Defeating Boredom in Long Meetings

Claire Suddath has a funny column at Business Week on how to cope with boredom at long management meetings.   Among the best coping strategies listed, she provides this story from Marcy, a former employee of the federal government:

“The M&M game is designed for a large-scale, all-hands-on-deck type meeting where you’re not expected to participate,” she explains. She and her friend would each get a packet of peanut M&M’s and then sit on opposite ends of the conference room, but within eye contact of each other. “We’d pick a set of buzzwords ahead of time—like ‘mission-driven,’ ‘nonproliferation,’ ‘efficiency,’ or ‘the president’—and then whenever one was used, we’d eat an M&M. If you finished your bag of M&M’s, you won.” This, my friends, is the American government in action.

I think that I'll try this strategy with a few colleagues here at the university.  I'm sure that we can come up with some terrific academic buzzwords to fuel our M&M appetites!  

Struggles at P&G

Apparently, the heat is on Proctor and Gamble CEO Bob McDonald.  McDonald reported some disappointing sales and profit news this week.  According to the Wall Street Journal, "He said the company's sales likely fell by 1% to 2% in the current quarter from a year earlier, compared with a previous forecast of 1% to 2% growth, and said core earnings would come in at 75 to 79 cents a share, down from a previously expected range of 79 cents to 85 cents."  Investors are becoming restless and asking increasingly tough questions.

P&G clearly needs to find a way to jump start organic growth.  However, I believe investors also will begin asking questions regarding the corporate portfolio.  Does the firm need to trim some operations that appear outside the core?  For instance, Iams is a billion dollar brand for P&G, yet pet food does not represent one of the company's main product lines.   P&G focuses primarily on health and beauty as well as household care.   The US pet food market is not as consolidated as the European market.  Therefore, perhaps there may be an opportunity to find a buyer for the business.   Investors may begin asking questions about other brands too, such as the Duracell battery brand.  Does it fit well with P&G's portfolio.  Whenever a company begins to struggle and investors become restless, these types of questions will begin to be asked.

How Analytics Can Help You Improve Quality and Reduce Costs

I found a terrific example of the use of "Big Data" in Fast Company magazine this month.   The article by Farhad Manjoo describes a situation at Washington Hospital Center.   ER doctors became concerned that many patients returned to the hospital just a short time after being discharged.  A computer scientist at Microsoft Research began to investigate.  He wanted to identify some triggers that would predict whether a patient would be readmitted.  Specifically, he was looking to help doctors identify some predictors that might not otherwise receive much attention by ER physicians and nurses.  He analyzed more than 300,000 ER visits.    Among other things, he discovered that the length of a patient's stay in ER tended to be a good predictor of readmission.  If a patient stayed in the ER for more than 14 hours, they were likely to return to the hospital within a few weeks.  Similarly, if the patient's chart mentioned the word "fluid" at some point, that seemed to predict readmission quite well too.  

This story illustrates how companies can use analytics to help them understand how to improve the quality of customer service, as well as to reduce costs.  Take an automobile dealer.   They conduct repair and maintenance on thousands of cars per year.  A fair number of those cars return shortly after a repair or maintenance appointment, because something is not working correctly or hasn't been done to the customer's satisfaction.   An automobile dealer could analyze the data from thousands of those cases, and it could try to identify the predictors of return visits.  If they could identify a few solid predictors, then they could try to intervene to reduce those return visits.  Those interventions could improve quality and customer satisfaction, while reduce costs (since every return visit is costly).   Many service businesses could apply a similar logic and use analytics to achieve positive results.   Can your company benefit from such an approach?  

Innovation: Working at the Boundaries

For years, we have known that successful innovations often come from people working in other disciplines. They bring deep knowledge in a related field, and just enough outside perspective, to solve a tough problem that individuals with years of experience in a particular field could not solve. Harvard Professor Karim Lakhani has studied crowdsourcing efforts and confirmed this result. He found that, "successful solvers solved problems at the boundary or outside of their fields of expertise, indicating a transfer of knowledge."

What does that mean for people trying to drive innovation within firms? I think it means finding ways to expose tough issues to people in different functional areas and silos. It means finding people working at those crucial boundaries. It means giving problem solvers access to the social networks of people working in related fields, thus expanding their perspectives.

Is YouTube An Oppportunity For Terrific Advertising Experiments?

