Tag Archives: Kathleen Eisenhardt

Career “Planning” = Career “Improvisation”

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In “VUCA world,” described by the U.S. Army War College as volatile, uncertain, complex, ambiguous environments, career “planning” occurs under rapidly-shifting conditions.

As a result, it is difficult to  meaningfully respond to the interview question: “What are your career plans for the next five years?”

Kathleen Eisenhardt

Planning is most suited to relatively certain circumstances when processes and decisions are linear, argued Stanford’s Kathleen Eisenhardt and Behnam Tabrizi in their analysis of global computer product innovation.

In contrast, frequently-changing or uncertain conditions with many iterative modifications require improvisation coupled with frequent testing.

Behnam Tabrizi

Iterative exploration, rapid prototyping/experimentation, and testing are hallmarks of agile software development and are more suited to rapid changes in economic, political, and technology changes that affect current career paths.

Alison Maitland

University of London’s Alison Maitland and Peter Thomson offered forecasts in Future Work: How Businesses Can Adapt and Thrive In the New World of Work,
and related books by Deloitte’s Cathy Benko, Molly Anderson, with Anne Weisberg of Paul, Weiss, Rifkind, Wharton & Garrison LLP consider The Corporate Lattice: Achieving High Performance in the Changing World of Work and Mass Career Customization: Aligning the Workplace with Today’s Nontraditional Workforce.

-*When have you found it more useful to “improvise” instead of “plan” your career?
-*What are the benefits of career “improvisation”?

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©Kathryn Welds

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Women Board Members + Strong Shareholder Protections = Higher Financial Performance

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Kris Byron

Kris Byron

The relationship between women on corporate Boards of Directors and company positive financial results is mixed, according to Syracuse University’s Kris Byron and Corinne Post of Lehigh University.

Corinne Post

Corinne Post

They conducted a meta-analysis of 140 existing studies and found that women on corporate boards was related to positive financial outcomes in countries with stronger shareholder protections.

Richard Gentry

Companies with women on Boards and subject to rigorous shareholder protections reported higher accounting returns or firm profitability, noted University of Mississippi’s Richard Gentry and Wei Shen of Arizona State University.

Wei Shen

Women on Boards of Directors provide “diversity of thought and experience” and tolerate less financial risk.
As a result, they made stronger efforts to monitor the firms and to ensure strategy execution, leading to superior financial results,according to Byron and Post.

Kathleen Eisenhardt

Kathleen Eisenhardt

The team drew on Agency Theory, proposed by Stanford’s Kathleen Eisenhardt, suggesting that Boards of Directors are “information systems” used by key stakeholders to verify organizational behavior.

Amy Hillman

Amy Hillman

Directors’ individual cognitive frames, derived from their diverse values and experiences, influence these systems, according to  Arizona State’s Amy Hillman and Thomas Dalziel of University of Cincinnati.

However, diverse cognitive frames yield more favorable organizational outcomes only when teams “engage in mutual and collective interaction [and] share information, resources, and decisions.”

This means that women Board members affect group decision-making and financial performance when other Board members are willing to consider their diverse perspectives and experiences.

Thomas Dalziel

Thomas Dalziel

Strong shareholder protections provide “an information-processing stimulus that motivates (Boards) to leverage the decision-making resources (i.e., knowledge, experience and values) that women bring,” asserted Byron and Post.
They concluded that strong financial outcomes occur in companies with women on their Boards of Directors in countries with strong shareholder protections.

Byron and Post’s analysis illustrates that diverse perspectives provide benefit only when they are solicited and considered in a context of regulatory oversight.

-*When have you observed diverse perspectives associated with increased profitability and performance?

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©Kathryn Welds

Integrating Natural Sciences and Business to Consider Strategy as “Structured Chaos”

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Shona Brown

Shona Brown

Former Google Senior Vice President of Business Operations Shona Brown and Stanford Engineering Professor Kathleen Eisenhardt assert in their best-selling book, Competing on the Edge: Strategy as Structured Chaos, that “the key driver of superior performance is the ability to change. Success is measured by the ability to survive, to change, and ultimately to reinvent the firm constantly over time.”

The book investigates matched pairs of anonymized companies in the computer industry as an example of strategy in fast-moving, unpredictable, competitive markets.

It draws upon concepts from the natural sciences, such as evolutionary theory and natural selection, as an analogy to change in businesses.

The authors state that decisions on what to structure or not, draw on:

-Improvisation
-Co-adaptation
-Regeneration
-Experimentation
-Time-pacing

These considerations set the pace of change by “balancing on the edge of time” from the past to the future.
They assert that these five phenomena enable a “semi-coherent” strategy, that is “unpredictable, uncontrolled, inefficient, proactive, continuous, diverse.”

Kathleen Eisenhardt

Kathleen Eisenhardt

Brown and Eisenhardt define natural science concepts in business terms:

• Complexity Theory
• Evolutionary Theory
• Dissipative Equilibrium
• Coadaptation
• Natural Selection
• Mutations
• Complexity Catastrophe
• Error Catastrophe
• Repeated Layering
• Genetic Algorithm
• Recombination
• Rearchitecture
• Modularity
• Entrainment

The authors advise to move to “the edge of time” and “the edge of chaos”, and offer guidelines including:

• Prune to reveal the core of the business
• Build the business through growth, not assembly, of modular parts
• Recognize that the business’s starting point and the order of implementing change strategies, are among outcome determinants
• Devote 15% of the product portfolio to experimental probes
• Apply successes from experimental probes in new ways
• Institute regular planning meetings focused on the future
• Exploit current capabilities in new ways
• Develop time-pacing through regular benchmark reviews
• Watch for missing linkage between key processes and innovation elements
• Use “patching” to match the best people resources with required tasks

This book offers an original examples and metaphors for change strategies in business, including jazz improvisation, The Tour de France, American Baseball.

-*What models do you use to understand and execute business strategy?

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©Kathryn Welds