Friday, December 07, 2018

Unlocking Creativity

My new book, Unlocking Creativity, will be released one month from today, on January 7th, 2019.  You can pre-order the book now.  Thank you for taking a look at my new work! I look forward to hearing what you think!

Discussing Your Failures as a Leader

Source: Wikipedia
Allison Wood Brooks and her colleagues have published a new working paper titled, "Mitigating Malicious Envy: Why Successful People Should Reveal Their Failures."   These scholars argue that leaders need to discuss their failures openly.  They should avoid simply talking about past success, because focusing only on past achievements can stir up "malicious envy" on the part of team members.  Brooks explains,  “When people feel malicious envy, they engage in counterproductive work to harm other people.  They tend to undermine others and try to slow them down.”  However, you might be thinking that discussing failures undermines people's perceptions of the leader's competence reduces their ability to inspire and motivate others to follow them.  Brooks and her colleagues find that acknowledging past stumbles does not reduce admiration for the leader.  You can read more about their research in this column from HBS Working Knowledge.

Interestingly, other research suggests that there may be another important reason for leaders to open up about their failures. Research in the field of education by Xiaodong Lin-Siegler and her colleagues examined how students responded to stories told about the achievements of great scientists such as Albert Einstein, Marie Curie, and Michael Faraday. If students heard only heroic stories of their achievements, they performed worse in science class than if they heard stories of the challenges and obstacles that these scientists faced, and the failures on their path to great achievement.   Students could identify more with those authentic stories of difficulty and challenge.   Moreover, they were more confident in their own ability to excel in science if they heard these stories of challenge and triumph.   

The lesson is clear for leaders.  You not only reduce malicious envy if you open up about past failures, but you may bolster the confidence of your team members.  The belief in their ability to take on new challenges may rise, and as a result, performance of your team may increase as well.  Most importantly, others' perception of your competence may not suffer if you are honest with them about past achievements and struggles.  

Thursday, December 06, 2018

Four Models of Management from Legendary Rock Bands

Source:  Wikimedia Commons
Ian Leslie has written a terrific story for The Economist's 1843 magazine titled, "A rocker's guide to management."  In the essay, Leslie describes four models for organizing a great rock band and draws some conclusions about how to run a start-up and later a more complex business. Leslie writes, "The history of rock groups can be viewed as a vast experimental laboratory for studying the core problems of any business: how to make a group of talented people add up to more than the sum of its parts. And, once you’ve done that, how to keep the band together."  He describes four models for how to run a rock band:

Friends: "We Can Work It Out" - example: The Beatles

Leslie cites research demonstrating that having friendships at work can enhance employee engagement and job satisfaction. Moreover, he notes that the intimate friendships of John, Paul, George, and Ringo meant that they could literally finish each other's sentences.  Of course, working with your closest friends has its costs and risks.  Differences of opinion on issues can turn emotional and interpersonal in a hurry.  Fractures can result within a team.  
Autocracies: "I Won't Back Down" - example:  Tom Petty & The Heartbreakers

Leslie notes that Tom Petty used to lead the band in a very egalitarian fashion.  He shared all profits equally.  Soon, though, he realized that trying to operate as a team of equals proved problematic.  He shifted toward a more top-down approach and no longer shared profits equally.  People had a hard time accepting his decision at first, but eventually, they worked through their differences and remained a cohesive, productive band for decades.  Leslie also points to "The Boss" - Bruce Springsteen - as an example of an autocratic approach. Springsteen once said, “Democracy in a often a ticking time bomb. If I was going to carry the workload and responsibility, I might as well assume the power. I’ve always believed that the E Street Band’s continued existence is partially due to the fact that there was little to no role confusion among its members.”  Some famous founders have operated autocracies successfully, but of course, autocracies come with serious downsides as well.  The lack of empowerment can be very demotivating in many circumstances.  Moreover, if the leader makes questionable decisions, and they remain unchallenged, team performance can suffer greatly.  

Democracies: "Everybody Hurts" - example:  R.E.M.

Democratic approaches in rock bands, as in startups, can be problematic at times, as people do not understand or accept their roles.  Members find themselves stepping on each other's toes, and they fight over who deserves the credit.  However, democracy worked for R.E.M. and for Coldplay.  Leslie writes, "The democratic model depends on individual members believing that each has the group’s interest at heart, not just their own... R.E.M.’s decision-making process meant they exhibited confidence in each other every day. There must also be a belief in each other’s competence. Tony Fletcher, the biographer of R.E.M., says that “usually in a band there’s someone the others think isn’t good enough, or isn’t pulling their weight.” But that was never the case with R.E.M., all of whose members were skilled in multiple ways. “Everybody Hurts”, the band’s biggest hit, was largely written by the drummer, Bill Berry."  

Frenemies: "It's Only Rock 'n' Roll" - example:  The Rolling Stones

The Rolling Stones learned to respect one another and to divide up their responsibilities clearly.  They each had a defined role.   Mick Jagger ran the business, while Keith Richards focused on music. He didn't always like Jagger's decisions, but he deferred on business matters to this bandmate.  They didn't always get along, but they tended to benefit from a level of constructive conflict and tension.  One reason that they managed to survive as a group for so long is that they didn't let disagreements fester beneath the surface.  They argued it out.   Finding that perfect balance of conflict and compromise can be very challenging though.  Many groups cannot prevent their issue-based disagreements from spilling over into the personal.   

Monday, December 03, 2018

SNL Parody: Netflix Originals

Check out this funny Saturday Night Live parody video, which takes aim at Netflix's strategy for creating tons of original content.  It's a great way to start Monday morning!

Thursday, November 29, 2018

Should America Be Run By... Trader Joe's?

I'm honored to be featured on this week's episode of the Freakonomics podcast.  They interviewed me regarding the research that I've conducted about Trader Joe's.  For more information about my research on the company, you can check out my HBS case study (co-authored with David Ager) as well as Chapter 4 of my forthcoming book, Unlocking Creativity

Wednesday, November 28, 2018

Team Effectiveness Lessons from The Celtics' Early Season Struggles

Source: Wikipedia
The Boston Celtics basketball team entered this season with much promise and high expectations. Last year, with two of their top players missing, they made it to the Eastern Conference Finals.  This year, with superstar Kyrie Irving back from injury and former All-Star Gordon Hayward back from injury as well, many analysts and fans expected a trip to the NBA Finals.  However, they have struggled through the first 21 games.  They have won 11 and lost 10.  What's wrong? Many people have pointed to the fact that they are trying to sort out their roles.  Young players who played a ton of minutes in last year's playoffs have had to adjust to the return of two veterans.   The veterans have had to adjust to the fact that some of these young players developed into major contributors and expect more playing time and more shots.   It seems as though they haven't figured out their roles, and they don't fully understand how they fit together.   Many teams struggle when the members don't have clearly defined roles and responsibilities, and when members don't understand how they complement one another.   We should not be surprised if it takes a few months for the Celtics to settle into a groove and become a cohesive unit.  