Alex Konrad has written an article for Fortune titled, "Pepsi, Brewing up viral magic."   The article describes how Pepsi debuted a new "Uncle Drew" ad for Pepsi Max on YouTube.   According to the article, "In the five-minute clip, 'Uncle Drew' amuses, then mesmerizes, a pick-up basketball game and its fans with crossovers and dunks unbecoming of a white-bearded, paunch-carrying old man, and only possible because the true identity of 'Uncle Drew' was a carefully disguised young basketball star, the clip's writer-director Kyrie Irving."  (Irving is the former Duke player and current NBA Rookie of the Year who plays for the Cleveland Cavaliers).   What's interesting is where the ad went next... it is now appearing on television as a 30-second spot during the first few games of the NBA Finals between the Miami Heat and the Oklahoma City Thunder (go Thunder!). 

That progression is somewhat unique, going from YouTube to television.   I find it very interesting though, and I think more firms should emulate this strategy.  This story proves that firms can and should use YouTube not just as part of a social media marketing strategy... They should think of YouTube as a land of experimentation.   YouTube offers an inexpensive way to experiment with new ad strategies.  The cost of failure is minimal, and even the ads that don't become viral sensations can be "useful failures" in that they may provide powerful learning opportunities.  

If firms are to use YouTube as a powerful mechanism for low cost, low risk, fast experimentation, then they need to have clear methods of evaluating these experiments.  Konrad's article explains that Pepsi had just such a method of evaluation:

"Pepsi Max brand team member Sam Duboff, who led creation and development of the piece, says 'Uncle Drew' had to satisfy three major metrics in order to justify its adaptation into a television segment. 'Uncle Drew' had to keep viewers engaged, hit the brand's target demographic, and generate its own legs through word of mouth. With 80% of viewers watching through the 4-minute mark, a 82.1% male viewer group that skewed towards the brand's core 25-44 age group, and over 5 million views from embedded YouTube players suggesting the viewer watched over a media site or Facebook, Duboff and his team hit all three." 

The Protege Effect: Lessons for Leadership Development?

You often hear the adage, "The best way to learn something is to teach someone else... If you can teach someone about a subject, you really have to understand the material."  New research, described by Annie Murphy Paul in Time magazine, reinforces the accuracy of this nugget of wisdom.  Scholars have used a "teachable agent" - a computerized animated figure named "Betty's Brain" to examine what they call the "protege effect."   Betty's Brain behaves like a real-world student.  Children are encouraged to "tutor" Betty's Brain.  The studies find that, "Student teachers are motivated to help Betty master the material, so they study it more conscientiously. As they prepare to teach, they organize their knowledge, improving their own understanding and recall. And as they explain the information to her, they identify knots and gaps in their own thinking."  Moreover, scholars have found that, "The agent’s questions compel users to think and explain the material in different ways, and watching the agent solve problems allows users to see their knowledge put into action." 

Is there a lesson here for leadership development?  I believe so.   Leadership development professionals, professors, and consultants always struggle with how to get managers to actually change their behavior based on what they might learn in a classroom-type environment.   We might think about putting high-potentials in the role of teacher, not just the role of student.  If we put high-potentials in the role of mentoring and teaching new hires and other junior employees, then perhaps the high-potentials will learn new skills and capabilities more effectively.  Perhaps behavior will change more significantly and more quickly. 

Small Groups of Smart People: Rethinking Our Meetings

Ken Segall wrote a good column for Fast Company about his experiences working with Steve Jobs.  Segall argues for bringing together "small groups of smart people" - avoid having a huge group of people attend key meetings.   He tells an anecdote about Steve Jobs:

One particular day, there appeared in our midst a woman from Apple with whom I was unfamiliar. I don’t recall her name, as she never appeared in our world again, so for the purposes of this tale, I’ll call her Lorrie. She took her seat with the rest of us as Steve breezed into the boardroom, right on time. Steve was in a sociable mood, so we chatted it up for a few minutes, and then the meeting began. “Before we start, let me just update you on a few things,” said Steve, his eyes surveying the room. “First off, let’s talk about iMac--" He stopped cold. His eyes locked on to the one thing in the room that didn’t look right. Pointing to Lorrie, he said, “Who are you?”

