Staying Grounded: Find the Right Sounding Board

Former Baxter International CEO and current Kellogg Professor Harry Kraemer has written a terrific column titled, "What Every New CEO Should Do In Their First 30 Days."  His lessons apply to people who take on new leadership roles at all levels. My favorite piece of advice focuses on finding the right sounding board.  You need to keep a few truth-tellers close to you.  These are the people who will give you the unvarnished perspective.  They will help you stay grounded too.  Kraemer writes,

The higher you rise, the more essential it becomes to have people who will tell you the truth. For me, that person is my wife, Julie. Whenever I was promoted—including when I became CEO of Baxter International, a $12 billion healthcare company—she would always say how proud she was of me. In the next breath she would remind me, “Harry, we’re not going to change the way we live, right?”

In the same way, you need a sounding board composed of a variety of people, such as a spouse or partner or close friend, a board member (or two), a former colleague now leading another company, or a professional coach. Each of these people has a unique perspective on you, your leadership, and the kind of support and honesty to remind you of who you are, as a person, not just as a leader.

Are You Listening to Me? How Can I Tell?

Are you listening to me? This thought comes to mind for many of us during conversations. How can we tell that someone is listening? Conventional wisdom is that body language and non-verbal cues indicate attentiveness. Is the counterparty nodding in agreement, making good eye contact, and leaning forward into the conversation? If so, they must care about what I'm saying. If not, then they are clearly disengaged.

New research suggests that this conventional wisdom may not be right though. In an article from UCLA's Anderson Review, Carla Fried reviews a stream of research by Hanne Collins and several co-authors. This research finds that people systematically overestimate the extent to which others are listening closely to them. They overestimate because they misread utterances or nonverbal cues... they think that the quiet "mm-hmm" or the nod of agreement signal close listening, when they may not represent that at all. Listeners may be using these conversational devices to "fake" close listening.

Collins and her co-authors instead suggest "conversational listening" as the remedy. Much like a stream of other work, including a great book by Charles Duhigg, they suggest that listeners paraphrase what they have heard and ask for confirmation, ask clarifying questions, and refer back to points made earlier in the conversation as ways to engage more effectively in a conversation.  In short, you must speak, not remain silent, to listen effectively.   Of course, you can not speak too much.  Interrupting without the intention of understanding more effectively can be highly counterproductive. Collins and her co-authors write, "“Conversational listening is a key building block of human social functioning. Information transmission, interpersonal connection, conflict management, happiness — the key foundations of human flourishing — hinge critically on our ability to hear, understand and respond to others.”

Is Hosting the World Cup an Economic Windfall?

CHARLY TRIBALLEAU/AFP via Getty Images

This year, the United States, Mexico, and Canada will host the World Cup to much fanfare.  Soccer enthusiasts are excited about the competition. They look forward to some thrilling games and the prospect of their country coming out on top.  Off the field, an economic issue bears examination: Does hosting the World Cup make financial sense?  Holy Cross Professor Victor Matheson has taken a hard-nosed look at the pros and cons of serving as the host country.  While Matheson acknowledges the benefits, he does not conclude that hosting is an obvious positive from an economic standpoint.  Naturally, Matheson cites some of the significant costs that accrue to the host country.  More interestingly, he describes how the benefits are often overstated for three key reasons:

1. The substitution effect:  For the local citizens attending World Cup games, the spending may not be "new" or "incremental" in any real sense. This spending may simply displace other leisure activities. If so, the country's economy does not grow as a result of the locals' spending on World Cup games, apparel, etc. 

2. The crowding out effect: The hoopla around the event may cause tourists who may otherwise visit the host country or host cities to avoid traveling to those locations.  Matheson cites the example of Orlando, Florida.  The city lost tourists who otherwise would have visited area theme parks, but avoided the area because of the soccer fans filling up area hotels, restaurants, and the like.  He cites a similar study that found that France did not gain international tourists during the 1998 World Cup. 

3. Leakages.  Matheson argues that FIFA collects much of the ticket revenue, and most of that money does not remain in the host country.  Moreover, most of the increased hotel profits typically do not remain in the local economy.  

Matheson concludes that these three effects cause the economic gains often to be far lower than those projected before the event takes place.  In fact, he writes, "The results generally show that the observed impact of the World Cup has been a fraction that touted by the event boosters, and frequently the observed impact has actually been negative."  

