Monday, March 30, 2020

Doing the Right Thing: Kent Taylor at Texas Roadhouse

This morning, I read some terrific news about a leader doing the right thing for his organization amidst the COVID-19 crisis. Kent Taylor is co-founder and CEO of Texas Roadhouse, the popular steakhouse restaurant chain. According to this article by Leo Shvedsky, Taylor has chosen to give up his 2020 salary and bonus.   He's giving the money to his employees who are hurting financially due to the crisis.  He's also made an additional $5 million donation to help his people.   Here's the excerpt:

Texas Roadhouse CEO Kent Taylor announced on Thursday that he is forgoing the rest of his 2020 salary and bonus and instead directing the funds toward paying his employees during the coronavirus outbreak. The remaining salary and bonus both amount to $525,000 each for a total of $1,050,000.  "Kent Taylor has always said that Texas Roadhouse is a People-company that just happens to serve great steaks. His donation of his salary and bonus to help employees is the embodiment of that saying," a Texas Roadhouse spokesperson told The Hill. "We are blessed to have his leadership."  The spokesperson also told The Hill that Taylor has already donated $5 million of his personal funds to Andy's Outreach, a non-profit run by Texas Roadhouse to help employees in times of need.

Paul Levy, former CEO of the Beth Israel Deaconess Medical Center, argues that all leaders should be taking these types of actions. In a blog post for Harvard Business Review, Levy, Atta Tarki, and Jeff Weiss write:

"If you are doing cut backs to save job losses, you must lead by example and do cut backs that impacts your own day-to-day as well. If you don’t, there is a danger that your staff will feel like saps, doing sacrifices while the C-suite continues unaffected. Get a commitment for a pay cut from your senior leaders. As CEO, you should take the largest salary cut yourself."

Friday, March 27, 2020

Small Wins: More Important Than Ever

In the 1980s, the great social psychologist Karl Weick wrote a paper about the importance of small wins. Weick argued that some problems can be cognitively and emotionally overwhelming. In these cases, people may find it very difficult to make progress toward addressing the issue and achieving their goals. Weick advocated breaking down large, complex problems and goals into smaller, intermediate objectives. Pursuing a small wins strategy could then help people achieve their goals, but lowering stress, creating a powerful sense of accomplishment, and motivating people to continue working on a tough project. Here's an excerpt from that paper:

A small win is a concrete, complete, implemented outcome of moderate importance. By itself, one small win may seem unimportant. A series of wins at small but significant tasks, however, reveals a pattern that may attract allies, deter opponents, and lower resistance to subsequent proposals. Small wins are controllable opportunities that produce visible results.

The idea of small wins seems more important than ever right now, amidst the COVID-19 crisis.  It's easy to feel overwhelmed at times.  Thinking in terms of concrete small wins may help us work toward longer term, stretch goals as well as to tackle very challenging projects.  

Wednesday, March 25, 2020

Why Companies May Benefit from More Transparency about Product Drawbacks

Source: Pixabay
Most companies, quite expectedly, focus intensely on the positive attributes of their products and services when communicating with customers.   They market all the benefits, and typically, they minimize any discussion of the limitations or drawbacks of the product. After all, who would want to shine a spotlight on negative attributes of your products? 

Well, Harvard Business School scholars Ryan Buell and MoonSoo Choi decided to challene the conventional wisdom.  They sought to examine whether a bit more honesty and transparency might actually be beneficial for companies.  Buell and MoonSoo Choi published their findings in a paper titled, "Improving Customer Compatibilitywith Operational Transparency."   

The scholars worked with Commonwealth Bank, a large Australian financial services company, to conduct a randomized field experiment.  On the bank's website, potential new customers received one of two offers: one highlighted the best attributes of the company's credit card, while the other also mentioned key drawbacks that firms often tend to place in the fine print only.   In short, the company made explicit some of the key tradeoffs inherent in the company's strategy and product offering.   In other words, you get these wonderful features, but here's what we don't offer, or what we don't provide at the same level of service.   Think about Southwest Airlines... we offer you on-time flights, low fares, friendly service, and no baggage fees, BUT we don't assign seats, have no first class and no meals, and won't transfer your bags to other airlines.  The company makes the trade-offs quite clear to consumers.  

The scholars tracked customer behavior at Commonwealth Bank for the next year.  What did the researchers find?   HBS Working Knowledge summarized the key results:

"The researchers found that people who opened an account after learning about a card’s downsides spent 10 percent more each month than customers who heard only the benefits. Their nine-month cancellation rate was also 21 percent less, and they were 11 percent less likely to make late payments on a month-to-month basis... Although the team didn’t probe why customers spent more, they suspect that providing more information helped people choose products that were more compatible with their financial needs, creating a better customer experience."

Now, clearly, companies need to be careful with this added level of transparency.  They can't just dump a bunch of negative information on customers and hope to succeed.  However, they can think about how providing more transparency may help them gain consumers' trust and help customers self-select in a way that creates a more enduring and better fit between company and customer.  

