BOOK REVIEW: “Confidence : How winning streaks and losing streaks begin and end” by Rosabeth M. Kanter (2004)

Confidence How winning streaks and losing streaks begin and endRosebeth Kanter holds the Earnest Arbuckle Professorship at Harvard Business School and specializes in strategy innovation and leadership for change. One of her areas of research is why organizations and people gain confidence and why they lose it. This book outlines some of the main reasons that she has discovered as the result of 300 interviews and two surveys with over 2700 responses.

Key words

Confidence, organization, people, sports teams, corporations, Gillette, Continental Airlines, BBC, Harvard Business School

The book concentrates on two main areas: sports teams and industry cases such as Gillette, Continental Airlines, and the BBC. Kanter is clearly a great fan of sports and a lot of the book is dedicated to studying sports, particularly baseball teams. Perhaps her passion for the sport is not surprising, given that she lives in Boston where both baseball and American football are highly popular. However, if you do not have a good knowledge of these two sports, some of this might be a little bit difficult to follow.

Continental Airlines shift

Continental Airlines faced difficult operational years

The examples she provides on several businesses are excellent. Clearly, she has much in-depth, firsthand knowledge of Continental Airlines and its turnaround under Gordon Bethune after 1994. The airline had gone through a terrible ten year period, which included going bankrupt several times and one of its CEOs shooting himself at his own desk. Under Bethune, however, the airline was able to quickly turn itself around. This, in part, came mostly from the CEO giving the employees confidence in what they did and aligning them on some very simple but clear goals. This included offering a $65 check to the employees if they could improve their performance on just one key indicator, that of on-time arrivals. When the employees did this, Bethune kept his promise, and in March, 1995 sent 38,000 checks for $65. Some employees were so impressed by this, they actually framed them. Bethune’s mantra was to get all the employees aligned on the same goals. Between 1995 and 2000, the company had twenty-four profitable quarters and won numerous awards.


Gillette’s management executed the turnaround impressively

The turnaround at Gillette is also another interesting case study. Kanter clearly consulted and researched the company over a number of years, beginning in 1994. In fact, her first impressions of it was that it was a Good Ole Boy Network where all the senior executives were white males with gray hair. This did nothing to help its innovation. This changed radically with the arrival of Kilts as CEO. His emphasis was clearly on sales and ensuring that the sales force not only met their targets on a generic indicator but also did so on each and every one of their products they had to meet. He also simplified the whole system, eliminating 17,000 SKUs within his first year that represented 1 percent of Gillette’s sales. The figures for the change in Gillette’s performance are highly impressive. Kanter’s principal message is that winning is a question of forming positive habits. She concludes by saying that you should try not to lose twice in a row, admitting that although this is easy to say, it actually gives you the confidence to bounce back once you have a setback. She concludes by restating by what she calls Kanter’s law: Everything can look like a failure in the middle.

However, winners define setbacks just as a minor hiccup of a detour in the road to success and will double their efforts to win and get around any obstacles in their way.

Rosabeth Moss Kanter holds the Ernest L. Arbuckle Professorship at Harvard Business School

Interesting quotes

“Sometimes it seems as if there are only two states of being: Boom or Bust.”

“Confidence is the bridge connecting expectations and performance, investment and results.”

“Confidence helps people take control of circumstances rather than be dragged along by them.”

“People who believe that are likely to win are also likely to put in the extra effort at difficult moments to ensure that victory.”

“To shift a cycle from decline to success, leaders must restore people confidence in the system, in the organisations, in the group and in themselves.”

“Continental Airlines’ turnaround CEO Gordon Bethune said, “It’s a lot harder to keep things going great than to get them going great in the first place. People who have put in long hours willingly during the crisis can start to relax a little, enjoy the success, and maybe figure that they’re good enough, unless they get more motivation to keep getting better”.”

““Kanter’s Law”- Everything can look like a failure in the middle-applies even within a single game. Happy endings or wins are often the result of persistence- of not giving up when everything seems to be in jeopardy.”

“In one study of fifty-seven bankrupt companies of the 1980s and a set of matched survivors, now-defunct losers such as W.T. Grant and Braniff Airlines showed signs of relative weakness as early as ten years before failing. They were prompted up by growth markets and had enough working capital to cover obligations, so they thought they could ride out any storms.”

“Airline employees are the ultimate migrant workers, always mobile, often remote, and unsupervised at critical moments in the air. They can easily feel disenfranchised.”

“But self-confidence is not the real secret of Leadership. The more essential ingredient is confidence in other people. Leadership involves motivating others to their finest efforts and channelling those efforts in a coherent direction.”

“Leaders of organizations in success cycles are a little like rabbits, constantly reproducing.”

“Publicizing achievements of individuals and teams reinforces pride in one another. To ensure collaboration, it is important to invest not just in stars but to lift everyone’s level of play; too much inequality of attention drives a wedge between people and groups.”

“In business, streams of innovations make it possible to stay head of the competition.”

“By now he secret of winning should be clear: Try not to lose twice in a row.”

“Being equidistant between the best and the worst is not a disaster, but it does not inspire confidence either. And it is an unstable state.”

“Commitments comes from high internal standards- the desire to achieve excellence in whatever the pursuit, and regardless of the outcome.”

“Winners redefine setbacks as detours in route to success, and they redouble their efforts to find a way around the obstacles.”

The author refers about transforming giants (industry companies) within an interview

See more book reviews:

BOOK REVIEW: “From Worst to First” By Gordon Bethune (1999)

from worst to first by gordon bethune

The turnaround of continental airlines in the 1980’s is one of the most remarkable stories of the corporate world. The company was set up in 1934 and for decades had been known for quality of its service and the stability and caring of its governance structure. Indeed the CEO Bob Six had actually been CEO of the company from 1936 till 1981. The deregulation of the airline industry by the Carter administration changed all that. Suddenly, Airline companies became caught in a dog fight for market share. In an industry that saw its profits plummeting due to the increase of oil prices and also the lack of barriers to entry in the industry. By the time Gordon Bethune took over in 1994, the company had gone bankrupt already and had gone through 10 leaders in 10 years and looked, to all intents and purposes to be totally doomed.

BOOK REVIEW: “Thinking, Fast and Slow” by Daniel Kahneman (2011)

Thinking, Fast and SlowThinking Fast and Slow is one of Amazon’s best sellers at the moment. Deservedly, so. This book is the summary of the research done by Nobel Prize winner Daniel Kahneman for the past 40 years in behavioral economics.

BOOK REVIEW: “The New Age of Innovation: Driving Co-Created Value Through Global Networks” by C.K. Prahalad & M.S. Krishnan ” (2008)

The new age of innovationThe New Age of Innovation is one of C.K.Prahalad last works. The central theme lies around what they define as N=1; R=G. Increasingly today business is having to adapt to the logic of the individual needs of each customer (N=1). At the same time, they are finding their resources on a global scale (R=G).

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Filed under Advanced Management Program, Book Review, Business, Corporate responsibility, Ethics, Harvard Business School, Leadership, Management, Research, Strategy, USA

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