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You Cannot Be a Bystander

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I went to the 90th birthday bash for the Harvard Business Review last night at Lincoln Center. The magazine had a glittering array of speakers, including CEOs such as Howard Schultz of Starbucks, Alex Gorsky of J&J, Vineet Nayar of HCL and Angela Ahrendts of Burberry, plus Professor Clay Christensen and Professor Rosabeth Kanter of Harvard Business School. Here are a few of the important lessons from the evening:

1)      You Cannot Be a Bystander—Schultz made a strong case for business to lead. “The boundaries are blurring between roles and responsibilities of business and government. We have to take on the issues of the time, from unemployment to sustainability.”

2)      No One Size Fits All —Prof. Christensen said, “I point the finger at B School professors who give the students the idea that there is one solution to the problem. Managers must understand “if-then.”

3)      Start Career Seeing Customers—Gorsky said, “I saw lots of RNs and MDs in my first job. Whenever I make a decision that has all of the complexity of R&D, marketing, finance and production, I keep the consumer and our customers in mind—it makes everything clear.”

4)      Put Innovation Close to Operating Unit—Gorsky suggested that you get faster innovation if you rely on the operating units instead of central R&D. “We give autonomy to our businesses. We now get 30 percent of our revenue from products introduced within the past three years.”

5)      Measure Profitability Differently at Each Stage— Prof. Christensen said that you cannot just rely on a single measure forever. He said that Sun Microsystems fell in part because of its obsession with gross margin. “Managers should be assertive on how to measure and not just listen to Wall Street.”

6)      The Job to Be Done— Prof. Christensen advises that companies focus on the causal mechanism to buy a product, not on what the customers say they want. “You have to find sustainable innovations that are disruptive, such as endoscopic surgery.”

7)      Put Employees Ahead of Customers (poor customers…they had a bad night!)—Nayar said that the constraint to growth in his IT services company is the right people so no customer can be sacrosanct.

8)      Employees Now Ask Why—Schultz made a strong case for full transparency with partners/employees. “Business is a team sport. You need to have moments of celebration and share successes. You must establish tribal knowledge. We galvanize our people by standing up for what we believe in.”

9)      Get Wisdom of the Young Employees—Ahrendts said that she has established a strategic innovation group, “the millennials, whose job it is to dream and to be social. They are to recommend specific ideas to the executive committee, which must execute.”

10)   Management Accountable to Employees—Nayar said that he is reviewed by a thousand employees for bonus and long term compensation.

I left the session committed to getting a more direct pipeline to my younger, native digital employees. I am also convinced that my father’s idea that every Edelman person should be an account executive working on client business is more right today than ever. Finally, I believe in business as the change agent, but that will happen only with different leadership of the Schultz/Gorsky model where shareholders are the end beneficiaries of a socially conscious, transparent enterprise where employees are free to create without the fetters of hierarchy.

Richard Edelman is president and CEO

Featured in the photo above: Roger Martin, Dean, Rotman School of Management; Angela Ahrendts, CEO, Burberry; Vineet Nayar, vice chairman, CEO of HCL Technologies LTD

Photo credit: Elie Photography

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