The NFL Draft: Are Teams Getting Better at Selecting Talent?

On Thursday, we will have the NFL Draft in which each team selects college players.   The draft has become a major television event, and an entire industry of analysts, scouts, and analytics gurus has emerged to flood the airwaves with "expert" commentary.  Teams have invested heavily in their scouting departments, and the assessment tools and analytics they use to select players are allegedly far more advanced than they were decades ago.  With that in mind, I decided to analyze the selection of quarterbacks in the first round over the decades.  I chose to analyze quarterbacks since that is the most important position on the field today.   You can see some interesting trends, although the 1990s appear to be a bit of an aberration (fewer stars and more busts than other decades).  Thus, I decided to compare the 1970s and 1980s to the two most recent complete decades (2000s and 2010s).  Here are a few observations:

• Teams are selecting more quarterbacks in the first round now than they did years ago.  We shouldn't be surprised at this fact, given that the passing game is much more important today.   Teams are clearly investing in a position which has much more value and contributes more to winning today than 50 years ago.  In the period from 1970-1989, teams selected 1.9 quarterbacks per year in the first round.  That number rose to 2.8 quarterbacks per year in the period from 2000-2019.  
• Despite the advanced scouting and analytics, and the tremendous investment in talent evaluation today, teams are not any better at identifying stars than they were in the past.  50% of the quarterbacks selected in the first round from 1970-1989 made at least one Pro Bowl.   Did the NFL general managers improve their hit rate in more recent years?  Not one iota.  50% of the quarterbacks picked in the first round from 2000-2019 made the Pro Bowl at least once.  No improvement despite all that work to allegedly improve talent evaluation!  
• How many champions did the teams identify in these years?  From 1970-1989, 8 of the 38 quarterbacks selected in the first round were the starting quarterbacks on Super Bowl championship teams.  That equates to 21% of the players selected.  From 2000-2019, only 5 of the 56 quarterbacks chosen in the first round have won a Super Bowl (just 9%).  Now, that number is lower, in part, because some of these players have many years left in their career.  Others will surely win Super Bowls.  It is also lower because a certain quarterback drafted in the 6th round, who played here in New England, won so many championships since 2000.  Having said that, the fact is that many of the most elite quarterbacks in NFL history win multiple championships. Thus, a small set of quarterbacks end up champions.  Consider that 5 players have won 36% of the Super Bowls ever played (Brady, Bradshaw, Montana, Aikman, and Mahomes).   12 players have won 60% of the Super Bowls ever played! Thus, the chances of selecting a future champion remain very low, despite all the investment in talent evaluation.  

What are the lessons from this analysis?  Can business leaders learn anything from the NFL draft?  First, if a certain type of talent becomes more valuable, don't count on simply improving your ability to identify future stars when recruiting and hiring.   You may need to simply recruit more people, knowing that your hit rate might not improve much despite new analytics tools.  Second, in some businesses, a few truly elite talents can have an unusually large impact on organizational success.  Yes, we like to emphasize that business is a team sport, much like football.  Yet, there is no way we can simply ignore that 60% of the championships in this sport have been won by 12 quarterbacks over nearly 6 decades.   Of course, they had tremendous talent around them, and great coaching, but still the impact of these individuals at this most important position is quite extraordinary.  Third, beware of the hype around various talent evaluation tools.  Yes, analytics can be helpful, as can other new tools for evaluating talent.  However, we should be skeptical of those who claim that these new tools and methods can dramatically improve our ability to identify top talent.  Beware the hype! 

When We Hire, Should We Consider How Well-Connected Candidates Are?

