Wednesday, April 21, 2021

Creativity & The Power of Persistence

Source: Thrive Global

Does our creativity diminish over time?  Most people think so.  They believe that that we are likely to generate our most creative and innovative ideas during the early stages of brainstorming.  Unfortunately, people are being misled because they think that those ideas that are harder to generate (i.e., that take some time to surface) are less innovative. They are mistaken in that belief. Those ideas you generate quickly and easily are not necessarily your most creative concepts.  

Professors Loran Nordgren and Brian Lucas have conducted a series of studies demonstrating that our creativity increases with some persistence.   Moreover, they have shown that people's failure to recognize the power of persistence comes at a cost.  Nordgren notes that people's mistaken beliefs may actually cause them to give up prematurely in search of transformative ideas, and therefore, not to maximize their creativtity. Nordgren explains, "People think their best ideas are coming fast and early.  You’re either not seeing any drop-off in quality, or your ideas get better. People don’t maximize their creative potential, and part of that is because of these beliefs." 

It's perhaps not surprising that people don't recognize the power of persistence when it comes to creativity.  As brainstorming begins, people tend to generate lots of ideas.  As time passes, it becomes more difficult to offer original ideas.  The drop in quantity often leads to a drop in energy in the group.  There's a sense that the team is floundering a bit.  Those feelings likely cause people to conclude that they are not likely to generate highly creative ideas if they continue their conversation.  Teams should not fall into this trap though.  They should not confuse quantity with quality.  Perhaps they need a break to achieve some pscyhological distance from the problem.  However, they should not give up. They should persist.  

Monday, April 12, 2021

Subtracting Features to Enhance Products: We're Biased Against Doing That

Source: Wikimedia

Diana Kwon recently wrote a Scientific American article titled, "Our Brain Typically Overlooks This Brilliant Problem-Solving Strategy."  She opens with an anecdote about how kids learn to ride a bicycle today versus in the past.  When I was a kid, my father installed training wheels on my bike, as many other parents did.  Today, more and more parents are opting to purchase balance bikes for their children.  These two-wheel bicycles have no pedals.  Kids learn balance and coordination on these bikes. Many say that these bikes are much more effective than training wheels.  Kwon asks the question, "Given the benefits of balance bikes, why did it take so long for them to replace training wheels?" 

To answer that question, Kwon describes a fascinating new research study published in Nature by Gabrielle Adams, Benjamin Converse, Andrew Hales and Leidy Klotz.  The article is titled, "People systematically overlook subtractive changes."  The authors found that people tend to focus on adding components and features when trying to improve a product or service, rather than considering how they migth subtract features and attributes.  This bias toward addition appeared quite strong in their research.  

For me, this interesting research has implications beyond product design.  It explains a great deal about the strategic mistakes that firms often make.   In strategy, we often talk about the power of choosing what not to do.  Great firms make tradeoffs, rather than trying to be all things to all people.    Choosing what not to do means subtracting features.  Southwest took away assigned seats and first class cabins.  Ikea took away furniture assembly and delivery.   Trader Joe's took away branded products, extensive product selection, self-checkout, and loyalty cards.  Edward Jones took away investment opportunities in penny stocks, options, and commodities.   Stihl took away distribution through big box retailers.   Why do firms struggle to make tradeoffs.  We have often said it's because managers become enamored with growing the top line, and they want every customer they can get... rather than thinking carefully about how to create a distinctive, difficult-to-imitate position in the market, tailored to a particular customer segment.  Now this research explains that there may be a persistent bias against subtraction inherent in the way that we think about improving existing products and services. That may be getting in the way of making good strategic tradeoffs. 

Wednesday, April 07, 2021

How about Building a "To-Don't List" for Yourself?


