Thursday, January 31, 2013

Lessons from the Columbia Accident

10 years ago tomorrow (February 1st, 2003), the Columbia shuttle accident occurred.  After the tragedy occurred, my colleagues and I embarked upon a lengthy research project culminating in the creation of an award-winning multi-media case study, a book chapter, a Harvard Business Review article, and other materials.  What lessons did we derive from this tragedy?

1.   NASA had a culture in which many people did not feel safe speaking up.  As a result, people downplayed their concerns about the foam strike, rather than sharing them openly.   Leaders did not do enough to cultivate dialogue and dissent.  They tended to be very passive, assuming that bad news would surface on its own.  It rarely does.  Leaders need to draw out the bad news, as it does not usually rise to the top.  

2.  Framing the shuttle program, from the very beginning in the 1970s, as a routine, operational endeavor turned out to have long-lasting detrimental effects.   The shuttle program should have been framed as an experimental initiative.  Promising dozens of flights per year, naming the vehicle a "shuttle" and describing space travel as "routinized" pushed the organization away from its roots during Mercury and Apollo as a laboratory of exploration.   The adoption of the production/routine mindset contributed to an obsession with schedules and deadlines, the creation of rigid organizational processes and protocols, and an insufficient emphasis on the imperfect state of knowledge in the organization. In short, it meant that the organization did not have a sufficient learning orientation. 

3.  Managers at NASA exhibited what Rebecca Wohlstetter has described as a "stubborn attachment to existing beliefs."  They had become convinced that foam strikes could not damage the shuttle.   The confirmation bias exacerbated the problem.   They tended to look for data that confirmed this pre-existing belief, and they discounted signs that contradicted the conventional wisdom about foam. 

Tuesday, January 29, 2013

Lessons from the Challenger Accident

Yesterday marked the 27th anniversary of the Challenger space shuttle accident.  Still today many leadership programs and business schools study this awful tragedy.   We analyze it because it offers profound lessons about leadership, risk management, and decision-making.  

Let me offer three points that we should take away from this tragedy as we reflect on it today:

1.  Normalization of deviance.    Diane Vaughan wrote the seminal book on the Challenger accident in 1996.  In that book, she explained how organizations gradually come to accept more and more risk.   She described this normalization process whereby the unexpected gradually becomes the expected and then becomes the accepted.   All organizations should be wary of moving down that slippery slope.

2.   Advocacy vs. Inquiry.    Many people initially described the eve-of-the-launch teleconference as an example of groupthink.   I don't think that's correct.   Engineers from Morton Thiokol clearly were arguing against the launch.  The meeting did not lack dissent and disagreement.   The real problem was that both sides (for and against launch) were operating purely in advocacy mode.  Each side was pushing its position.  Neither side did much to truly learn from the other.   The entire group did not move into collective inquiry mode, seeking to understand the problem of O-ring erosion more deeply or the reasons for each side believing what it did.   Instead, they argued their positions with regard to the next morning's launch and became more and more entrenched and polarized.   Effective teams balance advocacy with inquiry, so as to have a more constructive dialogue and debate.

3.  Learning from our failures.   During the Columbia shuttle accident investigation, astronaut Sally Ride said, ""I think I'm hearing an echo here."  She meant that NASA had repeated many of the failures of the past.  While they had fixed the technical errors after Challenger (no more o-ring erosion), NASA executives had not fixed the leadership and cultural problems that contributed to the tragedy.  Those problems continued and contributed to the Columbia disaster many years later.  Successful organizations take a hard look at their failures, and they examine the broad range of causes for those failures...not just the technical issues.   

Friday, January 25, 2013

Bryant IDEA

Over the past year, I have worked with an incredible group of people to create, plan, and execute Bryant IDEA: Innovation and Design Experience For All - a three day innovation immersion experience for all 746 first-year students.   Students applied design thinking to tackle complex real world problems.  They conducted anthropological research in the community, engaged in brainstorming sessions, and employed rapid prototyping techniques to develop creative solutions to these challenges.   Faculty, staff, upperclassmen students, and alumni mentored these student teams.  It was an exhausting and thrilling experience.  I hope you enjoy this video. 

Friday, January 18, 2013

Does going public stifle innovation?

