Lies, Lies, Lies: Hiring Managers and Job Candidates

Fortune's Paige McGlaufin and Joseph Abrams reported this week on some rather shocking survey results.  Resume Builder polled 1,600 hiring managers, and 36% of those individuals acknowledged they had lied to job candidates. McGlaufin and Abrams write, "Of hiring managers who admit to lying, around 75% say they lie during the interview, 52% in the job description, and 24% in the offer letter."  Moreover, many of these respondents indicated that they deceived candidates quite often.  Why do so many hiring managers lie?  The authors write,

"Some reasons hiring managers gave for lying include protecting sensitive company information, covering up negative company information, exaggerating benefits to attract job seekers, and generally making the job sound more attractive to find better candidates. What these managers falsify also varies—the most common lies are about the job’s responsibilities, growth and career development opportunities at the company, and company culture."

We have heard so much lately about the lack of trust and engagement among employees in many companies.  We've attributed these poor outcomes to a variety of leadership failures, but I've rarely read about how the problem may begin BEFORE the employee actually starts the job.  If someone is lied to during the hiring process, and then discovers the deception while on the job, they are highly likely to become disenchanted.  Many will simply quit.   In fact, the survey respondents indicated that roughly half of the employees who were deceived eventually quit the organization when they discovered the lies.

This article caused me to consider the incentive structure that these hiring managers likely face.  How are they measured and rewarded?  How does their ability to fill positions quickly affect their compensation and promotions?  By focusing on incentives, I'm not suggesting that we should excuse the unethical behavior.  However, we cannot simply hope to hire more trustworthy recruiters. The problem is not simply the ethics of certain individuals.  Given the widespread deception, we have to think systemically about the causes of the problem.  If we don't change the incentives, and the broader culture around recruiting, then the lies will likely continue.  

Tractor Supply Podcast and Case Study

Thank you to Joe Weisenthal and Tracy Alloway for having me on the Bloomberg Odd Lots podcast to talk about my latest HBS case study co-authored with David Ager.  The podcast episode is titled, "Why Tractor Supply is One of the Most Interesting Retailers on the Planet"

Will Rao's Thrive After Acquisition by Campbell's?

This week, Campbell's announced the $2.7 billion acquisition of Sovos Brands, a firm whose most famous and successful brand is Rao's.  If you aren't familiar with the brand, you should be.  It's simply the very best tomato sauce sold in the United States, and frankly, there shouldn't even be a moment of debate.  I should know.  As the son of Italian immigrants, I grew up never eating tomato sauce from a jar. We had a huge vegetable garden, and my parents grew tomatoes and made their own sauce. Still today, I grow my own tomatoes and store sauce for the winter, though I don't jar enough to last the entire year. When I have to purchase sauce, there's only one brand that I will purchase in a jar - Rao's marinara sauce. As a fan of the brand, I'm hardly alone. Ben Cohen of the Wall Street Journal writes, "Rao’s deliciousness is undeniable. Bon Appétit magazine called it “the best jarred pasta sauce there ever was.” When the Washington Post convened a panel of taste-testers, the judges tried a dozen brands and declared Rao’s their favorite."   Rao's is hardly a bargain though.  It's a premium brand.  A 32 ounce jar of Rao's currently sells for $10.29 at Stop & Shop.  You can purchase a 24 ounce jar of Ragu for $1.99.   Now you might think that I'm crazy to pay that kind of a premium for tomato sauce, but you would be wrong.  It's absolutely worth it! 

The Campbell's acquisition may be beneficial, but it understandably generates some concern.  Campbell's is known for selling a very affordable line of soups.  How will the premium brand Rao's fare within the Campbell's portfolio?  The company's track record of acquisitions is decidedly mixed.  In the late 1960s, it acquired Godiva's chocolates.  That brand thrived under Campbell's ownership for many years, but ultimately, the company divested Godiva because it didn't fit very well with the other products in the portfolio.  More recently, the company divested Bolthouse Farms at a steep discount to the price they had acquired the brand for just seven years earlier.  

The question remains whether valuable synergies exist between Campbell's and Rao's.  Why are these firms more valuable together than apart?  Can Campbell's manage the brand more successfully than it has already been managed?  That seems unlikely, given the parent company's lack of recent familiarity and success with super premium brands.  Moreover, they aren't buying a brand in distress; they are purchasing a brand that is already performing at a very high level.

Any attempt to drive synergies must be taken with caution as it may dilute the quality of the premium tomato sauce brand. For now, Campbell's has assured customers and investors that it won't change the taste and quality of the popular tomato sauce. Still,  we should expect some pressure to justify the acquisition premium by creating synergies.  That pressure can be counterproductive at times when mainstream companies acquire much more premium brands.  

Why Too Many Goals Can Be Counterproductive

Increasingly, organizations face pressure to achieve a range of goals, extending well beyond profitability and shareholder value maximization.  Many people note the benefits of this broader perspective.   Interestingly, though, Dartmouth Professor Pino Audia's work highlights one potential negative effect of defining too many goals as an organization.  Here's an excerpt from Kirk Kardashian's feature on the Dartmouth Tuck School of Business website regarding Audia's research:

Conventional wisdom says setting goals is a good practice, because it helps people and organizations accomplish their priorities. But it’s not that simple.  “Ironically,” says Pino Audia, Professor of Management and Organizations at Tuck, “having too many goals can make corporations less accountable.”   Audia has come to this perspective after 15 years of researching when organizations learn from failure, including writing a new book on the topic: Organizational Learning from Performance Feedback: A Behavioral Perspective on Multiple Goals (Cambridge University Press, 2021). One of his main contributions to the field of organizational behavior is his discovery that people show a tendency to form self-enhancing assessments of their performance. This tendency thrives in situations where performance metrics are ambiguous, giving people the latitude to see their own performance in a good light, even if others might assess it more harshly. “The proliferation of corporate goals creates greater ambiguity,” Audia explains, “and that creates greater latitude for self-enhancing assessments of performance.”

