Switch - Chip Heath [38]
6.
If you worry about the potential for inaction on your team, or if you worry that silent resistance may slow or sabotage your change initiative, B&W goals may be the solution. But, to be clear, you won’t always need a goal that’s so unyielding. Crystal Jones’s call to become a third grader was not a B&W goal. Let’s face it, if kids got third-grade-level scores on math and science but not on vocabulary, we’d all let them “graduate.” Laura Esserman’s vision for the Breast Care Center wasn’t B&W, and it didn’t need to be.
What is essential, though, is to marry your long-term goal with short-term critical moves. Esserman’s vision was compelling, but it would have been empty talk without lots of behavior-level execution.
You have to back up your destination postcard with a good behavioral script. That’s a recipe for success. What you don’t need to do is anticipate every turn in the road between today and the destination. It’s not that plotting the whole journey is undesirable; it’s that it’s impossible. To think that you can plot a turn-by-turn map to the end, like a leader’s version of Mapquest, is almost certainly hubris.
When you’re at the beginning, don’t obsess about the middle, because the middle is going to look different once you get there. Just look for a strong beginning and a strong ending and get moving.
7.
The average investor might make stock-picking decisions by listening to Jim Cramer or reading news reports or compulsively watching CNBC. But big institutional investors, such as philanthropic foundations or teachers’ retirement funds, get special attention from Wall Street. Historically, investment banks sponsored research departments as a free service to institutional investors. The exchange was clear: The bank hoped that if it made good recommendations, then the investors would use the bank’s traders to buy and sell stocks, bringing in revenue for the bank.
Because research is, in essence, a lure for big investment dollars, it is taken very seriously on Wall Street. Every year, Institutional Investor magazine asks big investors to assess the research they’ve received. Based on those responses, the magazine ranks the research analysts in each industry and also provides an overall ranking for the research departments on Wall Street. These Institutional Investor rankings are treated like holy writ. They drive (huge) bonuses to individual analysts, and they attract customers to the banks with the best research departments.
In 1986, Shearson Lehman’s research department ranked a humiliating fifteenth. Top executives at Shearson wanted a new leader, so they recruited Jack Rivkin, who had built Paine Webber’s research department into a powerhouse. The execs’ expectations for Rivkin were clear: Get us into the Top 5.
Rivkin’s first impressions of the department were not promising. “When I got to Lehman, the research department was a mess. It got no respect.” One of Shearson’s top analysts, Elaine Garzarelli, said, “The department wasn’t disciplined…. People did whatever they wanted to do. They didn’t have to talk at regular meetings; they didn’t have to submit reports at certain times. Absolutely no mention was ever made of the Institutional Investor All-America team.”
Rivkin made many formal changes to the department: He hired a number two, Fred Fraenkel. He successfully petitioned Shearson for a much larger staff and budget. He fired deadwood on the team. He changed the compensation system for the team.
These changes were vital, but ultimately, Rivkin had to influence the day-to-day behavior of the analysts on his team. As an analogy, consider a general manager (GM) running a baseball team. If you have more money at your disposal, you can sign more talented players. You can trade underperformers. You can offer your team a bonus for making the playoffs. These changes are important, but they don’t directly influence the way players play.