Coping with Quarantine: Learning from the Polar Explorers

Source: history.co.uk

Daniella McCahey, a history lecturer at the University of Idaho, has written an inspiring column for Fast Company this week.   She takes a look back at the Antarctic explorers of the early 1900s and examines how they coped with months of isolation, darkness, and surviving in close quarters with fellow adventurers.   She argues that seven things helped the explorers cope effectively, and that we can use some of these same strategies today during the COVID-19 crisis. 

1. Music: McCahey quotes Apsley Cherry-Garrarde, an English explorer and member of Robert Falcon Scott's expedition of 1910: “It is necessary to be cut off from civilization … to realize fully the power music has to recall the past…to soothe the present and give hope for the future."

2.  Books:  She reminds us that, when Shackleton's ship sank, he made sure to grab his favorite Rudyard Kipling poem.  Grab that book you have been meaning to read.  Dive into a subject you would love to learn more about, or expand your understanding into a related domain.   Reading widely can help spur creativity and innovation, as we sometimes find ideas in adjacent fields that are applicable to our own.   Read a few fun books too... a mystery that captures the imagination or keeps you in suspense.

 

3.  Diary Writing:  Taking the time to record key events and reflect upon them can have value.  It also helps people release a bit of their stress.  

4.  Expedition Newspapers:  Some explorers also chose a different form of writing.  Not only did they record personal diaries, but they also produced newspapers for the expedition as a whole.  These basic newspapers included poetry, humor, games, and puzzles. 

5. Games: She quotesCarsten Borchgrevink, leader of the Southern Cross Expedition: “The sameness of those cold, dark nights attacks the minds of men like a sneaking evil spirit. We found that … playing chess and cards were very valuable pastimes.”   I can attest to the value of playing games.   My family and I have been enjoying many game nights amidst the crisis.  As the kids grew older, we played board games much less often.   Now we are revisiting our game night tradition, and we have enjoyed the break from our remote work.  

6.  Food:  Here's one that I can relate to very much.   She says that the meals quickly became monotonous.  Out of boredom and at times necessity, the explorers experimented with new foods and recipes.  I've found myself doing the same thing.  I've always enjoyed cooking, but often don't have the time. Now, I'm usig my time at home to try new recipes, and the practice has not only lifted my spirits but made the entire family happy.  (well most of the time... there have been a few misfires!) 

7.  Alcohol:  I don't think that I need to say much about this one.  We all agree it has a role to play!  Of course, some research does suggest that drinking wine can enhance your creativity! 

Doing the Right Thing: Kent Taylor at Texas Roadhouse

Source: bizjournals.com

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."

Small Wins: More Important Than Ever

Source: https://michiganross.umich.edu/faculty-research/faculty/karl-weick

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.  

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.  

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.

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.  

A few tips for leading virtual teams

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.

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

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

Source: Needpix.com

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.

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?

Meaningful and Meaningless Work

Source: Good Free Photos

Several years ago, Catherine Bailey and Adrian Madden published an article for MIT Sloan Management Review titled, "What Makes Work Meaningful — Or Meaningless."  Here's their summary of the findings from their research:

We interviewed 135 people working in 10 very different occupations and asked them to tell us stories about incidents or times when they found their work to be meaningful and, conversely, times when they asked themselves “what’s the point in doing this job?” We expected to find that meaningfulness would be similar to other work-related attitudes, such as engagement or commitment, in that it would arise purely in response to events or situations within the work environment. However we found that, unlike these other attitudes, meaningfulness tended to be something intensely personal and individual; it was often revealed to employees as they reflected on their work and its wider contribution to society in ways that mattered to them as individuals. People tended to speak of their work as meaningful in relation to thoughts or memories of significant family members such as parents or children, bridging the gap between the public and the personal realms. We also expected meaningfulness to be a relatively enduring state of mind experienced by individuals towards their work; instead, our interviewees talked of the unplanned, unexpected or surprising moments during which they found their work deeply meaningful. 

We were anticipating our data would show that the meaningfulness experienced by employees in relation to their work was clearly associated with the actions taken by managers, such that, for example, transformational leaders would have followers who found their work meaningful, whereas transactional leaders would notv . In fact, our research showed that although quality of leadership received virtually no mention at all when people described meaningful moments at work, poor management was top of the list of meaning-destroyers. 