What does Audia mean by self-enhancement?  He argues that many business leaders don't learn effectively from failure because they find ways to convince themselves that they did not fail.  They try desperately to maintain their positive self-image in the face of disappointing results.  The establishment of a diverse range of objectives facilitates this self-delusion!  If many goals have been defined, they might point to the strong performance on a few of those goals, while trying to ignore or downplay poor performance on a range of other objectives.  Kardashian writes that, "a key feature of self-enhancing decision makers is that they are cognitively agile in the sense that they change the parameters used to assess performance to reach more favorable assessments."   Sadly, this "cognitive agility" means that leaders and organizations don't learn from failure as effectively as they should.  

Do Leaders Know What Employees Really, Really Want?

Source: www.lovetoknow.com

Fortune's Phil Wahba has written an intriguing article titled, "Too many CEOs don’t know what their workers need. Employee ‘engagement’ surveys can make the problem even worse." Wahba starts by giving an interesting example from Starbucks. He points out that former CEO Howard Schultz often took great pride in the tuition assistance program offered to company employees. Wahba writes:

It turns out that for many Starbucks “partners,” as the company calls its employees, tuition help at an online university wasn’t that crucial. They’ve proven to be far more interested in prosaic matters such as flexible scheduling, work conditions, and more predictable hours—the kinds of issues that have a much greater short-term impact on their income and quality of life.

Wahba goes on to critique employee engagement surveys administered annually by many organizations.  He notes that many questions are fuzzy and unclear.  The responses do not necessarily provide clear direction as to how leaders should change policies or behaviors.  At times, companies present the data in ways that make things appear better than they actually are.  He gives the example of firms that sometimes lump "4" and "5" responses together when reporting the data.  Of course, a "4" might be quite different than a "5" response.  Moreover, while the overall mean might look good on a particular question, certain subsets of the employee population might be responding much more negatively.  Finally, leaders don't always close the loop by communicating clearly to employees how they are making changes based on the survey results.  Employees think to themselves, "Why are we doing this? Are they actually taking our views into consideration? Is it just a waste of time?"  

Wharton's Peter Capelli offers a simple suggestion: ask managers to talk to their reports! He tells Wahba, "You could have supervisors actually go talk to people. Employees are usually not shy about telling their direct boss what’s going on."  In short, there's no substitute for one-on-one communication in which managers listen to employee concerns and then circle back to address them.  No survey can replace those valuable conversations.  

Will Disney Sell ABC, Other TV Networks?

Source: NBC News

In an interview with CNBC yesterday, Disney CEO Bob Iger acknowledged that Disney may divest its struggling legacy TV businesses. It may also seek a "strategic partner" for ESPN.  Reporting for CNBC, Lillian Rizzo and Alex Sherman wrote:

Disney is going to be “expansive” in its thinking about the traditional TV business, leaving the door open to a possible sale of the networks. “They may not be core to Disney,” Iger said, adding the creativity that has come from those networks has been key for Disney.

The press coverage regarding Iger's statement has focused on the decline in the traditional television business, particularly as more and more people "cut the cord" regarding cable television.   I think that's only part of the story though.  One can ask whether the legacy TV networks, such as ABC, ever belonged in the Disney portfolio.  

I've been teaching case studies about the Disney corporate strategy for two decades.  For the most part, Disney has always been a positive example of an effective diversification strategy with powerful synergies among the various divisions.  However,  the ABC acquisition (mid-1990s) has always been a more contentious issue.  What is the argument for Disney owning ABC?  Does Disney have a more powerful competitive advantage because it owns ABC?  It's not easy to see why it would.  If you examine Disney's stock performance during Michael Eisner's tenure, you can see two contrasting eras.  Prior to the ABC deal, the Disney stock outperformed the S&P 500 by a wide margin during Eisner's tenure.  After the deal, Disney stock underperformed the market during the second half of Eisner's tenure as CEO.  

While ABC does have studios that develop programming, it's first and foremost a broadcast network.   Acquiring a broadcast network is essentially forward integration for Disney.  My students and I have always debated whether there is a persuasive argument for vertical integration here.  Does Disney need to own ABC to have effective ways to distribute its content?  Hardly believable.  Disney has highly attractive content that clearly would be of interest to many different distribution partners.   Does Disney have negotiating leverage with other distribution partners because it owns ABC?  One might think so, but on the other hand, Disney may have some challenges when it comes to selling content to outside partners.  If you were another broadcast network, wouldn't you wonder why Disney was trying to sell great content to you, rather than putting that content on its own broadcast network?  When you forward integrate, you create potential conflicts of interest because you are now competing with your own customers.  Finally, could Disney achieve many benefits of collaboration without having to own ABC outright?  It would seem so.  After all, Disney and ABC worked together for years on a contractual basis when the network aired the Disney movie each Sunday evening for years.  Disney CEO Michael Eisner even used to introduce the movies on the network long before the company acquired ABC.  It would seem that contracts, partnerships, licensing deals, and the like could enable the Disney and ABC to collaborate effectively without having to be part of the same corporation.  

In sum, Disney divesting the legacy networks might be the right strategic move, but not because people are cutting the cord.  It might be the right move because the case for synergies was far weaker than ever acknowledged.  

Calculating the Cost of Meetings

Source: Getty Images

Kaz Nejatian, Chief Operating Officer of Canadian e-commerce company Shopify, has created a meeting cost calculator for his organization. Nejatian developed the software program to calculate the cost of meetings during a company hack-a-thon. According to Nejatian, meetings per worker have declined by 14% this year, and productivity has risen.  Bloomberg's Matthew Boyle describes this innovative new approach to curtailing excessive meetings:

The Canadian e-commerce company has rolled out a calculator embedded in employees’ calendar app that estimates the cost of any meeting with three or more people. The tool uses average compensation data across roles and disciplines, along with meeting length and attendee count, to put a price tag on the event.

A typical 30 minute endeavor with three employees can run from $700 up to $1,600. Adding an executive — like Chief Operating Officer Kaz Nejatian, who built the program during a company-wide hack day — can shoot the cost above $2,000.

