Thursday, December 31, 2020

Favorite Podcasts of 2020

Earlier this week, I listed some of my favorite books from 2020.  Today, I turn my attention to podcasts.  Like many of you, I listen to some very popular ones about which most readers will be familiar (e.g., Freakonomics, How I Built This, Hidden Brain).  However, I thought that I would feature three original podcasts that truly proved thought-provoking this year, and perhaps may be unfamiliar to some of you.   

Cautionary Tales: One of my favorite authors, Tim Harford, has created this unique podcast. As he says, the series features stories of awful human error, tragic catastrophes, daring heists and hilarious fiascos. Sounds morbid, right? Well, as a student of failure, I find the episodes to be full of important lessons that we should all learn. Harford writes for the Financial Times, and he has authored several terrific books, including Adapt: Why Success Always Starts with Failure.

WeCrashed: Here we learn about the incredible story of WeWork co-founder and CEO Adam Neumann. The podcast traces the remarkable rise and rather sudden collapse of WeWork.  The podcast doesn't simply identify the flaws in the firm's business model.  It examines the problematic characterisics of culture at the firm and explores the deficiencies in Neumann's leadership.  Some of the stories seem like pure fiction, except they are indeed true.  

Land of the Giants:  This podcast features two terrific seasons.   In the first season, the creators trace teh story of Amazon's rise and explore the key dimensions of the business model and culture.  In the second, even more entertaining and insightful season, the podcast dives into the strategy and culture at Netflix.  You hear directly from key players, and you learn about the key decisions that were made that shaped the evolution of both firms. 

Monday, December 28, 2020

My Favorite Books of 2020

As the tumultous year of 2020 comes to a close, I thought I would share a few of my favorite reads from the past year (note: a few of these books were actually published in 2019).   Here we go, in no particular order:  

A riveting account of Winston Churchill's leadership during the early portion of World War II.   Larson combs a variety of primary sources to describe how Churchill, his family, and his inner circle navigated the Battle of Britain.   I've read many biographies of Churchill, but I found myself learning something new on many occasions as I read this book.  Churchill had many flaws, and Larson documents them.  However, we also learn so much about Churchill's brilliance as a wartime leader.   

Insead Professor Erin Meyer has teamed up with Netflix co-founder and CEO Reed Hastings to write a terrific book about the unique culture at the streaming giant.  The book left me (pleasantly) with as many questions as answers.  I'm not sure other firms can adopt elements of the Netflix culture successfully, nor am I certain that they should try.  However, it seems to have worked incredibly well at Netflix, and it does have many merits.  For me, the most interesting part focused on the "Netflix innovation cycle."  I appreciated the extensive discussion about building a culture of candor, particularly given my work.  Having said that, I do worry that other firms could encounter serious challenges trying to adopt the Netflix approach on candid conversations.  

I just devoured all the Heath brothers books in the past.  Here, Dan Heath strikes out on his own and provides us an illuminating book about how to prevent catastrophes, rather than spend our time constantly fighting fires.   Heath digs into serious problems in many different facets of society, and he blends the findings of rigorous research with his fine story-telling skills and inductive reasoning capabilities.  Heath's work is full of important insights about problem-finding and error detection.   The book could not be more timely too, given the COVID-19 pandemic.  

Mike Isaac's book describes the rise and fall of Uber under founder and CEO Travis Kalanick.  Isaac offers a cautionary tale about a unique startup culture run amok and the devastating deleterious effects that emerged.   He explains the values that Kalanick championed, how they helped him build a high-growth company that attracted and delighted many customers.  Then, he demonstrates how those same values led managers to engage in a set of ill-advised behaviors, and how those actions harmed the company and many employees a great deal.  It's an easy read, and you find yourself wondering at times if it's a true story and a great work of fiction.  

Pulitzer Prize winner Edward Larson has written this fascinating dual biography of two central figures in the birth of the United States of America.   He brings to life, in vivid detail, the unique relationship between George Washington and Benjamin Franklin - perhaps the two most important and influential of our founding fathers.   In business, we often examine the interesting relationships between fascinating pairs that have shaped the founding and growth of successful companies (Moore & Grove, Jobs & Wozniak, Brin & Page, etc.).   Here we have a well-researched, engaging narrative about the partnership that helped launch a revolution and shaped a nation.  

The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company 

Bob Iger has written an insightful account of his career, culminating in his tenure as CEO of Disney.  He reflects on the many lessons he's learned, as he turned Disney around after the challenging final years of the Eisner era.  One of my favorite Iger lessons is this one:  It’s not good to have power for too long. You don’t realize the way your voice seems to boom louder than every other voice in the room. You get used to people withholding their opinions until they hear what you have to say. People are afraid to bring ideas to you, afraid to dissent, afraid to engage. This can happen even to the most well-intentioned leaders. You have to work consciously and actively to fend off its corrosive effects.

Tuesday, December 22, 2020

Leading Change: Focus on Desired Outcomes First, Not Activities


MIT Senior Lecturer and management consultant Elsbeth Johnson has written an interesting article for Strategy+Business about why many strategic transformation efforts fail (though I'm not a fan of the article title).  She argues that we often blame middle managers for resisting change efforts and putting up various obstacles.  However, she finds fault with senior leaders when examining many failed organizational change initiatives.  Johnson argues that leaders aren't focusing on the right type of work when launching transformation efforts.  She argues that leaders jump into the planning and execution of activities too quickly, rather than stepping back and clearly articulating the desired outcomes first.  She explains: 

Be clear about what you want. A new strategy needs to specify a target outcome — i.e., the change leaders want to produce — and, ideally, that target outcome should have three features. It needs to be outcome-based, not activity-based; it needs to have a financial target (such as improving operating margin by 20 percent); and it needs to be ambitious enough, with a sufficient time frame, to create fundamental, not merely cosmetic, change.  A target outcome with these three components enables managers to identify the projects, initiatives, and work streams that should be tackled — at different levels and in different parts of the business — in order to deliver it.

