Wednesday, October 31, 2018

IDEO's Response to Criticism of Design Thinking

Source: Medium
Fast Company's Katherine Schwab interviewed IDEO's Michael Hendrix this week for an article titled, "IDEO Breaks Its Silence on Design Thinking Critics." Schwab writes, "Over the last year, Ideo’s philosophy of “design thinking“–a codified, six-step process to solve problems creatively–has come under fire. It’s been called bullshit, the opposite of inclusive design, and a failed experiment."   I am a proponent of design thinking, but I understand the criticism.  Many people and organizations have adopted the language of design thinking, or sought to embrace the approach, without effecting real change.  They have talked the talk about innovation, without walking the walk.  Organizations have spent a great deal of money on innovation programs with little real impact. 

Schwab explains, "Part of the problem is that many people use the design thinking methodology in superficial ways. Hendrix calls it the “theater of innovation.” Companies know they need to be more creative and innovative, and because they’re looking for fast ways to achieve those goals, they cut corners."   Like Hendrix, I've observed many large organizations fail when trying to embrace or adopt design thinking.  I've seen plenty of theater.  He goes on to argue that the culture at many firms lacks the key elements required to truly succeed with a design thinking approach to innovation.  Hendrix notes that many organizations do not have a climate of psychological safety, where people trust that they can speak up and offer ideas without being rebuked or marginalized.  Moreover, he notes that many companies have not embraced a culture of play - a necessary precondition, in his view, for succeeding at design thinking. 

In my forthcoming book, I offer one other explanation for why design thinking fails in many organizations.  In my mind, the creative process is a fundamentally non-linear process.  It moves in fits and starts on many occasions, and it involves a great deal of iteration.  You find yourself moving off in unexpected directions at times, and reversing course when roadblocks or failed experiments occur.   Many companies have tried to implement IDEO's design thinking methodology, but they have perceived the stages of that process as sequential in nature.  They have applied a linear mindset to an essentially non-linear process.  They think that ideation always follows empathy-based research, and that prototyping always follows ideation.  Organizations are used to analyzing, planning, and then executing.  The creative process simply does not unfold in that linear fashion.  

Sunday, October 28, 2018

John Cleese: Lecture on Creativity

Many years ago, the English actor John Cleese, co-founder of the Monty Python comedy troupe, gave a terrific lecture on creativity.  He offered some wonderful reflections about the creative process.  Here's an excerpt: 

There is one negative thing that I can say and it's negative because it's easier to say what creativity isn't...  a bit like the sculptor who when asked how he sculpted a very fine elephant explained that he'd taken a big block of marble and then knocked away all the bits that didn't look like an elephant.  The negative thing is that creativity is not a talent.  It is not a talent.  It is a way of operating... When I say a way of operating, what I mean is that creativity is not an ability that you either have or do not have.   It is, for example, and this may surprise you, absolutely unrelated to IQ provided you're intelligent above a certain minimal level.  

Here's the video of the complete lecture: 

Thursday, October 25, 2018

The Value of "Stupid" Questions

Source: Hyatt Hotels
David Gelles interviewed Mark Hoplamazian, CEO of  Hyatt Hotels, recently for the New York Times Corner Office column.   In the interview, Hoplamazian describes his early days as CEO of Hyatt, when he was quite unfamiliar with the business.  He explains why "stupid" questions proved quite powerful.  

It was pretty intimidating in some ways. I came into the business, and I was pretty ignorant. I knew a lot about the financial and tax structure of Hyatt because I had helped put the company together in the whole family reorganization. But I didn’t really know the business; I didn’t grow up in the business. That level of ignorance was super powerful because it just let me ask a whole bunch of stupid questions, which served me extremely well. Those simple questions often led to interesting discussions about why we do certain things the way we do, and that led to changes. But it was organic as opposed to me coming in thinking that I knew better. It was actually the result of inquiry.

