Wednesday, April 30, 2014

Handsome Males More Likely to Achieve Success in Entrepreneurial Pitches

HBS Professor Alison Wood Brooks, Wharton Professor Laura Huang, MIT scholar Sarah Wood Kearney, and MIT Associate Dean Fiona Murray have conducted three intriguing new studies about the effect of gender in entrepreneurial pitches.  They found that investors are more likely to favor male entrepreneurs rather than female entrepreneurs.  Attractive men do better than unattractive males. 

In the first study, angel investors watched videos of real pitches and rated the attractiveness of the entrepreneurs.  According to HBS Working Knowledge, "Male entrepreneurs were 60 percent likelier to receive a funding prize than were female entrepreneurs. Among those male entrepreneurs, investor-deemed attractiveness led to a 36 percent increase in pitch success. But for female entrepreneurs, their looks had no apparent effect on the success of their pitches."  

In the second study, each participant watched two pitch videos, one of which was successful while the other was not.  50% of the participants were women.  Roughly 2/3 of the participants preferred the pitches from males.  Interestingly, the preference for male entrepreneurs existed both for the male and female participants who were judging the pitches.

In the final study, 194 participants watched a pitch video.  The voices on the video could be either male or female.   The voice-overs were accompanied by a photo, some of which had been independently rated as highly attractive and others that had been evaluated as less attractive.  According to HBS Working Knowledge, "As with the previous studies, participants awarded higher ratings to pitches with male voices—deeming the male pitches more "persuasive," "fact-based," and "logical" than otherwise identical female pitches. Additionally, the participants preferred pitches from the "high-attractiveness" male entrepreneurs over those from "low-attractiveness" men. But looks had no significant effect on whether female-voiced entrepreneurs fared well." 

Tuesday, April 29, 2014

Face-to-Face Communication

Do people behave differently when they communicate with another party face-to-face?  How do more remote forms of communication change the substance and tone of our interactions?   These questions have been debated for some time, as email and other forms of communication have come to dominate business workplaces.   Here's a hilarious sketch from Jimmy Fallon that shows how communicating face-to-face can be VERY different than other ways of interacting with others!  Enjoy!

Monday, April 28, 2014

Lego: Sticking to Bricks

LEGO faced a perilous strategic and financial situation roughly a decade ago.   Since that time, the company has experienced a remarkable turnaround.  The LEGO story reminds us of the folly of poorly designed diversification strategies, as well as the value that can be created by renewing the core business.  

Friday, April 25, 2014

Does Walking Make Us More Creative?

Stanford scholars Daniel Schwartz and Marily Oppezzo have conducted a new study examining the link between walking and creative thinking.   Here's the basic conclusion, summarized in an article from Stanford University News:

The study found that walking indoors or outdoors similarly boosted creative inspiration. The act of walking itself, and not the environment, was the main factor. Across the board, creativity levels were consistently and significantly higher for those walking compared to those sitting...  "I thought walking outside would blow everything out of the water, but walking on a treadmill in a small, boring room still had strong results, which surprised me," Oppezzo said.

To read these scholars' study, click here.  

Thursday, April 24, 2014

Alan Mulally on Running a Crisp Leadership Team Meeting

Here's a great response from outgoing Ford CEO Alan Mulally during an interview with the Wall Street Journal.    When Mulally arrived at Ford, he established some basic ground rules for conduct during senior team meetings (he called them "working together behaviors").  Mulally wanted to insure that the team members worked together effectively, and that they used their time efficiently during meetings.  Here, Mulally talks about holding people accountable with regard to these rules of engagement:

WSJ: When was the last time you had to remind someone: "No, you didn't get it."
Mr. Mulally: Every once in a while someone in business-plan review will, say, pull out their communication device and start working on it. We have the entire leadership team networked around the world, and somebody would have the audacity to start working a specific issue instead of being laser focused on helping everybody?  Or they'll talk. At Ford, one of the behaviors is you listen, and you don't have side conversations during the meeting. It's just so important everybody stays focused. So if someone has a side conversation, we just stop and we just look at them, and it's amazing how it doesn't happen again.

For more on those ground rules, please check out this prior blog post

Wednesday, April 23, 2014

Looking for Jobs in All the Wrong Places?

Inc. magazine reports today on a new study by iCIMS, an employment software company.  They examined roughly 60,000 employment opportunities listed on various social media platforms.   Their results offered a few interesting surprises.  

Where do most candidates expect to find jobs on social media?  LinkedIn, of course.  Approximately 2/3 of job seekers expect to find job postings on LinkedIn.   Indeed, LinkedIn accounts for nearly a quarter of all employment opportunities listed on social media platforms.   In contrast, only 1% of job seekers look to Twitter to find job opportunities.  However, 51% of employment opportunities posted on social media platforms in this study can be found on Twitter!  

