The Business Sensei

Robert Sternberg And The Cultural Immune Response in Action

Dr. Robert Sternberg, a well-known psychologist and, quite frankly, an absolutely brilliant scientist, just managed to get tangled up in the University of Wyoming’s cultural immune response. He’s hardly the first person who has been caught up in such a reaction, although his case is certainly dramatic: he ended up resigning after barely four months as the president of the university.

The cultural immune response is a phenomenon I discuss in my books, The 36-Hour Course in Organizational Development and Organizational Psychology for Managers.

At root, it’s pretty straight-forward: when the human immune system sees something that doesn’t fit, that triggers an immune response and the body attempts to repel the invader. At an organizational level, when someone enters the organization and does not fit with the culture, that person is seen as an invader. The organizational system mobilizes to fight off the invader. If the person entering the organization is a relatively low-level employee, it’s no big deal. The person either changes to match the culture, they leave, or they are fired. The overall culture barely, as it were, sneezes.

The situation is considerably more complex when the person triggering the response is the new president of, say, a university. As I wrote in Organizational Development:

Remember that culture is a roadmap of how the world works. The longer that culture has been in place, the more successful the organization has been, and the more people like the way things are working and are happy with the current situation, the stronger the culture will be. The stronger the culture, the more the roadmap is trusted. The more the roadmap is trusted, the harder it is to change.

When a new leader comes in who does not match with the culture, problems will immediately arise. It doesn’t matter whether we’re talking a group leader or a CEO, although in general the smaller the group, the weaker the culture simply because it is not distributed over as many people. What the new leader is effectively doing is saying, “Everything you know, everything you believe in, is wrong. Trust me. Follow me. I have the truth.”

Now, I suspect that many of you reading that last paragraph are rolling your eyes and thinking, “Yeah, right. It can’t be that big a deal!”

Let’s consider the situation. For the members of the culture, this roadmap, this view of the world, is their common bond. It’s the thing that holds the organization together. By providing structure and predictability, culture reduces anxiety and promotes a feeling of security. Remember also that culture quickly becomes largely unconscious. Behaviors are chunked, no longer thought about on a conscious level.

Then someone comes along and says, “No, no, that’s all wrong.” Imagine being in that position. How would you feel? How did you feel the last time your company announced major changes or restructuring?

In Sternberg’s case, it looks like he tried to do too much too fast without taking the time to build relationships and become part of the specific university culture. By way of contrast, when IBM brought in Lou Gerstner in the early 1990s, Gerstner rapidly made himself part of the IBM culture while still standing partially outside it. While part of this may have been luck in that his background was very similar to that of IBM founder Tom Watson, Gerstner’s taking the time to build connections and visibly recognize and respect the existing culture before he changed it was also a key factor.

I’m not going to attempt a detailed analysis of Sternberg’s actions at the University of Wyoming, particularly since all that I have to go on at this point is the relatively superficial reporting of the events. Organizational change, particularly when it involves a cultural change, is a tricky business; the fact that someone as psychologically savvy as Robert Sternberg got tripped up by it only serves to underscore that point.

Ultimately, change is hard. For the University of Wyoming, having just successfully exiled one leader who attempted to make changes, it just got that much harder. The immune system is now on heightened alert. So, if you’re trying to make a major change in your organization, think carefully about how you can avoid triggering that cultural immune response.

Smoke and Mirrors

It’s getting toward fall. Out here in Stow, that means one thing: Apples. Every weekend from now until late October, the world descends on the local apple orchards. At some apple places, the lines can stretch a mile down the road.

That, of course, got me thinking about another kind of Apple. I didn’t really pay attention when they announced that the 5C would be available for pre-order starting today, but the 5S would not be. Both phones will be released on 20 September.

In the past, Apple always made the new phone available for pre-order and guaranteed (assuming you ordered quickly enough) that it would arrive at your door on Release Day. Now, if you want a 5S on Release Day, you have to get on line.

It’s been a long time since we’ve seen long lines for Apple products. I’m sure it’ll make a nice visual and generate some serious media coverage.

But it makes me wonder why they need to create such an illusion of popularity. Smoke and mirrors anyone?

Organizational Psychology for Managers is now available at Amazon.com. Order your copy today!