Leaders need to consider these findings carefully.   How are they contributing to an environment in which employees find their work meaningful?  How are they eroding meaning or frustrating those who seek meaning in their work? Meaning is incredibly important when it comes to intrinsic motivation and performance. As Google found in their study of team performance, titled Project Aristotle, "Finding a sense of purpose in either the work itself or the output is important for team effectiveness. The meaning of work is personal and can vary: financial security, supporting family, helping the team succeed, or self-expression for each individual, for example."

Substantial Consequences of a Culture of Fear

Source: Flickr

What happens when a culture of fear takes hold in an organization?  How can it put an entire enterprise at risk?   The story of Sasol, the South African integrated energy and chemicals company, offers some stark lessons.   Bloomberg reported this week on problems with two giant  projects at the company:  a ethane cracker plant in Louisiana and a wax project in Sasolburg, South Africa.  In both cases, massive cost overruns and schedule delays took place. The Board remained in the dark for quite some time, unaware of how bad things had really become. Here's an excerpt from the article by Antony Sguazzin and Paul Burkhardt:

But Sasol’s struggle to break with a long-standing command culture, in which executives are rarely questioned, threatens to bring the global expansion of one of South Africa’s most successful corporations to a halt.   Shareholders have turned on Sasol in the aftermath of massive cost overruns and delays at a chemical facility that’s now nearing completion in Louisiana. The company fired its co-chief executive officers, Stephen Cornell and Bongani Nqwababa, in October, saying a “culture of fear’’ of managers overseeing the Lake Charles project had contributed to its failures.

A report by South African law firm Werksmans Attorneys examined the troubles at the wax plant. The article states that, "The report showed how employees concealed bad news about the wax plant from the board and made overly optimistic assumptions pertaining to expected profits from the project."  Haven't we heard that description about so many other organizations that have found themselves thrust into a crisis due in large part to the consequences of a culture of fear?  

Now, Fleetwood Grobler has become CEO, and he's trying to change the culture.  Unfortunately, significant damage has been done.  It seems that it will be a massive effort to create a climate of psychological safety at the firm.  

Communicating Complex Ideas Effectively

Source:  Stanford Business School

I recently listened to a highly informative podcast episode featuring Stanford University strategic communications lecturers Matt Abrahams and Lauren Weinstein.   In the episode, they describe several effective strategies for communcating complex ideas to an audience that may not have the background or expertise in that particular domain.   Abrahams and Weinstein describe how the "curse of knowledge" gets in the way for many experts.  They have so much knowledge that they forget how challenging it can be for novices to understand a particular topic.  They assume too much prior knowledge, and they underestimate how difficult it will be for novices to follow their line of reasoning.   Weinstein offers a terrific story of how she worked with a speaker to refine a TED talk.   The topic was challenging: treatments for diseases such as Alzheimer's and dementia.   Weinstein provides some rich detail on they structured the talk to communicate complicated ideas in a compelling, persuasive, easy-to-understand manner.   The lessons - starting with an engaging story, asking the audience questions to engage them, and using analogies to explain complex ideas - are applicable to many different communication situations.  Here's Weinstein explaining her coaching strategy: 

I worked with a TED speaker a while back. His talk was about a treatment that he developed for age-related diseases, such as Alzheimer's and dementia. When he first came to me, his first draft talked a lot about mitochondria and prokaryotic cells and cell membranes, which was really exciting for him and other scientists. But speaking to a lay audience, a TED audience, it was a bit too technical for them and less engaging.

So first, we had him start with a story. So he told the story of his father who had Alzheimer's disease and what it was like to see that decline. He established a personal connection. And he started sharing his content in a way that the audience could really connect to and relate with.  Then he asked the audience questions. So how many of you -- you know someone that's suffered from Alzheimer's or dementia, so again creating more connection with the audience to the topic.  And then finally, we came up with an analogy to explain something that was pretty complex. What we came up with was, in our bodies, we have trillions of cells, and each of these cells are like tiny little individual cities. And within these cities, we have factories, which are the mitochondria. And the job of these factories is to take the oxygen we breathe and the food we eat and convert it to energy.

