Insigniam Quarterly Spring 2016 — Executing Remarkable Results

TRANSFORMING THE PRACTICE OF MANAGEMENT AND LEADERSHIPVolume 4 Issue 2 | Spring 2016 | quarterly.insigniam.com

HOW UKTV CEO DARREN CHILDS TRANSFORMED A STAID TV NETWORK INTO AN INNOVATIVE MARKET LEADER

PAGE 24

EXECUTINGREMARKABLE

RESULTS

RELIANT ENERGY’S $1 BILLION PORTFOLIO VALUE BREAKTHROUGHPAGE 16

A NEW MODEL TO LEVERAGE THE COMPLEXITY OF PEOPLEPAGE 54

PIONEER TECH CEO JOHN SCULLEY ON WHAT IT TAKES TO INNOVATEPAGE 60

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INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. REPRINTED WITH PERMISSION.

SPRING 2016

2 INSIGNIAM QUARTERLY | Summer 2015

Whether focused on process, project deliverables, strategy

or culture, breakthrough results fundamentally alter what is possible: They open up new possibilities for the

company’s future.

—JON KLEINMAN AND JEN ZIMMER, PARTNERS, INSIGNIAM

Over 30 years ago, Insigniam pioneered the field of organizational transformation. Today, executives in large, complex organizations use Insigniam’s consulting services to generate breakthroughs in their critical business results. Insigniam’s innovation consulting enables enterprises to identify and cross into new strategic frontiers to rapidly generate new income streams. Insigniam provides executives of the world’s largest companies with management consulting services and solutions that are unparalleled in their potency to quickly deliver on strategic imperatives and boost dramatic growth. Insigniam solutions include Enterprise Transformation, Strategy Innovation and Innovation Projects, Breakthrough Projects, Transformational Leadership and Managing Change. Offices are located in Philadelphia, Laguna Beach, London, Paris and Hong Kong. For more information, please visit www.insigniam.com.


SPRING 2016

quarter ly. insigniam.com | INSIGNIAM QUARTERLY 1

LETTER FROM THE EDITOR

Shideh Sedgh BinaFounding Partner, Insigniam

EDITOR-IN-CHIEFShideh Sedgh [email protected]

EXECUTIVE DIRECTORNathan Owen Rosenberg [email protected]

CHIEF FINANCIAL OFFICERJeff [email protected]

MANAGING DIRECTOR OF INSIGNIAM QUARTERLYAlexes [email protected]

PUBLISHERJames [email protected]

EXECUTIVE VICE PRESIDENT & CHIEF CONTENT OFFICERKim Caviness

EXECUTIVE VICE PRESIDENT, DESIGNDouglas Kelly

VP, EDITORIAL DIRECTORCyndee Miller

CONTENT DIRECTORJeremy Gantz

EXECUTIVE EDITORKelley Hunsberger

SENIOR EDITOREdmund O. Lawler

EDITORSBecky MaughanJulie Ortega

SENIOR ART DIRECTORHugo Espinoza

CONTRIBUTING WRITERSJonathan Ball, Stacey Closser, Sarah Fister Gale, Paul Gillin, Joseph Guinto, Stephanie Kim, Novid Parsi, Richard Walker

Insigniam Quarterly is a thought leadership publication committed to transforming the world of business by offering content relevant to the C-suite and their executive teams at large, complex, global enterprises.

Insigniam Quarterly is published by Imagination, 600 W. Fulton St., Suite 600, Chicago, IL 60661, (312) 887-1000, www.imaginepub.com. No part of this publication may be reproduced in any form or by any means without prior written permission of the publisher and Insigniam. Printed in the U.S.A. Magazine patents pending. For subscriptions, please visit quarterly.insigniam.com.

Insigniam and its publisher, Imagination, distribute this edito-rial magazine to share the opinions and insights of companies and their leaders on impactful global business issues. Insig-niam Quarterly’s inclusion of a company or individual does not indicate that they are a client of Insigniam. Remuneration is not provided for editorial coverage. Individuals appearing in Insigniam Quarterly have done so with direct consent, or pro-vided consent by a designated authorized agent in addition to being disclosed on the magazine’s audience and purpose.The INSIGNIAM QUARTERLY mark is a registered trademark in the United States, European Union, and other foreign countries.

ORDINARY PERFORMANCE IS A LOSING PROPOSITIONTo win the future, leaders in today’s organizations must be bold. Whether the goal is to increase efficiencies, transform a business model, set a new strategic direction, bring an innovative product to market or drive culture change, to truly break through to be transformational leaders we must reject the status quo. We must stretch to imagine new and aggressive—even uncomfortable—outcomes, and act differently to execute on what we envision. And in the end, we must produce remarkable results.

At Insigniam, our focus has always been to move beyond the ordinary and achieve the remarkable. It’s in our DNA and our name. Insigniam derives from the Latin word “insignia,” meaning “marked as remarkable.” We act to help enterprises create remarkable performance.

These days, so-called unicorns like Uber, Airbnb and Snapchat are often mistakenly lauded as remarkable achievements. But let’s not be confused by billion-dollar valuations. They signify potential that doesn’t necessarily translate into lasting value and results. Just ask Evernote, Dropbox and Theranos, three embattled unicorns grappling with issues like high executive turnover or questions about the true value of their respective technologies. And then there are Box, Fitbit and Square, unicorns that went public only to generate less-than-stellar results.

For true examples of remarkable results, we need to consider executives like Darren Childs of UKTV. After becoming CEO of the London-based broadcasting company, Childs rejected the status quo and pivoted the network’s strategy to focus on producing original and online content. The ROI? UKTV is one of the most-watched commercial broadcasters in the United Kingdom. Profits and revenues are now nearly three times greater than when he started. Remarkable indeed.

Childs saw his industry rapidly changing and decided to act before it was too late. As volatility becomes the new normal across much of the economy, will you be able to turn opportunities others can’t see into remarkable results? I know this much: Bold, unorthodox leadership is the only way to transform the status quo into something extraordinary.


SPRING 2016

CHANGING THE RULES OF THE GAMETo compete in a shifting marketplace, GameStop needed to reinvent its business model. By Sarah Fister Gale

INCREASING THE VELOCITY OF EXECUTIONLetting go of certain decision rights can lead to increased growth and effectiveness. By Shideh Sedgh Bina

Q&AFIRST, KNOW THYSELFTo improve team performance, leaders must embrace the complexity of personalities.By Stacey Closser

42 48 54

Contents

COVER STORYTAKING THE RIGHT RISKSA look at how UKTV CEO Darren Childs transformed the 20-year-old staid broadcaster with a bold new strategy.By Joseph Guinto

THE BUSINESS OF BREAKTHROUGHSTrue breakthroughs require a willingness to reimagine the future.By Jon Kleinman and Jen Zimmer

CRACK THE CODE As chief learning officer for SAP, Jenny Dearborn uses analytics to improve its leadership development programs.By Sarah Fister Gale

24 32 38

FEATURES

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For over 30 years CXOs around the world have used Insigniam consultants to generate and execute new growth opportunities, install powerful corporate cultures and develop transformational leaders to produce breakthrough results. We promise your people will think newly, act differently and deliver unprecedented measurable results.


SPRING 2016

“Forget about the business plan and focus on the customer plan. Your reason to exist has to be around solving big customer problems.”—John Sculley, former CEO of Apple and Pepsi-Cola

On the CoverDarren Childs, CEO of UKTV, London

Photo by Jon Enoch

GAME CHANGERS PAGE 60

04 THE TICKERNews and trends affecting the C-suite

08 NUMBERSBreakthrough performance by the numbers

12 BROWSER HISTORYA roundup of books, websites, videos and more

68 IQ BOOSTFitness and breakthrough leadership: a winning combination

16 BLOOD, SWEAT & TEARSHow Reliant Energy’s COO achieved a $1 billion breakthrough —ahead of schedule.

20 FROM THE BOARDROOMAre government-mandated quotas the way to finally achieve board gender diversity worldwide?

DEPARTMENTS

INSIGHT


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THE TICKER

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MARRIOTT’S GROWTH SPURT

arriott International has been expanding its global footprint for years. But now the company is taking its acquisition strategy to new heights and purchasing Starwood Hotels and Resorts Worldwide. The strategic move is largely intended to help the traditional hotel chain compete against rapidly expanding home-sharing services. Airbnb now offers more rooms than Marriott or

Hilton Worldwide Holdings Inc., and Expedia Inc. agreed in November to acquire Airbnb’s rival HomeAway for $3.9 billion.

Marriott’s acquisition will make it a global force to be reckoned with. When its $12.2 billion purchase of Starwood closes, the hotel company will become the world’s largest, boasting more than 5,500 properties and 1.1 million rooms in more than 100 countries. It’s the hotel industry’s largest deal since The Blackstone Group purchased Hilton for $26 billion in 2007.

Marriott CEO and President Arne Sorenson believes Starwood’s international presence and appeal to young travelers will strengthen the company’s position against home-sharing services.

“This is a transformative event for Marriott,” Sorenson told investors in November. “Following the transaction, Marriott will be better able to compete in an evolving marketplace.”

Marriott and Starwood executives are confident the deal to

M When Marriott’s $12.2 billion purchase of Starwood closes, the hotel company will become the world’s largest, boasting more than 5,500 properties and 1.1 million rooms in more than 100 countries.

Starwood Hotels and Resorts’ W Hotel in Barcelona, Spain,

now part of the Marriott International family

Continued on page 6


SPRING 2016

6 INSIGNIAM QUARTERLY | Spr ing 2016

THE TICKER

GE’S SKY-HIGH AMBITIONFor the last half century, one engine has dominated the small turboprop aviation market: Pratt & Whitney Canada’s PT6 engine. Now GE Aviation has teamed up with Textron Aviation to challenge PT6’s reign with an all-new turboprop aircraft and engine. Its chief selling point? The new engine is slated to burn 20 percent less fuel than the PT6 while offering 10 percent higher thrust cruising power than competing products.

It’s a big gambit. GE Aviation will invest up to $1 billion in this project, including $400 million for a new development and production center in Europe. That’s where the company hopes to conduct a detailed design review of the new aircraft in 2017 and its first full engine test in 2018.

GE is confident the PT6 can be successfully challenged: It expects annual engine sales to reach $1 billion by around 2020. Textron, which man-ufactures Cessna airplanes and Bell helicopters, is the largest user of small turboprop engines. But GE sees sales potential beyond that company’s products.

“Our plan is to create a family of engines like [United Technologies’ sub-sidiary Pratt & Whitney] successfully did, and we’re talking to other airframers now,” said Brad Mottier, head of GE business and general aviation.

combine their companies will offer big benefits, particularly through the leveraging of larger marketing, technology spending and loyalty programs. The new organization’s economies of scale will also make it more cost-effective to manage new and old hotels, Starwood CEO Adam Aron said.

“To be successful in today’s lodging space, a wide distribution of brands and hotels across price points is critical,” he told investors.

“And we became more convinced that stra-tegically we could drive better value and com-pete better by being bigger,” Sorenson added.

Marriott expects to drive strong earnings and cash flow by cutting at least $200 million in annual costs and raising $1.5 billion to $2 billion in asset sales by the end of 2017.

Still, challenges are likely to accompany the enterprise transformation as executives grapple with how to strengthen a portfolio

Continued from page 5

of 30 brands involving many different hotel owners and franchisees. The lackluster performance of some Starwood brands, such as Sheraton, has caused some industry analysts to wonder whether Marriott will transform those brands or sell them off.

For now, Sorenson remains adamant about keeping all brands in the portfolio as he leads the integration of the two companies. “We expect to benefit from the best talent from both companies as we position ourselves for the future,” he said.

“To be successful in today’s lodging space, a wide distribution of brands and hotels across price points is critical.”—Starwood CEO Adam Aron

PLENTY OF ROOMS: THE WORLD’S 5 LARGEST HOTEL COMPANIES

Marriott International (U.S.) After merger

Hilton Worldwide (U.S.)

InterContinental Hotels Group (U.K.)

Wyndham Hotel Group (U.S.)

AccorHotels (France)

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OTEL

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2014

REV

ENUE

1.1 million

745,074 710,295 671,923495,072

$15.5 billion

$6.8 billion

$22.8 billion

$5.3 billion

$6 billion

(Marriott = $14.0 billionStarwood = $1.5 billion)

A J.W. Marriott hotel in Los Angeles

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CHINA CHIPS AWAY AT THE COMPETITIONChina’s largest computer chip manufacturer doesn’t lack for ambition. Late last year, the state-owned Tsinghua Unigroup announced it would invest $47 billion during the next five years to become the world’s third-largest producer of NAND memory chips, which inhabit everything from flash drives to digital cameras to personal computers. That’s almost as much as market leader Intel’s annual revenue, which was $50 billion in 2014.

“If you can’t be the top-three giant, it will be very hard to develop your business in the chip industry,” Zhao Weiguo, the company’s chairman, told Reuters.

Qualcomm Inc. is currently the third-largest chip manufacturer in the world, trailing Samsung Electronics and Intel. Tsinghua’s aggressive expansion plan continues a campaign begun in 2013 to reduce China’s dependency on Western chip manufacturers. (Both Qualcomm and Intel are based in California; Samsung is headquartered in Seoul, South Korea.) Since then the Beijing-based company has spent more than $9.4 billion in acquisitions and investments, including the acquisition of Spreadtrum

BIG DATA’S BIG CHALLENGESBig data has become a strategic imperative. But although C-level executives are increasingly tak-ing control of their organization’s data strategy, they don’t necessarily know what to do with all the data landing on their desks.

A 2015 global survey by the Economist Intelligence Unit found that 39 percent of CIOs are primarily responsible for all data initiatives, compared with 23 percent in 2011. Yet across the same period, more companies found it difficult to interpret and make use of all collected data. One in eight companies struggled with this issue

in 2011, compared with one in four businesses last year. The more surprising stat: More than half of surveyed executives suspect they lever-age only about half of the data they have.

What are the challenges relative to big data initiatives? Executives cite maintaining data quality, collecting and managing large amounts of data, and ensuring data security.

The task ahead of many CIOs and chief data officers now responsible for data strategy seems clear enough—turning lots of numbers into valuable and actionable insights.

“If you can’t be the top-three giant, it will be very hard to develop your business in the chip industry.” —Zhao Weiguo, Tsinghua Unigroup

Communications and RDA Microelectronics in 2013 and 2014, respectively, and buying a $600 million stake in Taiwan’s Powertech Technology Inc. in 2015.

But the execution of Tsinghua’s growth strategy, which supports China’s national security goal of strengthening its semiconductor industry, hasn’t been flawless. The company’s $23 billion bid last year to acquire the only remaining U.S. chip manufacturer, Micron Technology, fell apart due to the low likelihood of regulatory approval. Still, Zhao remains determined to establish Tsinghua as a top-three player in the global chip industry.

“The next five years is key,” Zhao said. “There is an enormous market out there.”

Samsung’s NAND flash-memory chip


SPRING 2016


NUMBERS

Summer 2015

PLAYING TO WINLeading global companies are producing remarkable results through increased efficiencies, superior products or services and innovative business models. Whether they are making investments in the Internet of Things, putting all their efforts behind a venture with a $1 billion dream or taking the lead on the stock market, executives in these organizations aren't afraid to take a risk to get ahead—or stay ahead—of the pack.

Fast-Growing UnicornsThere are more than 100 venture capital-backed companies valued at $1 billion or more. These so-called “unicorns” could be the iconic brands of tomorrow—or they could flame out like so many startups have before them. Here are the 10 most valuable.