International Apple Day +2

Here we are, two days after that moment when Cupertino becomes the center of the universe: International Apple Day. The day when Apple announces its new devices. The day when everyone yawned.

Last year, when Apple announced the iPhone 5, I commented that:

Don’t get me wrong: the iPhone 5 is a beautiful piece of technology. I’ll probably upgrade to one eventually (unless I decide to stick it out and see what the iPhone 6 looks like ). But it’s a lot closer to the iPhone 4s than the iPhone 3g was to the original iPhone. Apple may be growing the box, but it sure isn’t outside it, and they have lots of company in there.

So here’s the thing: Apple’s competitors are looking to find a way out of the box that Steve Jobs created. Is Apple?

Well, as it happened, I didn’t upgrade. I probably will get a 5S though. It’s not the best phone out there, but it’s good enough to make it not worth the effort to switch to another platform. I suppose I might feel differently if I were still doing engineering instead of management consulting. Hacking the phone just isn’t that interesting to me any more.

More to the point, though, is that Apple seems to be stuck in its box, or perhaps Apple Crate would be a better term. Either way, the world is moving past them. Yes, the iPhone 5S is a beautiful piece of technology. Apple put something together that very neatly builds on the previous generations of phones, with nothing out of place. It’s beautiful, it’s powerful, you know exactly what you’ll get. It’s safe.

Two years ago, when the iPhone 4S was announced instead of the i5, I commented that:

Even a bigger question than the i5 was whether or not Tim Cook could fill Steve Jobs’ turtleneck. I, for one, still don’t know.

As a good friend of  mine observed, Apple is turning inward, much as it did the last time Steve Jobs left the company. This time, though, the only way he’s coming back is if they have the services of a really good medium or they manage to build an iSteve gadget, sort of the equivalent of IBM’s Watson but with the personality of Steve Jobs.

Somehow, I suspect that neither of those options are terribly likely to occur. That means it’s up to Tim Cook. He’s got the turtleneck now. When Steve Jobs returned to Apple in the late 1990s, things looked pretty bleak for the company. Jobs took some real risks, and enjoyed some phenomenal successes as a result. So, Mr. Cook, perhaps it’s time to stop playing it safe. Toss the turtleneck, literally and metaphorically, and take a chance. Maybe next time you’ll surprise us.

Microsoft Yawn

Microsoft president Steve Ballmer put out a long letter detailing changes taking place at Microsoft.

After wading through the announcement, I was reminded of some of the restructuring announcements that IBM used to send out back in the late 1980s: long, boring, and ultimately pointless. It’s impressive to see how much Microsoft has really taken on IBM’s mantle… although perhaps they’d have been better off if they’d done something new instead of picking up what IBM got rid of!

Unless he’s trying to produce a sleep aide, Ballmer’s memo leaves a great deal to be desired. Effective organizational change requires clearly defining the outcome, painting a bold, exciting, and engaging picture of the destination. In other words, it requires a vision. Without vision, we don’t know where we’re going.

Vision, however, requires far more than vague statements like, “Helping people achieve their full potential.” What does that mean? If the Microsoft Surface is any indication, it might well mean “buy an iPad!”

Microsoft’s original vision, “A PC on every desktop,” had power. It was bold, it was exciting, and it was measurable. Yes, measurable. They could see their vision coming true and see how their actions mattered.

Now, though, Microsoft is wandering around lost in the wilderness of defining full potential. Ballmer’s memo fails to excite, fails even to provide context or any real vision. Instead, it reads like the rearranging of the proverbial deck chairs, done more out of a belief that if enough things get changed something will happen; for example, the deck chairs will look better… Hardly the stuff of inspiration!

Organizational Psychology for Managers is phenomenal. Just as his talks at conferences are captivating to his audience, Steve’s book will captivate his readers. In my opinion, this book should be required reading in MBA programs, military leadership courses, and needs to be on the bookshelf of every Fortune 1000 VP of Human Resources. Steve Balzac is the 21st century’s Tom Peters.

CMG Director of Publications

The Doom of Yahoo?

If creativity were simply a matter of having a bunch of people in an office, well, IBM of the 1980s and 1990s would have been the most creative business on the planet. The company employed close to 300,000 people worldwide, all working out of offices. As we all know, IBM went on to invent Windows, the Internet, online search, social networking, and the mobile phone. Oh wait, maybe not.

