Thinking Carefully about Boomerang Employees

How often do employees return to your company after departing for a promising opportunity elsewhere?  Why did they leave, and what caused them to return?  Anthony C. Klotz, Andrea Derler, Carlina Kim and Manda Winlaw have conducted some useful research on the topic of boomerang employees.  They found that returning to an organization where an individual once worked is quite common. Based on their analysis of extensive employee work records, "28% of “new hires” were actually boomerang hires who had resigned within the last 36 months."  Clearly, employees depart and often discover that the grass indeed was not greener elsewhere.  

What does this boomerang phenomenon mean for employees and employers?  For employees, the research implies that individuals must do more homework before jumping ship.  They need to go beyond what recruiters might be telling them and try to ascertain precisely what their role and responsibilities will be.  Moreover, they need to try to determine how the culture and values as articulated might differ from the actual practice within the organization.  Chris Argyris used to describe this schism as the difference between espoused values and values-in-use.  Employees also need to focus on how they leave their existing organization.  Ian Morris, co-founder of Likewise and former CEO of real estate software company Market Leader, once advised my students that they should always "leave well" when departing an organization.  You never know if and when your path may cross with that of a former co-worker or manager.  Preserving relationships during and after the departure may be very important for one's career.  It surely will help if you become a boomerang employee.

For companies, the boomerang phenomenon means two things. For the companies losing talent, managers  should maintain open lines of communication with talented former employees.  The research shows that many boomerangs occur shortly after the one year mark at the new company. Thus, managers should reach out around that time to see how things are going for the former employee at their new organization.  For the companies gaining talent, they need to think about how they can check in regularly with new employees to see if they are finding the position consistent with their expectations.  Identifying discrepancies between expectations and reality as early as possible can help to avoid misunderstandings, clarify roles and responsibilities, and make adjustments to better match workers' professional goals with organizational needs and demands.   Don't wait for the one-year merit review to have an in-depth conversation with a new employee because they may already have one foot out the door at that point.  

Creative Ideas Really Do Emerge More Often from the Periphery, Not the Core

Andy Grove, Former CEO of Intel

Do great ideas come from incumbents or from outsiders in a particular field?  Conventional wisdom says that outsiders usually introduce the boldest, most original innovations.  Is that true?  Lee Simmons recently wrote an article for Stanford Insights about the work of Paul Vicinanza, Amir Goldberg, and Sameer Srivastava.  The three scholars developed an incredibly large and diverse dataset, and then they used a deep learning model to examine the information.  They found that prescient ideas actually do come from outsiders more often than from those at the "core" of a field.  

The scholars examined over 100,000 quarterly earnings calls, more than 4 million judiciary rulings, and approximately 5 million speeches delivered in the U.S. Congress.   They used BERT, a deep learning model, to examine the texts.  The model rated each text based on the level of "prescience.  In other words, the speaker needed to not only offer an original idea, but it had to be an accurate prediction of what would come to be in the future.   Simmons reports on the scholars' findings: "The results were striking: In all three fields, they found that prescient ideas were much more likely to emerge from the periphery than the core. 'In studies of creativity, people tend to focus on brilliant individuals,' Goldberg says. 'But unless you think there are more geniuses on the margins, this suggests that where you sit matters at least as much as who you are.'" 

There it is... a person's position and perspective may matter just as much, if not more, than their particular knowledge or skillset.  You simply see things differently when you are the core of a field as opposed to the periphery.  Of course, that doesn't mean that you are doomed to not be innovative if you are an incumbent at the core of your industry or field.  You can take specific actions to move to the periphery, scan the external environment more broadly, and identify new ideas emerging at the margins of your domain.  Andy Grove used to say that, "snow melts at the periphery."  By that, he meant that new threats and opportunities often emerged first at the margins of an organization.  People at the core were often insulated from these new trends.  So, he encouraged his people to constantly get out to the periphery of his organization to spot and understand new trends.  

Do Those Super Bowl Commercials Increase Sales?

Companies will spend an enormous amount of money on Super Bowl commercials during Sunday's big game.  Sporting News reported that companies will spend an average of $7 million for a 30-second Super Bowl commercial.  Of course, you might be wondering:  How much of an impact do those commercials have on subsequent purchases?  I dug through some research on the topic, and I found one particularly interesting paper by Wesley R. Hartmann and Daniel Klapper.  They published their research in Marketing Science several years ago.  