Research also shows that some level of hierarchy can be beneficial on teams.  A "team of equals" does not always perform best.   Consider research by Nir Halevy and his colleagues.  They have demonstrated some of the benefits of hierarchy.  In fact, they have studied NBA teams.  They collected data over 11 seasons.  They examined the dispersion of salary and playing time among players on each team.  They found that teams with wide dispersions tended to win more games than those with what appeared to be more egalitarian structures.  In short, it helps if all the players recognize who the superstars are, and who the role players are, on the team.   A team of people who all think they are roughly equal doesn't perform best, according to this research.   The researchers argued that a clear pecking order led to more cooperative behavior among teammates.  In fact, they showed that the more hierarchical teams had more assists - a statistic that measures when one player helps a teammate score a basket.  

Could the Celtics have too "flat" a structure?  Perhaps.  Analysts have described them as having lots of interchangeable parts.  They have extolled the virtues of having players who can play "positionless basketball" because that means they can switch on defense all the time (a strategy that can be effective in today's NBA).   Are they right though?  Is a team of interchangeable parts who play positionless basketball really best? 

Consider the Celtics this year.  They appear to have a flatter structure, as opposed to a clear pecking order.   That might be part of the problem.  Everyone surely recognizes that Kyrie Irving is the best player.  However, after that, it may be a bit dicier.  Gordon Hayward is a former All-Star, but he missed all of last year after a gruesome leg injury.  He's clearly not back to full health.  Al Horford is a highly paid former All-Star, but he isn't a high scorer and seems to be showing some signs of age.  Meanwhile, youngsters such as Jayson Tatum and Jaylen Brown excelled in the playoffs last year, and they may think of themselves as rising stars in the league.  They may not be ready to defer as easily to these former All-Stars.  Terry Rozier, the back-up point guard, became accustomed to being the starter with Irving injured last year. He may think he's just as good as many of the starters, though he has now had to return to the bench. 

In the November 28th episode of the Celtics Beat podcast (start at 26:00 minute mark), legendary sportswriter Bob Ryan argues this very point about having a clear pecking order.  He describes great teams of the past as having a clear starting five, a few well-defined role players or "specialists" off the bench, and a few players at the end of the bench who know that they aren't going to see much playing time.  

What's the lesson from the Celtics' struggles?  Knowing who the star is and who the role players are can be important in certain kinds of teams.   Clear roles and responsibilities are very important for a team to excel.   An adjustment period is clearly needed when you are trying to integrate new members or re-integrate former members who are returning to a team.  It's not just about putting together the most highly talented set of individuals.  It's about figuring how they fit together, and helping each member understand how they fit with their fellow team members.  Getting people to buy into their role is a key job for a coach and for any team leader.  

Tuesday, November 27, 2018

Draw It and You Will Remember It

Source: pxhere
Myra Fernandes, Jeffrey Wammes, and and Melissa Meade have published an article titled "The Surprisingly Powerful Influence of Drawing on Memory" in Current Directions in Psychological Science.  The scholars write, 

"The colloquialism 'a picture is worth a thousand words' has reverberated through the decades, yet there is very little basic cognitive research assessing the merit of drawing as a mnemonic strategy. In our recent research, we explored whether drawing to-be-learned information enhanced memory and found it to be a reliable, replicable means of boosting performance."   

How do the scholars explain this powerful effect on our ability to remember concepts? They argue that you have to elaborate on the meaning of a concept in order to create a visual representation of it.  Mroeover, you use your motor skills to craft the drawing, and you use visual processing abilities to examine the picture and determine whether it has accurately depicted what you intended to represent.  Together, engaging these different mechanisms of our brains helps us remember the concept more effectively than if we simply tried to write out notes or visualize the concept.  

The research clearly has implications for education.  I hope to draw on these lessons as I work with students moving forward.  However, the research also has lessons for how leaders work with their teams to craft and implement strategy.   Sketching out strategies and goals may be a good way to both develop a plan as a team and for people to remember key elements of it.   Asking people to synthesize and summarize what they have discussed for an action plan at the end of the meeting can be helpful, but perhaps sketching it out on the whiteboard might be a better way to move forward from a meeting to the implementation process.  

Monday, November 26, 2018

Walking the Walk on Culture

Source: Wikimedia Commons
Adam Bryant used to write the terrific Corner Office column for the New York Times.  In that column, he interviewed successful leaders from large and small enterprises.   He's now moved on to become a Managing Director at Merryck and Company, but he still publishes some terrific interviews as articles on LinkedIn.  In a recent interview, he spoke with Mike LaBianca, senior vice president and global head of human resources for Sony Interactive Entertainment - PlayStation.  He asked LaBianca to comment on organizational culture.   Here's what LaBianca told him: 

For leaders, you have to walk the talk. You can talk about all sorts of cultural initiatives, but if you don’t see the leader actually putting those into practice, it actually hinders the development of a culture rather than helps it.

I started my career at Hewlett Packard, and probably the most impactful moment of my career was meeting Dave Packard for the first time. I think he was the chairman at the time. I had only been there five weeks, and I was in accounting. I went to give a report to his secretary, who was away from his desk. He came out and said, “Can I help you?” And I said, “I’m sorry, Mr. Packard. I didn’t mean to disturb you.” And he said, “Nonsense. Show it to me.” 

He looked at me, put his arm around me, and said, “You know, I want to thank you for deciding to invest your career with us. It’s very important that we have people out of college who believe in our mission, believe in what we’re doing. You’re going to be what makes HP great.” It had a very meaningful effect on me. He continued to believe in taking the time to get to know every employee the moment that he could and expressing his support and thanks. That’s the most powerful cultural moment that I’ve ever experienced anywhere.

I think LaBianca is right on the money.   What can leaders do with this advice about walking the walk?  They have to assess their employees' impressions of the culture.  Do people feel as though senior leaders' actions match their words?  Is there a serious disconnect there - a case of empty talk?   Sometimes, leaders won't get straight answers to these questions if they ask themselves, particularly if a major disconnect occurs.  They'll need some help.   They cannot ignore the problem though.  Cynicism can be a pernicious thing in organizations, and it often spreads quickly throughout an organization.  