Stanford Professor Shai Bernstein has conducted a new study on the rate of innovation at firms who issue an initial public offering.   According to Bernstein, "Using patent-based metrics, I find that the
quality of internal innovation declines following the IPO, and firms experience both an exodus of skilled inventors and a decline in productivity of remaining inventors."    Specifically, he found a "substantial decline of approximately 40 percent in innovation novelty as measured by patent citations."  Note that he didn't find the overall number of patents decreasing for these firms, just the level of breakthrough developments.  Bernstein also finds that post-IPO firms tend to shift toward acquisitions to drive innovation.  In the five years after an initial public offering, roughly 1/3 of the patents tend to come from acquisitions.  Finally, he finds a much smaller (and not statistically significant) decline in innovation novelty at those firms whose CEO also serves as Chairman (as compared to companies who have split the Chairman/CEO positions).  What explains that finding?  Bernstein hypothesizes that the CEO who also serves as Chairman is more "entrenched" and less susceptible to short-term profit pressures from Wall Street.  Therefore, he or she may be able to invest more freely in research and development that may have a low probability of succeeding, but could lead to a breakthrough innovation. 

Thursday, January 17, 2013

What happens if your favorite brand is attacked?

Think about one of your favorite brands, one to which you are quite loyal.  Perhaps you might even describe yourself as a fan.  How would you react if you heard some very negative news about that company?  Would you be less willing to purchase that product?  Or, would you become very defensive?

Monika Lisjak, Angela Y. Lee and Wendi L. Gardner set out to examine these questions through a series of experimental studies.  In one study, the researchers examined how people would respond to a critical editorial about a favorite brand - Starbucks or Facebook.  According to Kellogg School of Management Insights, "Sure enough, after crunching the numbers, Lee and her colleagues found that self-conscious, low-self-esteem subjects who said they liked Starbucks initially actually rated the coffee company more favorably after they had read the critical editorial."   Interestingly, in a subsequent experiment, they found that individuals get less defensive about a favorite brand if they are given some other opportunity to affirm themselves.  According to Lee, "If Starbucks is part of you, and you read something negative about Starbucks, you feel attacked.  But I now give you another way to feel good about yourself. Then, once that need is being satisfied, you may not feel that you need to defend Starbucks anymore.” 

I'm not surprised by the findings.   People do develop a strong attachment to certain brands.  Several questions do remain.  Specifically, I wonder whether the level of criticism attached to the brand matters.  Where do people draw the line?   What would it take for someone to "turn" on one of their favorite brands?   You would imagine that people might begin to "turn" on their favorite brands if a pattern of alleged misconduct emerges over time.  How much of a pattern does one need to see though?  Finally, I wonder if there may be other attributes of individuals that might signal whether they are likely to be defensive, or if they would lessen their loyalty, to favorite brands that have been criticized.   In other words, what are the characteristics of the "hyperloyal" customer who will be likely to stand firm even in the face of criticism for their favorite brand?

Tuesday, January 15, 2013

Conducting Virtual Meetings

Have you been on a virtual meeting that was incredibly unproductive?   Do you have to conduct some team meetings virtually because you are not all co-located?  How can you make things better?  Mars Mullenweg, from the company that created WordPress, has some good suggestions in Fast Company this month about how to conduct better virtual meetings.   Specifically, he offers four tips:

  1. He notes that it becomes very easy to misinterpret the meaning of a message in a text-based chat platform.  Therefore, you need to take the time to write a few extra words, to elaborate on your thoughts.  Take care to be a bit extra sensitive in how you say things.  Being too concise can cause people to believe that you are being curt with them. 
  2.  Sometimes, it becomes clear that two parties are really talking past one another in an online chat.  At that point, rather than continuing in a time-consuming back-and-forth, take a moment to pick up the phone.  A quick conversation by phone can help clarify a confusing situation.
  3. Don't multi-task.   You have to focus so that you can listen carefully, ask people for clarification, and offer your comments in a way that builds appropriately on others' comments. 
  4. Recognize when an in-person meeting is appropriate.  Sometimes, a virtual chat and even a phone conversation simply are not sufficient.  You have to spend the time and money to meet in person.  Knowing when that is the case, and acknowledging that, proves to be a very important team leadership skill. 

Tremendous Debate about Brainstorming

Check out this terrific debate about brainstorming, facilitated by Fast Company and published in the new issue of the magazine.  The discussion includes Bob Sutton, Charlan Nemeth, Keith Sawyer, and Gerard Puccio.  

