Marina Gorbis's Blog, page 1250

Why It’s Hard to Measure Improved Population Health

Ambitious programs to improve the U.S. health care system typically include improving population health in their objectives. For example, that is one of the Institute for Healthcare Improvement’s “Triple Aims” (along with improving the patient experience and lowering the per capita cost of care). Similarly, the Affordable Care Act (ACA) is designed to improve population health in multiple ways, the most obvious being improved access to care. But the ACA also aims to improve the quality of care, enhance prevention, and promote health through the implementation of affordable care organizations (ACOs) and the establishment of a new Prevention and Public Health Fund.

One of the great challenges in these efforts lies in how to measure success. In general, population health is defined as the health outcomes of a group of individuals and how those outcomes are distributed within the group. But most discussions about measuring outcomes focus on the group as a whole and neglect distribution.

That’s unfortunate because, as every business person knows, what gets measured is what gets managed. If we simply measure overall population health, we can almost certainly improve it by focusing on low-hanging fruit — improving the health of groups that are easily accessible and most amenable to changing their behavior. (Think, for example, of the wellness programs that are common today in the business world.) But these efforts will inevitably widen health gaps, improving the health of some while leaving marginalized communities behind.

Closing those gaps should be at the heart of efforts to measure and improve population health, even it means sacrificing some efficiency. For example, much effort has gone into behavioral intervention apps, like those designed to help people quit smoking. Although the data is still out, it’s plausible that these apps make a difference for people who use them. But those users are almost certainly people who have ready access to the technology and the discipline to apply it. People who can neither afford a smartphone nor lead lives organized enough to be driven by apps are left out, widening the health gap between app users and non-users.

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Sponsored by Medtronic

A collaboration of the editors of Harvard Business Review and the New England Journal of Medicine, exploring cutting-edge ways to improve quality and reduce waste.

Such approaches probably explain what has happened with the decline in tobacco use in the United States. Only about 1 in 5 adults now smoke, a historic low, but we are stuck there because most smokers are in the lower socioeconomic brackets. An alternative approach would explicitly aim to narrow the gap by doing the harder and more expensive work of targeting smokers with fewer means and enrolling them in smoking-cessation programs. This might divert efforts from the smartphone strategy, perhaps resulting in somewhat higher overall smoking rates, sacrificing some efficiency and cost savings in favor of greater equity.

Why should we be willing to accept such sacrifices, especially at a time when health care costs dominate the headlines? There are three reasons:

Health equity could bridge social divides, yielding much larger dividends than simple cost savings. Health is a public good that forms part of the social fabric. Health inequities fray that fabric, contributing to broader resentments of social inequities.
Narrowing health gaps is a value that drives much health care. Neglecting such equity chips away at the credibility and standing of health care organizations. Nothing undercuts that standing like charges of “Cadillac care,” available only to society’s “haves.” And credibility and standing are essential resources for health care organizations seeking to advance our collective health.
In an increasingly interconnected world, it is impossible to separate social groups. Poor health in some groups threatens the health of all groups. Consider the recent outbreak of measles that began at Disneyland and spread widely because some parents oppose vaccinations for their children. When a critical portion of a community is immunized against a contagious disease, most members of the community are protected. This “herd immunity” is a function not only of whether an individual child is immunized, but how many children are immunized as well.

Or consider the recent Ebola epidemic in West Africa, which threatened to become a global pandemic. While concern about the health of West Africans may feel like a distant problem for some of us, their health in an age of ready travel is inextricably linked to the health of Americans — an inescapable fact that should impel even the most cost-conscious among us to call for investment in better health for all.

There are several ways we can change the focus of measurement of health indicators from absolute achievement to measurement that accounts for inter-group differences. First, we can make closing the health gaps between groups one of the prime objectives in health improvement.

Second, we can include relative indicators of health along with absolute indicators in metrics. This will require that health systems measure factors around which we may expect difference — like race, ethnicity, and income — and tabulate, report, and hold themselves accountable to relative achievement in health indicators across these groups.