0 10U.S. Billions

20 30 40 50 60

Uber

Xiaomi

Airbnb

Palantir

Snapchat

Didi Kuaidi

Flipkart

SpaceX

Pinterest

Dropbox

Valuation Total Equity FundingCompany Headquarters

United States

$51B$7.4B

$46B$1.4B

$25.5B$2.3B

$20B$1.6B

$16B$1.2B

$16B$4B

$15B$3B

$12B$1.1B

$11B$1.3B

$10B$0.6B

China

United States

United States

United States

China

India

United States

United States

United States

transportation

smartphones

lodging

data analysis

social media

transportation

e-commerce

social media

aerospace

cloud services

Sector

Staking Claims to the Future The Internet of Things (IoT) is just beginning to take shape—and some companies are already capturing value.

1.5 trillionNumber of devices or objects that could be connected to the Internet

10 billionNumber of devices or objects that are currently connected to the Internet

By 2020, there will be…

200 billion+ Internet-connected items

3 billion connected utility meters

1.5 billion connected vehicles

$4.8 trillion Value of global IoT market in 2012

$8.9 trillion Projected value in 2020 0

2

4

6

8

10 IoT-Leading Companies*:

• Intel

• IBM

• Microsoft

• Google

• Cisco*As of Q3 2015

Intel sold $581 million

worth of processors for connected devices in the third quarter of 2015.

$14.4 TRILLION: IoT’s profit potential (2013-2022)

Smart factories$2 trillion Smart grid

$757 billionSmart

buildings$349 billion

Health care$106 billion

Advertising and marketing$2 trillion

Gaming and entertainment

$635 billion

Commercialground vehicles

$347 billion

Private college education$78 billion

Profit potential by sector:

AHEAD OF THE PACK Breakthrough performance is possible—and demonstrated by the stock market capitalization values of leaders in four different sectors. Industry-leader performance and overall industry growth can together be used to evaluate the health of a given sector.

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

183.5%Novo Nordisk’s

market cap growth

128.6%Industry growth

&

PHARMACEUTICALS/Market Leader: Novo Nordisk

50

100

150

200

$121.8B

$79.8B

$150.8B

$73.8B$63.3B

$53.2B

NO

VO

NO

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2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

6.5%Industry growth

16.9%ExxonMobil’s

market cap growth

&

OIL AND GAS/Market Leader: ExxonMobil

300

400

500

350

450$438B

$400.2B

$372.5B

$400.5B

$421.7B

$318.7B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

76.4%Boeing’s market

cap growth


&

AEROSPACE AND DEFENSE/Market Leader: Boeing*

40

60

80

100 $94.7B

$71.1B

$99.5B

$57.5B$58.7B$56.4B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

44.3%Microsoft’s

market cap growth


&

SOFTWARE/Market Leader: Microsoft*

200

250

300

350

400

$327.8B

$279.6B

$390.2B

$266.8B

$217.6B

$270.4B

*Although these companies are the leaders in their respective sectors, a variety of market factors—such as an influx of new industry players—could cause overall industry growth to outpace a leader's market cap growth over a given time period.

Sources: Dow Jones VentureSource/The Wall Street Journal, IoT Analytics, Cisco, YCharts, Fidelity InvestmentsSummer 2015



0 10U.S. Billions

20 30 40 50 60

Uber

Xiaomi

Airbnb

Palantir

Snapchat

Didi Kuaidi

Flipkart

SpaceX

Pinterest

Dropbox


United States

$51B$7.4B

$46B$1.4B

$25.5B$2.3B

$20B$1.6B

$16B$1.2B

$16B$4B

$15B$3B

$12B$1.1B

$11B$1.3B

$10B$0.6B

China

United States

United States

United States

China

India

United States

United States

United States

transportation

smartphones

lodging

data analysis

social media

transportation

e-commerce

social media

aerospace

cloud services

Sector










2

4

6

8


• Intel

• IBM

• Microsoft

• Google






$757 billionSmart





$635 billion


$347 billion




2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


market cap growth


&


50

100

150

200

$121.8B

$79.8B

$150.8B

$73.8B$63.3B

$53.2B

NO

VO

NO

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G’S

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2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

6.5%Industry growth

16.9%ExxonMobil’s

market cap growth

&


300

400

500

350

450$438B

$400.2B

$372.5B

$400.5B

$421.7B

$318.7B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


cap growth


&


40

60

80

100 $94.7B

$71.1B

$99.5B

$57.5B$58.7B$56.4B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

44.3%Microsoft’s

market cap growth


&


200

250

300

350

400

$327.8B

$279.6B

$390.2B

$266.8B

$217.6B

$270.4B


Sources: Dow Jones VentureSource/The Wall Street Journal, IoT Analytics, Cisco, YCharts, Fidelity Investments


SPRING 2016


Netflix CEO Reed Hastings said there’s a big difference between moving quickly, which the company had been doing successfully, and moving too fast —which happened in this instance.

ROI when an organization’s change man-agement is implemented successfully, i.e., businesses can earn 43 cents for every dollar spent on OCM

$23.6 BILLIONFord’s loan total after mortgaging all its assets in 2006

Price hike increase after Netflix tried to spin off its DVD mail service into a new business in 2011.

Success can be credited to the automaker’s simplified organizational structure, slashed operating costs, improved efficiency and a simpler, more innovative product line.

$83 MILLION

Amount Ford Motor Co. was losing

each day in 2008

$78 MILLION

Ford’s year-over-year net income increase in

the second quarter of 2014.

Sources: “Change Management That Pays,” 2002, McKinsey Quarterly; Bloomberg; Forbes; Reuters; “Accelerating Toward 2020—An Automotive Industry Transformed,” 2009, Deloitte; “Ford Posts Second Quarter 2014 Pre-Tax Profit of $2.6 Billion,” July 2014, Ford Motor Co.

0 0

0 0

Summer 2015



0 10U.S. Billions

20 30 40 50 60

Uber

Xiaomi

Airbnb

Palantir

Snapchat

Didi Kuaidi

Flipkart

SpaceX

Pinterest

Dropbox


United States

$51B$7.4B

$46B$1.4B

$25.5B$2.3B

$20B$1.6B

$16B$1.2B

$16B$4B

$15B$3B

$12B$1.1B

$11B$1.3B

$10B$0.6B

China

United States

United States

United States

China

India

United States

United States

United States

transportation

smartphones

lodging

data analysis

social media

transportation

e-commerce

social media

aerospace

cloud services

Sector










2

4

6

8


• Intel

• IBM

• Microsoft

• Google






$757 billionSmart





$635 billion


$347 billion




2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


market cap growth


&


50

100

150

200

$121.8B

$79.8B

$150.8B

$73.8B$63.3B

$53.2B

NO

VO

NO

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MA

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2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

6.5%Industry growth

16.9%ExxonMobil’s

market cap growth

&


300

400

500

350

450$438B

$400.2B

$372.5B

$400.5B

$421.7B

$318.7B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


cap growth


&


40

60

80

100 $94.7B

$71.1B

$99.5B

$57.5B$58.7B$56.4B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

44.3%Microsoft’s

market cap growth


&


200

250

300

350

400

$327.8B

$279.6B

$390.2B

$266.8B

$217.6B

$270.4B




SPRING 2016


NUMBERS

Summer 2015



0 10U.S. Billions

20 30 40 50 60

Uber

Xiaomi

Airbnb

Palantir

Snapchat

Didi Kuaidi

Flipkart

SpaceX

Pinterest

Dropbox


United States

$51B$7.4B

$46B$1.4B

$25.5B$2.3B

$20B$1.6B

$16B$1.2B

$16B$4B

$15B$3B

$12B$1.1B

$11B$1.3B

$10B$0.6B

China

United States

United States

United States

China

India

United States

United States

United States

transportation

smartphones

lodging

data analysis

social media

transportation

e-commerce

social media

aerospace

cloud services

Sector










2

4

6

8


• Intel

• IBM

• Microsoft

• Google






$757 billionSmart





$635 billion


$347 billion




2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


market cap growth


&


50

100

150

200

$121.8B

$79.8B

$150.8B

$73.8B$63.3B

$53.2B

NO

VO

NO

RDIS

K’S

MA

RKET

CA

P PE

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NM

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NC

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G’S

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2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

6.5%Industry growth

16.9%ExxonMobil’s

market cap growth

&


300

400

500

350

450$438B

$400.2B

$372.5B

$400.5B

$421.7B

$318.7B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


cap growth


&


40

60

80

100 $94.7B

$71.1B

$99.5B

$57.5B$58.7B$56.4B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

44.3%Microsoft’s

market cap growth


&


200

250

300

350

400

$327.8B

$279.6B

$390.2B

$266.8B

$217.6B

$270.4B




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Summer 2015



0 10U.S. Billions

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SpaceX

Pinterest

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$51B$7.4B

$46B$1.4B

$25.5B$2.3B

$20B$1.6B

$16B$1.2B

$16B$4B

$15B$3B

$12B$1.1B

$11B$1.3B

$10B$0.6B

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United States

United States

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United States

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$635 billion


$347 billion




2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


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$121.8B

$79.8B

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$53.2B

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2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:

6.5%Industry growth

16.9%ExxonMobil’s

market cap growth

&


300

400

500

350

450$438B

$400.2B

$372.5B

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$421.7B

$318.7B

2010 2011 2012 2013 2014 2015

FROM 2010 TO 2015:


cap growth


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40

60

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100 $94.7B

$71.1B

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&


200

250

300

350

400

$327.8B

$279.6B

$390.2B

$266.8B

$217.6B

$270.4B




SPRING 2016


BROWSER HISTORY

DRIVING RESULTS A roundup of books, websites, videos and other resources from and for the C-suite.

“The thing about experts is that they are experts of history. They are experts of the past. But it’s really hard for any of us to be experts of the future.”

—Brian Chesky, CEO of Airbnb

“The most dangerous poison is the feeling of achievement. The antidote is to every evening think what can be done better tomorrow.”

—Ingvar Kamprad, founder of IKEA

“Remarkability lies in the edges: the biggest, fastest, slowest, richest, easiest, most difficult. It doesn’t matter which edge, but more that you’re at (or beyond) the edge.”

—Seth Godin, author and founder of Squidoo.com

“The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

—Mark Zuckerberg, CEO and co-founder of Facebook


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Let My People Go Surfing by Yvon Chouinard, founder of Patagonia. The Penguin Group, 2005.

“When I look at my business today, I realize one of the biggest challenges I have is combating complacency.

I always say we’re running Patagonia as if it’s going to be here 100 years from now, but that doesn’t mean we have 100 years to get there! Our success and longevity lie in our ability to change quickly. Continuous change and innovation require maintaining a sense of urgency—a tall order, especially in Patagonia’s seemingly laid-back corporate culture. In fact, one of the biggest mandates I have for managers at the company is to instigate change. It’s the only way we’re going to survive in the long run.”

The Winner Within: A Life Plan for Team Players by Pat Riley, former NBA coach and president of the Miami Heat. Berkley Books, 1993.

“Hav[ing] a sense of mission that reaches beyond the present defines the final steps to individual and team significance. That means going beyond simply being the best, going so far that you leave footprints.”

STEPPING UP TO THE CHALLENGEHow leaders think: book excerpts

The Creative Habit: Learn It and Use It for Life by Twyla Tharp, founder of Twyla Tharp Dance. Simon & Schuster, 2003.

“The wonderful and scary thing about solving creative problems is that there isn’t one right answer. There are a thousand possible answers, but the valuable and practical thing to do is fix the things you know how to fix. That’s why a failure of skill is unforgiveable: If you don’t have the broad base of skills, you’re limiting the number of problems you can solve when trouble hits.”


SPRING 2016


BROWSER HISTORY

DEFYING THE LAW OF LARGE NUMBERSProbability theory says that the more times some-thing happens, the flatter and more predictable the results. Results at Salesforce.com are breaking all those rules. With more than 100,000 users, the cus-tomer relationship management company is seeing results that continue to leap rather than increase incrementally. Revenues in 2015 were up 32 percent year over year to nearly $5.4 billion.

RESOLUTIONS AND RESULTSRemember that New Year’s resolution to lose weight and get healthier? It’s probably the same resolution you’ve made every year. Now there are free apps that will help you keep that promise. They’re bossy but helpful. Starting slowly—let’s call it the warm-up—is Human, which only asks that you give it 30 minutes a day of whatever activity you choose. It tracks your move-ment and lets you know when you’ve accomplished your goal for the day.

If you need more of a nudge, there’s Pact, which asks you to promise a number of days you’ll work out and to put up a certain amount of money. If you don’t show up on a given day, you have to pay. It will do the same for what you eat. How much are you willing to pay for that brownie?

For those who need a customized solution, there’s Lose It! You enter your weight-loss and fitness goals, and it designs a program for you. It even includes a bar code scanner so you can track exactly what you eat. This app will connect to all your devices, including e-readers, to make it extra handy—or inescap-able, depending on how you look at it.

Supply is at the heart of America’s health care cost problem, according to John H. Cochrane, a senior fellow at Stanford University’s Hoover Institution. In the video “The Grumpy Economist: We need an Uber for health care,” he explains how the disruptive forces of competition and technological innovation can help bypass existing regulations to reinvent a category. If hospitals had more competition, and if the thicket of regulations governing the opening of new health care facilities could be circumvented, we would have better and cheaper health care, Cochrane argues.

HEALTH CARE NEEDS

AN UBERA senior fellow at

Stanford extols the virtues of competition.

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The Vancouver, Canada-based

company is expanding rapidly,

with 50 new stores set to open by

mid-2016.

ON THE REBOUNDApparel retailer Lululemon hasn’t lost its footing.

After a series of public relations and product blunders, Lululemon Athletica posted solid results in fiscal 2015, with 10 percent higher revenues and more than double its price per share, from 13 cents to 34 cents year over year. At the same time, the

retailer of yoga and fitness apparel has maintained very high individual store productivity, bringing

in $2,961 per square foot annually, more than four times the Canadian national average. The Vancouver,

Canada-based company is expanding rapidly with 50 new stores set to open by mid-2016 and an

aggressive move into men’s fitness apparel.


SPRING 2016


THE $1 BILLION BREAKTHROUGH

How a COO pushed the status quo aside to achieve breakthrough performance in just 18 months.

By Novid Parsi

organization’s portfolio could improve by 20 percent, or more than $1 billion. And he set an ambitious timeline of just 18 months—from early 2007 to mid-2008—for reaching that value goal.

The initiative, called WAVE (Wholesale Asset Value Expansion), would improve the operating performance of all 40 power plants, and involve all plant operations, commercial management, fuels, finance and regulatory groups. To produce a $1 billion asset improvement, no one could be left out and no group could be overlooked.

“People thought this was just impossible, that I was just nuts suggesting this,” says Landrum, who now serves as president of Gexa Energy, an electricity and gas retailer also based in Houston. “But I don’t see the point of maintaining the status quo. I always want to find the full potential of an organization.”

A NEW WAVE OF CHANGEThis wasn’t Landrum’s first time pushing an organization into bold new territory. Before Reliant, Landrum was general manager for an IT services company that had a negative

rian Landrum knew Reliant Energy could do better. It was 2006, and the COO saw major opportunity within the energy provider’s wholesale business. It owned 29 gas, oil and dual-fuel plants and 11 coal-fired power plants with a collective generation capacity of about 15,000 megawatts.

Earlier that year, the Houston-based organization had collected benchmarking data indicating that the power plants were not running within the top quartile of the industry in terms of plant availability and the cost and availability of the energy they produced.

“Many organizations come up with some rationalization as to why the benchmarking data isn’t relevant to them. Reliant was doing this,” Landrum says. “That stalls progress.”

