So long live Mavericks!

In the meantime, of course, we have been at work on other projects as well. As for me, it is with great pleasure that I can report that I just delivered the completed manuscript of my next book, called Practically Radical, to the folks at William Morrow–the fabulous company that published Mavericks at Work. Morrow hasn’t set an official release date yet, but it should be this Fall, hopefully right after Labor Day. Between now and then, I will be blogging like mad at a site devoted to the ideas in Practically Radical. It’s a blog I’m doing in conjunction with Harvard Business Review Online, and the folks at HBR.org have been a blast to work with.

So if you’re looking for my newest ideas and latest thinking, be sure to visit my Harvard Business Review blog. That’s the place to find me in 2010. Thanks for all the enthusiasm and support, and please do visit my HBR blog and follow me on Twitter (@practicallyrad).

Here’s to a healthy and prosperous 2010!

You can read the post here.

Indeed, when it comes to creating the future, the only thing more worrisome than the prospect of too much change may be too little change—especially in an economy where there are too many competitors chasing too few customers with products and services that look too much alike. Now is the time to rethink long-held strategic assumptions inside your company, to challenge decades of conventional wisdom in your industry, and to push yourself to learn, grow, and innovate. As Albert Einstein famously said, “Problems cannot be solved at the same level of awareness that created them.” Or, in the spirit of some unknown Texas genius: “If all you ever do is all you’ve ever done, then all you’ll ever get is all you ever got.”

It’s time to do—and get—something different. Here, then, are ten questions that leaders must ask of themselves and their organizations—questions that speak to the challenges of change at a moment when change is the name of the game. The leaders with the best answers win.

1. Do you see opportunities the competition doesn’t see? IDEO’s Tom Kelly likes to quote French novelist Marcel Proust, who famously said, “The real act of discovery consists not in finding new lands but in seeing with new eyes.” The most successful companies don’t just out-compete their rivals. They redefine the terms of competition by embracing one-of-a-kind ideas in a world of me-too thinking.

2. Do you have new ideas about where to look for new ideas? One way to look at problems as if you’re seeing them for the first time is to look at a wide array of fields for ideas that have been working for a long time. Ideas that are routine in one industry can be revolutionary when they migrate to another industry, especially when they challenge the prevailing assumptions that have come to define so many industries.

3. Are you the most of anything? You can’t be “pretty good” at everything anymore. You have to be the most of something: the most affordable, the most accessible, the most elegant, the most colorful, the most transparent. Companies used to be comfortable in the middle of the road—that’s where all the customers were. Today, the middle of the road is the road to ruin. What are you the most of?

4. If your company went out of business tomorrow, who would miss you and why? I first heard this question from advertising legend Roy Spence, who says he got it from Jim Collins of Good to Great fame. Whatever the original source, the question is as profound as it is simple—and worth taking seriously as a guide to what really matters.

5. Have you figured out how your organization’s history can help to shape its future? Psychologist Jerome Bruner has a pithy way to describe what happens when the best of the old informs the search for the new. The essence of creativity, he argues, is “figuring out how to use what you already know in order to go beyond what you already think.” The most creative leaders I’ve met don’t disavow the past. They rediscover and reinterpret what’s come before as a way to develop a line of sight into what comes next.

6. Can your customers live without you? If they can, they probably will. The researchers at Gallup have identified a hierarchy of connections between companies and their customers—from confidence to integrity to pride to passion. To test for passion, Gallup asks a simple question: “Can you imagine a world without this product?” One of the make-or-break challenges for change is to become irreplaceable in the eyes of your customers.

7. Do you treat different customers differently? If your goal is to become indispensable to your customers, then almost by definition you won’t appeal to all customers. In a fickle and fast-changing world, one test of how committed a company is to its most important customers is how fearless it is about ignoring customers who aren’t central to its mission. Not all customers are created equal.

8. Are you getting the best contributions from the most people? It may be lonely at the top, but change is not a game best played by loners. These days, the most powerful contributions come from the most unexpected places—the “hidden genius” inside your company, the “collective genius” of customers, suppliers, and other smart people who surround your company. Tapping this genius requires a new leadership mindset—enough ambition to address tough problems, enough humility to know you don’t have all the answers.

9. Are you consistent in your commitment to change? Pundits love to excoriate companies because they don’t have the guts to change. In fact, the problem with many organizations is that all they do is change. They lurch from one consulting firm to the next, from the most recent management fad to the newest. If, as a leader, you want to make deep-seated change, then your priorities and practices have to stay consistent in good times and bad.

