Joe Thornton: Creating a Positive Mood

Many managers believe that emotions have no place in business. As a practicing manager, and a scientist, I was always taught that emotions are bad and that they play havoc with our decisions. That is, we should be making logical decisions based on facts and facts alone. The reality of the workplace makes this something that is impossible to achieve. Since ignoring our emotions does not work, the problem needs to be considered as how do we make our emotions and the emotions of others work for us in business. We have all heard that people do better when they are happy, so then we should be striving to create happy work places. But how do we do that.

A recent commercial from Values.com shows a young boy with a bat and a bucket of baseballs, he states that he is the best hitter in the world, he tosses a ball into the air, swings and misses, he repeats his mantra a second and third time, yet he misses each time. He then looks down at the ground for a second, looks back up and says that he is the greatest pitcher in the world.  This illustrates what we typically call optimism or one of the positive emotions. In this commercial, we see a person who has taken what many would consider to be a failure and made it a victory. It is about striving to reach a goal and persevering in the face of adversity. In my research, I looked at how self-efficacy affects social responsibility and the effect of positive and negative emotions on that effect. When I measured self-efficacy, the questions that strongly contributed to my measurement were about being confident in our ability to succeed even when faced with something we had not done before. While this had an effect on social responsibility in companies, the effect was relatively small and was limited to economic and legal responsibilities. When I added positive emotions to the equation, the effect size climbed indicated that positive emotions created a much larger impact on social responsibility than did self-efficacy alone.

My measurements for positive (and negative) emotions looked at three shared items, compassion, overall mood, and vision. Vision statements are very commonplace in most companies and are often communicated or shared throughout the company, but what about the other two items, what is shared overall mood and shared compassion. Let’s take a look at shared overall positive mood (OPM).

When we measure positive mood, our questions are related to whether someone enjoys working at the company or not in terms of the company and the people, we also ask if they would prefer to work elsewhere. When we walk into a company for an interview or to meet people, we often perceive a very different culture than if it is a place where we work. Most of us, in the US at least are at work 8 hours or more per day, five days per week, 50 weeks per year, nearly a third of time is spent at work and we create relationships with the people we work with.  These relationships may be positive or negative depending on the people involved and how we deal with them. When we have positive work relationships, we look forward to going to work, we know the people, we feel with them when they are hurt or happy. This sense of positivity is what we call the overall mood of the organization. It can change quickly from positive to negative because emotions are contagious and we pick up the cues at a subconscious level.

Creating a positive emotional atmosphere means that we need to allow people to have relationships and we need to build these relationships into our organization. We should foster a sense that people share not just the burden of work, but the joys of work. Recognizing when people have a positive experience, passing out compliments and learning to listen are good starting points and they are easy to do. We just need to remember that we are human, and just as we have hopes, dreams, and fears, so do the people we work with. Foster an open and communicative atmosphere being willing to stop and listen, be willing to take time to build relationships on a foundation of respect for others. These are a few steps but gradually, the positive days will begin to outnumber the negative and soon your employees will care and want to be there.

Joe Thornton is an instructor of Management at Bellarmine University, where he focuses on small business ethics and social responsibility. He has over 29 years of industry experience at various management levels in the environmental industry as a consultant, regulator, and internal resource manager. He is a registered professional geologist in Kentucky, Indiana, and Tennessee and is a certified professional geologist through the American Institute of Professional Geologists. He is currently finishing his doctor of management degree at Case Western Reserve University and can be reached at jthornton@bellarmine.edu.

Solange Charas: Threats to Board Stability – Understanding Director Behavior

For the past 25 years, I have been advising Boards and Top Management Teams, and having served on both public and private for-profit Boards, it did not escape me that each Board has its own characteristic, rhythm, social construct and level of effectiveness.  Boards are a mystery to most people (directors and researchers alike) especially as it concerns the questions of what makes a board good versus bad, active versus passive, engaged versus indifferent. 

To try to answer the question of what makes a Board good or bad, I went back to school to study the “board phenomena.”  I had hope that with an intensive study of boards (and a PhD), I would be able to enhance the effectiveness of my advisory work and help boards harness the incredible talent resident in their individual Directors to produce, as a team, economic value-creating leadership.

After a year of reading over 300 research articles, books and practitioner accounts, and speaking to my circle of board Directors, I was able to design an effective context for the first phase of my research.  The fundamental problem was that evidence existed (GMI ratings) that the majority of low corporate governance ratings for U.S. publicly-traded companies are attributable to poorly-performing boards.  This scared me, and should scare anyone who owns a share of stock!

Passage of the Sarbanes-Oxley (SOX) and Dodd Frank Acts of 2002 and 2010 respectively have had a material effect on corporate governance of US firms ? heightening public scrutiny of board behavior and causing companies to reevaluate both board composition and internal controls.  On a governance stage more brightly lit by such legislation and resulting evaluation, my research draws on “theatric” theory to examine boards as “actors” whose individual and collective performances can enhance or diminish the quality of organizational governance.

One of the most respected executives and board members in the US is Warren Buffet, but even Warren has faltered, admitting in his 2002 annual report, to succumbing to the power of social pressure by: “…too often (remaining) silent when management made proposals…judged to be counter to the interests of shareholders.”  If the “Oracle of Omaha” found Boardroom dynamics challenging, what does that say for the rest of us mere mortals that serve on Boards?  The research question became obvious -- What are the enablers and impediments to Director participation in Board deliberations?  What makes good boards good and bad boards bad?

