In the tradition of famous word couplings — think “Branjolina” and “bromance” — let’s call this partnership “STARZ.”

In taking this step, Starbucks is signaling that they understand the power of being — and being seen as — an institution. Not the kind that cares for people who have mental and emotional problems. Nor the type synonymous with large, faceless, bureaucratic corporations. (Insurance companies come to mind.)

The kind of institution I’m referring to is the kind that underpins a company’s ability to thrive and endure. Here, from Webster’s, is the definition that counts: An institution is “an organization that has a relationship with the culture or society of which it is necessarily a part.”

Starbucks gets this imperative and its investment in higher education is how it is bringing its understanding to life. Why education? Because education is the oxygen of progress. It breeds curiosity, innovation and opportunity — the stuff society needs to stay healthy. In Starbucks’ case, an investment in education will breed profits, too.

Are there other STARZ out there? I hope so. I’d put Google on the list, along with Zappos and Whole Foods. What organizations come to mind for you? Which ones have the potential to become true institutions? Which ones never will?

The post Count your lucky STARZ appeared first on Larry Ackerman.

I recently read an article about Starbucks and its attempt to rejuvenate itself by going back to its essential, idiosyncratic roots, its eclectic, neighborhood gestalt, which eventually spawned its enormous success. Analysts are betting against the company’s ability to make this work. Howard Schultz, Starbuck’s founder and current CEO, says it will. I say it will. Why? Because innovating from the core – going ‘back to the future’ to jump-start innovation is the most natural act in the world.

Ford does it by continuing to ‘democratize the automobile,’ something it’s been good at since 1900.

IBM does it by applying technology solutions to solve the world’s thorniest business – and now societal – problems.

Apple does it by irrepressibly finding new ways to ‘humanize the computer.’

How does your company do it?

Why are we obsessed with promulgating the “new and improved” when the life of our organizations depends on constantly re-interpreting its original vision, or purpose in ways that marry up to how people and markets are changing?

Why do we look outside for answers that are right under our noses?

###

Flickr photo courtesy of H. Kopp Delaney

The post Innovating from the inside-out appeared first on Larry Ackerman.

Jim Press – once the top Toyota executive in the U.S. – recently stated that “The root cause of [Toyota’s] problems is that the company had been “hijacked by anti-family, financially oriented pirates.” Those executives “didn’t have the character to maintain a customer-first focus.” Why would such a paragon of corporate success shoot itself in the foot? I can’t help but default to the old (and admittedly tired) adage that money is the root of all evil. I don’t want to believe that, but these guys make it hard not to.

Toyota’s acceleration debacle is poetic. Toyota’s slogan is Moving forward, which they – not just their vehicles – did, in no uncertain terms. The automotive analogies are many … hitting a wall, crashing, spinning out, etc.

I’m disappointed in Toyota. They let me down. (Disclosure: I own a Lexus SUV.) More important, they let everyone down. I expect they’ll get religion, get their act together, and once again thrive. What’s most upsetting to me is the countless number of other “Toyota’s” out there, who will wind up going down the same road as these guys. What a waste.

By contrast, there’s Ford, who earned a healthy, $2 billion-plus in the last quarter. Somehow, they managed to stick to their core principles, profiting from their identity.

Apart from fixing their product problems, and issuing heartfelt mea culpas, I think Toyota’s management should do personal penance. In the meetings they have with non-Toyota executives, in the speeches they give at conferences, even in the words they speak to their children over the dinner table, these people need to send a message: Never do what we did. Why?

Because the costs of turning your back on who you truly are, are just too high.

The post Toyota’s “Acceleration” Problem and What It Means for You appeared first on Larry Ackerman.

Ask yourself this question: Have you ever heard of a VP for Financial Resources? Not likely, They’re simply VP for Finance, or Chief Financial Officer. The word, finance, stands on its own. Therein lies a seemingly innocent, yet elephant-in-the-room sized challenge for HR: Getting beyond the word ‘resources’ and focusing on human issues. “Human Resources” conjurs up all of the standard people management challenges, ranging from benefits administration, labor and leadership development, to recruitment, training, and compensation. As much as these disciplines are needed, do they really do justice to the human issues that deeply influence how well organizations perform? Issues like personal happiness and fulfillment that are the backbone of motivation? Issues of self-actualization and purpose which, unlike any financial incentive, fire the imagination and lead to unstoppable energy?

When we unleash the uniqueness and potential of individuals, we unleash value-creating instruments unlike any others. But doing so isn’t a human resources challenge; it is a human challenge and meeting it promises to be one of the great adventures of the 21st century.

The post The Problem with Human Resources appeared first on Larry Ackerman.

Ever since “the vision thing” collided with “execution is everything,” people have failed to resolve the ‘what is more important’ tug-of-war between these two powerful forces. Here, I offer a way to resolve the debate to everyone’s potential satisfaction (or consternation). Forget business for a moment; let’s garden.

It’s a simple fix, really, with a simple manifesto: Be the gardener. To all prospective CGO’s – chief garden officers – follow these instructions for a healthy organization.

Envision the harvest you want your business to produce, then, start with a few well-placed seeds: the right people, ideas, products, technology, capital, etc. Water, fertilize, tend, weed. In relation to your objectives, do all the little things gardens require in order to bloom. Beware over-fertilizing or watering in the name of speed. It will kill your plants. Don’t try and force growth. It just won’t work.

Combined, vision and execution are both a matter of cultivation. Practice being the gardener with your business – or your life – and small accomplishments will have great significance as your company – and you – blossom.

The post New Executive Title: CGO – Find or train one today! appeared first on Larry Ackerman.

Reminds me of my work for Norsk Hydro someyears ago, a 100 year old Norwegian conglomerate under attack from shareholders who felt the parts were worth more than the whole. My work for Hydro helped keep the company intact, but that’s another story.

The value-creating power of GE comes from managers crossing business lines on a regular basis, the creation of second-to-none generalist-leaders whose experience transcends the division they happen to work for at the moment. Strip out too many businesses to unlock shareholder value, and GE dies. So does one of the world’s most powerful schools of management.

There are always parts of organizations that can be shed for good reason – they just don’t fit. But in GE’s case, nothing fits and that’s the beauty of it all. GE is a paradox of focus…to be good at what it does, it needs to stay multi-disciplinary. Disassemble the company – even just a few of its main economic pistons – and the institutions will wither. This is the logic of identity-based management: who you are is as important as what you do. It is what separates great companies from good ones, to borrow from Jim Collins’ book title. But too many executives just don’t get it.

Jeff Immelt has a responsibility to investors, yes. But his larger leadership responsibility is to others as well, like up and coming managers who, if they survive “GE-U,” fire up others, including other organizations, which benefits everyone, even society. Immelt needs to be the steward of GE’s identity – its invisible, ultimately powerful, drive to be the purveyor of continuous rustworthy change.That’s what GE really “sells,” that’s how GE creates proprietary value,and the only way it can continue to do that is if it stays fundamentally intact.

The post Who is GE without all its parts? appeared first on Larry Ackerman.