Monday, December 21, 2015

Bad Design Ruins the Miss Universe Contest

Was Steve Harvey just a terrible host for the Miss Universe contest, or is there more to the story?   By now, most of you have seen the awful and embarrassing gaffe at the end of the competition.   Host Steve Harvey mistakenly announces Miss Columbia as the winner, when in fact, she was the runner-up.   After the crown is placed on her head, Harvey must deliver the bad news... Miss Philippines is actually the winner of the beauty pageant.  

Image from @cthagod
Eric Thomas, senior partner at Saga (Detroit-based marketing agency), has a great LinkedIn post today about the gaffe.  He describes the problem as an example of bad design.   I've posted a photo of the card  given to Harvey as he announced the winner.   Here's Thomas' analysis of the card.  Talk about a bad user experience!

"There isn't any logical order to this. Sizing, placement, and organizing is all over the place. Why is “Miss Universe” all the way to the right, but “Philippines” is centered below it? The actual winner, compositionally speaking, was essentially just cast off to the side. It looks like a footnote. And even though this document was created so that the names could be added later, they could have at least made the letters bigger. Microsoft Word can certainly adjust font sizes."

Image from Eric Thomas

I've posted here both the original card used in the pageant and the newly redesigned card by Eric Thomas.    I think you can see how bad the design actually is, and how easily one could improve the user experience.  It's too bad it took an epic failure to highlight the weaknesses in the existing design.  Fail often to succeed sooner... yes, but not by experiencing what Harvey and the contestants had to endure last night!   Fail often to succeed sooner is all about testing and experimenting so that you don't have a major catastrophe on your hands at a later date.

Friday, December 18, 2015

The Army's Two Up/Two Down Rule

Kellogg Insights has an interesting feature this month on situational leadership, drawing on an interview with Colonel Brian Halloran, U.S. Army Chief of Staff Senior Fellow at the Kellogg School of Management.   Here is an excerpt: 

In the U.S. Army, becoming an effective situational leader—understanding that where you stand is where you sit—is accomplished through a “Two Up/Two Down” model.

“When I get my assignment, I not only have to understand my mission,” Halloran says. “I’ve got to understand my boss’s mission—and my boss’s boss’s mission—and where my goals fit into that. What that does is it helps prevent me doing something that works great at my level but ends up causing a bigger problem for the overall organization.”

By the same token, becoming versed in the goals and responsibilities of your direct reports—and their direct reports—acts to open communication and increase strategic alignment throughout the organization.

“When you’re circulating and getting to know people in your organization two levels down, you have a better flow of information,” Halloran says. “You can make sure that people understand why certain tasks are being asked to be done, where it fits in the big picture, and how we’re all actually going to benefit.”

I love the Two Up/Two Down rule.  It should be a regular facet of our decision-making processes.  We have to understand the goals and interests of those above and below us in the organizational hierarchy if we are to make sound decisions that can be executed successfully.    

Wednesday, December 16, 2015

Simulating an Activist Investor

As I read the lengthy Wall Street Journal article about how Mondelez CEO Irene Rosenfeld has coped with two major activist investors, I was reminded of some thoughts I heard from a CEO recently.  When I gave a leadership talk recently to a group of executives in Chicago, I had the opportunity to listen to a Fortune 500 CEO address the group before I spoke.  He offered a terrific piece of advice for these executives.   One person asked him whether his firm had dealt with any activist investors pushing for strategic and financial changes.   The CEO responded that he had not faced that issue.  However, he described how his management team asked itself a simple question each quarter:  If an activist investor took a substantial stake in our firm, what changes would they advocate?  The team then discussed that question at length each quarter, and it determined which changes might actually make sense for the firm.  Then it made those alterations to the organization's strategy in a proactive manner.  The CEO felt that this proactive approach had helped the firm avoid a confrontation with an activist investor.   I think the technique sounds like a very effective way to not only avoid a battle with an outside investor, but it helps executives take a fresh look at their strategy.  It asks the executives to put themselves in the shoes of an outsider and to consider how someone external to the team would view the strategy. That is a very worthwhile exercise for all management teams.  

Tuesday, December 15, 2015

Be Hypersensitive to Pain if You Want to Innovate

Here's a great tip for all aspiring innovators and entrepreneurs. It comes from Jeff Nelson, an entrepreneur and former Google employee (via Mashable).  I've heard this advice many times, but it's worth emphasizing here:

Be hyper-sensitive to pain. Another technique for innovation is simply being hyper-sensitive to what's wrong around you. For example, one of the most valuable patents of all time is the paper milk container. Milk used to be carried in round glass jars, which were fragile, heavy and bulky. An inventor realized he could hold milk in containers made of heavy-duty, coated paper, which were [sturdy], light and could be tightly packed, resulting in one of the most valuable patents of all time.