Saturday, November 24, 2018

Not All Failure is Smart Failure

Source:  Flckr

Several months ago, long-time executive and now Duke Professor Jon Fjeld published an article for Sloan Management Review titled, "How to Test Your Assumptions."   He begins the article by questioning the "fail fast" approach embraced by many entrepreneurs in recent years.   He notes that many startups do not understand the lean startup philosophy, and they are implementing it in a haphazard and ineffective way.  He writes: 

The enthusiasm surrounding the “lean startup methodology” and its many offshoots has created a mindset that entrepreneurs should just launch, failing early and often — iterating, to use startup parlance. But failure alone does not teach. If there are an infinite number of bad ideas, eliminating one gets us no closer to a good idea. Rather, the businessperson contemplating a new venture must begin by evaluating factors that have to be true for the venture to succeed. He or she also must model these factors in a way that allows for reasonable testing. For example, the assumption that people will buy a product for the asking price is a big one; it would take a full launch to completely validate this. Therefore, the entrepreneur must split big assumptions into discrete, manageable assumptions that can be tested at a level of detail allowing for efficient learning.

He makes a terrific point.  Not all failure is instructive.  At times, you can fail, but find yourself unable to distinguish among many causal factors to which that failure can be attributed.  In fact, these types of failures can be enormously costly, because individuals can derive incorrect attributions easiliy, and then make the wrong kinds of changes in hopes of averting failure in the future.  Failing fast works best when you can test your ideas in ways that enable you to identify what went wrong and WHY it went wrong.   Sometimes, two or three possible causes should be considered, and another test may be conducted to determine which of these factors led to the failure.  

Wednesday, November 21, 2018

Thanksgiving: Expressing Gratitude Enhances our Well-Being

Source: Grisson Air Reserve Base
For past Thanksgiving holidays, I've blogged about some interesting research regarding the benefits of expressing gratitude. For instance, last year, I wrote about experimental research conducted by Robert Emmons and Michael McCullough that demonstrated the benefits associated with counting our blessings.   

This year, I'd like to share the findings from another important study about gratitude.  Several years ago, Sheung-Tak Cheng, Pui Ki Tsui, John Lam published a paper titled, "Improving Mental Health in Health Care Practitioners: Randomized Controlled Trial of a Gratitude Intervention."  In explaining the meaning and impact of their research, the scholars wrote, "This study revealed that an intervention involving writing gratitude events led to a reduction in perceived stress and depressive symptoms among health care practitioners. It is possible that such positive effects among these professionals can also lead to an improvement in both productivity and quality of patient services."

What precisely did these researchers do in their study?  102 physicians, nurses, physiotherapists, and occupational therapists participated in this research project.  The health care practitioners wrote diaries about work-related events twice per week for four weeks.  The scholars directed some participants to describe events about which they were thankful.  They directed others to describe something that annoyed them.  Naturally, the scholars included a control condition in their study.   They found that the gratitude diary entries often described receiving assistance from colleagues or benefiting in some other way from a constructive relationship with a co-worker.   The scholars found that writing about gratitude reduced perceived stress and depressive symptoms among the healthcare practitioners.  In short, expressing gratitude seemed to have a positive effect on the workers' well-being.  The scholars speculate that these positive effects might actually enhance the care of patients, though they do not measure that in this particular study.  

We often hear about the importance of self-reflection.  Some leaders take a few moments at the end of each day or week to reflect upon what they have accomplished recently, as well as the mistakes that they have made.  This type of reflection can enhance learning and lead to continuous improvement.  These studies suggest that these moments of self-reflection ought to also include some time for considering those things and people for which we feel very grateful.  Happy Thanksgiving, everyone!  I'm certainly grateful to those who take the time to read this blog! 

Tuesday, November 20, 2018

Blending Big Data and Design Thinking Works Best

Bryant University Professor Lori Coakley and I have published a new article in the American Management Association Quarterly (Fall 2018 issue) titled, "The Human Center of Design Thinking."  In this short essay, we argue that many firms stumble because they focus on a technology in search of a problem.  Put another way, they wield a hammer in search of a nail... rather than seeking out unmet human needs, pain points, and frustrations that must be alleviated.  Moreover, managers sometimes think large datasets, derived from surveys and purchase histories, can provide them all the insight they need about customers.  They are sorely mistaken.   Finally, we explain why we sometimes empathize poorly with our customers, and we offer some tips on how to do so more effectively. 

Monday, November 19, 2018

The Importance of Luck & Timing: Genuine Humility Indeed

Soure: Pixabay
In a recent interview, Stanford labor economist Paul Oyer discussed some of his research that demonstrates the importance of luck and timing in a person's career.   Here's an excerpt from the article featured on Stanford's website:  

Oyer’s findings suggest that it’s not just that people who like banking go into it and stay in it throughout their careers. Rather, investment bankers are often “made” by the conditions they encounter upon graduating. “That first step you take out of school ends up having long-term ramifications for where you end up working later in life,” Oyer says. “That initial draw in the labor market matters a lot.”

Oyer’s research showed a similar luck-of-the-draw finding for PhD economists on the academic job market. In a year when state budgets are in good shape and university endowments are up, schools do more hiring and a newly minted economist is much more likely to land a job at a higher-ranked university. And that initial job match has dramatic implications for the rest of the economist’s career, Oyer says, as he or she is more likely to publish more and stay at a top-ranked university.

“Every highly successful person had to do a lot of work to get where they are,” Oyer says. “But somewhere along the line they probably got a few good breaks. I think that’s a very important thing to remember, both to keep people who are very successful humble but also to encourage those who haven’t been successful yet to just keep looking for that break.”

This work reminds me of a former Baxter CEO Harry Kraemer's description of what it means for a leader to demonstrate genuine humility.  Kraemer argues that being genuinely humble means recognizing that your accomplishments are not simply due to your know-how and hard work.  Instead, they are a product of luck, timing, and your team. For Kraemer, he also credits the gifts and talents bestowed on him by God.   In short, it's not all about you.  It's about external factors that contribute to your success.  Stanford economist Oyer's research shows just how important luck and timing indeed can be.  

4 Lessons in Creativity: Julie Burstein

If you want to learn more about creativity, check out this interesting TED talk by Julie Burstein, a Peabody Award-winning radio producer and best-selling author.

Friday, November 16, 2018

The Dangers of High Expectations

Source: Flickr
Hengchen Dai, Berkeley Dietvorst, Bradford Tuckfield, Katherine Milkman, and Maurice Schweitzer have published a fascinating new study about the dangers of high expectations. Their article is titled, "Quitting When the Going Gets Tough: A Downside of High Performance Expectations."   They note that high expectations can be a very positive force.  For instance, when teachers set high expectations for students, they often achieve good academic results.   Why?  Research suggests that high external performance expectations elevates self-expectations.   

