Zappos Eliminates Job Postings: Is This a Good Idea?

Several days ago, online retailer Zappos announced that it was eliminating job postings.  According to the Washington Post,

"It has started a program called Zappos Insider, which it says is “like a special membership” for people who want to learn more about the company and its distinctive culture. Participants will get to chat with Zappos Ambassadors and are promised “top consideration” for job openings. It’s an approach that sounds like it favors prospective employees who are most deeply engaged with the brand. The people likely to take the time to enroll as Zappos Insiders are not the ones who are robo-sending résumés for every opening they see on Monster.com."

Naturally, Zappos received a ton of positive press about this bold and unique move.  Zappos has become a favorite of those who are looking for companies that are taking innovative approaches to organization, culture, and leadership.   I've visited Zappos myself, and I love many of the things that they do.  On this one, though, I have to admit that I am a bit puzzled.  I'm glad that I'm not alone.  Suzanne Lucas has written a good column for Inc. about Zappos' new initiative.   Lucas writes:

Now, I totally agree that online résumé systems are recruiting black holes, but that's not because of job postings. It is because most recruiters stink. Yep. They don't know much about the jobs they are recruiting for, and so they are just playing a matching game. This is why I'll tell candidates to skip over the recruiters, if at all possible, and get to the hiring manager personally. Networking works better than submitting a résumé online. No doubt... Zapar (Zappos' social recruiting leader) says that job postings are conversation killers. I'd say the opposite is true. If a person wants a new job, having a job description is immensely helpful as a conversation starter.

Lucas makes a good point.  Job postings don't seem like the essence of the recruiting problem.  The process has many flaws, but taking away valuable information that may exist in a well-crafted job posting seems counterproductive.   Are some job postings too vague or otherwise flawed?  Certainly.  However, most do convey some information about the type of opportunities available at the company.  Lucas questions the time and resources that will be necessary to operate Zappos Insider as well.   Karen Bleier of the Washington Post does the same.  Both wonder how Zappos will handle the volume of activity that may arise here.  

I would note several additional concerns.  Hiring for cultural fit is wonderful.  However, does Zappos' initiative increase the likelihood that insiders will hire others who are quite similar to them in many ways?  Are certain people simply not going to engage with the firm on this platform, and therefore, will Zappos be missing out on some great talent?   Will the best people be presented other opportunities during the time required to cultivate a relationship on Zappos Insider, and perhaps not be willing to wait for an offer from Zappos that may never materialize? 

 

Running a Better Meeting

We have all been stuck in terrible, unproductive meetings.   The discussion rambles on, and people constantly move off topic.  The agenda is unclear.  The meeting comes to a close without clear action items and assignments of responsibility.   How can we improve meetings?  We have all heard the typical advice.  Set a clear agenda.  Distribute key documents for review in advance of the meeting.  Select the attendees carefully.  And so on...  

Today, though, I read one piece of advice that I think bears emphasizing here.  Inc.'s Laura Garnett recently interviewed Dave Kashen, co-founder MeetingHero, a startup that has developed a cloud-based meeting tool.   Kashen offered several tips of making meetings  more productive.  I found one tip a bit different than the usual advice, and I'm going to apply it in my own work:

During the meeting, periodically summarize the discussion.

Kashen's suggestion: "Great facilitators instinctively do this. They stop every now and then to let people know where they are in the process and what has happened so far. This helps to ensure everyone is on the same page (and makes it easier to resolve inconsistencies if not), and frees people up to focus on the next part of the conversation. We realized that this function can largely be served by allowing the group, or a designated notetaker, to create a real-time meeting summary as it's going. That way the whole group knows where they are, and the summary can be sent out immediately after the meeting instead of someone having to go back through a set of notes and remember what happened."

Recruiting People with Grit

What is grit?   University of Pennsylvania Professor Angela Duckworth defines grit as "perseverance and passion for long-term goals."  Duckworth has studied grit extensively in her academic career.  She has found that intelligence is not always a good predictor of academic or professional success.  Grit matters.  For instance, she has found that, at West Point, a cadet's grit score is the best predictor of success in "Beast Barracks" – the incredibly challenging, six week summer training regimen that all new cadets must endure. Grit predicted success more so than intelligence, leadership ability or physical fitness. 

Now Josh Jarrett and Kristen Hamilton have launched a new startup, Koru, that leverages the concept of grit to help companies find great employees.    According to this Fortune article written by Erin Griffith, "Koru seeks out recent college graduates who possess grit, or tenacity, or resilience, but lack real-world experience, and help them land jobs at fast-growing companies. Koru does that by through intensive four-week training programs, hosted at by the companies looking to recruit raw talent."   

