Helping First-Generation College Students Succeed

Northwestern Professor Nicole Stephens and her colleagues—MarYam G. Hamedani of Stanford University and Mesmin Destin at Northwestern University—have conducted several studies examining the academic performance of first-generation college students.  Not surprisingly, they have found that, all else equal, first-generation college students do indeed underperform those young people with parents who have attended college.  Their research aims to understand how we might close that performance gap.   I'm particularly interested in this topic, since I was a first-generation college student.  Moreover, companies should be interested in this topic, since they want to insure that they can attract talented young people who have learned a great deal and achieved their potential in college. 

This research challenges the notion that extra academic skills-based preparation for these first-generation students yields performance improvement.   Many schools offer these "skills" enhancement programs, but they have not yielded positive results.  These scholars designed a program whereby college seniors would share their experiences with new students, describing to them how "their backgrounds affected their experience."   According to Kellogg Research Insights, "Seniors were asked, for example, to share an obstacle they faced in college and how they overcame it."  

The scholars found that those students receiving this intervention earned higher grade point averages than those who listened to seniors share their stories without an explicit discussion of backgrounds and social class. Amazingly, the researchers found that this program "eliminated the GPA gap between first-generation and continuing-generation students, as well as the disparity in the rate at which the two groups took advantage of institutional resources." 

Stephens explains, "If you understand that it’s normal for students from a background like yours to encounter obstacles—and that it doesn’t mean that you’re deficient, but that rather you need to do different things to succeed—that equips you to deal with the challenges you face.”

Why Lock-In and Switching Costs are More Substantial at LinkedIn than Facebook

Network effects exist when the value per user rises as the number of users increases.   In a situation where strong network effects exist, we often see high switching costs and a lock-in effect.  Take eBay, for example.  Why has eBay remained so dominant for so long in the online auction market?   Well, compare the value per user at eBay to the potential value per user at a startup that might challenge them.   Users place a high value on eBay because the existence of many fellow buyers and sellers makes it likely that they can find someone with whom they can engage in a mutually beneficial transaction.   They would have a much harder time making that match on a new auction site with  a limited number of users.  For that reason, the network effects create switching costs for users, and a lock-in effect emerges.   That's all good news for an incumbent player with high market share, such as eBay.

Ok, so clearly LinkedIn and Facebook benefit from strong network effects.  Does that mean that they will remain as dominant for as long as eBay has in the auction market?  I would argue that Facebook and LinkedIn face quite different levels of switching costs and lock-in effects.   Consider the cost of switching from Facebook to Instagram or Twitter.  What's keeping you on Facebook?  Well, it's probably that circle of fairly close friends and relatives with whom you keep up to date and exchange photos and messages via the social network.  Suppose that a critical mass of that small circle of friends defects from Facebook to another social network such as Snapchat or Twitter.  Would it be costly for you to switch as well?   Well, as long as a critical mass of friends has left, then your switching costs are rather low.  Yes, you have other acquaintances who might still be on Facebook, but are they really going to keep you there?  Perhaps not. 

Now compare Facebook to LinkedIn.  What's keeping you from potentially switching from LinkedIn to another prospective professional social network?   You should recognize rather quickly that your small circle of close friends is not what is keeping you on LinkedIn.  Instead, you derive value from a much wider range of users on LinkedIn.  Many of those folks are not people with whom you communicate often.  They might be former classmates, co-workers, and the like.  They are people with whom you share weaker ties, but maintaining a connection to them has potential value to you professionally.  Now suppose that a few close friends defect from LinkedIn. Would you consider defecting?  Well, the problem, of course, is that all those acquaintances and former associates remain on LinkedIn.    In short, the switching costs are higher on LinkedIn.  The lock-in effect is stronger.   You would be much more reluctant to abandon that expansive "rolodex" that LinkedIn has become for you professionally.  

Why the discussion today about LinkedIn vs. Facebook?   Consider the latest news from an iStrategyLabs report.  It found that the number of Facebook users ages 13-17 have declined by 25% in the past three years.  The number of users ages 18-24 has declined by 7.5%.   These young user defections show that Facebook's lock-in effect may not be as strong as people once thought.  We've seen the story before of a social network losing traction; remember MySpace?  I'm not saying that Facebook will face that fate, but it's worth noting that network effects don't guarantee that an incumbent will remain on top forever. 