One key caveat:  This study examined job postings, but of course, a job search involves much more than finding a listed employment opportunity.   Companies may indeed post lots of employment opportunities on Twitter, but is that a primary recruiting tool for them?  How does it actually stack up against LinkedIn?  We would have to know much more about the entire recruiting process.  For instance, LinkedIn activity related to employment involves much more than job postings.  Much of the action pertains to networking and searching, often in cases where a job is not even posted.  Many firms use LinkedIn to search for attractive candidates, before they even list a job opportunity publicly.  Similarly, many candidates search for opportunities via LinkedIn without an actual position posted.  They are networking, seeking introductions, learning about companies, etc.    

The lesson for those seeking jobs:  A great employment search involves multiple avenues of investigation and exploration.  Don't restrict yourself to one mechanism or tool. 

Tuesday, April 22, 2014

Never Make the First Offer: Is That Bad Advice?

The conventional wisdom is clear:  In a negotiation, you should never make the first offer.  We've all heard this advice, and we probably have tried to adhere to it when buying a car, working out a business deal, or negotiating a salary.  Is this good advice though? Is the conventional wisdom actually correct?

Northwestern negotiation expert Leigh Thompson thinks we should question the conventional wisdom.  She points out that research has never validated this advice.  In fact, some new research suggests that making the first offer leads to better outcomes.  Several good reasons exist for choosing to make the first offer.  For instance, she points out that people are subject to anchoring bias.   In other words, we often rely too heavily on an initial point of data.  We begin with that number, and we adjust from that point... and we would behave differently if not anchored originally by an initial piece of data.   Thus, you can anchor the other party by making the first offer, and you can use that anchor to your advantage. 

Thompson also offers some good advice so as to make an effective first offer.   First, she reminds us that few parties will take the first offer.  Keep that in mind when you put your offer on the table.  Second, be realistic with your first offer.  An outrageous first offer can create a "chilling effect" that will make it hard to come to an agreement with the other party.  Finally, a good first offer is often close to other party's BATNA (best alternative to a negotiated agreement).  Again, if the offer is far worse than the other party's BATNA, it may be viewed as outrageous and make a deal highly unlikely. 

Friday, April 18, 2014

P&G Emphasizes Premium Strategy in Razor Market

Over the past few years, Proctor and Gamble has struggled with the question of whether to deviate from the premium/differentiation strategy that made it so successful during the first tenure of A.G. Lafley.  When Bob McDonald succeeded Lafley, he deviated from that strategy as he coped with consumers "trading down" to lower-priced rival products and private labels during the recession.  The moves left P&G in danger of becoming "stuck in the middle" - trying to be both differentiated/premium and low cost at the same time.   

The razor market offers an interesting example of this challenge.  Over the past few years, the company's Gillette division has seen a new disruptive threat emerge, in the form of lower-priced competitors such as Dollar Shave Club (see inexpensive YouTube marketing below).  How would P&G respond? It essentially informed customers that they could always use an older version of the Gillette products if they wanted a less expensive option.  However, Gillette chose not to come out with a new low-price product.  Now we learn from the Wall Street Journal that Gillette will push even higher into the premium space with a new high-priced technologically advanced product.   Gillette is counting on some consumers to trade up as they have many times in the past, when the firm has brought out advanced razors.   Is this one step too far, or will consumers be receptive?   It will be interesting to see.   Sometimes, firms facing disruptive threats can "over-shoot" the high end of the market, offering consumers an advanced product that actually exceeds the needs of most people.   On the other hand, going down market with a cheaper product brings its own challenges, as premium players often are not capable of also competing in the low cost segment of the market.   In a way, we should not be surprised by this move from P&G.  Lafley is back as CEO, and he was very successful with this premium strategy in the past. Moreover, the economic recovery may provide perfect timing for a move to push deeper at the high end of the market.  

Tuesday, April 15, 2014

Do Visual Metaphors Affect our Creativity?

Fast Company's Eric Jaffe writes this week about new research on the relationship between visual metaphors and creativity.   Jaffe first cites a 2012 study by Angela K.-y. Leung and her co-authors.  Here is Jaffe's summary of that study:

Test participants enacted various metaphors for creativity, then took an association test designed to measure original thinking. (For "thinking outside the box," they actually sat outside a box made from PVC pipe and cardboard.) The results showed that embodying metaphorical creativity did, in fact, enhance it.