Johnson argues that leaders default to working on activities because that work is easier and more enjoyable for many individuals than clarifying priorities, persuading others to change, and motivating people to work toward ambitious new goals.  

The trap leaders fall into is their desire to specify activities rather than the outcomes these activities will deliver. In my experience, they do this because they find this work is easier and more enjoyable. Their “laziness” here is that they prefer to default to this simple, enjoyable work — picking projects to work on — when they ought to be doing something very different: clarifying and selling the change.

For example, the senior leadership team of a midsized technology company whose growth was plateauing had agreed the firm needed a radically different strategy. They’d asked me to help them develop the new strategy — including agreeing on the critical outcomes it should deliver and then making some clear choices about target markets and segments. But before these decisions had been fully discussed, let alone agreed upon, this senior team jumped to activities. One of the team members remarked: “There is one acquisition I think we should look at again,” while another said, “We need to work out the details of that China joint venture before the end of this quarter.”

These individual activities might well have turned out to be important, but they were just that — activities. They represented the “how” of the strategy, rather than the “what” or “why.” And until the team had clarity on what the strategy should deliver — in this case, we decided on a target of 12 percent return on capital within four years — it was premature to make any decisions about how that outcome might be delivered. Before deciding on the China joint venture or a particular acquisition, the team needed the 12 percent outcome nailed down.

The problem here is how a lot of leaders define work. A member of this same team asked me at the end of one strategy session, “When are we going to decide what we’re actually going to do?” — by which he meant deciding on which activities to pursue. That is what too many senior leaders still consider to be “work” — when what they should be doing is the work of clarifying and articulating the outcomes a change will produce. If leaders are primarily using their time to choose activities, not only does that deny managers — the people closer to the operations and the customers — the opportunity to choose how the strategy will be delivered, it also invariably means that leaders don’t have the time to work on clarifying and selling the change, which is work that really only those executives can do.

It may sound simple and obvious, but my experience does suggest that many organizations suffer from a lack of alignment regarding goals, priorities, and expectations.  Leaders often overestimate how much alignment actually exists...and they overestimate by a wide margin in many instances.  

Friday, December 18, 2020

Developing People: Focusing on the What AND the How

Source: Pixabay

Adam Bryant recently posted a terrific interview with Matt Schuyler, Chief Administrative Officer at Hilton.  He asked Schuyler about a key leadership lesson learned during his career.    Schuyler offered this anecdote about his time at PWC: 

In a professional services firm like Price Waterhouse, it’s an up-or-out environment. Around year 11 or 12, you know it’s time for consideration for partnership, which is the pinnacle. In the spring of that twelfth year for me, I got a call from my boss who was based in London, and he said, “Can you fly over to London to see me tomorrow?”

I arrived early the next morning, and he said, “Let’s go grab a pint.” And sure enough, the pubs were open at 8:30 in the morning. So we sat down and he said, “I have some news for you. You didn’t make it.” This was devastating because I’d spent the better part of twelve years leading up to this moment, and in the previous year I had accomplished all my objectives.

But then he said, “The good news is that it’s a ‘not now,’ not a ‘no never, ever.’” And here’s the lesson he shared: “We were not measuring you on the ‘what.’ We were measuring you on the ‘how,’ and you got more done than we’ve ever seen anybody get done, so you’ve checked the ‘what’ box. On the ‘how,’ you created some waves along the journey because you were such a zealot in getting a lot done. So you have a do-over. Take this next year, focus on the how, not the what.” The next year I made partner and I try to remember that lesson every day when I come to work.

Two important lessons jump out at me from this story.  First, the partners did not evaluate Schuyler simply based on WHAT he achieved.  They cared about HOW he did it as well.  That's crucial.  Second, the partners didn't give up on Schuyler simply because he had stumbled on the HOW.  They offered him constructive feedback and gave him an opportunity to course correct.  He did and achieved further success at the organization.  Of course, some folks won't be able to internalize that type of feedback and make the necessary changes.  However, many people will be able to do so if they are offered the right feedback, coaching, and development.  

Tuesday, December 15, 2020

Should I Cater to Others or Stay Authentic?


Imagine that you are headed to a job interview, pitching your business plan, or making a presentation to colleagues.  Should you try to align your words and actions to the other party's preferences and interests?  Or, should you simply remain authentic?   In other words, is catering to others the right strategy if you wish to persuade and influence others?   Scholars Ovul Sezer, Francesca Gino, and Laura Huang asked those very questions to over 500 working adults.   Two-thirds of the respondents indicated they would cater to the other party, and over 70% thought that would an effective strategy.   Are they right?  

Sezer and her colleagues studied that question in a series of studies.  They published their results recently in a paper titled "“To be or not to be your authentic self? Catering to others’ preferences hinders performance.”    The Kenan-Flager School of Business at UNC-Chapel Hill recently profiled this research.  Here's an excerpt from their description: 

In one study, Sezer and her colleagues recruited 258 students and working adults and split them into two groups – some serving as interviewers for a fictional job, some as interviewees. They randomly assigned interviewees to one of two strategies: Either to try to cater to the interviewer’s perceived interests or be authentic.  The interviewees who were told to cater reported higher levels of anxiety. The interviewees who were told to act authentically, on the other hand, got higher performance ratings from the interviewers.

Perhaps most interesting, though, were the results of a real-world competition. Some 166 entrepreneurs participated in a fast-pitch competition at a private university in the Northeast, each striving to become one of 10 semifinalists. They presented their business ideas to a panel of three judges – experienced angel investors.

Afterward, the entrepreneurs completed a short questionnaire for Sezer and her colleagues. Likewise, the judges filled out short score cards for each pitch they heard.  The entrepreneurs who chose to cater to the judges rather than acting authentically had worse outcomes – based both on whether they ended up as semifinalists and the judges’ opinion about the viability of their ideas.

