Peter Block makes other cities jealous of Cincinnati

Peter's Principles
BY STEPHANIE DUNLAP
City Beat

Peter Block
Chances are you've never heard of Peter Block, but he almost certainly will become a key player in Cincinnati's future -- if he's asked.

Although not yet especially well known in his adopted hometown, Block is an internationally respected consultant on management. That job description hardly suffices, however. Some who have talked and worked with him call themselves Block's "disciples," and all of them call Cincinnati lucky.

"Cincinnati's very fortunate to have him," says Hawaii State Sen. Les Ihara. "We want him."
Ihara notes that planes fly from Cincinnati to Hawaii.
When Block first rented his Mount Adams apartment four years ago, he quickly learned that he hadn't moved to just any Midwestern city.
"I've never been to a place where people think you're crazy for moving there," Block says of Cincinnati.

The good news is he's staying. The question is whether the city will take advantage of it. What other communities count themselves blessed to secure for a day or two, what organizations pay him handsomely to do, Block offers to do in Cincinnati pro bono, indefinitely.
"I'm trying to figure out how to be useful in the community," he says. "I would show up by invitation."

Block built a company, Designed Learning, and his fame by helping organizations worldwide implement ideas of empowerment, service and accountability. His clients have included The New York Times, Chiquita and the Union Institute. For the past four years he's traveled to Northern Ireland with the Mastery Foundation to lead conferences on peace and reconciliation.
"He leads powerful conversations that engage and empower the participants to take responsibility for our own future," Ihara says.

His wildly popular books describe the ideas and the work: Flawless Consulting; The Empowered Manager; Stewardship, Freedom and Accountability at Work: Applying Philosophic Insight to the Real World, co-written with Peter Koestenbaum; and the latest, The Answer to How Is Yes: Acting on What Matters. Each appears increasingly more philosophical and broader in scope.
Block now shifts his energy from organizations to public sector work with communities and associations.

"He clearly is the most innovative thinker about city governments and how they could be revived and transformed," says social scientist John McKnight, who frequently collaborates with Block.
Police Chief Mike Butler of Longmont, Colo., envies Cincinnati.
"He has a lot to offer," Butler says. "Cincinnati is very fortunate to have a person like Peter Block as one of its citizens."

A citizen is exactly what Block intends to be -- and that means more than residence. A citizen builds community by holding himself accountable for the well being of the larger institution of which he is a part, Block writes in "Citizenship and the Creation of Community." A citizen chooses to exercise power rather than deferring or delegating it to others. A citizen boldly gives form to the collective possibility of a hospitable community.

"What I don't want to do is start another association," Block says. "Most of my work is trying to change the way we come together."
If Cincinnati's leaders are interested in developing community experience on a different level, "the next phone call they make should be to Peter Block," Butler says.
'All the goals we need' Block thinks problems in a community measure our alienation and the lost experience of connection.

"Most people in this community, and most communities, have withdrawn from civic life, if they were ever engaged," he says.
The disconnection isn't for lack of trying. Perhaps it's in spite of trying; perhaps we try in the wrong ways.
Block says Cincinnati's adoption of the "strong mayor" system and passage of Issue 5, "making it easier to fire people," indicates a "power-oriented retribution-minded way" of thinking about change.

Much of Cincinnati's public debate emanates from the extremes, which personify and blame the opposition. There's no incentive to change vituperative dialogue because it creates job security: lifetime employment on the front lines. Then when things go wrong, we rush to find fault.
Block says he's never seen that approach make anything better.
"That conversation has no power in it," he says.

Accountability is a cornerstone of Block's philosophy on creating a healthy organization, community or life.
"Most of us are responsible for creating the institutions we're complaining about," he says.
Waiting for "them" to change only reinforces helplessness. When he runs across that attitude, he asks, "How's it going? How long you been complaining this way?"
Nor does Cincinnati suffer for lack of goals. The city has a huge list of goals, visions and commitments.

"We have all the goals we need," he says.
Block thinks that's part of the problem. Every time people hold a meeting, they feel the need to leave with an action plan.

"The idea we have to have a clearly defined goal is silly," he says.
Real answers for a strong urban center don't come from urban experts, he says. Most expert recommendations are never acted on, anyway, and the idea that more money will do the trick is naíve.

