The measure of a man: Performance reviews: not dead yet

17. February 2016

Date: 17-02-2016
Source: The Economist

Employers are modifying, not abolishing them

IN RECENT months the business press has reverberated with cheers for the end of performance reviews. “Performance reviews are getting sacked,” crows the BBC. They “will soon be over for all of us”, rejoices the Financial Times. Such celebration is hardly surprising. Kevin Murphy, a performance-review guru at Colorado State University, sums up the general feeling about them: an “expensive and complex way of making people unhappy”. The problem is, they are not in fact being scrapped.

A survey in 2013 by Mercer, a consulting firm, of 1,000 employers in more than 50 countries reported that 94% of them undertook formal reviews of workers’ performance each year and 95% set individual goals for employees; 89% calculated an overall score for each worker and linked pay to these ratings. It is true that a number of big companies have announced that they are abandoning annual performance reviews; this month IBM did so, joining Accenture, Adobe, Deloitte, GE, Microsoft and Netflix. In reality, though, they are no more getting rid of performance reviews than a person who shifts from drinking whisky to wine is becoming teetotal. Employee reviews are being modified, not abolished, and not necessarily for the better. Read the rest of this entry »

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The fashion for making employees collaborate has gone too far

25. January 2016

Date: 21-01-2016
Source: The Economist: Schumpeter
Subject: The collaboration curse

IN MODERN business, collaboration is next to godliness. Firms shove their staff into open-plan offices to encourage serendipitous encounters. Managers oblige their underlings to add new collaborative tools such as Slack and Chatter to existing ones such as e-mail and telephones. Management thinkers urge workers to be good corporate citizens and help each other out all the time.

The fashion for collaboration makes some sense. The point of organisations is that people can achieve things collectively that they cannot achieve individually. Talking to your colleagues can spark valuable insights. Mixing with people from different departments can be useful. But this hardly justifies forcing people to share large noisy spaces or bombarding them with electronic messages. Oddly, the cult of collaboration has reached its apogee in the very arena where the value of uninterrupted concentration is at its height: knowledge work. Open-plan offices have become near-ubiquitous in knowledge-intensive companies. Facebook has built what is said to be the world’s biggest such open space, of 430,000 square feet (40,000 square metres), for its workers. Read the rest of this entry »


Secrets of the world’s best businesspeople

22. January 2016

Date: 22-01-2016
Source: The Economist
Subject: The Gujarati way: Going global

AS BRITISH imperialists were trudging through African jungles to secure their newly conquered empire, some of the empire’s subjects were also roaming far and wide, under the cover of the Union flag. One was Allidina Visram, from Kutch, in what is now Gujarat state in India. He arrived penniless in Zanzibar (now part of Tanzania) on the east African coast in 1863, aged 12. He opened his first small shop 14 years later, and soon afterwards spotted his great opportunity. He opened a store at every large railway station along the 580 miles of railway track being laid down through Kenya to Uganda in the early 1900s, providing supplies to thousands of railway workers. He then opened more stores at Jinja on Lake Victoria.

Flush with success, Visram was later joined by another Gujarati, Vithaldas Haridas. He arrived in 1893 and was, if anything, even more adventurous than his mentor; he stomped 24 miles through the jungle to the small town of Iganga, where he started his own shop. More followed. These were the beginnings of some of the larger fortunes to be made in colonial Africa. Read the rest of this entry »


Disrupting Mr Disrupter

28. November 2015

Date: 26-11-2015
Source: The Economist: Schumpeter

Christensen CCClay Christensen should not be given the last word on disruptive innovation

TWENTY years ago a then obscure academic at Harvard Business School published a career-making article in the Harvard Business Review (HBR), warning established companies that they were in grave danger from being disrupted. Today Clay Christensen is an established company in his own right. He is regularly named as the world’s most influential management guru (his Harvard colleagues affectionately call him Mr Disrupter). He has applied his theory to an ever-wider range of subjects with books such as “Disrupting Class” (on education) and “The Innovator’s Prescription” (on health). He even has his own consulting operation to help him stretch his brand. Businesspeople everywhere treat him as a guide on how to cope with change. But the risk is that by paying too much attention to his theory, they will miss other disruptive threats. Read the rest of this entry »


Big businesses fail to make the most of employees with foreign experience

6. November 2015

Date: 05-11-2015
Source: The Economist: Schumpeter
Subject: Not-so-happy returns

COMPANIES devote a lot of thought to sending people abroad. They offer foreign postings to their most promising employees. They sweeten the deal with higher salaries and big allowances, and sometimes help to find work for spouses. But when it comes to bringing the employees home, it is a different story. One study suggests that a quarter of firms provide no help for repatriates at all. Many others offer at best a few links to websites.

Big companies are more globalised than ever. So you might think that they would treat staff with foreign experience as particularly important for maintaining their competitive advantage. Yet in practice they neglect such employees, blithely assuming they will soon be back in the swing of head-office life. The cost of this neglect is high. Sebastian Reiche of IESE business school in Spain estimates that anything between 10% and 60% of “repats” quit the company within a couple of years of returning home. Their attrition rate is notably higher than for those not sent abroad. Read the rest of this entry »


Reinventing the company

23. October 2015

Date: 22-10-2015
Source: The Economist

Entrepreneurs are redesigning the basic building block of capitalism

NOW that Uber is muscling in on their trade, London’s cabbies have become even surlier than usual. Meanwhile, the world’s hoteliers are grappling with Airbnb, and hardware-makers with cloud computing. Across industries, disrupters are reinventing how the business works. Less obvious, and just as important, they are also reinventing what it is to be a company.

To many managers, corporate life continues to involve dealing with largely anonymous owners, most of them represented by fund managers who buy and sell shares listed on a stock exchange. In insurgent companies, by contrast, the coupling between ownership and responsibility is tight. Founders, staff and backers exert control directly. It is still early days but, if this innovation spreads, it could transform the way companies work.  Read the rest of this entry »


Once regarded as safe havens, the professions are now in the eye of the storm

17. October 2015

Date: 17-10-2015
Source: The Economist: Schumpeter
Subject: Professor Dr Robot QC

IN 1933, as the Depression ground on, two British sociologists, Alexander Carr-Saunders and Paul Wilson, wrote a book celebrating the professions. They describe them as “stable elements” in a turbulent world, which “inherit, preserve and hand on a tradition.” They act as “centres of resistance to crude forces which threaten steady and peaceful evolution”.

Professions resist these “crude forces” through high barriers to entry. They routinely limit their recruitment to people with degrees. Some, such as medicine or law, require professional licences and sometimes membership in professional bodies. Others demand long periods of apprenticeship: although anybody can call themselves a management consultant, elite firms such as McKinsey and the Boston Consulting Group provide their recruits with extensive training and only promote a minority to partnerships. The oldest professions also emphasise the importance of tradition: professors dress up in medieval gowns on ceremonial occasions and British barristers wear wigs. Read the rest of this entry »