Next Generation Business Handbook: New Strategies from Tomorrow's Thought Leaders / Edition 1

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Overview

"The Next Generation Business Handbook gathers the knowledge and experience of promising minds from the world's top business schools, such as Harvard, Sloan at MIT, The Wharton School of the University of Pennsylvania, Kellogg at Northwestern University, Yale, London Business School, INSEAD, and IMD Switzerland, among others. Under the leadership of Subir Chowdhury, a top business thinker, these international next generation thinkers discuss every aspect of business and lay the groundwork for the key business concepts of tomorrow." "Along with addressing such special topics as career imprinting and operating in a virtual workspace, the Next Generation Business Handbook offers a complete presentation of all aspects of considerations organized around Chowdhury's own next generation business model." The Next Generation Business Handbook is a valuable tool for managers, consultants, and researchers at all levels of business as well as students in business schools.
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Product Details

  • ISBN-13: 9780471669968
  • Publisher: Wiley
  • Publication date: 10/28/2004
  • Edition number: 1
  • Pages: 1344
  • Product dimensions: 6.40 (w) x 9.69 (h) x 2.64 (d)

Meet the Author

SUBIR CHOWDHURY is Chairman and CEO of ASI Consulting Group–the world leader on Six Sigma and quality leadership implementation consulting and training. As one of the world’s foremost authorities in helping leaders achieve positive and measurable results in business process improvement, Chowdhury’s clients include global Fortune 100 companies as well as small organizations in both the public and private sectors. Hailed by the New York Times as a "leading quality expert," Chowdhury is the author of eleven books, including the international bestseller The Power of Six Sigma, which has been translated in more than twenty languages and has sold more than a million copies.
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Read an Excerpt

Next Generation Business Handbook


By Subir Chowdhury

John Wiley & Sons

ISBN: 0-471-66996-2


Chapter One

THE EFFECTIVE LEADER

Subir Chowdhury

In the field of leadership, there are hundreds, if not thousands, of pieces authored by thought leaders, business leaders, political leaders, and sports leaders. Most emphasize different leadership attributes, but still it is rare to find effective leaders like Jack Welch of General Electric (GE), Sam Walton of WalMart, or Herb Kelleher of Southwest Airlines. After the collapse of Enron in late 2001, leaders around the world have faced a major challenge in reestablishing trust with their employees, stockholders, and customers. Enron's former chairman and CEO Kenneth Lay, once recognized as an effective leader by the press, is now branded as a "liar." But Enron isn't alone. Throughout the year 2002, the Wall Street Journal reported on senior leadership's "nonleader" behaviors in respected organizations like ABB, Tyco International, and WorldCom. The biggest price these organizations paid by their breach of trust is their most important asset-people.

I begin this chapter by identifying the crucial characteristics of effective leadership. But it's not enough simply to possess the attributes of a good leader. You must also recognize the importance of the people in your organization and of fostering a workplace environment that challenges them in positive ways and empowers them to succeed as well. After all, ifyour employees don't succeed, how can your organization?

Let's examine the effectiveness of a leader. Rather than redefining leadership, I have emphasized some of the most critical attributes leaders must possess to be effective:

Honesty

Emotional commitment

Thinking differently

Taking timely action

Honesty

In their 1995 internationally best-selling book The Leadership Challenge, James Kouzes and Barry Posner report that honesty is the number one characteristic of an admired leader. According to their survey of several thousand business and government executives from four continents, nearly 90 percent of constituents want their leaders to be honest; this is a message that all leaders must take to heart. It is very difficult to measure honesty, as it is a subjective behavior. But people-internal or external-observe their leaders' behaviors every single day. All too often, business leaders lose sight of the importance of honesty and value as they focus more closely on the bottom line. It seems that the faster we advance toward technology and quick success, the more leaders mistakenly assume that subjective behaviors like value may not be critical. More than ever, customers as well as the workforce will study their leaders' behaviors more closely. It has been proved time and again that stockholders will punish those leaders who breach that trust. Enron, for example, was once widely referred to as America's seventh-largest company. But the lack of integrity displayed by CEO Kenneth Lay, who tolerated ethical lapses by subordinates, even overriding the company's own code of ethics to permit the CFO to form debt-disguising partnerships, led to the collapse of the organization. Consider also the obstruction of justice of Enron's auditing firm, Arthur Andersen, over the destruction of documents related to its Enron audit-a once-formidable accounting firm crippled by poor integrity.