With this premise, I selected directors from organizations with high and low governance quality GMI ratings.  The research process involved semi-structured interviews with seldom-sampled US small- and mid-sized enterprise (SME) board members of companies with high and low governance quality ratings (GMI).   My research reveal factors affecting their behavior in and out of the post-SOX boardroom ? and the consequences of that behavior on board culture, tenure and overall performance.  The research results illustrate how board member behaviors ? both individually and collectively ? impact board quality. There were three major paired findings of the research: 1. two distinct realms of the boardroom, 2. two types of conflict that exist in the boardroom and 3. two different recruiting strategies and how that influences governance quality.

Two Distinct Behavioral Realms of the Boardroom

There are two “realms” of the boardroom – front stage (the formal boardroom which is a stage for the information dissemination and decision ratification) and back stage (committee meetings, informal dialogue between board members, working meetings) where the work actually gets done.  Each realm has its corresponding social norm.  The front stage is characterized by more “collegial and congenial” climate and the backstage where directors have a more open and direct communication. Directors who have difficulty distinguishing these two realms and their corresponding social norm are typically regarded as “disruptive”, “uncooperative,” “overbearing,” “overpowering, or “egoistical” because they confuse appropriate behaviors in each realm.

Two Distinct Types of Conflict

It turns out that there is something quite powerful in the way directors speak to one another. My research revealed that there are two kinds of boardroom conflict – cognitive conflict and affective conflict.  Cognitive conflict is essential in generating value, whereas affective conflict destroys any chance of generating value:

• Cognitive conflict is task-oriented, with a focus on how to get things done and achieves optimal results – the dialogue around cognitive conflict can sound like:  “I don’t think your idea will work, maybe we need to look at it a different way….have you thought of this?” 
• Affective conflict, conversely, is emotionally-oriented and focused on personal differences or shortcomings between people – the dialogue around affective conflict can sound like: “I don’t think you have good ideas and you don’t understand the issue”. 

This is a subtle but powerful distinction, as cognitive conflict addresses ideas or points of view with an opening for something creative, innovative and positive, whereas the affective conflict is a seeming attack on the capabilities and perspective of the individual – making this personal and limiting.

Two Recruiting Sources

My interviews showed a consistent theme – there is a relationship between board governance quality and prior personal relationships of board directors. High governance boards cast a wide net when recruiting directors, and often recruit people with whom the other directors did not have a prior relationship.  My study showed that close to 70% of high governance-rated board directors were “strangers” when they joined their board, while only 25% of directors recruited to low governance-rated boards were unknown quantities.

Putting It All Together

This brings us back to the question – what makes directors participate or stay silent in board deliberations and what makes good boards good and bad boards bad? 

We found that:

• Directors that readily recognize the two realms of the boardroom tend to be perceived as productive and contribute value to boardroom deliberations effectively – they follow the rules in each realm. This leads to more productive board/committee sessions.
• Good boards recognized affective conflict and addressed it, whereas bad boards recognized affective conflict, but are less willing to address and resolve it. We’re all human and no matter how experienced and professional we are, it’s easy to allow affective conflict to seep into our conversations, especially when tensions are high, time is limited and there’s a lot at stake (like most boardroom environments).
• There is a relationship between board governance quality and prior personal relationships of board directors. High governance-rated boards cast a wide net when recruiting directors, and often recruit people with whom the other directors did not have a prior relationship.  Close to 70% of high governance-rated organizations board directors were “strangers” when they joined their board, while only 25% of directors recruited to low governance-rated boards were unknown quantities.  This leads us to consider “independence” of directors in a new light – not just independent from the company, but independent from other directors.
• Boardroom dynamics are influenced by prior personal relationships:  We found that when a director had a prior relationship with a newly-recruited director – one that exists beyond the boardroom – directors are driven by their desire to maintain a congenial relationship with one another  – to not “rock the boat” of their extra-board relationship by addressing affective conflict in the boardroom.  Conversely, in high governance-rated boards, where directors only have the boardroom as the context of their relationship, it becomes even more important to address affective conflict to make sure that the work environment be productive.  Directors are not willing to “sweep issues under the carpet” for the sake of keeping “peace” when the health of the company is at stake. 

The Story’s Moral

What can we learn about creating good boards?  Recruit the best people you can by casting a wide net to get the most experienced, most connected people.  It’s imperative to look beyond your personal network because recruiting your pal to the boardroom could turn out to be the enemy of the stakeholder and the downfall of governance quality!

Solange Charas is the President of Charas Consulting, Inc. (www.charasconsulting.com), providing comprehensive strategic HR consulting to organizations.  Solange is a seasoned professional with over 25 years of experience in both senior-level consulting and c-suite corporate roles in firms including The Hay Group, Ernst & Young, Arthur Andersen, Havas Advertising, Benfield and Praetorian Financial Group.  She started Charas Consulting in 2000, and serves clients in the area of governance advisory, Human Capital program design, metrics and optimization, team coaching, and M&A due diligence.   She has an MBA in Accounting and Finance from Cornell University and is currently finishing her PhD in Management from Case Western Reserve University.  She is an Adjunct Professor at Touro College and frequently speaks and writes on the topic of Boards, HR metrics and team performance.

Adrian Wolfberg presents his research at a conference of national security professionals

I presented my qualitative research at an academic/practitioner conference of national security professionals. My research was on challenges to information flow between knowledge producers and decision makers as mediated through the function of a “briefer,” someone whose job it is to be the conduit between technical information production and policy-level decision making. My context was the U.S. national security system. A political science professor told me that there is nothing in the national security literature that discusses the role of the “briefer” to high level policy makers and this research opened up an area of inquiry never known to exist. An educator from a U.S. intelligence agency said that their job was to train analysts to think and write using evidence-based reasoning yet how surprising it was to find out from the research that “narrative,” as opposed to analytic discourse, was the mechanism through which knowledge was transferred to policy makers. An intelligence officer from an allied country, during an “aha” moment after the presentation, was able to apply the “knowledge producer-briefer-decision maker” model to their own context (after stating during the presentation that the findings did not generalize across contexts) and I was able to help generate four strategies to fill specific gaps in their information flow context. It was very interesting and exciting to see how others applied the research to their own contexts.