10. Are you learning as fast as the world is changing? I first heard this question from strategy guru Gary Hamel, and it may be the most urgent question facing leaders in every field. In a world that never stops changing, great leaders can never stop learning. How do you push yourself as an individual to keep growing and evolving—so that your company can do the same?

If I haven’t made you seasick, you can read the full post here.

Just five days after that article, the Times was at it again, chronicling the difficult career choices for business students, including one former Goldman Sachs intern who started her own shoe-importing company, and a Wharton grad contemplating rabbinical studies. (He wound up in real estate.)

Now, I understand the use of students from elite business schools as a proxy for “talent” in the business world. But as the economy experiences the most deep-seated changes in decades, maybe it’s time to change our minds about what kinds of people are best-equipped to become business leaders. Is our fascination with the comings and goings of MBAs as obsolete as our lionization of investment bankers and hedge-fund managers? Is it time to look elsewhere for the “best and the brightest” of what business has to offer?

One place to look for answers is the fascinating research of Professor Sara Sarasvathy, who teaches entrepreneurship at the Darden Graduate School of Business at the University of Virginia. It’s been a long time since I’ve encountered academic research as original, relevant, and fascinating as what Professor Sarasvathy has done, in a series of essays, white papers, and a book. Her work revolves around one big question: What makes entrepreneurs “entrepreneurial?” Specifically, is there such as thing as “entrepreneurial thinking”—and does it differ in important ways from, say, how MBAs think about problems and seize opportunities?

The answer, Sarasvathy concludes, is an emphatic yes—and the differences boil down to the “causal” reasoning used by MBAs versus the “effectual” reasoning used by entrepreneurs. Causal reasoning, she explains, “begins with a pre-determined goal and a given set of means, and seeks to identify the optimal—fastest, cheapest, most efficient, etc.—alternative to achieve that goal.” This is the world of exhaustive business plans, microscopic ROI calculations, and portfolio diversification.

Effectual reasoning, on the other hand, “does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.” This is the world of bootstrapping, rapid prototyping, and guerilla marketing.

The more Sarasvathy explains the differences in the two styles of thinking, the more obvious it becomes which style matches the times. Causal reasoning is about how much you expect to gain; effectual reasoning is about how much you can afford to lose. Causal reasoning revolves around competitive analysis and zero-sum logic; effectual reasoning embraces networks and partnerships; causal reasoning “urges the exploitation of pre-existing knowledge”; effectual reasoning stresses the inevitability of surprises and the leveraging of options.

The difference in mindset, Sarasvathy concludes, boils down to a different take on the future. “Causal reasoning is based on the logic, To the extent that we can predict the future, we can control it,” she writes. That’s why MBAs and big companies spend so much time on focus groups, market research, and statistical models. “Effectual reasoning, however, is based on the logic, To the extent that we can control the future, we do not need to predict it.” How do you control the future? By inventing it yourself—marshalling scarce resources, understanding that surprises are to be expected rather than avoided, reacting to them fast.

Ultimately, she says, entrepreneurs begin with three simple sets of resources: “Who they are”—their values, skills, and tastes; “What they know”—their education, expertise, and experience; and “Whom they know”—their friends, allies, and networks. “Using these means, the entrepreneurs begin to imagine and implement possible effects that can be created with them…Plans are made and unmade and revised and recast through action and interactions with others on a daily basis.”

Sounds like a plan to me! So the next time you read an article about what MBA are doing, don’t forget to think about what entrepreneurs are doing as well. They’re the ones with the right stuff for tough times.

Consider these two scenes for a revealing look at the face of leadership in difficult times—and a surprising twist on how we read those faces.

Back on February 21, after his team beat the visitors from the University of South Florida, University of Connecticut men’s basketball coach Jim Calhoun fielded a press-conference question from a gadlfly blogger. Given the state’s economic crisis, this blogger asked, would Calhoun, as the state’s top-paid employee, consider returning some of his $1.6 million salary? “Not one dime,” Calhoun shot back. “I’d like to be able to retire some day.” When the blogger followed up, Calhoun heated up, “What was the take tonight? You’re not really that stupid are you? My best advice to you—shut up.”

Meanwhile, last week, a Boston Globe columnist wrote about Paul Levy, CEO of Beth Israel Deaconess Medical Center, a legendary hospital in a city filled with them. Levy had convened a gathering of employees and executives of the 8,000-employee hospital, to discuss how the organization would respond to the economic crisis. In the days prior to the meeting, the columnist noted, Levy had been walking the halls of the hospital, examining the details of how the place worked—especially how the often-overlooked frontline employees did their jobs. He was impressed by what he saw, and decided to recognize their commitment.

