The Soft Edge | Book Review

Tom Peters and Bob Waterman,  authors of In Search of Excellence,  consider Management by Wandering Around (MBWA) part of the "soft stuff" (p. xii). Analytically oriented, the pair discovered things they hadn't expected and that messed with their preconceptions (p. xiii). Rich Karlgaard gives voice to such stuff, adding to a growing realization that leadership and success are not solely the products of reasoning and procedures. If we imagine our skills toolbox having more depth and more implements, a sustained organizational advantage may be gained with such repertoire.

Karlgaard envisions a balanced triangle of forces: "hard-edge" (systems and processes), "strategic base" (clear strategic direction) and "soft-edge" (human values and resilience) - (p. iii), and with five chapters examines the principal components of the soft-edge: Trust, Smarts, Teams, Taste and Story.

Consider the similarities between Karlgaard's triad and the Project Management Institute's Talent Triangle:

Note the soft-edge correlates directly to Leadership.

Tectonic Forces

In Chapter two, Hard Versus Soft, Karlgaard puts his cards on the table. Read it first, then read it again:

The soft edge is the most misunderstood side of business. It also tends to be neglected and underfunded in too many companies. Several reasons: One, the soft edge is harder to measure. Two, because it is tough to measure, it's more difficult to attach an ROI (return on investment) to it. Three, most CEOs and board chairmen are not comfortable talking in the language of the soft edge. (p. 10)

Karlgaard declares trust begins with culture and values (p. 11), and companies that develop trust have a recruiting advantage. Recall if we do not understand individual needs at the deepest level (think Energize2Lead, or E2L instinctive profile), addressing everyday performance is at best a shot in the dark. So, how do we do this? Karlgaard retells a Northwestern Mutual top recruiter story (p. xix) who found his conviction and estimates his productivity increased roughly fivefold when his passion was turned on (p. xix).

Reminiscent of Team of Teams and The Purpose Economy, the battle for money and attention boiling inside most companies and among most managers is that between the hard and soft edges (p. 20). CEOs, CFOs, COOs, boards of directors, and shareholders speak the language of finance. To these left-brained titans, the soft-edge looks like a realm of artists, idealists, hippies, poets, shrinks, and do-gooders. It's almost like Mars vs. Venus (p. 21). Ask yourself about your own organization - hard-edge, soft-edge, or hybrid?

In 2005, Dan Pink asked us "Am I offering something that satisfies the nonmaterial, transcendent desires of an abundant age?" in A Whole New Mind. Like Pink, Karlgaard finds loyalty, passion, and commitment are the dividends of a strong soft-edge (p. 21), and that soft-edge excellence is the ticket out of Commodityville (p. 21). So let's consider this soft-edge and take a closer look at its five [leadership] components, and perhaps merge the hard and soft edges like W. Edwards Deming - one of those rare geniuses who saw the magical power of harmonizing them (p. 30).

E2L | Trust

We seem to intellectually accept that trust, and truly knowing others, is at the core of leadership. Yet when we are in a hard-edge board room or a program review, to speak with any degree of straightforwardness... earnestness was [is] a social faux pas that mark[s] you as a Boy Scout or a dork (p. 37). Karlgaard likes to think of trust as confidence in a person, group, or system when there's risk and uncertainty (p. 39), with two primary dimensions. One is the external trust between an organization and its customers (p. 40). The second dimension is the internal trust among employees, managers, and top-level management. Recall the paramount importance of transforming knowledge into action described in The Knowing-Doing Gap, especially how much action counts more than elegant plans and concepts. Or, as Jay Kidd, CTO of NetApp informs us (p. 42): "When information can flow easily and it's expected to flow easily -- that's what builds trust. It's the substrate for all the interactions in a company."

Hard-edged left-brainers take note: A PricewaterhouseCoopers study of corporate innovation among the Financial Times 100 showed that the number one differentiating factor between the top innovators and the bottom innovators was trust (p. 44). Karlgaard, like Comaford, finds that making and keeping promises creates trust, while breaking promises destroys it (60). Further, he believes we tend to anthropomorphize businesses, a very agreeable point when considering the emergence of purpose-driven organizations.