In short, Koru identifies students who appear to have a high level of grit, puts them through an intense, but short, program to both train them and test their determination and perseverance.  Part of the training involves working on short-term projects with real companies looking to recruit individuals with grit.  Ultimately, Koru tries to match these high grit individuals with employers seeking people with this crucial trait.  Koru makes money both from fees collected from hiring companies as well as tuition collected from recent college graduates who enroll in their four-week program.  Hamilton comments, "Hiring mistakes are expensive.  We realized a degree and GPA is not a good signal. We're looking to be that signal."

Reverse Mentoring

In 2009, I wrote about the very new concept of reverse mentoring in my book, Know What You Don't Know.  I'm very glad to see that the approach has begun to take hold in many companies.  Here's a new video created by the Wall Street Journal about the value of reverse mentoring:

Do Unmarried CEOs Take More Risk?

Wharton Professor Nikolai Roussanov and Temple Professor Pavel Savor have written a new paper titled “Status, Marriage and Managers’ Attitudes to Risk.” They examined the question:  Do unmarried CEOs take more risk in their business decisions than married CEOs?   Here's an excerpt from Knowledge@Wharton, in which Roussanov describes the findings from this research:  

We looked at … the risk-taking decisions of CEOs of public companies in the U.S. We collected data [about the] marital status of CEOs of the 1,500 largest public companies and looked at the differences in behavior of these firms — of the firms that were led by CEOs who were single and those who were married... What we found was that firms led by single CEOs engaged in much more aggressive investment behavior, along the lines of capital expenditures, as well as innovation activity, research and development, and acquisitions to some extent, than companies led by CEOs who were married. These differences translated also into greater riskiness of the firms led by single CEOs as measured by the stock return volatility.

The findings are rather interesting, and the scholars intend to extend this research in the future.  What's the next stream of research for them?  Roussanov reports that he would like to examine how marital status affects the decisions of money managers.  We look forward to seeing those findings.

College is Worth It

Everywhere you look these days, you see articles questioning the value of a college education.  Yes, college is incredibly expensive.  Yes, the student debt burden is incredibly worrisome.   I think higher education needs to change.  There is no question in my mind.  However, I do not agree with those who are questioning whether a college education is necessary.   Here's some interesting new data published in the New York Times: 

The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.... And the unemployment rate in April for people between 25 and 34 years old with a bachelor’s degree was a mere 3 percent.

Engage Your Employees By Helping Them Solve Customers' Problems

Mark Lukens, Founding Partner of consulting firm Method 3, has a good article on employee engagement at Fast Company. Lukens makes the point that senior executives often "throw perks" at employees in hopes of increasing engagement. It does not work. Boring work, a lack of autonomy, and inadequate feedback from managers cannot be overcome simply by offering a few perks. Lukens argues that we can increase employee engagement by helping our front-line works serve customers more effectively. Here's an excerpt:

Employees at the frontline collectively have the best knowledge of what customers want and what bothers them. This is what they care about. If they can satisfy those customers then they will be satisfied in their jobs, feeling like they’re achieving something. To create real engagement start by talking with those workers about what their customers want and the obstacles to their satisfaction. Empower your customer-facing employees to solve these problems whenever possible, and as they feel more successful and deal with happier customers, they’ll also feel more engaged.

Do entrepreneurs who "fail early" have a better chance of future success?

James Surowiecki has a terrific column on entrepreneurship in the New Yorker this month.   In the article, he asks why so many entrepreneurs continue to launch start-ups despite the low probability of success.   Here's one excerpt that I found interesting.  In this excerpt, Surowiecki questions whether an early failure leads the type of learning that can generate future success: 

There’s a widespread tendency to treat failure as a badge of honor: “Fail fast, fail often” is a familiar mantra in Silicon Valley. There’s now a regular FailCon, where people come to hear other entrepreneurs tell about the hard times they endured and about how starting a business and failing actually makes you more likely to succeed in the future. It’s a comforting message, but the evidence suggests that past failure really just predicts future failure. A 2009 study of venture-backed firms found that entrepreneurs who had failed in the past were not much more likely to succeed in new ventures than first-time entrepreneurs were—some eighty per cent of those who had failed before failed again. A later study of more than eight thousand German ventures came to an even grimmer conclusion: founders who had previously failed were more likely to fail than novices.

Beware the Maximizing Mindset: The Dangers of High Expectations

Kellogg School of Management's Neal J. Roese and Jingjing Ma have conducted some new research on consumer expectations.  They have shown that marketing professionals need to be aware that creating high expectations in consumers' minds can be dangerous.   Roese and Ma compare two different consumer mindsets:  the maximizing mindset (searching for something that is "best") vs. the satisficing mindset (searching for something that is "good enough").   In their experiments, they found that those in the maximizing mindset are more thorough in their evaluation of alternative products.  However, they also found that those in the maximizing mindset were more likely to experience "greater regret and lower satisfaction" than those in the satisficing mindset.    Marketers, therefore, must be cautious about setting unrealistic expectations for their product, thereby pushing the consumer into a maximizing mindset.  They may find that those consumers are very difficult to satisfy.   Ultimately, they may spend a great deal to acquire those customers, only to see them defect quickly. 