Landrum refused to look away from the problem. To improve Reliant’s performance, he set ambitious goals. After analyzing the data as well as the company’s operating capability and potential future cash flow, he determined that the value of the

B

INSIGHT

BLOOD, SWEAT & TEARS

“I got a taste of setting a really ambitious goal to do more than anybody thought possible. I found that incredibly satisfying.” —Brian Landrum, former COO at Reliant Energy


SPRING 2016


56 percent return on its invested capital. In just three quarters, he and his team turned that around to a positive return of 125 percent, in a business with more than $1 billion in revenue.

“I got a taste of setting a really ambitious goal to do more than anybody thought possible,” he says. “I found that incredibly satisfying.”

At Reliant, WAVE was launched on the notion of producing a “breakthrough result,” Landrum’s term for a seemingly impossible target that requires an organization’s leadership to think and act beyond the traditional.

“We didn’t know how to achieve the goal,” Landrum says. “We had a point in the future defined by time and dollars, but we didn’t know the path to get to it.” He knew that to reach the bold $1 billion portfolio valuation increase, Reliant would have to create value well above its current capacity. That meant everything about the plants’ operations would be up for discussion and change.

“The goal was transformational—to change the organization from thinking about incremental improvements and to come up with significantly better ways of operating the business,” he says.

To get there, Landrum started by convening more than 50 Reliant leaders and managers with expertise in operational areas like finance, regulated markets, customers, pipelines, fuel storage and both coal- and gas-operated plants. Project WAVE also included subject-matter experts, such as regulatory and legislative experts, not typically given the opportunity to discuss plant operations.

As the WAVE team, all were charged with devising new ways to run the business and then implement the opportunities. WAVE was fundamentally a massive implementation effort that was expected to deliver real dollars as the measure of real asset appreciation.

From the beginning, two things were

made clear to all WAVE participants. First, the current portfolio of assets was flexible. If value creation meant selling or buying assets, nothing was off the table. Second, there was no flexibility in hitting the $1 billion target. To ensure that everyone understood Landrum’s stance on the matter, he promised the Reliant board of directors the $1 billion increase in value prior to the project starting. The goal was unchangeable, but the pathways to the goal were as flexible as needed.

HATCHING THE BREAKTHROUGH STRATEGYThe launch group divided into subgroups, each tasked with identifying manageable areas of improvement to support the WAVE project’s overall goal. For instance, one team looked for ways to boost each plant’s power output, while another looked to lower costs while increasing the availability of the plants.

Landrum told his team leaders to compile a long list of ideas for adding value—more ideas than they could possibly implement. “I knew that not all the opportunities would pay off,” he says.

He soon discovered that team members were accustomed to being handed a problem and then solving it. This was different: Landrum was asking them to identify the problems themselves. Once people realized the seemingly unrealistic goal was theirs to reach, though, they took ownership of the project.

“We all had to be engaged and working with integrity to achieve the outcome. I told them, ‘We’re all in this together. We all own this outcome,’” Landrum says. A top-down decree wouldn’t have worked. “Had I just said, ‘Here’s what you’re doing,’ I would never have gotten the buy-in.”

In retrospect, project WAVE had two missions: The first was the mission to increase the value of the Reliant portfolio by $1 billion. The second was to create a unique, mini culture with a work environment

Landrum realized he needed to recognize his team members not just for the value they had secured, but also for the value they were on track to add.


SPRING 2016


communicate breakdowns is critical to a huge project like WAVE,” Broussard says.

BALANCING SUPPORTERS AND RESISTERSAt first, Landrum thought WAVE’s success would depend on getting buy-in from the entire organization. Yet while Landrum’s ongoing communication with his team and recognition of its efforts helped ensure the participation of much of the organization, he learned early on that not everyone would get on board—and that didn’t spell disaster.

The heaviest resistance was among the engineers who operated the plants. “Engineers want to see things linearly, but that wasn’t the kind of problem we gave them,” Landrum says.

Reliant had purchased the WAVE power plants during the 10 years before the WAVE initiative began, and many of their employees had worked at the plants since they were constructed. While that had given them valuable expertise, it also led to a fixed mindset about how to improve the business. These employees had been accustomed to conducting analysis to identify the goal, whereas Landrum asked them to do just the opposite: figure out how to achieve an already established goal.

Rather than spending his time and energy trying to persuade resisters, he concluded it would be more effective focusing on the supporters. “I realized I needed to spend my time on the guys who are rowing as hard as they can in the right direction, because they’re going to make the project successful,” he says. Even so, Landrum didn’t sideline resisters; he found they generated useful ideas the rest of the team could implement.

Throughout WAVE, Landrum’s team identified creative value-adding solutions. For instance, they conducted a deep dive into the top-producing plants to lower emissions,

in which accountability, integrity and performance expectations were all elevated significantly above business as usual.

For instance, getting people invested and working toward the project goals was not a one-time thing. Recovering a renewed sense of accomplishment in the face of both disappointments and successes was a constant part of WAVE. To foster resilience over the course of the venture, Landrum realized he needed to recognize his team members not just for the value they had secured, but also for the value they were on track to add.

With that in mind, the all-team meetings’ documents included a column for captured value and another for “line of sight,” or projected value. That way, Landrum’s team didn’t become discouraged if its added value hadn’t yet materialized by the time of a particular all-team meeting.

“We gave them recognition for making progress,” says Landrum, who constantly communicated expectations, feedback and support. “It had to be a steady drumbeat.”

Bill Broussard, an Insigniam consultant, calls Landrum a “natural leader.”

“I don’t think WAVE could have happened without the unique combination of skills he brought to the table. He seems to intuit naturally a lot of the principles we work with executives to learn to produce a breakthrough,” he says. “For instance, it’s frustrating to be told of all the breakdowns normal to working 12 or more project teams on different initiatives. Yet Brian deals with that as though multiple breakdowns are an expected normal occurrence, without showing frustration or impatience.”

That environment provides team members with a high degree of safety in disclosing breakdowns, which allows problem situations to become new opportunities once they are addressed.

“An environment in which it’s safe to

INSIGHT

BLOOD, SWEAT & TEARS

“Had I just said, ‘Here’s what you’re doing,’ I would never have gotten the buy-in.”

—Brian Landrum


SPRING 2016


reduce the frequency of cycling the plants and make the plants more responsive and flexible. This optimization effort generated about $115 million.

Another solution involved increasing the plants’ throughput while shaping and leveraging a new capacity market that would pay Reliant to have its plants available to improve power grid reliability—a market-shaping solution that by itself led to almost half of the project’s overall $1 billion value creation.

By August 2007, just eight months into the 18-month project, the WAVE team had captured $529 million, with an additional $469 million in sight—almost reaching the $1 billion goal. In the second quarter of 2008, a quarter ahead of its scheduled end date, the team hit the $1 billion mark. Landrum had taken a goal that seemed like a pipe dream and made it a reality.

“The project was chartered to end in the third quarter of 2008, but we ended in the second quarter because we overachieved the goal,” Landrum says. “If you set an ambitious goal, you can do more than anybody ever laid out as a potential.” IQ

LEADING FOR BREAKTHROUGH PERFORMANCE When team leaders are held accountable and encouraged to support each other, dramatic results follow.

After launching Reliant Energy’s WAVE project, Brian Landrum knew he had to hold his team of 50 managers accountable—and build a sense of camaraderie around their shared purpose.

So after the project launch, Landrum estab-lished weekly team meetings at which everyone assembled. These weren’t casual status update gatherings; Landrum invited Reliant’s CEO, CFO and board members as well.

During each meeting, every team leader reported on his or her subgroup’s progress. If the team leader could demonstrate progress after just a few questions from Landrum, he moved on to the next team. If not, the entire group discussed how to address the problem.

There were no pre-meetings or private meetings with Landrum; everyone discussed their team’s progress in front of everyone else. “There was nowhere to hide if you were behind schedule,” Landrum says. “But also, praise and recognition were shown openly.”

The big meetings did two crucial things: They bolstered the WAVE team’s sense of accountabil-ity and fostered a sense of camaraderie. Realizing they would all sink or rise together, team leaders stepped up to help generate solutions for one another’s problems.

“They didn’t want their peers to be hung out in the room in front of me and everybody else,” Landrum says. “We started to get a dynamic of a joint commitment: People stepped up to help each other toward the overall goal, not just their individual goal.”


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WELCOMING WOMEN ABOARD

With government and economic pressure growing, corporate

board gender diversity is slowly growing—in some

countries.By Rebecca Rolfes

INSIGHT

FROM THE BOARDROOM

he idea that a gender-balanced board of directors can positively impact the bottom line is well documented and becoming more widely accepted. According to a 2015 report from international audit and tax firm Grant Thorn-ton, excluding women from board positions cost companies across India, the United Kingdom and the United States $655 billion

(in terms of lower returns on assets) in 2014. In its Women on Boards report published

last November, MSCI ESG Research showed that companies with strong female leadership achieve a 10.1 percent return on equity, while those without attain only a 7.4 percent return on equity. Companies without strong female

Tleadership also experience more governance-related controversies.

Increasingly there is meaningful debate around the world on how to get more women invited to the board table.

The United Kingdom offers one model for change—voluntary goals. The scarcity of women on boards became a hot-button issue for the nation in 2010. That year, women accounted for only 12.5 percent of Financial Times Stock Exchange (FTSE) 100 company board members. And while this number represented a 3 percentage-point increase from the 9.4 percent of women who made up boards in 2004, government and some corporate leaders felt the pace of change was nowhere near good enough. In fact, according to the U.K. Equality and Human Rights


SPRING 2016


make such claims. According to the latest data available, 23 Fortune 500 companies still have all-male boards. Ten Fortune 250 companies have zero female board members—four of which are also on the Fortune 100 list.

Despite the strides by U.K. companies, Da-vies isn’t declaring “mission accomplished.” He is now championing a new target for U.K. companies: Increase the percentage of board seats held by women to 33 percent by 2020. (This new goal would still put the United Kingdom behind Norway’s world-leading female board member percentage of 35.5 percent.) He has also widened the challenge to include all FTSE 350 firms.

MANDATING PROGRESSProgress in the United Kingdom not-with-standing, increases in female board repre-sentation globally are “glacial,” according to MSCI. Women hold 18.1 percent of director-ships worldwide; they held 15.9 percent in late 2014. Emerging markets, where only 8.4 percent of board members are women, drag the number down.

In an effort to keep their economies from falling behind, 10 countries—including Belgium, Italy, France, Malaysia and United Arab Emirates—mandate some form of board gender diversity, according to MSCI, while another 14 have established requirements for state-owned enterprises.

These mandates do not always mean easy or swift compliance. For example, in 2014, India’s Securities and Exchange Board issued an ultimatum to publicly traded companies: Add at least one female board member or face repercussions. More than 500 companies listed on the Bombay Stock Exchange and 200 on the National Stock Exchange missed the April 2015 deadline and faced fines until an appointment was made, according to Reuters.

Commission, at that rate it would have taken more than 70 years to achieve gender-balanced boardrooms in the country.

In an effort to speed up progress, the government tasked Lord Mervyn Davies, former U.K. trade minister and past chairman of Standard Chartered bank, with bringing women into the boardroom. In 2011, Davies published his first Women on Boards report, which laid out a clear directive for the nation’s FTSE 100 executives: Voluntarily increase female representation on boards to 25 percent by 2015 or, although not recommended by Davies, possibly face government-directed mandates for change.

“You can’t carry on with a board that does not represent your employees or customer base,” Davies told The Telegraph in 2012. “If we don’t have equality in business between men and women, we’re just not going to be competitive internationally.”

Despite initial backlash and continued skepticism from some executives and experts, in October 2015 Davies announced that not only had the 25 percent voluntary goal been met, it had been exceeded. According to the latest annual Women on Boards report, now better known as the Davies Review, in 2015 26.1 percent of board members of FTSE 100 companies were women.

A “near-revolution has taken place in the boardroom and [had a] profound culture change at the heart of British business,” Davies said in the report.

Further illustrating the United Kingdom’s success is the fact that for the first time ever, there are no all-male boards in the FTSE 100, according to the Davies Review. In fact, only 15 male-only boards remain among the FTSE 250—a dramatic decrease from the 131 that existed when the report began.

Companies on the Fortune 500 list can’t

From Best to WorstThe percentage of women on corporate boards varies widely across 20 countries.

Norway 35.5%

Finland 29.9%

France 29.7%

Sweden 28.8%

Belgium 23.4%

U.K. 22.8%

Denmark 21.9%

Netherlands 21%

Canada 20.8%

U.S. 19.2%

Australia 19.2%

Germany 18.5%

Spain 18.2%

Switzerland 17%

Austria 13%

Ireland 10.3%

Hong Kong 10.2%

India 9.5%

Portugal 7.9%

Japan 3.1%

Source: Catalyst, 2014 Catalyst Census: Women Board Directors; Percentages reflect number of seats women hold on boards in stock index companies.

Note: In December 2015, the Davies Review announced that the portion of women on FTSE 100 company boards in the United Kingdom had increased to 26.1 percent.

“Board diversity is an indication that a company is progressive and future-oriented.” —Reatha Clark King, chairman of the board of the National Association of Corporate Directors (NACD)


SPRING 2016


The companies that did comply are not all worth celebrating, however. According to PRIME Database, more than 700 of the compa-nies appointed directors who cannot be consid-ered independent because they are either fami-ly members or have another vested interest.

“Companies [in India] need to be more serious about the whole idea of having women directors, which is to promote diversity. Having a woman

from the promoter group or family defeats the purpose,” Pranav Haldea,

managing director of PRIME Database, told Catch News.

“Compliance is being done only on paper,” he told CNN Money.

Despite some pushback, some governments and government agencies are not

shying away from promoting gender diversity. According to MSCI, several countries, including Canada, South Africa and Korea, all have possible

quotas pending. And in January, U.S. Securities

and Exchange Commission Chair Mary Jo White announced her agency would be reviewing existing company disclosures to provide recommendations on whether a

change is needed on how much detail companies provide about the racial and gender makeup of their boards. This announcement follows a U.S. Government Accountability Office report released just weeks earlier, which quoted a public fund fiduciaries petition when it said that some

companies have so much leeway in how they define diversity that “the concept conveys little meaning to investors.”

HOW MUCH AND BY WHEN?Government leaders aren’t the only ones issuing calls for equal representation on boards. Corporations, associations and non-profits are also leading the charge for change.

“Companies realize that diversity is a business imperative; more specifically, a talent imperative,” says Reatha Clark King, chairman of the board of the National Association of Corporate Directors and a member or former member of seven corporate boards. Many companies also see diversity—including cultural and gender diversity—as an asset for addressing ever-increasing complexity in the global marketplace, she says. Some companies even note in their proxy statement that the ability to deal with complexity is an expected competence—collectively and individually, according to King.

Despite the research, many women board members are reluctant to draw causality between board makeup and a company’s financial performance. Instead, they emphasize what it means for an organization’s leadership strategy.

“You have to be very cautious about the chicken and egg,” says Kim Van Der Zon, who leads board search for the global execu-tive search firm Egon Zehnder International. “It’s very difficult to say that just because a board has three or more women it will perform better.” If that were the case, every corporation would simply add a third woman to the board and wait for the inevitable results. “It’s more about the mindset of the overall board and the company itself that makes them more financially successful, which

“You can’t carry on with a board that does not represent your employees

or customer base.”—Lord Mervyn Davies, former U.K. trade minister and

past chairman of Standard Chartered bank


SPRING 2016


means that they are more inclined to see diver-sity in the boardroom as a positive.”