Adrian Wolfberg is a Department of Defense employee working in the Pentagon. He is a student in the Ph.D. in Management program at the Weatherhead School of Management at Case Western Reserve University and can be reached atawolfberg@gmail.com.  His research examines the nexus between information systems and organizational behavior to understand how technical knowledge is communicated to non-technical decision-makers.

Marty Abbott: Team Building and Relationship Conflict

Go to any nearly geographic location in the US where there’s a high density of medium and larger sized businesses and you’ll find at least one small business focused on helping these corporations with “team building events”.  There’s a good chance that you are familiar with such businesses; they usually have some outdoor space dedicated to an obstacle course and have “camp counselors” who both help teams negotiate the obstacles and spark debate over various challenges the team is expected to accomplish. The courses are typically fun, the events challenging and the results for the team in the long term… well… inconsequential.

On closer inspection, this claim shouldn’t seem so surprising.  Our desired results are clear, at least to us: We hope build a “better functioning team”.  Often this means that we want to increase team cohesion through the fostering of shared identity born from shared experiences.  The more we know each other, the better we can operate.  The more time we spend together, the more likely we are to form a common identity and think of ourselves as a team.  The more our team thinks of itself as a single (or common) team, the lower our levels of internal relationship conflict.  The less relationship conflict we have in our team, the higher the level of team performance. 

The key to creating long term identity lies in the plural of the word “experience”.  A single experience simply will not foster long term identity for the team and will not produce the long term benefits we expect.  Our qualitative research indicates that leaders must consistently reinforce this identity through any of a number of activities.  One way to do this is to consistently reinforce (as in often – not once) team identity through shared experiences beyond the boardroom as in the case of an obstacle course.  Leaders can also create this identity through the creation of a compelling vision that transcends the team – focusing the team on transformational activities greater than any individual or even the sum of individuals within the team.  Such an approach also needs to occur repeatedly, as when leaders stop focusing on team identity development, the benefits of shared identity deteriorate.

Regardless of approach, identity must be nurtured over time if one wishes to harvest the benefits.  Team building is a journey, not a destination.

 Marty Abbott is a Managing Director of AKF Partners (www.akfpartners.com), an organization located in Fountain Hills, AZ that assists organizational teams resolve critical scale and availability issues by aligning organizational technology and product strategies with the needs of the business. He is also a Doctor of Management (DM) candidate at Case Western Reserve University and can be reached atmarty@akf.com.

Stephan Liozu: Managing Complexity in Value and Pricing Management

Pricing is a complex process (Monroe, 1990; Nagle & Holden, 2002). Many industry managers consider pricing a headache and many firms have “thrown in the towel” on pricing. They complain that they have no control over prices since “the market sets the price and (they) have to figure out how to cope with it” (Dolan & Simon, 1996). Lancioni et al. (2005)proposed that pricing strategy has implications for stakeholders both within and outside the firm. For them, pricing is a difficult and complex process due to the plethora of internal and external economic and political influences that shape the firm’s pricing decisions. The tasks of price setting and implementation have numerous implications throughout the organization. These tasks involve “multidimensional processes affecting customers, products, cost recovery efforts, produce margin levels, customer retention, market share, and domestic and international sales” (Lancioni, et al., 2005, p. 125).

So what makes pricing so complex? Can pricing management be considered as a complex system? How do firms manage the complexity generated by the multidimensionality and multileveledness?

Our research work in the area of pricing management led us to conclude that one of the critical elements of the organizational journey towards pricing excellence is the organization capacity to change. Moving from a formula-based pricing orientation to a customer-value orientation requires deep changes and an overall organizational mobilization to achieve desired goals (Liozu, Boland, Hinterhuber, & Perelli, June 2011). This combination of change and complexity dimensions in pricing led us to the work of Richard Boyatzis and especially his 2006 paper on Intentional Change Theory from a complexity perspective.

Boyatzis refers to complex systems as “multi-level combination of systems that may behave in a way independent of any one of the component systems” (Boyatzis, 2006, p. 608). Later in his paper, he explores the aspect of his change theory that makes it a truly complex system: its multileveledness. We adopt these dimensions of system combination and multileveledness and apply to pricing management in organizations. We actually go one step further by stating that pricing is much more complex than that. Our figure below paints a complex picture. Complexity in pricing management is nested at various levels across multiple dimensions and cultures, and requires the convergence of multiple languages. Complexity is the result of complex interactions between internal sub-systems (functions and departments) exposed to the internal/external on-going opposition.

We conjecture that pricing management is multi-functional, multi-dimensional, multi-cultural, multi-lingual, and multi-leveled. Pricing requires the careful management of the multitude of agents involved in pricing decisions and the plethora of information that need to be consider to set price levels. Because all agents and actors act independently, tensions, conflicts, misunderstandings, difficult negotiations, and internal arguments are part of this complex price setting process. There is plenty of room for failure, for poor decision making and for break downs in the process. That is may be why most managers “throw in the towel”. 

Stephan Liozu is President & CEO of Ardex America Inc (www.ardexamericas.com), an innovative and high-performance building-materials company located in Pittsburgh, PA. He is also a PhD candidate in Management at Case Western Reserve University and can be reached atsliozu@case.edu.

Eric Woychik Finds Enron’s Trading Practices Result from too Much Market Certainty

According to the classic view of market competition, if all participants in the market had perfect information, prices would naturally be forced downward by those market participants. However, Enron traders and their ilk had virtually perfect information about their market and about the actions of other traders.  The result was collusion, gaming, and artificially inflated market prices.  In many ways, what happened was the opposite of what was supposed to happen according to the classical view.