Former GE chairman Jack Welch puts it simply: "People may not have agreed with me on every issue-and I may not have been right all the time-but they always knew they were getting it straight and honest. It helped to build better relationships with customers, suppliers, analysts, competitors, and governments. It set the tone in the organization." The distinction between being right and being honest is an important one. You cannot always be right, nobody is. But you can always be honest, and in the eyes of your customers, stockholders, and employees, that's an important characteristic in a leader.

When Honeywell chairman and CEO Larry Bossidy appoints a new business manager, the first thing he discusses is integrity. All companies should be focused on hiring talent who possess a high level of integrity. Especially these days, with such easy access to technology, more and more people may be tempted toward unethical behavior. The World Wide Web alone, accessible by virtually everyone, can easily be exploited for unethical purposes. Just look at the growing number of dubious Web sites, spam attacks, and viruses distributed daily. Something as simple as e-mailing off-color jokes to fellow employees might be regarded as suspect. It may seem obvious, but ask yourself whom you would rather hire: a candidate who has many years of experience but who demonstrates questionable regard for diversity or a recent college graduate who spends weekends volunteering at a nursing home? Of course, it's not always that cut-and-dried, but ask questions during the interview process with the aim of gauging your candidate's values. Talk about hobbies, family, travel, whatever you feel will give you a glimpse of where this person's values lie. The astute interviewer can pick up the signals from such discussions. All companies need to focus more on integrity and appropriately punish breaches of integrity, sending the message to the organization that such breaches will not be tolerated.

Emotional Commitment

Commitment with emotion is key to success. In India, it is called sadhana. When the famous sitarist Ravi Shankar was learning sitar from his guru, he didn't leave his room for many days until he learned the basics. He devoted all his time to sitar. That takes emotional commitment. Throughout history, you see the greatest successes coming from those who exhibited undying commitment. This is more visible in history and the arts, but effective leaders like Michael Dell, Rick Wagoner, and Bill Gates are also emotionally committed to their endeavors. They have to be-they have their own mission and commitment. Rather than randomly jumping into different initiatives, effective leaders focus on their own beliefs. It's their emotional commitment that has helped them succeed. Think about it. If they did not have this commitment, if they did not love their work, could they possibly have achieved their present success?

Sumner Redstone, CEO of Viacom and author of A Passion to Win, says, "I've always wanted to win. I think winning is everything. Throughout my life I've had an obsessive drive to be number one. That doesn't mean I've always been number one. But that's what drives me-a desire to be the best at what I do." He tells of the hotel fire in which he was badly burned-and then of being in the heat of negotiating and deal making-and yet at age 78 of being in perfect health. "The question isn't whether you are subjected to adversity and conflict during your life," he says. "The question is how you deal with it. If you really want to succeed, you have to be passionate and have a commitment to excellence in performance. If you have both of those, and some intellectual capacity, nothing is impossible."

Successful leaders want to create organizations that will dominate the economic landscape. They are passionate about making a contribution to society and creating a business culture of enlightenment. They want to create and deliver real value to their customers and shareholders. They have a "love it or leave it" philosophy. They don't do things only because they want to hit revenue numbers; rather, they "just do it" because they have emotional commitment. Michael Dell had a dream of beating IBM while IBM was the giant in the computer market. Without emotional commitment, he could not have succeeded.

The success of GE is largely credited to retired CEO Jack Welch's leadership; his strategy included creating an "emotional bond" with his employees. GE's Six Sigma initiative is not just a CEO-driven quality initiative. It is a management philosophy from top to bottom. Everyone has been learning the language of Six Sigma's revolutionary five-step process: define, measure, analyze, improve, and control (DMAIC). Welch personally made sure that the Six Sigma philosophy was understood all over the company, from the very bottom to the very top. The results suggest that it works. GE reported record results in 2000: revenues grew 16 percent; earnings grew by 19 percent. The point is not that Welch implemented Six Sigma; the point is that he was passionate about what he was doing and that passion seeped into the organization in a big way.

Emotional commitment makes the difference between typical managers and effective leaders. Average managers are nine-to-five performers; effective leaders strive for excellence regardless of the clock. They want to be winners in everything they do, whereas average managers may not share that winning mentality. Traditional managers are contractually obligated to do their jobs; effective leaders are mentally obligated. Leaders are risk takers, whereas traditional managers are risk averse. Above all, effective leaders are always emotionally committed. And fostering this commitment throughout your organization only makes it stronger.