"More experts, better leaders, more investment and more effective programs I don't think will make a real difference," Block says. "They're useful, but they're not enough."
Rather, he believes they create passivity and disengagement because power is delegated to someone or something other than citizens, who then become mere consumers. Programs just create employees and recipients. The conversation falters, and community further atrophies.
"The reason people leave here is probably because they're lonely, not because they can't make a living," he says.

The emphasis has been misplaced. A gated community in West Chester won't create a safer community, he says. It's the citizens who make neighborhoods safe, control the traffic, educate children and decide how healthy they will become.

"Who's responsible for your health?" he says. "Your doctor? Or you?"
Block tells a story about Naperville, Ill., where residents of a neighborhood complained to the transportation department about unsafe traffic. They wanted stop signs, speed bumps and better enforcement. Then a study found that 70 percent of those speeding through the neighborhood lived there.

The police department challenged neighbors to call a meeting of residents. They settled on a "pace care program" in which everyone agreed to drive 25 miles per hour.
"Citizens were both the cause and the solution to what they were worried about," Block says.
Real change results from connection and relationship, not better leaders or new policies, he says. The challenge is to bring into a room people who aren't used to being together and engage them so they find the connection and common aspirations underneath the noise of negotiation. The goal is to get people to reclaim ownership of the power they've given, delegated or voted away.
Block says Cincinnati's advocacy groups and individuals such as the Rev. Damon Lynch III give activism a good name.

"There are 500 people in this town who see each other everywhere" -- and they're not the problem, he says.
"New Prospect Church does great work," Block says. "They need support. They don't need to be confronted or changed."
He sees a connection between his work in Northern Ireland and Cincinnati's collaborative agreement on racial profiling.
"Once they achieved peace, then the work began: the work of reconciliation, of community," he says.
'Pockets of vitality' Block recognizes pockets of vitality in Cincinnati -- Clifton, Northside, Price Hill, Gilbert Avenue -- with people on the streets. Hyde Park has "wealthy, rich life to it. Over-the-Rhine obviously has life to it."

It's the rest of Cincinnati he wants to engage.
"There's this other side of Cincinnati that has zero faith in itself," Block says.
He says the porch has moved to the back of the house, by design. The highway does literally what years of racial and economic wounding have done metaphorically: divided Cincinnati.
Yet the city can claim an incredible arts tradition. Its unparalleled architecture gives it great possibility, he says.

Block doesn't underestimate the power of art.
"Every patriarchal system realizes the arts have the power to undermine it," he says.
Architecture is of utmost importance because the physical space of a community or a meeting room influences the conversation.

"Modern buildings are built to signify the insignificance of the human spirit," he says.
They are physical expressions of our love of efficiency. Corporate offices display artwork only in the lobby and on the executive level. Conference rooms are designed for persuasion and display, not for conversation. Tile walls in hospitals and schools make cleaning easy but stymie healing and learning.

Patriarchal systems try to make the arts irrelevant because the power of art makes them nervous, Block says.
He also dismisses the desire to "save" or "fix" the city as a colonial instinct. He doesn't think it's up to those on the edge to fix the city's center. That's why it's so important to get the questions right first: We have to be careful whom our answers serve.
"Who are the players?" he says. "What's the conversation?"
Bringing life back into the city means more than repopulation. We must reduce suffering and realize that "we are our brothers' keepers."

Block insists that we must focus on people's gifts rather than their deficiencies, because paternalistic efforts to help people, well, don't.
"When is help helpful and when is it disabling?" he says.
John McKnight, Director of Community Studies at the Institute for Policy Research at Northwestern University, uses a medical term -- "iatrogenesis," or doctor-created disease -- to describe the phenomenon.

Twenty years ago, all professional ideas about how to help poor people or older inner-city neighborhoods were couched in the assumption that they were "needy," according to McKnight.

Discussing Cincinnati's future are (L-R) Cynthia Pinchback-Hines, Mary Sexton, Donna Covrett, Doug Pentz, Peter Block and Bab DeArmond.

"If you cared about these people, the way you started was defining their needs," he says.
Professionals identified the alcoholics, the drug addicts, the school dropouts, the buildings below housing codes. They decided what was wrong and then what they could do to fix the "needy" people and their places.

McKnight's research found that approach had an "iatrogenic effect" because it assumed that what was most important about people was their brokenness and, what's more, they couldn't do anything about it.
People started to believe they were the problem but not the solution. Local organizations, associations and churches were ignored because "they had nothing to do with the building of the community" undertaken by outside groups, government officials and other professionals. A culture of dependency developed.