Hoplamazian's comments about the value of "stupid" questions speak to the importance of bringing some non-experts into the decision-making process on your team from time to time.  Experts may be wedded to the past, to the way things have always been done.  They can be trapped by the conventional wisdom.  Smart people with a broad range of other experiences can bring fresh perspective. They can ask, "Why are we doing it this way?"   Done effectively, these questions don't have to be threatening.  They don't have to disparage the existing ways of working.  They can simply inquire, seeking to understand, rather than being critical.   The right quesiton might not be "Why do you do it THAT way?" Instead, it might be, "Help me understand the rationale for that approach or that process." 

Wednesday, October 24, 2018

Great Mentoring: Let the Protégé Lead

Source: Max Pixel
Diane Brink, IBM's former Chief Marketing Officer for Global Technology Services, shared her thougths recently with Kellogg Insights regarding the mentor-protégé relationship. How do you make this relationships as mutually beneficial as possible? She offers a number of good recommendations in an article titled, "5 Ways to Get the Most out of a Mentor–Protégé Relationship."  My favorite suggestion is: "Let the Protégé Lead."  Here is Brink's advice, as summarized by Kellogg Insights:

For protégés, commitment means more than sitting back and nodding in agreement with every suggestion the mentor makes. Mentees need to own the relationship.  Brink describes a protégé who would always send an agenda for their mentoring meeting a week beforehand: “I thought ‘Oh, my gosh. This guy is really thinking about not only how he can use my time effectively, but how he can really move the relationship to something that is going to be beneficial for him.’ That was pretty impressive.”

In any mentoring situation, it should be the protégé who sets the priorities. Brink likes to remind mentees that they really drive their own careers.  “You’re going to have a lot of people providing their point of view on what you should be doing with your career,” she says, “and it’s not their decision.”  Agreeing to make the mentee’s agenda a priority keeps him or her from being swayed towards a career path he or she may not be interested in following. And it takes pressure off the mentor to act as an all-knowing guru.  

Monday, October 22, 2018

"I Don't Know All The Answers"

The Wall Street Journal's Vanessa Fuhrmans interviewed IBM senior executive Bridget van Kralingen several months ago.  Kralingen comments on the traits and habits of the most effective leaders that she studied as an industrial psychologist, and how she tries to embrace those behaviors now in her role as a senior leader at IBM.  She explains:

I saw it was the leaders who were the most curious, the most open to change and learning themselves who were the most successful in a very changing, unstable world, which is the world we’re in today in many ways. I also saw that leaders who loved their companies, their work, their teams were able to do things that other leaders couldn’t.

I’ve always asked my teams if they’d like feedback. And then I will always ask them for the same thing. I find that if you keep on asking for it and then show you act on it, you will generally get it. The other thing I do is say to people, “I don’t know all the answers. I need your help.” I make sure I’m able to show positivity but also the vulnerability to be open to getting the feedback.

To me, the most important statement to her people is:  "I don't know all the answers. I need your help."  That statement promotes psychological safety, encourages people to express dissenting views, and promotes learning and improvement.  Many leaders are afraid to express such a sentiment to their team members.  Why?  Either they don't believe that they need the help, i.e. they think that they already have all the answers, or more likely, they are afraid to be seen as indecisive or incapable.  They are afraid to admit what they do not know.  However, acknowledging that you don't have all the answers is the important first step to actually gathering the information and input that you need to make sound decisions.  

Friday, October 19, 2018

Four Questions Each Leader Should Ask

Bill Boebel, serial entrepreneur and CEO of Pingboard, has written a good column for Fast Company about the four questions each leader should ask themselves.  Boebel argues that leaders need to focus on these four questions in order to build a productive work environment for their team members.





Source: Blue Diamond Gallery

Four terrific questions.  Here's a suggestion: Each leader should print these questions on a poster and put them up his or her office.  Stare at them every day.  Ask others to provide them regular evaluations of how well they are doing on these four issues.  

Tuesday, October 16, 2018

The Effect of Competition on Creativity

Source: Pixabay
Daniel Gross has published an interesting NBER working paper titled, "Creativity under fire: The effects of competition on creative production." Gross writes the following in describing his key findings:

This paper studies the incentive effects of competition on individuals’ creative output, exploiting a unique field setting where creative activity and competition can be precisely measured and related: tournaments for the design of commercial logos and branding. Using image comparison tools to measure originality, I show that intensifying competition both creates and destroys incentives for creativity. While some competition is necessary to induce high-performing agents to develop original, untested designs over tweaking their existing work, heavy competition discourages effort of either kind.

