Quick takes

Citation

(2001), "Quick takes", Strategy & Leadership, Vol. 29 No. 4. https://doi.org/10.1108/sl.2001.26129dae.001

Quick takes

Editor's note"Quick takes" presents the key points and action steps contained in each of the feature articles. Catherine Gorrell prepares these summaries.

Page 4Maslow revisited: building the employee commitment pyramidDavid L. Stum

If the workforce is an essential asset to the success of a business, then understanding employees' level of commitment to the organization is vital. Research entitled the @Work studies has uncovered new meaning in the employee/employer dynamic based on the framework of Maslow's hierarchy of needs. Whereas Maslow's model conceptualized an individual's motivational needs, the @Work researchers formulated a Performance Pyramid that illustrates what employees need within an organizational setting.

The Performance Pyramid presents five levels of workforce needs:

1. 1.

   Safety/security. First and foremost, the employee must feel physically and psychologically safe in the work environment, if commitment is to be possible. This means a workplace free from fear, including freedom from sexual harassment.

2. 2.

   Rewards. Compensation and benefits are a fundamental foundation that must be in place before higher needs become commitment drivers.

3. 3.

   Affiliation. A sense of belonging (including being "in the know" and "part of the team") are important at this next level. Leaders who communicate a strong sense of mission, vision, and strategy enable this need to be met.

4. 4.

   Growth. Employees want opportunities to change, learn and have new experiences on the job. Their expectations are not only for their growth as individuals, but for the organization to grow and change as well. Thus, attributes such as "customer focus," "continuous improvement" programs, and "opportunities for training" contribute to meeting this level of needs.

5. 5.

   Work/life harmony. Members of the workforce want to reach their potential both on and off the job. One driver of the Workforce Commitment IndexTM is "management's recognizing the importance of my need to balance work and life."

There are no silver-bullet drivers or programs in compensation, training or work/life balance that can ensure a competitive advantage in commitment and retention. The research findings show that an organization must make efforts to at least meet employee expectations at each level in the hierarchy. The best strategy for retaining the existing workforce would be to "start from the bottom up." The HR function should architect a plan to support the pyramid levels. This plan begins with an accurate assessment of which pyramid levels should be addressed based on employee status. As policies are changed, the leaders in every part of the company must show support for the changes.

Page 10Do you have what it takes to be an e-manager?Jeanne G. Harris, David W. De Long and Anne Donnellon

Working in the e-economy is challenging. Managing there is even more so, as management competencies are critically affected in the following areas:

1. 1.

   Fast decision making. Making decisions at e-speed may well be the most important e-manager competency. Several characteristics help managers make decisions effectively in high-speed Web environments: a strategic orientation, a rapid analytic process, acting with relatively limited information, a willingness to admit errors, and an ability to balance the need for speed against the need to be right.

2. 2.

   Partnering. Because so many things are done with external partners, identifying and evaluating potential partnerships, building key relationships and successfully negotiating the terms of a deal are critical competencies.

3. 3.

   Knowing the technology. In e-business, technology is not a support system. It is the company business model. Invest the time to keep up. Take ownership for the implementation of strategic initiatives.

4. 4.

   Staying focused in spite of information overload. Getting and staying focused is difficult because of the speed at which e-business is evolving. Give more attention to the right things in part by learning defense mechanisms to deal with the information onslaught.

5. 5.

   Making sense of the future. Virtually all core assumptions about the company's business and market are up for grabs. Create a vision. Read widely. Grasp the significance of unfolding events. These attributes are essential to successful and rapid adaptation – the e-manager's "Darwinian advantage" over slower counterparts.

6. 6.

   Attracting and retaining talent. More than ever, the job of an e-manager resembles that of an NBA coach trying to build a team out of a group of highly paid, free agents. But, compensation aside, some key points for attracting and keeping talented staff in e-business include: hiring talented people who are attracted to the company's bold vision; creating a learning environment and offering employees the freedom to pursue their goals; and because high expectations and urgencies cause stress, maintain control over your own emotions.

In the fast-moving e-business world, knowing and applying the six key competencies can help executives achieve success in developing their management teams.

Page 15Excelling under pressure: increasing your energy for leadership and innovation in a world of stress, change, and unprecedented opportunitiesRobert K. Cooper

Most of us are ensnared by tension and stress, which is a result of demands to work faster (manifest ever-greater energy) and work better and smarter (be more creative). In his writings, Peter Drucker exhorts leaders to raise their own energy, then do so for their teams. But how can you get more energy? Recent scientific discoveries are demonstrating two important facts:

1. 1.

   We can only reach our untapped potential if we keep our energy high.

2. 2.

   There are two very distinct kinds of energy – tense energy and calm energy. Most leaders rely on the wrong kind.

Emergency stress hormones fuel tense energy. This energy is sparked from rush-hour traffic or demanding work assignments that kick your energies into gear, so you can either stand and fight or run away. Tense energy does not contain one ounce of creativity or reflection. Over time it can be very costly, causing premature aging, increasingly rigid attitudes, and irritability in personal relationships.