Online Experimentation at ESPN

The Wall Street Journal has an interesting article today about ESPN's efforts to experiment with online video offerings via its WatchESPN app for smartphones and tablets.  You can watch games live via the WatchESPN app, but you must be a cable subscriber to do so.  What about the "cord-cutters" - i.e. the young people who have never bought cable television subscriptions, or who have terminated their cable television in favor of simply having Netflix and other modes of viewing programming of interest to them?  Those folks can't take advantage of WatchESPN.   Why not?   Well, it's all about worries regarding cannibalization.   Sound familiar?  Most incumbent firms facing disruptive threats are fearful of embracing innovations that might cannibalize their core business.  Of course, they often end up in a situation where someone else just comes along and eats their lunch, after they spent years worrying about eating their own lunch.  Here's an excerpt from the article:

Mr. Skipper, a 59-year-old former Spin magazine executive who took the helm of ESPN in 2012, acknowledged a "dissonance" between its instinct to disseminate its content as widely as possible and the usage restrictions designed to safeguard the core television business. "There's no denying there's a certain element of protection and defense," he said.

How worried should ESPN be?  Well, the article cites the fact that the firm lost approximately 1.5 million subscribers between September 2011 and September 2013.   In other words, cord-cutting is a real phenomenon that is beginning to put pressure on ESPN.   Will it cause them to embrace an even bolder business model?  Well, the article notes that HBO is considering selling separate subscriptions to its HBO app for smartphones and tablets (i.e. subscriptions for those who are not purchasing HBO already via their cable company).  If HBO takes the plunge, I would expect others to follow. ESPN will face pressure to move in a similar direction.   Who moves first?  It will be interesting to watch.  

Can Meditation Reduce the Sunk Cost Bias?

The sunk cost bias is the tendency to "throw good money after bad" in situations where you have made a substantial commitment of resources that you cannot recover.   Over the years, many studies have documented this decision trap and shown that many of us are vulnerable to this bias.  Now, a new research study shows that meditation may actually mitigate the bias.    

Andrew Hafenbrack and his colleagues have shown that 15 minutes of "mindfulness meditation" can actually reduce people's tendency to fall into the sunk cost trap.  According to the BPS Research Digest, "Mindfulness meditation is all about learning to stay in the moment, and the researchers think it probably helps reduce the sunk-cost bias because the error is partly caused by memories of prior investments, and also by anticipation of regret in the future if a project or prior purchase is abandoned." 

Emotional Intelligence and Risk-Taking

Jeremy Yip and Stéphane Côté have published an interesting new study in Psychological Science.   They examined the effect that emotional intelligence had on risk aversion.  They found that people with lower levels of emotional intelligence tended to react to "unrelated stressors" by making risk averse choices.   Those with higher levels of emotional intelligence were willing to take more risk.  Yip tells Knowledge@Wharton: “By identifying the source of their emotions, those with high emotional intelligence realize whether their emotions are irrelevant to the decisions they need to make.  As a result, they don’t experience that spillover effect. They might feel anxious, but they don’t let it affect their decision.”

Interestingly, in one of their experiments, they actually induced the subjects to think a bit about what might be causing them anxiety.   In that situation, the people with a lower level of emotional intelligence behaved no differently than those with higher levels of emotional intelligence.  Côté explains: “By analyzing the source of the emotions and discovering that these emotions are, in fact, unrelated to the decisions we are making, we may de-bias our decisions." 

As a result of these findings, the authors suggest asking three questions to "de-bias" our decisions in stressful situations: “How do I feel right now? What is causing me to feel that way? And are my feelings relevant to the decision I need to make?”