King agrees. “Board diversity is an indication that a company is progressive and future-oriented,” she says. “A company with a progressive culture from the top down through the ranks will perform better.”

Absent a government mandate, King believes a voluntary initiative for board diversity is the only way to make it happen. In 2012, the U.S. Committee for Economic Development (CED), a nonprofit, nonpartisan, business-led public policy organization that delivers analysis to influence solutions to critical issues that impact the health of the U.S. economy, released the policy statement Fulfilling the Promise: How More Women on Corporate Boards Would Make America and American Companies More Competitive.

In this report—which examines the current state of corporate boards and urges companies to make it a priority to develop the talents of female staff who have been identified as potential leaders—the CED position advocates major corporations

adopting a policy of recruiting women in one of every two board seat openings.

At the same time, the CED recommends meeting with board nominating committees to explain the importance of hiring female members and expanding their criteria for can-didates to break down the typical barriers to entry females may face. This includes looking beyond the typical list of current and former CEOs and considering senior female execu-tives with a strong business background.

A variety of organizations and global executive search firms have also signed on to MSCI’s “Inching to 30 percent” global goal, a target that, at current rates, will not be reached until 2027.

For Van Der Zon, that goal is still too low.“Shouldn’t it be 50 percent?” she asks.

“Shouldn’t it represent the market at large? That scares people off, but I do think that wishing that and helping companies move toward that should be our goal. It’s not just in the boardroom. It’s throughout the executive ranks because that’s where the pool of board members comes from.” IQ

PROGRESS, BUT NOT PARITY*male directorsfemale directors *The number of

directors doesn’t equal the number of board seats because individuals sometimes hold multiple seats. Globally, the number of board seats per unique individual director at MSCI World Index companies is 1.2.

Sources: MSCI ESG Research, Women on Boards: Global Trends

in Gender Diversity on Corporate Boards,

November 2015

France951 board seats

111 MSCI World Index companies

United Kingdom1,174 board seats


Norway89 board seats


United States6,267 board seats


273

260 936

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33

55528

ALL-MALE COMPARISONHow do the largest companies in the United Kingdom and the United States match up when it comes to board gender diversity? Below is a breakdown of the num-ber of all-male boards at companies on the U.K.’s Financial Times Stock Exchange (FTSE) versus companies on the U.S.’s annual Fortune 500 list.

0 FTSE 100 companies15 FTSE 250 companies15 FTSE 350 companies

vs.4 Fortune 100 companies10 Fortune 250 companies23 Fortune 500 companies


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RisksRight

TAKING THE

As CEO of UKTV, Da rren Childs engineered the broadcasting company’s bold new strategy—and it’s paying off.


SPRING 2016

By Joseph Guinto Portraits by Jon Enoch

As CEO of UKTV, Da rren Childs engineered the broadcasting company’s bold new strategy—and it’s paying off.


SPRING 2016


“Great companies try new things all the time. Not having a desk is one of those small things I thought I’d try,” Childs says. “But all my direct reports have desks. So we’re not some kind of kibbutz. We’re a proper, serious company.”

Indeed, UKTV is a serious company, one that has achieved remarkable results since Childs took over. When he arrived, UKTV had a modest market share of 4 percent of total U.K. viewers. Most of its content, deliv-ered across a variety of channels available in Ireland and the United Kingdom through ca-ble or satellite subscriptions, consisted of re-runs of BBC programs. (BBC Worldwide has owned 50 percent of UKTV since its launch in 1992; U.S.-based Scripps Networks Interactive owns the other half.) But under Childs, who spent five years as a managing director at BBC Worldwide, UKTV’s ambition, audience—and profits—have all boomed.

The company is now churning out popu-lar original programming and growing view-ership. Four in every five adults in the United Kingdom tune in to UKTV’s offerings each month. But digital viewership is the compa-ny’s fastest-growing category, up 458 percent from 2013. All the new eyeballs are driving growth in revenues and profits.

Coming during a time in the television in-dustry that truly deserves the word “disrup-tive,” the results are particularly impressive.

arren Childs doesn’t have an open-door policy. That’s because the CEO of UKTV doesn’t have a door. Or an office. Childs, who led the multi-channel broadcaster

to its best-ever financial performance last year,

doesn’t even have a dedicat-ed desk at the company’s London

headquarters. Shortly after arriving as CEO in 2010 and launching an initiative to transform the company for the on-demand entertain-ment age, Childs eliminated his own office.

It wasn’t a symbolic gesture.“If I’m sitting in a corner office, it’s very

hard for me to tap into the kinds of seren-dipitous conversations where people bring creative ideas together,” Childs says. “I’m a huge believer that the best breakthrough ideas come from those kinds of unplanned interac-tions between people. As chief executive, one thing I can do is help speed those kinds of ideas to market when I encounter them.”

He’s certainly been moving quickly during his tenure as CEO, reimagining the company’s strategy and the corporate culture that sup-ports it. He’s invested heavily in original pro-gramming and marketing, expanded online content distribution, increased the company’s market share and boosted employee engage-ment. He didn’t look to increase engagement just to boost productivity—he also wanted employees to help him craft the new strategy.

To that end, Childs opened office spaces both literally—by creating common spaces and eliminating walls—and figuratively—by giving the rank and file new communication channels with executives no longer separated by walls and doors. Or, even, in Childs’ case, a desk.

Quick HitsThe Challenge: Overhaul a repeats-based U.K. commercial broadcaster to compete at scale in a world of on-demand and original content.

The Plan: Democratize company culture by inviting employees to contribute to a new strategy based on must-watch original pro-gramming and expanded online content distribution.

The Execution: Hire new digital talent and produce dozens of new original shows.

The Result: Revenues and profits have nearly tripled since 2010. Share of the advertising market has risen by 30 percent in the last five years to nearly 10 percent.

Before and after

When Darren Childs arrived, UKTV had a modest market share of

4% of total U.K. viewers


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does need to answer that question. When I got here, I could really see our category starting to get disrupted. We needed to build scale quickly. We needed to set for ourselves a level of ambi-tion that the company had not seen before.”

Childs and his team decided two steps were required to build the scale necessary to com-pete in today’s television market. First: UKTV needed to stop creating so much of what Childs calls “derivative content,” and instead

produce more original content. That content, he says, “had to capture the audience’s attention.” The strategy was not unlike online media streaming company Net-flix’s push to become a destination for some of the TV world’s most talked-about shows.

The second step was to create more digital outlets for content. Consumers have said goodbye to TV as mobile devices and faster

Internet connections allow them to watch the shows they like whenever they want. In other words, Childs and his team decided UKTV had to go where consumers were leading them.

“As a company, you can either focus on your competitor or you can focus on your custom-er,” Childs says. “We decided very early on that we’d focus on our customer and not worry much about what competitors were doing. All

New digital competitors are aggressively chal-lenging broadcasters in many countries, with online content providers like YouTube and Netflix and a slew of other digital distractions shrinking traditional broadcast audiences.

But those audiences remain large. So to successfully compete in today’s television environment, UKTV had to transform itself with two goals simultaneously in mind: Com-pete with the original offerings of commercial broadcasters like ITV and Channel 4, while also connecting to viewers who want content anywhere, anytime.

“There’s a business imperative driving the ways in which we’ve changed,” Childs says. “We want to become bigger and more profit-able. And we’re succeeding.”

Strategy From the Bottom UpWhen Childs arrived in 2010, UKTV was mak-ing money. People were watching its broad-cast channels. He could have, in theory, just created a digital platform for people to access its content—which the company did not have at the time—and left it at that.

Instead, he decided a major strategic trans-formation was in order.

“There’s no right or wrong answer to the question: ‘Do you want to manage for incre-mental growth, or do you want to be transfor-mative?’” Childs says. “But every chief executive

“Do you want to manage for incremental growth, or do you want to be transformative?”—Darren Childs

Now, roughly

80% of adults in the United Kingdom tune in to UKTV each month

Digital viewership is the company’s fastest-growing category, up

458% from 2013


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their ideas will be way better and more ambitious than anything coming out of an executive board-room. So we asked our people, ‘If you were go-ing to stick around here for five years to do phe-nomenal work, what would you want and need UKTV to be?’ We developed the strategic plan from what they told us.”

What employees said, roughly, was that UK-TV’s objective should be to produce great con-tent and a top-tier viewing experience. It needed to rapidly expand its market share, create and maintain a highly engaged workforce, and add digital and video-on-demand offerings—none of which existed when Childs arrived in 2010.

“We have to compete with a lot of business-es where talented, creative people can go,” he says. “So involving our people in the strategic process is an advantage to us. That is the key element to our success. It’s what sets us apart from our competitors. It’s an act of total corpo-rate insanity to produce a strategic plan, share it with a handful of executives and then put it in a drawer somewhere and expect the rest of the

our strategic planning is consumer-driven. It’s not, ‘This is what we do, so how do we take it to market better?’ It’s, ‘This is what we think consumers want. So the question becomes, how do we build a company that will best serve those consumer needs in a way that allows us to grow share and grow our financial success?’”

Building that ambitious future, Childs de-cided, would require a big shift in the com-pany’s culture. It needed to become bolder and less risk-averse. To that end, all employ-ees were encouraged to come up with break-through ideas and view failure as a necessary byproduct of taking risks. But boiled down to its essence, the goal was simple: Childs and his team hoped to build a workplace where each UKTV employee would be as engaged in his or her work as Childs was in his.

“I was absolutely convinced that if I could achieve just that one thing,” he says, “then in-novation, a digital transformation and a cul-ture change would all fall into line.”

To build a more engaged workforce, Childs placed employees at the center of the strategy development process very early on. Senior man-agers regularly asked employees to envision UK-TV’s future and what success would look like.

“When you allow people to start think-ing about success and where the company fits against the competition,” Childs says, “some of

Darren Childs’ Path to the C-suite

2010-present: UKTV CEO

2005-2010: BBC Worldwide, managing director

1998-2005: Sony Pictures Entertainment, senior vice president of international networks

1993-1998: Channel V/Star TV (a subsidiary of News Corporation), director of business development

1991-1993: MTV Asia, director of programming

Channel Surfing


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“We don’t make things; we don’t have fac-tories,” Childs says. “Instead, we make ideas. Then we execute those ideas. If we get the ideas and the execution right, we will get more people’s attention to our channels and our brand. So we have to always be looking for ways to increase creativity here so we can have breakthrough ideas.”

The search for the next hit show idea is aid-ed by UKTV’s “Innovation Pot.” It’s a fund that can pay for ideas proposed by anyone in the company, from senior executives down to new interns. The idea for it originated with employees suggesting the company create some kind of innovation challenge.

Think of it as UKTV’s own in-house Shark Tank show: When Innovation Pot ideas are proposed, a panel of UKTV employees re-views them. If the panel approves funding an idea, a senior executive is assigned to mentor the employee who proposed it and shepherd the idea through to market. One successful idea funded through the Innovation Pot was

company to execute it. We have a workforce of highly engaged people who know we trust them with the corporate strategy and that they have permission to do the best work of their lives. And that has driven our results.”

Among those results: In 2013, UKTV be-came the first broadcaster to be recognized as one of the best U.K. companies to work for by The Sunday Times.

Creating CreativityThe plan for transforming UKTV into a network focused on capturing market share through original content was dependent on something the company hadn’t really needed before: cre-ative, original ideas for new programs.

Remaking the company’s office space into an open-plan environment has helped increase creativity at UKTV, Childs says, but the big-gest boost has stemmed from the cultural shift that helped drive the strategic development process. It’s the simple, democratic notion that anyone can come up with a creative idea.

“As a company, you can either focus on your competitor or you can focus on your customer.” —Darren Childs

Darren Childs in UKTV’s

office, next to a sculpture created

as an homage to the British

comedy group Monty Python’s

classic “Dead Parrot” sketch


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growth: The company’s workforce has grown by 24 percent during his tenure (to 278 peo-ple). But the second has to do with some employees leaving during the transformation pushed by Childs. One big reason for that: UKTV insisted that its workforce become “100 percent digital,” meaning that everyone must have some functional knowledge of the digital platforms through which television content is now delivered.

The way Childs and his team saw it, if dig-ital expertise was siloed in the IT department, UKTV would never have the kind of creative ideas needed to reach consumers. There was a price to pay for making that technological tran-sition, though. “We knew going all digital meant that some people wouldn’t make this journey with us,” Childs says. “But it was important that digital not be a little division off in the corner, but part of the entire company’s makeup.”

To bring in new employees with the right digital skills who would also fit culturally, the company retooled its recruitment process. “The old way of recruiting is to base decisions primarily on skills,” Childs says. “But skills are barely half the picture. We’re looking for peo-ple who want to take risks, are willing to deal with failure and who share our values.”

The revamped recruitment process, though, is lengthy. Each potential hire is vet-ted by a hiring manager, senior executives and a peer. Each party has veto power. “Because we’re moving so fast, managers are some-

a stunt for Most Haunted Live, a ghost-hunting show that airs on the UKTV channel called Really. The stunt was cross-broadcast live on YouTube and became the most-watched epi-sode in the history of the Really channel.

“The next breakthrough idea in this com-pany really can come from anyone in the or-ganization,” Childs says. “The result of that is you get super-engaged, passionate people who work with you.”

You also get a lot of television. UKTV now has no fewer than 75 titles in development at any given time. That’s backed by significant funding: In 2014 alone, the company spent $174 million on programming and program launches.

The investments are paying off. For the male-centric channel called Dave, UKTV has created a lineup of new shows that have fueled rapid audience growth. Dave has become the most-viewed all-commercial channel in the United Kingdom on Childs’ watch (BBC One, the overall leading channel in the U.K. market, is not considered a commercial channel).

Building a Digital-First Workforce While Childs doesn’t set strategy in reaction to what UKTV’s commercial rivals offer view-ers, the competition does factor into how UKTV recruits new workers. The company does everything it can to find and hold onto digital-savvy risk-takers.

Recruitment has been a major focus during his tenure for two reasons. The first is sheer

57% of UKTV’s senior managers are women,

and the company leads the U.K.’s television market in terms of minority diversity. Some 16 percent of UKTV employees are members of a racial minority. The industry average? Just 6 percent.


SPRING 2016


that doesn’t work because there is no histor-ical trend to base your plans on. You will fail

sometimes. The key is to embrace failures and find the lessons to be learned from them.”

Every Tuesday morning during a companywide town hall meeting at UKTV’s London headquarters, these kinds of lessons reach the company’s entire workforce. Dif-ferent senior managers take turns serving as meeting hosts, celebrat-ing successes, showing off new content and answering questions posed to their department. The company has an actual question box where employees can anony-mously leave questions.

UKTV’s successful transfor-mation in recent years, Childs contends, isn’t just about big in-vestments in original content, pushing into the digital space and bringing the right new people in the door. Cultural initiatives like weekly town hall meetings have also helped boost the bottom line. Revenue in 2014 was a re-cord £286 million ($411 million), while profits for that year were a record £75 million ($108 million).

“We’re one of the fastest-grow-ing TV businesses in the United Kingdom, outperforming the market by quite a stretch,” Childs says. “All the key performance in-dicators important to our share-holders have been achieved.

That’s the reason we’re doing things differ-ently: to produce a more competitive and fu-ture-proof business. It seems to be working for us.” IQ

times desperate to hire and get help,” Childs says. “So they’ll sometimes push someone through the process that gets kicked back in the peer review. And we have to respect that.”

Childs believes the company is getting more creative and competitive because of this careful hiring process. It is certainly getting more diverse: Fifty-seven percent of UKTV’s senior managers are women, and the company leads the United Kingdom’s television market in terms of minority di-versity. Some 16 percent of UKTV employ-ees are members of a racial minority. The industry average? Just 6 percent.