Lorrie was a bit stunned to be called out like that, but she calmly explained that she’d been asked to attend because she was involved with some of the marketing projects we’d be discussing. Steve heard it. Processed it. Then he hit her with the Simple Stick. “I don’t think we need you in this meeting, Lorrie. Thanks,” he said. Then, as if that diversion had never occurred--and as if Lorrie never existed--he continued with his update. So, just as the meeting started, in front of eight or so people whom Steve did want to see at the table, poor Lorrie had to pack up her belongings, rise from her chair, and take the long walk across the room toward the door. Her crime: She had nothing to add.

Ok, so the anecdote is powerful, but probably should not be emulated.  We don't want to run around throwing people out of meetings in this fashion.   However, the principle deserves our attention.  Keep those meetings streamlined.  We get much more done if we keep our teams small and focused.  As Segall writes, "Most people know from experience that the fastest way to lose focus, squander valuable time, and water down great ideas is to entrust them to a larger group."

I can hear the pushback already.  "But shouldn't we strive to be inclusive? Isn't that required to build buy-in?"  Sure... we have to worry about including people so as to build buy-in. However, that doesn't mean that everyone needs to be at all these meetings.  We can solicit input and advice in many ways, and still have a small group focusing on the key collaborative problem-solving task in a meeting.  

PowerPoint Abuse

Megan Hustad has a good article at Fortune.com about PowerPoint abuse.   In the article, Warren Berger, design expert and author of Glimmer, argues that speakers use Powerpoint as a crutch.  It deflects the audience's attention away from the speaker, which is something many presenters actually prefer.  Berger argues that PowerPoint isn't the problem; the way people use it is the issue.  Speakers talk to the slides, rather than engaging interactively with the audience.  That lack of audience engagement harms a speaker's ability to persuade, influence, and impact.

Terri Sjodin,  author of Small Message, Big Impact, makes the argument that bullet points don't help the audience understand cause and effect.  A persuasive argument draws connections; it explains how and why one factor influences another.  Hustad ends the article with a story from the creators of South Park.  The story reinforces the notion that we have to draw connections when making a presentation.   The creators explain how they put "story beats" together: "We can take these beats, which are basically the beats of your outline, and if the words 'and then' belong between those beats, you're fucked, basically. You've got something pretty boring. What should happen between every beat that you've written down is either the word 'therefore' or 'but.' So it's not this happens and then this happens. Instead, it's this happens therefore this happens. Or this happens but this happens also, therefore something else happens."

Pixar Storytelling Rules: One Rule Could Help You Make Better Decisions?

I found this terrific list of Pixar storytelling rules the other day.  I encourage all my readers to take a look.  The lessons apply to all storytelling, not just the development of animated movies.  Since great leaders tell stories to communicate key messages, the rules are a must-read for business executives. 

I'm particularly interested in Rule #9: When you’re stuck, make a list of what WOULDN’T happen next. Lots of times the material to get you unstuck will show up.

Think of a tough decision you have had to make recently, one characterized by high stakes and a great deal of ambiguity.   Were you stuck at some point, unsure of how to proceed?  If so, you might try applying this rule.  Make a list of the options you would clearly NOT pursue.  Ask yourself why.   Developing the options that are clearly not plausible or attractive may help you generate alternatives that do make sense.  

Tony Fadell: Why Self-Doubt Isn't Always A Bad Thing and Ignoring Experts Can Be a Good Thing

Thank you to the StrategyProfs.net blog for pointing me to this terrific video from iPod inventor Tony Fadell.

What Happens When The Former CEO Sticks Around?

Professors Tim Quigley (Lehigh) and Don Hambrick (Penn St.) have published a new study in Strategic Management Journal on the impact when a former CEO stays on as chair of the Board of Directors.  Their results prove quite interesting.  Quigley and Hambrick examined 181 successions in high technology firms.  What did they find?  When a predecessor sticks around as board chair, the firm tends to experience less strategic change.  Resources don't get re-allocated as much to new initiatives or sectors, divestitures are less likely to occur, and executive team members are not replaced as often.   The scholars also found that company financial performance doesn't change much.  As they wrote, "New CEOs who are restricted in their actions are correspondingly restricted in the degree to which they can alter performance."  When the predecessor finally does step down as chair of the board, then strategic and personnel changes begin to occur.  Moreover, performance begins to deviate from the earlier levels. 