However, the scholars examine what occurs when someone with high external performance expectations hits a roadblock or obstacle early on during a particular effort. they argue the following: "We propose that when initial performance is poor, compared to individuals who face low expectations, individuals who face 6 high expectations will be more concerned about their public image and experience greater embarrassment."  How do individuals cope with this embarrassment?  For some people, persistence may be the right strategy.  They persevere so as to eventually succeed and thus avoid the embarrassment of not meeting external expectations.  For many individuals, though, an opposite reaction occurs. They begin searching for an exit strategy so as to avoid the embarrassment of unfulfilled expectations.  In particular, they hope to find an exit strategy with a "plausibly valid excuse" for quitting, thus enabling them to blame the initial poor performance on unforeseen or uncontrollable circumstances.  

To test their hypothesis about exit strategies, they conducted a study of over 300,000 men's tennis matches.   They showed that, "After losing the first set of a match, players who are expected to win (favorites) are significantly more likely to quit than players who are expected to lose (underdogs)."  A subsequent experimental study confirmed these results.  

What then should we do? Should we lower performance expectations for talented individuals on our teams? Of course not. What we must do, though, is be ready to coach, support, and encourage those who might encounter early setbacks.  Leaders need to focus on how one can learn from an initial failure, rather than seeking to assign blame.   They cultivate a growth mindset among their team members.  

Thursday, November 15, 2018

Who Interacts with the Customer?

Source: USAF Civil Engineer Center
Patrick Gorman recently published an interview with Susan Story, CEO Of American Water Works Company for   In that interview, Story describes what it means to be customer-focused.  She explains that, "If you're customer-focused, the next step, is, there's no bad idea and pepole can push back."  That's an interesting connection between customer focus and employee empowerment.  Story argues that you can't say you are customer-focused if you haven't created a culture where the people responsible for interacting with the customer every day have the ability to speak up, challenge the existing ways of working, and offer new ideas.  Story offers an example: 

I’ll give you a great example of the change we’ve made in technology. Several years ago we had a new back office software system put in and the people on frontlines weren’t asked about it. It was very rigid and our employees on the frontlines hated it. And it actually slowed down their ability to deliver customer service.

So with our new chief technology and innovation officer, we got a group of 13 field service reps from all over the country to and said, “Tell us what you need.” And we had technologists in the room and they built what the frontline employees told them they needed and they did it quickly. They met in April by July 31st, they had a prototype, they’re out in the field using it, they got feedback, and by the end of the year, we deployed it to 1,800 field service reps around the United States.

And I think that one of the biggest changes that we’ve made is that we’re trying to let our frontline employees dictate how we do our business, because they’re the ones interacting with our customers every day.

In too many instances, I think senior executives ASSUME that they know what customers want.  They jump to conclusions based on a few anecdotes, or they cling to beliefs about customers that may have been true in the past, but no longer hold.  They also don't empower those closest to the customer to share what they know, and what they have experienced through their interactions with the customer.  Some senior leaders spend a great deal of money hiring consultants to tell them what customers want, while never asking the people on the front lines of their own organizations about customer needs, wants, and pain points.  

Wednesday, November 14, 2018

Learn From Front Line Workers, Make Their Work More Meaningful

Source: Blue Diamond Gallery
I recently read an article that Maryn McKenna wrote for Scientific American several years ago. The article is titled, "Clean Sweep: Hospitals Bring Janitors to the Front Lines of Infection Control." The article describes the efforts by hospitals to control the rate of patient infection, particularly those that are increasingly difficult to treat. McKenna describes how infection-control specialists have partnered with janitorial staff to tackle this perplexing problem: 

Institutions also employ infection-control specialists, who track infections and investigate their causes. Yet when the problem is bacteria on surfaces, eliminating them depends on the building-services crews. “This is the level in the hospital hierarchy where you have the least investment, the least status and the least respect,” says Jan Patterson, president of the Society for Healthcare Epidemiology of America. Traditionally, medical centers regard janitors as disposable workers—hard to train because their first language may not be English and not worth training because they may not stay long in their jobs.

At N.Y.U. Langone in 2010, Phillips and his co-workers launched a pilot project that redefined those formerly disposable workers as critical partners in patient protection. Janitors, they realized, know better than anyone else which rails are touched most frequently and which handles are hardest to clean. The Langone “clean team” paired janitors with infection-control specialists and nurses in five acute care units to ensure that all high-touch surfaces were thoroughly sanitized. In its first six months the project scored so high on key measures—reducing the occurrence of C. diff infections and the consumption of last-resort antibiotics—that the hospital's administration agreed to make the experiment routine procedure throughout the facility. It now employs enough clean teams to assign them to every acute care bed in the hospital.

What a terrific story!  I love this example of learning and performance improvement because the leaders respected the knowledge and the abilities of often-neglected front-line workers with low status in the organization.  They partnered with them to get the job done, rather than thinking that the high-status, highly educated senior people had all the answers.  Moreover, they redefined the jobs of these front-line workers, giving them new meaning.  These janitors were not simply completing a set of tasks, such as mopping the floors.  They were helping to save lives by reducing the rate of patient infection.  They were doing incredibly important work.  I see this situation as a terrific example of aligning everyone in the organization in pursuit of a shared goal.  The janitors understood clearly how their work helped fulfill the hospital's main mission of saving lives.  In too many instances, front-line workers don't understand how their efforts contribute to the fulfillment of the organization's mission.  In this case, no such confusion or lack of clarity exists.   

Tuesday, November 13, 2018

Unlocking Creativity

Thank you to the San Francisco Review of Books for inviting me to participate in this interview about my forthcoming book, Unlocking Creativity.  You can listen to the entire interview at the link below. 

Friday, November 09, 2018

Saying No to Your Employees
How many times have you submitted a proposal to a leader of your organization and not received a clear yes/no answer?  In far too many instances, hard-working employees come up with an original idea, put together a detailed proposal, and then never receive a direct response.  It seems as though the proposals disappear into a black hole.  Or, in many instances, leaders simply stall endlessly.  They respond that they will have to consult with others in the organization.   When pressed, they blame others in the organization for not responding to them in a timely manner.   Or, they ask for more information and analysis... repeatedly.   They never appear satisfied with the supporting evidence and analysis provided.  Often, in these cases, leaders don't want to proceed with the proposed course of action.  However, they don't want to say no either.  So, they stall endlessly by constantly demanding more information. 