In an extraordinary example of practitioner scholarship, Eric Woychik (DM 2006) drew upon the work of Nobel Laureate Robert Aumann in his analysis of Enron's trading practices.  In his analysis, Dr. Woychik combined quantitative and qualitative forms of data analysis which included previously unreleased internal documents and emails.  His overarching finding is that it is precisely because of the widespread, near-perfect information available to traders that tacit collusion and market gaming occurred to artificially drive up prices.  Dr. Woychik argues that solutions that introduce greater uncertainty to the trading environment - such as strategies to reflect actual demand - would do more to drive down costs than perfect information or unwieldy levels of oversight.

Dr. Woychik has been actively involved with the electric industry for over three decades and has published research in each of those decades about trading practices.  He is currently exploring electric industry reform policies, including future electric industry policies and regulation, particularly to enable clean energy and smart grid resources to be used comparably with traditional fossil energy sources.  He is contributing to a forthcoming book, Smart Grids: Infrastructure, Technology, and Solutions, Stuart Borlase, Editor (CRC Press), and is an ongoing speaker, expert witness, and conference participant.

Dr. Woychik is Managing Director, Strategy Practice, and Electric Industry Lead for Black & Veatch Corporation's Management Consulting Division. He was previously Vice President and Senior Director of Development for Comverge, Inc., and for many years was the President and founder of Strategy Integration, LLC.  Over the last 30 years he has working with a wide variety of stakeholder interests in 20 countries and for more than 50 utilities in North America on electricity markets, regulation, and demand-side technologies. In addition to his DM from Weatherhead, Dr. Woychik holds a B.S. in Environmental Planning and Policy Analysis from U.C. Davis, and an M.S. in Economics from New Mexico State University.

Karie Willyerd’s Book on How Millenials are Transforming the Workplace

By 2014, according to Karie Willyerd (DM 2003), 47% of workforce will be comprised of "millenials" (those people born after 1979) and their presence will dramatically revolutionize the workplace. They have grown up with the Internet and are accustomed to using a particular set of tools and come to the workforce with a particular set of expectations. 

Those organizations that understand this shift will prosper, and Dr. Willyerd (with her co-author Jeanne Meister) detail many of the ways that globalization, changes in demographics, and the explosion of social media are transforming the workplace in their new book : The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow's Employees Today(http://www.the2020workplace.com/). 

The book is based off of their research into 300 organizations, which involved surveying over 2,200 professionals and 50 in-depth case studies.  The book follows up their successful Harvard Business Review article (http://hbr.org/product/leadership-the-next-generation-hbr-spotlight-artic/an/12914-PDF-ENG?Ntt=willyard). The book is enjoying tremendous success - already in its second printing only months after its release.

According to Dr. Willyerd, the DM program was essential preparation for this book - not only by its focus on research methods, but also because of the way it transformed her thinking: "The DM program changed the way I think.  It opened me up to the macroshifts; to step back and understand the impact of globalization.  That's just a different level of thinking... I think fundamentally I wouldn't have conceived of the book without having that personal thinking journey."

Dr. Karie Willyerd has held executive positions with Lockheed Martin, H.J. Heinz, and Sun Microsystems, among other organizations, and is now the CEO of Jambok, an on-line learning environment for small to medium sized businesses.  She holds a bachelor's from Texas Christian University and, master's degree in instructional and performance technology from Boise State University.

Videos from DM Alumni Week: Design, Complex Systems, Sustainability and a Variety of Practitioner-Scholar Presentations

On April 9^th and 10^th the Weatherhead Doctor of Management program hosted an Alumni Weekend and videos of the presentations from that event are now available on the following YouTube channel:
http://www.youtube.com/view_play_list?p=E833EB249DF928D9

Among the videos on this channel, Weatherhead's own Richard Buchanan leads a thought-provoking discussion about designing.  Dr. Buchanan is one of the thought leaders in the field of design, who has joined the Weathehead School of Management in an effort to lead the convergence of managerial and design perspectives in organizations and in society in general. (See "The Convergence of Management and Design" video: http://www.youtube.com/watch?v=xpKJSvKrk7o .)

In another presentation, award winning Case Medical School professor, David C. Aron, discusses a particular view of the world rooted in "complexity theory." He presents complexity theory in an altogether approachable manner and argues that this view is a useful way to think about issues relating to contemporary complex systems, such as the health care system. Dr. Aron addresses a variety of examples from health care, including AIDS and diabetes, as well as other fields. (See "systems Thinking, Complexity Theory and Management" video: http://www.youtube.com/watch?v=OqWJPSpWGyg.)

Roger Saillant is the recently-appointed director of  Weatherhead's Fowler Center for Sustainable Value, and has been referred to as the "LeBron James of Sustainability."  He leads a discussion on environmental sustainability, and indicates that while many contemporary sustainability commentators preach gloom and doom, the way toward progress involves positive thinking and empowered action. (See "Finding our Chon" video: http://www.youtube.com/watch?v=ocp8NmTFbHk .)

