Friday, October 28, 2022

As a Leader, Are you Trying to Impress or Connect?

I recently listened to an interview with Jon Levin, Dean of the Stanford Graduate School of Business.  The podcast focused on communication.   Levin offered a great take on how his thinking about communciation has changed over time, as he has taken on leadership roles.  

My thinking about communication has evolved over my career. I started as a professor teaching. And when you’re giving research talks, it’s just everything is about presenting ideas and information clearly, and maybe even impressing people a little bit and getting them to change the way they think about a problem.

In a leadership role, so much more of communication is about connecting with people, establishing shared humanity, motivating them, inspiring them, sometimes challenging them. So, going through my career, that has really reinforced to me the different purposes that communication serves: to inform people, to connect with people, to motivate and inspire them.

I really love this distinction between IMPRESSING PEOPLE and CONNECTING WITH PEOPLE.   The former, of course, often involves talking AT people.  The latter means that leaders listen to others, engage them in dialogue, and collaborate WITH team members.   Every leader should think about how they build connection so as to motivate, inspire, and build commitment in their organization.  

Friday, October 21, 2022

How Leaders Can Build Trust


In far too many organizations, employees indicate that they do not trust senior leaders.   Why is trust so important?  It helps leaders build buy-in and commitment, particularly when they have to make difficult decisions.  It drives engagement and helps increase employee retention.   Heightened trust increases intrinsic motivation, leading to higher productivity and organizational effectiveness.

How can leaders build trust?  Here are five strategies that prove quite effective:

  1. Be transparent.  That doesn't just mean providing more information about the performance of the organization.  It means helping others understand how you think.  What are the criteria you use to make big decisions?  What is the rationale for particular actions?  What are the values guiding your behavior?
  2. Walk the walk.  If you articulate a certain set of values and norms, then be sure that you are acting in ways consistent with those principles.  Root out any instances of misalignment between words and actions. 
  3. Lead fairer decision-making processes.  Fair process doesn't mean giving people their way. It means giving people voice and genuinely considering their views before making key decisions.  As noted leadership scholar Michael Watkins says, it means avoiding the "charade of consultation." By that, he means not asking for input AFTER you have already made up your mind.  Employees see right through the charade when you ask for advice, yet simply act in the way you always intended from the start. 
  4. Own your mistakes. If you fail, acknowledge it.  Explain what happened and why, and be clear about how you plan to fix the problem. Don't throw others under the bus.  Instead, describe what you learned from the failure. 
  5. Listen early, often, and actively.  When you speak to large groups of employees, make sure that at least half the time is reserved for questions.  Don't force people to submit questions in advance.  Be willing to show some vulnerability and address questions in the moment.  If you don't know the answer, say so.  Tell people how and when you will get them the answer.  

Wednesday, October 19, 2022

Case Companion: A New Tool from Harvard Business Publishing


In the past few months, Harvard Business Publishing has begun distributing a new online tool that I developed with a terrific team from Torrance Learning and HBP.  

The tool - Case Companion - helps students learn how to analyze a case study.   To date, we have received some very positive feedback from students and faculty.  We look forward to using this tool to help our students improve their performance in case-based classes.  

CFOs, Leadership Development, and the Cost of Losing Talent


Michael Pickrum has written a good article for CFO magazine titled, "The CFO's Role in Leadership Development."   He argues that talent is crucial to achieving an organization's strategic and financial goals, and that the job of leadership development does not rest only with the chief human resource officer.  The CFO can and should play a vital role.  Among other things, Pickrum argues that the CFO can help the organization recognize the value of leadership development efforts.  He writes,

Use data and more holistic analysis to aid better decision-making. What are the costs for contracting or recruiting externally versus upskilling internal high performers? Apply your visionary eye to this analysis. What are those costs over the long-term, given the value of in-house knowledge and retaining those who possess both the expertise and the experience with your organization’s way of working?

In short, Pickrum makes the case that CFOs can help organizations identify and quantify the costs and risks of losing key talent.  What precisely is the damage done by high employee turnover?  What benefits will we acheive if our development efforts improve the retention of highly talented employees?  Many CFOs (and other top executives) question the ROI of leadership development efforts.   Yet, CFOs should do more than ask the question in a theoretical way.  They should help the organization develop an accurate and thorough understanding of the potential benefits of leadership development efforts as well as the risks and costs of NOT investing in leadership development.   The connection between development and retention is crucial, and understanding the true cost of employee turnover is essential.  

Thursday, October 13, 2022

Flaws in the Rationale for the Direct-to-Consumer Business Model

Alexandra Sternlicht has written an article this week for Fortune titled "How Silicon Valley’s retail revolution withered. Eight years after Allbirds and Glossier were born, VC investors say direct-to-consumer is dead."  She quotes several investors, including Nicole Johnson, a partner at venture capital firm Forerunner.  

“We’re a whole decade past where pursuing the DTC model was at the forefront of innovation and retail, or was interesting on its own,” Johnson says. A direct-to-consumer sales channel is just “table stakes” today, she says—a useful feature for a young consumer brand, but not a business model in its own right.

It’s a sentiment echoed by numerous VC investors that Fortune spoke to, reflecting significant changes that have altered the internet landscape, as well as the shifting mindset among private company investors at a time of economic uncertainty. If direct-to-consumer startups were once touted as the harbingers of a retail revolution, today they are viewed by VCs as relics of a different era.

I found the article quite thought-provoking, but I'm particularly interested in reflecting on the rationale that many executives and entrepreneurs use to support a DTC business model.   Often, you will hear people say that the DTC model enables the startup to "capture the margin" otherwise obtained by the brick-and-mortar or e-commerce retailer.  Of course, that thinking is DEEPLY flawed.   Yes, you aren't giving away the "mark-up" to the retailer.  However, you ARE spending a considerable amount of money on your own marketing to build brand awareness, since you don't have the assistance of the retailer.  You have to find a way to distribute the product, and that "last mile" to the consumer's home can be quite expensive.  Moreover, if you end up opening some of your own brick-and-mortar stores, as some of these startups have done, then you are investing heavily in assets and will have to generate sufficient additional profit to maintain a healthy return on those expensive assets.  In short, the retailer does serve a very useful function for a nascent brand.  This is not to say that I believe DTC business models are not viable.  I'm simply arguing that entrepreneurs should not fool themselves into thinking there's easy money to capture by cutting out the retailer.