As I read about this article, I contemplated why excessive meetings sometimes take place.  Many reasons exist - positive and negative.  For example, sometimes leaders really are trying to give a range of people an opportunity to provide input, and they are involving others to build buy-in for a course of action.  On other occasions, though, leaders are simply engaging in what Michael Watkins calls the "charade of consultation." In other words, they hold the meeting to make it seem as though they are soliciting input, but in fact, they have already made up their mind.  It's all a show.  Another reason we have excessive meetings in many organizations is that managers want to avoid accountability and responsibility.   They call others to meetings so as to avoid being put on the spot if a plan goes awry.  They intentionally create a "when everyone is responsible, no one is responsible" culture.  Without a doubt, many unnecessary or unproductive meetings take place every day in organizations.  

Is there any danger though in trying to reduce the number of meetings?  First and foremost, some issues are better hashed out as a group, rather than in one-on-one conversations or email threads.   If we eliminate meetings, but simply replace them with a long set of email threads, we may not truly be increasing productivity.  In fact, we just be shifting our time from one form of communication to another, and one that is perhaps more inefficient.  Second, successful implementation of key initiatives requires a great deal of coordination.  Moreover, it requires a strong shared understanding of the plan, something that may not be achievable without critical meetings.  Third, employees may come to feel as though decision-making processes are not fair, if they are left out of the deliberation process.  If they don't feel as though they have been given voice, then they may not commit and buy into the plans being enacted.   Finally, plenty of learning can take place in meetings, as junior employees soak in knowledge from discussions and analysis undertaken.  Moreover, they watch how others conduct themselves, make presentations, and answer hard questions.  This on-the-spot learning may be lost if too many meetings are eliminated.  

In sum, the goal is admirable.  We all can identify many unproductive meetings we have attended.  However, we need to remember that most things we do require input, support, and collaboration with others.  We do few things alone in organizations.  Meetings serve as important coordination mechanisms in many cases. 

A Gen Z Board of Advisers at The Body Shop

Source: HR Exchange Network

What's the average age of the Board members of your company?  For many companies, that average is much higher than the average age of their customers, and higher than the employee population as well.  You can see where decisions made by the Board might not always be informed by up-to-date thinking about the values, goals, beliefs, and needs of Gen Z and Millennials.  What can companies do to bridge this gap?  Orianna Rosa Royle has written an interesting piece for Fortune about one firm's attempt to address this issue.   In her article, she describes The Body Shop's Youth Collective advisory board. 

Other companies have tried similar structures, but not always with as much success as anticipated.  In the worst cases, employees view these advisory boards as all for show, without any real substance.  The Body Shop has structured the board and its process in ways that increase the likelihood of securing valuable input and constructive criticism, while building trust with employees.   First, 50% of the members come from within the company, while the other half are from external organizations.  This balance seems very important.  The internal members have a strong vested interest in the organization's success.  Meanwhile, the external members provide a valuable outside perspective, and they perhaps feel safer speaking up with their concerns or feedback.  

Second, not every issue comes before the advisory board. Royle writes that The Body Shop "avoids drawing on their expertise unless a problem needs out-of-the-box thinking that the older leadership team can’t crack."  In other words, align the issues brought before the advisory board with the core purpose of that group.  Don't simply try to replicate the conversations that a board of directors might have.

Third, and perhaps most importantly, The Body Shop has outlined the ground rules and shared norms for this group in a very clear manner. Most importantly, everyone has a voice, and there's a commitment to listen and consider each opinion in a genuine manner.  That doesn't mean the group always gets their way.  The Body Shop executive and board of directors member Chris Davis notes, “Do we always listen? Yes. Do we always act? No. When we don’t, we explain why. When we do, we explain why—that’s part of the deal.  There will always be feedback and full transparency so it’s clear that everybody is heard.”  In short, The Body Shop has tried to create a fair and legitimate consultation process.  Fair process means giving people voice and considering their views genuinely, but not taking a vote and making decisions democratically.  In the end, creating a strong perception of procedural fairness means explaining decision rationale, and specifically why leaders acted on the group's recommendations or why they chose not to do so.  If you don't create this perception of a fair and legitimate process, people will stop offering their input.  Trust will be broken. 

Practice Makes Perfect

www.sportscasting.com

We all know that great athletes practice intensely in preparation for competitions.  As a teenager, I remember reading about the incomparable Larry Bird showing up at the Boston Garden hours before a game and hoisting up hundreds of jump shots, as well as running on the track.  For much of my adult life, I read about Tom Brady's maniacal practice habits, beginning when he was a rookie on the training camp fields here at Bryant University, where I serve on the faculty now. Scott Pioli loves to tell the story of a late night in April in Foxboro during the offseason before Brady's second year: "It was a Friday night in the very beginning of April, and I was leaving the building. We still had the (practice) bubble and the lights were on in the bubble. I went around the construction (of the new stadium) to go hit the lights and on a Friday night in April, it's almost 10 o'clock at night and there's Brady working on his own with his boombox, with elastics around his ankles, throwing balls into the net."  

If athletes use practice so effectively to improve, how about business leaders?  Does practice play a role in our development?  If so, how?  Here are the three ways we can use practice to our immense benefit:

1.  Presentations (and later speeches) play an important role in our work.  We have to share our ideas and proposals with others in a concise, clear, and professional manner.  We have to persuade and influence those over whom we may not have any formal authority.  Practice indeed makes perfect when it comes to public speaking.  We should work on delivery, timing, and emphasis.  Moreover, we should anticipate questions and prepare our responses.  The International Churchill Society notes that the great British Prime Minister, who delivered so many memorable and impactful speeches, practiced relentlessly: "Churchill drafted his speeches several times and wrote them out in a way that would help him deliver them effectively. He rehearsed passages, again and again, pacing his rooms, repeating them out loud, learning whole speeches by heart. He developed a unique oratorical style that both covered up and employed his speech difficulties so that his ‘lisp’ – or ‘stammer’, which could occasionally seem like a groping for words – became a prop, not a hindrance."

2.  Giving feedback can be extremely difficult at times.  Many leaders dread these meetings with their team members.  Rehearsing the conversation can be very fruitful.  Consider not only the content of the feedback, but the method of delivery.  In what order will you make your comments? How will you set the stage at the start of the meeting?  What type of response do you anticipate from the other person, and how will you respond?  Finally, what will you do to bring the meeting to a conclusion?