Many people advocate separating the chair and the CEO roles in corporations.  These results suggest that we have to think carefully about who occupies those roles.  If the chair position is held by the current CEO's predecessor, we may have a chair who does more than monitor and control the CEO's actions.  That chair may actually restrict the CEO's actions so as to preserve the strategy, structure, and executive team that already had been in place prior to the succession.  In these cases, the governance process may actually inhibit very necessary strategic change at times.

Design thinking: You must observe well!

The Wall Street Journal has several good articles about design thinking today. The article notes that anthropological observation of customers in their natural setting is a key phase of the design thinking process. What the article doesn't say is that firms have to distinguish between effective and ineffective observation. What must you worry about when conducting observations? First and foremost, you have to protect against confirmation bias. You have to avoid allowing predispositions to cloud your interpretations of what you are seeing. That is why you should not observe alone. Always go in pairs or trios. Then compare notes. In addition, take lots of photos and videos if possible. Then you can show your colleagues back at the office what you saw. They don't see through your filter. They see the raw data. Finally, pick your observation sites carefully. Watch for selection bias. Are you seeing something typical or not. Of course, sometimes we learn from extreme cases, but we must acknowledge and understand that it is an extreme case!

Are CEOs Spending Too Much Time Outside the Firm?

A new study suggests that some CEOs may be spending far too much time outside the firm.  Oriana Bandiera, Luigi Guiso, Andrea Prat, and Raaella Sadun have written a paper titled, "What Do CEOs Do?"  They examined how 94 CEOs of top-600 Italian firms spent their time.  According to these scholars, "The patterns we observe are consistent with the hypothesis that time spent with outsiders is on average less beneficial to the firm and more beneficial to the CEO and that the CEO spends more time with outsiders when
governance is poor."   The research findings suggest that CEOs perhaps spend too much time dealing with external constituencies at times, and they may overdo their role as the "public face of the firm."   Now one must ask, "Won't it hurt the firm if the CEO isn't out there interfacing with these constituents?"  Perhaps one answer is that the CEO doesn't need to take on this role by himself or herself.   CEOs might consider sharing the responsibility for this outreach more broadly, thereby preserving their time so as to focus appropriately on internal activities. 

Shouldn't Our Best & Brightest Be Doing Something More Substantial?

Leadership Development: Why Not Across Levels?

I'm always struck by the fact that most leadership development programs consist of people who work at the same level of the organizational structure.   I understand the rationale for this structure, but I think it has some limitations.  After all, to get work done, people need to lead and work on teams consisting of people from multiple levels of the organization.  To be effective, people must manage up and down.  Nevertheless, formal leadership development programs typically select a cross-section of high performers from one particular level.  I understand why, of course.  The programs seek to foster a cohort of peers who can learn from and network with one another.  Moreover, putting more senior folks in the room can stifle dialogue at times. 

Many programs bring senior executives in to speak to the group, conduct question and answer sessions, and the like.  This senior executive involvement is very important and should definitely take place.  However, I believe a more substantive involvement in the actual programs can be beneficial.   Such cross-level involvement would enable development on key issues such as communication, teamwork, project management, giving and receiving feedback, and the like.   Mentoring becomes a hands-on activity that becomes embedded in such a program too.  Not only can senior folks mentor more junior managers, but reverse mentorship can take place as well.  Younger, talented high potentials can educate and inform senior executives on key social, technological, and market trends.   In sum, leadership development shouldn't be taking place in isolation.  Leaders need to engaging in some development work along with the subordinates and superiors with whom they must cooperate and collaborate to get things done.

Do Some Global Firms Exhibit Excessive Localization?

Experts frequently criticize large multinationals for failing to customize their products adequately for local markets.  We hear about the fabulous flops, in which firms try to export a popular product developed in the United States or Western Europe, only to experience a huge failure in an emerging market.  I'm quite sure that multinationals do make these mistakes often.  However, I think we hear far less about an equally serious mistake that many firms make.   Some companies have far too many local variations of essentially the same product.  They adapt their goods for every local market around the world, yet perhaps they don't quite need that level of localization. 

These firms don't encounter the same level of criticism. Why?  The economic damage is not as apparent.  After all, these goods may sell very well in each local market.  However, the localization strategy comes with some costs.   By constantly adapting their products for each country, the firms fail to take advantage of potential economies of scale and learning.  As a result, their costs are much higher than they should be.  Moreover, they spend excessive amounts of money building multiple brands in the same product category, rather than investing in the growth of fewer truly global brands.   I'm not saying such a global strategy is ALWAYS better than localization.  Naturally, localization is essential in some products and markets.  However, I do think we fail to levy the same amount of criticism at firms that miss out on key cost savings because of the constant adaptation that they engage in from country to country.

