Should Disney Sell ESPN?

The Wall Street Journal reported this morning on Disney's quarterly earnings announcement, noting that the news disappointed investors.  "Declining income at ESPN continued to overshadow quarterly results at Walt Disney Co., with the sports powerhouse posting lower advertising and subscription revenue that dragged company earnings below Wall Street expectations."  These results continue a multi-year slide in subscriber numbers at ESPN, as many American consumers "cut the cord" - ending their cable television subscriptions.   Some people estimate that ESPN has lost more than 10 million subscribers in the past several years.  

This news raises a key question for me:  Should Disney sell ESPN?   That question may shock some people, as ESPN has been a substantial contributor to Disney's total net income since it was acquired as part of the Disney acquisition of Capital Cities/ABC two decades ago.   However, Disney's corporate strategy has evolved considerably since that time.   During the second half of Michael Eisner's tenure as CEO, Disney diversified well beyond the businesses that leveraged the animation studio as a central asset (acquiring ABC, owning baseball and hockey teams, etc).  However, during Bob Iger's tenure, characters have become the driving force of the corporate strategy once again.   The three major acquisitions during Iger's tenure have focused on expanding the character portfolio, so that Disney can leverage those characters across multiple platforms (i.e. Pixar, Marvel, and Lucas Films).  In many ways, Iger has returned Disney to its roots.   Below you will see famous chart created by Walt Disney himself to describe synergies at the company.   One has to ask:  How does ESPN fit into this chart?   Absent major synergies, and facing a long term disruption to ESPN's business model, might Disney be better off divesting the business unit?   Alternatively, Disney has to take a hard look at reinventing the business model at ESPN, rather than tweaking the strategy.   A reinvention seems necessary given the long term trends regarding cord cutters.   

What Will Our Rivals Do?

Do you want to spark creative thinking in a team meeting? David Burkus recommends asking how competitors might overtake, surprise, and/or outflank you. Here's an excerpt from his latest column for Inc.com:

Instead of thinking up what you should do, think about how your rivals are working to counteract what you're already doing? How would you drive yourself out of the market? Research suggests that we're able to think of more creative solutions when our frame of reference is someone else, rather than ourselves. In addition, if you think of what you're competitors would do to steal your customers, you can think of ways to turn that around and gain more customers yourself.

I recommend taking it one step further. Ask some members of your team to role play the competition. Have them devise strategies to destroy your business, or responses to your next proposed strategic move. That type of role play can open some eyes and help you reframe a situation to spark creative thinking.

How We React To Disconfirming Feedback

Francesco Gino has conducted research into how people react to critical feedback.  Unsurprisingly, she finds that we do not deal well with feedback.   Well, perhaps there is some surprise here. After all, I seem to read often these days that millennials love feedback.  I've always wondered about the veracity of that statement.  It seems that it has become conventional wisdom without much data to support the conclusion.   Gino's research shows that we do not like disconfirming feedback - i.e. critiques that are more negative than our own self-evaluations.  Moreover, we try to distance ourselves from those that offer us disconfirming feedback and seek out others to add to our network that will affirm our positive self-evaluations.   Here's an excerpt from Gino's HBR article about this research:

We found that in the year following feedback, an employee was more likely to eliminate someone from his or her network who offered “disconfirming” feedback (i.e., feedback that is more negative than one’s own self-evaluation) than a reviewer who provided “confirming” feedback. More specifically, when a colleague’s review was one point lower on a seven-point scale than one’s own self-review, the employee was 44% more likely to drop the relationship with that colleague.

We also found that when receiving negative feedback from fellow colleagues with whom they must retain a working relationship, employees tried to create a more hospitable network by seeking new colleagues who were relatively disconnected from their current circle.

In follow-up laboratory studies, we found that people engage in such behaviors because disconfirming feedback threatens their own views of their skills and accomplishments.