Creativity is an odd beast. According to the New York Times, Marissa Mayer at Yahoo decided that the reason she had to end Yahoo’s telecommuting policy was to make the company more creative. Another article in the Times claimed that the reason was because Yahoos weren’t actually working at home: the article mentioned Yahoo employees founding startups while on Yahoo’s payroll. At least the explanations for Mayer’s actions are creative, so maybe her policy is already bearing fruit!

Unfortunately, the idea that forcing everyone into the office will somehow enable managers to “keep an eye” on employees is both pointless and counterproductive. Again, if that were all it took, we’d be seeing a lot more amazingly productive employees at all those companies that don’t allow telecommuting. Yet, the reality is the other way around, provided the organizational culture and metrics for measuring performance actually encourage the appropriate behaviors. Frequently they don’t, which certainly appears to be the case at Yahoo. Bringing people into the office isn’t going to change that. Fixing a culture trapped in a cycle of defeat is much harder than a few slogans and forcing people to all mix at the water-cooler; however, forcing everyone into the office certainly feels like Taking Action. It is an Exercise of Power. It feels good, even though the actual results are likely to be both less positive than its supporters believe, and less negative than the naysayers are predicting. In short, a few people will probably leave and the rest will get used to working in the office again. At that point, all the old problems will still be there and will still be killing Yahoo. If Yahoo wants to fix that, perhaps they should learn how to set actual effective goals, with a well-defined strategy that they can then evaluate. I’m sure that’s what they think they’ve already done; I’m also quite sure that if they had actually done it right, they wouldn’t be having the problems they claim they are trying to fix.

Let’s face it, if you have effective goal setting and measurable strategy, then an employee who founds his own startup while on the payroll should be picked up simply because he won’t be meeting his objectives. Moreover, employees with goals they believe in and who are working for an organization they value do not, as rule, start their own companies on the side. Forcing people to sit where they can be watched over may force some people to behave, but it won’t make them enthusiastic or creative. If Yahoo is looking for compliant employees, they’re on the right track. If they really want creativity, maybe not so much.

As far as creativity, again that’s a tricky problem. In the 1990s, Yahoo was so far outside the box that they created a new box. Since early 2000, however, Yahoo’s been stuck in that very same box of their own creation while other companies, notably Google, thought outside of it. As I discuss in my talk, “Organizational Culture and Innovation: A Two-Edged Sword,” creativity is largely a function of environment and culture. Individuals do matter, of course, but even the most creative people will be stifled if the culture doesn’t truly support innovation. Even in organizations that claim that their culture supports innovation, what they really mean is that they support innovating in what they already do, not coming up with something radically different: the desire to protect existing products is very powerful, although it won’t stop your competitors from eating your lunch. Thus, after a certain point organizations become better and better at making what they already do more and more effective, but become equally resistant to doing something that’s really new. In other words, you can improve your better mousetrap all you want until someone shows up with a cat. You have to know how to change your culture and build up the four elements that support creativity if you really want to see serious innovation.

Google built a creative culture from the ground up. That culture involves people working closely together. Yahoo does not have that culture. Just bringing people back into the office isn’t going to change that. Yahoo is far more likely to end up not with creativity but with compliance.

Being Fred Flintstone

Remember the classic kid’s TV show, the Flintstones? Fred and Wilma Flintstone are a stone age couple who live in something that looks oddly like the 1950s with rocks. Lots and lots of rocks. Despite this, the show had nothing to do with either rock music or getting stoned. It did, however, have an episode which predicted that the Beatles were a passing fad. So much for prognostication! Fortunately, that episode is not the point of this article.

In one episode, Fred complains to Wilma that he can’t understand what she does all day. How hard can it be to take care of a house? Of course, as Fred swiftly learns, after he and Wilma make a bet, the answer is very hard. Fred, of course, makes a total mess of the whole thing. Now, obviously, the cartoon was playing off of social issues of the time and was intended to make people laugh. The obvious lesson, that a “non-working mother” is a contradiction in terms, is hopefully one that most people have figured out by now. The less obvious lesson is the much more interesting one: it is often impossible to gauge from the results, or from watching someone work, just how difficult a job actually is or even how hard they are working! Conversely, how people feel about the results has little bearing on how hard you worked to get them.