Of course, this research does not suggest that you should ignore the other party's interests and preferences completely.   You need to understand your audience, do your homework, and think very carefully about how they are most likely to be persuaded.   However, it is a careful balancing act.  It's one thing to know your audience, and it's quite another to think you can fool them about your own preferences, interests, and desires.  In sum, give your audience credit.  They are going to see through the B.S. in most cases.  Honesty is indeed the best policy.  

Friday, December 11, 2020

Beware the Gatekeeper

Source:  Wikimedia

Every leader has a gatekeeper or two amongst their team of closest advisers and confidantes.  These folks serve a useful role in many cases.  They manage the flow of information, so that the leader can use his or her time wisely.  They help synthesize data, frame the pros and cons of particular options, and help leaders assess complex situations.    They filter out issues that do not need to clog the leader's busy schedule.   Unfortunately, gatekeepers also sometimes filter out the bad news, even if unintentionally.  They also sometimes find themselves only telling the leader what they think the individual wants to hear.   For that reason, I wrote years ago about the merits of occasionally "circumventing the gatekeepers" on your team, to insure that critical data and perspectives are not being filtered out in a manner that could lead to disastrous results.  In the book, Know What You Don't Know, I wrote: 

If leaders hope to uncover key problems in their organizations before they mushroom into large-scale failures, then they must understand why subordinates may choose to filter out bad news. They must be wary of how their own behavior may cause their advisors to hold back dissonant information. Leaders clearly must create a climate where people feel comfortable coming forward with new data, even data that might go against the dominant view in the organization. To become effective and proactive problem-finders though, leaders must go one step further. From time to time, leaders must circumvent the filters, reaching out beyond their direct reports to look at raw data, speak directly with key constituents, and learn from those with completely different perspectives than their closest advisors. In short, leaders need to occasionally “open the funnel” that typically synthesizes, packages, and constricts the information flow up the hierarchy. They have to reach down and out, beyond the executive suite and even beyond the walls of the organization, to access new data directly. They have to find information that has not been massaged and packaged into a neat, slick Microsoft PowerPoint presentation. 

Later in the same chapter of the book, I profiled David Tacelli, CEO of LTX - a semiconductor test equipment company headquartered in Massacusetts.  In an interview during my research, Tacelli described how important it was to not rely solely on one or two voices. Instead, he advocated a systematic approach to seeking different voices over time.  Here's an excerpt: 

In 2005 David Tacelli became the CEO of LTX Corporation, a producer of semiconductor test equipment located in Norwood, Massachusetts. Tacelli has implemented a rigorous customer review system to review the company’s major accounts on a regular basis. He aims to “surface customer service problems early” through this routine evaluation process. He has learned, though, that the system can become stale if the same senior manager reports on a particular customer at each review meeting. As he says, “They tend to filter. They think that they can fix the problem. Therefore, they do not tell anyone until far too late.” Therefore, Tacelli makes sure that everyone involved with a particular client presents over time at these review meetings. He explains: 

“I rotate presenters very purposefully. If a problem surfaces at a particular meeting, I will go back to the person that presented at the previous meeting. I ask them if they were aware of the issue at the time of their presentation. If so, then I probe as to why they did not surface the issue sooner. The key is that I do not make that a blame game. I am simply trying to get them to understand that I want to hear about the issues sooner so that we can work together to fix them. Of course, I do look for patterns of mistakes. If someone repeatedly holds back on me, then I hold them accountable.” 

Tacelli asks his managers to limit the number of slides they present at these meetings. He says, “I want them to talk with me and one another, not to read off of slides.” He explains that his role is to “play Jeopardy with them… to use the Socratic method to find out what the key issues are, to see what we know about the causes of particular customer complaints.” 

Wednesday, December 09, 2020

How to Seek Constructive Feedback: 3 Questions to Ask

Source: Pixabay

We all appreciate praise and recognition.   Constructive criticism?  Not so much.   It's like spinach.  We know it's good for us, but we aren't eager to cook it for supper.   Of course, some managers aren't very effective at delivering feedback either.   Thus, have a particularly thorny problem: leaders who don't provide feedback in a constructive manner, and team members who don't seek it or are not willing to listen. In a recent Fast Company article, leadership expert Tomas Chamorro-Premuzic points out that many of us also falter when we do seek feedback.  Why?  He argues that we don't ask the right questions when soliciting feeback from others.  Here's an excerpt:

Since it’s often unkind to criticize others, especially when you care about them, you need to make it easier for people to do it. This means asking the right questions. Don’t ask people whether they liked what you did or how you do something, and don’t ask questions such as “Was this okay?” or “Did I do a good job?”  Instead, ask

  • “What would you have done differently?”
  • “What are the two things that they didn’t like so much?”
  • “If you can change one thing about X going forward, what would that be?”
Tell them you won’t take it personally, and then don’t take it personally. Tell them you value their opinion and are struggling to find people who help you get better, so if they want to help you, they need to improve your ability to identify blind spots and key areas for improvement.

Then, be thankful. Feedback is always a gift, and there is no bigger gift than constructive critical feedback because it is daunting and risky to provide it. There is a higher cost to honest negative feedback than fake positive feedback, but the former makes you much better than the latter.   

The three questions suggested by Chamorro-Premuzic are right on the mark.  They provide an opportunity for concrete, actionable feedback.   They solicit input that is specific, not generic.   They look forward and focus on what needs to happen differently in the future, rather than only dissecting past conduct.  

Monday, December 07, 2020

Dangers of 'Yes' People

Please consider taking a look at this new article in Financial Management magazine titled, "How Leaders Can Avoid the Dangers of 'Yes' People" - Thank you to Hannah Pitstick for interviewing me during her research for the article, along with others such as Kim Scott, author of Radical Candor.

