May 2016

Upwork’s CEO on How an Introverted Engineer Learned to Lead

Kasriel grew up around computers and started writing programs when he was 12. In a way, he says, he was like one of today’s typical Silicon Valley kids, but for him it was Paris in the 1980s. He recognized in high school that he prefers to be with small numbers of people or to be alone. Getting by in a crowd doesn’t come naturally—but as a CEO he now has to mingle at huge networking events or conferences. To manage that, he sets goals: Talk to at least 30 people, get 10 business cards, arrange five follow-up meetings.

For 10 years Kasriel has worked to overcome the perception that engineers don’t make great leaders. He sought projects and talked his way into jobs that were outside his comfort zone. He read widely to burnish his skills in strategy, leadership, and managing people. (The article includes a list of titles the author deems most influential.) He spent hundreds of hours taking online courses. He got an MBA at INSEAD not because he wanted to make a career change or expand his network but so that he could avoid the mistakes he’d seen other entrepreneurs make.

Since assuming his role, in April 2015, he’s learned that a lot of the job comes down to helping employees feel excited about their work, empowering them, and giving them the resources they require. When people come to him with difficulties, he must listen first and not see every situation the way an engineer would: as a problem that needs a solution.

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Embracing Agile

Over the past 25 to 30 years, agile innovation methods have greatly increased success rates in software development, improved quality and speed to market, and boosted the motivation and productivity of IT teams. Now those methods are spreading across a broad range of industries and functions and even reaching into the C-suite. But many executives don’t understand how to promote and benefit from agile; often they manage in ways that run counter to its principles and practices, undermining the effectiveness of agile teams in their organizations.

From their work studying and advising companies that have successfully employed agile methods, the authors have discerned six crucial practices for capitalizing on agile’s potential: (1) Learn how agile really works; (2) understand when it is appropriate; (3) start small and let passionate evangelists spread the word; (4) allow teams that have mastered the process to customize their practices; (5) practice agile at the top; and (6) destroy corporate barriers to agile behaviors. They expand on each, providing executives with a practical guide for accelerating innovation and profitable growth.

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Planned Opportunism

“Planned opportunism” is the author’s term for responding to an unpredictable future by paying attention to weak signals—early evidence of emerging trends from which it is possible to deduce important changes in demography, technology, customer tastes and needs, and economic, environmental, regulatory, and political forces. That attention gives rise to fresh perspectives and nonlinear thinking, which help an organization imagine and plan for various plausible futures. Planned opportunism is a discipline that creates a “circulatory system” for new ideas; develops the capacity to prioritize, investigate, and act on those ideas; and builds an adaptive culture that embraces continual change.

Govindarajan illustrates his thesis with several compelling company stories. For example, Tata Consultancy Services decided to divest its fast-growing call-center operations at the height of the boom in that business, because its leaders could see that technologies were moving to the cloud and that global enterprises would eventually demand higher-level, more strategic outsourced services. Call centers would just get in the way of that future. And Hasbro, the toy and game maker, acted on numerous technological and demographic shifts in the 1990s to significantly outpace its leading competitor, Mattel.

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“Both/And” Leadership

Leaders face a multitude of strategic paradoxes—contradictory pressures that are too often viewed as “either/or” choices. There are innovation paradoxes, in which the pursuit of new offerings and processes conflicts with the mandate to sustain the tried and true. There are globalization paradoxes, which involve tensions between local imperatives and boundary-crossing integration. And there are obligation paradoxes, when the goal of maximizing profits for shareholders clashes with the desire to generate benefits for a broader group of stakeholders.

The authors argue that organizational success depends on simultaneously addressing such conflicting demands, not choosing between them. Leaders need to become comfortable with multiple truths and inconsistency. They need to assume that resources are ample rather than scarce. And they need to embrace change instead of seeking stability.

All of this will help organizations reach a state of dynamic equilibrium, wherein paradoxes don’t impede progress—they spur it. And the way to tap the potential of paradox is to both separate and connect opposing forces: Managers must pull apart the organization’s goals and value each of them individually, while also finding linkages and synergies across goals.

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Superforecasting: How to Upgrade Your Company’s Judgment

Organizations and individuals are notoriously poor at judging the likelihood of uncertain events. Predictions are often colored by the forecaster’s understanding of basic statistical arguments, susceptibility to cognitive biases, desire to influence others’ thinking, and concerns about reputation. Indeed, predictions are often intentionally vague to maximize wiggle room should they prove flawed. But getting judgments wrong can of course have serious consequences.

On the basis of research involving 25,000 forecasters and a million predictions, the authors identified a set of practices that can improve companies’ prediction capability: providing training in the basics of statistics and biases; assembling teams of forecasters to debate and refine predictions; and tracking performance and giving rapid feedback.