3.  Data analysis and interpretation skills have become more important for leaders in all functions of an organization, not simply those working in finance, data science, or engineering roles.  We all need to know how to analyze data, interpret results, and draw meaningful and appropriate conclusions.  Practicing these skills can be very helpful.  As a young financial analyst, I used to hone my skills outside of work by focusing on something that I loved, namely professional sports.  I would analyze baseball and football statistics in my free time, and I loved to read articles in the nascent (at the time) field of sabermetrics.  I enjoyed it a great deal, and it helped me learn how to use Excel, perform various statistical analysis, and come up with conclusions that sometimes challenged pre-existing notions or conventional wisdom.   Ok, I was a nerd... but these analyses really helped me hone my analytical skills.  Sports doesn't have to be your thing.  You might take some time to analyze your own company's 10K filing, or to compare your firm's 10K with a competitor's results.  Or, you might read a few business school case studies about interesting companies and analyze the firms' performance.  These efforts can help refine your skills.   

Should Internships Be Fully Remote?

Is remote work diminishing the efficacy of the summer internship experience for thousands of young college students?  Emmy Lucas has written an article on summer internships for Forbes this week.  In that article, she examines how challenging it is this summer for many students to land internships, given the layoffs at many firms, particularly in the tech sector.  She also raises a question about how remote work has affected the ability of interns to learn, grow, and develop successfully.   Here's an excerpt from her article.  She begins with a comment by Jane Ashen Turkewitz, who administers internship placement for the University of Texas at Austin: 

Remote work has also put a damper on the intern experience. “I remember joining the workforce in my twenties and it being super fun,” Ashen Turkewitz says. “You would do your work, but there was camaraderie, there was brainstorming. There was an energy that I believe students and early career folks are missing out on, big time.”

On Glassdoor, negative mentions of remote work in reviews by interns grew by 548% between 2019 and 2021. “Clearly a lot of companies' internship programs are struggling to adapt to the new normal,” Glassdoor’s Terrazas says. “Big companies have been leading the charge in getting folks back into the office, so I'm really going to be curious to see if it has a measurable effect in terms of experience this summer.”

Salesforce’s head of global futureforce programs, Alex Murray, says its interns are back fully in person. “We’ve experimented with remote and hybrid programs over the past few years,” she said in an email. “But our interns told us they want to be in an office environment.”

Kate Feeney, who is interning a second summer at Raytheon Technologies, spent last summer fully remote, but is going to the office one or two days a week this summer. “It’s a lot more isolating [working] online,” she says of her experience last year. Now, “I get to ask more questions about [my co-workers’] job rather than it being so focused sitting on a Zoom listening to them talk.”

This article raises very important questions.  In my view, business leaders need to invest the time and effort to meet with their interns in person throughout a summer experience.  Apprenticeship, learning, and development will often (not always, but often) not take place as effectively in a fully remote manner.  One challenge is that many managers want the flexibility of working remotely often during the summer months.  However, if you hire an intern, you have a responsibility to make that experience meaningful and productive.  Managers should be paying it forward, offering the mentorship and guidance they once received at a young age.   

Investing in Your Own Development This Summer

Beyond spending time with family and friends this summer, we can all take the opportunity to invest in our own development as well.  Certainly, our organizations may offer workshops or leadership development programs in which we are asked to take part.   Or, we might be pursuing an advanced degree or certificate. However, we shouldn't simply wait for these opportunities to come to us, or simply focus on formal educational experiences.  We should find time to learn on our own.   I'm reminded of the famous Italian saying, "Ancora imparo."  I have a small plaque with this saying on my office bookshelf.  While some scholars have doubts about the usual origin story for this phrase, the common explanation is that the great Renaissance artist and sculptor Michelangelo uttered the saying at age 87.   The idea of Michelangelo exclaiming "Ancora imparo" at that ripe old age reminds us all of the power of always learning something new, no matter our age, experience, or knowledge.  

What can we do this summer to learn and develop as a leader?

• READ whole books!  Yes, blog posts 😉, web articles, and Twitter threads can be quite informative at times.  However, we should take the time to embark on a deep dive into a few important subjects this summer.   I don't mean just business or leadership books per se.  We can learn a great deal from reading history, about pressing problems of the past and the leaders, both successful and flawed, who tackled those issues.  For example, I just finished a terrific book titled "The Devils Will Get No Rest" by James B. Conroy.  The insightful book takes a close look at the Casablanca Conference of January 1943, when British and American poltical and military leaders gathered to develop a gameplan to win World War II.   I learned so much about how these leaders navigated contentious issues, debated intensely, and found a way to reach agreement, all while maintaining and even enhancing their working relationships.  
• Find a great podcast.  I don't mean the latest true crime adventure, though they can be entertaining.  Find one that tells a great story about the rise or fall of an enterprise, or offers insights into organizational behavior.  I enjoy podcasts such as How I Built This, Freakonomics, Cautionary Tales, Land of the Giants, The Dropout, and Choiceology.  
• Meet with a mentor/mentee.  If you have been too busy to invest in a mentoring relationship, commit to spending time on it this summer.  Make sure it's a two-way street, in which both parties are benefiting to some degree.  Try to take the time to meet in person, if possible. Prepare for these meetings.  Come with good questions and with some issues on which you woud like some advice and guidance.  
• Select a new skill to master.  Perhaps you want to learn how to code, or maybe you would like to learn more about data visualization.  However, don't just focus on these types of "hard skills."  Think carefully about certain "soft skills" you might hone over the summer too.  Maybe you want to improve at public speaking or presenting, or you would like to get better at setting and achieving goals.  Having a gameplan to improve both hard and soft skills is critical as you embark on your leadership development journey. 
• Reflect systematically.   I've written previously about Kellogg Professor and former Baxter Healthcare CEO Harry Kraemer's recommended practices for self-reflection.  Find some time this summer to reflect.  Perhaps you might use Kraemer's questions, or you could conduct an "after-action review" regarding a project you led recently.   As you reflect, don't build a long laundry list of things to work on moving forward.  Be selective and prioritize a few action items for the coming year.  You are much more likely to make progress if you focus your improvement efforts. 