Friday, December 04, 2020

Should We Self-Promote or Hide Success?

We dislike self-promoters, right?   Is it better to hide our success than shamelessly self-promote?  Many people may think it's appropriate and effective to hide success.  We don't want to seem boastful or arrogant.  Well, perhaps the conventional wisdom may not be correct.  Annabelle Roberts, Emma Levin, and Ovul Sezer have published a fantastic new paper titled "Hiding Success" in the Journal of Personality and Social Psychology.  

The scholars point out that self-promotion is quite typical these days, yet in their research, they also find that many people hide their successes at times.  Why?  They worry about how others will perceive them if they self-promote too much, or in some inappropriate manner. 

Roberts and her colleagues show that hiding success may have harmful effects on our interpersonal relationships.  They write:

"Unlike hiding other information, hiding success signals that a communicator has paternalistic motives, which targets find insulting.  We find that hiding success has relational costs in public and private settings as well as in response to direct and indirect questions.  Additionally, the negative reactions to hiding success have behavioral consequences:  Targets are less trusting of, less willing to cooperate with, and less willing to devote financial resources to maintaining their relationship with communicators who hide their success." 

In sum, perhaps a lack of transparency can have some significant costs.  That doesn't mean we should be arrogant, or that we should boast repeatedly about our accomplishments.  However, we should take great care about intentionally shielding others from the truth.  Honesty, it appears, is indeed the best policy.  

Wednesday, December 02, 2020

Creativity Technique: Keep a Da Vinci Notebook

Source:  Wikimedia
In my book, Unlocking Creativity, I wrote that our schools sometimes exhibit a bias against creativity, much as our corporations do.  Much like many business executives, teachers and professors sometimes talk a good talk about creativity, but they fail to walk the walk.  They claim that they value creativity, when in fact, they desire compliance and control. Not all teachers though... I read recently about a wonderful technique employed by a number of teachers. 

Lauren Cassani Davis is a teacher at the Feynman School in Potomac, Maryland. In an article titled 
Creative Teaching And Teaching Creativity: How To Foster Creativity In The Classroom, Davis explains the power of encouraging students to keep Da Vinci notebooks.  

“Describe the tongue of a woodpecker,” wrote Leonardo Da Vinci on one of his to-do lists, next to sketching cadavers, designing elaborate machines, and stitching costumes. Da Vinci filled over 7,000 notebook pages with questions, doodles, observations, sketches, and calculations. He nurtured creativity as a habit and skill every day—and it paid off. Da Vinci’s work reshaped multiple disciplines, from science, to art, to engineering.

I was intrigued when my co-teacher suggested using “Da Vinci” notebooks in our 2nd grade classroom. The idea was simple: students keep notebooks, independent of any academic subject, where they can try creative exercises and explore personal passions. I ordered a stack of bound notebooks for the occasion.

Within a week, the results astounded me. Whenever a student’s thinking diverged from our lesson objectives, or their question glimmered with the spark of a potential new interest, we sent them to their Da Vinci notebook. “Write it down!”—a refrain chanted countless times a day. One day, we did a “100 questions challenge,” inspired by the book How to Think Like Leonardo Da Vinci by Michael Gelb. The goal: Write 100 questions, in one sitting, about anything. The 2nd graders asked questions like: How does your brain work? Why do we have music? Do tiny people live on atoms? Why am I not a tiger? How do keys open door locks? Why do things have to die? Why did Beethoven write an ode to joy if he was so grumpy? Why aren’t all cars electric?

By the end of the year, the Da Vinci notebooks were gloriously full. 

Interestingly, many great innovators throughout history kept journals:  Curie, Edison, Einstein, Darwin, and Twain - to name just a few.   Some of the most successful leaders take time to reflect each day.  I've written about former Baxter Healthcare CEO Harry Kraemer's daily reflection ritual.   HBS Professor Joe Badaracco recently wrote a book about self-reflective leaders.  Many scholars and consultants have written over the past few years about the benefits of keeping a journal.  

The broader lesson: asking great questions is at the heart of creativity and innovation.  Don't jump to solutions.  Observe the world around you.  Explore the unexpected. Look for points of friction.  Inquire as to how things work and how they might be improved.  Look for connections between seemingly unrelated issues.  Then write it down before you forget.  

Monday, November 30, 2020

Selfless vs. Self-Centered Leaders


Adam Bryant wrote a brief Strategy+Business article two weeks ago about examining what it means to be a servant leader today. He makes a distinction between the self-centered vs. selfless leader. Bryant writes:

After all my interviews with leaders, and spending the last 30-plus years of my career working for some truly exceptional and truly horrible bosses, the key differentiator of leaders for me is whether they are selfless or self-centered. Do they see the people who work for them simply as assets to help them achieve their own goals, or do they consider it their responsibility to help their team grow and develop?... 

Maybe the self-centered leader will get faster results in the short run by ordering people around — a command-and-control boss of yore — but long-term leadership tests these days are about influence and attracting and building talent. These only grow when employees feel that their leader is more interested in their development and the broader success of the organization than in advancing his or her own career.

These selfless leaders recognize that their responsibility is to lift the performance of their team, which in turn will likely lead to more promotions if they are successful. Getting the best out of people is simply a matter of where leaders put their focus. Are they more concerned with what they are doing for their team, or with what their team is doing for them?

Build a great team, develop your people, prepare them to flourish in their current role and beyond.   Invest in expanding their capabilities.  You can do all that AND demand a great deal from them.  You can set high expectations and even raise the bar during challenging times.  Being selfless doesn't mean refraining from offering negative feedback, or setting easily attainable goals.   It simply means recognizing that you can't achieve greatness for your organization and personal success as well on your own.  You will need to work with and through others.  