McKnight's work, called "asset-based community development," focuses instead on the "skills, capacities and capabilities" of individuals. It identifies the unpaid associations, organizations and churches doing good things in the neighborhood and the local institutes whose resources and capacities could be reoriented to enhance the local community. He describes it as "identifying the full half of the glass."

Block saw the parallels between McKnight's work in neighborhoods and his own with large organizations. Instead of a top-down approach, they identify the greatest asset as the intelligence, creativity and values of workers and individuals. Block and McKnight drew heavily from each other and now team up for projects.
Block poses another question for Cincinnati residents: "What does it mean if you're afraid to go to your own downtown?"

He thinks it means we feel alienated from our own centers. He says we must rediscover them, because neither a person nor a collective can bear a hollow core and feel complete.
"What takes place in the culture is a projection of what is taking place in our own hearts," he wrote in The Answer to How Is Yes.

'The bullet's on the way' Questions about surviving, being successful, making a living and finding relationships that matter consumed the first part of his life, Block says. As he found answers, the questions shifted to, "Will it make any difference?" He quotes psychologist Carl Jung: "What's true in the morning is a lie in the afternoon."

Block realized that if he spent the second 20 or 30 years as he'd spent the first, he'd end up in a state of mild depression like most of the people he saw around him.
" 'What's the point?' becomes the question, rather than 'How do I do it?' " he says.
The question doesn't go away.
"I'm not sure I want it to anymore," he says. "The shift is to value the question when the world wants an answer."

He explores the issue in The Answer to How Is Yes.
"Good questions work on us, we don't work on them," Block wrote. "They are not a project to be completed but a doorway opening onto a greater depth of understanding, action that will take us into being more fully alive. ... Acting on what matters is, ultimately, a political stance, one whereby we declare we are accountable for the world around us and are willing to pursue what we define as important, independent of whether it is in demand, or has market value. ...
"The critical task is to find the right question, one that is open-ended enough to engage everyone personally and organizationally."

Block loves questions, which makes for an interesting interview.
"Who in this community needs to be engaged?" I ask.
"Exactly," he says.
"If you think the media is retributive, what can we do to shift that?" I ask.
"Exactly," he says.
The question in many cases is the answer, he says. There's no sound bite. Instead it's important to get the question right.
"Most of us are busy answering the wrong questions," he says.
Try these questions instead, he suggests: What did we do to help create this situation? What do we want to create together here? What's the conversation you've never had before? What's the commitment?

He especially likes this question: What is worth doing?
"As soon as you ask that, you go against the culture," Block says. "Most of us medicate ourselves with speed and efficiency, and technology is the drug of choice."
Cell phones illustrate his point.

"I still have nothing to say, but now I can call you anytime," he says.
Block believes there's been something counter-cultural in his bloodstream for a long time.
"There's a kind of madness there," he says.
The madness lies partly in his determination that ideas matter and the act of thinking is doing something, even when the rest of the world demands evidence.
"Why don't you get busy?" people tell thinkers.

In spite of a devotion to questions, mysterious insights pepper his conversation: If you want to change the culture, change the conversation. Most of what we do is run away from freedom. When you're drowning, dive. Going fast won't help. How do we go deeper? Life is paradoxical. For every great idea, the opposite idea is also true.

Block probably talks a little like the philosopher he regards as his mentor. He was 40 when he heard Peter Koestenbaum speak about loneliness, freedom, purpose and meaning. He'd never taken the words seriously, he says.

He became a client of Koestenbaum's clinical philosophy. Under his tutelage Block came to see death, guilt and anxiety as good things.
"Guilt means you said no," he says. "Anxiety means you're paying attention. Death gives purpose to life."
Block doesn't pontificate. He comes off as a modest man who's been interesting places on his journey and has places yet to go.

"Everything I talk about, I get from somewhere. Very little is invented ... I don't even know what the hell I'm talking about," he says.
"Implied in all of this is the idea that engagement is the design tool of choice; it is how social and cultural change happens," he wrote in The Answer to How Is Yes. "For complex challenges, especially when we create a system that goes against the default culture, dialogue itself is part of the solution. We need to believe that conversation is an action step."
'Feminine use of power' Block's challenge is to apply his stream of ideas to civic work. He says some people tell him his way of thinking isn't practical.

