Professor Murmann's Teaching Blog

New Management Focus: Invest in Relationships!

2010-08-21T09:23:23+00:00

Designing an organization requires making a million decisions both large (e.g. picking a strategy) and small (e.g. picking out paper for the PC printer). It is easy to get lost in the trivial instead of focusing on getting the critical elements right. In my courses, I try to present ideas and frameworks that help identify what is important. At the recent Academy of Management Conference in Montreal I came across a phrase that was new to me. In my view, it crystallizes what managers need to do to design an organization that is able to respond to all the unexpected events that invariably occur in the life of an organization: Invest in relationships!

You Don’t Have to Pay Employees More Than the Competition to Keep Them Happy

2010-08-16T02:24:41+00:00

Returning to Chicago for the first time in three years, I went to two of my favorite restaurants. In one, Lulu’s, most of waitresses and busboys I had seen three years ago were still there. In the other, I recognized no one except for the owner. So I asked the owner of Lulu’s if he was paying his people more. He said: “No.” I asked him a second time. He still said: “No.” Confirming the lesson that many management professors emphasize in the context of the Southwest airline example, you don’t have to pay people more than the competition to keep them happy. Lulu’s is a fun place and the interior design is attractive, providing employees non-monetary rewards. Evidently the owner is also not getting on the nerves of his staff. Jokingly he says in front of one of his female employees: “I cannot even get rid of the people I would like to see go.” The lady—who must have been working there for at least 8 years—interjects: “I knew you were going to say this.” The general lesson (except perhaps for Wall Street before the crash) is: You don’t need to pay people more than the competition. But the total rewards of working for you have to be more than the total rewards of working for someone else. Otherwise people will leave.

The Wrong Stuff Blog

2010-07-02T15:44:13+00:00

We seem to have a built-in tendency to want to learn from successful people and pay little attention to failures. We also have a hard time admitting mistakes. In fact, what dintinguihses mature and, dare I say, clever, indivdiuals is precisely that they can admit mistakes and learn from them. Kathryn Schulz, who is about to publish a book on the subject, has published on Slate a number of great interviews and reflections on being wrong. The one with Alan Dershowitz is particularly interesting. If you want to start with the most recent entry, start here: The Wrong Stuff

CEO Q&A: Greg Bourke

2010-05-03T02:23:53+00:00

What is your number-one tip for managing people? Be empathetic: When you understand the issues that constrain staff from doing their job you will usually identify bigger issues in the organization. Is there a lesson you have never forogotten? Progress is not perfection. From BRW, April 29-June 2, 2010, p. 12.

CEO Q&A: Lincoln Crawely

2010-04-16T12:22:01+00:00

What has been your greatest regret in Business? That I didn’t really get to know and accept my strengths and weaknesses earlier. From BRW, April 15-21, 2010, p. 10.

Warren Buffet’s Symbolic Leadership

2010-03-19T20:10:59+00:00

Watch this great advertisement staffed by employees of Geico. Warren Buffet, whose companey fully owns Geico, participates in the ad to demonstrate that he is one the many co-workers. It is funny to see the 80-year-old billionaire impersonate Axl Rose.

The New AGSM MBA (Executive) Strategic Management Year

2010-02-27T20:34:29+00:00

As the director of the Strategic Management Year, I led of team of faculty to redesign the year-long program. We added many new features (live case studies, book reviews, learning diaries, self-refelection papers, peer coaching, peer evaluations, rewriting of strategy paper) and organized the year around the fundamental problems that a general manager and entrepreneur faces:

1. How do I detect and select business opportunities?
2. How do I develop business opportunities?
3. How do I grow a business?
4. How do I transform a business?

In this short video, I describe the changes that we have made. Click on “More” to see a more detailed picture overview of all program.

Apple did not forsee the success of the application store

2009-12-06T23:35:56+00:00

It is hard to forsee the future as the recent episode with Apple’s application store demonstrates. The NY Times reports: The App Store’s success — as much a surprise to Apple as it has been to competitors — has given rise to a new digital ecosystem. Today, hundreds of software aspirants, from individuals tinkering in their bedrooms late at night to established companies looking for lucrative new revenue streams, are jumping into the App Store fray. When making a decision, managers often make the mistakes of only considering the potential upsides, but not the cost of downsides. Positive surprises don’t kill firms. It is the negative surprises that bring you down.