Tuesday, November 10, 2020

Gratitude & Its Impact on Creativity

Source:  SDW Tech Integration Now

In the past, I have blogged about interesting research on gratitude in the days leading up to Thanksgiving. I thought I would share new research on the topic.  Nashita Pillay and her colleagues published a new study earlier this year (January 2020) in Organizational Behavior and Human Decision Processes.  The paper was titled, "Thanks for your ideas: Gratitude and team creativity."  The scholars examined the impact that expressing gratitude has on a team's ability to accomplish a creative task.  The researchers conducted two experimental studies.  In one study, they asked 1/2 of the participants to write about something for which they were grateful.  The other half were in the control condition.  Here is the instruction for the "gratitude" condition:

There are many things in our lives, both large and small, that we might be grateful about. For the next 5 min, think back and write in detail about why you are grateful or thankful for your team members. These team members include the people you just worked with and past team members. Please elaborate on why you feel grateful or thankful and provide contextual information where necessary.

Then, the research subjects worked in groups to accomplish a team creativity task (How might we creatively improve university education?).   The scholars asked the participants to generate ideas that were both practical and original.   What did they find?   Gratitude enhances the intellectual exchange of ideas within teams, and as a result, team creativity rises.  In a second study, they confirmed that gratitude has a more beneficial effect than positive emotions in general.  Why does gratitude have this positive impact on team creativity.  The scholars offer this explanation:

In grateful teams, initial ideas shared by team members would be more likely to trigger a response gesture by which the team works collectively to improve on the ideas.  The more effort teams with higher gratitude put into thinking and systematically integrating others’ ideas, the more likely that these ideas will become intriguing or novel—and would otherwise have been harder to generate (Stasser & Titus, 1987). Team members who feel grateful should be motivated to think deeply and thoroughly about how to reciprocate the benefits they have received from others and, in turn, engage in more information elaboration during team discussion, thereby supporting and building on others’ ideas.

Tuesday, November 03, 2020

Boeing 737 MAX: Company Culture and Product Failure

Source: Picpedia

My latest case study, Boeing 737 MAX: Company Culture and Product Failure, has been published this week by the University of Michigan's William Davidson Institute.  The case (and teaching note for faculty) are available directly from the institute, and they will be available soon from the Harvard Business Publishing website as well.  Here's a short description of the case study: 

In October 2018, Lion Air Flight 610 crashed into the sea soon after takeoff from Jakarta, Indonesia. Investigators identified a problem with the new Boeing 737 MAX jet’s stall-prevention system (known as the Maneuvering Characteristics Augmentation System, or MCAS). However, the Federal Aviation Administration (FAA) allowed airlines to continue flying the jet, while Boeing worked on some changes to the MCAS software. Less than five months later, Ethiopian Airlines Flight 302 crashed six minutes after takeoff. Once again, a faulty sensor triggered a misfire of the MCAS software. The system pushed the nose of the plane down repeatedly. The pilots could not determine how to stop the sharp descent, and the plane plunged into the ground at more than 500 miles per hour. Four days later, facing immense pressure from government officials around the world, Boeing grounded its entire fleet of 737 MAX jets.

The Boeing board of directors faced a multi-part dilemma. Was the current CEO still the right person to lead the company, or to what degree, if any, was he responsible for the position Boeing found itself in? Had something gone awry with the company’s culture after decades of engineering excellence? How did it come to happen that pilots suddenly experienced fatal difficulties flying the latest model of one of the world’s most-used passenger jets? And, how could Boeing ensure such a situation would not happen again?

Monday, November 02, 2020

Are You Spending Your Time Correctly?

Source:  Northwestern University
I'm looking forward to reading Harry Kraemer's new book, Your 168: Finding Purpose and Satisfaction in a Values-Based Life. Kraemer is the retired CEO of Baxter Healthcare and currently executive partner with Madison Dearborn Partners, a private equity firm based in Chicago. Kraemer also serves on the faculty at the Kellogg School of Management at Northwestern.   Kraemer describes a challenging exercise we can and should undertake to examine how we are spending our time each week.   Here's an excerpt from the Kellogg Insight description of the self-reflection activity:

Make a grid with six rows for each of the major aspects of your life, which Kramer defines for everyone as career, family, health, spirituality, fun, and volunteering. Then decide how much of your time you would ideally like to be devoting to each of these activities. Next, figure out how much you actually are devoting. Finally, calculate the difference.

“Only attempt this exercise if you’re in a really good mood,” cautions Kraemer, the former CEO of Baxter International who is now a clinical professor of leadership at Kellogg. The reason: very few people match what they want to be doing with what they actually are doing.

“Every one of us has 168 hours” in a week, Kraemer says. “Do you know where you’re spending your time? And are you spending it where you believe it matters most?”

The exercise indeed may be eye-opening and perhaps will challenge us in ways for which we are not fully prepared.  However, I think we could all benefit from this opportunity for self-reflection. 

Thursday, October 29, 2020

“If you try to be everything to everyone, you end up being nothing."


Suzanne Kapner has written a great article about The Gap in the Wall Street Journal this week. She describes in great detail the formidable challenge facing new CEO Sonia Syngal.  The long-running troubles at The Gap are summarized most eloquently by Ivan Wicksteed, former chief marketing officer at Old Navy (one of the retail chains operated by The Gap Inc.).  The article quotes him directly: 

The brand “hasn’t articulated what they stand for,” said Ivan Wicksteed, a former chief marketing officer at Old Navy who left in 2015 and now works for a health-care-technology company. “If you try to be everything to everyone, you end up being nothing.

Kapner describes the roller coaster ride at The Gap over the past decade, as the firm's struggles have mounted:

Over the past decade, the Gap brand has careened from one look to another. One year, according to former executives, it wooed younger, budget-minded consumers by competing with fast-fashion chains. The next, it went after higher-income shoppers by selling $600 leather jackets.