He sees the wish to get practical as a loss of idealism in a "show me the money" culture. If we don't change our thinking about how to be practical, we'll re-create the past, he says.
He believes strongly that conversations voice real possibilities in community, that engagement and relationship lead to an agenda.

"Practical things do grow out of this way of thinking," he says. "The whole idea is to engage people in deciding for themselves what they want to create."
Harley-Davidson reinvented itself in the 1980s using these ideas, he says. A similar shift in thinking has led 300 U.S. cities to offer alternatives to the retributive criminal justice system through restorative justice, which emphasizes the ways crime harms relationships in the context of community.

One such city is Longmont, Colo., whose police chief knows the transformative effect Block's ideas have on a community. Mike Butler took 30 employees to hear Block speak in Denver. Since then Block has traveled to Longmont three or four times to work with the community, citywide organizations and the police. He helped shape "Our Town Conferences," on the premise that the more people know what's going on in their community, the more involved they'll get.
Restorative justice takes into account victims and community; its paradigm considers crimes to be committed against persons, not the state. In that vein, offenders must sit in circular conference with the victim, family, support group and community.
Circles indicate "a feminine use of power based on relationship, dialogue, engagement, feeling, intuition, a knowing you can't pin down," he says.
That's what makes the conferences so effective.

"People who commit crimes very often don't have a larger sense of accountability to community," Butler says.
Restorative justice tailors sentencing to create meaning and purpose for offenders; someone who breaks a bottle over another's head must work with a head injury unit, for example. It's not suitable for offenders in homicide, sexual assault or child molestation cases, but they comprise only a small percentage of crimes, according to Butler.

Restorative justice works. Of the 500 offenders who have gone through the system in Longmont, only 5 percent have subsequent run-ins with police. Ninety-five percent of victims report that they are "satisfied" or "very satisfied" with the process.
Butler says he and Block are considering collaborating to form a center or institute around restorative justice.

This year Block also helped City Manager Ray Patchett of Carlsbad, Calif., develop a conference called "Connecting Community Place and Spirit" to discuss the design of a planned civic center.
First, as always, they shaped the question: "What is a civic center? Is it a place where bureaucrats hang out or where citizens convene?" Patchett says.

Carlsbad's citizens decided a civic center should be a space for connecting and for reinforcing ideas, so they designed a structure to make conversations happen. Offices occupy only part of the building; there are also indoor and outdoor meeting spaces, an "outdoor living room" and amphitheater, Patchett says. They plan to create a web of public facilities by building trails between the civic center, other neighborhoods and the community's eight parks.
The conference and the "engagement teams" formed in response also set in place a community architecture that allows citizens to convene quickly around any issues that arise.
"I bet if we sent out invitations today, we could have 150 people in a room next week," Patchett says.

In Hawaii, Block's ideas led state leaders to focus on fostering "kitchen table conversations," State Sen. Ihara says.
The idea is to engage citizens in conversation about things that matter to them, in ways that don't create frustration and cynicism but instead encourage participation and a sense of responsibility. That leads to action, he says.
"Basically he asks a lot of powerful questions" in an engaging, safe and honoring way, Ihara says.
Jeffrey Stec saw Block speak at the Cincinnati Chamber of Commerce and asked him to facilitate the Sept. 10 meeting of the Urbanists (see "Fixing the City," issue of Dec. 5-11, 2002). Meeting later with Block solidified his belief in the ideas, Stec says.
"We'd agree with him," he says. "We'd get so excited and then we'd have an answer."
He says Block told him, "You just disengaged. You don't need an answer. When you have an answer, it's paternalistic."

Like personal renewal, urban renewal requires asking the right questions, according to Block.
"He's a Zen guy" who believes that when people are engaged an agenda magically follows, Stec says.

"Maybe there are elements of magic," Block says. "There is a spiritual dimension to the work. There is something to be done that can't be expressed in practical terms."
That's why the faith community must be in the room, he says.
"They just get that," he says.
He balks at questions about his own spirituality, though. People often accuse him of being New Age.

"I don't identify with that, even if it's true," he says. "I'm a Jew. You're a Jew, you're always a Jew."
Labeling people discounts them, he says.
"We call kids 'youth at risk' as if there's something wrong with them," he says.
As for "homeless people," Block says community is built not by focusing on what's missing in people but by bringing their gifts into the center.
He also challenges the "creative class" moniker.
"Who's not creative?" he says.