Leadership Competence | Smarts

Karlgaard distinguishes two major components (p. 68) of intelligence: The ability to learn new things and solve new problems -- call this intelligence-as-process; and the ability to apply outcomes of learning -- call this intelligence-as-knowledge. Perceiving knowledge as active -- rather than a static "thing" -- allows engaging questions by leaders wishing to encourage positive outcomes and results.

There's no shortage of labels categorizing knowledge: General intelligence, Multiple Intelligence, Emotional Intelligence -- and all the other types of "intelligences" theorized and promulgated by academia -- and to Karlgaard none of them matter in business (p. 69). Instead, it's about the importance of hard work, of perseverance, and resilience. Call it grit. Call it courage. Call it tenacity. Call it a can-do attitude. We should consider these distinctions, especially when composing our personal leadership philosophy or organizational core values.

Greg Becker, CEO of Silicon Valley Bank, told Karlgaard (p. 71), "when they look for individuals, they want people who are scrappy, who have been through trials and tribulations." Karlgaard concludes:

"...the smartest people in business are not those with the highest g (intelligences). Instead, they're those who regularly put themselves in situations that require grit." (p. 72)

Leadership Characteristic | Building Teams

Karlgaard noticed that at FedEx, the 11,000 Memphis hub employees represent a tiny fraction of FedEx' 300,000 total global workforce. Fred Smith balances FedEx's global scale with an intense focus built around small teams (p. 107) of a dozen people or less, whereby each team member is more likely to care about the others (p. 108). This is very similar to Stanley McChrystal's discovery in Team of Teams.

Diversity Will Fail If It's Shallow and Legalistic (p. 113)

An award-winning paper by Thomas Kochan, a professor at the MIT Sloan School of Business, concluded that the financial (hard-edge) case for diversity remains hard to support (p. 114). Karlgaard advises: Stop thinking about diversity solely in terms of categories like gender and race. That kind of diversity is important for societal reasons, but isn't sufficient for higher performance. I've found the broader and more inclusive designation of cognitive diversity -- which includes age and experience alongside race and gender -- to be a more powerful concept, yet underreported in existing literature (p. 115).

Performance matters. Karlgaard (p. 125) recommends letting team members know your expectations. "Don't screw around. Don't be a passive-aggressive wimp about it. Don't be afraid to drive people, cajole them, and push them to find that last 1 percent of team performance. But do it with love."

Goodness | Taste

Karlgaard cites Dan Pink (p. 140) in A Whole New Mind "Abundance has satisfied, and even over-satisfied, the material needs of millions -- boosting the significance of beauty and emotion and accelerating individual's search for meaning." What, then, distinguishes what we do from others? Tom Peters considers taste the basic element that pulls all of the [soft-edge] components together (p. xiv).

We should keep in mind that an integral triangle has three sides; or as Karlgaard advises

But, beware, you cannot skip function and form and go straight to meaning. The road to taste is a long journey. (p. 141)

Karlgaard refers to meaning as the significance and associations customers experience with a product (p. 144). Perhaps this is what led the Google Ventures team to the Sprint process, capturing real customer inputs quickly and before significant investments are made in new products and services. Contemplate the demographics: Nest Labs' Tony Faddell finds new products are 90+ point of view or taste driven, and maybe 5-10 percent data (p. 170).

Developing a Following | Story

Philosopher and influential critic Roland Barthes expressed the centrality of stories throughout culture: "The narratives of the world are without number. The narrative is present at all times, in all places, in all societies; the history of narrative begins with the history of mankind; there does not exist, and never has existed, a people without narratives." (p. 177)

Karlgaard emphatically posits purpose is a hugely important soft-edge factor:

"Yes it takes soft-edge traits like courage and passion. But as soon as you lose that real belief in your greater purpose and fail to sell it, you begin compromising whatever it was that made your brand great." (p. 181)

Or put another way, even a hard-edge data scientist's real job is, or soon will be, storytelling (p. 205).