Nickelodeon Innovates: Customized Television

Readers of the blog will know that I have been critical at times of the television industry for being slow to innovate. For instance, I've written about how the broadcast networks have clung to their old prime time television series model (launch in September, run once per week) while cable and Netflix have launched very different models (including Netflix's huge focus on binge viewing desires of many consumers).   Now we read in today's Wall Street Journal that one network is trying to innovate to compete with on-demand services and Netflix.   Nickelodeon will be launching a customized channel.  According to the Wall Street Journal:

Parents will be able to personalize the content that airs on My Nick Jr. by indicating their relative preference for seven themes such as "word play," "super-sonic science," and "get creative." Based on those preferences, My Nick Jr. will choose content to air from hundreds of episodes in the Nick Jr. library. Children can rate shows by clicking on smile or frown icons, and the service will tweak the programming lineup accordingly. Parents can get reports on what their children watch and can program the channel to shut off after a set period. There won't be ads.

 

I don't know if this channel will be a success, but I applaud the effort to innovate.  It's about time that television networks began to respond to the threat posed by Netflix and other outlets.  I did find one sentence in the Wall Street Journal story rather interesting.  The article notes:

One risk for the media company is that the new channel could draw viewers away from existing Nickelodeon channels. In the U.S., the flagship Nickelodeon network has a preschool programming block that averaged 570,000 viewers among children 2 to 5 years old in 2013.

 

I think the statement represents highly flawed reasoning.  The logic here is that you might eat your own lunch.  However, what management should be thinking is:  Perhaps it's better to eat our own lunch than to enable others to eat out lunch.   Fear of cannibalization is the one of the main barriers to innovation in large firms.  It often stifles efforts to grow new ventures.   

The Standup Economist Strikes Again: Economics of the Afterlife

If you have not seen Yoram Bauman, known as The Standup Economist, he is an academic who loves to poke fun at his fellow economists. 

Picking the Right Players

When you are assembling a team for an important project, how do you select the team members?  Do you select individual star performers in your organization?   How does that work out for you?  Recall, for a moment, one of the many great scenes in the movie Miracle, about the 1980 U.S. Men's Olympic Hockey team.  In that movie, Coach Herb Brooks talks with one of his assistants at the end of tryouts.  The assistant is incredulous.  He questions Brooks, wondering how he could have made some of the selections that he has made.  The assistant does not think that Brooks has assembled the most talented team possible.  Brooks responds that they won't win if he picks the best players.  He has to pick the right players.  In other words, he could not just assemble an all-star team.  He needed to find people with the right mindset and attitude.  He needed to fill certain roles.  He needed players with complementary skillsets.  

Are you picking your teams in the manner employed by Coach Brooks, or you trying to put together an all-star team?  You might think about that scene from Miracle the next time you have to staff a very important project at work. 

Habits of Resilient People

Breast cancer survivor Gwen Moran has written a terrific article at Fast Company titled, "Six Habits of Resilient People."  While all six habits are great, I wanted to stress two of them here.  First, she notes that resilient individuals have "multiple identities."  In other words, they don't allow themselves to be completely defined by one job, hobby, relationship, etc.   By having multiple identities, they can focus on an area (or two) that is strong, when perhaps they have encountered failure in a particular aspect of their life.  Second, they practice forgiveness.  They don't hold grudges, and they don't dwell on past hurts.  Instead, they find ways to forgive and move beyond a situation that may have hurt them badly.  I highly recommend reading the entire article for more thoughts on resilience from Gwen Moran.

IDEO's Tim Brown: Power of Asking the Right Questions

Do We Really Like Creative People (or not)?

Jessica Olien has a great article at Slate titled, "Inside the box: People don't actually like creativity. "  In the essay, she stresses the notion that many people and organizations value conformity much more than out-of-the-box thinking.   She quotes University of California-Berkeley Professor Barry Staw, who says, “We think of creative people in a heroic manner, and we celebrate them, but the thing we celebrate is the after-effect... As much as we celebrate independence in Western cultures, there is an awful lot of pressure to conform."   Staw argues that we often reward the "satisfiers" rather than the bold thinkers.  Olien even argues that the bias against creativity begins in our schools. She writes, "Unfortunately, the place where our first creative ideas go to die is the place that should be most open to them—school. Studies show that teachers overwhelmingly discriminate against creative students, favoring their satisfier classmates who more readily follow directions and do what they’re told."   