Does an organization benefit when its employees are highly connected to workers in other firms and industries? Or does the benefit simply flow to the employees themselves, as they perhaps are building better future job prospects through these connections. Shelley Li, Frank Nagle, and Aner Zhou set out to examine this question. They built an enormous dataset comprised of approximately 9 million employees with 2 billion individual employee relationships at more than 7,000 publicly held companies in the United States. The scholars discovered that companies whose workforces are more connected tend to produce more valuable innovations. The authors summarized their conclusions as follows:

Although employees do not necessarily make connections for the company’s benefit, we find that companies’ centrality in the employee network positively predicts company value. This effect is largely driven by mid-level employees. Furthermore, company centrality in the employee network predicts company innovation inputs (R&D spending), and controlling for these inputs, predicts the quantity, scientific impact, and economic value of companies’ patented innovation outcomes.

Nagle commented to HBS Working Knowledge about their findings: "What we’re trying to say is there are many more jobs than you might imagine where having the right connections can be helpful to your company.”  He also notes the implications for managers as they search for job candidates. 

“Managers, when they hire somebody, know to look for many different qualities. How well-educated are you? How much job experience do you have?  Today, in some jobs, such as sales or higher-level management, managers may think about how well-connected you are, but our work shows that might be a consideration for a broader set of jobs.”

I'm quite interested to know more about the particular jobs where these connections matter most.  Beyond science, engineering, and sales roles, are there other positions where these networks are important?  Moreover, rather than simply thinking about hiring people who are quite connected, I'm curious to know how organizations can help their employees build more relationships with workers in other organizations.  What can business leaders do to help foster these connections for their middle managers?  

Be a Loud Listener

I'm looking forward to hearing David Brooks speak at my daughter's graduation from Vanderbilt University next month.   Brooks, a writer for the New York Times, has written a new book titled, " How to Know a Person: The Art of Seeing Others Deeply and Being Deeply Seen.  I'm reading the book now, and it has some terrific insights on how we can connect, empathize, and communicate with others more effectively.  Brooks appeared recently on Matt Abraham's podcast from Stanford.  Brooks introduces a very interesting concept.  He describes the value of being a "loud listener" when communicating with others:  

First, regarding attention, treat attention as an on off switch, not a dimmer. So, when you’re talking to somebody, it should be a hundred percent or zero percent. Don’t try to 60 percent it and have 40 percent of your attention on your phone. Be a loud listener, I have a buddy when you’re talking to him, it’s like talking to a Pentecostal charismatic church, he’s like, uh huh, yes, yeah, uh huh, amen, I preach, preach. I love talking to that guy. And some people are loud with their voices, some people are loud with their faces, they’re emotionally reacting. And so, I love talking to those people.

Brooks is emphasizing an important part of active listening.  It involves really showing the other person that you are paying attention.  You are truly leaning into the conversation when you are a loud listener.  Brooks also reminds us that we aren't very good at multitasking.  We have to give others 100% of our attention in a conversation, rather than trying to do two other things at the same time (which we all do, of course). 

Three Voices Every Leader Needs

Fortune's Michal Lev-Ram and Alan Murray recently interviewed Otis Elevator CEO Judy Marks at Deloitte University. Marks offered some great insights to the assembled group of leaders from a variety of companies.  In the interview, Marks offered a great comment about the types of voices that a leader needs to hear now and again.  She specifically mentioned three voices:

You need a group of very trusted people who are going to tell you truth because things get filtered and they really do. So you need to call one of them a loyal irritant as long as it doesn’t really bother them. You need someone who’s going to kick you under the table every now and then and say, “Okay, enough, Jude.” Right? They got your point. Okay, it’s enough. Let go. You need someone who’s going to say, I think be really good if this got on your calendar because you can’t be everywhere.

We often hear about the need for that first voice - the devil's advocate, the trusted confidante and truth-teller.  However, the other two voices are interesting and important too.  First, you have to have someone willing to tell you when you've made your point, and perhaps you need to back off.  Sometimes leaders need to give people time and space to digest tough feedback and to determine how they want to adjust their actions moving forward.  In the moment, people can be defensive when the leader is pushing back, and just pushing some more won't cause them to listen more effectively.  They might just put up a bigger shield.  Second, you do need people who can help you determine where your intervention is needed, and when you need to make time to attend to an issue(s) that might not otherwise be on your radar.   Marks offers some good advice here.  Having these three voices and listening to them attentively can be very helpful for leaders at all levels. 