Jaffe goes on to examine a new study by Alex Marin, Martin Reimann, and Raquel CastaƱo.   They confirmed that visual metaphors can enhance creativity. However, these authors also found that visual metaphors can have a deleterious effect.   For instance, showing people an image of a burned-out light bulb can decrease their creativity.   Scholars don't know exactly why these visual metaphors affect our thinking, though they have demonstrated their impact.  

What's the implication for practitioners trying to nurture innovation in their companies?  Jaffe suggests that we pay close attention to the environment we create in our workplaces.    If we want a team to brainstorm, we might take care to shape the environment in which they will do their work.   Of course, that emphasis on environment should go WAY BEYOND the placing of appropriate visual metaphors.  It should involve creating a space that has plenty of materials available, as fuel for creative thinking.  It should involve plenty of materials, such as post-its and the like.  It should involve appropriate wall space for displaying ideas, sketches, etc.   We need to think holistically about creating a space that nurtures creativity, rather than simply hoping that a few visual metaphors can have a profound impact.

Friday, April 11, 2014

Lone Genius vs. Creative Collaboration

Ben Waber, president and chief executive officer of Sociometric Solutions, has written a great piece for Business Week. The article is titled, "The Myth of the Lone Genius."   Waber examined the 1,000 most-cited articles from Nature from 2001 to 2010.   Note that Nature is a very prestigious scientific journal.  Check out the two charts he created. 

Source: Business Week
Note, in particular, the right-hand tail on the top chart.  The five ground-breaking, highest impact articles were all co-authored.   Here's Waber's comment: "The five most-cited papers all have multiple authors. These are the papers that change science, that move entire fields—the ones we would expect “geniuses” to write. Except they’re all written by teams."  

Overall, the second charts shows that multiple author papers account for many more citations than single author articles.   We tend to make heroes of the long geniuses, but in today's world, collaboration is often the key to creative breakthroughs. 

Wednesday, April 09, 2014

Companies without HR Departments?

The Wall Street Journal reports today on some firms that have chosen to abolish (or never create) human resource departments.   Is that a wise move?   On balance, I would say that it is a risky move to operate without an HR group.  I understand the rationale for some of these firms who choose to eliminate the function.  They want line managers to take more responsibility for talent management duties.   They don't want leaders in the company shunning key people management responsibilities off to the human resource department.   Some firms also become frustrated with the bureaucratic procedures that emanate from some HR departments.  It is true that departments of all kinds begin to take initiatives and create processes simply to justify their existence.   However, I would argue that eliminating the HR department is a giant overreaction.  It is also risky.   Companies can find themselves in legal hot water because line managers do not have specific expertise on people management issues.  The article is worth a read, but I wouldn't want to emulate the extreme actions of some of the firms featured in it. 

Encouraging More Entrepreneurs

Tuesday, April 08, 2014

Troubling Data about Talent Management & Succession

Stanford's David Larcker, Stephen Miles, and Brian Tayan have written a new article titled "Seven Myths of CEO Succession."  They cite some rather startling statistics about succession.  

Each year, approximately 10 to 15 percent of companies change CEOs either because of retirement, recruitment to another firm, resignation following poor performance, or for health-related issues. For this reason, shareholders expect that companies have a chosen successor identified at all times to immediately assume the CEO position should the need arise. Unfortunately, research data indicates that this is often not the case. According to a 2010 study by Heidrick & Struggles and the Rock Center for Corporate Governance at Stanford University, only 54 percent of companies state that they are grooming a specific successor to the CEO position, and 39 percent claim to have no viable internal candidates to permanently replace the CEO if required to do so immediately. 

Wow... what an indictment of the leaders and the leadership development efforts at many companies! Nearly 4 of 10 firms report "no viable internal candidates."  The data raise some troubling questions.  Are these firms not investing in leadership development efforts?   Or, are they spending unwisely in their efforts to groom future leaders?   Perhaps most importantly, are many firms not holding their senior executives, including the CEO, accountable for developing talented people who can assume top positions in the future?  CEOs and other top leaders should be held responsible for more than meeting financial and non-financial performance targets.  They also need to be held accountable for talent development and succession.   That part of their job helps to insure the long term viability and success of the institution. 

Friday, April 04, 2014

Bryant University ranks in top 50 of Business Week List

I'm very proud that, for the first time, Bryant University cracked the top 50 in the Business Week undergraduate business school rankings!  Moreover, the school stood out on the corporate recruiter rankings - a key element of the BW methodology.  Corporate recruiters ranked Bryant #18 in the nation.  That ranking speaks to the quality of our students, their preparedness when entering the workforce, and the strong work of our career office led by Director Judy Clare.  As parents increasingly ask about the value of expensive college educations, I'm happy to report that we have a strong job placement record and highly satisfied corporate partners.  