Most managers don't have a winning mentality because they don't have a sense of ownership. If you own something, then you don't want to lose it. Profit sharing, reward, recognition, and bonuses are key ingredients to seed ownership within employees. In GE's Six Sigma initiative, "black belts" receive rewards for completing projects successfully and saving GE's bottom line. Contrast this level of commitment with that of many failed dot-coms whose founders admitted to starting a business just to go public or to be bought out. How could they succeed with this mentality?

Thinking Differently

There is tremendous competition for everything, and the only way you can compete is to do something different or do something common differently. The strong comeback of Apple Computer is mostly credited to its effective leader, Steve Jobs, who characterizes himself as well as his organization with a simple motto: "Think Different." No other computer manufacturer had ever thought of using multicolored plastic bodies for personal computers before Jobs's iMac. Its success is not necessarily due to the product innovation or better performance but rather to the "think different" strategy. Upon the same strategy, the United Kingdom's most admirable entrepreneur and leader, Anita Roddick, built her cosmetics empire, The Body Shop. Roddick's world headquarters lobby in London displays this declaration: "Small chest, flabby thighs, large hips, thick lips, BIG DEAL-love your body."

Dell Computer Corporation is one of the world's leading manufacturers of computer systems. One key to its success lies in its direct business model. Michael Dell, of Dell Computer Corporation, comments:

A lot of favorable economics occur when you take time out of the process. Dell's model has about eight days of inventory. One competitor has 81 days of inventory and 40 more days of inventory in their distribution channel- 16 weeks more than our eight days. A competitor with that level of inventory can't compete with Dell and make any money doing it. As a result, our business is growing fast, and our profitability exceeds that of all of our major competitors combined.

We define the customer experience from the order delivery process, to the setup, use, and operating experience. We've developed a set of metrics that take these customer measures and tie them to our goals and to every employee's profit sharing and incentive compensation. The next frontier of competition is in the area of customer service quality. We're constantly looking for breakthroughs, such as our direct business model, that change the dynamics of the game. Finding a new way to deliver a better customer experience and more value at less cost is a good strategy.

One way to achieve a new perspective is to reach out to your employees and listen to what they have to say. Do not restrict their thinking. Instead, be open to all employee suggestions, whether they differ from yours or not. Trust that your employees, regardless of their position, have gleaned their own competency through experience and that they bring varied, and valuable, knowledge to the table. You have a lot to learn from those who report to you. Spend some time listening to your employees and understanding why they think the way they do. By doing so, you may be able to look at your product or organization from a new perspective.

Taking Timely Action

The most important thing that effective leaders do is take "timely action." Leaders can be successful if they act on their unique idea at the right time. The secret of success is not necessarily the idea itself but rather the implementation of the idea. The attitude of "Just do it"-the slogan of Nike's founder and chairman, Phil Knight-is necessary for success, regardless of the industry you're in. The value of a great idea without implementation is zero. If you have a powerful idea, and you are talking about it but taking no action to implement it, someone else will likely have a similar idea and win while you remain stuck in place. If you are not an implementer, find a partner who is. The leader who takes timely action often does not have to tell people what to do but rather asks the right questions so others can figure out what they need to do. Larry Bossidy and Ram Charan call this process execution. In their recent book Execution, they state, "Leading for execution is not about micromanaging, or being hands-on, or disempowering people. Rather it's about active involvement- doing the things leaders should be doing in the first place." They define execution as a discipline and integral to strategy, as a core element of an organization's culture, and as the major job of the business leader.

Chrysler's PT Cruiser and 3M's Palm Pilot are still the leaders in their product lines due to timely action. Many companies may try to copy them, but none has had similar success. Proactive actions characterize market leaders. Michael Dell comments, "We've learned that we can't just follow the other guys. That approach won't create a lot of value. We try to find our own way and do things better. We are building our own path."

The action at Dell is centered on customers, as Michael Dell reports:

We maintain an intense focus on the customer, even as we grow. Today, Dell is still ranked number one in customer satisfaction surveys. Our account teams work face-to-face with all of our large customers. We work with our suppliers to deliver materials on a pull basis. Instead of waiting to build a machine until we have all the materials in the warehouse, and then guessing what people will buy, we focus on how fast the inventory is moving. If we can shorten that time, not only will we save our customers a lot of money, but also they'll get a superior product that meets their precise requirements.