The problem is that, often, our factories face oxidative damage from toxins and environmental stressors. And this sets the factory walls on fire. The factory walls are made of this delicate wood and easily set on fire. But that's okay because, normally, our -- we have antioxidants. We have a process for putting out the fire and rebuilding the factory walls.

But what happens as we age, for some of us, is we become less efficient at this process. And so essentially, the fires become much bigger than the firefighters in our body can handle. And so the fires become out of control. The factory goes down, and then the entire city goes down. And this is why we see the symptoms of Alzheimer's, for example.

What he developed is a supplement that's basically a fire-proof brick. So it comes in and repairs the factory walls with this fire-proof brick and makes it more resistant to damage so the factory can be saved as well as even, in some cases, rebuild itself.

It's really incredible. And my favorite part was, right after his talk, his daughter-in-law came up to me, and she said, "For four years, I had no idea what he did. This is amazing. Thank you so much."

Be Passionately Dispassionate: A Key to Unleashing Creativity & Innovation

Source: x.company

Eric "Astro" Teller, co-founder of Google's Moonshot factory, has published a wonderful blog post reflecting back on his experience over the past ten years.   Teller offers some important lessons that he has learned about how to unleash what he calls "radical creativity" in an organization.   My favorite tip is to "cultivate the ability to be passionately dispassionate."   Here's an excerpt:

Cultivate the ability to be passionately dispassionate. While we can’t predict the future, we’re trying to invent it efficiently, to maximize the impact of our effort and resources. So it’s absolutely necessary to be intellectually honest and kill things that are pretty good (even if we love them!) so we can move on to even better opportunities. It’s something we keep trying to get better and faster at, though it’s deeply unnatural. It’s never easy to kill projects. Over the years we’ve had to disband dozens of teams and walk away from hundreds of gorgeous ideas, including a carbon-neutral fuel made from seawater.

Entrepreneurs who are charging passionately toward their vision often need to be coached to pop their heads up regularly and switch their mindset to dispassionately assess their situation. Sometimes people say to us, “You have to keep going at this because no one else will.” But that misses the point. Yes, we want to invest in far-out technologies with huge promise when they’re still so risky no one else will. At some point, though, once we’re satisfied that the technology has been somewhat de-risked, we need to test its commercial viability. If the market is as excited about it as we are, other companies will put money into it too, and we’ll keep going. But if they won’t, then maybe we’ve been kidding ourselves, and we should walk away and redirect our time, resources, and talent to more promising solutions.

Don't Be a Copycat! Benchmark in a Better Way

Learn more about several approaches to benchmarking that can help you learn effectively and build a distinctive strategy, rather than engaging in copycat behavior.

Storytelling to Communicate Data Insights

Source: Pixabay

Companies are investing a great deal of time and money into data analysis to drive better decision making. Yet, data analysts sometimes find themselves frustrated by their inability to persuade others with regard to a particular conclusion. The bottom line is that we can say that we are fact-based or evidence-based decision makers, but we don't always respond to arguments rooted in data alone. Stories tend to be much more compelling than numbers, statistics, and bullet points. Nancy Duarte makes this point in a short post for Sloan Management Review. She writes:

If it’s your role to communicate data insights and persuade people to change their behavior, you’ll have more influence and promote better decision-making if you emphasize the people behind the numbers. In a story, we root for the hero as he or she maneuvers through roadblocks. To use data to steer your organization in the right direction, you need to tap into the human tale your data can tell.

Duarte argues that four storytelling techniques can be quite effective: 

1. Identify the Hero - Whose actions produce the data being analyzed? Who has the power to improve the situation?
2. Empathize with the Heroes - Speak with them directly. Try to stand in their shoes and understand their point of view.
3. Identify the Adversary - What is the source of conflict in this story? Who or what is standing in the way of our hero?
4. Share Context - Provide the bigger picture.  Put the current data in the context of a lengthier timeline of events.  

The Effect of Board Tenure on Firm Performance

Sterling Huang of Singapore Management University and Gilles Hilary of Georgetown University have published an interesting paper titled, "Zombie Board: Board Tenure and Firm Performance." They found a curvilinear relationship between average board tenure and organizational performance. Not surprisingly, financial results increase as board members gain some experience and learn about the firm and its industry. However, when average board tenure exceeds ten years, firm performance begins to decline. The authors argue that there are diminishing marginal returns associated with learning and experience. At the ten-year mark, the deleterious effects of board entrenchment become more pronounced and began to have a serious negative effect on performance, overwhelming any small amounts of learning that are continuing to take place. 