Employees deserve clear yes/no answers in a timely fashion when they propose original ideas.  If the answer is no, they deserve a clear rationale for why the organization does not want to proceed with the proposed course of action.  If employees don't receive a clear and timely response, they will become disengaged.  Trust in leadership will decline.  The flow of creative new ideas will slow to a crawl.   

Why don't leaders provide clear responses in many cases?  They don't want to be unpopular, or they don't have the courage to explain why they are declining to endorse a particular proposal.   Or, they want to go in a different direction, but they aren't prepared to offer a strong, concise explanation for why that's the preferred course of action.   Sometimes, they genuinely need more information to make a sound decision.  In those cases, though, leaders need to be crystal clear about what data they would like to see, and what analysis they would like subordinates to perform.  They need to make it clear that they aren't simply sending employees on a wild goose chase.  

Friday, November 02, 2018

Signaling and Shame: Why We Don't Seek Information & Advice From Others... Even Though We Should

Source:  Pixabay
Arun G. Chandrasekhar, Benjamin Golub, and He Yang have written a fascinating National Bureau of Economic Research working paper titled, "Signaling, Shame, and Silence in Social Learning."  They examine how individuals make the choice to seek or not seek information and advice from others.  The scholars argue that seeking information has obvious benefits, in that it helps us to learn from others and make more informed decisions.  On the other hand, asking others for information may bring with a social stigma.  The potential seeker may ask himself or herself:  Will I look incompetent?  Will others question my work ethic?  Will people think that I don't have the adequate experience or education to handle this job?  

The scholars go on to argue that there are two mechanisms that may cause people to refrain from asking others for useful information.  First, signaling may be a concern.  They explain: "One mechanism—a signaling concern—is about managing others’ beliefs. For instance, a pupil concerned about how others perceive him may be reluctant to ask a teacher or a peer basic questions about an assignment, fearing that this person could infer that the pupil is slow or lazy."  Second, shame may be a powerful inhibiting force.  The scholars write, "There is another way stigma can inhibit interaction, which is not about managing beliefs but managing interactions in view of compromised beliefs. To illustrate, the pupil in the example may simply dislike interacting with those who have a negative assessment of him, no matter how this assessment came about. In particular, such feelings can occur even when signaling concerns are irrelevant, because a bad attribute (such as a pupil’s ignorance) is apparent to the potential Advisor irrespective of his seeking decision. We may call this type of inhibition shame." 

To study the mechanisms that might inhibit individuals from seeking information and advice from others, the scholars conducted a field experiment with over 1,200 pairs of individuals in 70 villages in India.   In this setting, as villagers often seek information from others about issues of agricultural production.   The experimental results confirm their hypotheses, namely that signaling and shame concerns inhibit information seeking and learning.  Moreover, they find that signaling matters more in some situations, while shame plays a major factor in others.   Put simply, shame proves to be a major concern when interacting with friends.  Signaling concerns dominate when interacting with strangers and/or acquaintances.  

What's the implication for leaders on teams of all types?  We need to understand how social stigma plays a key role in limiting the information sharing and group learning that may be crucial to solving challenging problems.   Teams do not always perform to their potential because members often focus their dialogue on information common to all members.  They often do not spend enough time sharing, discussing, and integration that is unique to particular members.   Why don't people request vital information from their teammates or their leaders?  Shame and signaling play a key role.  Leaders need to break down these barriers to facilitate more effective team learning and problem solving. 

Wednesday, October 31, 2018

IDEO's Response to Criticism of Design Thinking

Source: Medium
Fast Company's Katherine Schwab interviewed IDEO's Michael Hendrix this week for an article titled, "IDEO Breaks Its Silence on Design Thinking Critics." Schwab writes, "Over the last year, Ideo’s philosophy of “design thinking“–a codified, six-step process to solve problems creatively–has come under fire. It’s been called bullshit, the opposite of inclusive design, and a failed experiment."   I am a proponent of design thinking, but I understand the criticism.  Many people and organizations have adopted the language of design thinking, or sought to embrace the approach, without effecting real change.  They have talked the talk about innovation, without walking the walk.  Organizations have spent a great deal of money on innovation programs with little real impact. 

Schwab explains, "Part of the problem is that many people use the design thinking methodology in superficial ways. Hendrix calls it the “theater of innovation.” Companies know they need to be more creative and innovative, and because they’re looking for fast ways to achieve those goals, they cut corners."   Like Hendrix, I've observed many large organizations fail when trying to embrace or adopt design thinking.  I've seen plenty of theater.  He goes on to argue that the culture at many firms lacks the key elements required to truly succeed with a design thinking approach to innovation.  Hendrix notes that many organizations do not have a climate of psychological safety, where people trust that they can speak up and offer ideas without being rebuked or marginalized.  Moreover, he notes that many companies have not embraced a culture of play - a necessary precondition, in his view, for succeeding at design thinking. 

In my forthcoming book, I offer one other explanation for why design thinking fails in many organizations.  In my mind, the creative process is a fundamentally non-linear process.  It moves in fits and starts on many occasions, and it involves a great deal of iteration.  You find yourself moving off in unexpected directions at times, and reversing course when roadblocks or failed experiments occur.   Many companies have tried to implement IDEO's design thinking methodology, but they have perceived the stages of that process as sequential in nature.  They have applied a linear mindset to an essentially non-linear process.  They think that ideation always follows empathy-based research, and that prototyping always follows ideation.  Organizations are used to analyzing, planning, and then executing.  The creative process simply does not unfold in that linear fashion.  

Sunday, October 28, 2018

John Cleese: Lecture on Creativity

Many years ago, the English actor John Cleese, co-founder of the Monty Python comedy troupe, gave a terrific lecture on creativity.  He offered some wonderful reflections about the creative process.  Here's an excerpt: 

There is one negative thing that I can say and it's negative because it's easier to say what creativity isn't...  a bit like the sculptor who when asked how he sculpted a very fine elephant explained that he'd taken a big block of marble and then knocked away all the bits that didn't look like an elephant.  The negative thing is that creativity is not a talent.  It is not a talent.  It is a way of operating... When I say a way of operating, what I mean is that creativity is not an ability that you either have or do not have.   It is, for example, and this may surprise you, absolutely unrelated to IQ provided you're intelligent above a certain minimal level.  

Here's the video of the complete lecture: 

Thursday, October 25, 2018

The Value of "Stupid" Questions

Source: Hyatt Hotels
David Gelles interviewed Mark Hoplamazian, CEO of  Hyatt Hotels, recently for the New York Times Corner Office column.   In the interview, Hoplamazian describes his early days as CEO of Hyatt, when he was quite unfamiliar with the business.  He explains why "stupid" questions proved quite powerful.  

