1 4MEMORANDUMTO CEO Smith” [email protected]From.docx

1
4
MEMORANDUM
TO: “CEO Smith” [email protected]
From:
Date:
Subject: Performance Appraisal Issues
Cc:
After reviewing Susan’s notes and researching the status on the
various projects you have requested updates on, I have put
together a proposal for three separate performance appraisal
systems that apply to Megan Pearce as well as the organization
as a whole. After careful consideration of Susan’s notes, it is
clear that Megan is not completing projects as assigned. She is
delinquent in the completion of employee training as well as the
implementation of employee development programs. She has
also shown a lack of motivation in recent history and has been
known to use company time to conduct personal business.
Management by Objectives:
Management by Objectives (MBO) is an approach that allows
employees and managers to set attainable goals together for an
agreed upon review period (Ivorschi, 2012). This approach
focuses on the bulk of involvement by both managers and
subordinates to ensure everyone is in line with Blossoms Up!
objectives. A large part of this approach involves setting clear
goals outcomes with specific deadlines and relying on these
measures to assess at what level these goals have been met
(Gomez-Mejia, Balkin, & Cardy, 2016). In Megan’s case, we
would meet to set smaller goals for the projects she is

delinquent on to ensure she can complete these projects. Due to
Megan’s delinquency in her performance, it would not be
advisable to offer direct rewards or incentives for her progress
at this time. Instead, it would be important to indicate to Megan
that her completion of these goals will ensure she is not placed
on further disciplinary action.
Self-review:
Self-review is an approach that allows employees to have input
on the appraisal process. Self-review is an important assessment
as it allows the performer to take an active role in the
evaluation process, which can engage the employee in his or her
performance management. This approach would be a good way
for Megan to appraise herself and look at how she is performing
and ideally become re-engaged and have a renewed sense of
motivation (Kromrei, 2015). It is my opinion that while Megan
could benefit from self-appraisal, this should not be the only
performance appraisal method used. This method can have a
large bias, as performers tend to be overconfident in personal
abilities, resulting in an inaccurate self-assessment.
360-degree Feedback:
360-degree feedback refers to the appraisal of an employee by
means of self-review, peer review, and subordinate review. This
appraisal system can ensure an accurate measure of performance
by offering perspectives from multiple individuals in the
organization, rather than relying solely on the appraisal of the
employee or a supervisor. One concern with this system is that
Megan is pregnant which can result in rater bias either
consciously or unconsciously (Gomez-Mejia, Balkin, & Cardy,
2016). In this case, it is possible that those individuals asked to
rate her performance may be more lenient in their appraisals
due to her pregnancy which could skew the rating in her favor,
making this system ineffective. Another important factor to
consider is the possibility that each rater will rate differently
based on his or her interaction with the employee. While this

would be an effective tool at gathering a full view of the
employee’s performance, these ratings should not be used to
determine pay raises or promotions (DeNisi, 2007).
Recommendation
My recommendation is to continue to monitor Megan’s
performance and implement the objectives-based appraisal
system, MBO. Megan has shown a real lack of motivation and
work ethic in recent months and has let personal circumstances
affect her performance. By addressing her delinquency on
particular projects with specific and achievable goals, Megan
could be successful in turning around her performance and her
department as needed. While she has had performance issues, it
is important to keep in mind that Megan’s increased fatigue and
frequent breaks are not opportunities that Blossoms Up! is
looking to address as performance issues. Under the Pregnancy
Discrimination Act of 1978, Blossoms Up! is required to
provide reasonable accommodations to pregnant employees in a
similar manner provided to any other employee with a medical
condition (U.S. equal employment opportunity commission,
2017).
References
DeNisi, A. S. (2007). 360-Degree Feedback. In S. G. Rogelberg
(Ed.), Encyclopedia of Industrial and Organizational
Psychology (Vol. 2, pp. 809-812). Thousand Oaks, CA: SAGE
Reference. Retrieved from
http://go.galegroup.com.contentproxy.phoenix.edu/ps/i.do?p=G
VRL&sw=w&u=uphoenix_uopx&v=2.1&it=r&id=GALE%7CCX
3470600327&asid=a75310b8d01e921de83dcc4e84138b3b
Gomez-Mejia, L.R., Balkin, D., & Cardy, R. (2016). Managing
human resources (8th ed.). Prentice Hall: Upper Saddle River,
NJ.
Ivorschi, R. (2012, 4). Basis for promoting performance and
efficiency growht of public entities, management by objectives.
Revista Română de Statistică, 60(4), 39-48.

Kromrei, H. (2015). Enhancing the Annual Performance
Appraisal Process: Reducing Biases and Engaging Employees
Through Self-Assessment. Performance Improvement Quarterly,
28(2), 53-64. doi:10.1002/piq.21192
U.S. equal employment opportunity
commission. (2017). Retrieved from
https://www.eeoc.gov/laws/statutes/pregnancy.cfm
38 Industrial Engineer
Innovation is a collaborative process through
which organizations abandon old paradigms and make sig-
nificant advances. Innovative ideas come from several sources,
including unreasonable demands, goals, and time pressures.
An organization must cultivate innovation and link it to their
business improvement strategies to realize benefits from
innovation.
There are many blocks to innovation. Innovative ideas must
be tested and implemented; otherwise, the innovators will not
generate more ideas. Innovative ideas require work to imple-
ment. The perfect solution is often there as a vision, a thought,
a dream, or just a wish. But it is often far too complex for one
person to take it into reality.
Many individuals possess great ideas but do nothing with
them. Their organizations do not even know of their concepts.
Unfortunately these ideas die because the creator kills them.
Why? Perhaps the innovator recognizes that the idea may
negatively impact her job or the job of co-workers, or maybe
INNOVatION

by michael stanleigh
Guide to
Business strategies must evolve
June 2008 39
the innovator does not know how to explore the idea to take
it from a vision to a reality. Furthermore, the innovator may
be too quick to discard the idea because he thinks that no one
would ever agree on how to structure the concept or pay for it.
Just how many innovative ideas in your organization regu-
larly go nowhere? To protect innovative ideas, organizations
need to create a forum for the innovation process and link
innovative ideas to overall business improvement strategies.
However, before they begin to think about using an innova-
tion process, they must check their cultures in order to iden-
tify innovative readiness.
analysis of innovation
As an industrial engineer, how involved are you in identifying
the culture for innovation in your organizations? In the analy-
sis of various processes within your organizations, have you
identified an innovation process?
Industrial engineers provide decision support to their orga-
nizations by focusing on efficiency and process improvement
through objective and detailed analytics. Industrial engineer-
ing fundamentals should be included as part of their orga-
nization’s overall strategy execution. Start by understanding
what innovation is and then identifying, based on this un-
derstanding, the extent to which they are engaged in creating

innovations.
Innovation is not the result of a lone genius inventor — just
about ideas or about individuality in thinking. Innovation
is a collaborative process in which people in many fields con-
tribute to implementing new ideas because teams are very
important to the process. Products and processes, both pres-
ent and future, involve people who will challenge the status
quo. The person who moans and groans and complains the
most may be the source of the next great innovation.
Change begins with an idea, an outlandish or unreasonable
demand, or a goal that a continuous improvement process will
not reach. Either situation will often spark innovation. How
do you get these ideas? Being under the gun with a deadline
adds a sense of consequence to the task and a purpose to
spur it. Studies show that positive thinkers rise to a challenge.
The more they are likely to face defeat, the more they want to
beat it. Abandoning the status quo of rules, policies, and set
procedures will free you to create. This is critical to successful
innovation.
Before you implement a creative culture, truly understand
what creativity entails:
• Creative thinking often springs from frustration. Like
Einstein, we have to give the creative process time to work
by giving employees some free time to think.
• Creative thinking is original thinking. To be original in your
thinking takes time and you won’t always do original think-
ing sitting at your computer keyboard. Creative solutions
to our workplace problems come to us at odd moments
and as unexpected breakthroughs. A breakthrough may
come when you are walking, driving in traffic, waking up, or

about to fall asleep.
• Encourage your employees’ creativity. Edward De Bono,
a world authority on developing creative thinking skills,
believes that anyone can learn to be creative. When you pay
attention to your creative flashes, you find fresh new ways
of thinking about workplace problems.
• It’s possible to kill good ideas by too much evaluation.
Instead of finding everything that is bad about an employee
idea, list what is good. Let your evaluation come later.
You are engaged in just-in-time manufacturing, total quality
improvement, computer-integrated manufacturing, imple-
menting statistical methods, ergonomics analysis, computer
system design, and various simulations. When you think
about it, you’re already by definition engaged in generating
ideas on many different fronts.
The great challenge for the industrial engineer, as it is for
anyone at any level within organizations, is moving these
ideas and innovations into reality. Roadblocks arise because
the culture does not support your efforts in generating
innovation, but these innovations will help the organization
or department overcome current challenges. There is no clear
innovation process that takes our ideas and moves them from
innovation into execution.
a supportive culture
Organizations with a culture that supports innovation are
often customer-focused, value-driven, and strategic. They
ensure that their operating strategies are developed through
interactions with their employees, customers, partners, ven-
dors, suppliers, and consultants. They review market trends
and identify, through benchmarking, what is required to
outperform their competition.