Hiring for Attitude and Cultural Fit

You arrive at a company and are escorted to a room for your interview.  The interviewer arrives with a notebook in hand along with a cup of water for you.  When you leave the room, what do you do with the cup?  Do you put it in the trash?   Hmmm... why does it matter?  Well, at HubSpot, Chief Product Officer David Cancel uses this simple technique to help assess cultural fit.  If a person disposes of the trash, he looks favorably upon them. If he or she leaves the trash behind, he begins to wonder if that individual will fit in an organization that looks for effective and humble team players.  For more on Cancel's approach, check out this article at Fast Company by Rebecca Greenfield. 

Over the years, Cancel has found that the usual interview questions, as well as a variety of tests or brainteasers, do not always lead to the best hires.  Those various interview methodologies simply do not help determine if someone will fit the culture and serve as an effective team player.   Instead, small techniques such as the cup/trash test help him develop a better understanding of how people with interact with others in the organization.  

Others in the organization have begun to create their own techniques for ascertaining cultural fit. For instance, according to the article, "Meghan Keaney Anderson, a director on the product marketing team, asks people what they like to read and why. She wants to attract people who love to learn and are curious enough to invest their time outside of work in learning."  

What's the result of this effort to hire better for cultural fit?  Apparently, employee engagement and employee retention have risen since HubSpot began implementing this approach.  

JetBlue: Stuck in the Middle?

Let me start by acknowledging that, as a customer, I love JetBlue.  Their service stands out in an industry known for, quite frankly, a pretty awful customer experience.  Having said that, I've always worried that they run the risk of being "stuck in the middle" in terms of their strategic position.  They are not a low cost player in the industry, but on the other hand, they cannot command a premium price either as a truly differentiated player.   Now the Wall Street Journal reports that CEO Dave Barger is under fire, as financial performance has been subpar.  The paper notes, "Meanwhile, excluding fuel and profit-sharing, unit cost—the cost to fly a seat a mile—rose by 6.3%, and labor expenses were up about 15% on a unit-cost basis, the biggest jump ever year over year."  

What's the diagnosis in this article?  Wall Street Journal writer Susan Carey explains, "But many analysts and investors believe that JetBlue is marooned in an industry middle ground, between much larger, full-service carriers like Delta Air Lines Inc. that are improving their service and profitability, and successful ultra-discounters like Spirit Airlines Inc. that go after passengers who don't want perks—just rock-bottom fares. JetBlue has been profitable since 2009, but only marginally so and it often disappoints on quarterly profits."   That sure sounds like a company stuck in the middle, doesn't it?  

Hiring and Retention at High-Status Companies

Management scholars Matthew Bidwell, Ethan Mollick, Roxana Barbulescu, and Shinjae Won have written a new paper titled, “I Used to Work at Goldman Sachs! How Firms Benefit From Organizational Status in the Market for Human Capital.”  Their results are not surprising, though their paper is admirable for the rigor with which they document the relationship between company status and talent attraction/retention.   The study finds that top talent will accept lower total compensation if they have an opportunity to land a job at a high-status firm.  That won't shock anyone.   Interestingly, though, the hiring advantage at high-status companies then turns rather quickly into a retention challenge.   Once those employees gain some experience, they become rather difficult to retain.   These employees at high-status firms view themselves as very attractive to other companies, and therefore, they demand higher compensation, better benefits, promotions, etc.   The advantages of status, therefore, dissipate perhaps a bit more quickly than firms would prefer. 

Whole Foods Suffers Large Drop in Share Price

Whole Foods experienced a dramatic drop in its share price this week.  The shares fell 20% as the company projected slower growth in the future.   What's affecting the company's growth rates?  Many new rivals have emerged, including conventional grocers who are allocating much more shelf space and attention to the organic food category.  Moreover, Whole Foods has tried to emphasize value more so than in the past, so as to compete more effectively with these conventional, lower-priced rivals.  The company, after all, does have a reputation as "Whole Paycheck."  Whole Foods also has felt pressure to emphasize value as it has moved into new geographic markets within the US where customers are not as affluent.  The emphasis on value, i.e. lower prices, naturally has a short term negative impact on sales growth (as each item generates less revenue), though it may help bolster growth in the long run.  