By describing these issues, I don't mean to put a damper on what should be a very exciting event.  However, the analysis put forth by Matheson should cause us to examine "economic impact" studies with a very critical eye.  That does not just hold for World Cup events.  The same type of critical evaluation should be applied to any of these types of studies, whether it be for hosting an Olympics, building a new sports stadium, or constructing a new concert venue. 

Espoused Strategy vs. Strategy-in-Use: Watch How The Resources Are Allocated

I recently encountered an organization with two main business units: the large core business and a smaller adjacent unit.  The enterprise as a whole was doing quite well, though it competed in a market that was becoming increasingly challenging.  Senior executives and board members lamented that the core business, while quite healthy, lagged behind several industry-leading competitors.  They pointed to  analysis by outside parties as evidence of the core business' secondary position in the industry.  Executives and board members had bold aspirations for elevating the core business to a more prominent competitive position. They wondered why managers and employees could not improve performance.  The stated strategy was clear: make the core business a top-ranked competitor in its industry.  

A close examination of resource allocation at the enterprise revealed a quite different story.  Competitors also had a similar structure: a large core business and a smaller adjacent unit.  Yet, the top competitors in the industry invested much more heavily in their core businesses and allocated far fewer resources in their adjacent units.  In fact, this organization invested three times as much on its adjacent business as the top-ranked competitors did.  Yet, executives and board members were shocked that the enterprise's core business lagged behind these rivals.  Company leaders loved to talk a good talk about being #1 in the industry in which the core business competed, but they loved to invest in the adjacency that was a pet project of some enterprise leaders.  

The story illustrates a powerful distinction between espoused strategy and strategy-in-use.  The great scholar Chris Argyris coined the terms espoused values and values-in-use to describe the distinction between what companies say their values are and how people in those organizations actually behave.  The same distinction can apply to strategy.  Don't pay attention to what executives and board members say that their strategy is.  Instead, pay close attention to how they allocate resources.   In so doing, you will see the actual strategy-in-use.  Pay even closer attention when you see resource allocation fundamentally divorced from the stated vision and strategy.  In the end, don't focus too much on executive speeches, strategic plans, and slick promotional materials.  Focus on where the dollars flow.  That will tell you about the actual strategy.  If you discover a mismatch, ask yourself: Why is there a divide between the espoused strategy and the strategy-in-use?  Uncovering the reason for that divide will help you think about how that enterprise has undermined the competitive position of its core business, as well as how a successful transformation can be unleashed.   

Achieving Your Goals by Talking about Time Differently

https://esheninger.blogspot.com/

I didn't have time.  I was too busy.  My schedule became too hectic.  We have all made these excuses when we didn't achieve our goals.  Of course, these explanations included more than a bit of truth.  Competing priorities and packed schedules do, in part, become an obstacle to achieving our goals.  However, new research suggests that how we talk about time might really matter when it comes to getting back on track and meeting our original objectives.  Luis Abreu and his colleagues have co-authored a new paper titled "Didn’t Have Time or Didn’t Make Time? How Language Shapes Perceived Control over Time and Motivation."   The authors explain what they found through a series of experiments:

Consumers often purchase products, subscribe to services, and download apps in support of valued goals, yet fail to use these tools as much as intended. But might the language consumers use to describe such goal failures affect how they subsequently pursue those goals? Nine experiments demonstrate that, compared with saying “didn’t have time,” saying “didn’t make time” increases subsequent motivation. This is driven by perceived control over time. Specifically, saying “didn’t make” (vs. “didn’t have”) time makes consumers feel more in control of their time, which increases their subsequent motivation to reengage with the goal.

Jordan Etkin, one of the authors, explains, "“The experiment shows how a simple linguistic cue can shift people’s sense of agency."  Of course, this shift requires being honest with ourselves, and that can be difficult at times. It means attributing our failure to achieve our goals to an internal cause (or own behavior) rather than external circumstances (factors outside our control).  When we feel, we tend to look externally.  We have to overcome that tendency to engage in this type of productive reframing that Abreu and his co-authors recommend.  