Innovation creates change. Budding concepts create new
knowledge, methods, implementations, and paradigms and
help to develop new products serving customers in new
markets, competing more effectively and gaining greater
revenues. Innovation helps all levels of staff to cope through
increased knowledge including technical, economic, competi-
tive, environmental, political, and social.
Organizations that focus on short-term thinking centered
40 Industrial Engineer
guide to innovation
on the bottom line create pressures on management and staff
that diminish the focus on the long-term innovation process.
Rather, it increases the focus on sustaining existing products
and services. This constant examination of quarterly results
vs. long-term planning creates a culture that is not supportive
of innovation. Organizations that are characterized as innova-
tive focus on their needs and their customers’ needs and op-
portunities. They focus on achieving and maintaining profit-
able operations. These organizations are constantly looking
for ways to reinvent themselves and constantly introduce new
varieties and generations of products and services.
Organizations that have a culture of innovation will mea-
sure management’s performance based on their ability to
create new value-added products, services, and ideas. The
extent to which they do this with staff, rather than indepen-
dent of their staff, demonstrates a clearer understanding of
the use of an innovation process vs. management directive.
This can be demonstrated in their regular department meet-

ings. To what extent are these focused on exploring new ideas?
How many of their staff are genuinely interested in (and will-
ing to pursue) new ideas? Are they trained to understand the
innovation process? Is there an aggressive effort in the organi-
zation to build new opportunities based on the development
of new services and products?
Innovative cultures permit all levels of staff to try new
things. A barrier to realizing this can be found in cultures that
insist on a requirement for compliance in every dimension.
Individuals who do experiment are often punished, especially
if they fail.
Where there is an absence of celebrating creativity and ideas,
innovations rarely thrive. In contrast, organizations where the
most talked about stories revolve around creativity inspire
others to follow suit and build a culture of innovation.
According to Seth Waugh, CEO of Deutsche Bank Ameri-
cas, culture is a critical factor in promoting innovation. Busi-
ness leaders stimulate innovation by offering incentives to
workers, creating an environment, and setting expectations.
Waugh noted: “You must have people with that hunger to
always learn, who are always open and who think about
things in a different way. You always have to reinvent yourself
tomorrow.”
Peter Linneman, finance professor at the Wharton School
of the University of Pennsylvania and founding chairman
of Wharton’s real estate department, had a more real-world
perspective. He said there is no magic “Aha!” moment in most
innovation. According to Linneman, “It’s just all hard work —
showing up every day in the morning, studying plans, walk-
ing around seeing what other people are doing. If you wait for
innovation myths

vs. reality
Myth: Innovation means developing new products
and services.
Reality: Innovation matters in every part of your
organization. It is about creating new opportuni-
ties, new businesses, new processes, new mar-
kets, new environments, new methods of work-
ing, and new methods of operating.
Myth: Innovation is too critical and proprietary
to involve outsiders such as customers, suppliers,
vendors, and consultants.
Reality: External collaboration with every
stakeholder is indispensable. This is how we
learn, understand, and create new opportunities
through their feedback and consultations.
Myth: Responsibility for innovation should be
delegated to staff that is responsible for doing
the day-to-day work.
Reality: Innovation must be led and managed
from the top. All levels of employees must be
engaged in innovation. It is neither a manage-
ment nor staff responsibility. It is everyone’s
job. Great ideas are often lost because of one’s
position.
Myth: Thomas Edison’s great inventions were
entirely his own.
Reality: Yes, he possessed the 1 percent of inspi-
ration. But the 99 percent of perspiration was
from his Menlo Park Laboratory team. Through
them, he applied the innovation process, which
helped his brilliant ideas materialize.

June 2008 41
eureka, you are never going to have innovation.”
Intuit, a software company, ensures that the new hires
understand the company’s Holy Grail: Happy customers.
Customer focus, wherein Intuit makes a difference in the cus-
tomer’s lives, is the everyday mantra practiced by everyone at
Intuit. It is demonstrated in their practices such as interview-
ing and hiring the right employees who believe in customers
first, postage-paid customer suggestion cards included with
every copy of software (and follow-through on the sugges-
tions), answering service and technical support calls for at least
four hours each month, and researching how marketing and
engineering staff literally follow a customer home and watch
him install and use the software. They also have a database
to track continuous customer feedback; a customer advisory
panel of loyal customers providing feedback on new products,
features, and quality; and focus groups to conduct market
research on how customers buy and use software (to manage
money and finances).
generating innovations
Management must listen to employees and ask them ques-
tions more often. Staff must listen to management for their
visions and ideas and ask them to elaborate so that they can
better understand the visions and goals of their organization.
By taking the time to ask questions, the staff will create its
readiness to start the innovation process.
Google’s engineering staff is encouraged to spend 20
percent of its time working on projects it feels passionate
about. That philosophy is credited with generating services
such as Google News, Google Suggest, adSense for Content
(online ads triggered by the content on the page), and Orkut,

a powerful social-networking site. Give your employees more
time to think, and you’ll get better ideas. Creativity is useless
without execution. Ideally, the organization’s culture of inno-
vation will motivate employees to create new ideas and ensure
that they get the support they need to use the innovation pro-
cess and implement their visions.
Consider the following ideas about how to build the culture
for innovation:
• Open communication within and between departments
and across all management levels.
• Hire people with diverse backgrounds and experiences and
avoid “cloning.”
• Encourage employees to find new ways to do work and
empower them to make decisions.
• Create an organization that extends out to customers,
suppliers, partners, and the environment.
• Stimulate research activities and provide employees free
time to experiment.
• Allow employees to take measured risks (with small costs)
and seize opportunities.
• Create processes to evaluate any idea on merit, regardless of
where it is generated.
• Identify and separate the creative from operational func-
tions in the organization.
• Use group creativity techniques frequently to promote team
building and generate new ideas.

Every organization undergoes innovation or else it is not
successful. The essence of innovation for you, as an industrial
engineer, is discovering what your organization is uniquely
good at, what special capabilities it possesses, and how
you can help it take advantage of these capabilities to build
products or deliver services that are better than anyone else’s.
Every organization has unique strengths. Success comes
from leveraging these strengths in its own service or product
marketplace.
Today, many organizations operate globally. They find that
innovation can occur anywhere, in any country or culture. Tra-
ditionally, innovation has been a local issue, not transferred
to other corporate locations. Innovation teams, similar to im-
provement teams, work on innovation surrounding a product
or service and then develop a centrally planned rollout. For
process innovations, the local organization implements them,
and then, because of enhanced communication, the innova-
tion moves from location to location. This is accomplished by
using the technology available today, including the Internet,
teleconferencing, and videoconferencing.
Innovation is a process. To encourage yourself to take
action, let me leave you with famous words of hope from
George Bernard Shaw: “You see things and you say, ‘Why?’
But I dream things and I say, ‘Why not?’” d
As president and CEO of Business Improvement Architects,
Michael
Stanleigh works with executives and senior managers around the
world to help them improve operational effectiveness through
strategic
planning, leadership development, project management, and
quality
management. He has been instrumental in helping his clients

reduce
waste and increase efficiencies and profits with his clear
processes and
quality approach.
CREATIVITY AND INNOVATION
A t th e h e a r t
o f in n o v a tio n
Adam Smith and Mike Robinson argue that understanding
and enabling people is at the core of innovation
T
he capability to bring innovation
successfully to market is a crucial
competitive advantage in any sector
or field. Peter Drucker wrote the
first book to present innovation
as a purposeful and systematic discipline in
the mid-1980s1 and it’s fair to say that many
text books, research papers and management
books have been written about the importance
o f managing innovation since. In more recent
times, innovation has moved to centre-stage
in strategic plans, organisations values and
even economic policy making. C E O ’s, leaders,
politicians and consultants are drawing upon
all o f the great ideas and thinking that has been
written about the structure, processes and the
skills need for innovation.