Why the Decline in Labor Productivity?

Jane Thier reported last week for Fortune on the decline in labor productivity in the American economy.  She notes that the United States has experienced productivity declines for the past five quarters.  That hasn't happened since World War II.  Thier examines George Mason economist Tyler Cowen's commentary regarding the potential causes of this significant decline.   She notes that Cowen attributes much of the problem to "a serious crisis of morale" in the workplace.   I think there's no question that many employees are disengaged, and even disgruntled.  Organizations have been grappling with low engagement for years, but it does seem that the problem has become worse since the pandemic began.

Thier also writes that some experts have begun to question whether remote and hybrid work might be driving declines in labor productivity.   Cowen argues that more data are needed to draw definitive conclusions about the impact of remote work.   Fellow economist Gregory Daco of EY Parthenon argues that comments from various clients suggests that remote work might be causing a decline in productivity.  

Many companies reported high productivity of their employees during those early months of the pandemic.  I wonder, though, whether unique circumstances contributed to that efficiency boost, and if productivity might be falling as those conditions no longer hold.  Many employees and organizations rallied in those early days of the pandemic, working extremely hard to ensure that their firms would survive amidst a preciptious economic downturn.   Moreover, we all were stuck in our homes.  We had very little else to do, and so perhaps many were quite productive in those circumstances.  

Things have changed though.   Now, perhaps, we are seeing some of the limitations of remote work, and it may be having a deleterious impact.  It's not the popular thing to say these days.  People who try to argue for return to office often get pummeled by the press, and they potentially scare off talented employees who insist on working remotely.  Yet, the national productivity data should trouble us greatly.  We have to dig deeper into these data, and more rigorous empirical work must be done to understand the complete ramifications of remote/hybrid work.  

When Layoffs Occur, Who Else Leaves?

Source: Moneycontrol.com

Lisa Ward of the Wall Street Journal reports today on a fascinating new study by Sima Sajjadiani, John D Kammeyer-Mueller, and Alan Benson.  Their research paper is titled "Who Is Leaving and Why? The Dynamics of High-Quality Human Capital Outflows." The scholars studied more than 1 million employee records from a two-year period at a major retailer with more than 1,600 stores.  

The scholars found that layoffs can trigger a loss of highly talented individuals.  They found that the attrition rate of high-performing employees increases after layoffs of underperforming peers. Ward writes:

Why? High-performing employees typically have more employment options, says Sima Sajjadiani, an assistant professor at the University of British Columbia’s UBC Sauder School of Business and one of the paper’s co-authors. As a result, when layoffs are announced, these individuals might pre-emptively begin job searches to secure new roles rather than wait to see if they would be included in the layoff.

What about when an employee is dismissed for cause?  Interestingly, they again found a disparity in subsequent attrition rates.  Higher performing employees tended to stay, but low performers left in larger numbers after a peer was dismissed for cause.  Sajjadiani explains:

“High-performing employees may view the dismissal of a low-performing colleague as the organization maintaining standards, which can be seen as a positive sign about the organization’s commitment to performance,” Sajjadiani says. “On the other hand, low-performing employees might perceive the dismissal of a similar peer as a warning sign that they might be next, leading to an increase in voluntary turnover among this group.”

Finally, what about voluntary departures?   Well, high performers follow fellow high performers who leave.  Low performers follow fellow low performers.  However, high performers do not leave in greater numbers when low performers depart.  Instead, stars are more likely to stay.  Apparently, our judgements about our performance relative to peers matter a great deal when we decide whether to leave a job.  

Leadership Lessons from Chris Licht's Fall

Source: CNN

News has broken this morning that Chris Licht is out as CEO of CNN, just days after controversy erupted about a lengthy piece in The Atlantic about the cable news network's new leader.    I'm sure the list of mistakes he made is quite lengthy.  I'll just note three key lessons here in the immediate aftermath of his departure:

1.  Giving a journalist seemingly unfettered access during your early days as CEO, and then being so loose with commentary and language during that time together, was a colossal mistake.  It's hard to believe someone would not anticipate how such access could lead to massive fallout.   Leaders need to work with the press and shape their message through the media at times.  If you are a media CEO, you certainly can't seclude yourself.  Having said that, this type of access seems completely unnecessary.  I simply don't see any potential upside here.   

2.  Locating his office away from the newsroom appears to have been a major error.  It's simply too easy for executives to become isolated from their staff members.   You might make it even more likely that you will be detached from their concerns if you remove yourself physically from their workspaces.  The location also serves a symbolic purpose.  It signals many things about your priorities and your leadership approach, even if unintentionally.   

3.  Finally, Licht himself admitted to his employees, "As I read that article, I found myself thinking, CNN is not about me. I should not be in the news unless it's taking arrows for you. Your work is what should be written about."  Well, he's absolutely correct there.  The CEO is not the organization.  It's not his or her personal fiefdom.  CEOs need to view themselves as stewards.  The institution doesn't belong to the leader.  In particular, leaders must remind themselves that many employees will work there much longer than they will.  

Build Relationships & Trust by Tapping Into Others' Expertise

Source: Noam Galai
Copyright: 2015 Getty Images

Jennifer Hyman co-founded Rent The Runway and currently serves as the CEO. Recently, she spoke to Stanford University students about her experiences as an entrepreneur and leader. Hyman described a critical meeting when she was first beginning to conceive her idea for the business. She landed a meeting with fashion-giant Diane Von Furstenberg.   During that meeting, Hyman asked for feedback about her idea, and she tried to learn as much as possible about the fashion business.   She asked many questions and listened actively.   Hyman explains the lesson she takes away from that remarkable encounter: 

Now also in that meeting, I asked her, “Hey, could you introduce me to a few of your friends, and I’d love to meet with them and talk about this idea,” because every meeting has to get you to like three other meetings. And so never leave a meeting with someone without asking them for that introduction. Now those other meetings led us to other people in the fashion industry, some of which were designers, some of which were publicists, but people that actually could give us real feedback on this idea and people that could see that like we were interested in listening. It was helping to build trust in an industry where we had no experience, where you go in and you actually allow someone else to give you feedback, like “How does that work?”