Other videos include presentations by DM students and recent graduates:

- Bernard Bailey (DM 2011), "Board Level Strategic Decision-Making: Process characteristics and Context" http://www.youtube.com/watch?v=mHyALgcuM4Y

- Ron Eastburn (DM 2011), "Post-Decision Surprise: How Bankers Manage the Unexpected"http://www.youtube.com/watch?v=-Lz9BV0kKb0

- Amol Kharabe (DM 2011), "Enterprise Information Systems and organizational Agility"http://www.youtube.com/watch?v=F0sBaCqoZcQ

- Will Oliver (DM 2010), "Impact of Microfinance on the Socioeconomic Status of the Poor"http://www.youtube.com/watch?v=9AIDiioRqIY

- Kathleen Roche (DM 2011), "Managing the Mission Through Times of Adversity"http://www.youtube.com/watch?v=44smfGsKuhU

- Sridhar Seshadri (DM 2010),   "Developing Contextual Ambidexterity in Academic Medical Centers" http://www.youtube.com/watch?v=kHmiZxbj6S0

- Ann Kowal Smith (DM 2010), "Where and How of Exploration and Exploitation"http://www.youtube.com/watch?v=0svgIdJEgKQ

Jimmy Schwarzkopf Shows how ‘Entrepreneurs in Residence’ can Lower VC Transaction Costs for Seed Funding

Venture capitalists (VCs) and entrepreneurs need each other, but many promising companies go unfunded when they otherwise might have succeeded with just a bit of early-stage "seed" funding.  It is simply cost prohibitive for VCs to identify and manage investments in too many small early-stage investments.  According to Dr. Jimmy Schwarzkopf (DM 2007), this is one of the reasons why seed investments make up only 4% of total VC investments in the U.S.

In Israel, however, where there is a common practice of interning "entrepreneurs in residence," VCs spend double that amount - 8% of total investments - in seed funding.  In a recent paper published byVenture Capital,  Dr. Schwarzkopf and his co-authors study draw upon the notion of "transaction costs" from economic theory and describe how entrepreneurs in residence reduce transaction costs associated with seed investment for VC organizations.  They do this in a number of ways, including by attracting high quality opportunities, reducing deal selection costs, and reducing contracting costs.

According to Dr. Schwarzkopf, the Case DM program trained him "to put a little discipline in [his] research."  Dr. Schwarzkopf was already an international thought leader in information technology before joining the program in 2004 - he is one of the world's foremost experts on the Israeli IT industry.  He indicated that he joined the program because it offered a level of quality that he did not find in other programs: "there are a lot of PhD programs where you buy the degree, I couldn't do that... I liked the three paper format.  It gives you the tools you need to understand and do good research."

Dr. Jimmy Schwarzkopf is Research Fellow and Managing Partner for STKI (http://www.stki.info/), a consulting firm specializing in IT market research and strategy analysis. He has worked for a variety of IT organizations for more than 30 years, including META Group, Digital Equipment, and Andersen Consulting.  He has also founded several IT startups and attained the rank of Major in the Israel Defense Force.  Dr. Schwarzkopf received Bachelor's and Master's degrees in systems engineering from the University of Central Florida and a Master's in systems science from Carnegie Mellon University ("all but dissertation" in the CMU PhD program).

The article is titled "How entrepreneurs-in-residence increase seed investment rates," and was published in Volume 12 (January 2010) of Venture Capital:http://www.informaworld.com/smpp/content~content=a918228843&db=all

Stephan Liozu Studies the Disconnect between Research and Practice of Value-Based Pricing Orientations

There are three common orientations for setting prices: cost-based, competition-based, or value-based. Academics have long extolled the virtues of value-based pricing, but practitioners continue to focus primarily on cost or competition based practices.  There is a major disconnect here.  Industrial pricing is a ‘problem of practice' desperate for the help of a practioner-scholar.

Enter Stephan Liozu (DM 2012).  Through his work with theWeatherhead DM program, Stephan is investigating why this disconnect between research and practice exists and what it means, and he's starting to get some answers.  Liouzu indicates that the adoption of value-based pricing is not as straightforward in practice as one might think.  A shift to value-based pricing is often challenging for organizations to implement, in part due to the limits of human interpretation.  Value-related issues are "difficult to define, conceptualize and measure" and the adoption of value-based pricing requires more than just a simple decision on the part of a manger, but often "requires an organizational transformation." 

Stephan was a keynote speaker for the Professional Pricing Society's Annual Pricing Conference in Chicago on May 7, 2010. His one-hour presentation "Pricing Orientation in Business Markets: Gap between Theory and Practice" focused on the problem of practice in the area of the adoption of value-based pricing in small and medium industrial firms. This work was based on his first-year work in the DM program.

According to Stephan, "I came in the program with some basic idea of what my research interest was. The first year of the program was a challenging and rich journey... The DM program is intellectually powerful and enriching from the get go. A year into the program, I realize how much I have accomplished with the support from great advisors and faculty. Presenting my first paper in Chicago in May 2010 as a practitioner scholar confirmed the novelty and relevance of my research project. This program has awakened my interest in academic research that is grounded in practice and interdisciplinary in nature."

Stephan is President & CEO of Ardex / W.W. Henry Company, a manufacturer of high performance building products. Stephan has masters degrees from Institut d'Administration des Entreprises and Cleveland State University, and has also completed Harvard Business School's General Management Training Program. He is a visiting professor with the Unversite Toulouse, where he teaches international business-to-business pricing strategies.

Todd Creasy and Mike Stull Identify Ways for Managers to Improve M&A Outcomes

Mergers and Acquisitions (M&As) are tough.  It seems they rarely realize their potential, and both the academic literature and business press are filled with stories of organizations that fail to achieve the returns they expected from M&As.  The academic literature has recently emphasized the way incongruent cultures of the two merging firms may be responsible for many common M&A problems.  If two companies have much different organizational cultures, then there may be problems.  The question then becomes - what can managers do about it? Actionable research into improving M&A outcomes on a cultural level is sparse.

Todd Creasy (DM 2007) and Mike Stull (DM 2005) have begun rectifying this situation with their study of employees and M&As in an article that was recently published in the Journal of General Management. Working with Case Western faculty Simon Peck, these two DM graduates surveyed employees that have recently experienced M&As in an effort to investigate how managers might improve their job satisfaction and their organizational citizenship in the wake of an M&A.  In addition to other findings, a key element of M&A success appears to involve the notion of "procedural justice." As Creasy, Stull, and Peck indicate:  "Management should make certain that decisions are fair and equitable to all parties, communicated overtly and honestly and are open to questions." According to their findings, procedural justice directly encourages corporate citizenship, and also encourages employees to identify with the newly merged organization and helps send a message to these employees that the newly merged organization is there to support them.

The article was based on Dr. Creasy's quantitative research he pursued in the third year of the DM program. Reflecting on the program, Dr. Creasy indicates that the DM program really equipped him with the tools to tackle such research: "The experience itself was wonderful... world-class education on how to really perform research, really consume research and make sense of it... Once you begin to read theories and understand them, you begin to look at situations through these lenses... it makes your thinking, your conversation, and your work so much more robust."

After completing the DM program, Dr. Todd Creasy (left above) hascontinued his consulting work and is now a full-time faculty member with the Western Kentucky University.  Dr. Michael Stull (right below) was Dr. Creasy's methods advisor in the DM program, and Dr. Stull is a member of California State University San Bernardino's faculty.

The article is titled "Understanding employee level dynamics within the merger and acquisition process," and was published in Volume 35 (Winter 2009-2010) of the Journal of General Management:http://www.braybrooke.co.uk/dynamic/viewarticle.php?articleid=181.

DM 'Intentional Change' Group Building an Impressive Body of Work

The DM program is a source of important research. As most scholars know, research in a field builds when a series of studies develop new insights about a theme. DMs have done just that with a key element of my of Intentional Change Theory. As part of the theory, sustained, desired change occurs in individuals, dyads, teams, organizations, communities, countries and even globally when people emerge through a series of five discoveries. Using concepts from complexity theory, the key is the movement between two stranger attractors, the Positive and Negative Emotional Attractors.

The Positive Emotional Attractor (PEA) is functioning in the Parasympathetic Nervous System (PNS). In this state, people are cognitive, perceptually and emotionally open and at a level of their maximum functioning. It also allows for neurogenesis (growth of new neurons throughout adult hood).  In this state, the human body can rebuild itself-it is the only known antidote to the ravages of chronic stress. In contrast, when experiencing chronic stress, a person is embedded in the Sympathetic Nervous System (SNS) continuously and pulled into the Negative Emotional Attractor (NEA). In this state, a person is cognitive, perceptually and emotionally impaired, has a diminished immune functioning, and is generally exhausting their tissues and cells. The chronic stress is the buildup of almost perpetual annoying daily stress. Because of the emotional contagion emerging from mirror neurons and the speed of such neural processes, the mood and relationships of a leaders invoke either the PNS or the SNS in those around them, whether they know it or not.

Terry Brizz (DM 2003) showed that Catholic Pastor priests who showed more emotional and social intelligence (i.e., able to build better resonant relationships) created more parishioner satisfaction and mission effectiveness than others. They did not generate more Mass attendance or increased donations. Several years later, Ray Massa (DM 2008)showed that effective financial service executives built resonant relationship with their key staff as compared to dissonant relationships of their less effective peers. Then he showed that the emotional and social intelligence competencies they show (as seen by other around them) predicts effectiveness of their regions-and cognitive intelligence and personality traits did not.

Meanwhile, a key element of the PEA is a shared vision. In the NEA, in teams and organizations, vision either does not exist, is not shared, or is talked about less than goals, threats, and dangers. Byron Clayton (DM 2009) showed that mergers and acquisitions were more successful when there was a shared vision, and it was the most potent predictor of the success of these ventures. Then Kathy Overbeke (DM 2010)showed that daughter's who become successors in family businesses versus those that lose opportunities to equally or less effective brothers have a vision for the family business. A year later, Ed Mahon (DM 2010) showed that shared vision was a powerful predictor of job and organizational engagement in IT teams. And he showed that emotional intelligence amplified this effect. These studies have been presented at academic conferences and have either been published, accepted for publication, or are in the process of being rewritten for submission.

In studies underway, John Neff (DM 2010) is looking at shared vision as a key indicator of success of family businesses. Kathy Buse (DM 2011) is predicting that personal vision is key to retention of women in engineering careers. Meanwhile, Joann Quinn (DM 2012) is examining the degree of resonance as it effects leadership effectiveness in health care and Linda Pittenger (DM 2012) is looking at a similar dynamic but in IT. In each of their studies, they are seeking to show differences between outstanding individual contributors (physicians or programmers) and their managers.

Supporting, encouraging, and at times provoking each other, the DMs are building a literature that makes scholarly contributions AND has practical significance to leadership and organizational effectiveness.  We do it by getting folks to help each other and participate in study groups. The study groups are combinations of DM and PhD students working on understanding and studying related topics. All of the above people have been involved in the Intentional Change Study Group or it's forerunner, the Coaching Study Group. It is exciting for me to help and guide these doctoral students, and continue our relationship after they graduate. With them and through them, research is occurring that would not be done or would be done at glacial speeds.

Richard Boyatzis is a Professor in the Departments of Organizational Behavior, Psychology, and Cognitive Science, and is the H.R. Horvitz Chair of Family Business.  Professor Boyatzis has been a key leader of the DM program since its inception.

Nancy King Studies Zoo Employees to Learn about the Future of Work

The management discipline is continually looking to understand what motivates people to be engaged, learn, and lead effectively in organizations. Answers often lie in novel incentive structures, cultural change, and top management leadership.  Rarely do managers and scholars look to the relationships of those people as a source of motivation.