Eliminate the Bosses? Organizational Transformation or Corporate Fad?

Source: https://www.organimi.com/

The Wall Street Journal's Chip Cutter has written about the transformation underway at Bayer, led by its new CEO, Bill Anderson. The article is titled, "One CEO’s Radical Fix for Corporate Troubles: Purge the Bosses." The 160-year-old company has struggled mightily in recent years, particularly after a problematic acquisition of Monsanto. Anderson's transformation plan calls for the establishment of 5,000 to 6,000 self-directed teams, as well as the elimination of many middle management roles.  He has taken aim at the pile of rules and regulations that govern employee conduct and decision making, hoping to streamline many processes.   

While the ambitious plan has many attractive features, it raises some concerning questions in my mind.  First, as I read the article, I'm reminded of the quote by the American writer and former State Department official Charlton Ogburn, Jr. He once said, "We tend to meet any new situation by reorganization, and a wonderful method it is for creating the illusion of progress at a mere cost of confusion, inefficiency and demoralization."  In many companies, attempts to redesign the organizational structure occur frequently.  Yet, CEOs are fooling themselves if they think that they will find an optimal organizational structure.  No such thing exists.  Each structure has its weaknesses.  Moreover, many transformation attempts create confusion and anxiety, as employees struggle to determine who has the decision rights on key issues.  

The WSJ article mentions that Anderson's transformation plan has introduced a whole new vocabulary regarding titles and processes.  Employees need to attend training to understand their new roles and responsibilities.  While a common language can be helpful, sometimes we are simply replacing one set of acronyms with another, without effecting profound cultural change.  Anderson will have to watch for signs of confusion in his workforce.  Moreover, there will always be some employees who think to themselves, "This too shall pass," having seen what they consider other corporate fads come and go.  Anderson will have to persuade them that this organizational transformation is not another fad.

One final thought from Wharton’s Peter Cappelli: he has compared serial reorganizing to the common tendency for doctors to administer antibiotics for minor illnesses.   He has argued that such prescriptions might address the pain and discomfort of the moment, but have adverse effects over the long run.   Why?  He argues that employees may lose faith in their senior leaders if they don't understand the rationale for yet another restructuring, if they are unclear about their roles and responsibilities, or if they think that it is yet another "flavor of the month."  

Anderson's plan has the potential to eliminate or streamline inefficient processes, while empowering employees closer to the actual work to make important decisions.  His goal is admirable and well-intentioned.  He just needs to make sure that he focuses on changing the culture and behavior, and not get too caught up in the boxes and arrows on organization charts.   

Action vs. State Orientation: Who is More Vulnerable to the Sunk Cost Trap?

Source: The MSLs' Liaison Newsletter

Some individuals have a strong action orientation.  Others have what is described as a state orientation. What's the difference?  According to James Diefendorff and his colleagues, 

"Individuals with a strong action orientation are able to devote their cognitive resources to the task at hand, thus enabling them to expediently move from a present goal state to some desired future goal state. These individuals flexibly allocate their attention for the purpose of task execution and goal attainment. Persons who are more action oriented are characterized by enhanced performance efficiency and the ability to complete tasks after minor failures or setbacks."

On the other hand, Diefendorff and his colleagues describe a state orientation as follows:

Alternatively, individuals with more of a state orientation tend to have persistent, ruminative thoughts about alternative goals or affective states, which reduces the cognitive resources available for goal-striving. This reduction of available resources impairs state-oriented individuals' ability to initiate activities and to follow tasks through to completion, especially when the activities are difficult, nonroutine, or both.

