Negotiation: Former Secretary of State George P. Shultz (video)
Stan Christensen, partner at investment banking firm, Arbor Advisors interviews former Secretary of State George P. Shultz on negotation. Christensen teaches a course on negotiation at Stanford University and is a member of the Council on Foreign Relations.
My take
I haven’t watched the entire video yet. The speaking is a bit slow and you’ll have to work to take away usable lessons. Nonetheless, it almost always interesting to listen to how major events unfolded and what the players perceived as being the critical factors involved.
A CEO’s guide to reenergizing the senior team (McKinsey & Co)
“Should you stay or should you go?”
In tough times, Boards ask this about CEOs and CEOs ask it about their teams. This article from McKinsey does a reasonably good job of framing the problems and pitfalls (e.g., getting rid of people too quickly) and the direction of a solution.
The direction, simply put, is for CEOs to manage, including managing their team’s emotional states. As much as we all hate to admit it, our states of mind are what lead to bad, blind or brilliant decision making. The idealized rational man –homo economicus– is as elusive as the mythical sasquatch, even in the halls of executive power.
Denial!
My favorite part of the article is a review of the “cognitive errors underlying denial…”
Toyota is Dead? Part 2
In Part 1 (Toyota is Dead? Part 1) I quoted a recent blog in BusinessWeek that suggested because Toyota had it’s FIRST quarterly loss in 70 years they needed to “…rethink supply chain technology…” A sub-heading in the same post reads, “The Limits of Lean: Why Technology Is Now a Must”.
Huh?
Anyhow…read my prior post for my opinion about this conclusion. Whatever anyone’s opinions numbers ultimately tell the story. Today Toyota announced a return to profitability in the latest quarter. I doubt new supply chain technology had anything to do with the return to (quarterly) profitability, just as a lack of technology had nothing to do with the previous (quarterly) loss. Both the recent loss and recent-er gain were driven by unique events (government programs helped this quarter, while crashing auto sales hurt the previous quarter).
Einstein famously said… ‘make things as simple as possible, but not simpler’. As humans and Americans in particular we’re constantly pinning ‘simpler than possible’ conclusions and solutions on problems that are warranted by the facts on the ground (i.e., when in doubt, computerize something).
VIDEO: Innovation in a Disruptive Environment (Steve Jurvetson, VC from DFJ)
Steve Jurvetson, partner at Draper Fisher Jurvetson, offers perspective on the market opportunities in innovation and technology. Topics discussed include the necessity for utter market disruption, interdisciplinary solutions, and advice for those interested in working in the venture capital arena.
RESEARCH: Listening to smart people makes you dumb.
I confess I’m skeptical of “brain studies”, but this one seems to match common experience: When an expert starts talking, people stop thinking (critically).
The study entitled “Expert Financial Advice Neurobiologically “Offloads” Financial Decision-Making under Risk” and summarized by Robert Cialdini claims that
“Our results demonstrate that financial advice from an expert economist, provided during decision-making under conditions of uncertainty, had a significant impact on both behavior and brain responses…these results provide significant support for the hypothesis that one effect of expert advice is to ‘offload’’ the calculation of expected utility from the individual’s brain. “
In short, when someone you perceive as an expert starts talking, the part of your brain where critical thinking takes place shuts down (or at least activity in that region decreases). Once you understand this phenomenon you see it play out almost everywhere–work, home, the news. The problem of course is that many times those perceived as experts aren’t, or being an expert experiences what I call “expert blindness” where their deep knowledge of a particular area causes them to mis-perceive or just miss critical changes or opportunties.
In any event, it’s an intersting paper well worth reading. Just don’t buy everything is says just because the authors are “experts”. :)
Citation: Engelmann JB, Capra CM, Noussair C, Berns GS (2009) Expert Financial Advice Neurobiologically ‘‘Offloads’’ Financial Decision-Making under Risk. PLoS ONE 4(3): e4957. doi:10.1371/journal.pone.0004957
‘Sick Sigma’? Is quality a waste of time?
“…why are companies that embraced Six Sigma..doing no better in this downturn than the companies that ignored it?”
Six Sigma mystique takes beating in downturn, Reuters, April 29, 20090
This is how bad rumors start…
Companies don’t make products, they make decisions
Behavioral economics & corporate decision making
Nobel Laureate Daniel Kahneman encourages us to think of companies not as mechanisms for manufacturing products but for manufacturing decisions. Several “user friendly” practices are described to improve decision making quality including conducting pre-mortems.
(Source: McKinsey & Co.)