Unafraid of FailureTelevision executives are often labeled “king-makers.” With the power to greenlight a new show, they can make or break careers. Where would Jerry Seinfeld be today, for instance, had NBC passed on his show about nothing?

Yet Darren Childs, the boss without an of-fice, doesn’t seem to fit the typical TV execu-tive mold.

“He’s not in any way an arrogant guy,” says Nathan Owen Rosenberg Sr., a found-ing partner at Insigniam who consults with UKTV. “But he’s got enough confidence in himself and his abilities that he’s really will-ing to experiment. He’s willing to try new approaches and new ways of thinking just on the hunch that something is going to pay off. And he’s willing to accept it when the hunches don’t pay off. Those are some of his great strengths.”

Accepting failures, Childs says, is para-mount to how UKTV has been able to remake its culture and strategy as well as innovate and grow its business.

“In business school, you’re taught to build a business plan by extrapolating from historical trends,” he says. “If you’re truly innovating,

“We’re one of the fastest-growing TV businesses in the U.K., outperforming the market by quite a stretch. All the key performance indicators important to our shareholders have been achieved. That’s the reason we’re doing things differently: to produce a more competitive and future-proof business. It seems to be working for us.” —Darren Childs


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BY JON KLEINMAN AND JEN ZIMMER

ILLUSTRATION BY ANDY POTTS

To achieve breakthrough performance, executives must start by imagining the impossible—and then work backward.


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Those of us who have experienced genuine breakthroughs that change the course of a company and industry know the true mean-ing of the word.

As pioneers in the field of generating busi-ness breakthroughs for more than 30 years, Insigniam defines a breakthrough as a specific, measurable result, outcome or performance that is unprecedented or unlikely given an organization’s history, resources and the envi-ronment in which it is operating.

Whether focused on process, project de-liverables, strategy or culture, breakthrough results fundamentally alter what is possible: They open up new opportunities for the com-pany’s future. True breakthroughs are not just one-hit wonders. They are sustainable, mean-ing they deliver results without sacrificing quality, integrity or well-being. They are the product of people thinking in new ways and acting differently, thereby opening and execut-ing on a new field of opportunity.

Reveal the DriftMany C-suite executives recognize when a transformation is needed within their enter-prise—they see growth lagging, disruptions on the horizon and the dangers of business as usual. But where to begin? How can they in-

tervene and alter their laggard growth?The first step is to identify and

confront the organizational “drift,” which is the almost certain future

for performance given the confluence of the en-terprise’s standard ap-

proaches, institutional dynamics and embedded belief

systems with the ex-ternal environment

within which the orga-nization operates. This

drift will move outcomes in a certain, predict-able direction; to misquote Adam Smith, it is the “invisible hand” of the enterprise.

To illustrate the power of the drift, imag-ine walking alongside a flowing river. When you look down into the water, you see the ebbs and flows of the current. You can see how quickly or slowly the water is moving, where it came from and where it’s going. If you were to pick up a twig and throw it into the river, you could predict where that twig would wind up, and where the “drift” of the river wouldn’t allow it to go. Similarly, we can examine the drifts within enterprises that de-termine mindset, behaviors, actions and mea-surable business results.

What momentum and direction does the organization have? At what rate is productiv-ity increasing or even declining? How has the organization historically handled challenges, planning and execution? What internal con-ditions (process, people, technology, etc.) or external conditions (financial, political, social) is it operating in? Answers to all of these ques-tions are indicative of the drift and predictable outcome set of your enterprise.

It’s important to note that inaction and the wrong action are part of the drift and are a common and dangerous part of the current in an enterprise. In a 2002 Harvard Business Re-view article detailing a 10-year study of man-agers in major corporations, Heike Bruch and Sumantra Ghoshal wrote, “Our findings on managerial behavior should frighten you: Ful-ly 90 percent of managers squander their time in all sorts of ineffective activities. In other words, a mere 10 percent of managers spend their time in a committed, purposeful and re-flective manner.” Translation: 90 percent of managers and organizations polled were be-ing swept away by their own corporate drifts.

Senior executives often tell us that one of their biggest frustrations with human perfor-

In today’s business world, “breakthroughs” are ubiquitous. They’ve become synonymous with any perceived improvement or marginal advancement, from

more powerful laundry detergent to longer-lasting batteries.

IMA

GE

BY O

LEK

SIY

MA

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HU

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OC

K


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mance is their inability to mobilize their peo-ple around the future that they themselves see as possible. They have a hard time get-ting their workforce to buy in and embrace building a new and potent future course of performance for the enterprise. All too of-ten, “resistance to change” is used to explain this inaction, when in reality, they’re all just caught in the drift.

Unhook From the PastJust as organizations must examine the in-ternal and external conditions holding them back, so too must they look at the past-based misconceptions that discolor present reality and ultimately thwart breakthroughs.

This process of “unhooking” individuals from prevailing conversations—the second step toward a breakthrough—may happen via individual conversations or working sessions. During this you may discover that while the fact communicated was “the competitor got to market first,” the interpretation of the team might be that “we will never be market leaders, it’s too late.” Or, you said “we need to deliver that bold, aggressive goal to stay competitive,” but what the organization heard

was “we are just being manipulated to work harder.” The ultimate goal is to break down the preset limitations in the minds of the work-force so they see it’s possible to set improbable goals along with real ways to reach them.

A well-known example of breaking down the old ways of thinking to spur a break-through took place during one of our consul-tants’ early enterprise-wide transformation engagements—at Ford Motor Co. in the mid-1980s. As competition from Japanese automakers intensified, Ford’s Chairman and CEO Donald Petersen came to realize that Henry Ford’s corporate culture had become a liability—it was no longer fueling success. So Petersen decided to reinvent the company’s mindset.

To illuminate possible ways forward, Pe-tersen and his team began a series of conver-sations with executives, managers and line employees. Many of those interviewed talked about “The Job” and “Job One,” terms for the most urgent priority. When a plant manag-er was asked what Ford’s No. 1 job was, he replied it was getting cars out of the factory. This answer was echoed repeatedly in one form or another throughout Ford’s headquar-

Though it’s useful to minimize the risk of failure, the pursuit of a breakthrough result by definition always involves risk.

4 Steps to a BreakthroughOur methodology for generating breakthroughs is designed around action. Four things must happen

in succession to achieve success:

1 Reveal: To achieve a breakthrough,

reveal the prevail-ing and controlling conversations that give rise to the way people in the organization act, interact, approach problems and view the work environment. This means confronting what is considered to be “real,” e.g., assumptions and beliefs.

2 Unhook: The organiza-tion and its people must

unhook from the prevailing conversations by recognizing them as just one possible set of conversations. This means understanding that much of what is considered to be real is actually just a collection of interpretations and facts. By unhooking people from prevail-ing conversations, enterprises can create an opening for new possibilities to emerge.

3 Invent: Once free from the prevailing

conversations, individu-als can invent and design a new set of conversa-tions based on an inspir-ing future to drive new and potent actions and results. Conversations move from being circum-stance-based to being commitment-based.

4 Implement: At this point,

organizations can operate from a base of new conversations, and individuals can design the appropriate structures and practices of operating to turn a breakthrough goal into breakthrough performance.


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ters. However, when Ford COO Harold Pol-ing was asked the same question, he exuber-antly replied, “Quality is job one.”

With this transformational statement by a leader willing to take a stand, creating a new context for the enterprise, the company—in-cluding those on the factory floor—adopted a new mindset and a new slogan: “At Ford, Quality Is Job One.” This mantra represented what Ford wanted to be as an organization and triggered a domino effect throughout the company that ultimately helped reverse slug-gish sales and declining reputation, and led to record profits.

The bottom line is that leaders who gener-ate breakthroughs have a willingness to be un-reasonable—meaning operate outside of the current, agreed-upon rules and constraints. They can and will commit to a bold vision even when unsure about how to achieve it. But they also have the wisdom to know that work must be done to free their people from entrenched, limiting beliefs before they can truly embrace a new worldview. The biggest mistake would be to try to deny or overcome the current drift and thinking with lots of “rah, rah” hype or (worse yet) command-and-control dictates. Transformational leaders take aspira-tions that defy current reason and logic and have compassion for and do the hard work to authentically engage their constituencies.

Once the past is broken down, the third step is to invent a new

set of conversations and create an inspiring context for the accomplishment you want to achieve. This accomplishment may come in the form of a new product, reimagined orga-nizational design or a new way of thinking; it allows people to commit while risking failure. Though it’s useful to minimize the risk of fail-ure, the pursuit of a breakthrough result by definition always involves risk. A wariness of risk often prevents companies from initiating and committing to a breakthrough goal in the first place.

Lead and Execute By Starting in the FutureUltimately, executing a breakthrough requires us to reverse the normal way of thinking, which views the future as a product of the past. Step four in the breakthrough process focuses on im-plementation by defining the accomplishment and planning backward from there.

Consider this well-known parable: A traveler was walking down the road when

he encountered two people seemingly engaged in the exact same type of activity. Both were in front of large blocks of stone, both equipped with the same tools. However, the traveler was struck by the distinct difference by which the two men were conducting their work. The first man was moving at a fairly normal pace, chipping away at his stone block. The second man was whistling, periodically looking at his work contemplatively and moving quickly with a spring in his step.

Ultimately, executing a breakthrough requires us to reverse the normal way of thinking.

Visualizing the Path to a BreakthroughR

ESU

LTS

TIME

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Low

Past Present

Strong “drift” to the past

Flat growth

Predictable, incremental growthor

Breakthroughresults

Future

CurrentReality

Breakthrough


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The traveler stopped the first man and asked, “What are you doing, sir?” The first man re-plied, “I’m cutting stone.”

The traveler then approached the second man, asking, “And what are you doing, sir?” The second man proudly replied, “I’m building a cathedral.”The message: People naturally take ex-

ceptional action to produce unprecedented results when they see they are building some-thing worthy of their personal commitment. Do your people think they’re cutting stone, or building a cathedral?

The future sets the context that decides what the people of an enterprise see as pos-sible or impossible; it determines people’s thinking, actions and behaviors. Like the “ca-thedral” in the parable, the future is decisive; it sets a horizon that calls people into action. The demands of the future can elicit new and often unfamiliar behaviors and innovative ap-proaches to the business at hand.

In actual enterprises, what is the future that we are talking about? It is the bold aspirations and the driving intent that gives meaning to each individual, team and group’s work. What sets the context for an enterprise? The context is created by a network of conversations. This is the non-physical environment of ideas, un-written rules, expectations and beliefs that shape perceptions and perspectives of each employee, team and group.

It exists in the content of your meetings, the conversations as people work, the work that managers pay attention to and the work they don’t call to attention, the problems that defy resolution, the taboos and what people think they really need to do to succeed. It can be found in gossip, jokes and banter. It manifests itself in the levels of accountability, collaboration and innovation that your enter-prise can foster.

Developing an enterprise with a potent future as a guiding context is not merely an act of writing vision statements and unveiling multimedia presentations at off-site meetings held in interesting venues. It takes a leader who appreciates that the power of an enter-prise is not merely in its capital and in its trans-actions, that galvanizing the Human Factor® is not a matter of rewards and consequences or

the job of human resource systems. It is the type of leadership that is willing to invest in in-tentional workforce development, that under-stands talk is not cheap, that in fact, talk is the “coin of the realm.” This mode of leadership has the interest and discipline to master the types of conversations that build and inspire an enterprise.

Perhaps the most critical question to ask yourself is: If an observer were looking at your organization, what type of action would he or she see? If you aren’t mobilizing your workforce around a powerful picture of the future, then you’re settling for the status quo. And you’re ceding the future to competitors committed to achieving breakthrough performance. IQ

If an observer were looking at your organization, what type of action would he or she see?

What a Breakthrough Looks LikeConsider the example of a large pharmaceutical com-pany that sought to streamline its global processes to move beyond incremental improvements. Lagging drug development cycles were dulling the company’s compet-itive edge, and executives felt a change was needed to stop the slide. To transform the enterprise, they worked closely with managers to look inward and define and examine their current processes.

By unhooking from organizational prac-tices that created barriers and bolstering communication and leadership opportunities, the company was able to inject continuous improvement into the DNA of its clinical development process. On a granular level, it redesigned and implemented five critical processes and enacted practices to engage, mobilize and inspire teams around the world. That accelerated performance.

The breakthrough was achieved when the company shortened its drug devel-opment cycle time by five years, including cutting drug trial times by 40 to 50 percent. By identifying an overall goal, as well as the roadblocks and missing links, the company was able to sustain the breakthrough and weave the improved process and mindset into its culture.

As one corporate vice president said, “Breakthrough is now part of our culture. I am amazed we were able to start the process and it sustained itself. The proof is in formal ratings that are published for benchmarks. … Our leaders are thrilled.”


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C r a c k

t h e

C o d e


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SAP isn’t the sexiest business on the block, but it certain-ly has a huge reach into enterprises around the world. Consider the facts: In 2015, the enterprise application software company posted more than €20 billion (about $22 billion) in revenues while serving nearly 300,000 customers in 190 countries. SAP is the fastest-growing

company in scale at cloud computing, with 95 million subscribers, as well as the fastest-growing database vendor. Seventy-four percent of the world’s transaction revenue touches a SAP system.

The infrastructure and talent needed to produce results at this global scale follow suit. Spread among offices in Europe, the Mid-dle East, Asia-Pacific and the Americas, more than 76,000 em-ployees call SAP their home away from home. To lead such a widespread, diverse group of employees and keep generating re-markable results, Walldorf, Germany-based SAP has made an investment in building highly effective transformational lead-ership development throughout the company. And it’s up to Senior Vice President and Chief Learning Officer (CLO) Jenny Dear-born to design, align and drive SAP’s leadership development across every department and in every country to enable a measurable, and remarkable, business impact.

Dearborn’s efforts have garnered her and the company industry recog-nition, including being named the No. 1 performing corporate learning department in the world by ELearning! Magazine. But the true barometer of success, according to Dearborn, comes from the analytics she uses to measure the impact of the programs. “Data is power. Data is influence,” she says. “Data is how you get stakeholders to listen to you, because you are finally talking about the things that are most important to them.”

Learning the Value of DataDearborn figured out long ago that to prove the value of a project, what counts are metrics that prove meaningful results. As Americas CLO at Sun Microsystems, she showed a client the volume of learning her department had delivered and the satisfaction survey ratings it had re-ceived. He was unimpressed, Dearborn says. “He said, ‘All this tells me is that you’ve spent a lot of time and money, but I don’t know whether anything you’ve done has made any difference at all. So come back to me when you can connect your activity with results that I care about.’”

That moment in her career set her on a new path, searching for ways to demonstrate concrete connections between learning initiatives and

“Data is how you get stakeholders to listen to you, because you are finally talking about the things that are most important to them.”

— Jenny Dearborn

As chief learning officer for SAP, Jenny Dearborn is using analytics to ensure the company has the leaders it needs to remain on top of the industry.

BY SARAH FISTER GALE


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Taking the Lead To produce quality growth strategy that en-gages employees at all levels, Dearborn first had to re-envision and restructure the way SAP taught. And that meant applying the slogan of the company to the way her office operated: Run Simple. She began by centraliz-ing the leadership curriculum for the compa-ny’s 7,600 managers in her own office. What were once separate learning groups became one federated group. Her team made the learning-technology experience, content tax-onomy, instruction design philosophy and em-ployee messaging the same across the board.

These changes immediately eliminated the redundancies of the existing system, in which each of SAP’s global regions built its own ver-sion of the same leadership courses. She also established a group of mobile trainers to deliver leadership courses around the world, both cut-ting costs and eliminating the biggest time and cost barriers leaders cited for not participating.

