Friday, February 26, 2016

Google, High Performing Teams, and Psychological Safety

My former MBA student at Harvard, Charles Duhigg, has written an excellent article for the New York Times this week. The article is titled, "Google's Quest to Build the Perfect Team." Duhigg describes an initiative at Google code-named Project Aristotle. The company studied hundreds of teams to determine the attributes of the highest performing teams. They found it difficult to determine why some teams excelled while others did not.  Then they began to hone in on an important determinant of success.  Duhigg describes how the Google researchers focused on psychological safety.    The term comes from the groundbreaking work of my long-time friend Amy Edmondson, with whom I have developed case studies, written articles, and created the award-winning Everest Leadership and Team Simulation.   Edmondson defines psychological safety as the "shared belief held by members of a team that the team is safe for interpersonal risk-taking."  Duhigg explains what the Google researchers discovered:

When Rozovsky and her Google colleagues encountered the concept of psychological safety in academic papers, it was as if everything suddenly fell into place. One engineer, for instance, had told researchers that his team leader was ‘‘direct and straightforward, which creates a safe space for you to take risks.’’ That team, researchers estimated, was among Google’s accomplished groups. By contrast, another engineer had told the researchers that his ‘‘team leader has poor emotional control.’’ He added: ‘‘He panics over small issues and keeps trying to grab control. I would hate to be driving with him being in the passenger seat, because he would keep trying to grab the steering wheel and crash the car.’’ That team, researchers presumed, did not perform well.

Google discovered what Edmondson did many years ago.   High performance does not come from simply designing a team correctly.  It's about more than just picking the right people and putting in place the right goals, structure, rewards, etc.   You have to build the right climate.  That takes a great deal of work over time.   Leaders need to work at it persistently to establish and reinforce that safe climate.   Each team member must commit to maintaining that safe climate as well.  

Wednesday, February 24, 2016

Can Small Experiments Turn Around J.C. Penney?

The failures of J.C. Penney have been well-documented, particularly with regard to Ron Johnson's rocky tenure at the retailer.  Johnson embarked on a sweeping change initiative that failed miserably. He tried to hit a grand slam, making substantial changes in strategy, marketing, and merchandising all during his first few months on the job.  He did not take the time to test many of his new ideas before rolling them out nationwide.  The failures led to his ouster less than two years after taking the helm.

Now Marvin Ellison, a former Home Depot executive, is trying to turn things around.  While sales are moving in the right direction, the profit picture is still not sound.  Still, I think it's interesting to note that Ellison is focusing on small experiments as a means of innovating and changing the retailer. Here's an excerpt from a lengthy story in Fortune on the Ellison approach:

Question: If you wanted to buy a pair of men’s shoes at a department store, would you look for them next to (a) Men’s Clothing, or (b) Women’s Footwear?  Most shoppers would probably answer “a.” But at J.C. Penney, the 114-year-old retailing mainstay, the answer until very recently was “b.” Women make up about 80% of Penney’s clientele, and Penney managers believed that, generally speaking, those women were likely to buy shoes for their spouses and beaus, just as they did during the Kennedy administration.  “It was a terrible idea,” says Marvin Ellison, shaking his head as he walks a reporter through a Penney store in Frisco, Texas. “It took space away from women’s shoes, and it made it very difficult for men to want to buy shoes.”  

Ellison, Penney’s newly minted 51-year-old CEO, had a better idea. He ran a test to see whether men’s shoes would sell faster when showcased next to, say, men’s suits; once the data showed that they did, he instituted that change last summer across the company’s 1,000-plus stores. Since entrusting guys to buy their own brogues and boots, Penney has seen double-digit sales gains in footwear. “That reset has been one of the smartest things we’ve done,” says Ellison.  This Frisco store, not far from company headquarters in Plano, north of Dallas, serves as Penney’s retail living lab, and as he continues the tour, Ellison proudly points out similar changes. Fashion jewelry now sits closer to its Liz Claiborne apparel brand, so women can try on accessories to go with a dress they might buy. The decor has been gussied up at the store’s traffic-driving in-house salons....As the adage goes, “Retail is detail.” And if the details Ellison is addressing seem forehead-slap obvious, signs of how far J.C. Penney had fallen behind its rivals—well, welcome to his world.