What's the danger here for Whole Foods?   If they drop prices and emphasize value in a big way, they may take away from their high quality, high service, differentiated positioning.   If they don't pay attention to value at all, they may sacrifice growth and lose market share in the organic category.     In short, Whole Foods faces a conundrum many differentiated, premium players encounter as they begin to saturate their original niche and as new rivals emerge.  Whole Foods would be well-advised to take great care that they don't allow a desire for growth and market share to cause them to dilute a strong brand and to hurt a premium image.  Many other premium niche players have made that mistake, and they have learned that it is very hard to recover from such an error. 

Encourage Your Workers to Reflect on Their Work: Their Performance Will Improve!

Scholars Francesca Gino, Gary Pisano, Giada Di Stefano, and Bradley Staats have published an interesting new working paper titled "Learning by Thinking: How Reflection Aids Performance."  The paper describes a series of experimental studies conducted by these researchers.  In one study, they conducted a field experiment at Wipro, an outsourcing firm based in India.  The scholars worked with employees experiencing a multi-week training program.  They broke the employees into three groups.  First, they had a "reflection" group.  They asked these workers to spend the final 15 minutes of each day reflecting on what they had learned.  Second, they had a "sharing" group.  These employees spent 15 minutes reflecting, and then they shared their thoughts with a peer for approximately 5 minutes.  Finally, the control group did not engage in any closing activity at the end of each day's training. 

What were the results of this field experiment?   The employees in the reflection group performed 22.8% better than the control group on a test administered at the end of the training program.  The workers in the sharing group experienced a similar advantage over the control group employees. 

The results should not surprised you at all.   Some of you are probably wondering why we needed an experiment to prove the obvious!  However, think for a moment about the work that you and your colleagues do in your organization.  How busy is your typical day?   Have you set aside 15-20 minutes for reflection and sharing from time to time?  In many cases, we don't allocate time to this important activity.  Yes, we do it informally, perhaps during a drive home from work or while working out at the gym.   In many instances, though, we get so busy in the day-to-day work that we allow far too many days to pass while we are not reflecting and sharing appropriately. 

The Customers You Do Not Want

New product launches often do not succeed.   That's the unfortunate reality facing many business leaders.  Strong early sales presumably are a leading indicator of a profitable success story to unfold in the near future.  However, some new research suggests that not all early sales, and all early customers in particular, are a positive thing.  Scholars Eric Anderson, Song Lin, Duncan Simester, and Catherine Tucker have conducted a new study examining new product launches.  They have identified a set of customers that they call "harbingers of failure."   If these customers are buying your new product, you might not want to celebrate... you may want to become concerned, quite concerned.   Here's an excerpt from Kellogg Insights: 

The researchers found that just 40 percent of new products are still in stores three years later, a number in line with previous estimates. But critically, a product’s chances of succeeding depend not only on how much is sold but also on who is buying.  The surprising finding is that when sales increase to a segment of consumers whom the authors label “harbingers of failure,” then the new product is more likely to fail.  This finding contradicts nearly every metric of new-product success: How can more sales signal that your product is about to fail?  

Who are these harbingers of failure?  Apparently, there are a set of consumers who consistently demonstrate unique niche tastes.   Their preferences clearly fall outside the mainstream.   According to Kellogg Insights, "Harbingers with a history of making four or more repeat purchases of a failed product are nearly twice as likely as other customers to buy another product that fails."  If these harbingers are involved in your early market research, they may convince you to launch a product that is ultimately going to fail.  So, you have to be on the lookout for harbingers long before launch.   The scholars suggest talking to consumers about the OTHER PRODUCTS that they like, not just the product that you are launching.  If they like mainstream popular products, you are probably on solid ground.  If they cite other niche products that have not become hits, you should be cautious.  They might be harbingers of failure. 

Michelle Peluso Has No Office

Michelle Peluso, CEO of Gilt Groupe, spoke at the Bryant University Women's Summit in March 2008.  I was quite impressed, as were the more than one thousand women in attendance.   At the time, Peluso served as the CEO of Travelocity.   About one year ago, she became the CEO of Gilt Groupe, an online shopping site that offers flash sales of designer apparel and accessories.  In the New York Times Corner Office column several weeks ago, Peluso described her leadership style.  Here's a terrific excerpt:

I don’t have an office. When I started at Gilt, I wanted to get to know the various teams, so I’d set up and work with them for a week. I joined their meetings and tried to do their work. When you’re sitting in the open with everybody, you pick up a lot. That was my schedule the first eight weeks, but I just loved it, and more than a year later, I haven’t stopped. I never want to be sitting in an ivory tower surrounded by people who tell me what I want to hear, or feeling that I don’t really understand how people feel and what’s going on.

Wouldn't it be great if other CEOs followed her example?   Peluso clearly understands how isolated senior executives can become.   She understands how easy it is for leaders to find themselves surrounded by sycophants.   Her strategy keeps her finger on the pulse of the business, well-connected to front-line employees throughout the organization.   