One great way to identify a user's "pain points" is to look for workarounds.  What is a workaround?   Consider the elderly woman who puts tennis balls on the bottom of her walker, or the Dunkin' Donuts customer who insulates their iced coffee by inserting it into a hot coffee cup.  These customers have a problem with the existing product, and they have modified it to alleviate their pain.  The workaround demonstrates an opportunity for innovation.  

Friday, December 11, 2015

Investors vs. Competitors: Disclosing Information Involves Key Tradeoffs

Companies face important tradeoffs when thinking about how much information to disclose about their business.  Investors, of course, want a great deal of information about the nuts and bolts of a business.  They want detailed segment information for diversified firms. They would like to see more detailed operating metrics about performance that might serve as leading indicators of financial performance in upcoming quarters.  They want to understand customer satisfaction, product pipelines, etc.  Companies face a delicate balancing act though. The more they disclose to investors, the more that they are also disclosing to competitors.   For instance, many diversified firms provide frustratingly little segment information in their 10K reports.  Of course, they can get away with this limited disclosure as long as they are performing well overall.  When the numbers decline, investors begin to wonder if the whole is worth less than the sum of the parts.  To complete that analysis, investors push for more detailed information about segment performance.   The diversified company may resist such calls though, not simply because they wish to rebuff activist investors.  They also may not want to offer critical data to competitors.  

The Wall Street Journal's Heard on the Street column demonstrated this conundrum that firms face when describing the situation at Netflix these days.  Investors would like to know how many people are viewing the company's original content.  They are, after all, used to seeing ratings information for broadcast andcable networks. On the other hand, Netflix may have good reason to resist investors' push for more disclosure. In fact, investors should understand that less disclosure may be very good for the bottom line. Here's an excerpt from this week's Heard on the Street column;

As much as Netflix’s investors might also want to know that, there is an important strategic advantage for the company in keeping everyone in the dark. Not only does having all the data allow Netflix to continue to tout the success of its originals, it also means more leverage over media companies in licensing negotiations. If the companies don’t know how many people are watching their shows on Netflix, they don’t know how much to charge for it.

Wednesday, December 09, 2015

Why Data Analytics Professionals Need to be Good Storytellers

Kellogg Insights has a good article this week, in which they feature comments from various executives about hiring data analytics professionals. It's a hot field, making it a tough fight for great talent. Still, companies have to find the right talent. That means more than hiring folks who can crunch the numbers. Leslie Hampel, Director of Global Strategies at Starbucks, explains: 

What I am looking for is someone who can bridge the gap. Can you do the math? That’s important, but can you pull the story out of the math? Particularly for the next 10 years or so, as we work our way through this current generation of CEOs who don’t understand algorithms for the most part. They are making decisions from a very different place. How do you show them that you have applied the analytic rigor, then help tell the story so that they feel comfortable investing millions, if not billions, of dollars in this idea? It really becomes about storytelling. 

I concur wholeheartedly.  When I was a graduate student, I taught introductory economics at Harvard.   I also participated in the interviewing and training process for new teaching fellows in this course.  Plenty of talented doctoral students in economics applied for these positions.  Some of them could not tell a story though. They could draw the graphs and write the equations on the board, but they could not explain the intuition and the logic in a way that others could understand easily.   The same logic applies with data analytics professionals.  They have to be able to persuade others, some of whom are not able to digest the math easily.   Telling a story with the numbers is crucial.  

Tuesday, December 08, 2015

Chipotle Responds to a Food Safety Crisis

Chipotle finds itself facing a major crisis these days.   The company has experienced a major E. coli outbreak.  It began in the northwestern United States, and the firm closed a number of restaurants temporarily to address the situation.  However,  reports now indicate that some Boston College students may have gotten ill after eating at a Chipotle in Boston.   According to, "City inspectors closed the Chipotle, located in Brighton near BC’s campus, “until further notice” after reporting three critical health violations following a visit Monday... Chipotle believes norovirus is to blame for the rash of illnesses that seemingly stem from the Cleveland Circle restaurant, but the Boston Public Health Commission says it’s too early to tell."

The Wall Street Journal asked several crisis management experts to assess Chipotle's response to the crisis.  Richard Levick commented,

"Long term, Chipotle will need to carefully examine its supply chain. Its 5% stock drop is likely due to the fact that this is the third instance of foodborne illness connected to Chipotle since August. That leaves the company more vulnerable to lawsuits and potential regulatory action. It also directly contradicts a brand built, at least in part, on the sourcing of fresh, organic, farm-sourced fare. Thus far, the supply chain has not been a major focus of the company’s communications. In the coming weeks, that may need to change."