Lengthy board tenure not only diminishes firm performance, but has an effect on key decisions made by the board. The authors note that, "A level of tenure close to the optimal reduces excess compensation and increases the pay-performance sensitivity." Huang and Hilary also find that CEO entrenchment exacerbates the negative impact of lengthy board tenure. In short, the mix of board and CEO entrenchment can be very bad for organizations. They conclude by stating, "Our results are consistent with the interpretation that directors’ on-the-job learning improves firm value up to a threshold, at which point entrenchment dominates and firm performance suffers."

Entrepreneurs and Salespeople: Are You Overestimating How Much Others Value Your Product?

Created on https://www.wordclouds.com/

Minah Jung, Alice Moon, and Leif Nelson have published a new paper titled, "Overestimating the valuations and preferences of others," in the Journal of Experimental Psychology.   The scholars examine how individuals evaluate the preferences of others.  Specifically, they find that people tend to systematically overestimate how much others will value something.   Here's an excerpt from their paper: 

In social judgments, we are frequently called upon to make predictions about the evaluations of others, such as how much a friend will enjoy a recommended novel, how long a coworker will be willing to wait for useful feedback, or how much a potential buyer will be willing to offer for a used set of golf clubs. The overestimation bias has important implications on real-world economic and social decisions. Furthermore, the paradox we document suggests that someone who perfectly understands others’ enjoyment for a good may nevertheless be imperfect at setting prices, simply because they fail to recognize how people trade off enjoyment against other valuation metrics, such as willlingness-to-pay and willingness-to-wait. This suggests that social and consumer judgments may suffer not only from general overestimation but also from an additional imperfect understanding of how people weigh trade-offs. Many preferences are developed from a complex weighting of positives and negatives, the balance of which produces a summary evaluation for each individual. When judging the preferences of others, however, that complexity may be ignored and the weight of some attributes will seemingly tip the scales in the direction of a simpler, more intense preference.

This research has important implications for entrepreneurs who are trying to determine whether their idea will gain traction in the market.   Are they systematically overvaluing their idea, or overestimating how much people will be willing to pay for the product or service?   We all know that entrepreneurs can fall in love with their own idea, but this research gives us a deeper understanding of precisely why we can't estimate willingness-to-pay properly and accurately.   The same bias, of course, affects salespeople in a wide variety of professions.  Do they really understand the potential buyers' preferences?  Can they accurately assess value from the buyers' perspective?   

The Perception Gap: Leader vs. Team Members

Kat Boogaard has written an interesting post for the Atlassian blog titled, "Attention leaders: there’s something your team isn’t telling you."  She explains the findings from some of the firm's research on leaders and their teams.   In particular, she focuses on the perception gap between the leader and his or her team members.  Here's an excerpt that summarizes the research findings:

Source: needpix.com

When we asked managers to rate their agreement with statements about their team’s health, they consistently agreed at a higher rate than their individual contributors. For instance:

• 37 percent of managers said their team had quick and easy access to information, but only 20 percent of their individual contributors agreed.
• 45 percent of managers said they receive honest feedback, but just 26 percent of individual contributors felt they like could give that honest feedback.

This inflated view is even worse in the C-suite. C-level executives are two times as likely to say that their team is high performing or has high well-being, while their individual contributors view those aspects as well below average.

How can leaders close this perception gap?  Boogaard has some good recommendations. For instance, she advocates getting out of your office to put your finger on the pulse of the organization, rather than waiting for people to come to you with problems or concerns.   Similarly, she focuses on the importance of promoting psychological safety within your team.   I would add one other important tip for closing this perception gap.  Find a truth teller on your team.   Find a sounding board, or consigliere if you are a fan of the Godfather movies.  Talk to them one-on-one, and use those private conversations to get a sense of whether team members are seeing things the way that you are.  Kathy Eisenhardt's research shows that effective leaders in high-growth firms operating in turbulent environments often have these confidantes who help them in numerous ways as they make tough decisions.  However, the key is to find a truth teller, not a yes-man or yes-woman.  Make sure it's someone who will give it to you straight.  

