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"There is intense competition at the moment to hire the most talented and most intellectually able people ... We have a shortage of talent both within countries and between countries, and there is an intense battle between companies trying to hire the most talented workers and also between countries which are looking to recruit talented young immigrants."
[mp3] Listen or Download / The Economist
Every managerial generation rediscovers the need for innovation to drive growth but, decade after decade, "grand declarations about innovation are followed by mediocre execution that produces anemic results, and innovation groups are quietly disbanded in quiet cost-cutting drives." So observes Rosabeth Moss Kanter in a new Harvard Business Review article, "Innovation: The Classic Traps."
In the crowded field of US venture capital, where arguably too much money is chasing the available quality investments and some firms bemoaning the industry's prospects , Sequoia Capital is on something of a run. Having reaped a reported $495m - or 43-fold return - on its investment in YouTube.
VC Ratings points to a new feature on the company's website - a list of 10 characteristics that Sequoia, which backed both Yahoo! and Google, looks for in companies and advice on submitting a business plan.
Whatever the product is, who could resist? And under the mysterious heading of "Inferno" - it concludes, "start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower." How refreshing.
» Search Financial-Specific Tags: VC Advice - Venture Capital
» sequoiacap.com/ideas
In the 26 years I've been in business, I've come to realize that there are two types of people who start companies: those who like risk, and those who don't. Whichever type you may be, there are challenges you need to confront if you want to build your business. Entrepreneurs of the first type had better learn how to rein in their risk-taking, or they'll make bad decisions that put their companies in jeopardy. Those of the second type have to understand that you can't grow without taking risks. The relevant questions are, how much risk can you handle, and how much is required to get you where you want to go?
» inc.com
With me today is Richard Tedlow, a noted business historian on the HBS faculty and the MBA class of 1949 Professor of Business Administration. His latest book (Andy Grove: The Life and Times of an American) is a biography of Andy Grove, a founding father of Intel, which has gone from startup status in 1968, to a ranking of number 49 on the latest Fortune 500 listing. Anyone with a computer is familiar with the phrase "Intel Inside." With this book, professor Tedlow has taken us inside Andy Grove. Richard, it's great to have you with us today.
[mp3] Podcast
Interviewer: James Aisner - Running Time: 29 min. November 9, 2006
James Aisner is director of Media Relations and a senior editor for Harvard Business School.
It's the season for many employee performance reviews. Why do they seem to rank alongside root canal dental work on our list of things we look forward to as managers and employees? And what are we doing about it?
If we assume that the basic purpose of employee evaluations is to build better-performing organizations, then this has to be one of the most important things we do as managers. But if formal evaluations weren't required, would we even provide them?
Much of this season's debate has centered around whether a forced ranking system works in such efforts. It was given visibility by its adoption at GE several years ago, where managers were forced to identify their direct reports in three categories on a "vitality curve": the top 20 percent, the "vital" 70 percent, and the bottom 10 percent. (Perhaps not entirely coincidentally, these are the de facto percentages used in the forced ranking system for students in required courses at this institution.) Although the system has been modified somewhat in its application, it still triggers advice to those being ranked, especially those in the bottom category who may be given help or advised to leave the organization.
Proponents of forced ranking claim that it is more humane and effective than most qualitative systems for employee appraisal in which employees don't receive frank appraisals because managers are not able or willing to give them. This helps avert surprises, or worse, lawsuits, when poorly-performing employees are fired. Opponents claim that it hurts such things as teamwork and innovation. What little research there is on forced ranking systems suggests that they produce a short-term improvement in performance that soon levels out, perhaps because the worst performers are weeded out in a timely fashion.
Perhaps a more important issue is the objective of the review itself. Is it to weed out poor performers? To recognize the so-called A players? To provide the basis for compensation decisions? To provide clues to future opportunity within the organization? To map out an individual plan for personal development? All of these? Too often this is unclear. Is it any wonder then that managers, many of whom receive little or no training in how to do it, conduct the task of reviewing performance so poorly?
The questions all of this brings to mind include: What can we do to make performance reviews more productive and less distasteful? Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation and, if so, how? As managers, should we invest time to keep a day-to-day scorecard on individual qualitative and quantitative performance and feed back impressions to employees on an ongoing basis? Should periodic performance reviews be relatively incidental as opposed to regular coaching "in the moment"? (After all, aren't we all teachers?) Should less emphasis be placed on looking backward and more on how to improve future performance? Should the process be renamed and redesigned as a "personal development review"? Should we put aside "forced ratings"? Just where does the process fit in building organizational performance? What do you think?