Monday, January 14, 2013

Brainstorming tutorial from Stanford

Managing Your Time

The Wall Street Journal reports on the findings of a McKinsey study about time management by senior executives.  Not surprisingly, they find that many executives struggle with time management, much like the rest of us.  McKinsey examined those leaders who were not satisfied with how they managed their time, and they compared those leaders to others who were satisfied.  They found that the dissatisfied executives could be clustered into four subgroups.  Here's the description from the Wall Street Journal:
  • “Online junkies” spent on average 38% of their time using email or voicemail, leaving little time for personal interaction.
  • “Schmoozers,” represented well by CEOs and sales directors, interacted heavily with external stakeholders like clients and customers, at the risk of neglecting their own employees.
  • Meanwhile, “cheerleaders,” often C-suite executives, spent a big chunk of their schedules meeting and managing employees, but considerably less time with outsiders.
  • “Firefighters,” usually general managers, were often preoccupied with resolving short-term and unexpected issues.
Take a moment, and think about how you manage your time.  Are you inefficient?  Do you fall into one of these categories?

Friday, January 11, 2013

Disney MagicBands: This Could be Magical... and Expensive!

Source: Fast Company
Disney has used RFID technology to develop MagicBands - a wristband that serve as a guest's theme park ticket, hotel key, and payment system throughout DisneyWorld.   When I read about this project at Fast Company's website, I thought to myself... "These MagicBands could be REALLY expensive for parents."  It's going to make spending money that much easier.  I speak from firsthand experience.  We just stayed at DisneyWorld's Contemporary Resort a few weeks ago.   The cards you receive upon check-in serve as hotel room keys and park tickets, and they can be used to pay for food and gifts throughout the parks.  I found myself a bit less hesitant about spending money with that card in hand, as opposed to having to pull cash out each time we bought something.  However, as Fast Company writer Mark Wilson points out, these new MagicBands offer more than a way to dig deeper into customer wallets.  Here's an excerpt:

But the cashflow aspect is only one aspect of Disney’s new service. When you begin to consider the potential of wearing a wireless ID around your wrist, all sorts of natural, customized interactions will become possible. Imagine a child meeting Mickey Mouse, and after sharing a warm hug, Mickey actually wishing them a happy birthday by name. There’s a digital handshake going on here, of course, but it’s totally imperceptible. All a child is left wondering is, “How did Mickey know me … and that it was my birthday?!?” Animatronics will see a similar personalization, so the otherwise obtuse talking robots can specifically acknowledge the people standing in front of them.  At the same time, MagicBands enable a deeper level of data collection for Disney. They’ll be able to track someone through the entire park--to see their kingdom as a complex interaction model--finding trends in preferences and habits that can no doubt be monetized. Do people who meet Cinderella buy more princess apparel? Do those who eat the cheese fries for lunch go back to the hotel to take naps?

Talk about Big Data and Personalization all wrapped up into one incredible initiative!   Immediately, one thinks about privacy issues, but Wilson points out that parents will be able to establish some privacy controls on the wristbands.   The bigger issue is how Disney uses the wristbands.  I think that the real opportunity here lies in focusing first on enhancing the guest experience.  If this new tool can make the guests enjoy their stay even more, then the money will follow.  People will spend more if they are more engaged and more satisfied with the experience, and if the wristbands can be used to minimize some of the guest's typical problems at the park (consider how mobile apps have helped people find rides with the shortest wait times).   If the experience is enhanced, guests will stay longer at the park, interact with characters and exhibits in a more meaningful way, and avoid some of the frustrations that they typically encounter at the park.  When that occurs, the improved profits will come.

Thursday, January 10, 2013

Professor Richard Hackman

Source: Team Diagnostics
I heard the sad news this morning of the passing of Harvard Professor Richard Hackman.  Widely acknowledged as one of the giants in the study of teams, the social psychologist influenced and advised many young scholars over the years.  Hackman earned the Distinguished Educator Award and the Distinguished Scholar Award of the Academy of Management during his career.  Perhaps more importantly, he had a vast influence on practitioners as well.   He advised and presented to many organizations in the private and public sector, offering them useful insight on how to make their teams more effective.  His book - Leading Teams: Setting the Stage for Great Performances - influenced the thinking of many managers and executives and earned him the Academy of Management’s Terry Award for the best management book of the year. Here are just a couple of terrific excerpts from an HBR blog post that Hackman wrote in 2011.   In the post, Hackman explained some of the common misperceptions about teams. 