How EOS Overtook Chapstick and Blistex

Lip balm... It doesn't seem like a market ripe for innovation, does it?  However, EOS (maker of those pastel-colored, spherical-shaped lip balm products) has overtaken industry leaders such as Chapstick and Blistex in a few short years.   Fast Company recently spoke to the founders about the strategy that has led to so much success.   Elizabeth Segran writes, 

The lip balm category struck them as a prime candidate for innovation, since the vast majority of products on the market "were indistinguishable" from their 100-year-old predecessor, Teller says. Many brands appeared to be driven primarily by cutting costs and competing on price, he points out. "It appeared to us that everybody in this category was being lazy. That was an opportunity."

EOS chose their target market carefully.  They focused on millennial women, rather than trying to be all things to all people (generally, the existing products approached all customers uniformly).  Specifically, they targeted "millennial women between the ages of 25 and 35 who were style conscious."  Why?  Their research showed that these women tended to be heavy users of lip balm, yet they did not find the application of lip balm to be enjoyable at all. Co-founder Sanjiv Mehra notes, "The products that women depend on every day should deliver moments of delight that elevate these daily routines." They made a series of other choices that fit with this target market. They tried to "engage all five senses, from soft round packaging that felt good in the hands to the colors of the orbs, to the smells, to the way the flavors tasted, and even to the clicking sound the sphere makes when it closes." Segran writes that the founders tried to build an emotional connection with the customer. They weren't just selling a utilitarian product. They wanted their product to be fun, even delightful.

What a terrific story!  The EOS entry into this "tired" market offers several important lessons.  First, if many existing incumbents are trying to be all things to all people, then a strategy with a laser focus on a specific target market might be quite successful.  Second, empathy with the users can deliver innovative design concepts.  Understanding these millennial women delivered key insights that led to an innovative product tailored to their needs.   Third, customer needs go beyond the obvious service that is provided.  Yes, people don't want chapped lips.  However, these millennial women cared about more than the quality of the balm itself.   EOS' focus on the five senses demonstrates one can delight the customer by paying careful attention to many details about the customer experience.  Ultimately, EOS is selling more than lip balm, just as Starbucks is selling more than coffee.  

Reverse Network Effects

Network effects exist when the value per user rises as the number of users for a particular product or service increase.  Classic examples of firms with network effects include eBay, Uber, Google, and Netflix.  Sangeet Paul Choudary has written extensively about network effects in the past few years.  His recent post examines the concept of reverse network effects.  Is there some point where adding more users decreases value per user?     He explains in this excerpt:  

Reverse Network Effects may sometimes set in with scale i.e. online networks may become less useful as they scale. I do not imply that all online platforms lose value as they grow. However, in the absence of robust curation, online platforms may lose value as they grow.  Under what conditions do online platforms lose value as they scale?  Since the participants on an online platform create value, an online platform loses value with scale when the participants it allows in OR the information/value that they create are not curated appropriately. Poor curation leads to greater noise which makes the platform less useful.

He goes on to give some examples of the ways in which increased noise can become a problem.  For example, he points out that less sophisticated participants may began to use the platform, and that might reduce value per user.   He cites Quora as one platform in which this danger may arise.  Quora worked very well in the beginning as experts answered interesting and challenging questions.   As people with less expertise use the system, however, may create a problem.  As their answers offer less value, some experts may leave the platform.  As experts leave, that can create a downward spiral of value loss and further expert attrition.   His work in this area is interesting, because it stresses the fact that more is not always better in the realm of network effects.  A reverse mechanism can begin to take hold on certain platforms.  

What are the Signs that Employees are Considering Quitting Their Job?