At one company, a manager told an employee that he wasn’t going to get a raise because he made the work “look too easy.” Of course, one might argue that most people who develop their skill in a field eventually become good enough that they manage to make the job look easy. It’s not until we try to imitate them that we realize just how hard it is to do what they are doing.

In another situation, the Principle Investigator in a biology lab had an employee who wasn’t producing results. He first told the employee that she wasn’t working hard enough and quickly moved to haranguing her to work harder. She quit and was replaced by another scientist. He also failed to get results and the process repeated until he quit. So it went through another two employees before the PI, quite by accident, discovered that there was an error in a protocol the scientists were required to follow. Each one had tried to discuss the possibility with him, but he consistently refused to listen, taking the attitude that any problems were purely a result of their lack of dedication. They simply weren’t working hard enough and if they just buckled down and took the job seriously, they would get results! This attitude cost the lab four excellent employees and set them back over a year on one of their projects.

On several occasions, when I’ve stood in front of audiences ranging from management students to senior executives, I’ve presented the following scenario: “Someone at your company isn’t completing their work on time. Why not?”

Invariably, the responses I get back are: “He’s not dedicated,” “he doesn’t work hard enough,” “he’s goofing off,” and so forth. Eventually, I point out that they really have no information from which to draw a conclusion. Occasionally, someone beats me to the punch, but it always takes several minutes before that happens. After the point is made, the number of dumbfounded looks is amazing.

Fundamentally, when we see something not working or something not getting done as fast as we’d like, we tend to blame the person doing the work. The tendency is to assume that they aren’t working hard or that they don’t care or some other fault in the person. We often assume that the difficulty of the task is proportional to how hard someone appears to be working, not what they are actually accomplishing. We tend to ignore the situation, often to the detriment of our companies. In that bio lab, if the PI had been willing to consider other possibilities than blaming the scientists, he could have saved a year of effort and not potentially damaged people’s careers.

By extension, there is also a tendency to assume that when the result looks small or insignificant, that the effort involved in producing it must have been lacking. Large and clunky is thus appreciated more than small and elegant, particularly in software. Unfortunately, this runs afoul of the Mark Twain principle: “I didn’t have time to write you a short letter, so I wrote you a long one.” Transforming something clunky into something well-built and efficient is not easy! Most corporate vision statements are wordy, vague, and meaningless. It actually takes a great deal of effort to create a short vision that works and that can inspire people for years.

Now, let’s look briefly at the converse: that how people feel about the results has nothing to do with how hard you worked to attain them. At one startup company, the VP of Marketing told me that she expected everyone to work long hours because “our customers will want to know that we worked hard to produce this product!” Actually, with apologies to Charlie Tuna, what your customers want is a product that will work hard for them. They really don’t care how hard you worked to make it. They only care that it meets their needs. If it does, they’ll buy it. If it doesn’t, you’re out of luck.

The fact is, it’s very easy to underestimate both how hard the work actually is, and how much work went into producing something. In both of these situations, the key is to figure out what feedback is really important. Results are a form of feedback. However, as long as you’re on track to accomplish those results, then it doesn’t much matter how hard or how easy it looks; as Fred Flintstone discovered, you probably can’t accurately gauge that anyway. When something doesn’t work, then you need to know the process so you can figure out why.

In other words, you need to clearly define your expected results and also clearly define meaningful and useful interim steps that should yield those results. The advantage of having those interim steps is that you can recognize fairly quickly when something is going wrong and you can figure out the real cause. A failure to achieve results is not necessarily the problem: it’s the symptom. Perhaps it’s because the person didn’t work hard enough. Perhaps it’s because the situation was untenable. Treat the symptom and not the problem and before too long you’ll be right back where you started from.

Curse of the Half-Empty Glass

“What was the primary means of motivation in those days?”

“Fear.”

— Carl Reiner and Mel Brooks, The Two Thousand Year Old Man

For the 2000 year old man, fear may have been a very effective motivator: when he saw a lion, he was motivated to run the other way. That, in a nutshell, is the problem with fear. Fear doesn’t make someone move toward safety; it makes them move away from danger. Same thing? Not really. In jujitsu, pain can be used to invoke a fear of injury. Someone experiencing that pain, and that fear, will move away from it, even if moving away means running full tilt into the nearest tree.