Misperception #1: Harmony helps. Smooth interaction among collaborators avoids time-wasting debates about how best to proceed.

Actually: Quite the opposite, research shows. Conflict, when well managed and focused on a team's objectives, can generate more creative solutions than one sees in conflict-free groups. So long as it is about the work itself, disagreements can be good for a team. Indeed, we found in our earlier research on symphony orchestras that slightly grumpy orchestras played a little better as ensembles than those whose members worked together especially harmoniously. 
Misperception #4: Face-to-face interaction is passé. Now that we have powerful electronic technologies for communication and coordination, teams can do their work much more efficiently at a distance.
Actually: Teams working remotely are at a considerable disadvantage. There really are benefits to sizing up your teammates face-to-face. A number of organizations that rely heavily on distributed teams have found that it is well worth the time and expense to get members together when the team is launched, again around the midpoint of the team's work, and yet again when the work has been completed.

Tuesday, January 08, 2013

Innovate by Looking for Problem Patterns

Is The End Drawing Near for Sears?

The Wall Street Journal reports today that Edward Lampert, whose hedge fund ESL Investments Inc. controls over 50% of Sears' shares, will be taking over as the CEO of the company.   Lampert merged Sears and K-Mart several years ago, and he has been Chairman of the company since that time.  He succeeds a former IBM executive who ran the company for the past two years.  Before that, Sears had an interim CEO for three years.   Hmmm... That's a pretty long period of instability at the top, and now we will be continuing with a person at the helm who lacks retail industry experience.   Can Lampert turn this ship around, or is it too late?

Same-store sales have decreased for six straight years.  Sear lost $441 million through the end of the third quarter, and it expects to lose roughly $300 million in this quarter. Concerns have been raised about liquidity at Sears.  The firm is clearly in rough shape.

What should they do now?   I think Sears really has to think long and hard about what assets it has that are truly valuable and distinctive.  It's future must rest on building around those assets.   What is valuable and distinctive?  Craftsman and Kenmore appear to fit the bill.  Perhaps Lands End does as well.  After that, it's not clear that the firm has a future.  So, if I were thinking about the future strategy, I would be thinking about those three brands, rather than trying to preserve the entire traditional department store business.  Maybe the future is in small stores and/or an online retail presence that just sell Craftsman, Kenmore, and related brands, with Lands End sold off to another clothing catalog retailer.  For certain, the future does not seem to bright for the traditional brick-and-mortar business that they have been trying to preserve for years, amidst a clear and tragic decline. 

Monday, January 07, 2013

David Kelley on 60 Minutes

60 Minutes ran a terrific and emotional feature last night on David Kelley, founder of design firm IDEO.

Friday, January 04, 2013

Asking Better Questions

Shane Snow wrote a good column recently on the importance of asking good questions.  He argues that asking good questions serves as a crucial leadership capability that people should develop.   Snow makes some good recommendations, such as trying to not ask leading questions, reframing questions later in a conversation when you haven't received a complete response, and replaying what you have heard to insure that you have a solid understanding.  

I would make a few additional points.  A good leader also asks questions that explore a topic a bit deeper, even when they appear to have a consensus in a meeting.  A good leader uses those questions to accomplish two things:  1.  Test what-if scenarios, and 2.  Test for understanding and alignment.   With regard to the first point, leaders want to make sure that they uncover any hidden risks.  They might ask: "What if some of our assumptions prove to be untrue?"  "What if our competitor responds in an unexpected way?"   With regard to the second point, a leader needs to make sure that a team is truly on the same page, and that everyone shares a solid understanding of a decision rationale, as well as each person's role and responsibilities during implementation.  Asking good questions can help reveal whether people are truly on the same page before moving forward with execution of a plan of action. 