Evaluating Creative Ideas: Ask Why, not How

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Stanford Professor Justin Berg has conducted some fascinating new research regarding people's self-evaluation of creative ideas. How do they assess the ideas that they generate, and can they spot the best ideas at a very nascent stage of the problem-solving process? Berg finds that individuals are not great at spotting the very best idea. In fact, the idea that they rank second-best at first often tends to be superior to the concept that seemed optimal at initial glance. What's happening? Berg explains his theory of how evaluation goes off track in this Stanford Leadership Insights article:

“People value concreteness too much and abstractness too little in their initial ideas,” Berg says. A concrete idea, he went on, is necessarily more developed, and so it will more readily present its creative virtues. Abstract ideas, meanwhile, can be difficult to see as promising. “The best initial ideas likely won’t seem very creative at the beginning—there may not be enough substance to see their potential originality and usefulness. Their abstractness is a barrier that prevents people from spotting their potential.”

Berg tested this theory by putting people in more abstract states of mind as they assessed their initial ideas. He had them ask “Why is this a good idea?” as opposed to “How is this a good idea?” and then provide answers. This approach was based on prior research showing that focusing on why (versus how) encourages abstract thinking. This simple shift to a more abstract mindset helped people identify their most promising idea at the outset.

This theory definitely resonates with me.   Research has shown the value of "why" questions and abstract thinking.   I think "how" questions often shift people into an "implemental" mindset too quickly, as I wrote about with Derek Pankratz in this article for Deloitte Review.  When we start thinking about how to execute an idea too soon, we can actually select a flawed course of action.  We become vulnerable to certain biases and faulty reasoning.  Perhaps we are also less creative too, as Berg's research suggests.   We move from the abstract to the concrete prematurely in those situations.  We need to think about what we want to do and why we want to do it, before we get too bogged down into the execution-related issues.  Of course, we can't ignore the how while we are making the decision, but the balance of our thinking can't shift too much to the how at those early stages of the creative problem-solving process.

Why Your Innovation Lab Might Be Failing

Source: Wikimedia

Vip Vyas and  Diego Nannicini of Distinctive Performance have written an interesting blog post titled, "Is Your Innovation Process a Corporate Illusion?" for INSEAD's Knowledge website.  The authors examine why some companies have shut down their innovation labs, after achieving less-than-desirable results.  Vyas and Nannicini offer several different explanations for the underperformance of these labs, but I find one explanation particularly compelling.  They argue that the leaders at the lab often lack credibility with the managers in the core business.   Here's an excerpt: 

In their efforts to promote a culture of creativity, companies may establish unintended physical and psychological distances between their main business operations and the innovation lab’s activities.

Setting up the lab as a free-thinking island, or tasking it with forwarding critical initiatives, is a key strategic decision. Without a clear pathway for connecting to the core business units, the innovation lab can find itself generating orphan products that fall into no man’s land. Even worse, the lab becomes nothing more than an expensive showcase, running public tours and hosting product demo kiosks.

The takeaway: An innovation lab needs solid executive sponsorship and advocates from mid-level management to effectively integrate solutions into the existing organisation.

To accomplish this feat, one has to insure that the leaders of the both the lab and the core understand one another.   After all, they often speak different languages, use different metrics, and have very different risk tolerance levels.  They also use quite different methodologies for making decisions.  Fostering understanding and appreciation of each other's methods, processes, and mindsets is essential for effective cooperation.   Otherwise, innovative ideas will wither on the vine. 

How Big is Your Idea? Will it Move the Needle? The Questions That Stifle Innovation

Early Career Failures: Do They Make You Stronger?