The company operates major retail chains:  Gap, Banana Republic, Old Navy, and Athleta.  Interestingly, the Gap stores themselves are the weak link at the company.  In large part, that's because the Gap brand has the most muddled competitive positioning.  Old Navy has a solid low cost positioning.  Banana Republic competed with a differentiated, premium price strategy targeting a very different set of customers than Old Navy.   The Gap, however, remained stuck in the middle.  It didn't have the low costs of many major rivals, including its own Old Navy brand, nor the cache to command higher prices.  

Moreover, the Gap wavered over the years between a "selling the basics" strategy more akin to Uniqlo and a "fast fashion" strategy pioneered and mastered by firms such as Zara.   The two strategies require completely different business models:  different supply chains, different management control systems, different store operating models, different types of people in key positions.  Zara's entire business model is tailored toward fast fashion.  In other words, its vertical integration strategy is not well-suited to delivering low prices on basics.  It is, however, very well-positioned to offer trendy fashion in a way that minimizes the downside of "fashion misses" and curtails the need for hefty markdowns.  

In sum, Syngal will have to decide who she wants The Gap to be, and then build an entire business model tailored to deliver that value proposition. It will mean making tough tradeoffs and targeting a particular set of customers, rather than trying to be all things to all people.  

Monday, October 26, 2020

Preparing for a Great Meeting: Spotify CEO Daniel Ek

Source:  Wikimedia

The Observer Effect has published a fascinating interview with Daniel Ek, CEO of Spotify.    Ek has a clear and concise take on how to tackle important issues, define his role in the decision-making process, and design effective group meetings.  Here's an excerpt on how he thinks about defining his own role in the decision process in advance of discussions with his team members:

I typically tackle one topic a day which takes a lot of my time. That's my big thing for the day. Before we go into a live team discussion on that particular topic, I invest time to prepare beforehand – reading and talking to members of the team who are either part of the decision-making process or who have insights and context. I sometimes even get external perspectives.

I also think about what my role is at that meeting. Sometimes I'm the approver. Other times, I'm supposed to come with a thoughtful perspective on whether an initiative makes sense or not.   I’ve found that creating this clarity of role for myself is critical. It’s something I challenge my direct reports to think about as they engage with their own teams. I remind them that all meetings are not the same. Even when we are meeting to discuss really, really complicated topics I always ask myself: “What am I going to do in this meeting? What does my involvement really need to be?”

The truth is: it's entirely contextual. I find it crucial to be upfront about everyone’s role in different meetings, I think this is super, super important. Often that's my number one thing: to make sure I know what role I'm playing.

Then, Daniel Ek explains the critical attributes of a highly effective team meeting.   Here's another excerpt from the interview:

A great meeting has three key elements: the desired outcome of the meeting is clear ahead of time; the various options are clear, ideally ahead of time; and the roles of the participants are clear at the time.

I often find that meetings lack one of those elements. Sometimes they lack all those, which is when you have to say, “This is a horrible meeting, let's end it and regroup so it can be more effective for everyone.”

To clarify outcomes, options, and roles ahead of time, we sometimes rely upon a preread. Prereads are a great way to share context so that attendees can quickly get into the meat of the issue and not waste time getting everyone up to speed.

I've always believed that the best leaders think carefully, in advance, about how to structure the decision-making process.  Moreover, they are thoughtful about their own role in that process. Ek does a nice job of articulating the value of this approach from the perspective of a leader running a large, fast-growing organization.  

Thursday, October 22, 2020

Don't Tell Them Your Opinion First!

Annie Duke, author of the new book , How to Decide: Simple Tools for Making Better Choices, participated recently in an interview with Katy Milkman, professor at Wharton. Professor Milkman asked the author which lesson from the book was her favorite. Here's Annie Duke's response... simple, but very important advice for leaders making tough decisions, yet often not followed: 

I think my favorite concept in the book is really simple, but really powerful. If you want somebody’s opinion, don’t tell them your opinion first. It sounds so simple and almost dumb when you hear it, except that nobody does it. When I read an opinion piece and send it [to someone else], I’ll say, “I think they’re cherry-picking the data, and I think the author is biased, and I cannot even believe that someone was willing to say this out loud. What do you think?”

We do that, not just about opinion pieces or TV shows, but also about feedback when it comes to a sales strategy, or whether we should make a particular investment, or who we should hire. We’re asking for people’s feedback, but we’re always offering the very feedback we’re trying to get from them first.

Monday, October 19, 2020

Don't Assume; Empathize First

Take a look at this brief video featuring Ed Batista, a Stanford Graduate School of Business lecturer and executive coach. He talks about the strategic importance of empathy. He argues that we often make a series of assumptions when we confront someone whose decisions or actions seem befuddling or even maddening. Rather than make assumptions, we should try to stand in their shoes, and ask ourselves: What is the reason they are making that argument, initiating that conflict, or making that seemingly unjustifiable decision?  What's behind their frustrating course of action?  Challenging our own assumptions can often help us find a path to more effective interaction and potentially collaboration.  

Thursday, October 15, 2020

Two Quite Different Questions that Begin: "What's the Worst Thing..."

Source:  The Clorox Co.
The Wall Street Journal recently ran a feature on the new CEO of Clorox, Linda Rendle.  She has become one of the youngest Fortune 500 CEOs.  Toward the end of the article, Rendle describes how she approaches making tough decisions regarding potentially bold new initiatives.   She reflects, in part, on her work years earlier launching the Green Works line of cleaning supplies.  

Ms. Rendle said she recalls feeling nervous ahead of the 2007 Green Works meeting, having mentally laid out an argument for why the company should implement a widespread rollout of the brand instead of the limited, niche launch executives were planning. At the time, so-called green cleaning products were a minute part of the mainstream market.

“Before I do anything that’s hard, I say: ‘What’s the worst thing that will happen if you do this?’” she said. “And: ‘What’s the worst that will happen if you don’t?’”