T h e c h a r a c te r is tic s a n d b e h a v io u r s o f
in n o v a tiv e p e o p le
Even with all o f this great writing and
management systems, why do organisations still
struggle with innovation? Innovation requires
talented staff with the right processes and
structure to support them but there is far more to
it than the systematic management o f innovation.
A t the heart o f innovation you will find focused,
purposeful employees. I f motivation, openness and
a proactive nature are lacking in your employees,
the rest o f their qualities will not produce the
results you need. I t’s the ‘how’ you want your
staff to behave that is the end goal, it gives the
purpose for process, structure and organisational
development activities. W ith o u t a good
understanding o f what types o f characteristics and
behaviours lead to innovation, organisations are
managing their employees in the dark.
A research paper was produced for NESTA
(an independent charity that works to increase
the innovation capacity o f the UK) by the City
o f University London and the W ork Psychology
Group2. Its key aim was to understand the
characteristics and behaviours o f innovative people
in organisations. Below is an attempt to summarise
the three key categories of innovative employees;
motivation, personality and behaviour:
M o tiv a tio n
Innovators display high levels o f motivation and
absorption in their work. A study by Sauermann
and Cohen (2008)3 found that extrinsic rewards,

such as pay, were not as important as certain aspects
o f intrinsic motivation such as curiosity, feelings of
mastery, and enjoying self-expression. T he question
for organisations is this... H ow can they encourage
the feelings that motivate their employees without
the use of extrinsic reward?
Here are two examples o f how organisations can
encourage the single most important ingredient of
individual innovation — intrinsic motivation:
Transformational leadership
A study by Shin and Zhou (2003)4, reported that
the transformational leadership style promoted
intrinsic motivation in employees, a laboratory-
based study, Sosik et al (1997)5 linked this
leadership style with ‘flow’ (the perfect balance
between concentration and enjoyment). Essential
if leaders can motivate and inspire their employees,
in the right way, it has a direct influence on the
creative performance o f their employees.
This is good news for organisations as
transformational leadership is a well-documented
concept that can be taught. According to Bass and
Avolio, transformational leadership is characterised
by the following (4 ‘Is)6:
• Idealised influence: They become role models,
they put employees’ needs above their own and
3 8 TJ J u l y 2015 w w w.trainingjournal.com
http://www.trainingjournal.com

their behaviour is consistent with the values of
the group
• Inspirational motivation: They motivate by
providing meaning and challenge and help
employees develop a vision for the future
• Intellectual stimulation: They do not criticise
mistakes but encourage employees to question
assumptions, reframe situations and approach old
problems from new perspectives (This stimulates
idea generation - an essential facet
o f innovation)
• Individualised considerations: They foster
personal development and provide learning
opportunities and a supportive environment for
each individual.
In summary, transformational leaders are described
as holding positive expectations for employees,
believing that they can do their best, they care
about their employees and focus on their personal
needs and development.
G o al o rie n ta tio n an d pro b lem -so lv in g
W hen an organisation engages its employees in
problem-solving as part o f their daily work, it
generates motivation. Employees come to see their
job in a different light. They are no longer hired to
do as they are told. Their role is to improve the way
they work and own the processes they use every day.
Goal orientation is important in problem-solving
because it guides employees’ intrinsic motivation.

I f y o u w a n t to r e le a s e th e
in tr in s ic m o tiv a tio n o f
a ll y o u r s t a f f y o u n e e d to
in s p ir e a t a ll le v e ls
Goal orientation refers to an individual’s desire or
purpose when solving problems. According to goal
orientation theory, there are two contrasting goal
orientations: a learning goal and a performance
goal. A learning goal focuses on learning and
understanding, whereas a performance goal
orientation focuses on employee efforts to
demonstrate his/her ability or competence, often in
relation to others (Linnenbrink & Pintrich, 2002)7.
Studies have found that when a learning goal
was highlighted, employees opted for challenging
tasks and tried to learn new skills, even when
they made mistakes. O n the other hand, when
the value of performance goals was highlighted,
employees gave up attempts to find more effective
solutions and attributed the mistakes to their lack
of ability. Strategies to increase the amount of
problem-solving done by employees, especially with
a learning goal orientation, therefore encourage
employees’ intrinsic motivation, one o f the key
aspects to innovative behaviour.
T h e ta b le s h o w s h o w th e tw o g o a l o r ie n t a t io
n s d iffe r
Task c h a ra c te ris tic s V a rie ty and d iv e r s ity in tasks S
im p le and p la in ta sks
Task p ro v is io n m e th o d s E m p h a s is e th e in trin s ic
v a lu e o f le a rn in g

S tre ss th e im p o rta n c e
o f p e rfo rm a n c e
P ro v is io n o f c o n tro l
a nd ch oice
O p p o rtu n itie s fo r d e c is io n -
m a k in g in te rm s o f
• e s ta b lis h in g ru le s
• s e ttin g p rio ritie s f o r w h e n
w o rk w ill be d o n e
• s e ttin g th e pace o f w o rk
• d e te r m in in g h o w th e ta sk
w ill be a c c o m p lis h e d .
Task s tru c tu re d b y le a d e r/
m a n a g e r to ach ie ve th e
d e s ire d o u tc o m e e ffic ie n tly
E v a lu a tio n c rite ria P ro v id e in fo rm a tio n on
in d iv id u a l im p ro v e m e n t,
p ro g re s s and m a s te ry based
on s e lf-re fe re n c e e v a lu a tio n
P ro v id e in fo rm a tio n a b o u t
so c ia l c o m p a ris o n
E v a lu a tio n re p o rt p ro c e d u re P ro vid e e v a lu a tio
n p riv a te ly D is p la y e v a lu a tio n p u b lic ly
E v a lu a tio n m e th o d s Use v a rio u s m e th o d s
(e.g. p o rtfo lio s )

S in g le te s t o r m e tric
— >
w w w .tra in in g jo u r n a l.c o m J u l y 2 0 1 5 TJ 39
CREATIVITY AND INNOVATION
So what? Inspire and collaborate with your staff
Both o f these two important elements point
towards line managers as having the largest scope
for affecting motivation. They need to be able to
inspire individuals, foster curiosity, self-expression
and a feeling o f mastery and pride in their work. At
the same time, these line managers need to manage
and effectively set tasks, focusing goals on learning
or performance dependent on the situation. This
directly impacts on two critical aspects of
an organisation.
Firsdy, the learning and development strategy
needs to help all line managers high or low in the
organisation become transformational leaders. For
some organisations, this can be a huge change in
the way they approach training. In our experience,
any training in transformational leadership is
usually reserved for upper management with
watered down versions slowly rolled out to the
middle layers o f the organisation. I f you want to
release the intrinsic motivation o f all your staff you
need to inspire at all levels.

Secondly, the performance management strategy
needs to be built to create less pressure and more
freedom to motivate people. Staff can bring
many unexpected and less tangible benefits to the
organisation. How do you recognise and reward
staff for the things they have tried to do or learn
rather than just what they have achieved?
P e r s o n a lity
In 1961, Ernest Tupes and Raymond Christal8 put
forward an idea that there are five personality traits
or dimensions that could be used to describe human
personality. Since then researchers have worked
independently for decades on this problem and have
generally identified the same five factors - openness,
conscientiousness, extraversion, agreeableness and
neuroticism. O ut o f the five factors, the report for
NESTA found that extraversion and neuroticism
cannot be directly linked to innovation activity
and are likely to be context dependent9. This
leaves openness (positive effect), conscientiousness
(negative effect) and agreeableness. Agreeableness
has been found to have a negative effect just on the
implementation stage o f innovation.
Openness to experience
Openness is the most important of the five factors
in predicting innovative behaviour. Research
suggests that openness enhances an individual’s
intrinsic motivation towards novelty10
(King et al 1996).
Consciousness
Individuals showing high levels of conscientiousness
are more resistant to change at work and are

more likely to comply with current organisational
norms. Studies have shown that the elements of
conscientiousness that are associated with a lack
o f innovation are being methodical, ordered and
dutiful11 (Robertson et al, 2000)
Agreeableness
Agreeableness is negatively associated with creative
achievement but not with creative thinking. This
is because the implementation stage is likely to be
a group effort which involves social pressures and
discarding the norm.
S o w h at? D o n ’t fit a sq u a r e p e g in a
r o u n d h o le
Every organisation will have many different
personalities and just recruiting for one type
of personality may be unwise. The opposite
o f consciousness for example is negligence or
nonchalance, maybe a risky talent management
strategy. How do line managers reconcile the need
for innovative individuals who display traits that are
traditionally viewed as difficult to manage and the
need to select agreeable individuals who are likely to
fit within the team?
W ith that said, are there any negative aspects
to hiring only people that are open to new
experiences? People with low scores on openness
tend to have more conventional, traditional
interests. They prefer the plain, straightforward and
obvious over the complex, ambiguous and subtle.
Closed people prefer familiarity over novelty; they
are conservative and can be resistant to change. In
some more high risk environments, we may prefer
the known over the unknown, but o f course this