The calm energy state is characterized by low muscle tension, an alert presence of mind, increased creative intelligence, physical vitality and a deep sense of wellbeing. This kind of energy is essential to the extraordinarily focused and productive state known as "flow" or "being in the zone."

Modern science has identified a few simple adjustments in the way you manage your day that will stop the gear-grinding effects of tense energy and help you shift into calm energy:

• •

  Start the day right – without a bang. By gently beginning the day, you can avoid the use of emergency hormone secretion to jump-start your energy.

• •

  Take strategic pauses and essential breaks. Short breaks and strategic pauses every half-hour stimulate natural, significant rises in calm energy, which actually speeds up your work output.

• •

  Bring your best self home. Give yourself a brief moment to shake off the stress and tension of the day. Renew your calm energy for the evening and, from time to time, do nothing, guilt-free.

We all have the potential for harnessing great energy from within. If it is the right kind of energy, we will have the energy to see opportunities missed by others, to be attentive under pressure, to shine even during the most difficult times, and to have more fun along the way.

Page 21Intellectual capital analysis as a strategic toolGöran Roos, Alan Bainbridge and Kristine Jacobsen

In reality, strategy is not under management's direct control. Rather, it emerges from the combined behavior of the organization. Managers may discuss their business's plan in terms of what is strategically correct, but action is effected in the context of what can be done, and the two become completely disconnected.

To align strategy plans more closely with everyday actions, strategy must first be conceived in terms of three dimensions: the rational, the emotional, and the political. These perspectives come from a fusion of external and internal views of the company. Second, managers must acknowledge that strategy implementation cannot be separated from the process of strategy formulation – they are two sides of the same coin.

The external analysis view of strategy addresses how the organization exists within its environment. By discerning the changing balance of key forces (suppliers and customers, substitute products, new entrants, rivals), the organization determines its best approach.

The internal analysis, or resource-based view of strategy, claims that success is due less to the dynamics of an industry and more to the way the organization accumulates and deploys its resources. Resources are strategic if they are relevant (they impact value creation), are rare (no one else has them), and are difficult to copy or substitute.

The intellectual capital perspective on strategy subdivides the company's human resources into three categories – human capital, relationship capital, and organizational capital – and considers the organization's ability to transform its resources from one form to another.

The most effective strategy process combines the best of external analysis with the internal, resource-based view and uses intellectual capital analysis to articulate the implications of the strategy for the organization as a whole. The tools and concepts of intellectual capital analysis create a model (navigator) of how the organization works in practice. This understanding forces managers to address the difficult practical issues that make strategy meaningful. The intellectual-capital navigator points out fundamental issues of what the organization is and how it behaves. It also raises emotional and political questions that determine whether or not managers understand what performance levers they can pull and if they are prepared to pull them.

Page 27Getting the price rightOrit Gadiesh, Dan Haas and Geoffrey Cullinan

Mergers and acquisitions are increasingly used as strategic tools to benefit from the synergies of integrating two entities. Unfortunately, half to three-quarters of all mergers and acquisitions fail to create shareholder value. Furthermore, many executives find themselves unprepared for the M&A opportunities, thus missing deals or completing them poorly. They fail to align the process of generating and executing transactions with strategic goals and fail to adapt their valuation methods accordingly.

A clear, well-articulated strategic vision that is linked to rigorous valuation and informed negotiation is a strong predictor of success:

1. 1.

   Screen strategically. Screen acquisition candidates based on strategic goals to establish a focused search and identify the right targets. It also pays to consider several options simultaneously and to court likely prospects months or years ahead of a sale.

2. 2.

   Set the price. Assess the price tag. The more complex the strategic rationale, the more work required to determine the right price:

3. 3.
   • •

     Check the cash flow. Build your own projections.

   • •

     Predict the benefits of scale. Deals founded on scale often fail, so it is critical to determine which aspects of scale really count. Different businesses achieve the benefits of scale differently.

   • •

     Test related business opportunities. All valuations need to undertake the detailed work of predicting cost savings, but firms moving into related businesses need to add a calculation of potential revenue synergies.

   • •

     Check the fit of acquisitions that increase scope. Some companies use acquisitions as a principal source of growth. For them, the make-or-break issue is whether the new outfit has high-quality employees who can be integrated into the company.

   • •

     Assess the potential value of transactions that transform the business. One of the most critical elements in the difficult-to-predict transaction is clearly and confidently communicating to the market the strategic rationale used to pick a price.

4. 4.

   Negotiate preemptively. Acting on the offensive, an acquirer who courts potential targets well ahead of a deal, forms relationships with managers and understands the culture of the organization has a good chance of preempting an auction. From a defensive position, it is essential to know what value competing bidders will place on the acquisition in determining whether there is a price that will trump others without overpaying for synergies.