In my experience, many managers ask themselves the first question about the worst case scenario.  However, they don't pose the second question.  What is the cost of inaction?  Could we miss a terrific opportunity? Will rivals gain the upper hand?  I think managers should follow Rendle's lead here.  They must ask themselves both questions when approaching tough decisions about high stakes, risky new initiatives. 

Friday, October 09, 2020

Lessons on Curiosity from the Latest Nobel Prize Winner in Chemistry

University of California-Berkeley Professor Jennifer Doudna earned the Nobel Prize in Chemistry this week. We can learn a great deal from her about the importance of curiosity, and how we can nurture that it in our employees and our children. Click here to read a short excerpt from my book on creativity, in which I describe a few lessons we can take from Doudna's upbringing.

Wednesday, October 07, 2020

Changes in Leadership, Reflection, and Reduced Commitment to Outdated Plans

University of North Carolina scholars Hanna Kalmanovich-Cohen, Matthew Pearsall, and Jessica Siegel Christian have published an interesting new study in a paper titled, "The effects of leadership change on team escalation of commitment."  The authors completed two studies as part of this research project.  In one of those studies, they conducted an experiment using the Food Truck Challenge simulation that I created in partnership with Harvard Business Publishing.   In the simulation, students try to maximize revenue for a food truck business.  To accomplish that goal, they must try to determine the optimal location and menu for the truck.  

The scholars created teams of three students and assigned a leader to each group.   For 1/2 of the teams, the researchers changed the group leaders after the first round of the simulation.  For the other teams, the leader remained the same throughout the game.   The scholars wanted to understand whether a change in leadership would reduce commitment to outdated plans.  Would new leaders engage in thoughtful reflection with their team about past choices? Would they examine feedback and adapt more effectively?   The researchers summarized their findings as follows:

We found evidence that a new leader promoted reflection behaviors within the team and reduced commitment to outdated plans. Therefore, teams that experienced leadership change avoided escalation of commitment over time. Further, such teams were better able to respond to feedback, to identify and correct errors in their updated plan and make course corrections by focusing on error reduction. In contrast, teams with ongoing leaders were more likely to remain committed to their initial plans, which then lead to greater escalation behavior and less of a focus on error reduction in the next performance episode.

What's the practical implication of this research finding? The scholars elaborate:

Leaders and teams can be trained in situation assessment, and to question whether objectives and methods are still appropriate and whether alternative courses of action may be viable, especially following environmental or other changes (Gurtner, Tschan, Semmer, & Nägele, 2007; Konradt et al., 2016). By finding ways to incorporate reflection into their regular activities, employees can better understand their actions and carefully diagnose the gap between what actually happened with what should or could have happened.

The results may not surprise us, but they remind us of the powerful impact that sunk costs can have on our decision making.   Moreover, the study demonstrates the importance of reviewing and evaluating our past decisions critically, being willing to updating our beliefs as new evidence emerges, and being open to adapting in the face of results that did not meet expectations.  We shouldn't need a new leader to shed outdated plans.  We need to get better at doing so without a change in leadership.  However, we also must remind ourselves that a new leader alone, without critical reflection, will not save us from poorly designed and seriously outdated plans.  

Monday, October 05, 2020

Others' Failures Are Valuable Learning Opportunities

Source: Flickr

Let's face it: we often are pretty bad at learning from our own failures. We make excuses, blame uncontrollabe external causes, and argue that we simply have to "move on" and not dwell on the past. What about learning from others' failures? Can we improve by examining others' mistakes carefully and systematically? Bledow, Carette, Kuhnel, and Bister conducted an experimental study several years ago on this subject. They published an article in the Academy of Management Learning and Education titled "Learning from others' failures: The effectiveness of failure stories for managerial learning." In a training setting, they gave research subjects stories about others' failures or successes. The stories all provided the same learning content, whether failure or success. They examined whether failures stimulated more learning than successes. Here is an excerpt from the paper, in which they explain their results: 

In support of the reasoning that failure stories stimulate deep information processing and result in enhanced learning transfer, we found that listening to others’ managerial failures led to more elaboration as compared to listening to other people’s managerial successes. Intensified elaboration, in turn, yielded higher transfer of newly acquired knowledge to a subsequent task. This effect was more pronounced for people who see failure as a valuable source of learning...

Because failure and success stories conveyed the same learning content and differed only in the way it was presented, framing of the learning content as a failure triggered the motivation to process the stories more thoroughly. Learners responded to the negative valence of failure stories with increased elaboration, which then resulted in enhanced learning. This study thus supports the assumption that a motivational mechanism is at play and yields the learning benefits associated with being exposed to others’ failures.

I should stress that I don't think we should conclude that learning only comes from failure. In fact, other studies demonstrate that powerful learning comes from being able to COMPARE successes with failures. In so doing, we get better at determining the true causes of particular good or bad results. Tel Aviv University scholars Schmuel Ellis and Inbar Davidi examined after-action reviews conducted by Israeli military units. They compared units that conducted post-event reflection exercises after successful and unsuccessful navigation exercises with those who only examined failures.   They discovered that groups who evaluated both successes and failures developed a richer understanding of the drivers of good and bad outcomes.  People who studied both successes and failures performed better over time than those who only studied failures. 

Wednesday, September 30, 2020

Perfectionism: A Barrier to Innovation

Source:  Best Buy
Take a look at this recent interview (start at 4:15) with Corie Barry, CEO of Best Buy.   In the interview she describes how Best Buy had been piloting curbside pick-up service in some of its stores prior to the COVID pandemic.  The introduction of curbside at some stores was part of a plan to introduce the service across the store network over the course of more than a year.  Then, in a matter of 48 hours, they decided to shift the entire nationwide store network to curbside pick-up ONLY because of the COVID quarantines and shutdowns.  48 hours.  The interview asks her why it had to take more than a year to introduce such a new service prior to COVID.  Why couldn't they innovate faster?  She offers a compelling explanation of the barriers to innovation at many large firms.  Barry explains,

"As a retailer, we are geared toward perfection around process... As a brick and mortar retailer, you are not as geared to just push out a new experience and iterate quickly on the process behind it.  We are geared at putting out there a perfect SOP (standard operating procedure), and then you just run it... It was not as much in our DNA to put out there something that might not be perfect." 