Benefits of the Knwoledge Economy

2009-11-29T17:57:03+00:00

Figure 1 from the ETH Strategy Report: Knowledge is the main engine of economic growth. A strong correlation can be observed between the Knowledge Economy Index (KEI) and GDP per capita. The KEI is calculated by the World Bank and is based on the four pillars of the Knowledge Economy framework: 1. An economic and institutional regime to provide incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship; 2. An educated and skilled population to create, share, and use knowledge well. Click on More to see a powerful picture.

The Economist on Annoying Bussiness Guru and the Problems with MBA Curricula

2009-10-25T02:00:53+00:00

The Economist has a wonderful new column called Schumpeter. The October 22 issue revists the shortcomings of management gurus that I highlight in my classes. The Sepember 24 column encourages business schools to teach people to be more sceptical. The three habits…of highly irritating management gurus Business schools have done too little to reform themselves in the light of the credit crunch

Phil Tetlock Critically Reviews Three Books on Forecasting the Future

2009-08-30T08:14:58+00:00

Telock does us the service of giving a close reading of three books that what to overcome the obstacle that Yogi Berra identified in his qib: “Prediction is very hard, especially about the future.” The Fat Tail: The Power of Political Knowledge for Strategic Investing by Ian Bremmer and Preston Keat. The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future by Bruce Bueno de Mesquita The Next 100 Years: A Forecast for the 21st Century by George Friedman Read Telock’s excellent review at National Interest.

Debate: Do Women Make Better Managers

2009-08-03T08:44:23+00:00

The jury is still out. But read this interesting exchange on NYTimes.com. Rember that just because on average women may be different than men, this does not mean that it is true for the person in front of you. Susan Pinker: Whether we’re talking about mentoring, managing or office politics, the research is clear: “Men and women together are the best.” Sharon Meers: Women often take an alternative approach to leading teams — encouraging more open discussion, cultivating talent and sharing credit. Feedback is the place where women bosses may add the most value.

Three Books on the Origins of the Financial Crisis and its Lessons

2009-06-06T22:36:51+00:00

John Lanchester reviews three books on the origins of the financial crisis and its lessons in the New Yorker. Two of them are useful for the general reader. Gillian Tett, “Fool’s Gold” (Free Press) Richard A. Posner, “A Failure of Capitalism” (Harvard) I personally personally found Fools Gold the most rewarding of all the books and a higly recommend it to anyone who works in the finance industy or simply wants to understand what caused the recent financial crisis. Read full review here.

CEO Q&A: Bernie Brooks

2009-04-02T08:44:18+00:00

Chief executive, Meyer (Australia) What is your number-one tip for managing people? You never get in trouble for over-communicating with them. What is your number-one tip for managing a business? Give the team more responsibility than they expect and measure everything in the business that can be measured. A lesson you have never forgotten? How the mighty have fallen. Some six of the top 10 retailers in 1987 don’t exist today and that is a sign that you can never be complacent in retailing. Excerpted from BRW, Vol. 31, No. 12, FYI.

GE’ s Jeff Immelt refuses bonus for 2008

2009-02-18T20:43:19+00:00

Very few executives have taken the step to cut their own bonuses when stockholder make big losses. Reading the national mood and the outcry over Wall Street bonus payments when the bank are bailed out by taxpayers, Jeffrey Immelt demonstrated leadership by refusing a bonus for 2008.

General Electric Co. Chairman and CEO Jeffrey Immelt passed up a $12 million bonus in 2008, a year that saw company’s stock price slide 56% amid a global economic crisis and declining profits at GE. “Earnings came in below where we expected,” Mr. Immelt wrote in a note Wednesday, citing declining equity markets and a sliding GE stock price in 2008. “In these circumstances, I recommend to GE’s Board of Directors that I would not receive a bonus in 2008.” He also said he declined a special three-year cash payout that goes to senior executives and which the board’s compensation committee said he earned.