For those interested in more reading about the research on this topic,  I suggest taking a look at one of my old blog posts, in which I describe the research of Jennifer Mueller and her colleagues.  It suggests that a "penalty" against creativity individuals exists in many organizations.  

The Difference Between the Top Job vs. Second-in-Command

In this article in the Wall Street Journal, Phred Dvorak writes about the difference between the CEO position and the COO position. Dvorak writes, "CEOs not only perform different tasks from their second-in-commands -- who typically focus on running operations -- but they have to act differently, too. That means the two roles often demand very different personality traits, say people who have been there."  He goes on to quote a number of executives who argue that some folks have the personality traits required to be a highly successful COO, but they don't have the attributes necessary to thrive as the CEO.   

I will acknowledge that some second-in-commands are not well-suited for the top job.  However, I think it's rather simplistic to argue that the two jobs require fundamentally different personality traits.  After all, most successful CEOs did spend time as a second-in-command prior to taking the top job.  I think it's more important to think about the skills, activities, and behaviors that differ between the two roles.  Then those who aspire to these roles must think about how they must CHANGE their behavior to thrive in each role.   Perhaps it may require some development or coaching to adjust to the new role.  In the end, a learning/development mindset enables people to consider taking on one of these roles and to grow into the job.  A "fixed" mindset simply falls back on the "traits" argument, suggesting that some are suited for particular roles and others are not.   Stanford's Carol Dweck has done extensive research about how those children with a developmental mindset are more successful in school than those with a fixed mindset.  I would argue that the same goes for executives.  Those who simply take their talents and skills as fixed are not as likely to succeed.   Those who believe that they can continue to grow and develop, even at a later stage in their careers, are more likely to thrive in various roles. 

Two Kinds of Questions: Which Do You Ask?

Stanford's Bill Barnett has a terrific blog post about the two types of questions that people tend to ask.   The "showing off" question aims to demonstrate how much we know about a subject.  It might be a "gotcha" aiming to expose the weakness or mistake in a presenter's argument.  The second type of question aims to learn, not to show off.  This question comes from a willingness to be a bit vulnerable, to acknowledge ignorance or a lack of a complete understanding about a subject.  This "learning" question aims not to demonstrate our existing knowledge to others, but instead to deepen our understanding about a particular topic.  Barnett points out that we often fail to ask these "learning" questions because we don't want to look stupid.  We are afraid to acknowledge in front of our peers, subordinates, or superiors that we do not understand a topic completely.   Unfortunately, we limit ourselves when we hold back in such a fashion.  

What type of questions do you ask as a leader?   Moreover, what type of questions do you encourage your team members to ask?  Here are a few clues that someone might be asking a "showing off" question rather than a learning one.  First, do you hear a long preamble before the actual question (or is there actually no question in there at all!)?  Second, does the person's agenda shine through when they ask the question?  Third, what's the person's body language like?   Are they in attack mode in their posture, as well as their words?   Finally, is it a leading question?  Are they clearly fishing for a particular answer?  

Engaging Your Workers

Business Week interviewed Jim Harter of Gallup about the firm's extensive analysis of worker engagement (or should we say, disengagement) across the United States.  Gallup data show that only 30% of American workers are engaged at their workplaces.  If you think that this problem exists only in the United States, think again.  Harter explained that the global engagement numbers are even lower!  Harter offered some comments based on their analysis of the data:

We see workplaces that have doubled the rate of average engagement, and the variance has a lot to do with the quality of management. Having a manager who really understands the individuals they’re managing and gets them into positions where they can use their talents effectively is really important. And then we’ve also found that individuals knowing what they do best and knowing their talents and being aware of them so that they can then leverage them along with their co-workers is really important.  Another thing that kind of stood out to me in these organizations we studied that grew is they didn’t use the economy and changes in the economy as an excuse. When the economy dropped, they just leaned into it a bit more. 