Timothy Gardner and Peter Hom have conducted some useful research about the signs that might emerge before an employee quits his or her job.  They describe these cues as "pre-quitting behaviors."  These include things such as acting less like a team player than usual, or becoming less enthusiastic about the organization's mission.  They also might become less committed to long-term schedules and deadlines, and they may become less interested in working with customers.  In this piece for Harvard Business Review, Gardner and Hom explain one of the most interesting aspects of their research:

The most interesting take-away from this second phase of our research were the behaviors that did not survive our screening process. Note that the 13 key behaviors do not include “wearing dressier clothes to work,” “leaving a resume on the printer,” or “missing work for doctors’ appointments more frequently than usual.” These and many similar behaviors, which have entered into managers’ folklore of key signs of impending departure, were rarely observed or did not statistically hang together with the core behaviors representing a general predilection to quit. Such behaviors may predict future turnover, but not as consistently as the 13 core pre-quitting behaviors across a wide range of jobs, industries, and geographies.

Try Temptation Bundling to Make The Tough Choices

We have all faced certain choices in which we know the right thing to do, but we don't choose the best path.   We should eat the lower calorie item on the menu, yet we opt for the delicious pasta dish.  We should work out daily, but we skip the gym and grab a beer after work with some friends.  We should save for retirement, but we opt to splurge on a vacation instead.  We should work on that term paper due next week, but we head to the party at our friend's apartment instead.   How can we improve our ability to make these tough decisions?  Wharton Professor Katherine Milkman has conducted some fascinating research on this issue.   She describes a self-control technique called temptation bundling.   In short, you bundle together a "want" and a "should" so as to make better overall choices.  This excerpt from a profile of Milkman by Princeton's alumni newsletter explains her findings:  

In 2014, Milkman published a study of a self-control strategy she calls “temptation bundling.” The idea is to link a want (in the study, listening to audio versions of page-turners such as the Hunger Games books) with a popular should (working out at the campus fitness center). If getting on a treadmill were the only way to hear the next chapter in the novel, would you be more likely to get off the couch and go to the gym?   The results were promising: Participants who had access to the audiobooks only at the gym made 51 percent more gym visits than those in the control group. (Another cohort that was encouraged, but not required, to restrict their listening to workout times had 29 percent more visits than the control group.)

What's the Rationale for the AT&T Acquisition of Time Warner?

This week AT&T announced the acquisition of Time Warner in an $85 billion cash-and-stock deal.  Investors did not exactly dance in the streets.  Why the concern from investors about this acquisition, and what's the possible rationale for this deal?  The proposed deal is an example of vertical integration, marrying a content creator (Time Warner) with a distribution system (AT&T).   When we hear about vertical integration, we should ask:  Why will these two entities create value by working together, AND why must they merge to achieve this value creation?  In other words, why can they not achieve certain synergistic benefits through other types of organizational arrangements (e.g., contracts, licensing, strategic alliance)?   AT&T CEO Randall Stephenson certainly understands why investors and analysts will ask if a merger was necessary to capture certain benefits of cooperation between the two entities.  Here is an excerpt from yesterday's Wall Street Journal:

AT&T’s Mr. Stephenson said owning content would make it easier for the carrier to adapt to various platforms quickly in a way that is time-consuming and difficult when it has to negotiate contracts with content partners. “It’s slow, it’s painful, just the contracting itself takes a lot of time whereas when it’s completely owned, you just move a lot faster,” he said Monday.

He might be right, but has he captured the whole story?   Stephenson essentially is arguing that the transaction costs of using market mechanisms (such as contracts) to work with content partners are very high.  He believes that the costs of such coordination are lower if the two entities are part of the same corporation.  Simply put, he believes you can accomplish coordination more easily and more quickly through managerial mechanisms than through market mechanisms.   Is that right?  Well, anyone with experience managing a large vertically integrated firm will tell you that coordination between business units owned by the same parent company is not always so easy or fast.  Bureaucracy, transfer pricing disputes, silo rivalry, and other problems can make life pretty difficult. Moreover, vertical integration reduces flexibility at times to work with desirable outside partners or to change business models, and it puts you in the awkward position of competing with your own customers.   The regulatory landscape also complicates the deal.  As the Wall Street Journal explains, "Analysts note that many of the attractive aspects of owning content—such as keeping it out of the hands of other distributors or giving it free distribution—would be barred by regulators."