What ends up happening in a situation where I sit with you and I ask you questions and I ask you for your advice, you end up walking out of that conversation feeling awesome. You end up liking me in that conversation. Like whenever you make someone else into the expert, like that builds a relationship right away. And we needed desperately at the beginning of the business to build trust so that anyone would actually trust us to like take their currencies and inventory and not cannibalize their business.

Hyman highlights two key lessons here. First, don't leave a meeting such as this one without soliciting an introduction to others who may be helpful to you.   Second, people love being put in the position of expert sharing wisdom with others.  They want to help, provided you demonstrate respect for their expertise, come extremely prepared, ask great questions, and listen actively.   Treating someone else as the expert sets the tone for a productive conversation.   You don't have to grovel or patronize others; you simply have to acknowledge what you do not know and point out how they can help.   Very often, others will find the time to share their wisdom with you, even if they have a very busy schedule.  I've certainly found that to be the case in my career as well.  

How Business Travel Spurs Innovation

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Dany Bahar, Prithwiraj Choudhury, Do Yoon Kim and Wesley W. Koo have written a new working paper titled, "Innovation on Wings: Nonstop Flights and Firm Innovation in the Global Context."  The scholars collected data from over 5,000 airports around the world over a ten-year period (2005-2015).  They married flight data with other datasets that provided information about company patents.  The scholars found that, "a 10 percent increase in nonstop flights between two locations led to a 1.4 percent increase in new patents between firms in those places."   Choudhury explains the finding in a comment for a HBS Working Knowledge feature about the research: 

"We’re showing that business travel matters for innovation, but it only matters if two firms’ locations are either culturally or temporally far away from each other,” he says—that is, if the two firms possess different cultural norms or don’t have overlapping business hours, defined as 1.5 hours or less.

For instance, colleagues who speak different languages and possess unique cultural norms around meeting styles would benefit from in-person meetings, whereas people who speak the same language and operate meetings similarly won’t realize the same benefit.

Choudhury hopes business leaders consider the research when refining post-pandemic work policies. Because of the vast sample size of flights used in this paper, he believes the findings are generalizable for all business leaders.

The paper appears to be a strong endorsement for face-to-face interaction as a catalyst for innovation under certain circumstances.   One caveat - the study focused on data from the pre-pandemic period.  Companies clearly have adopted a range of improved communication technologies since 2020, and managers have become more adept at using these technologies.   Does face-to-face interaction matter as much today as it did during the 2005-2015 period?  Future research will help us answer that question.  For now, the study at least requires us to question whether we can achieve desired innovation results simply by relying on remote communication and collaboration. 

Delivering Negative Feedback

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In a recent article for Kellogg Insight, Professor Brooke Vuckovic offered some great tips on how to deliver negative feedback effectively.   Among the bits of advice, Vuckovic recommended trying to anticipate the types of new information that might emerge and challenge one's beliefs about the drivers of poor performance: "To prepare for this possibility, she suggests asking yourself a few prompts: What’s your story of the problem—and what story might this other person tell about the same problem?"  She advocates preparing for the possibility that you might not have a complete and accurate understanding of the situation.  You might ask yourself:  Under what circumstances might I change my mind about this employee's status?  Finally, Vuckovic argues that you also have to consider whether you did not articulate goals and expectations clearly.  What role did you perhaps play by not communicating clearly?

In the end, the employee may not be performing well, and you must deliver some feedback that might be difficult to hear.  Still, Vuckovic argues that you want to make sure to solicit the employee's perspective, listen actively, and play back what you have heard to insure you have understood clearly.   Finally, and most importantly, prepare an exit strategy for the conversation.  If things aren't going well, have a plan for how to bring the conversation to a close, perhaps with an invitation for further discussion once cooler heads have prevailed.  

What Causes Us to Regret Key Decisions?

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Do you find yourself often regretting the path not taken? What's causing those feelings?  Is it affecting your job satisfaction, or your commitment to a key plan of action at work?  Scholars Daniel Feiler and Johannes Müller-Trede have published a fascinating study about regret in the context of decision making.  Prior research had shown that "decision-makers both anticipate and experience greater regret when they can observe the consequences of unchosen options."   However, these two scholars found something slightly different in their study.  They discovered that, "Participants in our studies were more likely to experience regret when they did not observe the outcome of the forgone alternative than when it was revealed."  How could that be?  

Feiler and Müller-Trede discovered that the explanation as to do with our beliefs.  What do we believe is the value of a foregone alternative vs. what is the actual value of that option we dismissed?  They found that, "When there are many alternatives to choose from under uncertainty, the perceived attractiveness of the almost-chosen alternative tends to exceed its reality."  In short, we exhibit over-inflated beliefs about options we rejected.  This misguided beliefs cause feelings of regret.  

What All of Us Can Learn About Decision Making From Baseball's New Pitch Clock

Source:  Sports Illustrated

If you are a major league baseball fan, you probably are enjoying the new pitch clock implemented this year.  Over the past few decades, games have become longer and longer, typically exceeding 3 hours.  In the playoffs, many games have exceeded 4 hours.  The increasing length of games and the slow pace were turning away many fans, particularly younger ones.   Interestingly, a scholar of decision making under pressure has suggested that all of us can learn a bit from the addition of the pitch clock in baseball.  Dartmouth College President-Elect Sian Beilock, a cognitive scientist, has argued that we might actually see better performance with the new time constraints for pitchers.  She extends that argument to many decision makers in an array of fields, arguing that situations without time bounds can actually increase decision fatigue and burnout, while yielding inferior choices.  We can spend so much time pondering and re-hashing our options that we become cognitively overwhelmed.  Here's an excerpt from a piece she wrote recently for Fast Company: 

My own research shows that we actually perform better under tight time constraints—especially when we’re doing something we’re good at. The performance of elite athletes is largely controlled by procedural memory and repetition rather than conscious thinking...  Too much time causes us to focus excessively on the minutiae of our performance, which can disrupt what we are doing. San Francisco Giants manager Gabe Kapler had it right when he said that the greatest advantage of the pitch clock will be “taking all the thoughts out of your head.”