Dearborn then made sure every develop-ment initiative linked to a strategic business goal—for example, improving employee satis-faction or reducing turnover in key roles—and established metrics to demonstrate results. Thanks to the remodel, Dearborn’s team saw record engagement levels for leadership development—especially impressive consider-ing most SAP executives had never participated in a single leadership development course.

The swell of interest has already helped the organization make significant strides toward a key strategic goal: 25 percent female lead-ership by 2017. While SAP is still early in the

strategic business results such as improved sales, reduced turnover and better customer satisfaction.

She first began to realize that vision in 2012, when she became CLO of the San Francis-co-based software company SuccessFactors. “They had the connectivity and integrated data systems that would let me fine-tune an-alytics performance models,” she says. “It was like working in an analytics lab.”

Her team focused its efforts on solving key performance issues within SuccessFac-tors’ sales team, which had a high attrition rate, slow time to quota and missed quotas among a large percentage of the staff. They began by developing algorithms to mine for the data that would allow them to hone SuccessFactors’ recruiting, training and per-formance-management programs for the sales team. In less than a year, performance measures showed sales representative ramp-up time was down, the number of represen-tatives meeting their quotas had tripled and overall sales-team attrition had declined by 80 percent.

The lessons learned at SuccessFactors would become a key driver behind the changes and programs Dearborn would implement at SAP. When Dearborn joined the company in 2014, its learning program lacked structure and inte-gration. There was little use of data or analytics to make development decisions. So Dearborn made a proposal to SAP’s leadership team: Let her take charge of the entire global learning function in the company and apply the lessons from SuccessFactors.

Thanks to the remodel, Dearborn’s team saw record engagement levels for leadership

development. The swell of interest has already helped the organization make significant

strides toward a key strategic goal:


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data-gathering phase, initial indicators are that the new leadership development program has helped female employees advance their careers. Sixty-six percent of female program graduates have had significant role changes since finish-ing the program, and the company’s leadership was 23 percent female by late 2015. “It proves that the training has had a huge impact on de-velopment opportunities for women at SAP,” Dearborn says.

Dearborn also helped implement a man-ager-assessment process that uses analytics to track how well managers contribute to com-pany results. “We triangulate new-hire data with manager success data and employee turn-over to create a kind of ‘manager batting aver-age,’” she says. These metrics also include data on a manager’s perceived trustworthiness, how well he or she supports employee development and his or her rate of regrettable attrition.

“Tracking leadership metrics around quali-ty and competency helps us find the bad-apple managers, as well as the ones who are wildly successful,” she says. These rankings provide SAP with metrics to determine what teams are likely to outperform their peers in meeting key business goals. They can use that data to build training programs to close performance gaps.

The Other 90 PercentLeaders aren’t the only ones reaping the benefits of Dearborn’s training revamp. Dearborn and her team have also reworked SAP’s training curriculum for non-manager employees. They regularly meet with man-agers to discuss the specific business metrics

they want to improve, and this helps manag-ers figure out whether training is the answer. “Now we start with a business problem and use analytics at every step to identify gaps and measure results,” she says.

For Dearborn, one of the key measures of success for this non-manager training comes from the annual survey, which asks employees whether SAP offers “development opportuni-ties to reach your career goals.”

“In just two years, our rating has gone up 13 percentage points,” she says. “That’s a big jump.”

Along with tracking survey results and manager performance, Dearborn’s use of an-alytics has also unearthed some unexpected in-sights. For example, the top 10 percent of SAP employees in North America based on perfor-mance ratings are also among the top promot-ers of SAP on social media. “It’s another way to show how engaged, high-performing em-ployees impact the business,” she says.

These metrics are only the tip of the ana-lytics iceberg. One of the big challenges with leadership programs, Dearborn says, is that it takes a year or more to see their business impacts, unlike sales training programs that deliver measurable results in a few months. That’s why Dearborn plans to spend 2016 ex-ploring the strategic impact of training on the indicators used to measure manager perfor-mance, including increased sales, improved customer service and higher loyalty ratings.

“That’s what will impress the rest of the C-suite,” she says. “And early indicators sug-gest we are heading in that direction.” IQ

“Tracking leadership metrics around quality and competency helps us find the bad-apple managers, as well as the ones who are wildly successful.”

— Jenny Dearborn

female leadership by 2017.


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Changing

RulesGame

the

of the


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GameFaced with a relentlessly shifting marketplace, GameStop reinvented its business model to drive a strategic transformation. It’s already paying off. BY SARAH FISTER GALE


SPRING 2016


that makes video games so addictive is the constantly morphing landscape: surprising twists, new technology and unexpected—sometimes nefarious—characters disrupting the environment.

It’s not all that different from today’s busi-ness world, especially when you’re a retail powerhouse trying to survive in an era of mobile gaming and digital downloads.

So when GameStop Corp., with $9 billion in annual sales and more than 6,000 stores around the world, started losing market share to online rivals, it took action. First, it beefed up its Spring Mobile and Simply Mac retail locations from 150 to more than 1,000. At the same time, executives made a dramatic shift in the sales strategy for core GameStop stores, expanding into the $30 billion mar-ket for licensed entertainment merchandise. This meant stocking up on everything from T-shirts and key chains to figurines and other branded items.

This array of “loot” (as gamers call it) became a part of the company’s diversification strategy, pulling in a new customer base and triggering the launch of a line of standalone stores that is projected to help boost sales by $500 million over the next three years.

“What was once an experiment in Austra-lia has turned into a rapidly growing glob-al business,” says GameStop’s CEO, Paul Raines. “Based on the success we’ve seen, we

will continue to dedicate more space in our GameStop stores to loot merchandise.”

The company also inked a big deal in June 2015, spending $140 million to acquire Geeknet, the parent company of ThinkGeek, an online retailer with a vast array of clothing, gadgets, toys and figurines. “The addition of Geeknet is an important expansion of our global multi-channel platform,” Raines says. “We’re excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles industry.”

Let the Looting BeginThis grand experiment into the collectibles market kicked off in 2013, when the com-pany’s franchise marketing team suggest-ed GameStop offer T-shirts and collectibles tied to the release of the newest Call of Duty video game. The company tested the idea with a limited line, and sales proved strong. That came as no surprise to Michael Mauler, pres-ident of GameStop International, who heads the company’s multichannel international retail business across 2,100 stores in 14 coun-tries. The deeply fragmented marketplace has no real retail leaders, leaving a wide-open space for GameStop.

So Mauler and his team did some digging.

Onethings

of the

Quick HitsThe Challenge: Boost the business model of a massive gaming retailer to compete—and thrive—in an era of mobile gaming and digital downloads.

The Plan: Add licensed en-tertainment merchandise, or “loot,” to the core retail sales strategy to diversify offerings and gain a new customer base.

The Execution: Dedicate more retail space to loot merchandise, acquire an online retailer with an existing vast merchandise supply and hire experts to track industry trends.

The Result: Demand for merchandise became so strong that GameStop introduced standalone col-lectibles stores, which have since expanded throughout Australia and into Europe and the United States.


SPRING 2016


They surveyed sales associates as well as the company’s 40 million loyalty-club members about whether they’d like to see other mer-chandise in the store and what they would buy. Armed with that data, Mauler and his team expanded the collectibles mix beyond video games to include merchandise tied to movies, TV shows and toys. They backed the launch with an ad blitz and marketing out-reach to loyalty members—all while keeping a close eye on financial results. “We set internal measures around sales and margins to deter-mine whether the collectibles were delivering an ROI,” Mauler says.

Indeed, a steady turnover of new mer-chandise, an increased average number of items purchased in one transaction and

strong margins proved the new product line was working. And by tracking sales data, the retailer was able to hone its strategy and better understand what drives purchasing decisions.

For instance, the GameStop team discov-ered that customers were more interested in specific icons than in product categories. If they came in looking for a Star Trek T-shirt, they weren’t going to buy a Marvel T-shirt, but they might buy a Star Trek key chain or pizza cutter. “We found that it was all about the IP [intellectual property], not the individual prod-uct,” Mauler says. “So it became really import-ant that we pick the right IP.”

To ensure it made solid choices, the com-pany hired “loot champions” and sent them to various Comic-Cons, toy fairs and other events

“The addition of Geeknet is an important expansion of our global multichannel platform.” —Paul Raines, CEO, GameStop Corp.

Hundreds of video game fans line up to buy Grand Theft Auto IV outside a New York GameStop retail store on April 28, 2008

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to track trends and pick the best products for the stores. As it improved its understanding of the market, GameStop scaled up these of-ferings. By the end of 2014, all 6,600 stores offered collectibles, with most featuring a 12-foot “loot section” of ever-changing products.

Yet tackling the collectibles market proved far more complicated than sticking to video games. “With video games, there are three key vendors—Sony, Nintendo and Micro-soft—and most products come from the top 10 vendors,” Mauler says. This was not the case in the world of collectibles.

Every piece of pop culture can have its own line of licensed merchandise and prod-uct owners. That translates into a far more

complex network of vendors and licensing agreements that can shift with every new re-lease or twitch in pop culture tastes.

Testing the MarketBefore long, the 12 feet of retail space dedi-cated to “loot” became too constrained. “The numbers told us that this could be a standalone store,” Mauler says. So in 2014, GameStop opened Zing Pop Culture, its first standalone collectibles retail location, in Australia. It was instantly popular, and not just with GameStop customers. Early store data showed Zing’s customer base was 60 percent women and fam-ilies, compared to 30 percent for those custom-er segments at GameStop stores worldwide.

“We have a saying at GameStop: The internal rate of change has to be faster than the

external rate of change.” —Michael Mauler, president of GameStop International

Zing Pop Culture store in Australia


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The response was strong enough that the company opened several more stores that year. Steady sales and better-than-expected margins followed, especially over the holi-day season, the retailer’s busiest sales period. GameStop continued expanding in 2015, with 35 standalone stores in Australia and several new sites in Europe.

Then the company turned its attention to the U.S. market. Company leaders considered expanding Zing stateside, but rather than in-troducing the relatively unknown brand to U.S. consumers, they decided to acquire a brand already known to GameStop’s largest consumer demographic in the United States: ThinkGeek. Another advantage? The online retailer owns scores of licenses for popular pop culture memorabilia. “It was a way for us to bolster our competitive position in a highly fragmented category and gain instant market share,” Mauler says.

With the acquisition of ThinkGeek in June 2015, GameStop began charting its ex-pansion strategy in the United States, open-ing the first standalone ThinkGeek store in September 2015 near Disney World. Since then the company has debuted additional U.S. stores and expects to continue that in-crease throughout 2016.

Driven By an Agile CultureNot every company would have been will-ing and able to undergo such a radical strategic transformation, but according to CEO Raines, GameStop prides itself on a driving commitment to change, relentless innovation and a deep understanding of the consumer marketplace. And the company’s culture provides space to experiment and fail—which unlocks unorthodox ideas and supports their implementation.

“It’s a place where we have the freedom to try new things to see what works,” without worrying about people pointing fingers if an idea fails, Mauler says. He credits that agile and supportive culture with helping the company transform its business model in a relatively short amount of time. “We have a saying at GameStop: The internal rate of change has to be faster than the external rate of change.”

By starting small, talking to customers and using financial metrics to justify expansion, GameStop not only generated new lines of revenue, but it also found a way to stay rele-vant in an ever-changing marketplace. IQ

ThinkGeek isn’t the only acquisition GameStop has made in hopes of expanding its customer base and bottom line. The retailer isn’t afraid to take risks on ventures that complement its core business—whether they’re relatively established or just starting out. Here are three companies GameStop has recently brought into its fold:

1. Spring Mobile: Acquired by GameStop in 2013, Spring Mobile is an AT&T wireless retailer that operates more than 950 stores in the United States. At the time of the acqui-sition, GameStop CEO Paul Raines said, “This acquisition provides GameStop an entry into the $170 million wireless market with one of the nation’s fastest-growing operators.”

2. Simply Mac: GameStop bought the controlling interest in Simply Mac, the largest authorized retailer for Apple products and solutions in the United States, in 2013. Since then, it has made an aggressive push to expand the retailer, including purchasing The Mac Store, a small chain of Apple reseller outlets, in 2015.

3. Kongregate: This social gaming site allows users to upload their own creations and play thousands of games for free. “Kongregate advances GameStop’s digital strategy by providing a gaming platform for casual, mobile and browser games that can be promoted and played by our existing gamers,” Raines said about GameStop’s 2010 acquisition of the company.

TheGameStop

TreeFamily


SPRING 2016


Letting go of certain decision rights is a key

to increasing growth, effectiveness and

collaboration—and a mark of mature leadership.

BY SHIDEH SEDGH BINA

Increasing the Velocity of Execution


SPRING 2016



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ottlenecks, lack of velocity in execution, finger-pointing and stagnation—it’s no secret that even leading companies around the globe struggle with these types of issues. Left untreated, these issues can hobble productivity and chip away at optimal perfor-mance. But there is an often-overlooked solu-tion to these common problems—something that can result in profound and meaningful growth, increased effectiveness and height-ened morale if implemented correctly.

What’s the solution? Take decision rights seriously: Methodi-

cally determine where and how decisions get made in the organization. When the right peo-ple are empowered to make the right kinds of decisions, there is a higher level of focus and better thinking. Bottlenecks disappear and re-markable results emerge with greater velocity.

A study published in the Harvard Business Review in 2010 showed that decision effective-ness was correlated to corporate financial re-turns 95 percent of the time. Furthermore, of the nearly 800 organizations surveyed, those that were most effective at decision-making generated total shareholder returns 6 percent-age points higher than less effective firms.

The value is clear. So why do so many com-panies overlook the importance of decision rights? One of the bigger issues we’ve found is decision rights are assumed to go hand in hand with certain roles and be inherent in a job and position within the corporate hierarchy. The as-sumption is that the higher the pay grade, the more empowered a person is to make decisions.

That may have been true in the old, hierarchi-cal command-and-control organization where business moved at a measured pace, information rested in the hands of the few, decision-making was top-down and work happened in clearly dif-ferentiated silos—but, as we know all too well, times have changed.

Today organizations are highly matrixed and even networked, creating blurred and



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overlapping lines of accountability. With customer-centricity a key lever for compet-itive advantage and new technologies giving real-time access to information across the enterprise, decisions can and should happen faster and closer to the customer. And in matrixed organizations, very few decisions can be made in isolation. Therefore in almost any enterprise, effective, fast execution requires collaboration and shared decision-making.

A Change in Organization Design Is a Change in Decision RightsAs the sociologist Max Weber first noted in the early 20th century, enterprises use organizational structure to enhance perfor-mance. While there is a cacophony of pa-pers, books, blogs and discussions about the topic of organization design, there is rela-tively little discourse about the true design function of organizations—the facilitation of the decisions needed to generate value, realize strategies, overcome threats and ex-ploit opportunities.

Because aligning on decision rights is not an easy task, we see very few intentional ef-forts at addressing this critical aspect of orga-nizational performance. As Harvard Business School Professor Emeritus Michael C. Jensen said in a Harvard Management Update article, “Allocating decision rights in ways that max-imize organizational performance is an ex-traordinarily difficult and controversial man-agement task.”

Given this challenge, there is often a serious and detrimental lapse in communication with-in organizations. The conversation between top executives and their leadership teams to decide who owns the ability to make certain decisions relating to specific parts of the en-terprise simply does not take place. The gears of execution, and productivity, stop moving as

people look up to their department head or the CEO to act and point the way forward.