Diana Shi has written an article for Fast Company in which she describes how she tried to craft a "to-don't list" as a means of improving her effectiveness while working remotely. She defines it as follows: "In essence, the list is a curated collection of activities that can derail your energy and motivation. They’re often alluring but end up creating a distracting spiral, sapping you of your most productive hours."   Shi began by reflecting on her daily activities and trying to identify those that derailed her and lowered her effectiveness and personal satisfaction.   Shi discovered that the list helped her in several important ways:

1.  The list offered helped her establish some personal accountability by providing a visible reminder of the actions that distracted her or prevented her from maintaining her energy and focus.  Her list included items such as not sitting in one place for more than an hour,  drinking too much caffeine, or engaging in a specific inefficient work practice to which she had become accustomed.  

2. The list helped her spot unhealthy patterns in her daily routine.  She identified the times and the activities during which she had high energy and productivity, as well as the practices that were not as effective. She quotes time management coach Elizabeth Grace Saunders: " “I think a to-don’t list is helpful if you’re working remotely.  A lot of times our minds wander because we’re simply bored and seeking stimulation. Knowing what your unhealthy patterns may be when you’re bored, and preemptively limiting them, can help you to make better choices in the moment."

3.  Finally, the list helped her feel a sense of accomplishment, just in a  different way that a traditional to-do list.  She writes, "Something can be said for being able to look over your list of “to-don’t’s” and not crossing them off, but congratulating yourself on the self-control needed to follow them. I felt less defeated, since I didn’t have an entire collection of tasks to address by late-afternoon. Moreover, my “to-don’t” bulletin made me aware of why it was I hit a wall."

Thursday, April 01, 2021

Teaching at Bryant University's College of Business

I have some terrific colleagues on the faculty - passionate, dedicated professors who love what they do.  Thank you to New View Media for creating this video for the College of Business at Bryant.  For more videos featuring our young alumni as well as other faculty, go to our YouTube channel at: 

Monday, March 29, 2021

A Simple Strategy to Help Us Achieve Our Goals

Source: Gold Dust Dental Lab

Katie Mehr, Amanda Geiser, Katherine Milkman, and Angela Duckworth have published an interesting new study that highlights a simple strategy that might help us achieve our goals.  They studied people's efforts to exercise more often.  They introduced a simple strategy; they call it "copy-paste prompts."  In their experiment, they gave some participants the following instructions:

"In this study, we want to help you learn about an effective hack or strategy that someone you know uses as motivation to exercise. Over the next 2 days, we’d like you to pay attention to how people you know get themselves to work out. If you want, you can ask them directly for their motivational tips and strategies."

In other words, participants had to actively seek out goal achievement strategies from people they knew.   They compared the behavior of participants receiving these instructions to a control group, as well as a group that passively received advice on how to meet exercise goals.  In short, encouraging people to benchmark and learn from others is an effective way to nudge them toward putting in the work to achieve their goals.  It's much better to encourage them to ask for advice rather than telling them what to do.  It's simple and intuitive, and it's not a costly intervention.  The scholars discovered that, 

"A brief and virtually costless copypaste prompt improved goal-directed outcomes over the following week. Specifically, this nudge led to greater increases in the amount of time spent exercising than did passively receiving a strategy of similar quality, highlighting the value of actively finding goal-related strategies among one’s peers."  

Why did this simple strategy prove effective?  They provide several reasons.

1.  Examining the effective strategies of peers raises the probability that individuals will actually employ advice.  Moreover, hearing what works for their peers increases people's beliefs in their own abilities to achieve certain goals. 

2.  The advice may be more "customized and goal-relevant" since the individuals chose the peers from whom they wanted to learn.  

3,  People feel a sense of empowerment and autonomy when they seek out information and advice themselves, rather than being told what to do. 