Parkinson’s law suggests that when people are given extra time to complete a task, we’ll generally take advantage of that time, even if we don’t really need it. In other words, we don’t lose out by trimming down deliberation time. All we gain is extra time for our thoughts to percolate—and disrupt our performance... In a world where we are all facing 35,000 daily decisions, it’s worth taking stock of how too much thinking time might be causing more harm than help. The “paradox of choice” tells us that having too many options actually makes us less happy—an experience anyone who’s spent a night scrolling through hundreds of Netflix titles only to declare “there’s nothing to watch” knows well. In many ways, the absence of a pitch clock in our own lives could be viewed as the culprit for decision fatigue and burnout, which over half of Americans are struggling with today.

Naturally, we have to consider the context.  The performance of an athlete performing the same task that they have performed millions of times since childhood is far different than a distinctive strategic decision that a CEO is facing and perhaps has never encountered previously.  Still, we should think carefully about what happens when we delay decisions repeatedly in hopes of benefiting from further deliberation and analysis.  There is a delicate cost/benefit calculus at play.  The benefits of delay don't always exceed the costs, and those costs are not only associated with the danger of falling behind more nimble competitors in the marketplace. 

A Leader's First 90 Hours

Source: https://www.nettl.com

As a new leader at any level, what will you do in your first 90 hours on the job?  Fascinating question.  A very important question in my view.  HBS Professor Emeritus John Quelch wrote a thought-provoking piece recently for HBS Working Knowledge on this topic.  He reminds us of the terrific book, First 90 Days, written two decades ago by Mike Watkins.  Quelch argues that the world is moving so quickly that new leaders need to focus on their first 90 hours; they simply can't wait to take certain actions given the pace of change.  Whatever you think about Quelch's arguments and recommendations, there's one piece of advice that resonated with me.  He advocates for careful consideration of actions during those first 90 hours that will signal your values as a leader.  I wholeheartedly agree.  

Think about how people throughout your team or organization will interpret your words and actions during those first few days.  They will be reading between the lines, chatting with their colleagues, and reflecting on the meaning behind your actions.   Through it all, they are trying to discern what is important to you, and what your priorities will be.  Who and what do you value?  

Therefore, consider carefully the way others will perceive those initial actions.  Who are you meeting with during those early days?   What are you emphasizing in your communications?  What small changes will you make to signal your values?  Are there any immediate investments you can make that suggest a new way of leading?  How open and transparent will you be in relation to what prior leaders have done?  Considering these questions carefully will be highly important as you set the tone in those first few days in a new role. 

Have You Become Too Reliant on Star Performers?

Source: NBA.com

Tom Taiyi Yan and Elad Sherf wrote a brief article this week in the Wall Street Journal describing their fascinating new research regarding team over-reliance on superstars.  They cite a terrific study of National Basketball Association players.  Here's an excerpt:

To investigate how team dynamics worked, we started by looking outside the world of business—at basketball. In our study, published in Organization Science, we examined competitive teams in the National Basketball Association across more than 60,000 games, spanning 34 years. Leveraging motion-tracking-camera data, we examined how teams’ passing patterns and shot distributions changed after wins and losses.

We found that after winning, teams became more reliant on their star players. Teams passed the ball about 6% more to the stars, and their shot distribution skewed 15% more toward the big performers. Although doubling down is intuitive (“We want to exploit what worked before"), it ended up decreasing teams’ chances of winning the next game. The increased reliance on the star players made teams more predictable to the next opponent and easier to defend—and therefore less likely to win the game.

This tendency to stick with stars doesn’t just hold true in competitive sports. All teams—particularly ones in the business world—tend to double down on what has worked. And it is often a bad idea.

Big Data AND Consumer Anthropology

We shouldn't be choosing between leveraging big data to make decisions vs. conducting in-depth qualitiative research about our customers.  We should be using both methodologies, as they are often quite complementary.  As market researcher and Kellogg Professor Gina Fong states, "“Big data’s having a real moment right now. Numbers don’t lie—and big numbers sometimes give people more confidence in the data. But they only give you the what. Consumer anthropology and qualitative research are there to address the why behind people’s choices.”

Qualitative research can be most effective when we study people in their natural environment - retail stores, homes, workplaces, public parks, mass transit stations, etc. The key is to see what they do, rather than relying simply on what they say. After all, as Margaret Mead once said, "What people say, what people do, and what they say they do are entirely different things.”  Fong offers a wonderful example of how qualitative research can deepen our insights into consumer behavior and even prevent us from jumping to the wrong conclusions. Kellogg Insight describes her powerful example:

For example, a colleague of Fong’s loved eating avocados, but he had stopped purchasing them in the grocery store. Looking solely at patterns in the data, the store’s brand team might conclude that he and others like him didn’t like avocados anymore, or that avocados had become too expensive. Armed with this information, the team might react by discounting avocados or displaying them in another part of the store.  But his motivation for passing up avocados was more complicated.

“He really liked avocados, but he didn’t know how to pick one when it was perfectly ripe,” Fong says. “Either the avocado would ripen too fast and spoil, or it would take too long to ripen, and he would forget about it. This was frustrating to him, so he just punted the whole activity.”  On a recent store visit, he saw a display with avocados categorized in three groups: “ripe today,” “ripe in a couple of days,” and “ripe in four to five days.” This has led to him once again buying avocados.

How You Handle Low Performers Can Hurt Morale and Drive Away Your Best People

I recently re-read a post from The Society for Human Resource Management (SHRM) about a study conducting by Eagle Hill Consulting.  The post focuses on the highly detrimental impact of not acting to address low performers in your workplace. Here's an excerpt from the SHRM blog post:

These findings, drawn from a survey of more than 1,700 professionals from across the private, nonprofit and government sectors, are detailed in a research report by Arlington, Va.-based Eagle Hill Consulting, Are Low-Performers Destroying Your Culture and Driving Away Your Best Employees? The researchers found that:

• Low-performers hurt morale in the workplace and increase the workload for others. When asked to pick the greatest problems created by low-performers, the top concern was that they reduce overall workplace morale (cited by 68 percent of respondents). Forty-four percent said that low-performers increase the work burden on high-performers.
• Low-performers stifle innovation and contribute to a standard of mediocrity. Some 54 percent said that low-performers contribute to a lack of initiative and motivation, resulting in a work culture where mediocrity is accepted.

