Phrasing the Question: Start by Presuming a Problem

Julia Minson, Eric VanEpps, Jeremy Yip, and Maurice Schweitzer have published a new paper titled, "Eliciting the truth, the whole truth, and nothing but the truth: The effect of question phrasing on deception."  They report their research regarding the impact that question phrasing has on a counterparty's willingness to reveal critical information.  They examine this issue in the context of negotiations and job interviews.  

Minson and her colleagues contrast three types of inquiries:  positive assumption questions (presume that no problem exists), negative assumption questions (assume a problem exists), and general assumption questsions (no mention of a problem). The authors provide an example of positive vs. negative inquiries. Positive: “This car doesn’t have any problems, right?” Negative: “What is wrong with this car that you are trying to sell me?”  

The authors conduct a series of studies to examine the impact that different types of questions have on a counterparty's behavior. They find that negative questions elicit the revelation of more critical information about problems.  In an interview with Knowledge@Wharton, Van Epps concludes, "“People are much more likely to disclose problems when you presume [there is a] problem.”  

These scholars examine questions in the context of job interviews and negotiations, but I think an even more important application might be for leaders assessing risk in their organizations.  We know that bad news often does not rise to the top in organizations.  How can leaders uncover hidden risks before small problems have become major crises?  This study suggests that leaders should ask probing questions that presume a problem exists, rather than inquiring in ways that assume things are going smoothly.  

HBO: Opportunity vs. Threat Framing in the Response to Cord-Cutting Behavior

Bloomberg BusinesWeek's Megan Murphy recently interviewed HBO's CEO, Richard Plepler.   The discussion offers some terrific insights regarding how an incumbent player can grow and innovate, overcoming concerns about how new opportunities might cannibalize existing products and services.  Plepler talks about purusing "multilateral growth" at HBO in an age of cord-cutting customers.  First, he explains that HBO made a decision to offer a standalone streaming service (i.e. purchasing HBO without having to buy a cable package) in 2013, when few homes were "broadband-only."  Today, nearly 20 million homes are in that category.   HBO didn't view cord-cutting as simply a threat though.  They framed it as an opportunity.   Plepler explains that HBO chose to pursue "multilateral" growth - expanding into the standalone streaming space, while also trying to grow its traditional cable business.   To management at HBO, one did not have to come at the expense of the other.   Plepler explains: 

We are going to grow multilaterally—digitally and among our traditional partners. We looked at the market and realized we were totally underpenetrating both...We knew it wasn’t going to be cannibalistic. There are some people who prefer a traditional bundle—maybe it’s a skinnier bundle and doesn’t have 180 channels in it. But for HBO, skinnier bundles have been a good thing, because if you take the average price of a cable or a satellite or a telco subscription down from $100 to, say, $65 or $70, that means HBO—which has always been a la carte—is a much more digestible purchase. Skinny bundles allowed the cable, satellite, and telcos to package us more effectively.

Opportunistically for us, we’ve been able to parallel-process and to grow digital. One has not been at the expense of the other. As I like to say, nobody is doing us a favor when they sell HBO, whether it’s digitally or whether it’s in the traditional ecosystem. They’re selling HBO because it’s a great product and it helps make their bundles stickier—and because they know their consumers want it.

That quote is packed with some fascinating insights.  Perhaps most interestingly, HBO did not buy into the conventional wisdom that skinny bundles would serve as a disruptive threat to its business.  Instead, it asked the question:  How might we take advantage of this trend to actually grow our business?   What they found was that the offering of skinny bundles by cable companies provided more disposable income and purchasing power for the consumer, enabling them to add HBO while staying within their budget.   

HBO didn't begin by assuming that these trends regarding cord-cutting and skinny bundles were simply threats.  They reframed these issues as opportunities, and asked the "how might we" questions that enabled them to discover new growth opportunities.  More companies need to think in terms of "opportunity framing" when their business environment shifts.  

What are the benefits of "opportunity framing" in these situations?  Research suggests that we can act very rigidly when we frame situations as a threat.  We often simply "try harder" - doing more of the same rather than thinking differently.  We act much more flexibly and adaptively when framing situations as opportunities.  We encourage more experimentation and learning, and we find new ways of working.   Clark Gilbert's research suggests that initially viewing a situation as a threat can help an organization to mobilize resources and get management's attention.  However, successful adaptation requires reframing the situation as an opportunity, much as HBO has done in this case.  

Framing the Problem: The Decline of Campbell Soup & Other Packaged Food Companies

The Wall Street Journal reports today that Campbell Soup reported a disappointing quarter of financial performance yesterday, causing the company's shares to fall by 8%. The firm has now experienced 12 straight quarters of declining revenues. The newspaper explains the decreases in sales as follows:

Campbell and other packaged-food companies are facing difficulties in attracting consumers who increasingly want foods that they see as healthier, more natural and more environmentally sustainable. Companies also face a changing food-retail environment, with the rise of meal-kit providers, the growth of deep-discount chains in the U.S. and the food-selling ambitions of Amazon.com Inc. and its Whole Foods Market.