Mentorship Mistakes

Fortune's Katherine Reynolds Lewis has written a good column titled "Five Mentor Mistakes to Avoid."    She makes two particularly strong points worth emphasizing here.  First, consider selecting a mentor who is not similar to you.  In many cases, people select mentors with whom they share some key things in common (perhaps educational background, gender, functional expertise, race).   However, Lewis suggests that picking someone similar to you may be a crucial mistake.  A mentoring relationship may deliver more fruit if you can learn from someone whose background and expertise enables them to offer you a different perspective.  Here's one excerpt:

When technology executive Sharon Meers, co-author of Getting to 50/50, was a vice president at Goldman Sachs, the women's network discovered that all the male vice presidents were playing basketball with the senior leaders. They asked the partners to create a program that would match women with senior men as mentors. A number of women who participated advanced to become managing directors.

Second, Lewis recommends thinking about mentoring as a two-way relationship.   I have written about that point several times, including on this blog.   Senior leaders should not only impart advice in a mentoring relationship.  They should use the opportunity to learn from their younger colleagues.  Making the mentoring relationship a two-way street can be incredibly beneficial.  

Handsome Males More Likely to Achieve Success in Entrepreneurial Pitches

HBS Professor Alison Wood Brooks, Wharton Professor Laura Huang, MIT scholar Sarah Wood Kearney, and MIT Associate Dean Fiona Murray have conducted three intriguing new studies about the effect of gender in entrepreneurial pitches.  They found that investors are more likely to favor male entrepreneurs rather than female entrepreneurs.  Attractive men do better than unattractive males. 

In the first study, angel investors watched videos of real pitches and rated the attractiveness of the entrepreneurs.  According to HBS Working Knowledge, "Male entrepreneurs were 60 percent likelier to receive a funding prize than were female entrepreneurs. Among those male entrepreneurs, investor-deemed attractiveness led to a 36 percent increase in pitch success. But for female entrepreneurs, their looks had no apparent effect on the success of their pitches."  

In the second study, each participant watched two pitch videos, one of which was successful while the other was not.  50% of the participants were women.  Roughly 2/3 of the participants preferred the pitches from males.  Interestingly, the preference for male entrepreneurs existed both for the male and female participants who were judging the pitches.

In the final study, 194 participants watched a pitch video.  The voices on the video could be either male or female.   The voice-overs were accompanied by a photo, some of which had been independently rated as highly attractive and others that had been evaluated as less attractive.  According to HBS Working Knowledge, "As with the previous studies, participants awarded higher ratings to pitches with male voices—deeming the male pitches more "persuasive," "fact-based," and "logical" than otherwise identical female pitches. Additionally, the participants preferred pitches from the "high-attractiveness" male entrepreneurs over those from "low-attractiveness" men. But looks had no significant effect on whether female-voiced entrepreneurs fared well." 

Face-to-Face Communication

Do people behave differently when they communicate with another party face-to-face?  How do more remote forms of communication change the substance and tone of our interactions?   These questions have been debated for some time, as email and other forms of communication have come to dominate business workplaces.   Here's a hilarious sketch from Jimmy Fallon that shows how communicating face-to-face can be VERY different than other ways of interacting with others!  Enjoy!

Lego: Sticking to Bricks

LEGO faced a perilous strategic and financial situation roughly a decade ago.   Since that time, the company has experienced a remarkable turnaround.  The LEGO story reminds us of the folly of poorly designed diversification strategies, as well as the value that can be created by renewing the core business.  

Does Walking Make Us More Creative?

Stanford scholars Daniel Schwartz and Marily Oppezzo have conducted a new study examining the link between walking and creative thinking.   Here's the basic conclusion, summarized in an article from Stanford University News:

The study found that walking indoors or outdoors similarly boosted creative inspiration. The act of walking itself, and not the environment, was the main factor. Across the board, creativity levels were consistently and significantly higher for those walking compared to those sitting...  "I thought walking outside would blow everything out of the water, but walking on a treadmill in a small, boring room still had strong results, which surprised me," Oppezzo said.

To read these scholars' study, click here.  

Alan Mulally on Running a Crisp Leadership Team Meeting

Here's a great response from outgoing Ford CEO Alan Mulally during an interview with the Wall Street Journal.    When Mulally arrived at Ford, he established some basic ground rules for conduct during senior team meetings (he called them "working together behaviors").  Mulally wanted to insure that the team members worked together effectively, and that they used their time efficiently during meetings.  Here, Mulally talks about holding people accountable with regard to these rules of engagement:

WSJ: When was the last time you had to remind someone: "No, you didn't get it."