Hartmann and Klapper examined how commercials impacted sales after the Super Bowl.  They found a positive relationship between the advertising and product purchases during a subsequent sporting event.   Specifically, they examined how Super Bowl ads impacted consumption of products such as beer during the March Madness college basketball tournament, which takes place about 5-6 weeks after the Super Bowl.  Here is their summary of the findings from the research: 

We measure the effect of ad viewership on post–Super Bowl sales. Without an obvious horizon for the effects, we measure the effect separately for each week following the game. While the first few weeks appear to follow a typical decay pattern, the advertising effects show resurgence in weeks when shoppers make purchases to consume during subsequent major sports broadcasts. This pattern suggests the hypothesis that Super Bowl advertising may build a complementarity with sports viewership more broadly.  To test this, we collected market-week-level data on viewership of the National Collegiate Athletic Association (NCAA) basketball tournament and interacted it with the Super Bowl ad exposures. We found that purchases for consumption during viewership of the NCAA tournament were augmented if the brand’s Super Bowl ad viewership was high.

Who Makes Those Private Label Products In Your Grocery Store and Why?

Ever wonder who manufactures the private label products you purchase at the grocery store?  Most of us suspect it is one of the large branded consumer products companies, but it is sometimes difficult to determine which firm specifically supplied that product to the grocer.   Why do these big national brands choose to produce private label products?  Scholars Yu Ma, Kusum Ailawadi, Mercedes Martos-Partal, and Oscar Gonzalez-Benito have conducted an in-depth study of private label manufacturing, and they offer some interesting insights.  They studied the private label market in Spain, examining data for six of the largest retailers in the country.   

First, they confirm a well-known fact about private label production.  The large brands have an inherent advantage when producing private labels.  They can leverage economies of scale to produce those private label goods at low costs.  Moreover, manufacturing the private label goods, and further taking advantage of scale economies, can lower their costs of producing their branded products.  

Second, they find that manufacturers may be supplying private label products in hopes of strengthening their relationships with key retailers.  In so doing, they hope to gain more shelf space for their branded products.   The scholars confirm that retailers do carry more of a manufacturer's branded products if that company supplies private label goods to their stores.   If a manufacturer exits the private label business, they tend to lose shelf space for their branded goods.  

However, interestingly, they find that the national brands do not gain market share in their categories simply because they have more shelf space and more availability of their product in the stores.  In the end, the consumer drives the success of the brands.  More shelf space doesn't mean more sales, and ultimately, a retailer may take shelf space away if products don't sell.  

One thing that they do not examine is why some branded manufacturers are more successful at private label production than others.  I suspect that some branded goods companies simply do not have the efficiencies and cost structure required to offer private label goods at competitive prices.  Moreover, attempts to become more efficient might harm the quality of the branded goods the firm supplies.  

Why Some Employers are Disappointed with Gen Z Hires

https://www.monitask.com/

Fortune's Orianna Rose Royle reports that, "six in 10 employers say they have already sacked some of the Gen Z workers they hired fresh out of college in recent months."  She cites data from a survey of nearly 1,000 business leaders conducted by Intelligent.  Royle offers some more data from the Intelligent study: 

Employers’ gripe with young people today is their lack of motivation or initiative—50% of the leaders surveyed cited that as the reason why things didn’t work out with their new hire. Bosses also pointed to Gen Z being unprofessional, unorganized, and having poor communication skills as their top reasons for having to sack grads. Leaders say they have struggled with the latest generation’s tangible challenges, including being late to work and meetings often, not wearing office-appropriate clothing, and using language appropriate for the workspace. Now more than half of hiring managers have come to the conclusion that college grads are unprepared for the world of work. Meanwhile, over 20% say they can’t handle the workload.

Now you may or may not have experienced these hiring challenges.  Some have argued that these complaints are overblown, and that they are typical of an older generation of managers that does not understand younger workers' mindsets and habits.  Still, one cannot easily dismiss these concerns expressed by managers.  Their perceptions matter because they will affect hiring practices, as well as the experience of those new hires during their initial months of employment.  

What strikes me, though, is that these hiring managers are not complaining about a lack of business skills such as data analysis, and they aren't pointing out a lack of content knowledge in specific business disciplines.  Instead, they are focused on how young workers conduct themselves.  These managers are focused on the basic blocking and tackling of becoming a professional. Can you show up on time?  Can you communicate clearly?  Can you dress appropriately?  The lesson for those of us in academia is very clear.   We cannot focus only on teaching content knowledge and analytical skills.  We have to prepare students for the day-to-day interactions that will take place in the workforce.  For young workers, the lesson is also very clear: being smart is not nearly enough to succeed in the workplace.  If you are late, disorganized, and/or cannot communicate clearly, no one cares how knowledgeable you are. 

Reducing Customer Pain Points: The Savannah Bananas

My former student, Jon Huntley, and I are working on a new case study about the Savannah Bananas, the wildly successful and highly entertaining barnstorming baseball team co-founded by Jesse and Emily Cole.  The company provides a wonderful example of how to identify and alleviate pain points in the customer experience.  In his book, Banana Ball (written with Don Yaeger), Jesse explains how the Bananas sought to find and eliminate all the friction in the fan experience.  

“Here’s what I don’t understand about many businesses.  Why do they continually do the things that their customers hate? Why are people endlessly put on hold, while a message plays that tells them how ‘important’ their call is, but they do a slow burn while waiting to talk to an actual human being… and maybe they still hang up in frustration.  In the Bananas’ organization, we have a word for this – friction.  We looked at all the friction points from a baseball experience – ticket fees, price gouging on parking and concessions, as well as limited access to autographs and fan photos with their favorite players – and we did the opposite.”

Jesse Cole explains that improving the customer experience involves a focus on both macro-frictions and micro-frictions.  At the macro level, the Bananas had to overcome the perception that baseball games were too long, slow, and boring.  At the micro level, the Bananas mapped the entire customer journey, from buying tickets to arriving at the ballpark, watching the game, and returning to their cars in the parking lot.  They identified each of the frictions, or pain points, along that journey.  They are relentless about eliminating friction.  

They use several methods to identify and eliminate pain points. First, employees pose as Undercover Fans during games.  Second, senior leaders in the organization work on the front lines at times to see the processes and fan interactions up close.  Third, the organization takes photos and video of the fans throughout the ballpark to see when and why they are frustrated.  Finally, they constantly look for opportunities to transform pain points into moments of joyful entertainment.  For instance, most people hate being put on hold.  The Bananas have created such entertaining voicemail messages and hold music that fans enjoy the wait.  Many people become frustrated by the wait times in the concession areas.  The Bananas try to reduce those wait times, but they also have developed all sorts of entertainment on the concourse.  

Sounds simple, right? Why do many organizations fail to alleviate these pain points?  In my view, three main reasons exist. First, managers become too isolated from the true customer experience.  When they "experience" the customer journey, it's not real.  Employees know they are watching and inspecting, and they create a "false" process for managers. Second, managers do not empower front-line employees to eliminate those frictions.  They constrict their freedom and autonomy such that the employees feel powerless to address problems that are clear to them on the front lines.  Third, and perhaps most importantly, managers convince themselves that an amazing product should be sufficient to satisfy customers.  It's like the doctor who thinks that patients should be happy if they receive the appropriate treatment to remedy their illness, even if patients had to experience long wait times, confusing insurance forms, an array of unexplained fees, and unclear instructions about medication and other treatments.  A great product alone is not sufficient to satisfy customers.  How you deliver that product matters.  In baseball, a competitive, well-played game is far from enough to satisfy fans.  That's the key insight that the Bananas have used to transform the ballpark experience into a magical one for fans. 

Negotiating a Job Offer: Step Back, Think Broadly

As the new semester begins, many soon-to-be-graduates are deeply immersed in the job search process.  Some already have job offers and are contemplating whether to accept those positions.  During this process, many students and recent graduates ask me about negotiating with their potential employers.  Can I negotiate? What should be the focus of my negotiation?  How do I make sure that I don't harm the relationship before I even start working?   For those students, I highly recommend a Harvard Business Review article by my friend Hannah Riley Bowles and her co-author Bobbi Thomason.  They write:

Although reaching agreement on pay and benefits is important, failure to think more broadly about your career could mean losing valuable opportunities for advancement. For instance, women are increasingly urged to negotiate for higher pay as a way to close the gender wage gap. However, studies have shown that women’s “80 cents on the dollar” is explained more by differences in men’s and women’s career trajectories than by differential pay for doing the exact same job. Our research and our work coaching executives suggest that negotiating your role (the scope of your authority and your developmental opportunities) is likely to benefit your career more than negotiating your pay and benefits does. And at times of work-life conflict, negotiating your workload and the conditions that affect it (including your responsibilities, your location, and travel requirements) may be critical to remaining gainfully employed and moving forward professionally.

They offer terrific advice for job-seekers.  Step back from your focus on the job offer that presents itself at the moment.  Start instead by considering your long-term career goals and aspirations.  How can this job help you achieve those longer term objectives?  What will it take to achieve those goals?  How can you craft the opportunity in front of you to help fulfill those aspirations?  Work backward from this focus on career goals to the more immediate issue of the potential job you are considering.  Most importantly, think broadly about all aspects of the opportunity, rather than simply about compensation.  I find this last point so important, particularly for new graduates.  An extra $5,000 may sound enticing to a student with very little remaining in their bank account at the end of college.  However, taking the long view is so critical in that situation.  Investments in growth and development, with ample opportunities to learn, will provide a long-term payoff that far exceeds that extra compensation here and now.