How do these contrasting orientations affect our decision making?   Are individuals with one of these orientations more vulnerable to certain cognitive biases when making critical choices?  Marijke van Putten and his co-authors examined this question with specific focus on the sunk cost trap.  In other words, they asked the question:  Are individuals with a strong state orientation more susceptible to throwing good money after bad than individuals with a strong action orientation?   They posited that state-oriented people would ruminate about past events and dwell on past failure. Consequently, they might try to recoup past losses and escalate commitment to failing courses of action.  Action-oriented people would, according to their hypothesis, focus on the future.  That forward focus would enable them to cut their losses and de-escalate commitment to an ineffective course of action.  

The findings from an experiment confirmed their hypothesis.  The sample size was rather small, and more work certainly needs to be done in this area.  However, the initial exploratory results are quite intriguing to me.   It speaks to a broader set of psychological research suggesting that people's well-being and decision-making abilities may suffer if we them to dwell or ruminate on their emotional state. Encouraging people to shift toward an action orientation may be beneficial.  

What are Your REAL Values?

Lila Maclellan has written an important story for Fortune titled "The recent debacles at Boeing and Meta highlight the dangers of shrugging off employee concerns."  Boeing, of course, has been saddled with product quality and safety troubles for several years, including two fatal crashes of the Boeing 737 MAX, about which I wrote a case study.   Meta has had repeated instances of internet safety and privacy issues, for which senior leaders dismissed or downplayed employee concerns.  

In this article, Maclellan cites Ann Skeet, senior director at the Markkula Center for Applied Ethics at Santa Clara University.  Skeet says, “When people bring things to your attention, it’s an opportunity to reset expectations and to clarify culture.  But if the leadership says that we can continue even when people are surfacing things they feel are inconsistent with the organization’s espoused values, it suggests there is another set of values that are actually being applied.”  

Skeet makes an important distinction here between an organization's espoused values and its values-in-use (a concept first articulated by Chris Argyris).  The espoused values are those that we find on the placard posted on the wall, or articulated by senior leaders when addressing employees and other stakeholders.  The values-in-use are the REAL values as identified by the ACTIONS of the leaders in the organization.   When employees perceive a serious disconnect between the espoused values and the values-in-use, then disenchantment and disengagement rise.    Some people stay silent in the face of serious problems.  Others simply exit the organization.  Leaders at all levels need to constantly ask themselves: Are we walking the talk?  Are we living up to our espoused values?  Or, are employees perceiving us as disingenuous?  If so, why has that perception arisen?

Does Money Serve as an Effective Motivator for Certain Types of Work, But Not Others?

(Shutterstock.com/retrorocket)

Does money serve as a more effective motivator for certain types of work, but not others? That is the fundamental question explored by scholars in a recent working paper. Pamela Osborn Popp, Ben Newell, Daniel Bartels, and Todd Gureckis have written a paper titled, "Can Cognitive Discovery Be Incentivized With Money?" They conducted six experiments. In the first five experiments, they asked research subjects to examine a set of items. The participants had to determine how the items might be categorized sensibly into groups and then assign them appropriately. The scholars describe this task as "rule discovery" work. In the sixth experiment, the subjects engaged in "rule implementation" work. In that study, the scholars told the subjects what the categorization process should be, and the participants simply had to apply that criteria. 

The scholars found that money proved to be an effective motivator in the sixth experiment, but not in the previous five studies. The scholars conclude that tasks requiring creativity, insight, and discovery are quite cognitively challenging, and they depend on both attention and working memory.   They write  that "the results suggest that performance in tasks which require novel inductive insights are relatively immune to financial incentive, while tasks that require rote perseverance of a fixed strategy are more malleable."  

The researchers note that tasks in the workplace don't fall simply into these two categories though.  There's most likely a spectrum that stretches from the highly rote work to the extremely cognitively challenging tasks require high degrees of creativity.   Moreover, our work often involves some combination of these types of tasks.  Finally, the scholars remind us that this study focused strictly on one form of monetary incentive.  Non-monetary incentives may have different effects. 

Why Do We Miss Key Opportunities?