In addition to examining AT&T's rationale, I've been considering the perspective of Time Warner in this deal. Time Warner CEO Jeff Bewkes has spent the past decade dismantling a prior failed attempt at vertical integration at his firm. He broke apart the AOL-Time Warner combination, and he divested Time Warner's cable operations. Why then sell yourself to a distribution company now? (ok, the hefty takeover premium is the obvious financial reason!). In particular, it seems odd given that Time Warner has begun to sell its premium content directly to consumers, bypassing the traditional cable operators (e.g., HBO Now). I understand that the content creators have been worried about millennials cutting the cord. Witness ESPN's shrinking subscriber base - clearly a concern at Disney these days. Time Warner surely faces such concerns with some of its content, though perhaps not with a premium network such as HBO. I'm not sure, though, that selling to AT&T solves this fundamental problem. Do we think that innovative new entertainment industry business models will emerge from such a large complex entity, or is it more likely to occur from newer, more nimble players in the industry?

Whom Do We Follow? Choosing Our Leaders Wisely

Stanford Graduate School of Business organizational behavior professor Lindred Greer has conducted some excellent research on team dynamics. In this article on the Stanford website, Luke Stangel describes one interesting class exercise that Greer has conducted. The exercise reveals that we do not always choose our leaders wisely.  Here's an excerpt from that article:

In top-down team structures, the leader holds more influence than others over the eventual decision. That’s dangerous when the team’s leader knows less about the subject than his or her team, Greer says.

She described a class exercise where Stanford undergraduates were asked to choose the smartest person in the room to lead them out of a theoretical desert. Researchers found roughly 50% of students were persuaded to choose a leader based on the person’s attractiveness, height, vocal intonation, facial features, gender and other arbitrary factors.

Students who chose their leader based on relevant knowledge “survived” the exercise; those who chose their leader based on arbitrary factors didn’t.

“When you’re in a meeting and everybody’s speaking up, it’s critical to make sure you’re listening to the right person,” Greer says. “That may not always be the tallest person or the person with the most seniority. It’s the person who knows most about this particular situation. That’s the challenge of teamwork: It’s going to change moment to moment, based on the discussion.”

Combining Intuition and Analysis

We live in an age of big data.  People have become enamored with the use of analytics to solve complex problems and to make better decisions.  I'm a big believer in analytics, but I hope we don't forget that intuition does play an important role in decision-making processes.   In the video below, I explain briefly what intuition is and how it works.  

How can we combine intuition and analysis to help us make better choices?  Here are four ways that the two modes of thinking can complement one another.  

1. Use analysis to check your intuition, but not simply to justify decisions that have already been made 
2. Use intuition to validate and test the assumptions that underlie your analysis 
3. Use analysis to explore and evaluate intuitive doubts that emerge as your prepare to make a decision 
4. Use the intuition of outside experts to probe the validity of your analysis

Lands' End CEO Pushed Out: Culture Eats Strategy For Lunch

The Wall Street Journal reported last week that Federica Marchionni was forced out as CEO of Lands’ End Inc. after only 19 months on the job.   The news did not surprise me given the faltering performance at the firm and the controversy surrounding her leadership.   Six months ago, I wrote a blog post about her effort to turn around Lands' End.   In that post, I referred to some comments by Columbia Professor Rita McGrath, who questioned whether the Lands' End scenario would unfold much like the situation at J.C. Penney when Ron Johnson tried unsuccessfully to engineer a turnaround.  I was particularly taken aback at the time by Marchionni's choice to work out of an office in New York, while only spending one week per month at the firm's headquarters in Wisconsin. At that time, the Wall Street Journal reported, "As part of her contract, the Lands’ End board agreed to let Ms. Marchionni work primarily from an office in New York’s garment district—an arrangement that rubbed some in Dodgeville the wrong way, according to former employees. Her employment agreement says she must be in Wisconsin for holiday parties and other social events that the Lands’ End CEO “historically has attended.” 