It was pretty intimidating in some ways. I came into the business, and I was pretty ignorant. I knew a lot about the financial and tax structure of Hyatt because I had helped put the company together in the whole family reorganization. But I didn’t really know the business; I didn’t grow up in the business. That level of ignorance was super powerful because it just let me ask a whole bunch of stupid questions, which served me extremely well. Those simple questions often led to interesting discussions about why we do certain things the way we do, and that led to changes. But it was organic as opposed to me coming in thinking that I knew better. It was actually the result of inquiry.

Hoplamazian's comments about the value of "stupid" questions speak to the importance of bringing some non-experts into the decision-making process on your team from time to time.  Experts may be wedded to the past, to the way things have always been done.  They can be trapped by the conventional wisdom.  Smart people with a broad range of other experiences can bring fresh perspective. They can ask, "Why are we doing it this way?"   Done effectively, these questions don't have to be threatening.  They don't have to disparage the existing ways of working.  They can simply inquire, seeking to understand, rather than being critical.   The right quesiton might not be "Why do you do it THAT way?" Instead, it might be, "Help me understand the rationale for that approach or that process." 

Wednesday, October 24, 2018

Great Mentoring: Let the Protégé Lead

Source: Max Pixel
Diane Brink, IBM's former Chief Marketing Officer for Global Technology Services, shared her thougths recently with Kellogg Insights regarding the mentor-protégé relationship. How do you make this relationships as mutually beneficial as possible? She offers a number of good recommendations in an article titled, "5 Ways to Get the Most out of a Mentor–Protégé Relationship."  My favorite suggestion is: "Let the Protégé Lead."  Here is Brink's advice, as summarized by Kellogg Insights:

For protégés, commitment means more than sitting back and nodding in agreement with every suggestion the mentor makes. Mentees need to own the relationship.  Brink describes a protégé who would always send an agenda for their mentoring meeting a week beforehand: “I thought ‘Oh, my gosh. This guy is really thinking about not only how he can use my time effectively, but how he can really move the relationship to something that is going to be beneficial for him.’ That was pretty impressive.”

In any mentoring situation, it should be the protégé who sets the priorities. Brink likes to remind mentees that they really drive their own careers.  “You’re going to have a lot of people providing their point of view on what you should be doing with your career,” she says, “and it’s not their decision.”  Agreeing to make the mentee’s agenda a priority keeps him or her from being swayed towards a career path he or she may not be interested in following. And it takes pressure off the mentor to act as an all-knowing guru.  

Monday, October 22, 2018

"I Don't Know All The Answers"

The Wall Street Journal's Vanessa Fuhrmans interviewed IBM senior executive Bridget van Kralingen several months ago.  Kralingen comments on the traits and habits of the most effective leaders that she studied as an industrial psychologist, and how she tries to embrace those behaviors now in her role as a senior leader at IBM.  She explains:

I saw it was the leaders who were the most curious, the most open to change and learning themselves who were the most successful in a very changing, unstable world, which is the world we’re in today in many ways. I also saw that leaders who loved their companies, their work, their teams were able to do things that other leaders couldn’t.

I’ve always asked my teams if they’d like feedback. And then I will always ask them for the same thing. I find that if you keep on asking for it and then show you act on it, you will generally get it. The other thing I do is say to people, “I don’t know all the answers. I need your help.” I make sure I’m able to show positivity but also the vulnerability to be open to getting the feedback.

To me, the most important statement to her people is:  "I don't know all the answers. I need your help."  That statement promotes psychological safety, encourages people to express dissenting views, and promotes learning and improvement.  Many leaders are afraid to express such a sentiment to their team members.  Why?  Either they don't believe that they need the help, i.e. they think that they already have all the answers, or more likely, they are afraid to be seen as indecisive or incapable.  They are afraid to admit what they do not know.  However, acknowledging that you don't have all the answers is the important first step to actually gathering the information and input that you need to make sound decisions.  

Friday, October 19, 2018

Four Questions Each Leader Should Ask

Bill Boebel, serial entrepreneur and CEO of Pingboard, has written a good column for Fast Company about the four questions each leader should ask themselves.  Boebel argues that leaders need to focus on these four questions in order to build a productive work environment for their team members.





Source: Blue Diamond Gallery

Four terrific questions.  Here's a suggestion: Each leader should print these questions on a poster and put them up his or her office.  Stare at them every day.  Ask others to provide them regular evaluations of how well they are doing on these four issues.  

Tuesday, October 16, 2018

The Effect of Competition on Creativity

Source: Pixabay
Daniel Gross has published an interesting NBER working paper titled, "Creativity under fire: The effects of competition on creative production." Gross writes the following in describing his key findings:

This paper studies the incentive effects of competition on individuals’ creative output, exploiting a unique field setting where creative activity and competition can be precisely measured and related: tournaments for the design of commercial logos and branding. Using image comparison tools to measure originality, I show that intensifying competition both creates and destroys incentives for creativity. While some competition is necessary to induce high-performing agents to develop original, untested designs over tweaking their existing work, heavy competition discourages effort of either kind.

The key idea here is that a certain amount of competition can encourage people to continue exploring original ideas, rather than simply becoming conservative and making only incremental changes to previous work because of positive initial feedback.  Of course, as Gross notes, the ability to find just the right level of competition to properly motivate creative work is very tricky.  He describes the challenge of achieving the "Goldilocks" level of competition - just balanced in the optimal way.  It's hard to do.  The paper is interesting, nonetheless, because it seems to counter some arguments that have been made in the past suggesting a simple negative relationship between competition and creativity.   In short, those past arguments tend to be very negative toward extrinsic rewards and favor methods for fostering intrinsic motivation as a means of encouraging creative work.   They favor collaboration over competition.  Gross' work suggests that competition can play a favorable role, but only if managed carefully.  

Monday, October 15, 2018

Solo Founders or Teams: Who Has More Success?

None of us is as smart as all of us. Right?  Teams are smarter and more effective than individuals at challenging tasks, right?  Not so fast.  New research by Jason Greenberg and Ethan Mollick examines new ventures.  They found that solo founders tend to achieve better results, at least in terms of certain metrics, than entrepreneurial ventures founded by a team of people.  Here's an excerpt from an NYU summary of the research:  

Common wisdom has assumed that the value of having a team is additive or even synergistic, based primarily on the theory that starting a business requires a portfolio of skills and resources that few individuals possess. However, in “Sole Survivors: Solo Ventures versus Founding Teams,” Professor Greenberg and his co-author, Wharton’s Ethan Mollick, showed that companies started by solo founders survive longer and generate more revenue than those started by teams, while not performing significantly differently across various operating categories.

