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    Twelve months on: living the dream

    Governance Management Performance Phd Readings Societal Wellbeing Strategy
    Today is an auspicious day (well for me anyway). Musings was created twelve months ago today. At that time, I wanted (needed?) an outlet through which new ideas, thoughts and reflections could be expressed as I began to grapple with the demands of a PhD. 

    When I set out, the goal was entirely personal: Musings was a vehicle to share my thoughts and ideas about governance, strategy and societal wellbeing. I had no idea whether Musings would make it beyond a few months (or a few entries for that matter!), or whether anyone would read the entries. I wasn't really bothered either. To my surprise, my motivation to share ideas remains intact, somewhere between 50 and 200 visitors view the site each day (that number is slowly growing over time), and quite a few people have either posted comments or contacted me directly.

    Looking ahead, I plan to continue writing, because the process helps me refine my (doctoral) thoughts. The focus will probably narrow slightly (to strategy, decision-making and governance), as these topics start to dominate my thinking time (I've discovered doctoral research does that to you). One twist though: I'm going to move from writing for my sake, to trying to provide "value" to readers. To do this, I'd appreciate some feedback. Are there some topics or themes that you'd like to read about in the coming months? If so, please post a comment! In the meantime, postings will continue at the pace of 2-3 postings each fortnight.
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    Perhaps Board composition does matter after all?

    Governance Performance Research
    An interesting article appeared in the Financial Times about a week ago. I've been pondering it for a few days now, because it challenged my perception that Board composition has relatively little bearing on company performance outcomes.

    The article reported the results of a comprehensive survey into US company performance in the decade 2000–2009. The results revealed that the prevalence of lawyers on Boards increased from 24% (2000) to 43% (2009)—and that the levels of litigation, malpractice and corporate risk-taking declined markedly—through the decade. The results are not that surprising, given the introduction of Sarbanes-Oxley and other compliance measures in the survey period.

    On the surface, this study suggests that the presence of lawyers on Boards does make a difference in some areas (and therefore composition may matter). But what about the big question: Does the presence of lawyers lead to increased company performance? The study enhances the case for lawyers on Boards for their contribution to the risk conversation. However, this should not be misunderstood as providing evidence to link the presence of lawyers with increased company performance. Increased performance is dependent on innovation, the taking of risks and the making strategic decisions—all of which are somewhat of an anathema to many members of the legal community.

    So, does Board composition matter when it comes to company performance? On the evidence provided by  this study, we still can't tell—but I doubt it.
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    Can the domino effect be avoided?

    Management Performance Societal Wellbeing Strategy
    Every time a major company fails, smaller suppliers and associated companies are at risk of the domino effect—of becoming a statistic themselves. It's through not fault of their own, save choosing to do business in good faith with the failed company. This was highlighted in fairly stark terms in the last week, when companies either sub-contracted to, or associated with, New Zealand's third largest construction company, Mainzeal, started suffering.

    The domino effect has major implications on economic performance and the wellbeing of communities. When major companies succeed and grow strongly, many smaller and associated companies also gain considerable benefit. Sadly, the domino effect also applies when major companies struggle or, worse still, fail.

    While suppliers are generally very happy to benefit from upswings, downsides are something to be avoided. But can the downside of the domino effect be avoided? Thankfully, suppliers do have options. Here's two for starters:
    • Diversify their customer base, so that they are not reliant any one customer for a major portion of their business. 
    • Negotiate more favourable commercial terms, which may well include fortnightly invoicing and payment cycles (although this can be very difficult to achieve).

    What other "defence" mechanisms can put in place to avoid the domino effect?
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    ICMLG Conference: Post-conference summary

    Conferences Governance Management Performance Research Societal Wellbeing Strategy
    I've just arrived home after a demanding but highly enjoyable trip to attend the ICMLG Conference in Bangkok. On the long flight back to New Zealand I found myself reflecting on the conference overall. Here's a selection of what I wrote down in my notebook:
    • While diverse in topic, research methodology and scope, the general calibre of papers and presentations was impressive. ACI did a great job pulling together and running the conference.
    • Input-output research designs and quantitive data sets continue to dominate the research landscape, despite qualitative data and empirical data being more well suited to understanding and explaining social dynamic phenomena (like governance).
    • The case study approach appears to be gaining ground as a credible methodology for governance and leadership research.
    • Those researchers who are using qualitative methods are attempting to move from purely descriptive (exploratory) studies towards explanatory studies. (One of my objectives in attending ICMLG was to gain a better understanding of contemporary research methodologies.)
    • Relatively few researchers are investigating the link between governance and company performance.
    • I met some wonderful people! The conference was a melting pot of cultures. People from many different nations, religions and cultures were in attendance—a true "global village".
    Overall, I learnt a lot and the investment was well worthwhile. ICMLG 2014 will be at Babson College in Boston, Mass. On the strength of this year's conference, expect to see me in Boston in 2014!
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    ICMLG Conference: Reflection #6

    Conferences Management Performance Research Strategy
    Gender diversity: a new competitive advantage?

    Manasi Shukla (Bangkok University) and Aurilla Aurelie Arntzen (Buskerud University, Norway) presented a conceptual paper which explored gender diversity in management and systems design as an important element for competitive advantage.

    They outlined the challenges many women face, whereby many systems and products are designed by men, without any significant consideration for female cognitive or physical elements. They suggested that a woman's response to "design shortfalls" is to dismiss or avoid using a particular product.

    Shukla and Arntzen tentatively proposed a leadership practices inventory, to assist organisations design for, and accommodate, the needs of women. They asserted that organisations that take such steps have the opportunity to secure a competitive advantage in the marketplace. This is an interesting assertion—one that merits further research via the analysis of empirical data to determine if/how the practices they suggest are indeed significant. I look forward to reading more about this in the future.
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    ICMLG Conference: Reflection #5

    Conferences Performance Research
    Are solutions the solution to adding customer value?

    Philip Dover (Babson College, Mass) started his talk by sharing data that clearly shows that businesses perceive that "solutions" are crucial to business success. But what is a solution? There are as many definitions as claimants. Dover offered a definition developed by ITSMA, and then described a solutions hierarchy which ranges from general capability through to customer-specific solutions (which is where considerable added value occurs). He went on to acknowledge that it is very difficult for a company to make the transformation from a product-oriented company to a solutions-oriented company.

    Dover and ITMSA have identified several key elements that must be addressed when companies wish to become solutions-oriented:
    • The organisation must redesigned, to allocate P&L responsibility at the business unit level, appoint a "solutions Tsar", and align effort with business partners
    • Marketing must be redefined—to events and sales literature, to a deep understanding of customer needs and the creation of value propositions
    • Move from a [standalone] product development cycle to an integrated portfolio approach (founded on an intentional solutions development process)
    • Change the measurement metrics from revenue and profit, to lifetime value of the customer
    • Change the sole of the salesperson from a single operative, to that of a coordinator ("acts like a quarterback").

    Given the commercial upside of embracing a solutions-oriented approach, should all businesses strive to adopt such an orientation? Dover's is "no". He suggested three elements must be present as pre-requisites before attempting to adopt a solutions orientation—being a large (high $$) customer and a complex requirement and relatively new technology.