To me, the scenario at Lands' End reminded me of the old saying:  Culture eats strategy for lunch.  You can have a bold vision, but you will not succeed as a leader if you can't build buy-in and commitment from people throughout the organization.   How could working from an office halfway across the country have sounded like a sensible way to build support for her turnaround?   There's a bigger issue here though.  Like the J.C. Penney scenario with Ron Johnson, Marchionni did not spend sufficient time understanding the culture, building a coalition of supporters, and making people feel a sense of involvement and ownership with regard to the turnaround plan.   The best turnarounds involve people throughout the organization believing that it's their plan, not simply the CEO's plan.  Sometimes, the CEO has to set the organization on a new course.  Still, the CEO can consult with employees to determine the best way to make that shift, to execute those plans, and to achieve key goals and objectives.   You can tell them what to do differently, but still ask for their input as to how to implement that strategic shift.   

Great Teams: An Interview with Don Yaeger

I had the opportunity recently to interview Don Yaeger, the former Associate Editor of Sports Illustrated and author of twenty-five books, nine of which have become New York Times best-sellers. His newest book is titled, Great Teams: 16 Things High Performing Organizations Do Differently.  Here are his responses to my questions.  As a Patriots fan, I especially loved his answer to my final question! 

1.  You focus in the book on the notion that great sports teams build a strong high-performance culture. You say that matters more than having the right offensive or defensive schemes and strategies. Can you describe the most important elements of a high-performance culture?

Don Yaeger: Culture is a buzzword that is all over the business publications these days, so I think it’s important to define it. In considering how the word specifically applies to a team setting, I came up with two possible definitions: 1) the conditions within the organization that promote either growth or failure and 2) the shared understanding of what to do in adverse situations. The effort to achieve that culture can be broken down to four essential pillars that I believe set a truly Great Team apart from one that simply performs well.

• Targeting Purpose— The team is connected to a greater purpose. Members understand whom they are serving and why that matters.

• Effective Management— The team is able to think creatively and act dynamically in order to stay fresh, effective, and relevant. 

• Activating Efficiency— Each member of the team brings a unique set of talents, experiences, perspectives, work ethic, personality traits, and know- how that melds with and complements those of the other team members. 

• Mutual Direction— There is a strong sense of understanding, appreciation, shared responsibility, and trust that unites and motivates the team to work together.

After studying the subject carefully and discussing it with truly great leaders, I found sixteen defining characteristics that special teams— the ones that are in a class by themselves, that accomplish more than just a winning season or a successful fiscal year, that pack extra punch and bring a degree of excitement to what they do— all share. These traits can be worked on independently by individual team members, but the truly outstanding teams use them to build on one another. Organizations that exhibit real greatness combine talent, relationships, and innovation in a variety of ways for the sake of achieving a shared goal. 

Great Advice For Writing Cover Letters

You are applying for that job you would really love to nab.  You have created a strong resume. Now comes the cover letter. What should it say?  How should you communicate your skills and experiences in a way that the reader will find compelling?  At Fast Company this week, Sara McCord has written an unbelievably good article about the mistakes that people often make when drafting cover letters.  She offers some great tips for how to strengthen your letter, grab a recruiter's attention, and make yourself stand out from the crowd.   

First, McCord argues that you have to get the basics write.  Make sure you proofread carefully.  Typos, spelling errors, and grammatical mistakes are all disqualifying immediately.  Address your letter to a specific person by name.  Don't address it, "Dear Sir or Madam."   Don't just thank the recruiter for considering you; make the case that you are the perfect fit given the requirements of the position and the culture of the company.   

Second, come up with a killer opening sentence that grabs the reader.  Don't start with, "I'm interested in applying for the marketing analyst position at your firm."  Instead, she suggests writing an opening sentence that makes the reader to want to know more about you.  She offers three examples:

• I’ve wanted to work in education ever since my third-grade teacher, Mrs. Dorchester, helped me discover a love of reading.
• My approach to management is simple: I strive to be the kind of leader I’d want to work for.
• In my three years at [prior company], I increased our average quarterly sales by [percentage].