Does the NFL Risk Oversaturation? The Pursuit of Growth vs. the Value of Scarcity & Exclusivity

Source: Fox Sports

Great luxury brands such as Brunello Cucinelli, Patek Philippe, Hermes, and Ferrari use deliberate scarcity and exclusivity to optimize brand equity, enhance willingness-to-pay, and distinguish themselves from the competition.  

Most people would not consider the National Football League (NFL) a luxury brand.  Yet, the NFL traditionally benefited from scarcity and exclusivity.  While Major League Baseball played 162 games per year, and the NBA teams competed 82 times per season, the NFL played only 14 games per season when I was a child.  All but one of the games took place on Sunday afternoon in a six-hour window, making that day an event that was highly anticipated each week.  One very special game took place on Monday night, with Howard Cosell, Frank Gifford, and Don Meredith serving as the star-studded announcing team.  Two networks split the games, and another (ABC) broadcast the very special Monday night event. 

Today, the NFL has expanded in numerous ways.  Revenues and profits have skyrocketed over the years.  Yesterday, the NFL announced the 2026 schedule.  The NFL now plays 17 games per season, with an 18th game anticipated soon.  Games will be played on Wednesday, Thursday, Friday, Saturday, and Sunday at different points during the season.  Games will be broadcast on streaming services, as well as major broadcast and cable networks.  Games will be played around the globe, meaning that on some Sundays, there will be games from early in the morning until nearly midnight on the east coast.  The growth is astonishing.  I love the sport. Yet, I keep asking myself: Is there a point at which the NFL will have gone too far in pursuit of growth?  Will the NFL lose some of the scarcity and exclusivity it enjoyed relative to other sports, and in so doing, erode its brand equity?  Perhaps not.  Americans cannot seem to get enough of football.  Still, it bears asking the question. 

Many successful companies face this challenge.  They want to grow, but they find themselves risking oversaturation and brand dilution. At various points, luxury brands such as Coach and Gucci severely harmed their brands because of their expansion strategies.  The best brands practice restraint. They grow with some caution and discipline.  Ferrari, for example, has grown its production volumes in recent years. Still, it makes less than 14,000 cars per year.  By comparison, Porsche produces roughly 300,000 vehicles per year.  Ferrari has expanded by producing ever-more-expensive vehicles, rather than moving down market to cater to a broader audience.  Hermes is very careful about the distribution of the famous Birkin bag.   Customers cannot just stroll into a store and purchase one.  You have to earn the right to purchase the bag!  

Will the NFL show any restraint in the years to come, or will they continue to expand aggressively?  How much football is too much, or are fans' appetites simply insatiable?  These are the questions the owners and their broadcast partners must grapple with in the years to come. 

Reframing the Purpose & Value of an Education

When we were young students, we often remarked to our teachers: "This subject is useless to me. When am I ever going to use this knowledge in the real world?"  Teachers everywhere cringe at this comment.  Today, many people are questioning the value of higher education as a whole.  Schools are scrambling to demonstrate their graduates' return on investment.  Institutions should be focused on helping students prepare for a successful career.  Developing practical skills and capabilities is important.  Yet, the value of higher education extends well beyond learning concrete skills that are easily transferable to the first job after graduation.  

As a faculty member, I believe that I'm helping to form the whole person, to contribute to the personal development of young people.   As part of that formation, I believe that I'm responsible for shaping the minds of my students, not by teaching them what to think, but how to think.  We sharpen their minds not by giving them all the answers, but asking tough questions. We push them, challenge them, and ask them to do something perhaps they did not think they could accomplish.  Sometimes, it means making them uncomfortable.  

Employers need to be focused on understanding the quality of the minds they hire, not just the batch of immediately applicable skills that person brings to the table.  By that, I don't mean focusing on GPA or test scores alone.  I mean that employers need to assess how applicants think through tough problems.  How do they frame an issue, explore alternatives, analyze ambiguous data, and draw conclusions backed by strong supporting logic?

As I think about these issues at the end of this academic year, I'm reminded of one of my favorite movie scenes about teaching and education.  The movie is The Paper Chase, starring John Houseman as a professor teaching first-year students at Harvard Law School.  He offers a beautiful soliloquy about his approach to teaching during an early scene in the movie.   My favorite quote: "We do brain surgery here. You teach yourselves the law, but I train your minds. You come in here with a skull full of mush, and you leave thinking like a lawyer."