Mr. Mulally: Every once in a while someone in business-plan review will, say, pull out their communication device and start working on it. We have the entire leadership team networked around the world, and somebody would have the audacity to start working a specific issue instead of being laser focused on helping everybody?  Or they'll talk. At Ford, one of the behaviors is you listen, and you don't have side conversations during the meeting. It's just so important everybody stays focused. So if someone has a side conversation, we just stop and we just look at them, and it's amazing how it doesn't happen again.

For more on those ground rules, please check out this prior blog post. 

Looking for Jobs in All the Wrong Places?

Inc. magazine reports today on a new study by iCIMS, an employment software company.  They examined roughly 60,000 employment opportunities listed on various social media platforms.   Their results offered a few interesting surprises.  

Where do most candidates expect to find jobs on social media?  LinkedIn, of course.  Approximately 2/3 of job seekers expect to find job postings on LinkedIn.   Indeed, LinkedIn accounts for nearly a quarter of all employment opportunities listed on social media platforms.   In contrast, only 1% of job seekers look to Twitter to find job opportunities.  However, 51% of employment opportunities posted on social media platforms in this study can be found on Twitter!  

One key caveat:  This study examined job postings, but of course, a job search involves much more than finding a listed employment opportunity.   Companies may indeed post lots of employment opportunities on Twitter, but is that a primary recruiting tool for them?  How does it actually stack up against LinkedIn?  We would have to know much more about the entire recruiting process.  For instance, LinkedIn activity related to employment involves much more than job postings.  Much of the action pertains to networking and searching, often in cases where a job is not even posted.  Many firms use LinkedIn to search for attractive candidates, before they even list a job opportunity publicly.  Similarly, many candidates search for opportunities via LinkedIn without an actual position posted.  They are networking, seeking introductions, learning about companies, etc.    

The lesson for those seeking jobs:  A great employment search involves multiple avenues of investigation and exploration.  Don't restrict yourself to one mechanism or tool. 

Never Make the First Offer: Is That Bad Advice?

The conventional wisdom is clear:  In a negotiation, you should never make the first offer.  We've all heard this advice, and we probably have tried to adhere to it when buying a car, working out a business deal, or negotiating a salary.  Is this good advice though? Is the conventional wisdom actually correct?

Northwestern negotiation expert Leigh Thompson thinks we should question the conventional wisdom.  She points out that research has never validated this advice.  In fact, some new research suggests that making the first offer leads to better outcomes.  Several good reasons exist for choosing to make the first offer.  For instance, she points out that people are subject to anchoring bias.   In other words, we often rely too heavily on an initial point of data.  We begin with that number, and we adjust from that point... and we would behave differently if not anchored originally by an initial piece of data.   Thus, you can anchor the other party by making the first offer, and you can use that anchor to your advantage. 

Thompson also offers some good advice so as to make an effective first offer.   First, she reminds us that few parties will take the first offer.  Keep that in mind when you put your offer on the table.  Second, be realistic with your first offer.  An outrageous first offer can create a "chilling effect" that will make it hard to come to an agreement with the other party.  Finally, a good first offer is often close to other party's BATNA (best alternative to a negotiated agreement).  Again, if the offer is far worse than the other party's BATNA, it may be viewed as outrageous and make a deal highly unlikely. 

P&G Emphasizes Premium Strategy in Razor Market

Over the past few years, Proctor and Gamble has struggled with the question of whether to deviate from the premium/differentiation strategy that made it so successful during the first tenure of A.G. Lafley.  When Bob McDonald succeeded Lafley, he deviated from that strategy as he coped with consumers "trading down" to lower-priced rival products and private labels during the recession.  The moves left P&G in danger of becoming "stuck in the middle" - trying to be both differentiated/premium and low cost at the same time.   

The razor market offers an interesting example of this challenge.  Over the past few years, the company's Gillette division has seen a new disruptive threat emerge, in the form of lower-priced competitors such as Dollar Shave Club (see inexpensive YouTube marketing below).  How would P&G respond? It essentially informed customers that they could always use an older version of the Gillette products if they wanted a less expensive option.  However, Gillette chose not to come out with a new low-price product.  Now we learn from the Wall Street Journal that Gillette will push even higher into the premium space with a new high-priced technologically advanced product.   Gillette is counting on some consumers to trade up as they have many times in the past, when the firm has brought out advanced razors.   Is this one step too far, or will consumers be receptive?   It will be interesting to see.   Sometimes, firms facing disruptive threats can "over-shoot" the high end of the market, offering consumers an advanced product that actually exceeds the needs of most people.   On the other hand, going down market with a cheaper product brings its own challenges, as premium players often are not capable of also competing in the low cost segment of the market.   In a way, we should not be surprised by this move from P&G.  Lafley is back as CEO, and he was very successful with this premium strategy in the past. Moreover, the economic recovery may provide perfect timing for a move to push deeper at the high end of the market.  

Do Visual Metaphors Affect our Creativity?