In business, the same phenomenon occurs. Faced with an unexpected problem or setback, the most common response is to highlight the threat to the organization and all the terrible things that will happen if the threat is not immediately countered. This practice of attempting to motivate people to work harder through fear – fear of competition, loss of market share, job loss, company going out of business, and so forth – may encourage harder work, but not necessarily more effective work. In the business environment, there are a lot of trees.

While fear gets the adrenaline flowing, it also narrows focus, reduces creativity, and makes it harder for people to recognize and change a losing strategy. This would be fine, except that what is actually needed in most situations is a creative solution, the ability to accurately assess whether or not a strategy is working, and the ability to quickly discard failing strategies. Avoiding premature decision making, no easy task at the best of times, only becomes more difficult. As we all learned in grade school, in the event of a fire, don’t rush for the door: proceed slowly and avoid panic. The same is true in business: rushing to a decision is almost guaranteed to lead to a bad decision.

So given that the business needs to get employees focused and energized to meet a potential challenge, how should it go about doing that?

The key is to recognize that the glass in not half empty. It’s half full. That makes a difference: instead of focusing on what you lack, focus on what you have going for you. Instead of fear, instill an atmosphere of optimism. There are several steps to accomplishing this:

• Start by defining success. What does it look like? What will your business have accomplished in order to have been successful? Communicate that in a few brief, vibrant, sentences. If you don’t know where you’re going, you can waste a lot of time not getting there.
• Lay out a set of goals that will make the business successful. Include what you’ll be doing as well as what you expect others to do.
• Remind employees of previous challenges that they’ve successfully overcome. Emphasize the positive: how teams pulled together, how individuals stepped up to the plate, and so forth.
• Recognize that roadblocks will appear: don’t assume everything will go perfectly. The competition may do something unexpected. A critical employee may get the flu. A storm may disrupt travel or power. Make sure you’ve allowed time to deal with the unexpected so that it doesn’t derail you.
• Present energizing images to use when bad news strikes or setbacks occur: a cyclist passed by an opponent can imagine a rubber band attached to his opponent’s back. The rubber band pulls him faster and faster until he passes said opponent. Come up with the equivalent for your business. Repeat it frequently. If you can’t keep a straight face, find a different image.
• Take the time to brainstorm different solutions to the problems you are facing. Evaluate what you come up with and make sure it will get you to that success state. Rushing off down the wrong path wastes valuable time and, even more important, drains enthusiasm.
• Periodically review progress and show people how far they’ve come. Pilots may care more about the runway ahead than the runway behind them, but everyone else is motivated more by how much they’ve accomplished rather than being constantly reminded of how much more there is to do.
• Celebrate successes. Short-term reminders increase the sense of progress and make people feel appreciated.

Half empty or half full. A fearful team or an enthusiastic, creative team. It’s your choice.

Happy New Year!

The Seven Habits of Pointy-Haired Bosses

Scott Adams, of Dilbert fame, routinely features tales of bumbling managers. The popularity of Dilbert, and the degree to which it resonates with people, are a testament to his accuracy; indeed, Dilbert’s pointy-haired boss has become an iconic figure. Dilbert aside, however, I have observed that very few leaders intentionally act like the pointy-haired boss depicted in the comic strip. Rather, they engage in pointy-haired behaviors without realizing the effect they are having on the organization as whole. Let’s explore some examples of such behaviors and their unintended consequences.

1. Pointy-haired bosses break their own rules and figure either no one will notice or no one will mind because they are in charge. In one company, the CEO called everyone together to talk about the importance of really working hard and putting personal needs to one side in order to ship a product. At the end of the talk, he announced he was leaving for a two week vacation in Hawaii and wished everyone good luck. This did not go over well. One vice-president, who had apparently not been warned, almost choked on his coffee. When the CEO came back, two people had quit and the rest were up in arms.

2. The pointy-haired boss believes that he is separate from the group he leads. In fact, leaders are also group members, with a very important and well-defined role. Through their actions, leaders set the norms for their group. For example, the manager of a team at a large software company imposed a $.25 penalty for being late to meetings. When he was subsequently late himself, the team gleefully demanded he pay up. After a brief stunned moment, he tossed a quarter into the pot. No one complained about the fine after that. What the leader does is directly mirrored in the organization. When leaders find that employees are not living up to the standards of the organization, they often need to look in a mirror and see what example they are setting.