Source: Osan Air Base

We all have heard the old adage: What doesn't kill you will make you stronger. Researchers at Kellogg School of Management have tested whether that is indeed true when it comes to early career failures. They did so by examining a very unique dataset. Dashun Wang, Benjamin Jones, and Yang Wang have examined research grants provided by the National Institutes of Health (NIH).  The paper, published recently in Nature Communications, is titled, "Early Career Setback and Future Career Impact."  The scholars compared scientists awarded grants early in their career to those who narrowly missed out on achieving a grant.  Here is what they found, as summarized by Kellogg Insight:

To figure out just how much of a difference these early successes or setbacks made to a scientific career, the researchers traced the careers of 623 near-miss and 561 narrow-win scientists.  Notably, it turned out that the two groups published at similar rates over the next 10 years—not what you’d expect, given that narrow winners got an early leg up from their NIH grant funding. Even more surprising, scientists in the near-miss group were actually more likely to have “hit” papers (that is, papers that cracked the top-five percent of citations in a particular field and year). In the five years after they applied for NIH funding, 16.1 percent of papers produced by scientists in the near-miss group were hits, compared to 13.3 percent for the narrow-win group.

The researchers went on to rule out some of the possible explanations for this finding.  For instance, they demonstrated that the finding is not attributable to attrition by the "near-miss" scientists... i.e., it is not explained by quitting on the part of some of the researchers who did not receive grants early in their career.  They conclude that the career paths of these "near-miss" scientists suggests that they indeed did become stronger through adversity.  Somehow, the early career failure inspired them to persevere, led to key learnings, and/or helped them understand their own strengths and weaknesses.   As a result, they overcame the failure and went on to achieve considerable success.  What an uplifting finding for all of us... the old adage is not just a cliche...there is real truth there apparently! 

How Do I Assess This Firm's Culture Before Taking a Job?

Source: SHRM

Joann S. Lublin wrote a Wall Street Journal column last week about assessing the organizational culture of a firm at which you are considering taking a job.  She offered five tips for how to identify warning signs that a culture might not be the right fit for you.   I thought her first strategy was particularly useful.   Lublin argues, "Identify Who and What Count."  Here's an excerpt:

To grasp unwritten norms, discern what is acceptable behavior—especially for rainmakers, said Gail Meneley, co-founder of Shields Meneley Partners, a career-transition firm. She recommended inquiring whether sales stars operate under looser standards, such as completing deals without required internal approval.

“You may feel uncomfortable working for a business where there are different rules for different people,’’ she cautioned.

Small but significant gestures can offer hints about what behaviors matter. In 2017, Brad Neuenhaus became chief business officer of MindEdge Learning Inc., a provider of online education. He did so partly based on a company lunch he had attended as a customer. He recalled being impressed when a MindEdge leader exhibited respect for employees by clearing their plates.

“I wanted to be part of their organization,” Mr. Neuenhaus said. “Culture starts at the top.’

You might think that such small gestures don't matter, but in fact, they often can signal a great deal about the interpersonal and cultural dynamic at a company.  I had a boss who once said that he used to pay close attention to how someone treated a waiter or waitress at a restaurant during an interview process.  These things do matter.   At the end of the day, your antenna should be up at all times as you assess cultural fit. 

Simplify to Amplify: The Spindrift Story

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I recently listened to a particularly intriguing episode of Guy Raz's How I Built This podcast.  Raz interviewed serial entrepreneur Bill Creelman, founder and CEO of Spindrift - the sparkling water company.  I found one particular part of the Spindrift growth story quite compelling.  Creelman explains that the company had started to take off, and then he made the courageous and intelligent decision to exit one of the firm's two product lines.  

In the beginning, Spindrift sold both a sparkling water product made with real squeezed fruit, as well as a soda product (albeit one with less sugar than mainstream soda brands).   The interesting part of the story is that the soda product line was quite profitable, and it was generating millions in revenue for the company.   Yet, Creelman decided that that the brand positioning needed focus and clarity.  He called it a "simplify to amplify" strategy.   Creelman explains, 

Source: spindriftfresh.com

"That was a really important moment for us... we had a very low sugar soda, but even that, among our team, that was confusing. We had people who would say, you know, I don't drink soda. And we would say, well this isn't a soda... So, we made the hard decision to shut down about a $5 million business, super profitable, and just focus our resources on the sparkling water... The risk was for us that if we didn't stand for one single thing that we were going to go down the path of so many other businesses where you sort of try to do everything pretty well and nothing really, really great."

As I've written before on this blog, far too many companies try to be all things to all people.  They would never exit a profitable business, even if it meant a clearer competitive positioning that would be more sustainable in the long run.   Creelman made a smart move, sacrificing in the near term for the sake of a smarter strategy for competing in a confusing and highly competitive marketplace.  

