Why Airbnb CEO Brian Chesky Doesn't Believe in One-on-One Meetings

In this interview, Airbnb founder and CEO Brian Chesky argues against the use of recurring one-on-one meetings between leader and team member.   Here is an excerpt: 

I don't believe in one-on ones and almost no great CEO in history has ever done them... the one-on-one model is flawed it's a recurring one hour one-on-one meeting where the employee owns the agenda and what happens is they often don't talk about the things you want to talk about.  You become their therapist.  They're bringing you problems, but often times they're bringing you problems that you want other people in the room to hear.  There are very few times employees should come to you one-on-one without other people.  Perhaps if they're concerned about something if they're having a difficult time in their personal life, if they want to confide in you with something that they don't feel safe telling a group, but that should be infrequent.   If that's happening frequently that is a very ominous sign.  [I prefer] recurring group meetings in which everyone hears each other's views, where there are  notes taken.  It's very transparent.  [We all know] the topic, what decision was made, who was in the room, who had input.  If the process was unfair in some way... or inadequate, there is at least a record of the process, and people can weigh.  

Chesky loves to be provocative with regard to leadership style and process.  Here again he's offering a fresh perspective, and one that warrants serious consideration.  He's pointing out a serious risk associated with one-on-one meetings.  Specifically, he has two worries.  First, Chesky doesn't want decisions being made in these meetings, rather than in group settings where the person's peers can offer their perspectives on the same issues.  He wants the productive conversation and give-and-take that emerges from group dialogue and debate.  He doesn't want to make decisions in a vacuum.  Second, he worries about the one-on-one meeting becoming what he calls a "therapy session."  He thinks that quick check-ins as needed can occur if someone has a personal concern or problem, but he sees no reason for a recurring meeting to talk about personal matters.  Moreover, Chesky does not think the employee should be driving the agenda of these recurring one-on-one meetings.  

Chesky makes some strong points.  He's certainly correct that leaders should not be sacrificing transparency and the value of constructive debate by learning about perspectives and viewpoints too often in one-on-one rather than team meetings.  On the other hand, he doesn't talk about the value of one-on-one meetings as forums for providing coaching, mentoring, and constructive feedback.  Perhaps those meetings don't need to take place weekly, but most employees do need some opportunity to solicit and receive coaching and constructive criticism in a private setting.  In the end, I don't think the issue is WHETHER to hold recurring one-on-one meetings, but HOW leaders and their team members use the meetings.  It should not be a complaint session.  It should not primarily be a decision-making meeting.  It should be an opportunity to drive personal improvement and enhance performance.  

Are You Willing to Pay More for Products Someone Loved Creating?

Writing for Kellogg Insight, Dylan Walsh reports this month on some fascinating new research by Jake Teeny, Anna Paley, Robert Smith, and Daniel Zane. Teeny and his colleagues examined the relationship between willingness-to-pay and the level of enjoyment a seller derives from creating a product. Walsh summarizes the findings:

As a whole, the studies showed that buyers actually associated production enjoyment with greater product quality and value, consequently increasing how much they were willing to pay for it. And yet sellers often charged less for the products and services that they enjoy providing, even though they also believed them to be of higher quality.

The scholars argue that potential buyers seem willing to pay more for products when they believe that sellers have experienced high levels of intrinsic motivation while creating the products.  In other words, if the seller valued the process of creating the product as much, if not more, than the good itself, then buyers seem willing to pay a higher price for the product.  On the other hand, they argue that sellers price the product with their own enjoyment in mind.  If you are performing an unenjoyable task, you might charge more for a particular service.  If you are doing something very enjoyable, you may perceive some of your "compensation" has come in the form of that satisfaction and pride.  As a result, you may not expect as high of a price for the product from the buyers.  

What does this mean for sellers?  Think carefully about showing your customer how much effort and passion has gone into the creation of a good or service.  You might just command a higher price as a result.  And sellers... not shortchange yourself when placing a value on something you loved creating. 

