Scaling up excellence requires idiosyncratic talent: Hayagreeva Rao, Professor

Scaling up excellence requires idiosyncratic talent: Hayagreeva Rao, Professor

Priyanka Sangani, ET Bureau Feb 14, 2014, 04.49AM IST

In 2006, Professor Hayagreeva (Huggy) Rao and Robert Sutton were teaching a short course on ‘Customer Focussed Innovation’ at Stanford University. Rao, the Atholl McBean Professor of Organizational Behaviour and Human Resources, Stanford University says that one recurring question was on how to scale up the pockets of excellence in an organization.

“We realised that our answers to those questions were rather lame, so we set out to research this,” says Rao. This forms the basis for his upcoming book, Scaling Up Excellence: Getting to More without Settling for Less, co-authored with Bob Sutton, Professor of Management at Stanford Engineering School.

The duo realised that whether it was a start-up or a five member business unit within a larger organization, the issues remained the same. There are always groups within an organization who are performing brilliantly, and the challenge for the leader lies in transferring and replicating this in the rest of the organization. This is a challenge for leaders at all levels.

“The details and daily dramas vary wildly from place to place but the similarities among scaling challenges are more important than the differences. The key choices that leaders face and the principles that help organizations scale up without screwing up are strikingly consistent,” says Rao, adding that scaling up excellence requires idiosyncratic talent and not everyone has it. He defines excellence as people doing the right thing when no one is looking over their shoulder. As a leader, that’s what you need if you want to have a nimbler, faster organisation which can replicate and innovate and do things better.

image001-3Taking successful behaviours and practices from one part of the organization and spreading it across a larger number of people is never going to be easy. It’s important to remember that scaling up doesn’t mean replicating things down to the last detail.

Scaling up excellence isn’t about introducing new behaviours. It’s easier and more effective to stop bad habits rather than introduce new ones, and this is where cognitive load matters.

As organizations grow, they become more complex and scaling up places additional demands on people. They’ll focus on the wrong tasks or shift focus too often and that results in poor performance. “Load degrades accountability, and wherever possible, we must work to reduce our cognitive load,” says Rao. “Scaling up excellence is not addition but smart subtraction.”

Leaders who are adept at scaling excellence talk and act like they are knee-deep in a manageable mess but at the same time realise that there will be patches of unpredictability and unpleasantness. The biggest mistake most leaders make is to sacrifice mindset for scale.

At the peak of its expansion, the inside of a Starbucks smelled like egg sandwiches and not coffee. That’s when CEO Howard Schultz realised that they had over scaled. “The most important thing to do is define what is sacred and what’s taboo – the one thing you would never do,” says Rao.

Another common mistake leaders make is travelling across the country making the same presentation in all locations without really taking the employees point of view into consideration. “A successful scale-up is not an ‘air war’ but a ‘ground war’. You can’t make power point presentations and expect the changes to stick.

You need to look into the issues that the workers down the line face and work at fixing those,” says Rao. There are many mental butlers in our head, he says, and it’s important to get them to work for you so that people do things without having to. For instance in one experiment it was found that simply by spraying a citrus fragrance in a room stopped people from littering.

“Most people who scale up excellence think people can only read and listen and forget that we have five senses,” says Rao. The other thing to keep in mind is the trade-off between poetry and prose, or between having an inspiring lofty vision for the organization as against getting involved in the day to day running of it. Leaders tend to over emphasise one and forget the other and while scaling up, it’s critical to find this balance. While both can never be fully aligned, finding a balance between the two is critical.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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