He considers the creative class concept an effort to be hopeful but thinks assigning people to a class is useful mostly to advertisers. His own two daughters belong to "Gen X." He suspects they were labeled that because marketers couldn't identify a buying power.

During the Urbanists meeting, Block says, he will engage people with each other through a series of powerful questions and design an experience to give participants a taste of what more powerful engagement looks like. He will act as what he calls a "social architect."

"The social architect then becomes an engagement manager," he wrote in The Answer to How Is Yes. "They help to decide who should be in the room at various stages and what questions they should confront, and all while keeping to the ground rule that the questions of intent and purpose precede the questions of methodology."

'Too safe a life' At one time Block was on his way from the University of Kansas to a job as a systems analyst for IBM, which told him he was hired partly because he's tall and has a good handshake.
Then a professor stopped him in the hall and asked, "What are you going to do?"
The question started Block thinking.
The professor suggested the field of organizational development. Block, who had never traveled east of the Mississippi, enrolled in Yale's graduate program.
Later, he accepted a job with Exxon because "they seemed big and safe." He stayed there five years. He liked the job.

"These big companies, it's easy," he says. "Nobody's accountable for anything. They're rich, they're very bureaucratic and they pay well."
He says he was too ambitious to stay put. He began running sensitivity and relationship-focused training groups. He soon expanded his client base and his focus to include organizational changes, mediating conflict and helping organizations talk more authentically.

"Most organizations are broken in their capacity to have honest conversations with each other," Block says.
Reading Timothy Gallwey's The Inner Game of Tennis taught him the difference between teaching and learning. It led him to develop his idea of engagement.
Block says he's always been drawn to mentors. He can name at least one for each book he's written.

Block speaks evenly, softly. His tall frame folds gracefully into a chair in his colorful living room. There's a foosball table two feet from his desk. Original artwork, including his brother's photography, hangs on walls, sits on mantles, decorates the bathroom, stacks neatly in hallways. Crudely lettered panels of rough wood rest in one nook, resembling either Basquiat or trash. The walls of two rooms are warm shades of red. Every element seems carefully selected, lively.
"Bidden or not bidden, God is present," says a plaque in the kitchen.

"Mostly I cook," Block says. He buys ingredients at Findlay Market and Avril's Meat Store.
He goes to local restaurants such as Pigall's downtown, Ambar India on Ludlow Avenue and Teak Thai Cuisine and Bar in Mount Adams. He likes Nicola's Ristorante on Sycamore Street because its owners saved the old building.

He watches movies at the Esquire. He'd go anywhere to see the local band the Modulators; he first saw them perform at this year's Last Chance Prom in Northside, a fuschia-tie affair for those who don't take themselves too seriously.
Block runs, often to the YMCA where he works out.
"Whenever I want to punish myself, I go run on a treadmill," he says.
Running clears his thoughts like waking in the middle of the night, which he seems to do often.
"I think everybody should wake up from 2:30 to 4:45," he says.
Lie awake at least an hour.
"If you're not, you're living too safe a life," he says.
He's learned much from years of Gestalt and Jungian therapy.
"Facing the shadows reduces their power," he says.

Two balconies with distinctive Mount Adams skyline views have kept him in that neighborhood until now, but he doesn't feel connected there. He talks of buying a downtown building and luring a New Jersey friend to open a restaurant on the first floor so he could live in the loft above and have a table waiting anytime.

He misses the Northeast coast. But he came to Cincinnati to be near a loved one, and he seems determined to become a citizen of the city he's chosen.

He asks no less from a young reporter. He challenges me to form a support network for my peers, to give feedback to corporations about what will keep us in Cincinnati.

"Make this a place where your friends will stay," he says. "I'll help you."
PETER BLOCK is the guest speaker at the next Urbanists' meeting at 6-8 p.m. Sept. 10 at Guilford Institute, 421 E. Fourth St., Downtown.

The Why, What, and How of Management Innovation

Gary Hamel February 2006 Issue Reprint # R0602C
Harvard Business Review

Abstract:For organizations like GE, P&G, and Visa, management innovation is the secret to success. But what is management innovation? Why is it so important? And how can other companies learn to become management innovators? This article from expert Gary Hamel answers those questions. A management breakthrough can deliver a strong advantage to the innovating company and produce a major shift in industry leadership.