Why do we miss key opportunities at times in our careers?  Sometimes, it may have to do with the type of opportunity we encounter.  Suppose we have to decide whether to pursue a course of action which could have a positive outcome, but it has a very low probability of a successful result.  Harvard's Emily Prinsloo and her co-authors have published an interesting new paper exploring what they call "opportunity neglect."   Through a series of studies, they show that individuals  systematically fail to take advantage of low-probability opportunities, even when the costs of an unsuccessful outcome are quite low.   In fact, they demonstrate that, "people are even willing to incur costs to opt out of low-probability opportunities."   

Why do people fail to take advantage of these opportunities?   Perhaps, we anticipate the emotions that we will experience if we fail, and we are trying to avoid those negative feelings.  We might not only worry about how we are going to feel, but about how others will perceive us if we don't achieve a successful outcome.  

The question is:  Are we over-estimating the negative repercussions of an unsuccessful outcome?  Do we anticipate the negative emotions lasting much longer than they actually will?  Are we exaggerating the reputational hit we might take if we don't succeed?  

In writing about this research for BPS Digest, Emma Young recalls the famous Wayne Gretzky quote: ”You miss 100% of the shots you don’t take.”   Perhaps we need to remind ourselves that pursuing stretch goals is worthwhile.  In fact, there may be a great deal of fulfillment associated with taking on big challenges.  Moreover, we should recall what Daniel Pink wrote about in his excellent book, The Power of Regret.  Pink notes that people tend to experience more regret in life about paths they did not pursue than actions they undertook.   

Learning on the Job: Do We Learn and Develop Faster with In-Person Collaboration?

Source:  https://www.myworldofwork.co.uk

Do we learn more from in-person collaborators than remote teammates?  That question has been top of mind for many people over the past few years.   Much of the dialogue about this question has not been evidence-based though.  It's been highly anecdotal.   Recently, however, I read about some fascinating research on the topic. 

Frank van der Wouden and Hyejin Youn analyzed more than 17 million academic publications over decades to address the question of whether local collaboration generates more learning than remote collaboration.  The scholars wanted to identify each researcher who collaborated with someone outside their discipline and later published a sole-authored paper in that new domain.  That later publication would indicate that the researcher had learned a great deal from this collaborator outside his or her original field of expertise.  Youn and van der Wouden compared the learning rate for those who collaborated locally vs. at a distance.   They found that the learning rate of local collaborators exceeded that of distant collaborators, with a particularly substantial impact in areas such as chemistry and engineering.  

Moreover, Youn explained why the impact of local collaboration was greater for people early in their careers: “That’s understandable, because early in your career, you still need to acquire knowledge, and you have to be present to do that when knowledge isn’t yet codified. It’s like riding a bicycle. You can’t learn how to ride a bicycle by reading a paper.”

The study covered the period from 1975-2018. Therefore, some will argue that we have much better tools for virtual collaboration today, and we have become more adept at remote interaction.  As a result, they will conclude that we cannot draw far-reaching conclusions from this study.  That may be true, but it still warrants consideration and certainly indicates that we need further study of the topic for the more recent period of time.  The finding about young people is of particular interest to me.  What do these findings mean for how we bring new workers into the fold early in their career? What should onboarding and apprenticeship look like in those early years?  How will they learn and develop most effectively?  We've been thinking a great deal about what type of work can be done best remotely vs. in-person.  We should also be thinking carefully about the stage of each person's career and how that impacts our decisions about in-person vs. remote collaboration.  

Fighting Back Against Becoming Insular & Isolated

Source: www.cleartouch.com

Leaders love to talk about customer obsession.  They often highlight it as a value they cherish.  They encourage others to put the customer first.   Yet, all too often, they don't walk the talk.   Far too many organizations are quite insular in their thinking.  People focus an overwhelming amount of their time and attention on internal processes and procedures.   Executives become buried in staff meetings, and they become isolated from customers, markets, front-line employees, and external partners.    How can we fight back against becoming too insular in our thinking?  It's about more than just building in some scheduled time to visit with customers.  Here are a few tips:

1.  Walk a mile in the customer's shoes from time to time.   Don't just ask customers what they think; actually put yourself into their situation.  What is it like to purchase your product or service?  What are the pain points and frustrations of your customers? 