Fast Company's Eric Jaffe writes this week about new research on the relationship between visual metaphors and creativity.   Jaffe first cites a 2012 study by Angela K.-y. Leung and her co-authors.  Here is Jaffe's summary of that study:

Test participants enacted various metaphors for creativity, then took an association test designed to measure original thinking. (For "thinking outside the box," they actually sat outside a box made from PVC pipe and cardboard.) The results showed that embodying metaphorical creativity did, in fact, enhance it.

Jaffe goes on to examine a new study by Alex Marin, Martin Reimann, and Raquel Castaño.   They confirmed that visual metaphors can enhance creativity. However, these authors also found that visual metaphors can have a deleterious effect.   For instance, showing people an image of a burned-out light bulb can decrease their creativity.   Scholars don't know exactly why these visual metaphors affect our thinking, though they have demonstrated their impact.  

What's the implication for practitioners trying to nurture innovation in their companies?  Jaffe suggests that we pay close attention to the environment we create in our workplaces.    If we want a team to brainstorm, we might take care to shape the environment in which they will do their work.   Of course, that emphasis on environment should go WAY BEYOND the placing of appropriate visual metaphors.  It should involve creating a space that has plenty of materials available, as fuel for creative thinking.  It should involve plenty of materials, such as post-its and the like.  It should involve appropriate wall space for displaying ideas, sketches, etc.   We need to think holistically about creating a space that nurtures creativity, rather than simply hoping that a few visual metaphors can have a profound impact.

Lone Genius vs. Creative Collaboration

Ben Waber, president and chief executive officer of Sociometric Solutions, has written a great piece for Business Week. The article is titled, "The Myth of the Lone Genius."   Waber examined the 1,000 most-cited articles from Nature from 2001 to 2010.   Note that Nature is a very prestigious scientific journal.  Check out the two charts he created. 

Source: Business Week

Note, in particular, the right-hand tail on the top chart.  The five ground-breaking, highest impact articles were all co-authored.   Here's Waber's comment: "The five most-cited papers all have multiple authors. These are the papers that change science, that move entire fields—the ones we would expect “geniuses” to write. Except they’re all written by teams."  

Overall, the second charts shows that multiple author papers account for many more citations than single author articles.   We tend to make heroes of the long geniuses, but in today's world, collaboration is often the key to creative breakthroughs. 

Jon Stewart on the GM Crisis

Companies without HR Departments?

The Wall Street Journal reports today on some firms that have chosen to abolish (or never create) human resource departments.   Is that a wise move?   On balance, I would say that it is a risky move to operate without an HR group.  I understand the rationale for some of these firms who choose to eliminate the function.  They want line managers to take more responsibility for talent management duties.   They don't want leaders in the company shunning key people management responsibilities off to the human resource department.   Some firms also become frustrated with the bureaucratic procedures that emanate from some HR departments.  It is true that departments of all kinds begin to take initiatives and create processes simply to justify their existence.   However, I would argue that eliminating the HR department is a giant overreaction.  It is also risky.   Companies can find themselves in legal hot water because line managers do not have specific expertise on people management issues.  The article is worth a read, but I wouldn't want to emulate the extreme actions of some of the firms featured in it. 

Encouraging More Entrepreneurs

Troubling Data about Talent Management & Succession

Stanford's David Larcker, Stephen Miles, and Brian Tayan have written a new article titled "Seven Myths of CEO Succession."  They cite some rather startling statistics about succession.  

Each year, approximately 10 to 15 percent of companies change CEOs either because of retirement, recruitment to another firm, resignation following poor performance, or for health-related issues. For this reason, shareholders expect that companies have a chosen successor identified at all times to immediately assume the CEO position should the need arise. Unfortunately, research data indicates that this is often not the case. According to a 2010 study by Heidrick & Struggles and the Rock Center for Corporate Governance at Stanford University, only 54 percent of companies state that they are grooming a specific successor to the CEO position, and 39 percent claim to have no viable internal candidates to permanently replace the CEO if required to do so immediately. 

Wow... what an indictment of the leaders and the leadership development efforts at many companies! Nearly 4 of 10 firms report "no viable internal candidates."  The data raise some troubling questions.  Are these firms not investing in leadership development efforts?   Or, are they spending unwisely in their efforts to groom future leaders?   Perhaps most importantly, are many firms not holding their senior executives, including the CEO, accountable for developing talented people who can assume top positions in the future?  CEOs and other top leaders should be held responsible for more than meeting financial and non-financial performance targets.  They also need to be held accountable for talent development and succession.   That part of their job helps to insure the long term viability and success of the institution. 