Deciding to DecideConsider a recent example of a CEO who had previously served as his company’s COO. Despite positive intentions, he quickly found that the people who reported to him felt ham-strung because he was heavily involved in op-erational decisions. It was clear that the range of motion people had to fulfill their responsi-bilities was far too narrow for them to truly create the greatest value in their roles.

They spent significant time rehashing in-formation for the CEO and relaying plans rather than focusing on moving the business forward. As part of his transition, this CEO commissioned an intensive series of decision rights activities for himself and his direct re-ports. In this exercise and through a series of facilitated conversations, he intentionally let go of several of the decision rights he was ac-customed to having.

This was no easy task: Giving up decision rights is both liberating and terrifying. We all tend to believe our own judgment is superior to someone else’s. Unfortunately, this is a very immature managerial perspective. This partic-ular CEO understood that.

To become pragmatically comfortable with relinquishing some decision rights, he held a series of conversations with his team to negotiate a finite set of decision rights he would retain, as well as how other decision rights would be distributed. His team in turn experienced a greater range of motion and an immediate elevation in performance.

The Middle Manager BluesOne of the biggest errors companies can make is over-centralizing decision rights, Jen-sen says. Often as a leader, “you think you can

When the right people are empowered to make the right kinds of decisions, there is a higher level of focus and better thinking. Bottlenecks disappear and remarkable results emerge with greater velocity.


SPRING 2016


make better calls.” But decision rights must be put in the hands of the person possessing the relevant information and line of sight to have the greatest positive impact.

In fact, if you take the time to thoughtfully consider the purpose of executive roles and their true accountabilities, it becomes evident that the CEO and the two levels beneath her or him at dynamic, high-performing organiza-tions must retain very few decision rights.

Why? One key reason is that the purpose of their roles is to ensure the biggest, most sustainable future, set direction and establish the requisite conditions for realizing enter-prise intentions. That purpose has a finite set of mission-critical decisions. To have an executive engaged in decisions that don’t align with the purpose of his or her job is a waste of time and money.

Moreover, the highest levels of the organi-zation are often too far removed from the cus-tomer or the process to have the perspective and information to make the appropriate de-cisions. Just as a message is quickly distorted in the “whisper down the lane” game, so does a decision run the risk of becoming erroneous as it moves away from the point of relevant information. Lastly, and perhaps most signifi-cantly, moving a decision away from the point of action and execution adds unnecessary time to the execution cycle.

Over-centralizing the decision-making pro-cess can also cause tension at the middle-man-agement level. Insigniam’s 2014 Middle Man-agement Survey revealed that 50 percent of middle managers say their primary job frus-tration is that decision-making is taken out of their hands. This, in turn, created a sense of stress, dissatisfaction and a feeling of loss of power to get work done.

Twenty-five percent of managers involved

in such situations said they only intended to stay with their current company until they re-ceived a better offer.

Deciding to Establish Decision RightsHow can organizations best address this key component of performance? Engage people to craft the decision rights needed to fulfill their job. This means having critical conversations where people can answer important questions:

n What is the purpose of my job? Why have my role?

n What does the organization count on from me—what am I accountable for?

n What decision rights must I retain to deliver on my commitments and the purpose of my job?

n With whom do I share decision rights? What decisions must I be involved in with others—who must I enroll, get input from and notify?

Amazingly, the very act of having someone consider these questions will create a more ac-countable and effective executive or manager. Be-cause decisions in a complex organization cannot be made in a vacuum, the process of setting these rights must happen in a series of collaborative dis-cussions and negotiations. This in turn solidifies alignment and creates better visibility, which can facilitate faster, better execution.

It takes time and requires candid and un-common conversations, but what’s the alterna-tive? A slow-moving organization embroiled in constant breakdowns that stem from the fact that people don’t fully understand the purpose of their role or haven’t fully identified what they are accountable for.

Front-Line DecisionsSeveral leading organizations have identified

of middle managers say their primary job frustration is that decision-making is taken out of their hands.Source: Insigniam’s 2014 Middle Management Survey50%


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that empowering teams on the front line with decision rights is a powerful way to stimulate top-line growth, eliminate errors and improve the customer experience.

For instance, Honda Motor Co. embraces the concept of waigaya, which leads directly to “significant improvements in productivity, process, systems and performance that would otherwise have been absent.”

Here’s an example. As Jeffrey Rothfeder discusses in his book Driving Honda: Inside the World’s Most Innovative Car Company, a situa-tion arose at an assembly plant after a worker discovered a problem with a handful of cam-shafts. Just as managers were planning to ship the affected cars to another factory for servic-ing—which would have been a costly produc-tion setback—an assembly worker decided to halt the assembly line and fix the camshaft without having to remove the major compo-nents of the engine.

Had that one assembly worker not been given the decision rights at that critical mo-ment and locus of action, “we would be lit-erally sliding engines in and out of cars every day, not knowing [there was a better] way,” said one Honda executive. He continued, “If we don’t include our associates in the deci-sion-making, we’re ignoring potentially our most valuable asset.”

The highest levels of the organization are often too far removed from the customer or the process to have the perspective and information to make the appropriate decisions.

Indeed, human capital is the most valuable asset in a company’s portfolio. Unlocking this competitive advantage means empowering teams across the leadership spectrum to make decisions that will positively impact an organi-zation’s ability to be effective.

To truly empower your operational teams, they must know what they are accountable for and retain the right to make decisions to fulfill their goals and responsibilities. That is the key to empowerment.

If you want your team to perform optimal-ly, make sure the necessary thought and dia-logue occurs to actually give them the access to freedom of movement. Because with great freedom comes great responsibility, a bias toward immediate action—and results. IQ


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First, Know Thyself Stewart Desson, founder and CEO of Lumina Learning, is on a mission to help leaders understand themselves to improve team performance.

BY STACEY CLOSSERPORTRAITS BY JON ENOCH


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Quick HitsThe Challenge: Foster organizational change that drives results from the individual level.

The Plan: Assess employees’ personali-ties in a comprehensive way that captures the complexity of people, viewing them not as “human doings,” but as “human beings.”

The Execution: Create a new kind of assessment that offers employees a roadmap for improved communi-cation, teamwork and leadership.

The Result: A new psychometric tool that provides the self-knowledge needed to drive widespread organizational change.


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to discuss how Lumina’s novel approach to psychometric testing embraces complexity of people—and by doing so, helps them drive remarkable results.

Insigniam Quarterly: What are the differences between traditional approaches to assessing personalities and Lumina’s?Stewart Desson: There are two big theories in psychology: typing and traits. Through my own research and that of a lot of other people, I’ve concluded very clearly that types actually do not exist. Most of us are a bit introverted and a bit extroverted. A data-based approach to introversion and extroversion suggests the scale is normally distributed and people are not types.

We’ve brought in the idea that you can be opposites; you don’t have to be one or the other. We’ve also brought in the idea that we re-create our personalities in the moment in every new conversation. People shift on an everyday basis. Our assessments allow for that and allow people to be different in different contexts. We look at the dynamic of personality.

I’m really on a passionate mission to say, “Let’s not label people, let’s not limit people, let’s look at them as who they really are. Let’s encourage people to be the contradictions that they are and have these different, opposite qualities in them.” I can be quite critical and

Stewart Desson hates putting people in boxes. As the CEO of Lumina Learning, he’s made it his mission to help companies understand the full complexity and dynamism of human personalities. Desson has built his U.K.-based organization, which he founded in 2008, around two simple but powerful ideas.

First, personality types as we have come to know them—“introverts” and “extroverts”—don’t really exist. Most people shift their personality to suit the moment. Second, the ability to deliver results starts with an accurate understanding of yourself—and those you lead.

“Really successful leaders have self-aware-ness,” Desson says. “They can read other people, they can adapt their style and connect with other people, and they can value others and co-create results together. Those are peo-ple who get breakthrough performance.”

Using a handful of different proprietary psychometric assessment tools, Lumina helps companies around the world improve their teams’ performance by bringing diverse personalities together and building rapport. Clients have included Goldman Sachs, Adidas and Pfizer.

Any company that uses typing models to recruit or assess employees is stuck in the past, says Desson, who has master’s degrees in operational research as well as change skills and strategies. “It’s quite funny that so many people are attached to typing models in businesses when the scientific models say types don’t exist. People who use typing models, in my opinion, are dated and they’re not looking at the latest scientific evidence.”

While at British Airways, where he worked for 15 years, Desson specialized in applying the scientific method to the company’s orga-nizational change initiatives. He objected to being typed and labeled. “At British Airways, I was an extroverted intuitive—an ideas per-son. That is a really unhelpful label because it limits me. I might have lots of good ideas, but I’m capable of re-creating myself and building other skills, such as plan execution, as well.”

Insigniam Quarterly sat down with Desson

“We’ve concluded very

clearly that types actually do not

exist. Most of us are a bit

introverted and a bit extroverted.

A data-based approach to

introversion and extroversion suggests the

scale is normally distributed and people are not

types.” —Stewart Desson

Lumina Spark qualification in China


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logical, but I can also be quite compassionate. That creates some inner tension in me. It’s not always easy, but that’s part of my leadership style, and that’s what makes me who I am. Let’s measure and embrace that complexity.

IQ: So how exactly do you measure some-one’s different personas within the work environment?SD: In our model we measure the ones that are the most obvious, helpful and meaningful. There are three: the “underlying persona”—what are you like at your most comfortable? Then there’s the “everyday persona”—how you tend to behave when responding to your environment. And then the “overextended persona”—when you might be under pres-sure or overplaying your strengths.

Other questionnaires tend to measure one thing, like just your everyday persona, and then try to infer the other things. For exam-ple, a questionnaire might find your everyday personality to be quite direct, clear, candid and straight-talking. Then they’ll make the assumption that under pressure you could be a bit blunt, even a bit aggressive. But we found in our Lumina Spark assessment that this might not be true. You may be tough and so on when things are going well, but under pressure you might strive really hard to be nice and agreeable, try to pull everybody together to be in consensus.

From the Big Five to a 360° PortraitIf you’re alive on this planet long enough, chances are good that your personality will be parsed and measured against the Big Five traits: extroversion, agreeableness, conscientiousness, neuroticism and openness to experience. These traits were identified in the 1970s by U.S. research teams, including Paul Costa Jr. and Robert McCrae at the National Institutes of Health. Costa and McCrae asked thousands of people hundreds of questions. After reviewing their data, the Big Five traits emerged. To this day, they’re an empirically based framework for understanding personalities.

But there is a problem with understanding personality through five trait-based scales: You make it impossible for people to inhabit both ends. For example, the absence of extroversion is assumed to be introversion; a person who is not agreeable must be skeptical.

Lumina assessments are built on the Big Five model, but they embrace paradox and attempt to measure both ends of the spec-trum independently. One person can have both extroverted and introverted qualities. And unlike its academic predecessors, the Lumina Spark assessment model was designed for use in industry. The guiding idea is to equip business leaders and users with valuable information that can drive positive results—leadership that motivates, teams that communicate and are resilient to stress, sales forces that anticipate customer needs and close deals.

The Lumina Spark Mandala, a 360-degree display of an indi-vidual’s personality traits grouped into eight aspects, attempts to offer a complex picture of an individual while still being useful to organizations. Though the aspects within each set seem to be in opposition, it’s quite possible for individuals to possess strengths in both areas simultaneously.

Inspiration-Driven—adaptable, flexible, spontaneousDiscipline-Driven—reliable, structured, purposeful

Big-Picture Thinking— conceptual, imaginative, radicalDown to Earth—cautious, evidence-based, practical

Extroverted—sociable, demonstrative, takes chargeIntroverted—observing, measured, intimate

People-Focused— accommodating, collaborative, empatheticOutcome-Focused—logical, competitive, tough


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performing, I want to know how I can better connect with people. If I’m the project leader, I need to know how to value the diversity in the team. I don’t want to just recruit people in my own image. I might want to recruit people who are quite opposite because the team is stronger with more diversity.

If I’m in sales and business development and I’m going to meet a potential customer, I need to build rapport quickly. That means I need to be an expert in reading them, connecting with them and communicating in a way that works for them.

IQ: How do you communicate the value of the assessment to companies?SD: There are studies showing that when salespeople understand who they are and how to read their customers, they can increase sales by 25 percent over the next 12 months. That’s because they become a relationship master as well as a technical sales master.

With leaders, the typical metric that’s used is staff engagement. In order to have engaged staff, leaders need to do things like read their staff and treat them as individuals. They need to help them create meaning and purpose in their role, and they need to stimulate their intellect so they’re truly engaged in the role,

IQ: How can the results of these assessments be used?SD: The starting point is self-awareness. We help people find out who they are, understand if they’re more direct and forthright with

others, or diplomatic and nice. The next step is using that knowledge to understand other people. Can I read them? Can I notice their emotions?

The third stage is building rap-port, “speed-reading” people to no-tice their qualities. Most of us are not good, normally, at speed-reading. We’re good at doing our thing. We’re good at our job, our tasks, but we don’t always notice people’s different ways of being.

If we do those three things, the fourth thing we can do at work is co-create results with other peo-ple from a more collaborative space where we value different ways of

being. At heart, that’s what Lumina is about, and that’s why personality is a useful thing to know about.

IQ: Can you give some specific applications?SD: If I’m in a team, I need to understand my colleagues. For the team to be high-

There are studies showing that when salespeople

understand who they are and how to read their customers,

they can increase sales by

over the next 12 months.

“Really successful leaders have self-awareness: They can read other people, they can adapt their style and connect with other people, and they can value others and co-create results together. Those are people who get breakthrough performance.” —Stewart Desson


SPRING 2016


their awareness and change their behavior. That’s the perfect use.

IQ: How do you measure success?SD: If we’ve rolled out assessments to a large group of people, we would expect to see the needle moving around staff engagement. If staff members are more aware of who they are and better connected, they should be more engaged.

We also expect the percentage of people who leave an organization each year will drop. One way of ensuring that organizations retain talent is to make sure their top talent is developed and given great opportunities.

If we are using psychometrics effectively in recruitment, that means that we are ana-lyzing the jobs and correctly understanding what traits and qualities are needed. It means that when we recruit people, we’re assessing against some objective criteria that have been thought through. It means that in our inter-view, we are more likely to ask pertinent ques-tions to find out about people’s true strengths and weaknesses. It means we’re more likely to recruit people who will perform better, and we’re more likely to recruit people who will stay in their job longer. We’ll have less of what we call PUREs—“previously undiscovered re-cruitment errors”—that emerge six months after someone joins.

Another measure is: Can we improve our retention rate, and can we improve the perfor-mance of new employees in their first 12 months?

IQ: Are there certain people poorly suited for these kinds of assessments?SD: The biggest problem is when someone is worried what their boss might think, so they fill in the questionnaire thinking, “I need to please the boss.” Or they’re worried people will expose their weaknesses so they admit to none. These are challenges.

I think we need to acknowledge that when-ever you get someone to fill in a questionnaire, you may be creating anxiety in that individual. The onus is on the consultant to create the right environment to minimize anxiety so the whole process will be genuinely useful. IQ

rather than dominate them and tell them what to do. They need to find a way to empower their staff. All of that requires knowledge of who you are.

We want to see leaders who are more trans-formational, who engage their staff. We want to show quantified improvements through staff engagement surveys. There are studies showing that for every percentage point you put into staff engagement, it’s worth X million dollars depending on the type of business, its size, and so on.

The final area of trying to quantify im-provement relates to high-performing teams. Can you quantify the comparative benefits and productivity of just a functioning team and a high-performing team? If you speak to a CEO and ask him or her what’s the difference between a functioning team and a high-per-forming team, they will give you an instinc-tive feel of what that could be worth to the bottom line.