2.  Open your eyes when you travel and look for the unexpected.  When we drive to work each day, traveling the same route, we are usually on auto pilot.  We don't have to think much, and we often don't notice much along our path.  When we travel, our minds are more alert, and we have to think a bit more about where we are going and how to get there.   Use these travel opportunities to notice the differences between your home city or country and the place you are visiting.  What is different about consumer preferences?  What cultural differences stand out to you?  What local competitors are behaving in interesting new ways?  How might these factors influence your business?

3.  Study organizations outside your industry.   Don't just remain laser focused on the 3-5 major rivals with whom you compete each day.  Find interesting companies, far and wide, from which you can learn.   What interesting practices are they employing?   How have they overcome challenges similar to those you face? 

4.  Go out and recruit new talent on college campuses.  Don't just send your front-line human resources staff members, or your young workers who are alumni from those schools.   Send some more senior leaders to those colleges.  Encourage them to interact with the young people and ask them questions, rather than just providing information about your company. Find out what they care about, how they view your organization, and what they think about your products and services. 

5.  Encourage a few people on your team to role play the competition when you are making a big decision.  Ask them to really study how your rivals think and act, and then encourage them to propose how your rivals will react to your decision.  

6.  Read voraciously, but don't just read the business news and a few books relevant to your industry.  Read more broadly, and keep a journal reflecting on what you have learned.  

The Kyte Baby CEO Apologizes: Could the Apology Do More Harm Than Good?

Source: https://marketoonist.com/2017/04/corporateapologies.html

 
CNN's Ramishah Maruf reported this week about the severe backlash that occurred recently for a children's clothing brand with a cult-like following.   Kyte Baby is one of several popular brands of bamboo fiber clothing for kids.  These brands market their clothing as better for children's skin.  According to Kyte Baby's website, "Bamboo is, simply, the Goldilocks of fabrics—not too hot, not too cold. It’s temperature-regulating, and while we’re pretty confident it’s the softest fabric you’ll ever feel, it’s also super stretchy to grow with baby and fit longer. Perfect for crying babies, busy toddlers, and tired parents alike."

However, consumers revolted recently when news emerged about Kyte Baby's response to an employee's request to work remotely.  The employee had given birth, and their new child was being cared for in a hospital's neonatal intensive care unit.  Kyte Baby denied the employee's request.  Consumers decried the decision on various social media platforms.  Kyte Baby's CEO and founder Ying Liu issued an apology via TikTok.  Apparently, many customers considered the apology insincere and highly scripted.  Liu returned to TikTok to apologize for the poor apology!  The question, of course, is whether the damage has already been done, and whether the brand can now bounce back. 

This episode caused me to turn to the scholarly research on corporate apologies. I found an interesting study by Tessa Basford, Lynn Offermann and Tara Behrend in the Journal of Business Ethics.  In their studies, these scholars found that, "Whereas sincere apologies generated the most favorable follower reactions, insincere apologies often appeared worse than non-apologies... apparently, Chesterton was right - insincere apologies may add insult to injury."  They found that leaders who issue sincere apologies tend to viewed as more humble, and they tend to be perceived as transformational leaders.  

The lesson is clear - take a deep breath and don't rush that apology after making a significant error.  Don't over-script your apology.  Speak from the heart, and empathize with those who have been harmed.  Often, people obsess over the precise wording of an apology.  However, keep in mind that HOW you deliver the words may matter as much, if not more, than WHAT words you use.  

Stanley's Having a Moment: Should They Be Worried?

 

Everyone seems to want a Stanley water bottle these days.  The 40 ounce bottle has become a social media sensation, and it has skyrocketed in popularity with young people.  According to Fortune, the recent introduction of a Target-exclusive Valentine's Day product line created quite a stir: " People are camping outside Target stores, and there have been reports (and social media videos) of physical alterations as people try to get the special edition of the cup that has become something of a multi-generational craze."  

