Today’s interview is with Huggy Rao, Atholl McBean Professor of Organizational Behavior and Human Resources at Stanford Graduate School of Business and co-author of a new book, with Robert Sutton, called: Scaling Up Excellence: Getting to More Without Settling for Less. Huggy joins me today to talk about the book, the key scaling challenges that confront every organization and how you spread pockets of excellence across an organisation.
This interview follows on from my recent interview: Transforming the internal customer service experience of your IT dept – Interview with Jason Andrew of BMC Software – and is number ninety-eight in the series of interviews with authors and business leaders that are doing great things, helping businesses innovate, become more social and deliver better service.
Here are the highlights of my interview with Huggy:
- Huggy just co-authored a new book with Robert Sutton called: Scaling Up Excellence: Getting to More Without Settling for Less.
- The idea for the book originated in 2006 out of a Customer-Focused Innovation Executive Program at the Graduate School of Business, Stanford University lead by Huggy and his colleague and co-author Robert Sutton.
- In the course, they cover theory in the morning and give the attendees actual problems to solve in the afternoon – Huggy calls this ‘clean models, dirty hands’.
- One such problem was how to improve the customer experience of Jet Blue, which they had to do by not spending any money. Then they had to present their ideas to the Chairman of Jet Blue without using Powerpoint. This required them them to act out their ideas.
- One idea that came from their observations was that elderly travellers can tend to get over-awed by the scale of airports. As a result, the attendees of the course came up with an idea that they could recruit other passengers to act as guides for these elderly travellers. In return, the ‘guides’ would get the right to board the plane at the same time as the elderly customers.
- The Chairman of JetBlue said he loved the idea and wondered why they themselves had not thought of that.
- The attendees of the course came to Huggy and Robert at the end of the course and said that they loved the approach. However, they wondered how they could ‘scale’ it.
- Huggy and Robert were thoroughly disappointed with the answer they gave and thus began a research and teaching programme that is the foundation of the book.
- Through their research they found that it was a very complex problem.
- They also found that executives are very confident about their decision-making skills but they are very apprehensive about their scaling skills.
- The key challenge for organisations is how to spread pockets of excellence across the organisation without ‘voltage loss’.
- One of the key reasons that organisations fail to scale excellence is because they think of it is a ‘footprint’ (size) problem. However, research has shown that the most effective organisations in this regard realise it’s not a footprint problem but a mindset problem.
- When you think of mindset, then it’s important to understand what is sacred and what is taboo i.e. what are the norms.
- In the book, they define excellence as doing the right thing even when nobody is watching over your shoulder.
- Therefore, if you want to scale excellence you have to scale accountability, meaning that you don’t just feel like you own the place but the place also owns you.
- Decision-makers that have difficulties scaling only think of things as an ‘air-war’ and not a ‘ground-war’ too. Therefore, they do not think of, or consider people, on the front line.
- Front line people are not interested in the corporate logic for change. All they care about is…are you providing me with tools to help me do a better job or to make it quicker and easier to do my job.
- One of the key principles that they identify in the book that will help scale excellence is that you have to ‘cut cognitive load’, meaning that we need to reduce the number of things that people are juggling if we don’t want them to fall into bad habits and thus help them be better at dealing with complex and hard issues.
- The research suggests that five is the best size for a core team.
- Amazon are great putting all of this into practice and do it, particularly when it comes to managing the size of teams, by employing what they call their ‘Two Pizza Rule’. What that means is that you can easily feed a team of five with two large pizzas comfortably. Therefore, if you need to order more than two large pizzas then you know that your team is too big and not good.
- What excellent organisations do is they don’t focus on the cream of the crap. Instead, they are focusing on the cream of the crop.
- Another thing that they identify in the book is that the journey to excellence is from bad to great.
- If you really want to improve quality then you need to first focus on eliminating everything that is bad first because people remember and focus on the bad. Also, when when they see ‘bad’ they infer that the powers that be don’t care. For example, if you are a washing machine manufacturer and have bad bathrooms what does that say about how much you care about your workers and therefore your products and customers.
- If you don’t take care for your employees, how can you expect them to take care of your customers.
- The employee is like a customer of the organisation.
- When you want to scale excellence, don’t just think about your star employees, think about your ’Sherpas’ too.
- In reference to Mark Lancaster’s comment in a previous interview and post (Are you sure your customers will wait two years for you to change?), Huggy suggests that firms cannot afford to wait two years to drive out bad behaviour or bad habits out of an organisation.
- Scaling up excellence begins with each one of us. You can’t afford to wait for your boss to start. Start with the smallest thing (re-organise your desk, change how you relate to your employees/team-members or talk to your customers) and start yourself.
- Finally, people at excellent organisations tend to be forever restless and take a glass half-full approach, where they are never satisfied with what they have and know that it can always be better.
- One last thing: Huggy and Robert are keen to hear about your scaling adventures so feel free to email them (here and here) and tell them your stories.
Huggy Rao is the Atholl McBean Professor of Organizational Behavior, the Morgan Stanley Director for the Center for Leadership Development and Research and Co-director of the Customer-Focused Innovation Executive Program at the Graduate School of Business, Stanford University, where he studies the social and cultural causes of organizational change. Huggy’s honours include the W. Richard Scott Distinguished Award for Scholarship from the American Sociological Association and Sidney Levy Teaching Award from the Kellogg School of Management. He is the author of Market Rebels: How Activists Make or Break Radical Innovation,” which Intel’s Andy Grove praised for providing “shrewd analysis” and an “aha moment.” You can follow him @huggyrao on Twitter.