IQ: How are psychometrics misused by businesses?SD: One of the biggest misuses is in recruit-ment—to screen out people who don’t match a particular personality type and just go for an oversimplified and particular sort of person. Anyone who does that is at risk of behaving un-ethically. You can get sued for doing that.

Another misuse is using psychometrics to box and label people. With modern comput-ing power and algorithms, there is no need to oversimplify and type. But the worst use of a psychometric is to excuse behavior. I’ve had someone come to me and say, “I’m ever so sorry, Stewart. I’ve just really upset one of the customers. But you know what? I’m the extroverted thinker type, so I can be a bit rude and blunt. It’s just who I am.” That to me is a cardinal sin. We don’t find out about our-selves to excuse away our behavior. We find out who we are so we can adapt and change our behavior.

In my opinion, the best use of a psychomet-ric is to catalyze a conversation to help people create meaning, figure out who they are, raise

“In my opinion, the best use of a psychometric is to catalyze a conversation to help people create meaning, figure out who they are, raise their awareness and change their behavior. That’s the perfect use.” —Stewart Desson


SPRING 2016


GAME CHANGERS

ForeverStayIf you know where and how to look, innovation opportunities are everywhere, says former Apple and Pepsi CEO John Sculley.

BY PAUL GILLIN

PORTRAITS BY JOSH RITCHIE

To Grow Your

Business,


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ForeverCurious


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The former CEO of Apple and Pepsi-Cola says many of today’s corporate giants are about to be bulldozed into oblivion unless they take action—now.

Cloud computing, mobility and machine intelligence will soon trigger an explosion of innovation, he says. Entrepreneurs can start companies with a fraction of the resources that were necessary just a few years ago, and they can move with unprecedented speed and agility. Forces like the sharing economy and the rise of a new breed of middle-class consumers in developing countries will fuel the next generation of billion-dollar companies. Those that aren’t ready, willing and able to blow up existing business models and face a new reality may not survive.

The Customer PlanUnderlying all this transformation is the new power of customers, now firmly in control of the way companies and markets behave. Em-powered by ubiquitous Internet access and social media, customers now have unprece-dented access to information to evaluate their choices, and they trust each other’s opinions over marketers’.

“It’s fundamentally changing every business,” Sculley says. “Forget about the business plan and focus on the customer plan. A business plan looks back and tries to improve on what you’re already doing. A customer plan asks whether you can solve any really big customer problems.”

Yet, most big companies are so focused on protecting the day-to-day business that they don’t spot new, customer-driven opportunities,

At an age when many

he adds. Kodak, for example, could have owned digital photography, but it was too focused on defending its legacy business.

Such commentary is almost de rigueur from an up-and-coming tech entrepreneur; it’s less expected from a veteran of big, established or-ganizations. But Sculley has long understood the power customers wield over a company’s fate. More than 40 years ago, he watched a grandmother sip cola samples from two un-marked paper cups. To her surprise, the life-long Coke drinker discovered she preferred the taste of Pepsi. That insight led to the Pepsi Challenge, one of the longest-running and most successful marketing campaigns in his-tory.

The Pepsi Challenge was a pre-Internet ver-sion of the customer conversations that now permeate social media, the same ones that can make (or break) companies. By blunting the force of big marketing budgets, the new democratized media environment levels the playing field and gives small startups a way to compete against established competitors.

The upshot for any executive fending off new players is simple, Sculley says. “Your rea-son to exist has to be around solving big cus-tomer problems.”

Making the Right ConnectionsThe mark of a true leader is the ability to identify connection points, those intersec-tions between disciplines that yield oppor-tunity. With experience in tech, consumer marketing, health care, and cloud and mobile platforms, Sculley looks out for connections across sectors and then backs companies he believes are positioned to make the most of those intersections.

executives are playing golf or writing memoirs,

John Sculley is sounding the alarm.


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“Forget about the business plan and focus on the customer plan.”—John Sculley


SPRING 2016


As the Affordable Care Act takes hold in the United States, for example, Sculley points to massive opportunities in a provision of the law that shifts the criteria for insurance pay-ments from inputs to outcomes. Health care providers were long paid according to the procedures and treatments they administered (inputs). That gave them every incentive to schedule lots of office visits, tests and thera-pies, even if their value to patients was ques-tionable. Now health care providers are paid for results, which means that doctors, hospi-tals and plan administrators are scrambling to find ways to keep patients out of hospitals and doctor’s offices.

The connection point is technology that can create new opportunities for remote diagnosis, treatment and monitoring. So Sculley, acting as vice chair, along with his brother David, are bring-ing their contacts and experience to help MDLIVE. The health care information company is building a platform that empowers patients, medical profes-sionals and plan administrators to collaborate via voice, video, email and mobile devices.

Another example of cross-sector connec-tions is how Ford Motor Co. is trying to bring vehicles, home appliances and new technolo-gies together. The U.S. automaker announced in January that it will increase its efforts in intelligent mobility services by pairing its SYNC in-car technology with Amazon’s smart speaker and virtual assistant products, as well as with Wink, a home-automation system that can centrally control smart appliances, thermostats and lights. By networking all of these devices together, drivers will be able to voice-control their car and their home.

“We are completely rethinking how we approach the business,” Ford CEO Mark Fields said at the 2016 Consumer Electronics

Steve Jobs and John Sculley in January 1984

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BoardroomsJohn Sculley has had a remarkably long and varied career, marked by C-suite stints at two of the world’s most iconic companies.

Most famously, he served as the CEO of Apple Computer Inc. during a tumultuous decade during which founder Steve Jobs was ousted from the com-pany by a contentious board of directors, who later ousted Sculley as well. (Actor Jeff Daniels portrayed him in the 2015 film Steve Jobs.)

Nevertheless, during his 10-year tenure, Scul-ley oversaw a tenfold growth in Apple’s revenue, stabilized the business, launched the iconic Macintosh computer and conceived of the legendary “1984” Super Bowl ad that burnished Apple’s anti-establish-ment image.

His first foray into C-suite was at Pepsi-Cola. After being named the company’s youngest-ever vice president of marketing, his Pepsi Challenge helped vault the company past archrival Coca-Cola, a once-unimaginable achievement. He was then tapped as the company’s youngest-ever president and CEO in 1977.

Although he left the limelight after exiting Apple in 1993, Sculley has arguably created more wealth in the last 20 years than he did at that iconic company. As an investor and board member, he was involved in the launch and growth of billion-dollar babies like the MetroPCS wireless carrier and Zeta Interactive, a global digital marketing firm that employs more than 800 people.

Today he sits on the boards of more than 15 startups, many of which he co-founded. They span a variety of fields ranging from digital health care management to online tire sales in India. His most visible recent venture is Obi Worldphone, a startup that plans to sell low-cost smartphones in more than 40 emerging-market countries by the end of this year. It’s a big gambit. But Sculley can’t resist trying to fill a market gap left unaddressed by the dominant smart-phone players—including a company he used to run.


SPRING 2016


Show. “With one foot in today and one foot in tomorrow.”

Deriving OpportunitiesSculley also keeps an eye on derivative effects, structural shifts that open up new markets. For example, the adoption of smartphones and social networks spurred by Apple and Facebook (among others) means huge open-ings in both markets.

One derivative effect of the rapid main-streaming of social media platforms, for exam-ple, is that “cloud computing has been commod-itized,” Sculley says. Businesses and consumers are comfortable with cloud applications and data, as they use them every day on Facebook. “If cloud works for brand-new businesses, how can it be applied to established businesses?”

New England Funding Technologies LLC (NEFT), where Sculley is a board member and investor, is one attempt to answer this question. The company exploits the derivative effects of cloud computing to turn control of credit pro-files over to the consumer and empower them to enhance their credit scores in real time. Called mPowerCredit, this online resource not only shortens the frustrating month-long (or longer) lead times credit bureaus need to up-date their records, but also reduces loan deni-als, increases borrowing and closes more deals. NEFT isn’t seeking to displace established in-

What It Takes to InnovateIn today’s dynamic and merciless business environment, being smart is table stakes. Consistently great innovators—as opposed to one-hit wonders—tend to share the following qualities, says veteran executive and entrepreneur John Sculley.

Unending curiosity: It keeps you young, motivated and agile, and contributes to the cross-discipline experience that lets entrepreneurs see connection points and derivative effects. “Innovation takes place at the edges as domains move togeth-er,” he says.

An ability to attract talent: Suc-cessful leaders are confident enough to surround themselves with people smarter than they are—and to trust their judgment. Sculley’s longtime business partner David Steinberg is an example. When a change in fed-eral student loan policies threatened to destroy Zeta Interactive’s business in its early days, “David knew how

to pivot. In the space of three years we reinvented the whole company. Experienced leadership makes a difference,” Sculley says.

A customer-first mindset: Sexy technology isn’t enough. Many com-panies have floundered after building technology without a clear vision of how it solves customers’ problems. View every opportunity from the perspective of customer value.

A willingness to pivot: Great innovators know enough to exit markets before they become dead ends, even if it means absorbing short-term losses.

A sense of urgency: Innovative leaders can’t accept the possibility of losing out on new opportunities.

A willingness to fail: Asked about the most notable failure of his career, Sculley immediately answers: New-ton, the personal digital assistant Apple introduced in 1993. Ahead of its time, Newton was derided by media and analysts and ultimately contributed to Sculley’s dismissal from Apple. But the product also gave birth to the ARM chip that today powers billions of mobile devices, and some of its features became mainstream on smartphones 15 years later.

stitutions but rather to streamline operations in a way that creates more opportunities for consumers to obtain credit.

“There’s an opportunity to literally recon-figure the entire ecosystem of credit finance, from back office to banks to credit card com-panies, using a combination of technologies,” Sculley says.

The New Middle ClassAt a macro level, Sculley sees huge derivative effects—and innovation opportunities—re-lated to the new middle class now rising in developing markets. But organizations must recognize that it doesn’t look much like the old middle class in the United States and other developed countries.

“There’s a new group of at least 1 billion people who aspire to the American dream, but their definition of middle class is very dif-ferent from Americans’,” he says. These up-wardly mobile new professionals in cities like Mumbai and Shanghai aim to own houses, cars and other luxury items, but their income expectations are more modest than those of their American predecessors. Entrepreneurs willing to redefine their assumptions about the middle class and figure out ways to reduce the costs of so-called luxury items can find op-portunities others miss and reap the rewards of huge sales volumes, Sculley says.

“Your reason to exist has to be around solving big customer problems.”—John Sculley


SPRING 2016


“There’s a new group of at least 1 billion people

who aspire to the American dream, but their definition

of middle class is very different from Americans’.”

—John Sculley

Endless is one example of a company try-ing to capitalize on this expanding customer base by building an innovative new comput-er designed with the needs (and price point) of the emerging middle class in Asia, Africa and South America in mind. The compa-ny’s $79 small, spherical PC built for the living room turns your television screen into a computer monitor and ships with-out a mouse or keyboard. The Endless Mini comes with apps designed to work offline or with limited connectivity. “People want a stable, simple computer that’s easy to use and won’t get viruses,” Endless CEO Matt Dalio told Newsweek. “And they need to be able to use it without the Internet.”

A challenge the company may face is that many consumers in the new global middle class may gravitate toward smartphones and tablets in lieu of computers. Naturally, Sculley is trying to claim some ground in this shifting landscape. In 2014, Sculley founded Obi Worldphone with the audacious goal of delivering full-featured smart-phones to the developing world at prices two-thirds lower than established competitors. Why smartphones? In countries with a rudimentary or nonexistent consumer infrastructure, smart-phones can be a hugely versatile tool, allowing users to easily buy goods, make payments or ac-cess health care information. The company that owns the smartphone market holds sway over an entire ecosystem.

Obi’s design gap strategy encompasses the power of all the factors Sculley extols to size up new markets: connection points, derivative technologies and macro shifts that give birth to new markets.

The fledgling company may also illustrate the power of entrepreneurs to out-innovate market powerhouses. Rather than investing

heavily in R&D, Obi is building its products on the foundation of reference designs created by other smartphone makers. It’s innovating at the edge by focusing on lowering costs with-out sacrificing design. Betting the new emerg-ing middle class will want to pay a little extra for iPhone-like usability, the startup plans to sell its devices in more than 50 countries by the start of 2017.

Tapping into the advantages of virtual infrastructure and cloud collaboration, Obi thinks it can make big money in a market ver-tically integrated competitors won’t touch. “We take what is a problem for others and turn it to our advantage,” Sculley says. And it doesn’t require the powers of some all-know-ing business guru. “You don’t have to be a ge-nius to do it.” Intelligence matters, but what it really comes down to is an insatiable curiosity, a fear of missing out. IQ


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Strategic HorizonsWhich frontier are you looking to in order to spur growth in your business?

Horizon 1: Core:

Provide more, better and different

products to the same customers.

Horizon 2: Adjacent:

Bring adjacent markets and

customers into the opportunity

portfolio.

Horizon 3: Transformational: Invent markets and create customers

that don’t currently exist.

Visible Opportunities

Visionary New

Markets

© Copyright 2016 INSIGNIAM All rights reserved.


SPRING 2016

IQBOOST

Playing sports is about more than just fun. It fires the competitive spirit and can impart a sense of leadership, discipline and teamwork. We believe that athletics can also help female executives get into the C-suite.

Although women now have, on average, equal professional experience and educational credentials as their male executive counterparts, during the last 15 years they’ve made little progress in reaching the corporate upper echelons. Male executives have long bonded through athletics—and businesswomen can and should as well. Participation in sports can accel-erate a woman’s leadership skills and provide invalu-able networking opportunities to advance her career.

That’s why we founded Fit to Lead, a six-month fit-ness regimen that serves two functions: triathlon prepa-ration and transformational leadership development to pave the way for promotions and job opportunities. (Insigniam encourages its employees to do pro bono work benefiting the community year-round, which has helped us launch and sustain this project.)

Offered through the Greater Philadelphia Chapter of the Healthcare Businesswomen’s Association, Fit to Lead prepares businesswomen mentally, emotion-ally and physically for tough challenges, motivating them to emerge as stronger leaders. In 2013, the first year of the program, 13 women competed in the two-day TriRock Philadelphia Triathlon. In 2015, there were 27 competitors. Five of the participants have recently been promoted or landed new jobs.

Fit to Lead is a breakthrough for the participants be-cause it takes them out of their comfort zone and em-powers them to take actions, such as swimming in open water, that they never thought possible. Often, they must face failure over and over to achieve their goal.

The program offers unique opportunities to network—or as some call it, “sweatwork”—during group workouts and regular leadership development conference calls. There is a natural bond among par-ticipants as they get to know their fellow triathletes and recognize their ability to meet their commit-ments and inspire others.

If female athletes do make it to the C-suite, they’re likely to find other women who’ve competed as athletes. In a 2014 survey of women executives on four continents by EY Women Athletes Business Network and espnW, 52 percent of C-suite women said they played sports at the college level.

We expect that number to grow as more women come to recognize sports as a critical tool for career advancement. Business and fitness go hand in hand because they are both ultimately about one thing: per-formance. IQ

Ashley Tappan is a consultant at Insigniam.Bonnie Wingate is a partner at Insigniam.

FIT TO LEADFitness and leadership can and

should go hand in hand.By Ashley Tappan and Bonnie Wingate


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Inspire a vibrant relationship

Relationships are the core of your business—no matter what products or

services you deliver. Imagination helps you form deeper connections through integrated content strategies, right-time, right-channel

distribution and creative storytelling that inspires action.

Find out what Imagination can do for you at imaginepub.com/IQ.


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