Tuesday, February 23, 2016

Who Judges Creative Ideas Well... and Who Doesn't

Stanford Professor Justin Berg has conducted some interesting research on people's ability to evaluate creative ideas.   He asked over 300 circus professionals to forecast how popular a series of circus acts would be with audiences.   He then tracked their actual popularity with more than 13,000 circus audience members.  What did Berg find?   The people who actually created the new circus acts are not very good predictors of their success with audiences.  Interestingly, managers are not very good judges of their success either.   Who is a better judge than either the creators or the managers?  It turns out that peers of the creators were more accurate judges.  In particular, peers of the creators were much better at identifying the potential success of novel/unconventional circus acts.   The research found that, "managers tended to undervalue novel ideas in favor of conventional performances."  Interestingly, this finding about the lack of accuracy of managers' predictions holds despite that the fact that many managers were indeed creators themselves at one point in their careers. 
This finding reminded me of the value of the "Brain Trust" at Pixar.   At the animation studio, the brain trust is a group of people who gather to provide unvarnished feedback to the director of a new film.  The brain trust often includes a few higher-level managers at the firm.  However, the focus of the brain trust is peer-to-peer feedback.  Other directors offer their constructive criticism to the person leading a particular project.  The Brain Trust's success at Pixar seems to reinforce the findings of Berg's experimental research.  

Monday, February 22, 2016

Can You Have Too Much Grit?

Amy Morin writes in Forbes this week about an interesting new study about grit. The study, is titled "When the going gets tough: Grit predicts costly perseverance." The authors are Gale Lucas, Jonathan Gratch, Lin Cheng, and Stacy Marsella.  Note that a lengthy stream of research over the past decade or so has extolled the benefits of grit.  What is grit? University of Pennsylvania Professor Angela Duckworth defines grit as "perseverance and passion for long-term goals." Duckworth has studied grit extensively in her academic career. She has found that intelligence is not always a good predictor of academic or professional success. Grit matters. For instance, she has found that, at West Point, a cadet's grit score is the best predictor of success in "Beast Barracks" – the incredibly challenging, six week summer training regimen that all new cadets must endure. Grit predicted success more so than intelligence, leadership ability or physical fitness.

The new study by Lucas and her colleagues examines whether grit may come with some negative consequences.  Could it be possible for someone to exhibit "too much" grit in some circumstances, leading to poor results?  In a series of studies, Lucas and her colleagues had subjects tackle very challenging tasks.  What did they find? 

Across three studies, we found that higher grit individuals invest more effort and persist in tasks that are not going well. Grittier participants were less willing to give up when failing even though they were likely to incur a cost for their persistence. In Study 1, grittier participants were able to complete fewer problems in an anagram task where some of the items should have been passed over (i.e., unsolvable items). This provides initial evidence that they persisted at a cost to themselves, in this case the cost of getting to attempt more problems. Because we incentivized performance (with entries into a lottery for $100), it seems that grittier participants were specifically trading off greater chances at monetary gains to persist at the more difficult questions. Compared to participants with lower grit, grittier participants not only increase effort when they are losing a game (Study 2), but also are more likely to stay and keep fighting a losing battle when they could quit (Study 3).

Friday, February 19, 2016

The Decline of Sears

I've been saying for years now that Sears is doomed to fail.  I just don't see light at the end of the tunnel.  The company's revenues have been dropping for years.  Multiple restructurings have attempted to pare costs, but none of these moves have recharged sales.  Adam Hartung has a good article for Forbes about the reasons for the decline under CEO Ed Lampert.   Two of the reasons cited by Hartung are: "micromanagement in lieu of strategy" and "seeking confirmation rather than disagreement."   For more on the latter point, here's an excerpt from Hartung's article:

Seeking confirmation rather than disagreement. Mr. Lampert had no time for staff who did not see things his way. Mr. Lampert wanted his management team to agree with him – to confirm his Beliefs, Interpretations, Assumptions and Strategies — to believe his BIAS. By seeking managers who would confirm his views, and execute rather than disagree, Mr. Lampert had no one offering alternative data, interpretations, strategies or tactics. And, as Mr. Lampert’s plans kept faltering it led to a revolving door of managers. Leaders came and went in a year or two, blamed for failures that originated at the Chairman’s doorstep. By forcing agreement, rather than disagreement and dialogue, Sears lacked options or alternatives, and the company had no chance of turning around.