Interestingly, the company has been around for more than 100 years (founded in 1913). The brand enjoyed popularity with construction workers and outdoor enthusiasts for its rugged, utilitarian products. I remember my dad owning an all-steel thermos bottle, as did many other of his fellow factory workers. Trendy it was not.  

In 2016 the company launched the "Quencher" - a very large water bottle (40 ounces) with a handle and a straw whose narrow bottom fit into a car's cupholder. The product did not enjoy market success until a 40-something blogger named Ashlee LeSueur started touting the product online.  She even advised the company to market the product to women, rather than to the men the firm typically targeted.  She encouraged them to create a line of Quenchers in many bright colors.  The company's executives resisted for some time.  Then they shifted gears, and they began to adapt the product and the marketing.  The product has become immensely popular.  Great news, right?  Well, perhaps executives should still be worried.  

When a brand explodes like in this case, executives need to ask themselves:  Is this surge in popularity likely to generate a permanent lift in revenue, or are we experiencing a temporary spurt of growth that may subside?  Could the bubble burst quickly, as other companies introduce copycat products, or as consumes move on to the next big thing?  Given these questions, leaders need to think about how to mitigate the risks associated with scaling up quickly to meet this surge in demand, only to be left facing challenging circumstances if the popularity wanes quickly in the near future.  Think Peloton, who did not mitigate these risks effectively.   Here are a few thoughts about managing the potential downsides at Stanley: 

1.  Don't forget the traditional core customer, and certainly don't neglect their needs.  Sometimes, firms take their eye off the ball in pursuit of new customers, and then capable rivals emerge to attack their core.  What do the construction workers and outdoor enthusiasts need?  How should we continue to innovate for them?  Invest some of the new profits back in the core.  

2.  Scale up with caution.  Don't over-hire in pursuit of the growth.  Cutting workers later will be mighty painful.  

3. Get comfortable with some product scarcity.  That may even enhance the product's popularity.  It may be better to stock out then to be stuck with a ton of excess inventory if the product suddenly loses its "cool" among these new customers.  Moreover, too much product out there in too many places can actually contribute to a sudden turn in popularity, as people begin to complain that "everyone" has what they once considered a more exclusive product.  

4.  Be cautious about extending the brand further into new product categories.  Investing some of the new profits in innovation makes good sense (rather than simply pocketing all the cash), but you have to ask yourself:  Will we have a competitive advantage in this new category or market segment? If so, what precisely is our advantage?  Don't just pursue growth without understanding the nature of the the firm's competitive advantage.  

5.  Watch product quality like a hawk.  As production scales up rapidly, many firms encounter quality problems that quickly become a brand's downfall.  Put in place strong measures to insure that product defects remain very low. 

Stuck in a Rut

Source:  https://hrcsuite.com/pioneers/ 

Alicea Lieberman, On Amir and Ziv Carmon have published an interesting new paper titled, "The entrenchment effect: Why people persist with less-preferred behaviors."   The scholars conducted a series of experiments to examine why people become stuck in "behavioral ruts."  We can all relate, of course. At times, we find ourselves continuing to engage in undesirable activities even though we could rather easily switch to a more enjoyable or beneficial course of action.   The scholars note that many explanations exist for this suboptimal behavior, including the sunk cost trap.  However, they explore another potential explanation for behavioral ruts.  They describe this causal mechanism as entrenchment, defined as "the increased accessibility of a task set which strengthens with repetition and continuity and makes constructing an alternative task set feel difficult, leading people to forgo opportunities to make beneficial changes."  

In their first set of experiments, the scholars show that people can get stuck in behavioral ruts rather easily.  Then, they demonstrate that the more we have engaged in a suboptimal activity, the harder it can be to envision an alternative course of action.   In their language, the alternative becomes less accessible to individuals.   Therefore, people tend not to switch to a more desirable activity.   This entrenchment occurs even when switching is actually not difficult at all, and the other course of action is clearly more desirable.  