Monday, March 23, 2020

Now is the Time: What is Your Organization's Purpose?

Source:  Needpix
Over the past decade, we have seen more organizations come to the conclusion that they must become purpose-driven.  They have come to realize that an authentic higher purpose (that connects to business goals and objectives) can be motivating and inspiring, and it can advance efforts to develop a highly engaged and committed workforce.  I would argue that now is the time for organizations to think deeply about purpose, specifically as it relates to the current COVID-19 crisis.  What is your organization's role in helping our society cope with this crisis?   How can your firm help our society preserve and improve public health, promote economic recovery and protect jobs, insure that global supply chains remain functioning effectively, etc.?   Even if you already have a clearly articulated purpose, now may be the time to adjust that purpose to suit the specific situation in which we find ourselves.  Or perhaps more appropriately, to communicate how your purpose connects to and can contribute to addressing the crisis in which we find ourselves.  

If you are interested in this topic, I highly recommend an article from Harvard Business Review titled, "Creating a Purpose-Driven Organization" by Robert Quinn and Anjan Thakor, published two years ago.  They remind us that we have to take great care not to simply resort to cliches and platitudes.  We have to engage with our employees to discover that authentic higher purpose, and to get their buy-in as we align the organization with that new sense of mission.  Here's an excerpt:

At a global oil company, we once met with members of a task force asked by the CEO to work on defining the organization’s purpose. They handed us a document representing months of work; it articulated a purpose, a mission, and a set of values. We told them it had no power—their analysis and debate had produced only platitudes.

The members of the task force had used only their heads to invent a higher purpose intended to capture employees’ hearts. But you do not invent a higher purpose; it already exists. You can discover it through empathy—by feeling and understanding the deepest common needs of your workforce. That involves asking provocative questions, listening, and reflecting.

Friday, March 20, 2020

Don't Overestimate Your Multi-tasking Capabilities

Source: Pixabay
Given the COVID-19 situation, many of us find ourselves juggling a variety of unexpected tasks and obligations.   For many parents, working from home has become the norm.  In addition, parents have been asked to home school their children in conjunction with various online learning being faciliated by their children's teachers.  In our home, my spouse and I are both teaching online.  My oldest daughter is home from college taking classes online, and my other two children are engaging in online learning at the high school and middle school level.  The house is busy, and the schedule is complex.   

The natural tendency in these cases is to find ourselves multi-tasking often.  However, we have to be careful about overestimating our multi-tasking capabilities.  Research clearly shows that human beings struggle with trying to work on multiple streams of work simultaneously, yet we are overconfident in our abilities to juggle in this fashion.  Here's an excerpt from an article Kendra Cherry on the topic:

Take a moment and think about all of the things you are doing right now. Obviously, you are reading this article, but chances are good that you are also doing several things at once. Perhaps you're also listening to music, texting a friend, checking your email in another browser tab, or playing a computer game.

If you are doing several different things at once, then you may be what researchers refer to as a "heavy multitasker." And you probably think that you are fairly good at this balancing act. According to a number of different studies, however, you are probably not as effective at multitasking as you think you are.

In the past, many people believed that multitasking was a good way to increase productivity. After all, if you're working on several different tasks at once, you're bound to accomplish more, right?

Recent research, however, has demonstrated that that switching from one task to the next takes a serious toll on productivity. Multitaskers have more trouble tuning out distractions than people who focus on one task at a time. Also, doing so many different things at once can actually impair cognitive ability.

Ok, so how do we handle the current dynamic situation given these research findings?  Building a schedule is a start, as is dedicating particular spaces as quiet areas where people cannot enter and interrupt others.   Building in breaks is essential, so that you can step away and clear your head.   Research shows that "unfocusing" in this way can stimulate creativity and enhance productivity.   For us, we've started a family workout challenge.   That has been a nice diversion, and it addresses the issue of breaks and unfocus time.   Next, you need to find some time to step away from being connected so that you can get some of your work done without interruption by email, text, and the like.   Be sure to let others know when you are going to be focused on a task and not able to respond to messages.  Finally, you have to spend some time each day prioritizing tasks, so that you are focusing your efforts on the most essential duties.   Getting three things done very well is always better than doing a mediocre job at ten things.  

Wednesday, March 11, 2020

Microsoft CEO Satya Nadella on Empathy

Source: Wikipedia
In this interview with IESE Business School, Microsoft CEO Satya Nadella describes the importance of empathy as a company tries to innovate and evolve. Empathy means more than asking customers what they want, as Nadella explains. It means truly trying to understand their pain points, frustrations, and unmet needs. Empathy means digging deep to understand the latent needs that may not be articulated by your customers when you ask them questions or conduct surveys and focus groups. It means stopping yourself from assuming that you know what the custonmer wants. Nadella, interestingly, connects empathy with a growth mindset. Here's an excerpt from this terrific interview with Nadella: 

My success depends on my customers’ success. That’s the essence of business. If we’re successful, it means we’ve somehow been able to meet the needs of customers, even their unarticulated needs. But where does that inspiration for being able to be in touch with that unmet, unarticulated need come from? It comes from empathy — that deep sense of understanding the real needs out there. It’s not, “Oh, I talked to 10 customers and I’m doing exactly what they told me to do.” It’s going deeper to understand what’s behind those words.