will not bring you innovation.
We think the take away message for this is one of
valuing diversity and recognising what others have
to bring to the workplace. Line managers need to
be aware that they may need to hire people that do
not fit the typical mould for their team. They need
to understand how to recognise strengths and not
fit a square peg in a round hole.
B e h a v io u r s
So let’s say that your organisation has highly
motivated employees that are open to new
experiences, creative and willing to do things
differently to their peers. H ow do leaders want this
motivated personality to behave in the workplace?
Firstly, you want your employees to work together
but, more importantly still, you want to make sure
you don’t get in their way. Discretionary employee
behaviour is the most powerful innovation tool an
organisation can have.
40 TJ J u ly 2015 www.trainingjournal.com
Pro-activeness
T he main concept in contemporary research on
proactivity is called personal initiative or PI. It
is defined by three main facets that have been
positively linked to innovation - self-starting,
proactivity and persistence. These three facets
reinforce each other and tend to co-occur in an
individual. This concept of personal initiative has
been used at an organisational level with findings

suggesting that organisations with pro-initiative
climates are more innovative and profitable.
Collaboration
In order to innovate, employees often need to relate
and interact with other individuals both inside and
outside the organisation. I t ’s vital that employees are
able to communicate and make connections with
others, articulate their ideas and have the skills to
network effectively.
So what? Enable don’t manage
For a long time, organisations have understood how
important collaboration is but how much time has
been spent empowering your proactive employees?
I f you have motivated people with the right tools
and skills to work together, it is the organisation’s
job to not hinder their creativity or energy. Not
all your employees will be proactive but the ones
that are might be the key to an important change,
innovation and in some cases the key to your
future survival.
W ith that said, how do you ensure that all
o f these employees’ projects are pulling in the
same direction? How do you provide consistency
to goals and objectives? The answer is a strong
organisational narrative; not the type o f narrative
that is inward facing, common to many companies.
A narrative needs to be about the people an
organisation is trying to reach and move. A
powerful narrative can focus a much broader
community on an exciting opportunity that can
spur innovation in unexpected directions. Narratives
encourage people to take initiative - properly
framed, they can unleash a wave o f experimentation

and exploration that can lead to accelerated learning
and insights from unexpected quarters. W hile all
the time bringing some consistency and sense of
direction to the organisation as a whole.
Im pact o n o rgan isation al design
and d evelop m en t
There are many important aspects o f innovation
that both consultants and organisations are
aware of:
• T he creative skills needed for idea generation
• Knowledge management systems and enabling
technologies that allow ideas to be spread
• T he line manager skills needed to give their staff
the rattle room they need
• The overall culture o f an organisation
• Systems o f governance and process that can be
used to deliver innovation.
The problem is if an employee is not motivated to
innovate or has no desire to do so, all o f the above
could be a huge waste o f time and money.
W hen it comes to innovation, we are looking
for unknown outcomes and deliverables because
o f this you cannot rely on structured process or
a clever organisational design. By looking at the
types o f behaviours and character traits that lead
to innovation, organisations can start to design
their organisational development and design with
the end in mind. As with all research papers, new
information and research can come to light that
makes us reinterpret data differendy. But what

makes the research paper for NESTA interesting is
the focus on the individual rather than the systems
and management of innovation. I f an organisation
can understand the type of people it needs and
what to do to enable them, it gets to the very core
of what innovation is all about - having original
ideas and extracting value out of them. TJ
R e fe r e n c e s
1 R F Drucker, (1985).The Practice of Innovation, Innovation
and
Entrepreneurship Practice and Principles, Harper & Row, New
York
2 F Patterson, M. Kerrin and G. Gatto-Roissard, (2009).
Characteristics &
Behavoiurs of Innovative People in Organisations, research
paper for
NESTA, by the City of University London and the Work
Psychology Group
3 H. Sauermann, and W.M Cohen, (2008). What makes them
tick?
Employee motives and firm innovation. EBER working Paper
N.14443.
4 S. J Shin, and J. Zhou, (2003).Transformational leadership,
conversation
and creativity: Evidence from Korea. Academy of Management
Journal.
5 J. J Sosik, (1997). Effects of Transformational Leadership
and Anonymity
on Idea Generation in computer-mediated groups.
Groups & Organisation Management.

6 B. M Bass, and B. J Avolio, (1990).Transformational
leadership
development: Manual for the Multifactor Leadership
Questionnaire. Palo
Alto, CA: Consulting Psychologists Press.
7 E. A Linnenbrink, & R R Pintrich, (2002). Achievement goal
theory and
affect: An asymmetrical bidirectional model. Educational
Psychologist
8 E. CTupes and R. E Christal, (1961). Recurrent personality
factors based
on trait ratings. USAF ASDTech
9 NESTA Ibid
1 0 L. A King, W.L McKee and S. J Broyles, (1996). Creativity
and the
five-factor model. Journal of Research in Personality.
11 I. Robertson, H. Baron, R Gibbons, Maclver G. Nyfield.
(2000).
Conscientiousness and managerial performance. Journal of
Occupational and Organizational Psychology.
A d am
S m ith
is marketing
manager and
M ike
R o b in s o n
is managing
director of
The Berkshire

Consultancy.
visit WWW.
berkshire.
co.uk to find
out more.
w w w .tra in in g jo u rn a l.c o m J u ly 2015 TJ
Copyright of Training Journal is the property of Fenman Ltd.
and its content may not be
copied or emailed to multiple sites or posted to a listserv
without the copyright holder's
express written permission. However, users may print,
download, or email articles for
individual use.
CULTURE
Management shift
V la tk a H lupic urges a culture change
for the 21 st century organisation
F
or years, training and development
professionals have debated the big
issues that they confront: what is
training for? How do we select and
develop programmes? How do we
know which are the most effective? Some o f the

latest findings on organisational development
promise to inform, perhaps even revolutionise,
our thinking.
Above all, the latest research opens up the
possibility to broaden the discussion away from
the familiar tussle between finance and H R . For
example, there has been much discussion over
the years on whether one can, or should, assess a
financial return on training investment. The debate
is evenly balanced. W hile there is an obvious need
to help the business and avoid waste, some training
initiatives have objectives that are long-term and
difficult to quantify, such as maintaining corporate
culture or assisting the management o f risk.
The case for gauging a return on training
investment can be inadvertently weakened by
assuming that a precise monetary figure can, or
should, be determined over a prescribed timescale.
Determining the ROI can be a good idea but one
that can be couched too much in terms that are
determined by accountancy timescales, rather than
the needs of the organisation. Business partners
from the human resources department often have to
work hard to blend the cultures o f finance and HR:
ensure that there is financial accountability without
tying the hands of learning and development
professionals too much by a pedantic cost-benefit
calculation for every move that they make.
But if there is a requirement for the business
partners to bind the H R strategy and the business
strategy together, this begs a bigger question: how
did they come to be separate?

M uch o f the latest research supports a more
joined-up approach to the development o f all
people-related investments, linked closely with
business strategy and operations. Findings raise
fundamental questions over key aspects o f the 20th
century corporation, with its specialist departments
or ‘silos’, and supports a more co-operative culture
where accountability is to the customer, rather than
functional head. In this new paradigm, it is taken
for granted that corporate culture and employee
engagement are always o f great importance; that
learning and innovation are continual, and that
communication is strong, enabling intelligent
feedback on the effectiveness o f all initiatives —
training-related or otherwise.
This new business model, based on many years
of research on organisational development, takes
organisational culture and skills seriously all the
time, not just when the employee survey results
are in. It replaces a passive, inert concept o f an
organisation consisting o f assets, resources and a
cost base, with a dynamic one consisting o f teams
and engaged people. It summarises not just the
rationale for better engagement of people across the
enterprise but how to go about this in practice.
The findings support the view that it helps to
take a holistic approach and to address mind-set
and values, as well as the organisational set-up. It is
a shift:
1. From a controlling mind-set to an
empowering one
2. From setting rules to establishing principles