Finally, she argues against compiling a laundry list of your skills in the cover letter.  Instead, focus on what distinguishes you from other applicants.  Don't just talk about skills.  Provide anecdotes, examples, and descriptions of experiences that illustrate the talents and capabilities you would bring to the position.  

McCord's article is a must-read for anyone applying for a job.  I would add one important piece of advice to her suggestions. You must know your audience!  Take some time to learn about the culture of the company.   That research will help you understand the approach you should take.  Can you be light-hearted or humorous?  The answer is simple: it depends.  Doing your homework on the company culture will help you find the right tone and format for that cover letter.  

Etsy Engineers Share Their Failures in Company-Wide Memos

Many organizations exhibit of culture of blame and shame when it comes to failures.  In a case study that I co-wrote with Amy Edmondson years ago, a doctor described the "ABCs of medicine" - in the past, he said, health care practitioners and administrators tended to Accuse, Blame, and Criticize when it came to medical accidents and mistakes.  Yesterday, I read a fascinating article about one firm's attempt to transform its attitude toward failure.  Etsy has tried to create a culture that encourages people to acknowledge, discuss, and learn from failures.   Here is an excerpt from the  article posted on Quartz: 

In a conversation yesterday (Sept. 17) with Quartz editor-in-chief Kevin Delaney, Etsy CEO Chad Dickerson revealed that people at the company are encouraged to document their mistakes and how they happened, in public emails.  “It’s called a PSA and people will send out an email to the company or a list of people saying I made this mistake, here’s how I made that mistake, don’t you make this mistake,” Dickerson said. “So that’s proactive and I think really demonstrates that the culture is self perpetuating.”  He was referring to the company’s efforts at practicing a “just culture,” based on the idea that blamelessness makes people more accountable, and more willing to admit mistakes.As described by Etsy CTO John Allspaw in an Etsy blog post, engineers (and now others at the company) who mess up are given the opportunity to give a detailed account of what they did, the effects they had, their expectations and assumptions, and what they think happened. And, crucially, they can give that account without any fear of punishment or retribution, in what’s called “a blameless post-mortem.”

I love this technique!   Etsy has done something quite remarkable here.  They are not simply demonstrating tolerance for failure.  They are not simply avoiding the tendency to point fingers when failures occur.  Etsy has gone one step further with this practice.  They are encouraging serious self-reflection on the part of their people.   The employees do  more than admit a mistake in these PSA e-mails.  They describe what happened and they analyze why events did not transpire as they had hoped or expected.  The review and analysis provides the opportunity for improvement, not only for themselves, but for others throughout the organization who read these PSAs.   

Love 'Em or Hate 'Em, Icebreakers Have Value!

Cari Room has written an article this week for New York magazine titled, "Icebreakers Are Terrible. They Also, Unfortunately, Work Really Well." She interviews former Rice University Anton Villado in the article. Villado argues that icebreakers accomplish three important things for a group: 

1. They calm people's nerves about being in an unfamiliar or novel situation.
2. They also provide an opportunity for the facilitator to model the behavior that people should expect throughout the session, and/or the behavior he or she would like to encourage. Team members also can model behavior, providing that all-important first impression about themselves. 
3. Most importantly, they provide an opportunity for self-disclosure. People grow closer to one another when they share about themselves.   Research shows that self-disclosure proves more effective at building relationships than simple small talk.  

Penn State Professor Susan Mohammed explains in the article that icebreakers can begin to build psychological safety within a group. Room writes, 

And even when the bonds it creates are superficial and temporary, both Villado and Mohammed say that an icebreaker can help to foster a sense of “psychological safety,” or an atmosphere in which people feel free to speak up — to question, criticize, say something out-there — without fear of being ostracized. “Having people do weird and crazy stuff, or step out and do something wild — having people feel kind of uncomfortable, basically — would begin to help foster that,” Mohammed says. You may hate every second of it, but you’re not the only one undergoing humiliation. If everyone in the room has to tell their life story in a silly voice, or mime their favorite thing to do on weekends, at least you all look stupid together.