The key idea here is that a certain amount of competition can encourage people to continue exploring original ideas, rather than simply becoming conservative and making only incremental changes to previous work because of positive initial feedback.  Of course, as Gross notes, the ability to find just the right level of competition to properly motivate creative work is very tricky.  He describes the challenge of achieving the "Goldilocks" level of competition - just balanced in the optimal way.  It's hard to do.  The paper is interesting, nonetheless, because it seems to counter some arguments that have been made in the past suggesting a simple negative relationship between competition and creativity.   In short, those past arguments tend to be very negative toward extrinsic rewards and favor methods for fostering intrinsic motivation as a means of encouraging creative work.   They favor collaboration over competition.  Gross' work suggests that competition can play a favorable role, but only if managed carefully.  

Monday, October 15, 2018

Solo Founders or Teams: Who Has More Success?

None of us is as smart as all of us. Right?  Teams are smarter and more effective than individuals at challenging tasks, right?  Not so fast.  New research by Jason Greenberg and Ethan Mollick examines new ventures.  They found that solo founders tend to achieve better results, at least in terms of certain metrics, than entrepreneurial ventures founded by a team of people.  Here's an excerpt from an NYU summary of the research:  

Common wisdom has assumed that the value of having a team is additive or even synergistic, based primarily on the theory that starting a business requires a portfolio of skills and resources that few individuals possess. However, in “Sole Survivors: Solo Ventures versus Founding Teams,” Professor Greenberg and his co-author, Wharton’s Ethan Mollick, showed that companies started by solo founders survive longer and generate more revenue than those started by teams, while not performing significantly differently across various operating categories.

The authors’ unique dataset was comprised of companies that were crowdfunded via the Kickstarter site between 2009 and 2015, were eventually established formally, and whose performance could be followed for several years. For-profit and nonprofit companies were analyzed separately, and collectively they raised $151 million in crowdfunding and generated approximately $358 million in revenue.

Of course, these results do not suggest that teamwork is not essential for a new venture.  It speaks to the possible frictions and dysfunctional conflict that can occur when you have multiple founders though.  Moreover, it may speak to the speed of decisions in situations where multiple founders must come to an agreement on key strategic choices.  Still, one should not conclude that a solo founder does not need  a strong team around them.   Collaboration is essential in many aspects of a startup, regardless of the structure at the very top.  

Saturday, October 13, 2018

Knowing Other People's Salaries at Work

In recent years, we have heard some people advocate for pay transparency in organizations.  The recommendations in this regard have received a great deal of publicity, with arguments for and against the concept being made in the press.  Now we have a well-crafted research study that examines the topic.  How does knowledge about fellow employees' salaries affect a worker's motivation and effort? Zoë Cullen and Richardo Perez-Truglia examined this question in a paper titled, "How Much Does Your Boss Make? The Effects of Salary Comparisons."  The scholars conducted a study of over 2,000 workes at a large commercial bank.  They discovered that knowledge about your manager's salary can enhance your motivation.  However, having salary information about your peers can be demotivating.  Here's a summary of the findings from HBS Working Knowledge:

The research results were sometimes counterintuitive, Cullen says. For example, employees worked harder after discovering how much their managers made. For every 1 percent higher in the perceived salary of a manager, employees clocked 0.15 percent more hours.  
But the employees’ extra effort diminished as the difference in rank between employee and manager widened. In some cases, “We were looking at how employees responded to managers who were five promotions away and who they explicitly thought were in positions they themselves would never achieve,” Cullen says. In those cases, the work-harder reaction was much smaller but did not become negative. When employees received salary information about managers who were closer to their own rank, they may have found the salary difference aspirational—just a promotion or two away, she says.

While knowledge of managerial compensation seemed to coax more effort out of workers, the exact opposite happened when employees learned what peers were making. For every 1 percent higher salary a co-worker earned over the employee’s expectation, they worked 0.94 percent fewer hours, the researchers found.  
In a global environment where companies are scrambling to find qualified workers to fill vacancies, another important finding emerged. When an employee learned a co-worker’s salary was 1 percent higher than estimated, chances rose by 0.225 percent that they’d leave the company.