Levick raises a crucial point. Product quality and safety crises become especially threatening to a company when they go to the heart of what a brand has chosen to stand for over many years. In fact, companies can be punished even more extremely by customers (and investors) when a crisis undermines the core of their competitive positioning. Chipotle has staked its reputation on the quality and freshness of its ingredients. Thus, the supply chain has been at the heart of their competitive positioning. Any substantial defect in that supply chain will have long-lasting repercussions. The company not only has to address the situation at the restaurants, but they will have to reassure customers that the supply chain indeed lives up to the reputation that has been cultivated over time. As a big fan of Chipotle, I hope they get it right! 

Sunday, December 06, 2015

Persistence & Creativity

Brian Lucas & Loran Nordgren have conducted a series of interesting studies about creativity.  They find that people tend to underestimate the number of creative ideas that they can generate.  The scholars asked people to generate ideas on a particular topic.  Then they asked them to predict how many more ideas they could generate if they continued thinking about the topic.  The subjects then continued to try to generate ideas.  

The scholars found that people underestimated how many ideas they could generate by persisting for that additional period of time.  Moreover, outsiders judged the ideas generated after persisting as of higher quality than the ideas generated initially.  

The study shows the value of persistence, but it also demonstrates that we sometimes downplay its importance. I think it's because we often think of creativity as a flash of brilliance.  It's not.  It's hard work! It takes time to reflect, think, make connections among disparate concepts, and synthesize ideas.  

Wednesday, December 02, 2015

How Do You Enhance Instrinsic Motivation?

Jane Porter has written an article this week for Fast Company on the topic of intrinsic motivation.  Porter writes:

It's easy to hustle through our daily tasks, head down, focused on what's next on the long list of to-dos. But taking a step back to evaluate what really motivates and drives us is critical, not just for our well-being, but also, as research has shown, for our productivity.  Social psychologists call this type of drive "intrinsic motivation," or the desire and urge inside ourselves that propels us to do the work we do and do it well. While we're often motivated by external factors like pay, approval, or recognition, research has shown that intrinsic motivation is fundamental not just for our long-term happiness, but also for the quality of our work.

How can organizations enhance the intrinsic motivation of their employees?   I would urge managers to consider the lessons imparted by social psychologist J. Richard Hackman in his work on job design many years ago.  Hackman argues that five elements of job design have a strong impact on the intrinsic motivation of workers:  skill variety, whole task, task significance, autonomy, and clear and immediate feedback.   By skill variety, Hackman means that employees should not be performing the same monotonous task all day. They should able to use a range of their capabilities.   Whole task means that we cannot get carried away with the division of labor.  We should enable workers to be part of completing more than one minor step in a more complex task.  Third, workers need to understand the importance of their work.  What does it mean for the organization?  Sometimes we refer to this as establishing a line of sight.  Can workers see how what they are doing has impact throughout the firm, all the way to the customer?  Fourth, workers will be more intrinsically motivated if they have some autonomy in terms of how they do their work. Finally, employees need clear, constructive, and immediate feedback.  They need to know where they stand.   If you design the work in this way, you are likely to have workers who are more intrinsically motivated, and therefore, more engaged, satisfied, and productive. 

Tuesday, December 01, 2015

Giving Tuesday: No One Wants to Fund Overhead Expenses

Few people enjoy donating to charities which have a high administrative expense ratio.  We prefer that our money goes directly to people in need, rather than to fund overhead expenditures.  Uri Gneezy, Elizabeth A. Keenan, Ayelet Gneezy have written a paper on the subject.  Their paper, "Avoiding Overhead Aversion in Charity" was published in Science last fall.  

They conducted an interesting field experiment to examine how people would behave with respect to donations to a large education foundation's new initiative.   Approximately 40,000 people received requests to donate to this foundation.  They split the population into four groups, with each receiving a different letter.  One group received a letter indicating that one donor had already made a $10,000 contribution to the foundation to launch this campaign.  A second group received a letter indicating that someone had offered to match donations up to a total of $20,000.  A third group received a letter indicating that someone had contributed money to cover all overhead expenses for this new initiative.  Finally, the fourth group represented the control for the study.  They simply received a generic letter with information about the foundation's request for funds.  

What did the scholars find in this field experiment?  A significantly higher percentage of people in the "overhead-free" group donated to this cause.  Moreover, they donated three times as much as the people in the control condition, and nearly twice as much as the next highest group.   The findings are quite interesting.  Certainly, nonprofits can try to keep overhead expenses low.  However, some administrative expenditures are necessary.   Having a donor who is willing to fund those costs can make it much easier to raise money from every other potential donor.