3. Pointy-haired bosses fail to recognize the culture they are creating. To be fair, it’s hard to see your own culture from the inside, and despite what many managers and CEOs believe, culture is formed not from what you say but from what you do. As MIT’s Ed Schein observes, “Culture is the residue of success: success in dealing with external challenges and success in internal advancement.” What behaviors are successful in the organization? What behaviors are rewarded? The very behaviors that people tell me they want to change are frequently the ones they are encouraging.”

4. Pointy-haired bosses lack an understanding of group/team dynamics. They like to say that their organization is “different,” and the research on group dynamics doesn’t apply. That’s like the people in early 2000 who said about the stock market that “This time, it’s different.” If you’re dealing with people, patterns repeat. It pays to recognize the patterns and understand how they are manifesting in your specific situation.

5. Pointy-haired bosses are often unable or unwilling to create a clear, compelling vision for their organization that gets everyone involved and excited. The best way to attract and retain top talent is to make people care about what the company is doing. That’s best done through painting a vivid picture of the outcome and creating clear goals.

6. Pointy-haired bosses motivate through short-term rewards and/or intimidation. They assume they know what their employees want, rather than taking the time to ask or to observe how people are responding. Short-term rewards and intimidation generate short-term spikes in performance, but build neither loyalty nor the desire to go the extra mile. Unfortunately, far too many people are willing to sacrifice the longer-term performance of their team for a short-term gain. In one company, the head of engineering “motivated” employees by inviting them to join him for happy hour in a bar on Friday nights. Had he asked, he would have realized that what the team wanted on Friday nights was to go home and have dinner with their families. Instead of motivating the team, he made them feel imposed upon.

Finally,

7. Pointy-haired bosses do not believe in asking for or accepting help. It’s not about asking for help, it’s about investing time and money to enable the company to accomplish its goals. The boss’s time is a resource; skilled leaders invest their time and the time and money of their business where that will produce the best return. Sometimes the best return is obtained by investing in an employee, sometimes by investing in a contractor.

Very few leaders deliberately engage in these Pointy-haired boss behaviors. Rather, their behaviors are the result of their own corporate success story. Therefore, for all that even one or two Pointy-haired boss behaviors can derail an organization, behaviors acknowledged to be counter-productive are very difficult to eradicate. Nevertheless, the ability of a manager or CEO to recognize these failings and invest in changing themselves is the true test of great leadership.

Twinkie, twinkie, little star…

The news that Hostess Brands (aka Interstate Bakeries), maker of the legendary Twinkie, is closing its doors after 80 some years is all the rage these days.

Along with that news is the argument about why they are closing their doors. There are so many claims and counter-claims running around that it’s starting to sound like the beginning of a bad detective movie. Hostess is dead! Whodunit?

Some people are claiming that union demands killed Hostess, others that tripling the CEO’s pay did the job. More than likely, what really did the job was the death of a thousand knives: a series of cascading errors that put them in the position where their demise was inevitable; it was just a question of what specific event finished them off.

Of course, to really understand what happened, we then have to ask the question, “How did the cascade get started? What happened, or didn’t happen, what changed or didn’t change, to make the vulnerable in the first place?”

Here we can see the power of organizational culture at work. Specifically, we can see what happens when two cultures that were tightly aligned drift apart from one other.

When Hostess was founded in 1930, it was a product of the culture of the time: created by people living and working in that time period. The foods it sold were the foods of the day, the things people wanted. Over the years, Hostess became very successful selling twinkies, Wonder Bread, and the like. They weren’t just the best thing since sliced bread, they were the sliced bread!

Culture, of course, is the residue of success: the accumulated lessons an organization learns over time about how to successfully navigate the world. Those lessons can be hard to unlearn. Sometimes bankruptcy will do it, but not always. In the case of Hostess, they went bankrupt in 2004 and spent the next five years in Chapter 11 bankruptcy protection. When they emerged from Chapter 11 in 2009, however, they had apparently failed to learn some lessons, specifically:

1. Sliced bread was no longer quite the rage it had been in 1930.Indeed, today artisan breads, local breads, and the like are extremely popular. Wonder bread is no longer the first choice of many parents.