Failing to Change When Faced With Negative News

Source:  Flickr

I recently read about a new study by Bradley R. Staats and his co-authors titled “Maintaining Beliefs in the Face of Negative News: The Moderating Role of Experience” in Management Science.  They set out to study how decision-makers react when faced with negative news.  The scholars chose to look at how expertise affects our likelihood to adjust our behavior in light of new negative information.  They assembled an interesting database about cardiac stent use in Pennsylvania from 2003-08 involving nearly 400 cardiologists. During this time, the Federal Drug Administration (FDA) recommended that doctors reduce their use of drug-eluting stents, but it did not ban the use of these devices.  The scholars set out to see how much the FDA's announcement affected behavior.  In particular, they wanted to see how experts reacted, as opposed to doctors with less experience.  Would overconfidence lead some experts to discount the new negative information?  Here's what they found: 

"For each standard deviation increase in experience, cardiologists were 6.3% more likely to use the drug-eluting stents before the FDA warning. Afterward, their use of the stents fell, but they were still more likely — 2.8% for each standard deviation increase in experience – than average to use the drug-eluting stents."

An article on the University of North Carolina's Kenan-Flagler Business School website summarizes the results and implications of this study:

It’s a kind of paradox. Are more experienced individuals – because of their presumably greater expertise – more likely to change their behavior when confronted by new information? Or are they more likely to resist new decisions because they’re confident about relying on their experience?  That’s the fundamental question tackled by Brad Staats, professor of operations and faculty director of the Center for the Business of Health at UNC Kenan-Flagler.  “Ideally, when you receive new information, you quickly adjust your decision-making – and you would expect the most experienced people would do so most accurately,” says Staats, “but our research indicates that might not be the case when they get negative news.”

Preparing for a Meeting: You Do Better When You Anticipate Conflict

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This week, I read an interesting interview with several scholars from the Kellogg School of Management. In the interview, Professor Cynthia Wang describes an interesting study that she conducted with Denise Loyd, Katherine Phillips, and Robert Lount, Jr. They published their findings in an Organization Science paper titled, "Social Category Diversity Promotes Premeeting Elaboration: The Role of Relationship Focus."   Wang reports that people tend to prepare better for meetings when they anticipate interacting with others with whom they expect to have conflicting views.  This preparation and introspection leads to better decisions.  Here's Wang commenting on the research:

Sometimes conflict can actually be productive. When you go into a group meeting with somebody who is very different from you, the assumption that there’s going to be a conflict actually leads to better outcomes because you prepare better. For example, in one study, Katherine Phillips and I gave people tasks and said, “Hey, you’re going to be working with a stranger from the opposite political persuasion.” We then saw that knowing this leads you to start preparing a little bit more for the discussion, because you assume that there is going to be conflict. This drives better decisions in the end, because you’re more prepared and more introspective. On the other hand, if we come from the same group, we don’t challenge each other as much.

The Charade of Consultation

Years ago, my friend Mike Watkins, author of the best-selling book The First 90 Days, coined the term "charade of consultation."  He used it to describe instances when leaders would hold meetings, ask for input and advice, and yet do not genuinely provide an opportunity for those participants to influence the final decision.  He described these situations as a charade because the decisions were pre-ordained, a fait accompli.  Leaders were simply using the meetings to pretend that they were giving employees voice in the decision-making process.  Somehow, they thought that soliciting input would build buy-in, without recognizing that employees would see right through the charade.  

What are the negative consequences of engaging in a charade of consultation?

1.  Leaders diminish the extent to which their employees trust them.  That loss of trust adversely affects commitment, engagement, and morale.  

2.  Implementation efforts falter, because employees have not bought into the decision that was made.  They perceived the decision process as unfair, and therefore, they fail to commit the selected plan of action.  

3.  Employees opt out of future opportunities to participate in decision-making processes.  They think to themselves, "What's the point?  They aren't really listening to us anyway."   

4.  Leaders find themselves only hearing from people that agree with their proposals and plans.   Dissenters have opted out, and thus, leaders find themselves operating in an echo chamber. 