Does this research have lessons for employees in larger organizations? Perhaps it does.  Do we demand less monetary compensation if we truly love our job?  Are we shortchanging ourselves in these situations?  

Coping with Changing Priorities

Every employee has been frustrated at times by changing organizational priorities.  They thought the understand this year's primary goals and objectives, but then, senior leaders threw them a curveball.   They shifted the priorities.  Even worse, sometimes leaders seem to simply add priorities to an already lengthy and challenging list.  Employees wonder what really matters most. Can it really be a "priority" if it is among a list of nine or ten goals, all of which seem to be deemed equally important?  

Here are four practical questions that can guide our actions when executives confront us with changing priorities. 

1.  What clarifying questions should I ask? 

Before one starts reallocating resources and taking decisive action in a new direction, a few clarifying questions might be illuminating.  Don't just act without making sure you understand clearly what you are being asked to do differently.  One question that I love:  Is this a change in destination or just a change in our flight path?  In other words, are we really aiming at a different outcome, or are we simply adjusting how we intend to arrive at that result?  

2.  Is this change a threat or an opportunity?

Many of us might naturally frame this type of shift in direction as a threat.  If we do so, we may be subject to what scholars call "threat rigidity."  In short, we tend to adopt well-established behavioral routines when framing an event as a threat.  We tend to be more open and innovative if we frame a change as an opportunity.  

3.  What tradeoffs am I willing to make?  What tradeoffs must I make?

We have to recognize that not all goals are equally important, and that we will have to make tradeoffs if we adding new priorities to an already lengthy list of goals and objectives.  Being clear about those tradeoffs is essential.  Moreover, we have to determine what criteria we should be using to make those tradeoffs.

4.  Why might others resist the change?

Before we ask our employees to shift their behavior, we must put ourselves in their shoes. Why might they resist this change?  What are their personal goals, motivations, and incentives?  Why might this change in their daily routines or allocation of time be unsettling?  By putting ourselves in their shoes, we can determine how to address this resistance.  

Five Priorities Is Probably Too Many

Willie Pietersen, retired CEO of businesses Lever Foods, Seagram USA, and Tropicana has written a column for Fortune in which he argues that many leaders proclaim too many priorities.  The article is titled, "You can’t have 5 priorities—even Steve Jobs and Bob Iger couldn’t."  He writes:

During my 20 years as the CEO of various enterprises, I developed an ingrained habit. Recognizing that the core responsibility of a leader is to unify an organization behind a clear strategic direction, I followed conventional wisdom and developed five key priorities for the business, and asked each function and business unit to follow suit.  However, at progress review meetings I saw that executives were often trudging through these priorities mechanically like a project checklist, without connecting them to a central strategic thrust or inspiring story.

Pietersen cites research by Don Sull and his co-authors, in which they find that many middle managers can't recall the priorities established by the senior leadership team.  Sull and his co-authors write,

The CEO of a large technology company (let’s call it Generex) recently reviewed the results of her company’s annual employee engagement survey and was delighted that strategic alignment emerged as an area of strength.  Among the senior leaders surveyed, 97% said they had a clear understanding of the company’s priorities and how their work contributed to corporate objectives. Based on these scores, the CEO was confident that the company’s five strategic priorities — which had not changed over the past two years and which she communicated regularly — were well understood by the leaders responsible for executing them.

We then asked those same managers to list the company’s strategic priorities. Using a machine-learning algorithm and human coders, we classified their answers to assess how well their responses aligned with the official strategic priorities. The CEO was shocked at the results. Only one-quarter of the managers surveyed could list three of the company’s five strategic priorities. Even worse, one-third of the leaders charged with implementing the company’s strategy could not list even one.

These results are typical not just in the technology industry, but across a range of companies we have studied. Most organizations fall far short when it comes to strategic alignment: Our analysis of 124 organizations revealed that only 28% of executives and middle managers responsible for executing strategy could list three of their company’s strategic priorities.  