Why does this excessive localization take place in some multinationals?  I would argue that the explanation lies in the organizational structure, not in the minds of those senior executives plotting global strategy.   In many firms, country managers and regional presidents push for localization because it gives them more control and power.  It justifies the existence of larger brand management staffs at the local level, and in general, the country managers control more financial, physical, and human resources.  All else equal, country managers have some personal incentives to push a level of localization that may be higher than optimal.   We often don't hear experts discuss this failure; instead, we hear often about the firm that failed to adapt to a local market.  Yet, both types of mistakes can be equally costly. 

Making the Novel Seem Familiar

I've just finished reading New York Times journalist Charles Duhigg's new book, The Power of Habit.  I enjoyed it a great deal (full disclosure: Charles was my student 10 years ago at Harvard Business School).   Duhigg has a terrific chapter focusing on the predictive analytics function at many corporations, including Target.  Many of you probably read an excerpt from the book which appeared in the New York Times.  That excerpt discussed how Target tried to determine which female shoppers were pregnant so as to begin marketing key products to them before their babies were born.  As we all know, predictive analytics has become a crucial area of focus for many companies.  They can't seem to find enough talented folks who can mine data, conduct sophisticated analyses, and distill key insights.  

Duhigg makes a key point though.  Simply identifying people who are likely to want to purchase your product is not enough.  You have to entice them by "making the novel seem familiar."   It turns out that we are more likely to adopt a new habit if the behavior seems familiar to us.  Duhigg uses the example of a new song.  We tend to listen to music that has some key similarities to music heard often on the radio.   We tend not to listen to dramatically different songs.  Thus, radio stations sandwich such new songs between two tunes that are very familiar.  That tactic entices us to give that new song a shot.  Similarly, Target doesn't just come right out and bombard those pregnant women with a ton of ads and coupons for baby products.  They have come to realize that these women may not want retailers to know that they are pregnant, or they might be alarmed that a company could have figured this out.  Thus, retailers sandwich such targeted marketing between ads and coupons for other products unrelated to pregnancy and children.  They make the novel seem familiar.  It turns out that this tactic often works when it comes to getting us to adopt new habits, in life and in business.

Captain Sullenberger: Dealing with the Unexpected

CEOs with Military Experience

The Boston Innovation blog reported on a new study today about CEOs with military experience. New research by Efraim Benmelech of Harvard and Carola Frydman of Boston University found that CEOs with military experience tended to engage in less fraudulent behavior than those executives who had never served in the armed forces. The study findings suggest that the leadership training and emphasis on honor and ethics at the military academies may have a lasting impact on personal behavior - years after the individuals depart the military. Does this research suggest that we can teach ethics in places such as business school and thereby increase ethical behavior of business leaders? I'm not sure it is quite that simple. The military inculcates a certain sense of honor and character in many ways, well beyond the classroom. In short, the armed forces employ a holistic approach to building character. If business schools wish to enhance ethical behavior, they must do more than teach a class or two on ethics and morality.

When Hierarchy Helps?

Richard Ronay, Katherine Greenway, Eric Anicich, and Adam Galinsky have produced a new study titled, "The Path to Glory Is Paved With Hierarchy: When Hierarchical Differentiation Increases Group Effectiveness." Chris Shea writes about it in this weekend's Wall Street Journal. The scholars primed some people to think of a time when they had high power, while others were primed to think of an occasion when they wielded low power. Still others were not primed at all. In a cooperative task, the mixed groups outperformed those with folks only from one of the three conditions. The results suggest that a power hierarchy seems to improve productivity. Interestingly though, the results do not hold for other kinds of tasks. These results are consistent with another study by Galinsky, in which he found that NBA teams with larger salary disparities outperform those with more equal pay. Again, those results suggest a power hierarchy improves team effectiveness. We have to take these results with a grain of salt though. First, the type of task does matter. Second, this study examines "informal" hierarchies within teams. It does not examine formal hierarchies within larger, more complex organizations. Most importantly, we should not interpret the results to mean that efforts to flatten organizations are ill-advised. While some hierarchy may have benefits (it helps to have some who are clearly in charge), many organizations have such rigid hierarchies that many negative effects ensue.