Wednesday, October 10, 2018

In Search of Humble Bosses

Source: Flickr
Sue Shellenbarger has written a column for the Wall Street Journal today titled, "The Best Bosses are Humble Bosses."  Schellenbarger notes that many firms are now trying to assess humility right from the start, during the hiring process, because they believe that it's a vital attribute of effective leaders.  She cites a variety of studies suggesting that humility can be a positive characteristic for leaders.   When leaders exhibit humility, positive results include better collaboration among team members, more team learning, and lower employee turnover.  She doesn't discuss psychological safety specifically, but I suspect that humility on the part of leaders tends to make it safer for team members to speak up, and that open dialogue and collaborative learning leads to better team performance.    Here's Shellenbarger's summary of some of the research findings: 

Workplace researchers often rely on subordinates’ reports to assess leaders’ level of humility. In a 2015 study of 326 employees working on 77 teams at a health-care company, researchers asked team members to assess their managers’ humility, based on a scale including their willingness to learn from others or admit when they don’t know how to do something. Team members also assessed their teams’ attitudes and performance.

Teams with humble leaders performed better and did higher-quality work than teams whose leaders exhibited less humility, according to lead researcher Bradley P. Owens, an associate professor of business ethics at Brigham Young University.  The performance gains held up independently of how much team leaders exhibited other positive leadership qualities unrelated to humility.

I know what you might be thinking at this moment.  What about Jeff Bezos, Elon Musk, Steve Jobs, Larry Ellison, Bill Gates, and the like?  They don't strike us as very humble leaders, yet they revolutionized entire industries in many cases.  Of course, Shellenbarger is not suggesting that you MUST be humble to succeed.  However, she's making a case that, for most of us, pulling off the arrogant and largely benevolent dictator model of leadership is highly likely to lead to failure!  The bigger question is: Can firms actually assess humility effectively during the hiring process?  Plenty of research suggetsts that the hiring/screening process at many firms is highly problematic.  So, there's more work to be done, even if we know that humility is a desirable characteristic.   

Tuesday, October 09, 2018

Disagreeing with the Boss

Vivian Giang has written a useful article for Fast Company about how to disagree effectively with your boss or other senior leaders in your organization.  She draws on the expertise of Priscilla Claman of Career Strategies, Inc.  Giang provides several recommendations:

1.  Know Your Boss' Decision-Making Style

Are they influenced by data and formal analysis?  Do they worry about how their decisions affect interpersonal relationships?  In short, you need to know what type of argument or presentation will be most influential with your boss.  Speak and make your case in a format and style that will make the most impact with that person.  

2.  Recruit Credible Allies

Don't go it alone.  Find others who can rally behind your argument and stand with you.  Perhaps they can even join you in making the case to your boss or other senior leaders.  Or, perhaps, you can identify the leader's confidante or trusted adviser.  Make your case first to that person, as they may be your best channel for presenting a constructive dissent and persuading your boss to listen carefully.  

3.  Identify Your Baggage

Consider your past experiences and your reputation/track record.  Now put yourself in your boss' shoes.  What will they automatically assume about you and your argument?  What will they expect of you?  If you can recognize any baggage that you may bring to the conversation, you can anticipate roadblocks and objections much more effectively.  

Monday, October 08, 2018

Gender Diversity and Venture Capital Firm Performance

Source: Pixabay
HBS Professor Paul Gompers and his colleagues have conducted impactful research on the impact of gender diversity, or lack thereof, in the venture capital industry.  Not surpisingly, they found that venture capital firms tend to have homogenous management teams.   Most of the partners tend to be white men with liberal arts undergraduate degrees and MBAs.  A significant portion attended Harvard Business School.   The representation of women in the venture capital world has not increased much since 1990, according to Gompers' research. He notes, "“We really saw how powerful the force of ‘birds of a feather flocking together’ was. The more similar you are to someone, the more likely you are to work with them.”  The scholars discovered that, "Partners who came from the same school achieved an 11.5 percent lower success rate for acquisitions and IPOs; those who were ethnically homogenous saw a success rate 26 to 32 percent lower."  