“I want to run an idea by you that I think is important, and I’d like to get your reaction to it,” Levy told the assembly. “I’d like to do what we can do to protect the lower-wage earners—the transporters, the housekeepers, the food-service people…If we protect these workers, it means the rest of us will have to make a bigger sacrifice. It means that others will have to give up more of their salary or benefits.”

Now, I wish I could report that Calhoun’s rant was met by a wave of disgust and revulsion, while Levy’s gesture was met by acclaim and celebration, but the world’s more complicated than that. The latter certainly was the case. Levy’s proposal received “thunderous” applause at the assembly, according to the Globe, and it touched off wave of email brainstorming about how to save money while protecting the lowest-paid employees. The CEO’s challenge to his colleagues became a feel-good episode for the whole city.

As for Calhoun, well, the people of Connecticut spoke loud and clear—in feeling good about their coach. A Quinnipiac University poll showed that 61 percent of respondents thought that Calhoun should keep his full salary, while only 30 percent thought he should give back a portion of it. Even more strikingly, 51 percent approved of his press-conference rant, and even those who disapproved did not think he should be disciplined by the Governor, who said that she found his behavior “embarrassing.”

So how do I make sense of these two contrasting leadership moments? The bottom line is that the idea of leaders taking a pay cut in difficult times really isn’t about money, it’s about mindset—modeling the values and behavior that you’d like to see in the rest of the organization.

At a place like Beth Israel, the values are about healing, compassion, and empathy. So it’s no wonder Levy’s call for sacrifice met with approval. In big-time college sports, the values are about winning at all costs. After all, the players themselves receive no salary for their hard work, no matter how big “the take” at their games every night. But don’t feel sorry for them—their goal is to cash in with NBA contracts that make Jim Calhoun’s salary look like lunch money. As for Calhoun’s “customers,” the citizens of Connecticut? Well, they have overlooked many expletive-filled tirades in the past by Calhoun, who seems to be as execrable a person as he is effective a coach. According to the Quinnipiac poll, Calhoun has a 68 percent favorable rating in the state and an 86 percent favorable rating among basketball fans.

In other words, we get the leaders we ask for. I’m sure the 8,000 employees of Beth Israel Deaconess Medical Center are proud to have a CEO whose leadership values reflect the mission of their hospital. And I guess the people of Connecticut are proud to have a basketball coach who gets fightin’ mad when questioned about his $1.6 million salary—so long as that coach delivers plenty of wins during March Madness.

You can see the video blog here.

Yes, you read that right. (By the way, I pride myself on having coined the term). The BBC recently conducted an interview with Michael O’Leary, the combative, controversial, and endlessly colorful CEO of Ireland’s Ryanair. In the interview, O’Leary said the airline has contemplated installing coin slots in on-board bathroom doors and charging customers one British pound to use the facilities.

O’Leary and his colleagues are nothing if not disruptive. They have reshaped air travel in Europe, with a business model that is relentless about cutting costs. Indeed, Ryanair makes Southwest Airlines look downright extravagant. A few years ago, according to the Wall Street Journal, the company ordered a new batch of planes and insisted that they come without window shades, seat pockets, or reclining seats—the better to keep the planes clean and turnaround times short. By the end of 2009, the company intends to eliminate all airport check-in counters, requiring that customers check-in online.

By being draconian on costs, Ryanair keeps its fares astonishingly low—and then charges for anything and everything above the flight itself, from checked bags to newspapers to. . . perhaps. . . the toilet!

You can laugh at the idea (my guess is that CEO O’Leary, who loves to offend, is laughing himself this morning), but it does underscore a serious point. You can’t be “pretty good” at everything anymore. You have to be the most of something—the most affordable, the most specialized, the most elegant, the most colorful, the most transparent, the most friendly. Everybody used to want to be in the middle of the road—that’s where all the customers were. Today, the middle of the road is the road to ruin.

Love ‘em or hate ‘em, Michael O’Leary and Ryanair know what they’re the most of—a winning combination of insanely low costs and a colorfully high profile that allows them to carry more passengers than any other airline in Europe. As The Economist put it back in 2007, the company” has brought flying within the reach of people of the most limited means. It has helped to change the economic prospects of neglected parts of Europe by bringing passengers and their money to underused provincial airports. But at the same time Ryanair has become a byword for appalling customer service, misleading advertising claims and jeering rudeness towards anyone or anything that gets in the way.”

You don’t have to like Ryanair to loves its strategic confidence. What are you and your company the most of?