As for those companies that have moved to open floor plans, well they might want to rethink that design.  Harter reports that people tended to be more engaged if they had "a space that they could call their own."   They enjoy collaborating with others, but they value their own space.   As for telecommuting, it does not harm engagement in general.   In fact, telecommuters tended to report slightly higher engagement on average.  However, the most engaged workers in the Gallup data are actually those who telecommute less than 20% of the time.  

Peter Thiel: Should He Be Encouraging People to Avoid College?

The Wall Street Journal interviews Peter Thiel today.  Thiel, founder of Paypal, has stirred controversy due to a key initiative of his nonprofit foundation.  Thiel's 20 Under 20 Fellowship offers substantial financial support to young people who will forgo college to work on a startup that can have a significant social impact.  Thiel believes that this "learning by doing" can be more valuable than college for some bright young people.  According to the paper, "So far, 64 Thiel Fellows have started 67 for-profit ventures, raised $55.4 million in angel and venture funding, published two books, created 30 apps and 135 full-time jobs, and brought clean water and solar power to 6,000 Kenyans who needed it."  

Thiel has attracted many critics, including Harvard's Larry Summers and Stanford's Vivek Wadhwa.  What do I think about Thiel's initiative and his views about higher education.  To begin, I agree with Thiel's concerns about the amount of debt many families take on so that a young person can attend college.  Moreover, I do agree that many universities do not provide enough "learning by doing" opportunities.  

However, Thiel should be much more careful about discouraging young people from attending college.  Why?  First, Thiel attended Stanford.  He admits that he would do it again if he had the choice today.   It's easy to talk about pursuing other avenues to success, when you have the comfort of the Stanford brand on your resume, as well as the incredible network that comes with being an alumnus of that prestigious school. Moreover, Thiel relies on graduates of top schools to do the legwork for his venture capital and private equity investments.  He isn't hiring college dropouts to manage his money!  There is more than a bit of hypocrisy here, as we compare actions and words. 

Thiel also does not acknowledge that the rate of failure for many startups is quite high, and that students without a college degree then don't have the diploma to fall back on when they fail.  Sure, they could always attend college later, but that can be difficult.  It's not always easy to attend college later in life when you begin to have family obligations and the like. 

The bottom line: Higher education is very expensive, and families are taking on too much debt in some cases. Still, the average college graduate earns far more than the average high school graduate.  A select few can build a startup and become Mark Zuckerberg or Steve Jobs, people who built amazing companies without a college degree.  Are the odds in your favor though if you pursue their path?  I'm afraid not. 

Recommended Reading Around the Web

I thought that I would share a few links today to some of my favorite spots on the web for reading about leadership and strategy:

Drake Baer, writer for Fast Company

Adam Bryant, Corner Office column, New York Times

LDRLB: Leadership, Innovation, and Strategy (David Burkus & colleagues)

Work Matters (Stanford Professor Bob Sutton)

HBS Working Knowledge

Beyoncé and the Power of Surprise

Last week Beyoncé stunned the music world with the surprise release of a new album.   Yes, she released 14 new songs and 17 music videos, with no long marketing and public relations buildup over the course of many prior months.  The album's release set social media on fire.  Mashable reported that the album generated 1.2 million tweets in the first 12 hours after the release.  The Twitter volume peaked at more than 5,000 tweets per minute. Did the surprise release make sense?  Would she have been better off doing the usual public relations ramp-up employed by most recording artists?  

Beyoncé's strategy reminded me of a great HBR blog post from May 2013.  Advertising executive Scott Redick penned a post titled, "Surprise is Still the Most Powerful Marketing Tool."  He made several arguments for why surprises can be so effective.   Here's an excerpt:

Surprise is like crack for your brain. Scientists at Emory and Baylor used MRIs to measure changes in human brain activity in response to a sequence of pleasurable stimuli, using fruit juice and water. The patterns of juice and water squirts were either predictable or completely unpredictable. Contrary to the researchers’ expectations, the reward pathways in the brain responded most strongly to the unpredictable sequence of squirts. “The region lights up like a Christmas tree on the MRI,” said Dr. Read Montague, an associate professor of neuroscience at Baylor. “That suggests people are designed to crave the unexpected.” Birchbox, a subscription service that sends customers a box of mystery beauty products each month, and Phish, the rock band that never performs the same show twice, proves that entire business models can be built around this insight.