I would one other key point to Hartung's insightful analysis.  The Sears decline began long before Lampert took over.  Yes, he has mismanaged the retailer and accelerated its fall toward bankruptcy. However, in many ways, the crisis at Sears stretches back decades.  Harvard Business School Professor Jay Lorsch has said that gradual crises are often much more dangerous than sudden crises. When a sudden jolt occurs, firms often mobilize resources and attack the problem with a sense of urgency.  However, when a decline occurs over many years, beginning with small decreases in performance, managers often find ways to rationalize the diminishing results.  Denial sets in during these crises that unfold over lengthy periods of time.  Sears seems the perfect example of what Lorsch calls gradual crises.  

Wednesday, February 17, 2016

Whole Foods: Could it Get Stuck in the Middle?

Companies pursuing a differentiation strategy often face a serious challenge when low-cost competitors begin to infringe on their turf.   Some customers may opt for lower-priced options.  As growth slows for the differentiated player, it may try to boost profits by cutting costs.  If it goes too far though, the differentiated player may further erode willingness-to-pay on the part of some customers.  The company may get caught "stuck in the middle" at some point, no longer clearly as premium and differentiated as it once was, but clearly with higher costs and prices than the most efficient low-cost and low-priced rivals.   

Whole Foods faces this conundrum today, as reported this week by the Wall Street Journal.  The company faces slowing growth, in part because low-cost rivals such as Kroger have expanded their organic food offerings, while offering consumers much lower prices.  Whole Foods has responded by announcing a  plan to "save about $300 million a year by September 2017, partly by eliminating more than 2,000 jobs." That plan involves centralizing some key tasks and streamlining processes to generate more efficiency.   Whole Foods Co-CEO John Mackey understands the risks. He said, "We want to evolve the structure in such a way that we take out redundancy and waste, and at the same time though, we’re not diminishing the culture, the empowerment efforts that make Whole Foods Market special." 

 The Wall Street Journal article goes on to explain, "Transferring more authority to headquarters and automating more tasks risks harming Whole Foods’ customer-friendly reputation and turning off shoppers who place a high value on local products, such as blueberries and hometown pasta sauces, and niche items, said Jim Hertel, senior vice president at retail consulting firm Willard Bishop,a unit of Inmar Inc."   

Whole Foods clearly still has a solid position as one of the premium players in the supermarket industry.  However, the warning signs are there.  They must be careful about compromising their well-crafted and highly successful competitive positioning, as they cope with lower growth rates.  

Tuesday, February 16, 2016

Recognize What Happens When You Enter a Room

The best leaders recognize how they change the climate of a meeting when they enter the room.  They understand whether people are reticent to speak candidly in their presence.  They discern the way in which the dialogue changes, whether people become more or less energized, and how attentive people are to their statements.  They recognize the behaviors that they engage in that may have positive or negative impacts on the team.   Kellogg Professor Karen Cates talks about this issue in more depth in a recent Kellogg Insights article.  Here's an excerpt from the article, in which she describes social awareness and self-awareness - and the importance these concepts have for leaders: 

As Cates sees it, the biggest challenge for leaders moving up in an organization is to cultivate awareness. “People who rise in organizations are usually good self-managers,” she says. “They figure out a job and get it done. They also have great social skills—they know how to work with a team and communicate up and down the hierarchy. But as you get further along, awareness becomes the difference maker when it comes to energizing people.”

Cates distinguishes between two kinds of awareness: social awareness and self-awareness. Social awareness is more or less the ability to read a room. Self-awareness, by contrast, is the understanding that when you enter a room, you change the room. “Being aware of who you are and how you impact other people’s ability to do their work is one of the hallmarks of a good leader,” Cates says. Awareness, a concept linked to emotional intelligence, ties back to the issue of alignment: aware leaders are better able to foster trust by purposefully aligning values and policies—and are better at noticing when they are not in sync.

Monday, February 15, 2016

Varied Practice: Key to Learning New Skills

Charlie Sorrel writes about some fascinating new research on skill development in an article at Fast Company this week.  Sorrel describes research by Johns Hopkins University professor Pablo Celnik.   His studies focus on how people develop new skills.  Celnik has found that how you practice new skills affects the speed with which you acquire and develop those capabilities.    Celnik summarizes his findings:  "What we found is if you practice a slightly modified version of a task you want to master, you actually learn more and faster than if you just keep practicing the exact same thing multiple times in a row."   

Most athletes instinctively understand this finding.  No good coach directs his or her players to engage in the very same practice drills over and over.   Instead, the best coaches vary the routine a bit, while working on the same fundamental skills.   Consider a softball coach working on fielding ground balls.  He or she doesn't just keep pounding grounders at players and asking them to throw the ball to first base.   The coach finds a variety of ways to work on the key skills required to field grounders effectively.  