Addressing low performance does not mean you have to fire people.  It does mean you have try to understand WHY certain individuals are not performing to expectations.  What are the causes? Don't assume you know.   Then, you must provide concrete, actionable feedback to people who are not achieving their goals.  It means putting in place a specific plan for coaching and developing low performers.  Finally, it means having key milestones at which you can check in on the performance of these individuals, measure progress or lack thereof, and take additional steps to address performance below expectations.  Failing to have the hard conversations will not only harm the organization's effectiveness, it will lead to a deterioration in employee morale.  Ultimately, it might lead to the departure of your best employees, who become frustrated and upset with the situation. 

Why You Should Train as a Barista

The Wall Street Journal's Heather Haddon reported several days ago about the leadership transition at Starbucks. Laxman Narasimhan has taken over for Howard Schultz, who has completed his third stint at chief executive of the coffee chain.  I found one element of the transition particularly interesting.  Haddon notes that Narasimhan "spent 40 hours training to become a certified barista" and served coffee at cafes around the world.  He learned a great deal about challenges on the front lines.  Haddon described the new CEO's plans to stay engaged in the stores moving forward:

Mr. Narasimhan said he plans to regularly work alongside baristas in cafes to understand why it sometimes is so aggravating to get a customer a simple cup of coffee. He intends to work four hours in a different Starbucks store each month and expects his senior leaders to do the same.

To me, this type of direct engagement on the front lines is MUCH more effective than simply visiting restaurants, stores, or factories.   You can truly empathize with your employees if you actually do the work that they do, and if you engage in conversation while tackling tasks alongside them.   You learn a great deal about the obstacles they face each day that make their jobs much harder than they need to be.  Starbucks, as we all know, has had its labor relations challenges in recent years.   This type of engagement can be a step forward. 

Narasimhan's work here reminds me of when Chris Nassetta took over as CEO of Hilton Hotels.  The company was in rough shape.  Inc. magazine reported on the turnaround several years ago.  Nassetta said, "We had lost touch with the front line."  The article noted, that, "Nassetta and his senior executives started spending one week each year working at hotels--in housekeeping, engineering and the front desk. 'Their job is harder than your job,' Nassetta says. 'You get in there, and you pay them the respect.'"

What Do I NOT Know?

Often, when leaders encounter a challenging problem, they naturally begin by asking themselves: "What do I know about this issue?  What expertise and past experience can I bring to bear on solving this problem?"  That would seem like the appropriate place to start.  However, I've recently been challenging leaders to begin with a slightly different question.  I encourage them to pose the question: "What do I NOT know about this issue?  What do I need to learn to make a more informed and wise decision?  From whom can and should I learn, both on my team and beyond my team?"  

Why begin with this question?  Here's my logic.  If you start with what you know, you frame the problem for others on your team.  You might even exert undue influence on them as discussion ensues about the issue.  They might defer to you and your expertise and authority, and in so doing, you may not gain access to vital information and perspectives.  Perhaps you even make yourself particularly vulnerable to confirmation bias.   As Harvard Business School Professor Amy Edmondson argues, effective leaders encourage people to speak up by acknowledging their own limits.   "I'd like to learn more about this specific issue.  I could you use your help to understand more about it." 

Satya Nadella, CEO of Microsoft, put it best when he argued that the "learn-it-all" leaders outperform the "know-it-all" leaders.  Becoming a "learn-it-all" leader begins with asking the question: "What do I NOT know about this issue, and how can I learn effectively and quickly so as to fill the gap in my expertise?"  

Persuading Others: "I'm one of you..."

Source: https://psychology.iresearchnet.com/

Recently, the renowned social influence scholar Robert Cialdini sat down for a chat with Matt Abrahams for his Think Fast, Talk Smart podcast.  Cialdini recapped a few major findings from his research on persuasion.   As he shared a few experimental findings, Cialdini emphasized how we can be more persuasive if we convince others that we are "one of them."   Here's one example:

There was a study done on a university campus, researchers took a young woman who was about college age, dressed like a college student, asked her to set up a table for the United Way on a heavily trafficked area of campus and request people who were walking by to donate to the United Way. And because she looked similar to them she was getting some contributions. But if she added one sentence to her request she got four and a half times as many contributions. So what was the sentence, it was I’m a student here too, I’m one of you.

Cialdini went on to offer another example. In this case, the "persuader" did not meet others in person. Instead, people were persuaded simply becaused they were informed that others "like them" had acted in a certain way. Here's an excerpt from the podcast in which Cialdini described an experiment at a hotel:

We had the cooperation of the managers and we went into hotel rooms and randomly assigned various kinds of cards that were the same except for the recommendation, please do this for, right, and the environment was one, please do this for future generations was another. But the one that made the most difference was “the majority of guests who stay in this hotel have reused their towels,” and that produced a significant increase in the willingness of people to reuse their towels.

But even more interesting we got a more significant effect if we said not just the majority of visitors to our hotel have reused their towels, the majority of visitors who’ve stayed in this room have reused their towels. We got significantly more now because the principle we’re talking about is the principle of social proof, that if a lot of other people are doing something it validates the behavior, it makes it more correct. But if those people are comparable to us, staying in the same room now that’s not unity, that’s just similarity here, they’re comparable they’re like us. Well, that makes their behavior even more diagnostic of what we should do.

For more of Cialdini's terrific work on persuasion, I highly recommend his groundbreaking book, Influence: The Psychology of Persuasion.  

My Fast Company article about Ted Lasso

Today, Fast Company published my article titled, "Was Ted Lasso's Leadership to Blame for Nate's Betrayal?"  The article describes why "giving employees ownership of the win" is very important.