To disentangle correlation from causation, Paul Gompers and Sophie Wang conducted another fascinating study.  They reviewed alumni data from universities that accounted for most of the venture capital partners in their sample. They discovered that partners with daughters tended to hire more women as partners in their firms. Then they examined venture capital fund performance, and they found a substantial advantage for funds with at least one woman serving as a partner. According to HBS Working Knowledge, "While the median venture capital fund return is around 14 to 15 percent, funds with a female partner returned 16 to 17 percent. Moreover, having women as partners increased the percentage of successful startups supported by those firms—that either went public or sold for more than their total capital investment—from about 28 percent to about 31 percent." 

Friday, October 05, 2018

Reducing Leader Overconfidence

Daniel Walters, Philip Fernbach, Craig Fox, and Steven Sloman have developed an intriguing and apparently quite effective technique to curb overconfidence.  They published their research in a paper titled, “Known Unknowns: A Critical Determinant of Confidence and Calibration."  Walters described the key findings and implications from this research in a web essay published by INSEAD,  where he serves on the faculty. 

The scholars describe a technique in which people are asked to "explicitly consider the missing pieces of information in a judgment." In other words, they try to identify and write down what they don't know about a situation, i.e. what are the key unknowns? They compared this methodology to another technique often recommended for improving decision-making effectiveness: devil's advocacy. Walters reports that identifying unknowns can be more effective than devil's advocacy. Why? In one of their experiments, they examine two situations: one setting in which people were overconfident and another where they were underconfident. They found that devil's advocacy reduces confidence in both settings. On the other hand, considering unknowns only reduces confidence in the situation where people were initially overconfident.  Devil's advocacy proves to be a "blunt instrument" in their words.  Here's Walters' summary of the research:

The third study allowed us to test whether considering the unknown reduced confidence or improved calibration. In many domains, people demonstrate underconfidence and are overly cautious. A true improvement in calibration would mean that considering the unknowns reduces confidence when people are overconfident, but not when people are well-calibrated or underconfident. In this study, participants answered two sets of general knowledge questions. The questions were divided into nine knowledge domains (e.g. state populations, calorie counts), for which participants varied in their level of overconfidence versus underconfidence. As in the second study, participants either considered the unknown, or considered the alternative (the devil’s advocate technique). Both interventions were compared with a group which had no prompting to ponder additional information. As we predicted, considering the unknowns only reduced confidence when it was misplaced (in overconfident domains), whereas playing devil’s advocate had an equal impact in the subject areas that encouraged overconfident and underconfident responses.

The research is intriguing.  I would offer two caveats.  First, I would argue that many organizational leaders display overconfidence much more frequently than underconfidence.  Second, I have come to believe that WHO plays the devil's advocate, WHEN they play that role, and HOW they serve as the devil's advocate matters a great deal.  Indeed, it is a blunt instrument, particularly if not used properly. However, with some care, the technique can be deployed with much success.   

Thursday, October 04, 2018

CEO Tenure: What Does the Evidence Indicate?

John Stoll has published an interesting article in the Wall Street Journal today about CEO tenure. He  describes academic research by Xueming Luo, Vamsi K. Kanuri, and Michelle Andrews. Their work examines the optimal tenure of a chief executive. The scholars conclude that the optimal tenure is roughly five years. Here's Stoll's summary of their work, with some comments from the researchers: 

We tend to celebrate long tenure, but there is evidence that boards are becoming less patient, and that’s a good thing. Researchers, studying a decade’s worth of financial and share-price performance of hundreds of large-cap companies, found that the “optimal tenure length” is 4.8 years.

Xueming Luo, a professor at Temple University’s Fox School of Business and one of the authors of a widely cited 2012 study, said CEOs are most effective in the initial years because they are more open to outside opinions and less risk-averse. “The search for external knowledge tends to end,” he told me this week.

“It eventually becomes a situation where the CEO surrounds themselves with a lot of ‘yes’ people,” Michelle Andrews, a coauthor of Dr. Luo, said. “At a certain point, there are diminishing returns.”  Leaders operating in declining markets and other volatile environments, Dr. Luo said, tend to turn inward faster than if things are going smoothly.