The authors’ unique dataset was comprised of companies that were crowdfunded via the Kickstarter site between 2009 and 2015, were eventually established formally, and whose performance could be followed for several years. For-profit and nonprofit companies were analyzed separately, and collectively they raised $151 million in crowdfunding and generated approximately $358 million in revenue.

Of course, these results do not suggest that teamwork is not essential for a new venture.  It speaks to the possible frictions and dysfunctional conflict that can occur when you have multiple founders though.  Moreover, it may speak to the speed of decisions in situations where multiple founders must come to an agreement on key strategic choices.  Still, one should not conclude that a solo founder does not need  a strong team around them.   Collaboration is essential in many aspects of a startup, regardless of the structure at the very top.  

Saturday, October 13, 2018

Knowing Other People's Salaries at Work

In recent years, we have heard some people advocate for pay transparency in organizations.  The recommendations in this regard have received a great deal of publicity, with arguments for and against the concept being made in the press.  Now we have a well-crafted research study that examines the topic.  How does knowledge about fellow employees' salaries affect a worker's motivation and effort? Zoë Cullen and Richardo Perez-Truglia examined this question in a paper titled, "How Much Does Your Boss Make? The Effects of Salary Comparisons."  The scholars conducted a study of over 2,000 workes at a large commercial bank.  They discovered that knowledge about your manager's salary can enhance your motivation.  However, having salary information about your peers can be demotivating.  Here's a summary of the findings from HBS Working Knowledge:

The research results were sometimes counterintuitive, Cullen says. For example, employees worked harder after discovering how much their managers made. For every 1 percent higher in the perceived salary of a manager, employees clocked 0.15 percent more hours.  
But the employees’ extra effort diminished as the difference in rank between employee and manager widened. In some cases, “We were looking at how employees responded to managers who were five promotions away and who they explicitly thought were in positions they themselves would never achieve,” Cullen says. In those cases, the work-harder reaction was much smaller but did not become negative. When employees received salary information about managers who were closer to their own rank, they may have found the salary difference aspirational—just a promotion or two away, she says.

While knowledge of managerial compensation seemed to coax more effort out of workers, the exact opposite happened when employees learned what peers were making. For every 1 percent higher salary a co-worker earned over the employee’s expectation, they worked 0.94 percent fewer hours, the researchers found.  
In a global environment where companies are scrambling to find qualified workers to fill vacancies, another important finding emerged. When an employee learned a co-worker’s salary was 1 percent higher than estimated, chances rose by 0.225 percent that they’d leave the company.

Wednesday, October 10, 2018

In Search of Humble Bosses

Source: Flickr
Sue Shellenbarger has written a column for the Wall Street Journal today titled, "The Best Bosses are Humble Bosses."  Schellenbarger notes that many firms are now trying to assess humility right from the start, during the hiring process, because they believe that it's a vital attribute of effective leaders.  She cites a variety of studies suggesting that humility can be a positive characteristic for leaders.   When leaders exhibit humility, positive results include better collaboration among team members, more team learning, and lower employee turnover.  She doesn't discuss psychological safety specifically, but I suspect that humility on the part of leaders tends to make it safer for team members to speak up, and that open dialogue and collaborative learning leads to better team performance.    Here's Shellenbarger's summary of some of the research findings: 

Workplace researchers often rely on subordinates’ reports to assess leaders’ level of humility. In a 2015 study of 326 employees working on 77 teams at a health-care company, researchers asked team members to assess their managers’ humility, based on a scale including their willingness to learn from others or admit when they don’t know how to do something. Team members also assessed their teams’ attitudes and performance.

Teams with humble leaders performed better and did higher-quality work than teams whose leaders exhibited less humility, according to lead researcher Bradley P. Owens, an associate professor of business ethics at Brigham Young University.  The performance gains held up independently of how much team leaders exhibited other positive leadership qualities unrelated to humility.

I know what you might be thinking at this moment.  What about Jeff Bezos, Elon Musk, Steve Jobs, Larry Ellison, Bill Gates, and the like?  They don't strike us as very humble leaders, yet they revolutionized entire industries in many cases.  Of course, Shellenbarger is not suggesting that you MUST be humble to succeed.  However, she's making a case that, for most of us, pulling off the arrogant and largely benevolent dictator model of leadership is highly likely to lead to failure!  The bigger question is: Can firms actually assess humility effectively during the hiring process?  Plenty of research suggetsts that the hiring/screening process at many firms is highly problematic.  So, there's more work to be done, even if we know that humility is a desirable characteristic.   

Tuesday, October 09, 2018

Disagreeing with the Boss

Vivian Giang has written a useful article for Fast Company about how to disagree effectively with your boss or other senior leaders in your organization.  She draws on the expertise of Priscilla Claman of Career Strategies, Inc.  Giang provides several recommendations:

1.  Know Your Boss' Decision-Making Style

Are they influenced by data and formal analysis?  Do they worry about how their decisions affect interpersonal relationships?  In short, you need to know what type of argument or presentation will be most influential with your boss.  Speak and make your case in a format and style that will make the most impact with that person.  

2.  Recruit Credible Allies

Don't go it alone.  Find others who can rally behind your argument and stand with you.  Perhaps they can even join you in making the case to your boss or other senior leaders.  Or, perhaps, you can identify the leader's confidante or trusted adviser.  Make your case first to that person, as they may be your best channel for presenting a constructive dissent and persuading your boss to listen carefully.  

3.  Identify Your Baggage

Consider your past experiences and your reputation/track record.  Now put yourself in your boss' shoes.  What will they automatically assume about you and your argument?  What will they expect of you?  If you can recognize any baggage that you may bring to the conversation, you can anticipate roadblocks and objections much more effectively.  

Monday, October 08, 2018

Gender Diversity and Venture Capital Firm Performance

Source: Pixabay
HBS Professor Paul Gompers and his colleagues have conducted impactful research on the impact of gender diversity, or lack thereof, in the venture capital industry.  Not surpisingly, they found that venture capital firms tend to have homogenous management teams.   Most of the partners tend to be white men with liberal arts undergraduate degrees and MBAs.  A significant portion attended Harvard Business School.   The representation of women in the venture capital world has not increased much since 1990, according to Gompers' research. He notes, "“We really saw how powerful the force of ‘birds of a feather flocking together’ was. The more similar you are to someone, the more likely you are to work with them.”  The scholars discovered that, "Partners who came from the same school achieved an 11.5 percent lower success rate for acquisitions and IPOs; those who were ethnically homogenous saw a success rate 26 to 32 percent lower."  