What's going on when we vary our practice routine a bit?   Celnik describes the process as "reconsolidation."  Natalie Tronson and Jane Taylor have conducted research on the neuroscience of memory.  Consolidation refers to the process by which memories stabilize and solidify over some period of time.   Tronson and Taylor describe reconsolidation as a "distinct process that serves to maintain, strengthen or modify memories."   People retrieve a memory and actively consolidate it again, and in so doing, they strengthen the existing memory.   

Interestingly, Celnik found that reconsolidation works best when you change the task being practiced slightly.   Too much change inhibits the reconsolidation process.   He explains, "If you make the altered task too different, people do not get the gain we observed during reconsolidation. The modification between sessions needs to be subtle."

Friday, February 12, 2016

Keeping Millennials Engaged at Work

Consultant Tracy Benson has written a terrific post this week for Harvard Business Review.  She focuses on how to engage Millennials at work.  Benson argues that work-life balance is important to them, and flexible work policies can attract them to your firm.  However, keeping them engaged, and retaining them, takes much more than just flexibility about hours and location of work. Engaging them requires providing them a compelling sense of purpose, building an entrepreneurial environment, loosening the traditional career ladder, and providing technology that promotes collaboration.  These suggestions make good sense.  Beyond that, I also think we need to challenge them.  They need to be stretched intellectually.  At the same time, we need to provide them excellent learning and development opportunities.  In that way, they will have the tools to succeed at these stretch assignments.  What if they face adversity or fail?  Many may fear failure a great deal.  They have been hovered over for years, and their self-esteem has been boosted relentlessly. Thus, we have to be ready to address their anxieties as they take risks, face adversity, and perhaps stumble badly at times. We have to challenge them to pick themselves up, fix their mistakes, and climb back on the bike. 

Monday, February 08, 2016

Brainstorming vs. Question-Storming?

I read a terrific article by Stephanie Vozza in Fast Company this week.  The article focuses on the notion of asking great questions.  She argues that the best leaders ask good questions so as to enhance their learning and engage more effectively in meetings.  Toward the end of her article, Vozza highlights a particular technique proposed by Hal Gregersen of the MIT Leadership Center.   He proposes that teams should employ "question-storming" sessions from time to time, particularly when they have reached an impasse on a tough issue.  Vozza explains:

Have your team generate at least 50 questions about the problem. At about question 25, Gregersen says it will stall. "I have watched this a hundred times around the world," he says. "People say: 'I don't have any more questions, I am stuck.' Keep going, because it's that pass forward that can sometimes give you some of the greatest questions."  Question storming a long series of questions gets you closer to the right questions that will give you the right answer, says Gregersen. "And that's where question storming complements traditional brainstorming," he says.

I like the notion.  In fact, I think question-storming might be useful at the front end of some challenging problem-solving processes, rather than simply as a tool for when a team is deadlocked.  Generating a list of thoughtful questions can insure that a team looks at a problem from multiple frames, and it can help inform the research that needs to be done to generate key insights about an issue.  

Friday, February 05, 2016

Behavioral Science & Effective Super Bowl Commercials

Great Super Bowl commercials engage us with wonderful stories and some humor as well.  Is there more to it than that though?  Could we use cognitive science to understand why some ads have a bigger impact than others?  Ad Age magazine sat down with Carey Morewedge, associate professor of marketing at Boston University.  Professor Morewedge explained how certain principles from the research on cognitive biases help us explain the power of certain very memorable commercials.  First, Morewedge points to the legendary "1984" ad from Apple as well as last year's BMW Super Bowl commercial.  In both cases, the representativeness heuristic is at work.   Ad Age's Michele Fabrizi explains: 

"Analogies transfer positive associations with a good, old idea to the new idea. In scenes evoking the well-known novel "1984," the hammer-wielding young heroine smashing the existing norm heralds the societal sea change promised by the introduction of Apple's Macintosh.  We see the same principle effectively used again -- albeit with ironic humor -- in last year's BMW "New Fangled Idea" (No. 23 on Ad Age's list). Here a look back at Katie Couric and Bryant Gumbel's failure to initially recognize the massive future impact of the internet is juxtaposed against their confused first response to an electric car."