Few companies, however, have been able to come up with a formal process for fostering management innovation. The biggest challenge seems to be generating truly unique ideas. Four components can help: a big problem that demands fresh thinking, creative principles, or paradigms that can reveal new approaches; an evaluation of the conventions that constrain novel thinking; and examples and analogies that help redefine what can be done.

No doubt, existing management processes in your organization exacerbate the big problems you're hoping to solve. To identify them, pose a series of questions for each one: Who owns the process? What are its objectives? What are the metrics for success? What are the decision-making criteria? How are decisions communicated, and to whom? After documenting these details, ask the people involved with the process to weigh in. This exploration may reveal opportunities to reinvent your management processes.

A management innovation, the author says, creates long-lasting advantage when it meets at least one of three conditions: It is based on a novel principle that challenges the orthodoxy; it is systemic, involving a range of processes and methods; or it is part of a program of invention, where progress compounds over time.

The Five Messages Leaders Must Manage

John Hamm May 2006 Issue Reprint # R0605G
Harvard Business Review

Abstract: If you want to know why so many organizations sink into chaos, look no further than their leaders' mouths. Over and over, leaders present grand, overarching--yet fuzzy--notions of where they think the company is going. They assume everyone shares their definitions of "vision," "accountability," and "results." The result is often sloppy behavior and misalignment that can cost a company dearly.

Effective communication is a leader's most critical tool for doing the essential job of leadership: inspiring the organization to take responsibility for creating a better future. Five topics wield extraordinary influence within a company: organizational structure and hierarchy, financial results, the leader's sense of his or her job, time management, and corporate culture. Properly defined, disseminated, and controlled, these topics give the leader opportunities for increased accountability and substantially better performance.

For example, one CEO always keeps communications about hierarchy admirably brief and to the point. When he realized he needed to realign internal resources, he told the staff: "I'm changing the structure of resources so that we can execute more effectively." After unveiling a new organization chart, he said, "It's 10:45. You have until noon to be annoyed, should that be your reaction. At noon, pizza will be served. At one o'clock, we go to work in our new positions." The most effective leaders ask themselves, "What needs to happen today to get where we want to go? What vague belief or notion can I clarify or debunk?"

A CEO who communicates precisely to 10 direct reports, each of whom communicates with equal precision to 40 other employees, aligns the organization's commitment and energy with a well-understood vision of the firm's real goals and opportunities.

Growth as a Process, Jack Welch "GE" Leadership

Jeffrey R. Immelt, Thomas A. Stewart June 2006 Issue Reprint # R0606C
Harvard Business Review, The HBR Interview

Under Jack Welch's leadership, General Electric's managers applied their imaginations relentlessly to the task of making work more efficient. Jeffrey Immelt succeeded Welch as CEO on September 7, 2001, just in time to see the world change. Corporate scandals and terrorist attacks shook the global economy. In this fundamentally altered context, Immelt knew that GE could not simply cling to its status quo.

Harvard Business Review offers the first deep look under the hood of Immelt's GE. In a conversation with editor Tom Stewart, Immelt was quick to point out that he is not leading a revolution; productivity is still important. But the new focus is on achieving organic revenue growth--and plenty of it. Immelt has set the audacious goal of increasing annual revenues from GE's existing businesses at two to three times the rate of global GDP growth. Hitting that target will depend on deep cultural change and, in Immelt's words, "making it personal" for every one of his managers. He's not afraid to pull the necessary levers.

He has overseen changes to the company's famed talent management process (now, the highest potential executives are the ones who exhibit "growth leadership traits"); established new performance metrics; invested in new marketing capabilities and R&D resources; and created new mechanisms to flag promising ideas. Immelt expects positive results from each of these moves, but the real payoff comes from combining them in a process design he calls "Execute for Growth."

It's vital, he believes, to cast growth as a process because that allows him to tap into a traditional strength of the organization--its process orientation--and put it in the service of the new goal. Meanwhile, investors are reassured to the extent that GE's recent stellar organic growth seems like the reliable and repeatable output of a well-designed process.

Home Depot's Blueprint for Culture Change

Ram Charan April 2006 Issue Reprint # R0604C
Harvard Business Review

Abstract:What could be harder than turning around a seemingly wildly successful company by imposing a centralized framework on a heretofore radically decentralized, antiestablishment, free-spirited organization? That was the challenge GE alumnus Robert Nardelli faced when he abruptly succeeded Home Depot's popular founders, Bernie Marcus and Arthur Blank, as the top executive in December 2000.