The article goes on talk about some of the company's recent moves intended to address these competitive threats:

Campbell executives have said they intend to use acquisitions and investments in new products to help lift the company’s fortunes and expand from its mainstay soups. In July, the company said it would buy organic-soup maker Pacific Foods for $700 million, as part of its natural-food push. It now expects to complete that acquisition by the end of the year. It has also invested in some food-related startups.

There's a lesson here about how you frame a problem. To me, the challenge facing Campbell Soup is much broader and deeper than simply the rise of organics or the margin pressures from Amazon and Wal-Mart. Campbell Soup faces a problem with respect to how people shop the grocery store these days. Increasingly, people are spending more time on the perimeter of the store and less time in the center. They are buying fresh fruit and produce, fresh meats and fish, and frozen foods and dairy items. They aren't buying as many packaged foods. Campbell Soup is in the center of the store. Adding a line of organics won't solve that problem. The issue is broader than organic soup displacing conventional soup. The broader challenge is that people are purchasing fewer packaged food items, period. There's a lesson here for all firms. Always make sure you think carefully about how you frame the competitive problem you face. How you frame a problem will, of course, shape the nature of the options you generate for future strategic action.

The Irrational Desire to Complete a Set of Tasks, Purchases, etc.

Kate Barasz, Leslie John, Elizabeth Keenan, and Michael Norton have completed a new study demonstrating that people have an irrational desire/need to complete sets of tasks, purchases, assignments, etc. Barasz says, "People really don't like to leave things incomplete." HBS Working Knowledge describes the implications of their research: 

  

Do you want customers to refer more of their friends to your company’s website? Ask them to refer friends in arbitrary “batches” of five at a time. Looking to increase charitable giving to your nonprofit organization? Ask potential donors to contribute a set of six gifts. Are you and your fiancé struggling to write thank-you cards for all those wedding shower gifts? Try batching the unwritten cards into sets of eight. Rather than feeling overwhelmed by the prospect of writing one note at a time, you’ll feel oddly motivated to finish a whole set at a time.

In one study, the scholars conducted a field experiment with the Canadian Red Cross.  They tested three types of donation request with more than 7,000 donors during the Christmas season in 2016.  One group of donors received a request for cash donations.   A second group received a request to donate so as to fund the giving of particular items to people in different spots around the globe.  A location marker on a visual of the globe indicated where their money was funding a particular item. The third group of donors received a request to donate funds for a "Global Survival Kit" of six items. As they donated each item, a line stretched further around the globe, going around the entire earth if all six items were funded. The prospective donors did not have to donate all six items.  They could choose to donate a single item if they wished.  Barasz notes, “Who wants to donate six blankets, when you can donate one blanket and feel just as good? But, if you frame it as a set, then there is a reason to want to complete the set and to donate all six of the items.”

What did they find? 21% of the people in the third group chose to donate all six items. That was more than 4 times as many people donating as compared to the second group, and 7 times as many people donating as compared to the first group.  In short, framing the decision as a set to be completed has a substantial impact on donor behavior.  Presumably, the same type of framing may have a significant impact on customer or employee behavior.   It may not seem rational to be compelled to complete a set, but that's the way many individuals feel.  

Framing the Question: Improving Your Brainstorming Session

I listened recently to a Stanford Innovation Lab podcast with Professor Tina Seelig. During this episode, she interviews Emily Ma from Alphabet.  They discuss the keys to an effective brainstorming session.  During their discussion, they focused on important it is to frame the question properly at the outset of a brainstorming meeting.  For instance, Seelig and Ma describe the question:  "How might we create an awesome birthday party for our friend?"   Then they talk about how you might reframe the question with a slight change in word choice. What if you used the word "celebration" instead of "party" in your "How Might We" question?  The word "party" might have framed the question too narrowly.  Changing the word to "celebration" could invite a much wider range of ideas.   This example reminds us that we should be careful about our word choices.  However, we also have to consider multiple frames as we pose the question(s) that initiate our brainstorming sessions. 

Generate Multiple Frames to Make Better Decisions

How you frame a situation helps to determine the types of options you consider and the ultimate decision that you make.   By frame, I mean the way that you characterize a situation.  We face a complex and messy reality.  We simplify those situations by adopting mental models and frameworks.  Those frames can be powerful in helping us make sense of that messy reality.  However, how you frame a situation can constrict the range of alternative solutions that you generate and analyze.  To broaden the range of alternatives generated, managers should seek to frame situations in multiple ways.  For example, suppose that a firm has experienced high employee turnover.   A leader may frame the situation as an incentive problem.  However, that framing would focus his or her team on potential solutions such as changes in compensation.   A better approach would be for the leader to offer multiple frames of the situation.  He or she might ask: We might say that we have a turnover problem, or perhaps we might cast the issue as a talent management problem.  In other words, we don't simply have a talent retention issue... perhaps we have a recruitment challenge, a development problem, etc.   Framing the problem in a broader way might lead to a very different type of discussion.  If you are in a situation where you feel that the range of options being considered is particularly narrow, consider reframing the problem.