If you are passionate about your idea, regardless of what it is, you must act on it, or chances are, you will lose it. Many people have ideas, and some have more relevance than others. But once you establish that your idea is worth pursuing, move forward with it.

Now that we've discussed the leadership attributes of an effective leader, let's reexamine the two other critical elements with which leaders must deal every day: people and the workplace.

Effective Leadership and People

Leaders must know their talented people, and leaders must have the right talent at the right place. Jack Welch emphasized, "Getting the right people in the right jobs is a lot more important than developing strategy. This truth can be applied to all kinds of businesses." Sumner Redstone of Viacom is known as the consummate champion of talent and content. "I believe that talent is king because people don't watch TV, they watch talent, content, programming. The way you manage talent is to let them run their businesses to a large extent. If you have confidence in the talent of your managers, you do not intrude every time they make a decision." Beyond capability in talent, Redstone looks for character and loyalty. "I look for someone I can trust, and who trusts me. And, I look for confidence, competence, and commitment."

As mentioned previously, you always want to hire the best talent with the highest level of integrity you can find. But hiring the best talent isn't easy. I have identified seven secrets of talent, which you can easily remember using the acronym SECRETS:

1. Search for the dream. The dream is the vision. Talented people celebrate each success but then quickly move on to the next challenge, the next dream.

2. Evaluate your strengths and weaknesses. Talented people are not afraid to acknowledge their weaknesses. It is the only way they can be addressed and turned into strengths.

(Continues...)



Excerpted from Next Generation Business Handbook by Subir Chowdhury Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

1 The effective leader 7
2 Using organizational culture as a leadership tool 22
3 Leadership and innovation 39
4 Leadership and destructive self-confidence 56
5 Leading by analogy 75
6 Career imprinting and leadership development 91
7 Leading by doing 109
8 Leadership to improve performance 124
9 Managing leadership images 142
10 Leadership in the virtual workplace 159
11 Leadership in a branded world 174
12 Managing a self-managed team 186
13 The merchandising of leadership 200
14 Quality strategy 229
15 Competing on social capabilities 248
16 Dynamics of competitive interaction 272
17 Strategic advantage and the dynamics of organizational competence 294
18 To plan or not to plan? 315
19 Mastering strategic renewal 333
20 Value creation in the networked economy 361
21 Global strategy in an Internet era 377
22 Symbiosis or parasitism? 393
23 Globalization and management attention 414
24 Strategy dynamics for nonprofit organizations 433
25 Understanding customer needs 459
26 Strengthening customer relationships 473
27 Building customer interface 492
28 Avoiding traps in customer relations 507
29 Customer relations online 523
30 Customer experience 539
31 Coping with critical criticism 553
32 Growing pains 569
33 Persuading with emotions 584
34 Strategic customer management 599
35 Designing supply and distribution channels 616
36 Managing global customers 630
37 The effective entrepreneur 657
38 Entrepreneurial opportunities 666
39 Nature of entrepreneurship 680
40 New-venture finance 697
41 Untangling service-for-equity arrangements 712
42 Business planning 726
43 Playing entrepreneurial judo 745
44 Success for new ventures 760
45 Entrepreneurial mind-set in multinational corporations 775
46 Sustaining rapid growth 793
47 Income disparity and entrepreneurship 811
48 Talent-management system 839
49 Living strategy 860
50 Changing foundations of people management 872
51 Returning human to HR management 887
52 Change management and HR practices 903
53 What really matters in HR management? 920
54 The four thrusts driving corporate renewal 941
55 Creating the family-friendly organization 956
56 Transforming the process of staffing toward innovation 971
57 How old you are may depend on where you work 986
58 Tomorrow's global workforce 1007
59 The power of networked business 1031
60 Managing networked organizations 1039
61 Beyond "synergies" 1060
62 From extended enterprise to orchestrating a team of companies 1076
63 Digital networked business 1090
64 Strategic connections 1105
65 Technological mediation as strategy 1128
66 Seamless IT alignment 1157
67 Seizing the value of online auctions 1169
68 Building a platform for E-business 1183
About the next generation business thinkers 1265
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