Does this mean that leaders always have to do what employees think is best, over their own better judgement? Of course not.  The opposite of the charade is not workplace democracy.  It's a thoughtful, robust, open process of dialogue and debate.  After hearing diverse viewpoints, the leader can then make a more informed and prudent decision.  

Is Avoiding Losses Actually a More Significant Motivating Force Than Realizing Gains?

For decades, psychologists and behavioral economists have proclaimed the importance of loss aversion, one of the most prominent cognitive biases identified by researchers. However, a recent thought-provoking article in Scientific American by David Gal challenges the conventional wisdom. Gal writes about the research he has conducted with David Rucker and published in the Journal of Consumer Psychology. 

Source:  Blue Diamond Gallery

Gal argues that, "Loss aversion is essentially a fallacy." The statement surprised and intrigued me. Could it really be true that such a prominent theory was incorrect, and that a great deal of evidence existed to contradict it? Gal explains in more detail:

That is, there is no general cognitive bias that leads people to avoid losses more vigorously than to pursue gains. Contrary to claims based on loss aversion, price increases (ie, losses for consumers) do not impact consumer behavior more than price decreases (ie, gains for consumers). Messages that frame an appeal in terms of a loss (eg, “you will lose out by not buying our product”) are no more persuasive than messages that frame an appeal in terms of a gain (eg, “you will gain by buying our product”).

People do not rate the pain of losing $10 to be more intense than the pleasure of gaining $10. People do not report their favorite sports team losing a game will be more impactful than their favorite sports team winning a game. And people are not particularly likely to sell a stock they believe has even odds of going up or down in price (in fact, in one study I performed, over 80 percent of participants said they would hold on to it).

To be sure it is true that big financial losses can be more impactful than big financial gains, but this is not a cognitive bias that requires a loss aversion explanation, but perfectly rational behavior. If losing $10,000 means giving up the roof over your head whereas gaining $10,000 means going on an extra vacation, it is perfectly rational to be more concerned with the loss than the gain. Likewise, there are other situations where losses are more consequential than gains, but these require specific explanations not blanket statements about a loss aversion bias.

Perhaps most interestingly, Gal goes on to offer an explanation for why loss aversion has become such a prominent principle generally accepted by many scholars as truth.  He explains that another key cognitive bias, confirmation bias, has been a major factor. Scholars have tended to look for evidence that confirms and bolsters the theory of loss aversion, while dismissing or discounting contradictory or discordant findings. Other social forces too have helped to maintain and preserve the conventional wisdom. Gal concludes, "Wrong ideas can persist for a long time despite contrary evidence, and therefore, that there is a need to critically assess accepted beliefs and to be wary of institutional consensus in science and otherwise."

Working Backwards to Innovate at Amazon

Recently, Lisa Eadicicco wrote an article for Business Insider titled, "This is the test Amazon uses to decide which ideas are worth turning into new products."  She describes the "working backwards" methodology that Amazon routinely uses during its new product development process.  Here's an excerpt: 

And while Amazon's product portfolio may be larger and more diverse than ever, there's a simple process the company uses to figure out which ideas are worthy of becoming real products: writing a press release.  This is what has come to be known as the "working backwards document" within Amazon, a mock press release that describes the product and the problem it's trying to solve.

"Everything starts as a working backwards document," Miriam Daniel, Amazon's vice president of Alexa and Echo devices, recently said to Business Insider following the company's fall product launch event. "The reason we write a press release is, when we read it, we want to be able to say as a consumer, 'Wow, I want that.' We write with that end in mind."

All of the devices Amazon unveiled during its event at the end of September started as a working backwards document, says Daniel. The goal of the working backwards document is to help the product team focus on what the main use case for a particular product would be.

Often, at Amazon, they not only draft the press release as part of this working backwards process.  They also write the frequently asked questions document that will be provided to customers if the product/service is built.   These documents help Amazon's managers envision how customers will react to the new product, and in particular, whether it will fulfill a customer need or alleviate a key pain point for users.   

I wrote about the working backwards approach in my book, Unlocking Creativity.   It's a powerful technique that can help individuals step back and gain some distance from a challenging problem.  They can look at the problem in a new way by jumping forward in time and trying to predict how others will react to our solution at that point in the future.  For more on how and why this type of approach is worthwhile, check out the video below: