Plastic covers the outside of the fuselage plug of the Boeing jet that exploded in mid-air on January 5, 2024. NTSB (via Getty Images)
good morning.
I read the book over the long weekend. friction project, a new book by two of my favorite business school professors, Robert Sutton and Hagie Rao of Stanford University. They spent seven years working with companies to remove the bureaucratic sludge that slows down organizations, allowing them to combine the best of academic behavioral science with real-world examples. .
But what's really compelling about this book is that even as it cites pointless and soul-crushing friction as the biggest problem facing most companies, it also recognizes that sometimes friction can be good. . The authors say Google Glass rushed to market in 2012, but collapsed under the weight of hardware and software problems, poor battery life, unresolved privacy issues, and reviews calling it the “worst product”. He uses Google's Sergey Brin as an example. of all time. “A little friction would have helped.
So how can we remove the bad friction while preserving the good? Some of my takeaways:
Let's start with self-awareness. CEOs frequently complain that it is middle managers who are sabotaging execution. However, Sutton and Rao discovered that many leaders' habits drag out meetings, waste time, and mislead others in countless ways. “When you exercise influence over others, you may not realize that you are causing trouble to those below you, or that your organization is causing trouble to your clients and customers.” It's best to think of yourself as a custodian of your employees' time, as well as your clients and customers.
Champion subtraction project. “Humans by default ask, 'What can I add here?' rather than, 'What can I remove?'” Those who fight friction create new rituals to ensure the opposite. To do. Have your team identify wasted effort, meaningless practices, and unnecessary obstacles to action and systematically eliminate them.
notice 'Ignore adjustment People tend to fixate on their part of the organization and ignore how each part needs to work together. Sutton and Rao point to Steve Ballmer's Microsoft as an example where employees across the organization were stack-ranked, leading to “management by character assassination.” Satya Nadella abolished the stacked ranking system and encouraged employees to “learn everything” rather than “know it all.”
Add “good friction” if necessary. There are clearly limits to the “act fast and break things” approach—Just ask anyone at Boeing. Sutton and Rao advise adding friction at key moments, especially when irreversible and costly decisions are about to be made. One suggestion is to pause and do a “pre-win” or “pre-die” and try to imagine in advance why your project or product ultimately succeeded or failed.
There's much more to this rich book, presented in a fun style. Count it as the first book to be added to your business books in 2024. Please see the news below for more information.
alan murray
@alansmurray
alan.murray@fortune.com
top News
too much nickel
BHP chief executive Mike Henry has warned that Australia's aid “may not be enough” to save the country's nickel industry. Australia is considering tax credits and other government support for miners as the industry struggles. large quantities of cheap metal From Indonesia. BHP has written down the full value of its Western Australian nickel mine, resulting in an 86% drop in net profit for the final six months of 2023. financial times
CapitalOne wants Discover
Capital One will acquire rival Discover Financial Services for $35 billion. The merger is the largest so far this year, creating the largest credit card company in the U.S. by loan value. Acquiring Discover could allow Capital One, which has traditionally focused on subprime consumers, to acquire more premium customers. bloomberg
First large-scale CHIPS Act grant
The US awarded its first major CHIPS Act grant, awarding US chipmaker GlobalFoundries $1.5 billion. The company plans to use the funds for a project in Malta, New York. Chip manufacturers such as TSMC and Intel delayed plans Due to sluggish sales and a lack of skilled labor, the company decided to start manufacturing in the United States. Reuters
around the water cooler
Gen Z treats employers like bad dates: 93% have ghost interviews and 87% don't even show up on their first day of work Written by Oriana Rosa Royle
Chinese consumers are spending big to usher in the Year of the Dragon, but analysts still see no signs of a 'meaningful recovery' Written by Lionel Lim
While the majority of workers are desperate to upskill, Gen Z is likely to return to the classroom. Written by Emma Burley
Why a big Wall Street bank is accused of inventing a fake job title and instructing Germany's new 'head of loan transactions' never to use it Written by Pratana Prakash
German companies are pouring record investment into the U.S. as Germany and China's close economic ties falter. Written by Ryan Hogg
Sanofi CEO: AI promises a great era of drug discovery that could fundamentally change medicine, but only if we enable it. Written by Paul Hudson
THis edition of CEO Daily is curated by Nicholas Gordon.