To disentangle correlation from causation, Paul Gompers and Sophie Wang conducted another fascinating study.  They reviewed alumni data from universities that accounted for most of the venture capital partners in their sample. They discovered that partners with daughters tended to hire more women as partners in their firms. Then they examined venture capital fund performance, and they found a substantial advantage for funds with at least one woman serving as a partner. According to HBS Working Knowledge, "While the median venture capital fund return is around 14 to 15 percent, funds with a female partner returned 16 to 17 percent. Moreover, having women as partners increased the percentage of successful startups supported by those firms—that either went public or sold for more than their total capital investment—from about 28 percent to about 31 percent." 

Friday, October 05, 2018

Reducing Leader Overconfidence

Daniel Walters, Philip Fernbach, Craig Fox, and Steven Sloman have developed an intriguing and apparently quite effective technique to curb overconfidence.  They published their research in a paper titled, “Known Unknowns: A Critical Determinant of Confidence and Calibration."  Walters described the key findings and implications from this research in a web essay published by INSEAD,  where he serves on the faculty. 

The scholars describe a technique in which people are asked to "explicitly consider the missing pieces of information in a judgment." In other words, they try to identify and write down what they don't know about a situation, i.e. what are the key unknowns? They compared this methodology to another technique often recommended for improving decision-making effectiveness: devil's advocacy. Walters reports that identifying unknowns can be more effective than devil's advocacy. Why? In one of their experiments, they examine two situations: one setting in which people were overconfident and another where they were underconfident. They found that devil's advocacy reduces confidence in both settings. On the other hand, considering unknowns only reduces confidence in the situation where people were initially overconfident.  Devil's advocacy proves to be a "blunt instrument" in their words.  Here's Walters' summary of the research:

The third study allowed us to test whether considering the unknown reduced confidence or improved calibration. In many domains, people demonstrate underconfidence and are overly cautious. A true improvement in calibration would mean that considering the unknowns reduces confidence when people are overconfident, but not when people are well-calibrated or underconfident. In this study, participants answered two sets of general knowledge questions. The questions were divided into nine knowledge domains (e.g. state populations, calorie counts), for which participants varied in their level of overconfidence versus underconfidence. As in the second study, participants either considered the unknown, or considered the alternative (the devil’s advocate technique). Both interventions were compared with a group which had no prompting to ponder additional information. As we predicted, considering the unknowns only reduced confidence when it was misplaced (in overconfident domains), whereas playing devil’s advocate had an equal impact in the subject areas that encouraged overconfident and underconfident responses.

The research is intriguing.  I would offer two caveats.  First, I would argue that many organizational leaders display overconfidence much more frequently than underconfidence.  Second, I have come to believe that WHO plays the devil's advocate, WHEN they play that role, and HOW they serve as the devil's advocate matters a great deal.  Indeed, it is a blunt instrument, particularly if not used properly. However, with some care, the technique can be deployed with much success.   

Thursday, October 04, 2018

CEO Tenure: What Does the Evidence Indicate?

John Stoll has published an interesting article in the Wall Street Journal today about CEO tenure. He  describes academic research by Xueming Luo, Vamsi K. Kanuri, and Michelle Andrews. Their work examines the optimal tenure of a chief executive. The scholars conclude that the optimal tenure is roughly five years. Here's Stoll's summary of their work, with some comments from the researchers: 

We tend to celebrate long tenure, but there is evidence that boards are becoming less patient, and that’s a good thing. Researchers, studying a decade’s worth of financial and share-price performance of hundreds of large-cap companies, found that the “optimal tenure length” is 4.8 years.

Xueming Luo, a professor at Temple University’s Fox School of Business and one of the authors of a widely cited 2012 study, said CEOs are most effective in the initial years because they are more open to outside opinions and less risk-averse. “The search for external knowledge tends to end,” he told me this week.

“It eventually becomes a situation where the CEO surrounds themselves with a lot of ‘yes’ people,” Michelle Andrews, a coauthor of Dr. Luo, said. “At a certain point, there are diminishing returns.”  Leaders operating in declining markets and other volatile environments, Dr. Luo said, tend to turn inward faster than if things are going smoothly.

Saturday, September 29, 2018

The Downside of Testing, Prototyping, and Experimentation?

I'm a big fan of the concept of testing, prototyping and experimenting during the product development process.  I believe in David Kelley's philosophy: Fail often to succeed sooner.   I think that "test and learn" and rapid iteration beats formal planning every time in highly ambiguous environments.  However, new research suggests one very important limitation to testing that involves going to market with a minimal viable product (MVP).  

Andrea Contigiani, a researcher at the Mack Institute for Innovation Management and a Wharton doctoral candidate, assembled a fascinating dataset on the product development efforts at over 1,000 software startups. He looked at how these firms' approaches to product development changed after a landmark court decision, Alice Corp v. CLS Bank International, made patenting software less effective.  He wondered if firms changed their behavior after this court ruling, for fear that prototyping and testing might invite many imitators and therefore make it harder to establish and defend competitive advantage.  He explains his findings:

I found two things, broadly speaking. One is that after Alice took place, the affected companies changed strategies. In particular, they seem to be less likely to test their product; they do less experimentation. Given that they can no longer use patents to protect their ideas, experimentation becomes risky. Sure, you get the benefit of learning, but the cost of doing so goes up. So it’s not necessarily a good idea.

On the other hand, they seem to launch their product faster. They go to market sooner and so they can start getting feedback. Adapting your product, or pivoting, once you are in the market is a little harder [than early testing], because adaptation costs are higher. But on the other hand, once you do that you are essentially creating other barriers to imitation, like brand and network effects. So it is safer.

The second result is more about performance, and there I looked at what happened to companies that did a lot of experimentation while in the new post-Alice regime where they could not really protect through patents. I saw a negative correlation between doing that and performance.

Companies that experimented a lot without potential access to patent protection were less likely to get funding, and they also seemed less likely to get acquired. And so overall, this choice seemed to really affect the performance.

The findings are fascinating.  I would offer one important caveat though.  Contigiani is studying testing that involves actually going out into the market with a product, or at least exposing ideas to public inquiry and study.  Much testing, prototyping, and experimentation can take place in a very private way, so as to not enable potential rivals to learn about innovations.  It seems to me that firms ought not to be eliminating testing and prototyping, but thinking instead about how to do it in a way that protects their ideas from imitation.