In short, creating a list of five priorities or more often leads to confusion, misunderstanding, and a lack of organizational alignment.  For me, the lesson is clear.  Leaders need to have a coherent strategic story.  What's the overall direction?  What is the firm's desired competitive position, and how is that distinct from the competition?  Then, with that coherent story established and communicated, leaders need to make clear what matters most.  Perhaps there are five important goals, but are they truly equally important? Which ones are more critical than others?  It is very difficult to answer that final question, but it must be done.  Moreover, leaders need to communicate that overall strategic perspective over and over, through multiple channels and using multiple forums and media.  Then, most importantly, leaders need to take the pulse of the organization.  They have to test whether the message got through to lower levels of the organization.  Leaders have to do that through direct conversation with those at lower levels, through both formal and informal opportunities for communication and conversation.  

Successfully Onboarding New Employees

https://hires.shareable.com/

Fast Company's Julia Phelan has written a good article titled "The ultimate guide to onboarding an employee successfully."  As I read the article, several key points resonated with me, and led me to think about what else I might consider as suggestions about the onboarding process.  Here is a synthesis of Phelan's recommendations and my own:  

1.  Put yourself in the new employee's shoes.  Think about a time when you were brand new to an institution, whether it was a company, a school, or a volunteer organization.  Empathize with the new team member.  Recognize how and why they might be stressed, confused, or anxious.  If you have been at your firm for a long time, putting yourself in their shoes will be more difficult.  Therefore, companies should think about having recently hired employees be part of the onboarding process, and not just rely on seasoned managers. 

2.  Set them up for a small, early win.  Don't give them a huge project right off the bat.  Give them something manageable so that they can get some experience working within the organization and delivering desired results.  

3.  Make sure they know where to go for help. Beyond their direct supervisor, who else can be a resource to them?   What other sources of information and training are available to them?  Who are the key people they need to get to know as soon as possible, including key employees in other departments?

4. Establish a clear schedule for the initial set of one-on-one meetings with their supervisor.  Make sure that these meetings can put on the calendar right away.   

5. Introduce them to other new or relatively new hires.  Help them build a cohort of new members of the organization who can help each other navigate the onboarding process.  

6.  Make sure they understand the big picture.  It's important that they understand their personal goals.  However, it is also very important that they understand the broader organizational goals and priorities.  How does their work fit into the bigger picture?  Providing that clear viewpoint will help them discover purpose and meaning in their work. 

7.  Be clear about what technical skills and capabilities they will need to learn as soon as possible to succeed in their role.  Take a quick inventory.  Make sure you know what they can do and what they can't do.  Is Tableau required for the job?  If so, make sure they know how to get up to speed on that software?  What if they know Tableau, but it is not currently used in their department?  Could it be useful?  Could they teach others, or introduce the software to make key activities more effective and efficient?   

Thinking about these key questions can take onboarding to the next level.  It is about far more than insuring new hires know the company policies and procedures.  Onboarding should be about setting people up to succeed and thrive in the organization. 

Careful about Romanticizing Failure

Source: Vistage

Have we come to romanticize failure at times in business and in the society at large?  Perhaps we have.  Is that detrimental to us at times?  New research suggests that we should be careful about romanticizing failure.  Lauren Eskreis-Winkler, Kaitlin Woolley, Eda Erensoy, and Minhee Kim have published a paper titled "The Exaggerated Benefits of Failure" in the Journal of Experimental Psychology: General.   They conducted a series of studies that demonstrate that we often overestimate the likelihood that people will rebound from failure and achieve success.  They write,

Across 11 studies, people in the lab and professionals in the field overestimated the rate at which health failures, professional failures, educational failures, and failures in a real-time task were followed by success. People thought that tens of thousands of professionals who fail standardized tests would go on to pass (who do not), that tens of thousands of people with addiction would get sober (who do not), and that tens of thousands of heart failure patients would improve their health (in fact, they do not).

The scholars argue that people consistently tend to overestimate how much we will learn from our failures.  In reality, we often are not effective at reflecting upon our failures, identifying the root causes of poor performance, and implementing corrective courses of action.  