Mohammed stresses, however, that one should set the appropriate expectations for icebreakers. They can begin to build psychological safety, but much more work needs to be done to create a climate where people truly feel comfortable speaking up, asking questions, admitting mistakes, and expressing dissent. I agree wholeheartedly. Ultimately, psychological safety will be shaped by how people begin to engage with one another as they work to solve real problems. Moreover, if the team has a leader, that person will have a substantial impact on the climate of psychological safety. Icebreakers can be helpful, but you have to build upon that "risk-taking" atmosphere with concrete actions that make people comfortable speaking up on real issues.

Design Thinking Builds Strong Teams

The Nielsen Norman Group has a drafted a terrific blog post titled, "Design Thinking Builds Strong Teams."  They argue that design thinking accelerates the process of building common ground for a team, and thereby enhances team effectiveness.   Here is an excerpt:

Teams are the foundation of a successful workplace. But working in teams can have a fairly large cost: members must spend time building common ground — that is, a body of common knowledge, assumptions, vocabulary, and cultural practices. In strong teams, the common ground has already been established and the overhead of communication is outweighed by the benefits of collaboration. As a result, these teams are able to be not only efficient, but also produce high-quality, fruitful outputs.

How does design thinking create common ground?  They argue that it provides team members with a  shared vocabulary.  Second, the design thinking process produces what they call "tangible artifacts" that facilitate shared understanding and productive conversation - artifacts such as storyboards, wireframes, and prototypes.  Finally, design thinking creates trust within a team because it values everyone's contribution, minimizes the traditional emphasis on hierarchy and status, and encourages all to speak up and express dissenting views.  

  

WD-40: Building a Culture of Learning Maniacs

Bill Taylor has written a terrific article for Harvard Business Review about what he learned from studying WD-40 and its CEO, Garry Ridge.  Taylor explains that many managers at established firms struggle with the "paradox of expertise."  By that, he means that the more experienced and knowledgeable you are in a particular field or industry, the more challenging it can be to see emerging trends, opportunities, and developments in that domain.  You become trapped by conventional wisdom, well-established rules of thumb, and implicit assumptions.   How do you overcome the paradox of expertise?  Taylor argues that you must become an insatiable learner.  As an example, he turns to Ridge and the culture he has created at WD-40.   The company has a long track record of success with an iconic brand.  One could easily see how such a firm could become complacent.  Ridge knew that the paradox of expertise could become his organization's undoing.  He set out to create a powerful learning culture.  Taylor explains:

Indeed, Ridge is so serious about the commitment to learning that he insists everyone at the company takes the “WD-40 Maniac Pledge,” a solemn vow to become, in his words, a “learning maniac”:

I am responsible for taking action, asking questions, getting answers, and making decisions. I won’t wait for someone to tell me. If I need to know, I’m responsible for asking. I have no right to be offended that I didn’t “get this sooner.” If I’m doing something others should know about, I’m responsible for telling them.

Ridge even sends a subtle message to employees with each email that he writes. According to Taylor, his electronic signature contains a phrase often attributed to the great Italian artist and sculptor, Michelangelo: "Ancora imparo." In English, that means, "I am still learning." People used the phrase in the 16th century to describe how one could and should continue to learn in old age just as he or she did as a child.

How to Network Effectively

We all know that having tons of LinkedIn connections does not make you an effective networker.  The quantity of connections does not serve as the primary driver of networking efficacy.  The nature of those connections matters.  Researchers have compared two types of networkers for years.  First, there are those that engage intensely in a closed network.  They connect with others who share similar knowledge, expertise, and experience.  In short, they stick to their silo.  They aim to deepen their expertise in a particular field.  Second, there are the brokers.  These people are good at bridging among pools of people with different expertise.  They help connect people in different closed networks.   Brokers are incredibly important.  