However, the scholars find that the continuous repetition of a mundane task leads to more entrenchment than when individuals have the opportunity to intermittently perform other task.  The interruption of the less desirable activity reduces entrenchment and enhances the likelihood of switching to a preferred course of action moving forward.  

The authors argue that the research has important implications for how we structure work for our employees.  Sometimes, requiring employees to take a break, or adding some variety to their work flow, will increase the likelihood that they will seek out and adopt better ways of working rather than staying entrenched in a less productive course of action.  Breaking up the mundane has some really important benefits, as it could stimulate the search for, and adoption of, more efficient ways of working.  

Lesson from the Closing of the Belichick Era in New England

 

Source: ESPN

Simple, but powerful, lesson from the Belichick era's closing chapter in New England: Open up your inner circle as you grow older, invite new voices inside, and keep questioning whether the formula for past success continues to apply in a changing environment. 

Changing Behavior by Making a Process MORE Difficult Rather than Less

https://buffalo7.co.uk/blog/how-to-get-buy-in/

Holly Dykstra, Shibeal O'Flaherty, and Ashley Whillans have written a fascinating new Harvard Business School working paper titled, "The Buy-In Effect: When Increasing Initial Effort Motivates Behavioral Follow-Through."   They begin by noting that many behavioral scientists advocate the removal of friction as a mechanism for stimulating people to adopt a new behavior (or to change their existing behavior).   In other words, make a new course of action easier for people to adopt, and you are more likely to get people to engage in that desired conduct.  However, these scholars posit that sometimes it might make sense to actually ADD friction - in short, make it MORE difficult to pursue a new course of action, and you might actually induce behavioral change.    They argue that adding some friction can increase a sense of ownership and buy-in toward a new course of action.  

To test their hypothesis, they conducted a field experiment with Oregon Department of Transportation.  Several years ago, the department migrated to a new carpool platform for residents of the state.  The scholars noted that there were many inactive users on the old platform (87% of all accounts).  In other words, they had established accounts, but they were not actually using the carpool services.  

The scholars examined whether a slightly different procedure for migrating inactive users to the new platform might have an impact on sign-ups and usage.   Some users were provided information regarding a low-effort method for moving to the new platform.  Others received information regarding a sign-up process that involved more effort.   Here's what the scholars found:

"More Effort group took more trips overall, despite there being fewer participants who signed up to the platform: while 694 signed up from the Less Effort group, only 511 signed up from the More Effort group. During our 122-day study period, we observed 9,147 total trips; out of these, the More Effort group took 5,106 trips, while the Less Effort group took 4,311, meaning that More Effort group took 795 more trips overall than our Less Effort group."

Why did adding friction actually increase usage of the carpool platform?  The scholars don't have a way of actually determining the psychological mechanism underlying individual behavior in this case.  However, they offer some possible explanations.  For example, they suggest that people may "feel a greater sense of psychological ownership over the action and value it to a greater extent, which would increase their likelihood of following through."  They also note that the sunk cost effect may be at play here.  If you are invested some time and effort into a process, you may continue down that path because you don't want to "waste" the initial investment you have made.  

Some Great Reads from 2023

 Here are some of my favorite books that I read in the past year:

• The Devils Will Get No Rest, by James Conroy
• Outsmart Your Brain, by Daniel Willingham
• Hero of Two Worlds, by Mike Duncan
• Unscripted, by James Stewart and Rachel Abrams
• Right Kind of Wrong, by Amy Edmondson
• The Revolutionary Samuel Adams, by Stacy Schiff
• The League, by John Eisenberg
• The Restless Republic, by Anna Keay
• The Power of Regret, by Daniel Pink
• It's Not TV, by Felix Gillette and John Koblin
• Elon Musk, by Walter Isaacson
• Our Man in Tokyo, by Steve Kemper