Redick also argues that surprise can amplify emotions, and that unexpected events often stimulate changes in behavior.  Moreover, he points out that surprise can be fairly inexpensive at times. 

Is surprise always the right strategy?  Clearly not.  In this case, Beyoncé has a huge following.  Thus, she has the luxury of relying on surprise.  She knows that people will notice her album's release, and that it will generate a great deal of online buzz.  For new or unknown artists, surprise used in this manner will not likely lead to such positive results.  For well-known brands in other industries, though, the lesson is clear:  Perhaps the usual formula of publicity prior to a product launch does not always prove to be the optimal strategy. 

Big Monster Toys: When Vertical Integration Provides Speed

Readers of the blog know that, from time to time, I've discussed the costs and benefits of vertical integration.   In many cases, vertical integration can be problematic.  It can increase fixed costs, reduce flexibility in the supply chain, dull incentives, create dysfunctional political bargaining, etc.  However, vertical integration does make sense in some cases (see Apple owning retail stores).    

Can vertical integration make coordination more effective and actually increase speed?  At times, it can. Witness Zara's fast fashion strategy, enabled by vertical integration.  This week, I ran across another company that achieves speed through vertical integration.  In the American Way magazine on my flight yesterday, I read about Big Monster Toys.  The company invents toys, which are sold by major toy companies such as Hasbro and Mattel.    They created "Polly Pockets" and "Uno Attack!".   They also created Hot Wheels' Criss Cross Crash.  How do they achieve remarkable success in the toy design business?  Here's an excerpt from the article:

The train’s-eye view provides the best vantage point of the work floor and the key to BMT’s success: vertical integration. Every function required to make and promote a prototype is performed in-house, from plastic molding to painting, sound engineering to sewing, computer-aided design to animation. “We control everything,” Rosenwinkel says. “We don’t go outside to hire anyone; we don’t have to get on waiting lists to get work done. We are very nimble. We can immediately say, ‘We like this idea. Let’s pull a team together and work on this.’ ”

Many design forms operate this way.  They have all the tools and functions required to build prototypes in house.  That enables them to prototype rapidly, and to smoothly coordinate the activity of designers and builders.   Moving all those functions in-house means that they can adjust and adapt rapidly.  

Stifling Innovation: The Why vs. How Mindsets

Fast Company's Eric Jaffe reports on some terrific new research by University of San Diego Professor Jennifer Mueller.   The creativity scholar has examined how a person's mindset affects the way that they perceive and evaluate a new idea.  Her work helps explain why large companies often dismiss or reject innovative proposals.   

In one study, Mueller and her colleagues asked subjects to examine four ideas:  two that independent evaluators judged to be creative, and two that were judged to not be creative.  To begin, the researchers tried to establish a certain mindset in the subjects.  Half of the subjects were encouraged to adopt a "why" mindset, while the other half adopted a "how" mindset. A "why" mindset tends examine issues from a broader, conceptual perspective (why might this work?  why might this be a good idea?  why might we want to pursue this approach).  A "how" mindset tends to approach ideas much more narrowly (how could this work? how would we implement this idea?).  

After trying to put people in one or the other mindset, the researchers asked the subjects to evaluate the four ideas.  The scholars found no difference in the evaluation of the non-creative ideas by the subjects in two mindsets.  However, key differences emerged when it came to the ideas judged to be highly creative by independent evaluators.  The people in the "why" mindset found these ideas to be quite creative, much more so than those who had adopted the "how" mindset at the beginning. 

Ask yourself:  Which mindset do you adopt when evaluating bold ideas presented to you?  What mindset is typical of senior executives in your corporation?  Could the mindset that evaluators adopt explain why your firm fails to embrace innovation at times?

New Case Study about Trader Joe's

I am excited to announce that David Ager and I have published a new Harvard Business School case study about Trader Joe's.  David is a senior fellow in Executive Education at HBS and a classmate of mine from graduate school.   We are excited to publish this new case that examines the strategy, organization, and culture at Trader Joe's.