Who is the more effective networker - the person who builds connections with others to deepen their expertise in a particular area or the broker who bridges multiple silos?  Ronald S. Burt and Jennifer Merluzzi have discovered that "network oscillation" actually proves to be the most effective networking strategy.  They studied 350 investment bankers at one particular financial services firm, and they tracked them over four years.  Here's an excerpt from a University of Chicago story about their research:  

The short answer: the most-successful people take advantage of both systems—sometimes they broker, and other times they dive into closed networks. In fact, without this movement back and forth, their networks give them no advantage at all... Analyzing salary and bonus packages as well as year-end performance surveys proved revealing for Burt and Merluzzi. Bankers who were able to move between brokering and working in closed networks during the year reaped the greatest rewards. These individuals formed ties across the organization, gaining access to new projects and opportunities. But once they found an opportunity, they quit brokering and engaged deeply in their new project. When that project ended, they once again tapped into their broad network of contacts at the firm to find the next interesting project. Swinging between working intensely on a project and networking more widely did have a cost: these bankers sometimes saw their reputations suffer while they were on the bench. But the hit was temporary. And the compensation data show that these oscillating bankers made the most money over time.

Why People Leave Their Jobs

Bravetta Hassell of Chief Learning Officer magazine has a good article this month titled, "Employees Really Do Leave Managers.  Use L&D to Change That."  Here is an excerpt:

When it comes down to it, having free snacks in the employee break room, for example, isn’t as important as having a manager who appreciates his employees.  According to the report, “The Human Touch for Tech Talent: Employee Retention Could Be as Simple as ‘Thank You’,” employee responses to questions about what attracted them to a company and what kept them there say as much. The survey showed that 60 percent of employees said when analyzing a job offer, knowing whether staff feel appreciated by managers matters. Variables like how fast a person could move up in the company or how they’d be evaluated for raises were of lesser concern. Other highlights from the survey included:

• 33 percent of respondents want to know their manager always has their back compared to 22 percent of people who valued having a clearly defined career path, and 17 percent of respondents who found it important to receive regular performance feedback.
• 32 percent of respondents who looked back at ‘worst boss’ experiences said that person never gave credit where it was due.
• 28 percent of respondents to the same questions said that person rarely gave verbal praise or support.

What can learning and development professionals do about these findings?   According to Hassell, they can rethink the types of capabilities that they focus on during professional development  programs and initiatives.  These findings suggest a renewed emphasis on how to delegate effectively, how to recognize employees for their work, how to celebrate team successes, and how to maintain an open and ongoing dialogue with subordinates.  

The Path to Becoming a CEO: The Long and Winding Road

The New York Times published the findings of a fascinating new study by LinkedIn regarding the path to becoming a CEO.   They examined 459,000 people who had worked as management consultants at one point in their career.  They tried to discern some patterns regarding how and why some people reached the position of CEO of a company during their careers.  Here is how Neil Irwin described the findings in his article in today's New York Times:

To get a job as a top executive, new evidence shows, it helps greatly to have experience in as many of a business’s functional areas as possible. A person who burrows down for years in, say, the finance department stands less of a chance of reaching a top executive job than a corporate finance specialist who has also spent time in, say, marketing. Or engineering. Or both of those, plus others. However, there is still such a thing as too much variety: Switching industries has a negative correlation with corporate success, which may speak to the importance of building relationships and experience within an industry. Switching between companies within an industry neither helps nor hurts in making it to a top job. These are some of the big findings in a new study of 459,000 onetime management consultants by the social network LinkedIn. Experience in one additional functional area improved a person’s odds of becoming a senior executive as much as three years of extra experience. And working in four different functions had nearly the same impact as getting an M.B.A. from a top­ five program.

The results do not surprise me.  You need to master a diverse range of skills to become an effective CEO.  You have to understand the different functions and disciplines within a firm.  Therefore, accumulating a range of experiences tends to be helpful if you wish to become a chief executive.  It also speaks to the importance of being a successful lifelong learner.  You can't just build upon the expertise you have.  You must take risks and venture into domains about which you are not an expert, and be willing to learn quickly.