3. From issuing instructions to creating teams
4. From overseeing transactions to building alliances
5. From a focus on short-term profits to serving all
stakeholders.
This helps counter the dysfunctions that can arise
in an organisation overly segregated into silos,
in which training and development is seen as
something only for the training specialists to worry
about. Instead we become, in line with Peter Senge’s
vision, a learning organisation, continually receiving
feedback and intelligence from customers and
each other.
The most effective companies raise performance
and engagement across the whole organisation,
in many dimensions, unleashing the potential of
all the people employed. And the bigger lesson is
R e f e r e n c e
1 V. Hlupic,
The
M anage-
m e n t Shift:
H o w to
Harness the
P ow er o f
People and
Transform
Your Organi-
zation for
Sustainable
Success,
Palgrave

MacMillan
2014.
www.trainingjournal.com J u n e 2015 TJ
CULTURE
that business strategy and operations; and people
development and engagement have to be
considered together.
There are immense implications for the
learning and development profession. Having
high engagement scores and well-regarded
training programmes may feel satisfying but is
the engagement well directed? Is a major training
investment really helping the business meet the
needs of the customers, or identify and attract new
ones? Has it been assessed against
alternative investments?
In terms o f practical application, the approach
overseen in many applications applies respectively
to an individual shift and an organisational shift
towards this joined-up way of managing.
The model has five levels o f operation, for both
individuals, executive teams and organisations -
from the apathetic individual/lifeless institution
at Level 1, to the limitless/unbounded high
performance of Level 5 (see Figure 1). There is a
particularly significant transformation from Level
3 - the ordered command and control approach

that is common in many corporations - to Level 4,
where high engagement begins to be felt, with its
multiple benefits for service, innovation
and efficiency.
The organisational shift is further bolstered by
an approach called the 6 Box Leadership Model
and its online diagnostic tool, which emphasises
the inter-relatedness o f organisational activities.
My research and work with employers has resulted
in identifying six key groups o f factors (that drive
value creation, innovation, engagement as well
Figure l: The em erg en t lea d e rsh ip m o d el
EMERGENT LEADERSHIP
IN D IVID U A L
Level 5 Limitless
Level 4 Enthusiastic
Level 3 Controlled
Level 2 Reluctant
Level 1 Lifeless
ORGANISATIONAL
Unbounded
Collaborative
Orderly

Stagnating
Apathetic
as profit) which form this model. Three o f the
dimensions relate to people: culture, relationships
and individuals and three are related to processes
and materials: strategy, systems and resources
(see Figure 2).
In-depth questionnaire-based information
creates a series o f categorised scores and the two
approaches are used together, so rankings can be
obtained to determine the level o f operation of
individuals and different parts o f the organisation
and across the six different dimensions o f the
organisation defined. The questionnaires are based
on a six-point Likert scale, which eliminates
the neutral option. The software allows also for
qualitative comments, which helps to elucidate the
why o f a quantitative score indicating operation at a
particular level.
Taken together, these approaches result in
an organisation’s leaders being able to access
continuous intelligence on the performance,
capability and potential of the entire workforce,
and the extent to which it is achieving its aims. It
is a whole level beyond the traditional snapshot of
an employee survey, both in terms o f detail, and
in terms of the dimensions addressed - looking at
relationships, strategy and wider performance, not
just the degree o f commitment and enthusiasm of
individuals. It can be particularly valuable when
scores are assessed against time to see not just

if there are improvements but which o f the six
dimensions are changing and why.
In this way, the 6 box leadership model reduces
the guesswork in managerial investments and
other decisions generally. Instead o f relying on a
combination o f hearsay, financial data and employee
opinion, one has access to richer organisational
intelligence, giving information on the internal
dynamics and how they change over time.
For learning and development specialists, a whole
new array of organisational information becomes
available to help one assess, for example, the impact
o f a major managerial development initiative.
Employers that have used it have found it to be a
powerful generator o f value and innovation.
In the example o f a
City of London insurance
company, scores from the 6
box leadership analysis were
used to reform induction
and training programmes,
tailored to the specific needs
of the firm. It is a medium-
sized underwriting agency,
relatively young for the
City. All employees were
invited to complete the
MANAGEMEI-T5f
L
SHIFT

TJ Ju n e 2015 www.trainingjournal.com
PEOPLE-RELATED
ASPECTS
questionnaires and the completion
rate was 100 per cent.
The headline figures were
reassuring: the employees
reported a good level of
engagement and performance
across the six dimensions.
Delving into the results a
little further, however, revealed
some areas to address. For
example, senior managers
rated the organisation more
highly than other staff - this
is a common finding when
using this approach. Also, the
dimension o f culture scored
lower than others at 62 per cent
- respectable but leaving room
for improvement. And within
culture, some scores were
much higher than others. W hat
emerged was a high-performance climate, with
some emerging issues around stress and potential
burn-out. Social responsibility scores were low.
Qualitative information - comments in the
questionnaire - yielded clear requests for stronger

induction for all employees - as well as training
and development in different areas, including for
more tailored courses relating to specialist
aspects o f underwriting. This led directly to the
following actions:
• Named individual to lead the underwriting
manuals project
• Individual to lead a new on-boarding project for
new joiners
• Individual to launch the effective broker
communications course
• Group o f individuals to build a suite o f relevant
and tailored courses
• Programme o f refresher courses for
key products.
Initial feedback showed that some benefits started
to emerge soon after, and that a more people-
focused culture was developing. T he managing
director observed:
"The [survey] was very easy to administer and came
up w ith some very interesting findings. Perhaps
most importantly, it provided the impetus f o r us to
apply renewed vigour to the training and personal
development o f all staff, and as a consequence we are
now rewriting our training policy, making it f a r more
employee-friendly, p u ttin g the onus on managers,
mandating more training, an d providing f a r more
tailored courses. ”

F i g u r e 2: T h e 6 b o x l e a d e r s h i p m o d e l
6 BOX LEADERSHIP
PROCESS-RELATED
ASPECTS
S p r e a d i n g t h e w o r d
Given the logic, and evidence base, for a move
towards the empowered ‘Level 4/5’ organisation
on the model, why is such a wholehearted
commitment to an empowering leadership style not
more common? One likely explanation is that it can
be very challenging. It is common to seek progress
only at an individual level, or only within some of
the six dimensions. So organisations might seek to
develop a few individual leaders’ capabilities with
their own team but pay little attention to the wider
culture, say, or induction o f new recruits. O r there
can be a move away from a ‘command and control’
structure, but not a ‘command and control’ mindset.
And there is a wider issue. Organisations do not
exist in a societal vacuum. It is difficult to transform
the culture o f a single organisation when the wider
culture influencing how businesses are perceived
and reported on remains stuck in Level 3 (at best)
- although the best employers like W L Gore and
Morning Star have consistently managed to do this.
To support a wider shift, I am seeking to join
with other academics, leading management
organisations and business schools to encourage
dissemination o f the research findings and
innovative ideas surrounding the whole agenda
o f enlightened leadership and the learning

organisation.
I f training professionals sometimes feel
frustrated that their efforts are not better
appreciated, it may be that the source o f the
frustration lies in the wider organisational or even
societal culture. There is now a body o f thought
leaders wishing to confront that challenge and a
vast store o f evidence to call upon. TJ
V latk a
H lu p ic
is a professor
of business
and manage-
ment at the
University of
Westminster.
She can be
contacted
at vlatka®
themanage
mentshift.com
or visit w w w .
themanage
mentshift.com
Vlatka w ill
be a keynote
speaker at
the TJ 50th
Anniversary
Conference
on 10th July
in London.
To find out

more or book
a place, visit
www.training
journalconfer
ence.com
w w w .tra in in g jo u rn a l.c o m J u n e 2015 TJ 9
http://www.training
Copyright of Training Journal is the property of Fenman Ltd.
and its content may not be
copied or emailed to multiple sites or posted to a listserv
without the copyright holder's
express written permission. However, users may print,
individual use.
PROFESSIONAL ENGINEERING AUGUST 2015
Editor’s comment
Lee Hibbert
Innovation and skilled
management made these
two British engineering
companies world leaders
O n e o f th e b e n e f its o f e d it in g a n
engineering m agazine is th e opportunity to
travel th e country to m eet in teresting

com panies and people. This p a s t m onth
rem inded m e of th a t fact, offering up th e
chance to visit tw o g rand old nam es of our
sector w ho have em erged as global leaders
in their respective fields.
First up it w as Renishaw, th e
G loucestershire-based m etrology firm th a t
has becom e th e rising s ta r of th e South
W est. E stab lished in th e la te 1970s by tw o
am bitious engineers, R enishaw has
expanded a t a sensible, sustainab le pace,
now em ploying a to ta l of 4,000 people,
m ainly b a sed in th e UK. But R enishaw is no
inw ard-looking organisation, exporting
95 % of th e m easurem ent m achines th a t it
m akes to all four corners of th e globe.
Still majority ow ned by its founders Sir
David M cM urtry and John Deer, th e
com pany is a m odel of financial probity,
investing w isely and tak ing on no deb t. It
spends be tw een 14% and 18% of its sales
incom e on research and developm ent,
enabling it to spo t em erging technologies
such as additive m anufacturing and to
ad ap t its skills and know ledge to create
p roducts to m eet dem and.
R enishaw has, to its credit, eschew ed
th e w ell-trod p a th of establish ing
m anufacturing facilities in low-cost
countries. It has stayed loyal to th e region
w here it w as born, em erging as one of th e
b iggest em ployers in th e South W est. A