I would argue that we need to stop repeating overused and inaccurate cliches about failure.  One that often bothers me: We learn more from failure than from success.  Actually, research suggests that we learn most effectively when we can compare and contrast failure and successful outcomes.  Reflecting on both success and failure leads to more improvement than only conducting lessons learned exercises after we fail.   

For those interested in practical guidance for how failure can lead to learning, I highly recommend Amy Edmondson's book, The Right Kind of Wrong: The Science of Failing Well.  Edmondson does not romanticize failure. Instead, she offers a clear-eyed view of different types of failure, some that are more preventable than others, and some which can lead to a great deal of learning if we approach them the right way.  

Why Might CVS Be Breaking Up?

News reports indicate that CVS Health may be splitting up in the months ahead.   Company leaders apparently are mulling their strategic options while under pressure from Glenview Capital and other investors.  CVS Health has diversified through acquisition over the past two decades.  In 2006, CVS acquired Caremark, a pharmacy benefit manager.  Then in 2017, CVS acquired Aetna, making a major move into the health insurance business.  More recently, they have made other moves to expand in the healthcare delivery space, such as by acquiring Oak Street Health - a primary care provider.   Unfortunately, the company's stock has underperformed the S&P 500 by a wide margin over the past two years, leading to increasing pressure from investors. 

Why might CVS Health be considering a break-up after moving so aggressively to transform themselves from a pharmacy retail chain to an integrated healthcare company?  Several factors may explain the potential strategy reversal.   

1.  Diversification works best when the different business units within a corporation operate by the same "dominant logic."  C.K. Prahalad and Richard Bettis coined this term in a very famous academic paper published in the 1980s.  They defined dominant logic as "the way in which managers conceptualize the business and make critical resource allocation decisions..."   In short, what is the mental model that leaders use to think about the business and make choices?  Do the businesses make money in a similar manner, or are the value propositions and business models fundamentally different?  They argued that strategic variety and complexity means that multiple "logics" exist across the portfolio of businesses, making it very difficult for the top management team to lead them all effectively.  They cannot apply the same criteria, rules, and principles when making decisions across the businesses.   One could easily argue that the dominant logics at CVS vary considerably from pharmacy retail to health insurance to primary care provision.  Can one CEO and her leadership team manage all these businesses effectively?  

2.  Scale and scope do not always yield economies.  We often hear about the benefits of bringing multiple units together.  In short, what are the economies of scale and scope?  I would argue that managers often focus on these potential economies when justifying acquisitions, yet they underestimate the potential diseconomies of scale and scope.  How might the increased complexity of the business make it more difficult to manage effectively?  What conflicts might emerge among business units?  What costs and disruption might occur as a company tries to secure key synergies?  Do the costs outweigh the benefits of collaboration and integration?  CVS Health has become a behemoth, and at some point, that sprawling conglomerate becomes very hard to manage.  

3.  The existence of potential synergies alone does not justify mergers.  One has to ask whether one could achieve some of these benefits through some other sort of organizational arrangement (stretching from contracts and partnerships through strategic alliances and joint ventures).  Firms don't always have to merge to coordinate and collaborate in pursuit of certain economies of scale and scope.  Consider Target's decision about its own pharmacy business.  The company wanted to continue to have pharmacies within each of its stores.  However, it came to the conclusion that it was best not to try to manage and operate these pharmacies themselves. Instead, they sold the business to CVS, letting the pharmacy experts run the "stores within a store" at each Target location.  Target shed a business, but it retained some of the benefits of having a pharmacy within each of its stores (the pharmacies are good traffic drivers and lead to other incremental sales for Target).  

4.  Vertical integration has many potential benefits, but it does not come without substantial risks. One risk is that you find yourself competing with your own customers at times.  That brings challenges for many companies, including in the healthcare space.  CVS Health has embarked on quite a bit of vertical integration over the years, creating these potential conflicts of interest that can be challenging to manage.