Barry highlights a key barrier to innovation at many large well-established firms.  They resist introducing new products and services until they feel as though the innovation is perfect.  They don't want any failures or mistakes.  They don't want any negative customer feedback.   Yet, the desire for perfection slows them down substantially.   Moreover, it deprives them of the vital learning-by-doing that comes with soliciting feedback from customers (and front-line employees) early and often.  Every brick-and-mortar retailer, and frankly every large firm, should consider this discussion about perfectionism and ask whether it's holding their organization back too.

Monday, September 28, 2020

Stop Relying on Heroes to Get the Job Done

Source: Pixabay

Sara Brown has written a good piece for the MIT Sloan Management Review. The title of the article is "4 ways to design employee experience in the remote work era."  Brown draws on an interview with research scientist Kristine Dery. In the article, Brown & Dery argue that organizations have to reduce their reliance on heroic behavior on the part of employees to get to the job done.  Here's an excerpt:  

Companies that deliver strong employee experiences deliberately move away from a culture of heroics, in which employees often have to go above and beyond to find ways to deliver for customers, becoming “heroes” in the organization, Dery said. 

Instead of depending on heroic employees, companies should focus on processes and systems that can deliver for customers consistently and solve more complex problems. “Let’s figure those things out, and then let’s embed those into our organization, either through technology or through behaviors or through new metrics. That connection is much more systemic,” she said.  Implementing systems includes:

-Integrating operations across silos to make it easier for employees to innovate and deliver on the customer experience.
-Allowing seamless access to data and information about customers, putting power into the hands of employees to do what technology can’t do.
-Digitizing work, which allows for employee mobility — especially important now — and employee self-help.
-Using employee platforms, which allow employees to search for information and ideas, easily share knowledge, and reduce duplication.

Companies should also consider a dedicated customer experience team. “That phase where different employee experiences across the company were creating all sorts of quite chaotic decisions and responses was managed much more effectively by companies that had a dedicated [employee experience] team, that were looking at that right across the organization, and able to create more systemic accountability measures,” Dery said. These companies were able to get technology into the hands of employees faster, and could anticipate speed bumps ahead of time, instead of reacting to them after the fact.

This notion of moving beyond "heroic behavior" reminds me of the research conducted by Anita Tucker, Amy Edmondson, and Steve Spear years ago on first order vs. second order problem solving.  First order problem solving often involves heroic behavior.  It involves corrective action by front-line employees who are often going above and beyond to get the job done.  However, the same problems keep emerging, and over time, heroes don't always emerge to stop bad things from happening. Tucker and her colleagues explain the distinction and its importance:

Research on problem solving makes a distinction between fixing problems (first-order solutions) and diagnosing and altering root causes to prevent recurrence (second-order solutions). First-order problem solving allows work to continue but does nothing to prevent a similar problem from occurring. Workers exhibit first-order problem solving when they do not expend any more energy on a problem after obtaining the missing input needed to complete a task. Second-order problem solving, in contrast, investigates and seeks to change underlying causes of a problem.

So, ask yourself:  Are we too reliant on heroes in our organization?  Do the same problems keep resurfacing?  Are we thinking systemically when we examine the reasons why problems occur?

Wednesday, September 16, 2020

Distinctive Strategic Positioning: Don't Panic and Just Abandon It Amidst the Pandemic

Source: Wikimedia

Suppose your firm has a distinctive strategic positioning and a powerful competitive advantage.  Then along comes COVID.   Some managers may panic and abandon key facets of the unique strategy in an effort to cope with difficult economic and social conditions.   Some firms, though, have prospered despite the pandemic, in part because they have capitalized on the fact that so many people are spending a great deal of time at home.   Stihl is an interesting example of a firm with an unorthodox strategy that has resisted the temptation to abandon distinctive elements of its business model over the years, including during the past six months.  They have demonstrated that personal relationships and interactions still matter to consumers, even in an age of increasing online transactions, curbside pick-up, and home delivery.  

Stihl is one of the world's leading chainsaw manufacturers, headquarted in Germany. A recent Bloomberg story is titled, "Stihl Still Sells Chainsaws the Old-Fashioned Way." The firm is still owned by the descendants of founder Andreas Stihl.  Here's how the article opens:

If a limb falls on your car or you suddenly need to carve a wildfire break around your house, will zip you a Husqvarna 120 Mark II chainsaw in a few days for $180.  It's not so easy with America's top-selling brand, though. On the Stihl website, no prices are shown, and once you select a product, you’ll have to click through to find a nearby dealer – typically a small hardware store – that may or may not offer delivery. It’s an anachronistic, clunky sales machine, seemingly ill-suited to shopping during a pandemic. It’s also working just fine thanks.  Stihl (pronounced 'steel') sales so far this year are up 20 percent over 2019 and in the U.S. it is on pace for the best year in its near century of business, both in terms of revenue and units sold.

The company doesn't sell through big box stores.  In fact, in the past, Stihl has boasted about not selling in these establishments.  They once runs ads saying that you wouldn't find their chainsaws in a box, not even a big box.   The ad referenced the fact that the dealer staff often assembled and taught you how to use the product before you left the small neighborhood store.  The article ends noting the loyalty of its customers:

The strategy might not make for as many transactions, but it makes for a stickier, more lucrative customer. The personal touch, apparently, still works in a digital, distanced world.