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. 

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.  

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.  

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.  

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.  

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! 

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. 

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.

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.  

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 ChiefExecutive.net.   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.  

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.   

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. 

Saying No to Your Employees

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17147713246

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.  

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.