as paraphrasing what you think you heard. (4) Instead of hastily blurting out a counterargument, consider how your points relate to what has just been said. This is the key step many individuals skip. Many times, the biggest thing getting in our way of listening is waiting to interject with our own point of view. Instead, allow other views to shape your perspective. (HBR)
New experiences don’t just change how you think – they change who you become.
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Profitability of UK companies (latest)
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KEY INDICATORS3rd January 2018
Regular customers are happy with
digital sales channels. In a survey conducted by McKinsey, 46% of buyers say they would be willing to buy from a supplier’s website if the option were available and the service efficient. A deep dive into the numbers tells us that 76% of B2B buyers find it helpful to speak to a salesperson when they are researching a new product or service. That figure falls to around 50% for repeat purchases of products with new or different specifications. Only 15% want to speak with a salesperson when repurchasing the same product or service. It seems the important indicator is whether or not the buyer is making a first-time purchase. (MQ)
The trust benefits of accusing others
of unethical behaviour. A new study finds that compared to individuals who do not make accusations, accusers engender greater trust and are perceived to have higher ethical standards. This even seems to be true when the accuser has a conflict of interest when making the accusation. However, the accuser should be careful with both moral hypocrisy and the veracity of the accusation, as these two factors can decrease trust in the accuser. Also, accusers who have acted unethically themselves will fail to signal high ethical standards when they accuse others, and accusers who make false accusations lose, rather than gain, trust. Overall, accusations have significant interpersonal consequences. In addition to harming accused targets, accusations can substantially benefit accusers. (SSRN)
Excessive social network use can lead
to symptoms associated with addiction.
If pigeons are given food every time they peck a button, they peck a lot. If they are sometimes given food when they peck a button, they not only peck more, but do so in a frantic, compulsive manner. Excessive social network use has been argued to lead to these symptoms associated with addiction. Tendencies such as using these sites to modify our
mood, needing to use them more and more to get the same effects, and suffering withdrawal effects when use is ceased is a cause for concern. It is estimated that around 5% of adolescent users have significant levels of addiction-like symptoms. (CON)
What would you give to keep your digital
footprint private? Before you think of the answer, you may want to consider the following costs: (1) No more “free” services. For most of us, the “free” services we use online enable us to fulfil a specific need: to connect with others. Imagine if you have to deposit a small payment every time you send a WhatsApp message. (2) No more personalisation. We expect a degree of personal and contextual relevance. Imagine turning off your location settings for a taxi app; you will have to manually enter your location every time you want to use it. (3) No more instant gratification. When it comes to signing up for a new service, convenience will often trump rational consideration. For example, when was the last time you read the T&Cs of an app you downloaded? (HBR)
How people justify any excuse not
to give. Giving to charity is the ultimate act of selflessness. We offer our own hard-earned money to those in need, with no thought of return. However, according to an Assistant Professor at Harvard, the reality of altruism is much more complicated. The research highlights that, in fact, people look for any excuse to avoid giving a donation and then rationalise their behaviour to avoid feeling selfish. Often those excuses come in the form of an uncertainty about how much good the donation will achieve. It indicates that one very broad generalisation is that regardless of how you present the information, if it’s anything less than perfect, individuals will find a way to manipulate the information in a way that benefits themselves. (HBSWK)
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Communication QuarterlyBPR Business Perspectives and Research BQ Benefits QuarterlyC The Conversation CBS Columbia Business School CBR Compensation & Benefits Review CEER Centre for European Economic Research CfL Centre for London CGR Corporate Governance:
An International Review CIO CIO Magazine CIPD Chartered Institute of Personnel
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