To improve prediction capability, companies should keep real-time accounts of how their top teams make judgments, including underlying assumptions, data sources, external events, and so on. Keys to success include requiring frequent, precise predictions and measuring prediction accuracy for comparison.

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How to Hedge Your Strategic Bets

Today companies grapple constantly with the unexpected: disruptive advances in technology, the rise of new markets, sudden swings in demand, surprise moves by competitors. To cope, firms try to improve their forecasting and their agility, but those efforts take them only so far. A complementary—and perhaps more effective—approach is to use “strategic options.” These are small bets that allow businesses to test the waters and build their experience. If they fail, they’re easy to unwind, but if they succeed, they position organizations to capitalize on valuable opportunities.

In this article, two BCG consultants detail three kinds of strategic options: Temporary organizations, which are staffed by consultants and contractors, help firms ramp up operations quickly and yet avoid massive layoffs if an initiative fails. Small exploratory acquisitions allow firms to get a foothold in a new business—without the costs and headaches of large-scale deals. Disposable factories are a good solution to uncertain demand; they can be set up (and taken down) quickly, be sited closer to demand, and provide early data on costs and capacity that informs the construction of permanent facilities.

Executives often resist strategic options because they seem expensive in the near term. But when a payoff is far in the future and risk is high, they may be the best way to go.

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Increase Your Return on Failure

Although many companies claim to embrace failure as an integral part of the innovation process, near-zero tolerance for it blocks them from pursuing new ideas. Corporate budgeting, resource allocation, and risk control are all designed to promote predictability and efficiency, and even when people understand that they can and should fail, they do everything possible to avoid missteps. There’s a way to resolve this conundrum, however: Increase your return on unsuccessful projects by rigorously extracting value from them, boosting their benefits while minimizing their downsides.

In this article, two business school professors outline three steps you can take to improve your firm’s return on failure. First, study projects that didn’t pan out and document all the insights they offer about customers, markets, future trends, your organization, your operations, your team, and yourself. Second, magnify the impact of those lessons by spreading them across your company. Senior leaders should gather frequently to discuss their failures, and efforts to share lessons with all employees will build trust and goodwill and encourage future initiatives. Third, step back and do a corporatewide review of your pattern of failure, to ensure your overall approach is yielding all the benefits it should. If failure rates are too high, you may need to tighten up your systems, but low rates may signal a need to encourage more openness to risks.

Mistakes are the inevitable consequence of trying something new. But they can also be a source of tremendous value in the form of learning if your firm has the right mindset.

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“We Need to Intensify Our Sense of Urgency”: An Interview with Meg Whitman

In September 2011 Hewlett-Packard had just dismissed two CEOs in quick succession before inviting Meg Whitman to step into the role. She was taking the reins of a badly damaged company, and although she has presided over more than 80,000 layoffs, she has restored stability in her four and a half years on the job. In November 2015 HP became two new $50-billion-plus companies, with Whitman the CEO of Hewlett Packard Enterprise and the chairman of HP Inc.

In this edited interview she talks about why she agreed to take the job (“I thought that HP was a global icon and that nothing was fundamentally wrong with the bones of the company”), how the disastrous Autonomy acquisition happened (“It was financial misrepresentation”), the company’s core values (“the ability to do incredible innovation; a passion for customer support and service; giving back to the community”), the role of a leader (“You have to communicate that you believe your goal can be achieved. You have to exude confidence. You have to celebrate the victories along the way”), and much more.

Whitman says she is the product of her experiences in a variety of companies—Procter & Gamble, Bain, Disney, Hasbro, FTD, Stride Rite, eBay—and of her unsuccessful campaign for the governorship of California, during which she significantly developed her communication skills. She also played a lot of sports as a girl, “so I knew how to be part of a team.”

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Learn to Love Networking

“I hate networking.” It’s a familiar refrain. But in today’s world, networking is a necessity—and fortunately, an aversion to it can be overcome. Drawing on laboratory experiments and on studies at a large law firm, the authors have identified four strategies that can help people become more excited about and effective at building relationships:

1. Focus on learning. Adopt a “promotion mindset” and concentrate on the positives, and you’re more likely to perceive networking as an opportunity for discovery rather than a chore.
2. Identify common interests. Consider how your goals align with those of people you meet, and networking will feel more authentic.
3. Think broadly about what you can give. Remember that you have something valuable to offer, whether it’s knowledge, gratitude, or recognition.
4. Find a higher purpose. Frame your networking in terms of a larger goal—the collective benefits for your company, say—and the activity will feel more authentic and will lead to connections that bear fruit for everyone.

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