Thursday, April 03, 2014

Amazing Evidence for the Wisdom of Crowds

Check out the amazing results of something called the "Good Judgment Project," profiled here by NPR.   Three psychologists - Philip Tetlock, Barbara Mellers and Don Moore - have created this project in collaboration with members of the government intelligence community.   Over the past three years, the researchers recruited roughly 3,000 people to make probability estimates about geopolitical issues such as the threat of a North Korean missile attack.   The NPR article profiles one such person, who happens to be a pharmacist living in Maryland.  She does not have any special expertise in international affairs.  She received some basic training in probability estimation, and then set out to respond to various questions posed to her by the researchers.  Her responses are among the most accurate of all 3,000 average citizens participating in the study.   She credits Google searches as her most useful tool for learning about an issue before making a prediction.  The NPR story indicates that, "According to one report, the predictions made by the Good Judgment Project are often better even than intelligence analysts with access to classified information, and many of the people involved in the project have been astonished by its success at making accurate predictions."  

What's going on here?  First, it clearly demonstrates the concept of the wisdom of crowds.  If you pool the collective intellect of a large, diverse group of people, you can often get the right answers more frequently than you can by relying on a few experts.  Of course, the wisdom of crowds only works if you have members of that large diverse group making independent judgments.  If people are influenced by others, then the wisdom of the crowd breaks down.  Second, as the story indicates, "If you want people to get better at making predictions, you need to keep score of how accurate their predictions turn out to be, so they have concrete feedback."  The researchers have done that throughout the study.  Finally, why do the experts often stumble?  Well, they are subject to many biases.  For instance, they often fall into the confirmation bias trap.  They may have more data at their disposal, but they often rely on the information that confirms their pre-existing views.   Moreover, the experts perhaps are not making independent judgements.  They may be influenced to a large degree by others in their work group or agency.  In that way, they may be subject to conformity pressures.  

Wednesday, April 02, 2014

Mary Barra at GM

The Wall Street Journal reports this morning on new developments in the GM ignition switch scandal. According to the newspaper, 

For the first time within General Motors executives will be told of vehicle safety problems when they are first reported and are now expected to expand any potential recalls if they deem it necessary, Chief Executive Mary Barra said in an interview.  "The executive team can only expand, they can never make it smaller," Ms. Barra told The Wall Street Journal. "I am trying really hard to communicate that we have made great strides to reduce the bureaucracy within GM."

Barra's comments are certainly welcome, but a key point needs to be made here.  You can't simply order lower-level employees to report all safety issues to senior executives.    You have to create an environment and a culture where people feel comfortable bringing bad news to the boss.  Moreover, senior leaders need to recognize that some people will feel hesitant to share bad news.  Therefore, senior executives at GM need to become "problem finders" who actively seek the bad news.  They have to do more than just say that they have an open door.  They have to get out of their offices and dig for problems.  They have to become seekers, rather than just receivers of safety information. 

Tuesday, April 01, 2014

10 News Conference Appearance - Part 1

News, Weather and Classifieds for Southern New England

10 News Conference Appearance Part 2

News, Weather and Classifieds for Southern New England

Baseball Umpires and the "Inconsequential Bias"

Stanford Graduate School of Business PhD students Etan Green and David P. Daniels have conducted a fascinating new study about umpires in Major League Baseball.   Here's an excerpt from an article on the Stanford website:

Green and Daniels analyzed ball and strike calls made by Major League Baseball umpires for more than a million pitches between 2009 and 2011. In their study, which recently won second place at the MIT Sloan Sports Analytics Conference, they show that an umpire’s strike zone shrinks in counts when the batter already has two strikes (and therefore a third strike would result in an out) and expands when the batter has three balls (with a fourth ball then resulting in a walk). “Oftentimes, the umpires face a choice between a call that would be really pivotal and a call that would be relatively inconsequential,” says Green. “And what we find is that they err on the side of the inconsequential call unless they’re absolutely certain that the pivotal call is the right one.”

What do we take away from this study?  The findings suggest that decision-makers in high stakes situations may be biased toward "punting" - i.e. they may choose the more inconsequential course of action, if one exists, rather than taking the action with more substantial impacts.   We certainly have all been in situations where we choose the "path of least resistance."  Of course, this study differs from the managerial context in organizations, because the umpires do not experience the consequence here.  The batter and pitcher do (though the umpire is more likely, perhaps, to be criticized if he makes a highly consequential call).   In a business context, the decision-maker often experiences the consequences for themselves.  Still, we should be mindful of this potential bias that may affect us in high stakes situations.