Nancy King (DM 2004) focused precisely on such relationships in her DM research, and she argues that relational elements of organizing are particularly important in contemporary society.  To explore the interplay of relationships and organizing, Dr. King studies a novel set of research subjects: zoo docents.  Zoo docents are those folks that teach zoo visitors about the animals.  They are a particularly interesting group because they are completely devoted to the zoo, actively take on additional responsibilities, are continually, enthusiastically learning, and go to great effort to teach new docents.  Most importantly, docents are paid nothing.  That's right, Dr. King was studying volunteers.

In studying volunteers, Dr. King was free to focus on the unorthodox elements of their motivation.  After extensive observation and interviewing, she concluded that "relational practices" are the primary elements of the docent experience, and these relational practices are important to the passion,autonomy, and responsible ethic that is critical for docent-like performance. 

Dr. King argues that docents give us a view into the future of work, an alternative to command-and-control bureaucracies and standardized processes: "In light of the tendencies toward individualization in late modern society, relational organizing provides an opportunity for volunteers to experience a passion for their work, achieve desired social proximity, and be highly efficacious and respected.  In a larger sense, the docents' agency produces a relational model of self-organizing that stands as an alternative to that of bureaucratic, staff-managed volunteerism and, more broadly, to that of impersonal, technocratic and proceduralized depictions of organizing."

Dr. King has co-authored a book chapter on this research with her advisor, Paul Salipante.  The book,Relational Practices, Participative Organizing, (Steyaert & Van Looy eds). will be published later this year by Emerald Publishing in its Advanced Series in Management.

Kathy Buse and Alice Walker Earn Awards at ShowCASE 2010

Kathleen Buse and Alice Walker (both DM 2011) won awards for their research in Case Western Reserve University's annual "Research ShowCASE" event (https://ora.ra.cwru.edu/showcase/index.cfm).  Over 400 researchers were selected from across campus to present posters of their research at the event, and judges rated each presentation for creativity, design, and significance of research.

Kathleen won a "Second Place" award for her research entitled "Against the Odds: Women Who Persist in Non-Academic Engineering Careers."  Under the guidance of Diane Billimoria and Richard Boyatzis, she reported on her research into the factors that affect the decisions of women to remain in engineering positions. 

Alice received an "Honorable Mention" for her work entitled "The Paradox of Evidence Based Management in Higher Education." Under the guidance of Richard Boland, this research studied how a variety of educational institutions went about attempting to implement evidence based management practices.

Alice Walker is the Director of the Human Services Program at Lakeland Community College and holds bachelors and masters degrees in education from Cleveland State University. Kathleen Buse a consultant with CareerCurve and she holds a masters in electrical engineering from the Rochester Institute of Technology and bachelors degrees in chemical engineering and public policy from Carnegie Mellon University.

Ann Kowal Smith Finds that Balancing Leadership Approaches Drives Innovation

In order to innovate, contemporary leaders are encouraged to be visionaries, to engage and nurture their teams at much higher levels, and to transform organizational cultures.  The command-and-control micromanagement of the industrial age is a relic of the past - certainly no way to bring about the innovation required for modern organizations.  According to a recent study by Ann Kowal Smith (DM 2010), however, leaders should not entirely jettison their top-down managerial repertoire - because in certain circumstances this approach can actually increase organizational innovation.  According to Ann, leaders should actively seek to balance different styles of leadership to encourage increased innovation and better organizational performance.

Management scholars often think about organizational innovation as a dichotomy between exploration and exploitation.  Exploration refers to activity that fosters more radical, longer-horizon innovations that depart from an organization's traditional business activity, whereas exploitation refers to more incremental, shorter-horizon innovations that are extensions of that organization's current business. Recent work has found that visionary, "transformational" leadership encourages exploration whereas top-down, "transactional" leadership drives exploitative innovation. 

In analyzing data from 111 companies across 42 countries, Ann found that the dynamics between leadership and innovation are not quite so simple.  She found that the combination of both transactional and transformational leadership drove the more exploratory forms of innovation that lead to sustained earnings growth, whereas a sole focus on transformational leadership may indirectly inhibit earnings growth over time. According to Ann, "These findings, in fact, seriously question the transformational/transactional leadership dichotomy represented in the academic literature and confirm that good leaders, in practice, must balance multiple, even at times counterintuitive, behavioral styles and approaches to drive innovation and performance.  The right "cocktail" of these behaviors is highly dependent on the context and desired outcomes." 

Ann is currently working with Kalle Lyytinen and Nick Berente to prepare this work for journal submission.  She will be presenting her research at the 2010 Academy of Management's Annual Meeting based on an early version of the paper entitled "The ‘Where' and ‘How' of Exploration and Exploitation: Balancing Leadership Styles to Drive Innovation and Performance."

Ann Kowal Smith is an independent consultant, counseling individuals and organizations on strategy and leadership issues, coaching, communications, and project/initiative management.  She is currently actively involved in issues at the intersection of education and economic development. Previously, Ann held senior-level positions with Heidrick & Struggles, McKinsey & Company, Squire, Sanders & Dempsey, LLP, Benesch, Friedlander, Coplan & Aronoff LLP, and KeyCorp.  She has taught and been actively involved in the development of curriculum in a Montessori environment, and serves as Chair of the Board of The Montessori High School at University Circle, a new high school that opened to students in Fall 2008. Ann holds a B.A. in History of Art from Bryn Mawr College, an M.A. in History of Art from the University of Michigan, and a J.D. from Case Western Reserve University. 

Chinese and Indian Professionals Respond Differently to Change Messages

Organizations must continually innovate in order to remain competitive, and many of these organizations do so in diverse cultural contexts around the globe.  So managers find themselves driving change processes across locations around the globe, but do so with little guidance about how different strategies might impact the success of the change in different cultural contexts. 