new ly opened £20 million, 153,000ft2
innovation cen tre a t its W otton-under-Edge
headquarters show s th a t its com m itm ent
rem ains strong. R enishaw has to fight hard
to com pete for g raduate engineers against
a c luster of nearby com panies including th e
likes of Dyson, Rolls-Royce, Airbus and
Babcock, and it does so by offering
‘We have a tendency in
this country to undersell
the ingenuity and
commercial success of
our leading companies, and
to underplay the respect
in which they are held
around the world’
well-paid, highly-skilled job opportunities
a t modern, spacious facilities.
There are m any similarities be tw een
R enishaw and th e second of the world-
class engineering firms I w as fortunate
enough to visit las t m onth. Ricardo is one of
th e best-know n nam es in British
engineering, having had a long and
distinguished history th a t da tes back 100
years. Originally founded as Engine
P aten ts, th e com pany th a t is know n today
w as th e creation of Sir Harry Ricardo, one of
th e m ost creative and gifted engineers th a t
th is country has ever produced.
Innovation has alw ays b een a t its core,
being focused from th e o u tse t on the

creation of new technologies, as opposed to
engaging directly in th e m ass m anufacture
of engines or vehicles. T hat legacy lives on,
w ith Ricardo being th e first port of call for
global OEMs th a t look to tap into its unique
concentration of consultancy expertise in
its core product of engine, transm ission,
hybrid and electrical system s, and
environm ental forecasting. Its centenary
year w as capped last m onth by the opening
of an im pressive £10 million vehicle
em issions research centre a t its Shoreham-
by-Sea h eadquarters w hich will help bring
about th e developm ent of th e nex t
generation of clean, low -carbon vehicles.
We have a tendency in this country to
undersell th e ingenuity and commercial
success of our leading com panies, and to
underplay th e respect in w hich they are
held in major nations around the world. The
stellar perform ance of R enishaw and
Ricardo serves as a timely rem inder th a t
th a t shouldn 't be th e case.
Contact Lee Hibbert, Pi?Editor, at Unit G4, Harbour Yard,
London SW10 0XD. [email protected]
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WHAT’S
YOUR

TYPE?
ENTREPRENEUR 11/1556
Entrepreneur 360
entnov15 056-068 E360feat.indd 56 9/21/15 5:00 PM
09212015191941
By DAVID FREEDMAN
and MATT VILLANO
Illustration by
STUART BRADFORD
How does a new
business achieve
success? Clearly,
there is no single
answer—but there
is some science
amid the art.
We’ve developed
six archetypes of
company leadership
that embody the
varieties of
management style,
processes and

culture that are
demonstrated by
today’s flourishing
entrepreneurs.
11/15 ENTREPRENEUR 57
09212015191941
WILLINGNESS
TO TAKE RISKS.
RELIANCE
ON DATA.
EMPLOYEE
RELATIONS.
ABILITY AND
DESIRE TO
INNOVATE.
These are among the factors
one may consider when exam-
ining company leadership and
performance. Why do some
startups achieve lasting success
while others become flash-in-
the-pan fads or all-out failures?
Every company has a unique
strategy and culture. Some play

things safe, staying the course
for lasting (yet modest) profit;
others see growth through rapid
evolution in tandem with tech-
nological advances or trends,
yielding major returns that may
not have staying power. Some
place a high level of responsi-
held, for-profit and have shown
net capacity growth over at least
two years, with an employee
size in 2015 of 10 to 1,000.
With the help of Gary Kunkel,
senior research fellow at the
Business Dynamics Research
Consortium at the University
of Wisconsin—who examined
information on businesses from
BDRC’s proprietary data sets—
we conducted surveys over the
first nine months of 2015 with
nearly 400 qualified companies.
We asked highly detailed ques-
tions about market sector, man-
agement style, sales territories,
target growth rates, expansion
planning, processes and other
business functions.
We reviewed the data
received to come up with our
six company archetypes. We
think of these archetypes as
providing a 360-degree view
of thriving business and thus

we have dubbed this study the
Entrepreneur 360.
You may be surprised that
representatives of some of
these company archetypes can
demonstrate growth. All have
benefits, and all have flaws. But
whether or not you find them
relatable—do you recognize
yourself anywhere?—they con-
tain lessons for entrepreneurs
that can be applied to nearly any
industry. And all are emblematic
of leaders who have the passion,
talent and grit to launch and
maintain a resilient business.
—Carolyn Horwitz
bility and decision-making on
employees at all levels; others
choose to place all their faith
in management.
The combinations are end-
less. However, when considering
the components of flourishing
companies of all types, some
commonalities emerge.
Through surveys and
available data, we’ve examined
hundreds of small businesses
and come away with six arche-
typal sets of practices and char-

acteristics that we believe are
representative of most growth
companies operating today.
The qualifications were
simple: Companies had to be
domestically owned, privately
Best Practicers
These star companies do everything evidence-based
management wisdom says they should do. They set
high growth targets and are confident of hitting them.
They are employee champions, staying highly attuned
to staff needs and input and promoting more agile,
decentralized
decision-making,
as well as innova-
tive and proactive
action. It all
pays off: These
firms report not
only sustained
but especially
rapid growth, and
almost no prob-
lems in any area
of management
or performance.
WHAT WORKS
Best Practicers tend to
achieve everything they’re
going for. They report confi-
dence in hitting their daunting
growth targets. They attract
good employees, retain them

and are able to ensure that
they build their skills and
remain fully productive. Com-
pany cash flow tends to stay
strong. They’re able to time
their expansions well, and
they keep up with changing
customer needs and poten-
tially disruptive technologies.
WHAT DOESN’T
WORK Zip. That’s right:
These companies as a
group report fewer problems
on average than their peers
across every single aspect
of their businesses.
Entrepreneur 360
09212015191942
Best Practicers
These star companies do everything evidence-based
management wisdom says they should do. They set
high growth targets and are confident of hitting them.
They are employee champions, staying highly attuned
to staff needs and input and promoting more agile,
decentralized
decision-making,
as well as innova-

tive and proactive
action. It all
pays off: These
firms report not
only sustained
but especially
rapid growth, and
almost no prob-
lems in any area
of management
or performance.
• Best Practicers tend
to be in rapid-growth
industries, and are
mostly national and
international in focus
rather than local or
regional. They are
also more likely to be
urban-based.
• Avoiding top-down,
command-and-
control management,
they emphasize em-
powering employees
through distributed
decision-making,
transparency, sharing
information and
frequent, deep
communication
both up and down in
the organization.

• They are big on
rewarding employees,
by sharing profits,
promoting from
within and empha-
sizing good benefits,
good quality of life
and a positive work
environment.
• They set high
growth targets and
make a point of
clearly communicat-
ing those aggressive
plans to employees,
customers, suppliers
and even the local
community.
• They see fast
growth as a compet-
itive edge in its own
right and are driven to
constantly increase
market share.
• They seek to be
both brand leaders
and innovators,
and encourage
risk-taking.
• They rely heavily
on internal metrics
and external market

research.
• They expand
proactively, without
waiting to book the
orders that would
necessitate it.
• They give to charity
for its own sake, and
not just to help the
company grow.
WHAT WORKS
Best Practicers tend to
achieve everything they’re
going for. They report confi-
dence in hitting their daunting
growth targets. They attract
good employees, retain them
and are able to ensure that
they build their skills and
remain fully productive. Com-
pany cash flow tends to stay
strong. They’re able to time
their expansions well, and
they keep up with changing
customer needs and poten-
tially disruptive technologies.
WHAT DOESN’T
WORK Zip. That’s right:
These companies as a
group report fewer problems
on average than their peers
across every single aspect