Monday, March 22, 2021

Demonstrating Impact, Showing You Care

Thasunda Brown Duckett, CEO of TIAA
Source:  WSJ

In Google's Project Aristotle, Julia Rozovsky and her team identified the five most important attributes that distinguish the highest performing teams at the company from the lowest.  Impact was one of these five characteristics.  Rozovsky and her group defined impact as follows:  "The results of one’s work, the subjective judgement that your work is making a difference, is important for teams. Seeing that one’s work is contributing to the organization’s goals can help reveal impact."  What happens, though, if workers don't always feel as though they are having a significant impact on the company's broader goals and objectives.  What if some workers never interact with customers, and thus, never see the positive effect their actions have on customer experience and satisfaction? Leaders need to bridge that gap. They need to create a "line of sight" between the workers' actions and the customer. They need to demonstrate and affirm that the workers are having an impact.  In so doing, leaders also can show their front-line employees that they truly care about them and value their efforts.  

Here's a great example of a leader who understood the importance of affirming impact. Thasunda Brown Duckett is the new CEO of TIAA.  Prior to that, she served in several senior executive positions at JP Morgan Chase, including as CEO of their Auto Finance business.  In an interview with David Gelles of the New York Times, she described one of her early moves as leader of that business at JP Morgan Chase: 

When I was named C.E.O. of Auto, within the first 90 days I went to the mail room, and I told them, “Keep doing your job with excellence. If you don’t put that payment in the right chute, and it accidentally goes to mortgage, then the customer doesn’t post on time, they’re upset, and they end up closing their account with us. But you started that process. So when you hear me talk about our customer experience having improved, brush your shoulders off.”  And they go, “You’re welcome. You know we got you.” At that moment I was able to connect them to Chase, to this bigger narrative. And now they know that T cares about everybody.

Friday, March 19, 2021

Why Do Entrepreneurs Keep Entering Highly Unprofitable Industries?

Source: New York Times

During the early days of my strategy courses, we often learn about Porter's five forces as a tool for evaluating industry structure.  We often examine industriest at the extreme - either highly profitable (such as pharma) or highly unprofitable (such as airlines or fitness centers).  We use the framework to try to explain the level of profitability in these markets.  Of course, one examine barriers to entry quite closely.  Low barriers to entry tend to depress profits in an industry, because new players can easily come in and compete on a relatively even playing field with incumbent firms.  

Students often ask me a question:  "Why do entrepreneurs keep entering these industries with consistently low profits? Don't they understand how hard it is to make money in these markets?"   What a terrific question!  As I read a New York Times story this morning about two new upstart airlines, the question really hit home again.  Why enter the airline business when it has been so unprofitable for decades?  After all, Richard Branson has told a great joke about the business.  He says that people always ask him how to become a millionaire.  He says it's quite easy.  You just start as a billionaire and then open an airline.  

What is happening in these industries?  For me, three factors explain the continued entry into unprofitable markets. 

1.  The low barriers to entry make it quite enticing for entrepreneurs.  They don't see the major obstacles that often obstruct entry into other industries.   They would love to be an entrepreneur, and they are looking for "easy targets" - i.e. markets that they can access more readily than some others.  

2.  They enter because, to them, it's a lifestyle business. They aren't think simply in terms of profit maximization. Fitness centers is a good example.  People open gyms because they have a passion for fitness and wellness.  They also would love to be their own boss.  A similar phenomenon has emerged in the wine industry. Many people enter the business because of their passion for the art and craft of making wine.  It's also a status symbol to enter the industry. Witness the celebrities who enter, including athletes, movie producers, and actors and actresses.  

3.  Entrepreneurs think to themselves, "I'm different. I'll be the exception to the rule."  In fact, some of the most compelling business stories are those of firms that have made strong profits in very unattractive industries. People know the remarkable story of Southwest Airlines, or Ryanair in Europe.  Or, they have observed the success of Planet Fitness and Trader Joe's (both companies about which I have written case studies - Planet Fitness case and Trader Joe's case).   Therefore, entrepreneurs think to themselves, "I can do that!"  Or, they look at the many failures in the industry and think, "That won't be me. I'm smarter than that!"  Unfortunately, they often don't understand quite what that it takes to position a firm to survive and thrive in a very challenging industry.   Hubris clouds their judgement as well.