Talk about a shock: No one expected Marcus and Blank, both in their 50s, to leave. And, as Nardelli himself acknowledges, the last thing anyone wanted was an outsider who would "GE-ize their company and culture." But despite its glossy high-growth exterior, Home Depot was standing on shaky financial footings.

Rapid expansion had stretched cash flow, inventory turns, profits, and store manager ranks thin. Each store's vaunted independence was making the company as a whole highly inflexible, unable to take advantage of economies of scale. What so effectively got Home Depot from zero to $50 billion in sales wasn't going to get it to the next $50 billion. The story of the vision, strategy, and leadership skills Nardelli used to move Home Depot to the next level has been told. But vision, strategy, and leadership alone--while necessary--are not enough.

Typically, culture change is unsystematic and, when it works, is based on the charisma of the person leading the change, Ram Charan says. "But Home Depot shows--in perhaps the best example I have seen in my 30-year career--that a cultural transition can be achieved systematically."

In this article, Charan lays out the panoply of tools that, wielded in a coordinated and systematic fashion, enabled Home Depot to get a grip on its freewheeling culture so that the company could reap--and sustain--the advantages inherent in its size. Many an up-and-coming company would do well to look to this model to gain similar advantage when the time comes to exchange the thrill of entrepreneurial spirit for the strength of established power.

Growing Talent as If Your Business Depended on It

Jeffrey M. Cohn, Rakesh Khurana, Laura Reeves October 2005 Issue Reprint # R0510C
Harvard Business Review

Abstract:Traditionally, corporate boards have left leadership planning and development very much up to their CEOs and human resources departments--primarily because they don't perceive that a lack of leadership development in their companies poses the same kind of threat that accounting blunders or missed earnings do. That's a shortsighted view, the authors argue.

Companies whose boards and senior executives fail to prioritize succession planning and leadership development end up experiencing a steady attrition in talent and becoming extremely vulnerable when they have to cope with inevitable upheavals--integrating an acquired company with a different operating style and culture, for instance, or reexamining basic operating assumptions when a competitor with a leaner cost structure emerges.

Firms that haven't focused on their systems for building their bench strength will probably make wrong decisions in these situations. In this article, the authors explain what makes a successful leadership development program, based on their research over the past few years with companies in a range of industries.

They describe how several forward-thinking companies (Tyson Foods, Starbucks, and Mellon Financial, in particular) are implementing smart, integrated, talent development initiatives. A leadership development program should not comprise stand-alone, ad hoc activities coordinated by the human resources department, the authors say.

A company's leadership development processes should align with strategic priorities. From the board of directors on down, senior executives should be deeply involved in finding and growing talent, and line managers should be evaluated and promoted expressly for their contributions to the organizationwide effort. HR should be allowed to create development tools and facilitate their use, but the business units should take responsibility for development activities, and the board should ultimately oversee the whole system.

Managing Multicultural Teams

Jeanne Brett, Kristin Behfar, Mary C. Kern November 2006 Issue Reprint # R0611D Harvard Business Review

Abstract:Multicultural teams offer a number of advantages to international firms, including deep knowledge of different product markets, culturally sensitive customer service, and 24-hour work rotations. But those advantages may be outweighed by problems stemming from cultural differences, which can seriously impair the effectiveness of a team or even bring it to a stalemate.

How can managers best cope with culture-based challenges? The authors conducted in-depth interviews with managers and members of multicultural teams from all over the world. Drawing on their extensive research on dispute resolution and teamwork and those interviews, they identify four problem categories that can create barriers to a team's success: direct versus indirect communication, trouble with accents and fluency, differing attitudes toward hierarchy and authority, and conflicting norms for decision making.

If a manager--or a team member--can pinpoint the root cause of the problem, he or she is likelier to select an appropriate strategy for solving it. The most successful teams and managers, the authors found, dealt with multicultural challenges in one of four ways: adaptation (acknowledging cultural gaps openly and working around them), structural intervention (changing the shape or makeup of the team), managerial intervention (setting norms early or bringing in a higher-level manager), and exit (removing a team member when other options have failed).

Which strategy is best depends on the particular circumstances--and each has potential complications. In general, though, managers who intervene early and set norms; teams and managers who try to engage everyone on the team; and teams that can see challenges as stemming from culture, not personality, succeed in solving culture-based problems with good humor and creativity. They are the likeliest to harvest the benefits inherent in multicultural teams.