of their businesses.
PROFILE
iCracked
W
hen new hires are onboarded
at iCracked, a repair and
reselling company that
specializes in both Apple and Samsung
devices, trainers share the same set of
mission-critical instructions multiple
times: Managers don’t want to hear,
“What do you want me to do next?” but
instead, “Hey, can I do this?”
The distinction is subtle; the
former enforces hierarchies, while the
latter sparks a culture of exploration,
experimentation, independence and
confidence.
“Our hope is that this philosophy
instills in our people a sense of empow-
erment,” says iCracked co-founder
and CEO AJ Forsythe. “We believe
people learn through mistakes and
decision-making. True fulfillment
comes through finding solutions and
implementing them.”
The approach certainly resonates
with employees. At last count, iCracked,
which is based in Redwood City, Calif.,

had 130 full-time employees spread over
five offices on three continents—and a
microscopic turnover rate. The company
also employs more than 3,000 techni-
cians, a number that continues to grow
as iCracked establishes a presence in
more cities around the world.
Communication is another key to
keeping employees satisfied. Every two
weeks, Forsythe runs an all-hands-on-
deck meeting during which he and other
executives share big-picture strategy and
implore the rank and file to share their
ideas for the future.
Finally, in hiring, Forsythe says
iCracked looks for candidates with
curiosity, ethics and drive. “You can’t
teach someone to have those traits,” he
explains. “But if they possess them, you
can teach just about everything else.”
TAKEAWAY The conventional wisdom isn’t
always right, but in the case of management best
practices, it seems spot-on. The formula isn’t a secret:
Pursue aggressive growth; lavish care and atten-
tion on employees; set up nimble and broad-based
decision-making processes; embrace change and
disruption; stay on top of data; and communicate
with customers and suppliers.
Key Characteristics
09212015191942

WHAT WORKS Modest growth
targets and conservative management
leave Data Champions more willing and
able than other types of companies to
eschew debt and fund growth primarily
through earnings. These are steady-
as-she-goes firms that do not tend to
produce standout success in any category.
But their focus on data may make them
more aware of their challenges than their
peers, and their emphasis on treating staff
well may pair with having much higher
expectations of employees.
WHAT DOESN’T WORK
These firms complain about struggling
with almost every type of business chal-
lenge and every type of potential growing
pain, from finding employees to timing
expansion. And in spite of setting relatively
low growth targets, they’re less confident
than their peers in meeting them.
TAKEAWAY You don’t have to
shoot for the moon or embrace every
touted management approach to be a
leader. Well-established tactics such as
self-funding expansion, being generous
with employees, setting modest targets
and keeping a careful eye on financials and
other performance metrics can do the

trick. On the other hand, not only does
aiming for relatively moderate growth fail
to insulate a company from growth pains,
it may actually invite some problems.
C
reative firms don’t typically embrace
literal names. But in the case of
Oakland, Calif.’s Enlisted Design,
an agency that specializes in planning and
birthing new products, the name says it all.
The agency handles industrial design,
packaging, brand identity and other functions
for a wide range of housewares, electronics
and food, pet and lifestyle products. So why
“enlisted ”? On each new gig, the company
embeds its designers into client-side teams
and asks that clients enlist specialists on the
agency side of the creative process, as well.
Naturally, this crossover creates a glut of
data and internal research—information used
to tie every effort back to client demands.
At the same time, co-founder Beau Oyler
admits that the focus on collaboration and
cross-pollination results in a scenario in which
creatives are expected to put in long hours.
In many cases, the company’s 15 employees
relish the opportunity to make hay in a com-
petitive industry. In others, employees can
feel vexed, stressed and out of balance. With
this in mind, Oyler says his biggest challenge
is people. “Finding the right talent to do what

we do is really difficult,” he notes. “We spend a
lot of time on recruiting and interviews.”
The issue bleeds into the company’s ex-
pectations for the future. While Oyler wants
to become a “leading brand,” he believes
hiring more than 25 employees could hinder
Enlisted’s ability to serve customers with what
has become a signature kind of intimacy.
PROFILE
Enlisted Design
Data Champions
The generally conservative companies in this
group focus on steadily pushing forward via careful
planning and data analysis, and by working hard
to empower employees. The reward is continued
growth and solid cash flow
that enables avoiding debt.
Yet less aggressive growth
targets and a lack of tight
communication keeps them
from sprinting ahead of the
pack and can leave them put-
ting out fires on all fronts.
Key Characteristics
• Data Champions are
more likely than their peers
to be in a mature industry.
• They emphasize a

reliance on performance
data, sharing it across
the company to help
employees at all levels
make decisions.
• They are much more
likely than their peers to
offer employees higher
pay and a share of profit.
• They pay close attention
to planning growth, but
they are not as likely as
their competitors to set
a formal growth target,
and if they do set one, it
averages half of what their
peers are shooting for.
• These relatively con-
servative firms are more
concerned about survival
than dominating the
competitive landscape.
• In the same vein, they are
more likely to be reactive
than proactive and are less
likely than their peers to
expand in anticipation of
growing demand.
• They are less likely than
other companies to have
expanded internationally.

Informed decisions: Enlisted Design.
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09212015191942
• Controllers take pains to
get the input of customers
and suppliers in business
planning, and to commu-
nicate their growth plans
outside the company.
• They are pressured to
keep growing by owners
and investors, rather than
by competitive forces. They
are careful to establish
an annual growth target,
and they match their peers
in confidence in meeting
that goal.
• They constantly research
their markets and use the
findings to make decisions.
• They consistently lag
most E360 companies in
championing employees,
and are especially low
in sharing profits and
information, promoting
from within and empha-
sizing benefits and work
environment.

• They are not interested in
new ideas and don’t place
a high priority on keeping
up with emerging technol-
ogy and processes.
• They are risk-averse,
waiting until orders are
booked before expanding
capacity.
• They tend to be nationally
focused, with few special
ties to local community.
WHAT WORKS Controllers don’t
grow especially fast compared to their peers,
but they grow fairly steadily. Perhaps surprisingly,
given their somewhat ungenerous attitude
toward employees, they don’t report many
problems with HR; that’s likely related to the
fact that they’re not heavily competing for labor—
suggesting they’re able to take advantage of
labor pools serving tighter job markets.
WHAT DOESN’T WORK These
companies often have trouble retaining their best
employees, developing employee talent and
getting employees’ best efforts. But problems
in other departments are more serious and
pervasive, including maintaining good profit mar-
gins, timing expansions and adjusting production
and logistics to industry and market changes.
That may explain why Controllers are forced to

set lower-than-average growth targets, and why
they seem plagued with management tensions
leading to difficulty in reaching consensus.
TAKEAWAY Being supplier- and customer-
facing can cover a lot of sin, as can finding
ways of exploiting markets where jobs are
tight. That may be enough to keep Controllers
hitting reasonable growth targets, though other
tactics—especially upping the level of employee
engagement—could enable them to do better.
PROFILE
Zozi
T
o say the travel industry
presents challenges for a
startup would be an un-
derstatement. For starters, the
industry is highly fragmented,
with tens of thousands of
operators around the world.
Also, many merchants are
behind the technology curve,
which means centralizing them
onto one platform can be like
herding cats.
Perhaps this explains why
San Francisco-based Zozi,
which provides online booking
software for travel outfitters, has

been playing it safe. According
to founder and CEO TJ Sassani,
the company spent its first three
years being primarily angel-
financed, with dozens of in-
vestors writing relatively small
checks. Only after Zozi had a
steady base of customer accounts
did Sassani seek venture money
to help speed along growth.
“We have had no problem
building this gradually,” he says,
noting that the company has
raised a total of $60 million.
In terms of employees,
Zozi’s philosophy is simple:
The company prides itself on
team play, yet executives drive
decision-making—no ifs, ands
or buts.
Zozi’s goal is to hit $1 billion in
gross transactions, a milestone
Sassani expects to achieve in
2016. A secondary objective is
to get to 20,000 merchants by
next year, a number that would
make Zozi about half the size
of OpenTable. From there, of
course, the plan is about as
traditional as they come: filing
for an IPO.
Slow build:

TJ Sassani of Zozi.
Controllers
This group places a rigid focus on customers and suppliers—
even
while neglecting to be open or generous with employees or to
keep
up with technology. Risk-averse and old-fashioned bossy in
their
approach to hiring and developing talent, they pay close
attention
to what’s going on in their markets and do what it takes to keep
customers happy. The results aren’t uniformly pretty, but in the
end
these somewhat inflexible companies tend to hit their growth
targets.
Key Characteristics
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Entrepreneur 360
09212015191942
Classics place an emphasis on sales but glue them-
selves to the middle of the road when it comes to most
management practices. That’s why they don’t stand out
much from the crowd in terms of how well they support
employees, how
aggressively they
seek growth and
how they deal with
risk. The results
are—surprise,
surprise—average.