How does one invoke empathy? You can’t just go to work and hit the empathy button every morning: “Now I’m going to be empathetic.” Your entire life has to involve constantly pushing yourself to develop a deeper sense of empathy with those around you, recognizing that that journey never ends.

At Microsoft we’ve been trying to develop what we describe as a learning culture. Stanford University psychologist Carol Dweck wrote a famous book called Mindset, which shares a simple concept. Take two schoolchildren: one has great innate capability but is a know-it-all; the other has less innate capability but is a learn-it-all. You know how the story ends: the learn-it-all does better than the know-it-all. And that applies to CEOs, to companies and to company cultures.

The goal is to adopt that growth mindset and use it to develop a deeper sense of empathy, so that you can create those products and services that meet the unmet, unarticulated needs of your customers.

Tuesday, March 10, 2020

CNBC Feature on Trader Joe's

CNBC's Cat Clifford and Helen Zhao have produced a video feature about Trader Joe's.  They interviewed me for this story.  Check out the video at this link

From CNBC:  People crowd into the new Trader Joe’s, located on Colorado Blvd. and East 8th Avenue in Denver, for the grand opening of specialty grocer.
RJ Sangosti | Denver Post | Getty Images

Thursday, March 05, 2020

Do the Word Choices in Your Company Code of Conduct Matter?

Maryam Kouchaki, Francesca Gino, and Yuval Feldman have conducted a fascinating series of studies regarding company codes of conduct. These scholars examined many different codes of conduct. They noticed many similarities with regard to content. In other words, companies tend to prohibit the same types of misbehavior, as well as encourage the same types of positive conduct. However, the researchers found that word choices differed in at least one important way. Some codes of conduct employed "communal" words such as "we" and "us." Other codes spoke in more formal language: "Employees should not..."

Did these word choices matter? Initially, the researchers hypothesized that communal words would encourage more ethical behavior. Surprisingly, though, their research found the exact opposite! Through a series of experimental studies, Kouchaki, Gino, and Feldman discovered that people tended to engage in more unethical behavior when given a code of conduct including many communal words and phrases. 

The scholars then examined corporate misbehavior. Here's what they found, according to this description of their research by Kellogg Insight:

Finally, the team wanted to test whether communal language was linked to acts of corporate misbehavior in the real world. So the researchers examined codes of conduct from 188 S&P 500 manufacturing firms. They also looked up news articles about bad behavior at those companies, such as employees committing fraud or breaking environmental laws, and found 873 such violations from 1990 to 2012. Employees at companies with “we” language were more likely to act unethically.

What explains this surprising result? Kouchaki offers one interesting potential explanation: she argues that communal language create a situation in which, “the group is being seen as forgiving and tolerant." In those situations, perhaps individuals do not believe that unethical or inappropriate conduct will be punished in a substantial manner. If people believe that the response to bad behavior will be "soft" then perhaps they will be more likely to misbehave. The scholars don't argue that we should avoid trying to create a communal atmosphere, but they do prescribe a clear emphasis on an intolerance for inappropriate and unethical behavior, and a clear message that misconduct will be handled seriously and substantively.

Monday, March 02, 2020

Squandering Time: How Many Hours to Support One Executive Team Meeting?

Source:  Pixabay
Michael Mankins, a partner in Bain & Company’s San Francisco office, published a short blog post for Harvard Business Review several years ago.  Bob Sutton reminded us about the research this week on Twitter.  In the post, Mankins provided highlights from an in-depth study of meetings and time management at one large organization.  Here's what Mankins and his team found:

How much time does your organization squander? My colleagues and I gathered data about time use at one large company and found that people there spent 300,000 hours a year just supporting the weekly executive committee meeting.  

You read that correctly... 300,000 person-hours per year supporting one top management team meeting.   Where does the time go?   Hundreds of other meetings take place to prepare executives for this one senior meeting which they must attend weekly. Mankins writes, "Research shows that 15% of an organization’s collective time is spent in meetings—a percentage that has increased every year since 2008. No amount of money can buy back that time. It must be treated more preciously."

How can managers change their behavior in light of this research?  Here are five key questions one can ask as you call for and prepare for meetings:

1.  What is the purpose of the meeting?  What are we trying to achieve?  

2.  Who should attend this meeting?  Who does NOT need to be there?

3.  How should we structure the meeting?  How will that structure help us achieve the outcomes we desire?

4.  What pre-work should participants do, and what materials should we distribute in advance, so that we use our meeting time efficiently?  

5.  How do I plan to follow up so as to insure that we do what we say we are going to do after the meeting?  What will I do if we don't achieve the results we expect as a result of decisions taken during the meeting?