Bryant University ranks in top 50 of Business Week List

I'm very proud that, for the first time, Bryant University cracked the top 50 in the Business Week undergraduate business school rankings!  Moreover, the school stood out on the corporate recruiter rankings - a key element of the BW methodology.  Corporate recruiters ranked Bryant #18 in the nation.  That ranking speaks to the quality of our students, their preparedness when entering the workforce, and the strong work of our career office led by Director Judy Clare.  As parents increasingly ask about the value of expensive college educations, I'm happy to report that we have a strong job placement record and highly satisfied corporate partners.  

Amazing Evidence for the Wisdom of Crowds

Check out the amazing results of something called the "Good Judgment Project," profiled here by NPR.   Three psychologists - Philip Tetlock, Barbara Mellers and Don Moore - have created this project in collaboration with members of the government intelligence community.   Over the past three years, the researchers recruited roughly 3,000 people to make probability estimates about geopolitical issues such as the threat of a North Korean missile attack.   The NPR article profiles one such person, who happens to be a pharmacist living in Maryland.  She does not have any special expertise in international affairs.  She received some basic training in probability estimation, and then set out to respond to various questions posed to her by the researchers.  Her responses are among the most accurate of all 3,000 average citizens participating in the study.   She credits Google searches as her most useful tool for learning about an issue before making a prediction.  The NPR story indicates that, "According to one report, the predictions made by the Good Judgment Project are often better even than intelligence analysts with access to classified information, and many of the people involved in the project have been astonished by its success at making accurate predictions."  

What's going on here?  First, it clearly demonstrates the concept of the wisdom of crowds.  If you pool the collective intellect of a large, diverse group of people, you can often get the right answers more frequently than you can by relying on a few experts.  Of course, the wisdom of crowds only works if you have members of that large diverse group making independent judgments.  If people are influenced by others, then the wisdom of the crowd breaks down.  Second, as the story indicates, "If you want people to get better at making predictions, you need to keep score of how accurate their predictions turn out to be, so they have concrete feedback."  The researchers have done that throughout the study.  Finally, why do the experts often stumble?  Well, they are subject to many biases.  For instance, they often fall into the confirmation bias trap.  They may have more data at their disposal, but they often rely on the information that confirms their pre-existing views.   Moreover, the experts perhaps are not making independent judgements.  They may be influenced to a large degree by others in their work group or agency.  In that way, they may be subject to conformity pressures.  

Mary Barra at GM

The Wall Street Journal reports this morning on new developments in the GM ignition switch scandal. According to the newspaper, 

For the first time within General Motors executives will be told of vehicle safety problems when they are first reported and are now expected to expand any potential recalls if they deem it necessary, Chief Executive Mary Barra said in an interview.  "The executive team can only expand, they can never make it smaller," Ms. Barra told The Wall Street Journal. "I am trying really hard to communicate that we have made great strides to reduce the bureaucracy within GM."

Barra's comments are certainly welcome, but a key point needs to be made here.  You can't simply order lower-level employees to report all safety issues to senior executives.    You have to create an environment and a culture where people feel comfortable bringing bad news to the boss.  Moreover, senior leaders need to recognize that some people will feel hesitant to share bad news.  Therefore, senior executives at GM need to become "problem finders" who actively seek the bad news.  They have to do more than just say that they have an open door.  They have to get out of their offices and dig for problems.  They have to become seekers, rather than just receivers of safety information. 

10 News Conference Appearance - Part 1

News, Weather and Classifieds for Southern New England

10 News Conference Appearance Part 2

News, Weather and Classifieds for Southern New England

Baseball Umpires and the "Inconsequential Bias"

Stanford Graduate School of Business PhD students Etan Green and David P. Daniels have conducted a fascinating new study about umpires in Major League Baseball.   Here's an excerpt from an article on the Stanford website:

Green and Daniels analyzed ball and strike calls made by Major League Baseball umpires for more than a million pitches between 2009 and 2011. In their study, which recently won second place at the MIT Sloan Sports Analytics Conference, they show that an umpire’s strike zone shrinks in counts when the batter already has two strikes (and therefore a third strike would result in an out) and expands when the batter has three balls (with a fourth ball then resulting in a walk). “Oftentimes, the umpires face a choice between a call that would be really pivotal and a call that would be relatively inconsequential,” says Green. “And what we find is that they err on the side of the inconsequential call unless they’re absolutely certain that the pivotal call is the right one.”

What do we take away from this study?  The findings suggest that decision-makers in high stakes situations may be biased toward "punting" - i.e. they may choose the more inconsequential course of action, if one exists, rather than taking the action with more substantial impacts.   We certainly have all been in situations where we choose the "path of least resistance."  Of course, this study differs from the managerial context in organizations, because the umpires do not experience the consequence here.  The batter and pitcher do (though the umpire is more likely, perhaps, to be criticized if he makes a highly consequential call).   In a business context, the decision-maker often experiences the consequences for themselves.  Still, we should be mindful of this potential bias that may affect us in high stakes situations.