Thursday, January 03, 2013

Being Clear vs. Being Right

Fast Company's Jessen O'Brien recently interviewed Ping Fu, the cofounder and CEO of 3-D software company Geomagic.   Ping Fu just wrote a new book titled Bend, Not Break: A Life in Two Worlds. Fu's story is quite remarkable.  She grew up during the Cultural Revolution in China.  She suffered brutal treatment at the hands of Mao's regime.  Fu survived those tortuous years and came to the United States to become Inc. magazine's Entrepreneur of the Year in 2005.  In this interview, she offers some leadership advice that I found to be quite thought-provoking:

I found in my career that it is better to be clear than to be right. A lot of times, I find leaders want to be right and they think being right is what gains respect. I find being clear is what gains respect--if you’re clearly wrong, people can correct you, and if you’re clearly right, people can follow you.

Here's why I think she makes a great point.  If someone isn't making a clear point, here is what you should be asking yourself:  Do they really have a sound strategy, vision, plan?  Lack of clarity may be a simple problem of  articulation and communication.  However, in many cases, a lack of clarity speaks to much deeper problems.  An inability to articulate a plan or strategy clearly means that someone actually has a muddled vision.  They haven't thought it through with the type of precision required to perform at a very high level.  In many cases, it means that they are trying to do too many things at once, or they are pursuing inconsistent objectives.     

Wednesday, January 02, 2013

Should You Purposefully Annoy Your Employees?

Ray Fisman and Tim Sullivan offer an interesting anecdote in today's "How To Be A Better Boss" article in the Wall Street Journal.   Fisman and Sullivan write:

Employees often wish managers were a little more understanding, but people tend to associate the idea of "understanding" with "nice." A little well-directed pain can be a good thing in getting workers to focus on the tasks they might otherwise choose to forget, and to increase overall productivity.  Given that developers often prefer programs to people, Kayak founder Paul English says, making them deal directly with customers' questions drove them nuts. Once they heard the same complaint two or three times, the engineers tended to stop and fix the code. As an added bonus, after taking his turn on customer-service duty, an engineer can pass the phone—along with its grating ring—down the line for someone else to deal with.

What an interesting example!   Of course, the phone calls work for reasons beyond the fact that they annoy the software developers.  The phone calls create a direct line of communication between the developers and the users.  Kayak has removed all the information filtering that often takes place between the users in the marketplace and the developers back at the office.  Moreover, developers get a real sense of what is just a one-off complaint versus a real pattern.   Too often, someone can shrug off a complaint from the sales force as an "isolated incident."  However, in this case, the developers can begin to see that a pattern exists, and that the incident is far from isolated.   Finally, the developers share the pain here.  We don't have a few "problem-solvers" focused on fixing bugs.  We have all the developers addressing bugs.  Everyone is accountable, as opposed to having a small unit that worries about fixing bugs.   The collective accountability goes a long way toward improving quality.  Once everyone knows that they will have to address these calls at some point, it also makes people take extra care to get it right the first time.  

Tuesday, January 01, 2013

Pivot: The Road to Ruin for Many Startups

The word "pivot" has become part of the entrepreneurial lexicon over the past few years.   Eric Ries developed the "Lean Startup" methodology for building and launching new products.  Ries argues that entrepreneurs should work toward the development of an MVP - minimum viable product - and then listen carefully to customer feedback so that the next iteration of improvements can be put in place.  Entrepreneurs should use the minimum viable product as part of a process of disciplined experimentation, whereby they test core hypotheses about their business model.    As entrepreneurs gather feedback, they should pivot based on what they are learning.  According to Ries, a pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."

In a blog post for the Wall Street Journal, serial entrepreneur and Stanford Professor Steve Blank offers some cautionary words about the "pivot" concept though.  Blank gives an example of a founder who would rush back to his startup's offices after every customer visit and initiate a fire drill of sorts. The founder would constantly be advocating changes based on his most recent interaction with a customer.  Blank explains the problem:

Pivot as an Excuse
I wasn’t surprised when he pushed back: “I’m just getting out of the building and listening to customers. All I’m doing is pivoting based on their feedback.” By now I’ve heard this more times than I liked. “Yuri, one of the things that make you a great founder is that you have insight others don’t. But like all great founders, some of these insights are simply hallucinations. The problem is you and other founders want immediate action every time you have a new idea. That’s a mistake.
“A pivot is a substantive change to one or more of components to your business model.” You’re using “Pivot” as an excuse to skip the hard stuff – keeping focused on your initial vision and business model and integrating what you’ve heard if and only if you think it’s a substantive improvement to your current business model. There is no possible way you can garner enough information to pivot based on one customer’s feedback or even 20. You need to make sure it’s a better direction than the one you are already heading in.”