In an attempt to begin understanding how different change strategies play out in different countries, Dr. Humayun Rashid (DM 2008) studied the reactions of Indian and Chinese (in Malaysia) business professionals toward a large-scale change.  In the spirit of practitioner-scholarship, Dr. Rashid focused on "actionable" strategies that managers can influence - in this case the nature of the change message.  There are three broad forms of change messages: "discrepancy" (does the organization need the change?); "valence"( what's in it for me?); and "support" (are others in favor of the change?). He studied the impact of change messages on "affective" forms of commitment to change, a form of commitment that has been shown in academic research to be particularly important to bringing about change (according to the work of the University of Western Ontario's John P. Meyer, among others).                                                     

Through a series of nested statistical analyses, Dr. Rashid found significant differences in how Chinese and Indian professionals responded to different change messages, and that these differences were also associated with their ages.  For example Chinese professionals over the age of 30 responded with affective commitment to change messages that emphasized "valence" or the value of the change to the individual (i.e. "what's in it for me?").  Chinese professionals under 30, on the other hand, responded with affective commitment more for "discrepant" messages, or those that emphasized the importance of the change for the organization.     Indian professionals generally did not respond to change messages with affective forms of commitment, but instead tended toward more reactive, non-affective forms of commitment ("continuance commitment") based on "valence" and "support" messages.

Dr. Rashid has presented portions of his research at the Academy of Management's Annual Meeting and the Americas Conference of Information Systems.  He is currently working with Weatherhead faculty Dick Boland and Nick Berente to prepare this work for journal submission.

Dr. Humayun Rashid is CEO and Managing Partner of Xavor Corporation, an Irvine, California-based global management & technology consulting firm (www.xavor.com ). Prior to founding Xavor in 1995, Dr. Rashid worked and consulted with global organizations such as AST Computers, Paramount Pictures, Boeing, Standard Chartered Bank, IBM and Microsoft in areas of CRM, SCM, PLM, ERP, Knowledge Management and Human Workflow & Process Integration. In addition to his DM, Dr. Rashid holds a Bachelor in Information Systems from the University of Texas, Austin and an MBA from UC Irvine, California.

Betty Moon Finds Learning Styles & Adaptability Drive Sales Performance

As products continually become more complex, the role of salespeople in bringing these products to market continues to be critical to organizational success.  While research has found that the competence and trustworthiness of salespeople is important for nurturing customer relationships, Dr. Betty Moon (DM 2008), argues that the preferred learning styles of salespeople are particularly important for selling complex, abstract products such as financial services.

To explore this issue, Dr. Moon studied over 400 salespeople in the financial services industry.  She found that an abstract learning style is positively associated with sales performance.  In part this is because a tendency toward abstract reasoning appears to enable salespeople to be more flexible in certain ways. This research is particularly important because abstract reasoning is not an attribute which is typically associated with salespeople. In addition, Dr. Moon's continuing research is focusing on the impacts of adapting and delivering training programs for sales people in which learning styles are explored and discussed.  Early indications suggest that raising the awareness of sales personnel about the impacts their customers' learning styles may play in the relationship selling process can positively impact the customer/salesperson relationship.

Much of Dr. Moon's work is based on the research of Weatherhead Faculty David Kolb and Richard Boyatzis known as the "Learning Style Inventory" and "Adaptive Style Inventory." A prime example of practitioner scholarship, Dr. Moon's research leverages well-established academic theory to help with the particular practice-based issue she faces every day.  She has presented her work at a number of organizations, most recently for the Bank Insurance and Securities Association conference in Miami (March 2010).  This work was also featured in that organization's magazine: http://www.bisanet.org/bism/2010/leveraging.html.

Dr. Betty Moon a Senior Vice President with Bank of America's HomeLoan division based in Charlotte, where she is a member of the National Sales Performance team.  In addition, Betty is a partner of MoonInsights, LLC, a corporate consulting and coaching firm (www.mooninsights.com ).  MoonInsight's consultants provide "Sales Centric" leadership training and employee assessments to improve employee selection and training and positively impact sales outcomes and firm profitability.

17 DM Papers Accepted to Academy of Management Meeting

A key element of the DM program involves learning to conduct research and write research articles that meet academic demands of rigor and theory while at the same time addressing the relevant problems of practice.  Over the course of the program, each student writes three articles: one to report the results of the initial theoretical inquiry; one to communicate the outcomes of a qualitative study; and one to report the findings of a quantitative study. Students are expected to send those  articles to relevant academic conferences for review and presentation.

This work is aimed at major academic events with stringent acceptance and quality criteria, which include the Academy of Management's Annual Meeting, the premier conference for management scholars from around the world. In January, 2010 twenty DM students submitted to the Academy of Management's Annual Meeting and the  results are just in.  These submissions were peer-reviewed and held to a strict academic standard for rigor, relevancy and interest-value.  Results of the review process have been delivered, and 17 of these articles have been accepted - 8  quantitative papers and 9 qualitative papers. Overall our acceptance rate is over 85%, which is well beyond the average acceptance rate of roughly 40%.  

The DM program presents the largest single group presenting research at the meeting. We are very proud of this achievement as it shows that DM students regularly meet the standards of high quality research. Another aspect is the amazing variety of the papers presented. The papers are presented in  multiple major divisions of the Academy of Management including:  Entrepreneurship, Managerial and Organizational Cognition, Organization and Management Theory, Organization Development and Change, Organizational Behavior, Organizational Communication & Information Systems, Public and Nonprofit Organizations, Technology & Innovation Management, and Business Policy and Strategy. Overall it shows that this program - with excellent students,  careful and continued guidance by the faculty, and inspiring intellectual environment - can produce outstanding results.

Author: Kalle Lyytinen

Director of the DM Program