2. The dessert market changed. Twinkies are not so cool or fun anymore. They are the object of jokes and experiments to see how long before the go bad, or how much oil can one absorb, and so forth. They are not a school lunch staple as they were even 30 or 40 years ago. Same for Hostess cupcakes, ding-dongs, and the rest.

Are there additional factors? Sure. Supposedly Hostess never really modernized its distribution system and it’s not at all clear how much their internal management ever adopted modern goal-setting and motivational techniques. Fundamentally, though, what killed Hostess is the same thing that almost killed IBM in 1992: their market changed; their culture did not. Unlike IBM, Hostess didn’t have the same willingness to confront unpleasant realities and make necessary changes soon enough.

The rest is merely detail.

Who Needs Strategy?

This is an excerpt from my upcoming book, “Organizational Psychology for Managers.”

“Our goal is to succeed!”

“Our goal is simple: we will build a winning product.”

“Joe’s goal is to get his work done on schedule 75% of the time.”

“Billy’s goal? He should cross the street safely 75% of the time.”

I’ve heard each of these so-called goals presented with a straight face. They sound good; well, at least the first three sound good. The fourth? Well, isn’t it just like the third?

Goals are an interesting beast. We talk about them all the time, put them down on paper, hang banners with goals written on them, and exhort people to stay focused on the goal. Despite all that effort, a great many of these goals never come to pass. Most of them are little more than wishful thinking or downright fantasy.

The goal problem is two-fold.

First, setting a goal does not make it happen. You can set a goal of finding a pony under your Christmas tree, but that doesn’t magically cause a pony to appear. For a goal to succeed, there needs to be a plan to accomplish it. That planning process, sometimes known as the strategy, is critical. It doesn’t matter how much you want to succeed if you aren’t willing to plan you aren’t going to get there.

Now, I frequently hear that planning is pointless since no battle plan survives contact with the enemy. That may be true, but seeing the plan not survive is at least giving you feedback that you’ve encountered the enemy. Seeing how your plan is failing can give you vital information on how to shift focus, allocate resources, and generally adjust your strategy.

More broadly, though, the difficulty is often a misunderstanding of what it means to plan. I’ve worked for companies that tried to plan projects out 2-3 years. While this is possible in a very broad sense, details matter, and you can’t plan details that far in advance. Instead, you have to plan the steps in front of you. Part of the plan is to pause periodically and review the plan. What worked? What didn’t work? What are the next steps? Developing an effective strategy is not something you do once and then execute blindly; you have to constantly adjust as circumstances change. The beginning chess player tries to play out a sequence of moves and is paralyzed when the opponent doesn’t respond as expected; the chess master has a plan and constantly adjusts his strategy in response to his opponent.

Interestingly enough, the beginner usually can’t explain his plan, while the master can. The beginner’s plan sounds like, “I have a plan: I’ll do this, and this, and this, and that’s how I’ll win.” The chess master, on the other hand, is likely to treat you to a detailed discussion of his thinking processes and chess strategy. The first is easy to say and easy to listen to, but is fundamentally useless. The second is hard to articulate and takes a lot of effort to follow, but actually does have a chance of working.

I said earlier that there are two big problems with goals. The second is failing to fail correctly.

Sometimes failure is a form of feedback. In fact, this is exactly what you want failure to be: a means of testing out different strategies and figuring out which ones work best. It is Edison’s proverbial, “I learned a thousand ways to not make a light bulb.” Used this way, failure can be very helpful. Indeed, without such productive failures learning and strategy development is impossible.

However, sometimes the cost of failure can be somewhat higher. If Billy’s goal is to cross the street safely 75% of the time, what about the other 25%? Even if we raise the expectation to 99%, that one failure can negate all the successes: getting hit by a car can ruin your whole day.

It’s all too easy to confuse the two types of failures and businesses do it all the time. They are afraid to fail when that failure would give them valuable information and they take risks that sound good but where one slip causes you to lose everything.

How do you tell the two apart?

Check out the strategy around the goal. If there is a strategy and the possibilities of failure are being considered and managed, then odds are good that if you fail, you’re failing successfully. If there is no strategy or failure is not being considered as a possibility, turn and run away. All you’re doing is rolling the dice, and if that’s your game, Vegas is a better bet.

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Steve’s latest book, “Organizational Psychology for Managers,” is due out from Springer in 2013. For more information, or to sign up for Steve’s monthly newsletter, visit www.7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.