• No daredevils here.
Though Classics
are average when
it comes to risk
aversion, they are
more likely to be
reactive than proac-
tive, expanding only
when the orders are
booked.
• There’s no inno-
vation in leadership
here, either.
• They express rela-
tively high confidence
in growth, apparently
because they are
sales-focused, seek
customer input in
planning and work
hard to communicate
success to cus-
tomers. Even their
charitable contri-
butions are seen as
supporting customer
relations.
• Their relationships
with suppliers are
not as close as with
customers.

• Overall, they’re
not employee
champions, and
they avoid sharing
financial and other
information with
staff members.
However, they do
solicit input from
employees in busi-
ness planning, mostly
on the sales side.
• They are more
focused on local
markets than most
E360 companies.
WHAT WORKS
Because of their sales focus,
Classics express confidence
about continuing growth,
and their sales, marketing
and HR teams handle
the growth in stride. They
cope well with the pace of
change, probably helped by
the fact that they aren’t tech-
nology leaders or disruptors.
WHAT DOESN’T
WORK Classics’ growth
targets are lower than
average. And as is common
among sales-driven firms,
they report problems finding,

retaining, developing and
getting high levels of pro-
ductivity out of employees.
They may also have trouble
reaching management
consensus.
TAKEAWAY In
spite of all we hear about
leading-edge management
practices and disruptive
companies, there is still
plenty of room for more
conventional companies to
notch growth year after year.
Markets don’t award extra
points for being flashy, and
success can be built around
a mastery of sales.
PROFILE
UpCounsel
I
t figures that lawyers would do every-
thing by the book. How else to explain
UpCounsel’s success? In 2012, when
Matt Faustman and Mason Blake wanted
to build a company to match small and
midsize businesses with experienced
attorneys, they pounded the pavement
to get a sense of what legal services were
needed. Later, when Faustman, CEO,
and Blake, CTO, needed cash to offset

the costs of acquiring those new cus-
tomers, they sought out venture funding
from Menlo Ventures to the tune of
$10 million (and $13.9 million overall).
Once the approach was perfected—
eliminating the traditional partner
structure and reducing overhead by uni-
fying customers on proprietary practice
management software—UpCounsel was
able to provide quality legal services for
up to one-third the traditional cost, the
San Francisco-based company says.
Data has formed the foundation for
each of these moves. Call Faustman
conservative, prudent, almost skittish,
but the former attorney says he learned
early on never to make business decisions
without researching each possible
outcome. This has resulted in 20 percent
month-over-month revenue growth in
2015, the company says.
“The equation is about user acquisi-
tion and lifetime value economics,” he
explains. “We know what it
costs to bring customers in;
we know if we can net more
than that over time, we’ll be
in good shape.”
UpCounsel applies this
same philosophy to HR, hir-
ing “smart people,” Faustman

says, and encouraging them
to rely on research and data to
solve problems. There’s
no magic, no conversation
circles for the company’s 30
employees. Just hard-nosed
research and data-driven
decision-making. Which is
exactly how lawyers like it.
Classics
Key Characteristics
By the book: UpCounsel’s
Mason Blake, left, and Matt Faustman.
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Entrepreneur 360
09212015191942
Forward Thinkers surge ahead in growth and
profits by being aggressive in adopting new
technologies and processes, setting high
targets and expanding proactively. But they
can be disorganized when it comes to oper-
ations, controls and managing employees,
leading to struggles with some of the basics.
• Forward Thinkers tend
to be in mature industries.

• They lead the E360
in being driven by new
production technologies
and processes.
• They set the highest aver-
age annual growth targets
among E360 companies.
• They expand proactively.
• They are more likely than
their peers to prioritize
input from their boards
of directors.
• Their focus is more
international than local.
WHAT WORKS
The big payoffs to emphasizing
technology and innovation are
strong growth and high margins.
That high growth rate isn’t easily
financed without outside fund-
ing, but Forward Thinkers seem
to have little problem finding
investors—which may explain
why they have unusually influen-
tial boards of directors.
T
he Matrix gets a lot of attention at
Avant. Not the science-fiction movie;
rather, the four-part matrix the

Chicago-based marketplace lending plat-
form has developed to codify the process
through which it tackles new initiatives.
Step 1 is easy: Scale. Any move the
company makes has to be proportionate to
complexity (that is, the more complex the
move is, the larger it must be). Step 2: The
move must extend the company’s brand
and provide stellar customer experience.
Step 3: Company leadership must under-
stand the new initiative at its core. Step 4:
The company must have the right resources
to make the move worthwhile.
“We embrace the notion that you can
never be too focused,” explains CEO Al
Goldstein, co-founder and CEO. “We like
to think of it as an 80-20 rule: 80 percent of
our time on the core mission but somewhere
between 10 and 20 percent of our time
thinking about what is going to come next.”
Employees play a big part of this mission.
The company holds weekly demo days and
Q&A sessions; at quarterly town hall meet-
ings, executives share financial information
with the entire team.
All of this has paid off: Since the compa-
ny’s debut in 2013, Avant has grown from
three to 730 employees worldwide and
launched operations on two continents.
Sure, Goldstein and his crew like to boast

about their accomplishments. But if the
wins are legit, is it ever really boasting?
PROFILE
Avant
WHAT DOESN’T
WORK Most departments
in a Forward Thinker company
struggle to some extent to
cope with the rapid growth—
and those proactive expansions
sometimes turn out to be
ill-timed. Forward Thinkers
also report trouble with
management consensus and
keeping the organization
focused on objectives.
In step (from left): Avant founders
Paul Zhang, Al Goldstein and John Sun.
Forward Thinkers
Key Characteristics
TAKEAWAY It’s no
surprise that technological
and process innovation can
rocket a company to success,
particularly in mature industries
that may have become sleepy.
But fast, innovation-fueled
growth also calls for extra atten-
tion on company components
that may become stressed

by the pace of change. What’s
more, managers at cutting-edge
firms need to be prepared to
deal with what may be conflict-
ing direction from outside inves-
tors and other stakeholders.
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Entrepreneur 360
09212015191942
S
peed. That was the driving
force behind restaurant
delivery service Dashed.
When CEO Phil Dumontet started
the Boston-based company in 2009,
he wanted it to be the fastest in the
industry. It has largely achieved
that goal.
Revenue is up 140 percent since
2011, the company says. A key

factor: diversifying delivery
methods, with roughly a quarter of
all deliveries handled via bicycle,
scooter or smart car.
“We can zip around traffic,
park in commercial spots and be
much more nimble with our fleet,”
Dumontet says, adding that propri-
etary mapping technology enables
drivers to find the fastest routes
between stops.
To keep drivers engaged (deliv-
eries can get boring by the end of an
eight-hour shift), Dashed has set up
a leader board that rewards drivers
in each transport category for the
fastest times every day. Rewards
ranging from cash to medals are
given out at the end of every week.
Beyond implementing this
incentive system, management
philosophy has remained relatively
unchanged since the beginning—a
move by design. Even the recent
rollout of driver ratings was done
quietly, so it wouldn’t detract from
the company’s primary mission.
Says Dumontet: “We want it so when
customers think about Dashed, they
think about one thing and one thing
only: speed and fast delivery.”
These companies thumb their noses at management

best practices, from taking care of employees to
proactive use of
data. But unlike
Controllers,
Contrarians seem
made of Teflon,
blithely gliding over
the bumps and pits
that trip up other
companies. They
keep putting up the
growth numbers,
and they do every-
thing their way.
• Contrarians rank
among the lowest on
most measurements
of championing
employees, including
promoting from within,
sharing profits, decen-
tralizing decision-
making, supporting
skills development,
sharing financial
information and
encouraging new ideas.
• They don’t even
bother to claim to
prospective employees
that opportunities and
rewards are high.
• When it comes to

planning and decision-
making, they don’t turn
to data, operational
metrics or internal
or external market
research. They don’t
listen to customers or
suppliers, either.
• They are slow to
change, tending to
be reactive rather
than proactive.
• They don’t keep up
with new technologies
and processes.
• They don’t bother
to clearly articulate a
growth plan.
• They are less likely
than other E360 com-
panies to be national
or international in
scope, or to be in a
pioneering industry.
WHAT WORKS
Contrarians’ employees have
needed skills and are fully
productive, and managers
usually reach a consensus. They
maintain good profit margins,

their departments are all able
to adjust to growth and they
time expansions well. Growth is
readily funded from cash flow.
WHAT DOESN’T
WORK Nothing. Though
their style is opposite that of
Best Practicers, Contrarians
are the only other group to be
essentially problem-free.
Accord
Engineering
Archimedia
Solution
s
Group
Assay Depot
Atlas Home
Energy

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