Physics of Business Growth: Post #4--Structure

Structure and Growth: Successful systems-aligned companies create innovative strategies, policies (especially HR), and cultures that are structured for change. Such companies celebrate success and “console” failure with lessons learned, ask questions, and are respectful, playful, open to new ideas, and curious. Best Buy serves as a good example with its innovative inverted pyramid—customers on top, employees next, finally servant leaders. Three approaches to innovative structure that promote growth: 1) Structure innovation initiative inside the company. Example: At Best Buy, the front of the house management is entrepreneurial and customer centric, but the back of the house is run by headquarters; 2) Segregate innovative initiative outside the company—like biotech where it may take years and cost a lot; 3. Build hybrids, like at IBM under Gerstner—Emerging Business Opportunities (EBO) to grow new opportunities that can become their own P&L organizations.  Engaged employees result from policies like promotion from within, good HR policies, perceived fairness in compensation and promotions, constructive feedback, equality, stock ownership and leader humility and stewardship.

Physics of Business Growth: Post #3--Systems

Growth Systems: Alignment accelerates growth. It does no one any good to have internal systems bumping into each other—stifling growth. Thus, HR policies, reward systems, culture and structure (to mention just a few) need to be tested and aligned to facilitate growth, not frustrate progress. For example, if CEOs are rewarded for quarterly growth, they’ll likely take short-term gain over the long view—creating just the opposite of growth. “Asking for new behaviors in a system that still encourages, measures, and rewards the old behaviors is a complete waste of time or, worse, engenders cynicism and mistrust.”  Successful growth companies—like Best Buy, Southwest Airlines and UPS—are rare and produce an engaged workforce; humble, passionate leaders; and a learning environment.

Phyiscs of Business Growth: Post #2--Mindsets

Creating Growth Mindsets: Leaders need to create the kind of environment where innovation can thrive. Chance favors the prepared mind, and mindset determines choices. A learning mindset, a broad repertoire of experiences, and customer empathy all create the kind of mindset required to thrive in an uncertain, adaptive environment. Cognitive diversity especially improves decision quality. Some creativity engineering techniques: Challenging assumptions; Connecting unrelated ideas; Visualizing how the future might look; Collaborating with diverse people (and customers); Improvising when necessity requires it; Reframing by asking a different question; and, Playful experimentation.