Morewedge also points to the principle of loss framing as a mechanism by some commercials have a powerful impact on us.   Fabrizi explains: "Loss framing offers an approach to elevate the importance of a brand's benefits. This principle tells us that the pain of losing a thing we own is about twice as powerful as the pleasure we would feel acquiring it." FedEx ran an ad called "We Apologize" that took advantage of loss framing. It didn't focus on the benefits of FedEx's timely service. Instead, it showcased (with humor) the dangers of bad service and delayed deliveries. 


Thursday, February 04, 2016

Learning by Doing

On Twitter the other day, I saw a great quote from Jerry Sternin. He said, ""It's easier to act your way into a new way of thinking, than think your way into a new way of acting."  Sternin proved the value of learning by doing in an amazing project on malnutrition in Vietnam, while he and his wife were working for Save the Children.   Most efforts to combat malnutrition in developing nations focused on big problems/solutions such as education, infrastructure, sanitation, etc.   Sternin took a different approach.  He talked to many families there, and he discovered that some children were better nourished than others, though they did not have higher incomes.  These mothers had adopted a different approach to meals.  What did he do?  He asked the malnourished families to prepare meals alongside these moms who had discovered a better approach.   The malnourished families learned by doing.  Sternin had much more impact on their behavior than previous programs.  Dan and Chip Heath explained in a column for Fast Company some time ago

He (Sternin) knew that telling the mothers about nutrition wouldn't change their behavior. "Knowledge does not change behavior," he told us in the spring of 2008 (Sternin passed away in December of that year). "We have all encountered crazy shrinks and obese doctors and divorced marriage counselors." The mothers would have to practice it. They'd have to act differently until the different started to feel normal.

The community designed a program in which 50 malnourished families, in groups of 10, would meet at a hut each day and prepare food together. The families were required to bring shrimp, crabs, and sweet-potato greens. The mothers washed their hands with soap and cooked the meal together. Sternin said that the moms were "acting their way into a new way of thinking." Most important, it was their change, something that arose from the local wisdom of the village. Sternin's role was only to help them see that they could do it, that they could conquer malnutrition on their own.

Dozens of experts had analyzed the situation in Vietnam, agonizing over the problems — the water supply, the sanitation, the poverty, the ignorance. They'd written position papers and research documents and development plans. But they hadn't changed a thing.  Six months after Sternin's visit to the Vietnamese village, 65% of the kids were better nourished — and they stayed that way.

Wednesday, February 03, 2016

What Do Facebook's Best Managers Do?

Facebook's VP of People Lori Goler talked to Business Insider recently about an interesting study that the firm conducted. Facebook analyzed teams throughout the organization to determine the ones whose members reported the highest levels of employee engagement and satisfaction. They talked to members of these groups to find how what the team leaders were doing to create such high levels of engagement. Seven behaviors stood out. They should not shock you at all, but they do provide a nice summary of what good leaders do day after day as they work with their teams:

1. They care about their team members.

2. They provide opportunities for growth.

3. They set clear expectations and goals.

4. They give frequent, actionable feedback.

5. They provide helpful resources.

6. They hold their team accountable for success.

7. They recognize outstanding work.

Monday, February 01, 2016

The Dangers of Decisiveness

Last week, Derek Pankratz and I published a new article in the Deloitte Review.  The article focuses on decisiveness, and it is titled, "Crossing the mental Rubicon: Don't let decisiveness backfire."   Here's a summary:

We demand that leaders be decisive, but research in social psychology and behavioral economics suggests that decisiveness is not an unequivocal good. Studies on “mindset” reveal that, when contemplating an important decision, prematurely focusing on execution can exacerbate decision-making biases and lead to overconfidence and excessive risk-taking.

In the article, we describe two mindsets for decision-makers.  We argue that people adhere to a deliberative mindset as they are making a critical choice.  They are contemplating the options they might pursue to achieve their goals, and they are evaluating the consequences of various courses of action. At some point, people shift to an implemental mindset. At this stage, individuals focus on how to execute a particular plan of action. They consider the key steps involved in implementation, who will be responsible for those elements of their plan, and how progress will be measured. Of course, decision-makers often look ahead to issues of execution as they are contemplating their choice. We argue that jumping ahead into the implemental mindset too soon can be dangerous. Here's the core of our argument:

Herein lies the danger. Even if a decision seems correct at the time it was made, new facts may arise, warranting reconsideration. However, the implemental mindsets we adopt to help us achieve our chosen goals can exacerbate a host of judgmental and decision-making biases. An execution-oriented frame of mind may encourage “tunnel vision” and lead to overconfidence and excessive risk taking. In the end, individuals may stick to decisions that no longer make sense, with potentially disastrous consequences.