Finally, we can establish incentives that promote both efficiency in improving the absolute numbers and equity in closing gaps. The job of stimulating the adoption of such incentives may initially have to fall to government. But over time they could become embedded in provider culture, effecting a shift in system indicators we value and reward. With such incentives, payers and providers could broaden their expectations about outcomes to include equity, which ultimately benefits everyone.

What to Do First When Managing Former Peers

STEVEN MOORE FOR HBR

You just learned that you’ve been promoted and will now be managing a team of your former peers — exciting news! That is, until the moment you realize that your good fortune means disappointment for your coworkers who didn’t get the job. When you’re promoted over people who have always been friends (or rivals), the power relationship is inevitably altered.

I’ve been working with teams for two decades, and the one thing I can almost guarantee is that there will be awkward moments as you transition from team member to team leader. But these three things can help ease your transition: one-on-one meetings with individuals, a team planning session, and swift intervention with resistant individuals. Here’s how to go about it:

First, meet one-on-one with each member of the team. By having your first boss-subordinate conversations individually, you’ll be able to personalize the message and be more candid than you can be in a group setting. Spend considerable time in each meeting listening to your new direct report. Ask questions such as “Take me through your objectives and where things are?” “Are there any specific areas where you would like my support?” “Tell me about your development planning and any career conversations you have been having.” Listen carefully to the answers and always rephrase and summarize to make sure you’re getting the right messages. That will allow them to relax and realize you haven’t transformed into a maniacal manager.

Many newly promoted leaders make the mistake of stopping there. If you’re going to establish yourself as the boss, you need to balance the friendly and inclusive approach with some signs of strength. That will give everyone confidence that the team is in good hands. You don’t need to provide much detail, but do share your early vision for the team and any priorities that you will tackle first. Make room for comments and questions so your team members feel like coauthors of the plan.

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At the end of each one-on-one meeting, enlist the support of individuals by asking for specific help in areas where they can add value. Everyone knows that you went from being a peer to being the boss overnight, and pretending that you suddenly have all the answers will damage your credibility. Ask for assistance in a genuine way that makes your direct reports feel valuable and engaged. For example: “Juan, you’ve always been the software expert. I need your help to get up to speed and to make sure I’m keeping the software issues top of mind.”

Next, it’s time for your first team meeting. If possible, try to make it a special format; ideally longer than normal and in a unique setting such as a conference center outside of town or a room in your office with couches instead of tables. If you can spend an afternoon and then go out socially after, it works even better.

Start by discussing the purpose of the team. Because you’ve already been a part of the team, you have all of the background. But this is the chance to evolve the mandate in accordance with changing times. Bring in some of the ideas from the one-on-one conversations and engage in a discussion about where you need to continue on the same path and where you need to change the trajectory. By making some modifications to the goals or priorities of the team, you will demonstrate that you’re not just a steward of the former boss’ plan but a leader in your own right.

Based on the mandate you develop, discuss the ideal meeting cadence for the team. What are the different types of meetings you’ll need, how frequently do you need them, and with what durations? Meetings are often associated with the leaders who established them, so setting out your own meeting formats and times goes a long way toward ushering in the new era under your leadership.

Finally, spend some time explaining how you like to operate and what your rules of the road are going to be. If you can distill your philosophies into two or three guiding principles, it’s really useful. For example, if you know that the team tends to be somewhat passive-aggressive, be explicit about your expectation that concerns be addressed directly. “I want to be very clear that all issues need to be shared openly so they can be resolved. Please don’t come to me with an issue you haven’t addressed directly with one another first.” That way, if you need to deal with bad behavior later, you’ve set the precedent from the start.

By meeting one-on-one with your team members and then engaging in a conversation about the team’s role and functioning, you will go a long way toward establishing your leadership. Be open and demonstrate that you are listening and learning but don’t make the mistake of being wishy-washy in hopes of not ruffling any feathers.

Those two steps will get you off to a good start. If (or more likely, when) there are challenges to your role or your authority, be sure to deal with them swiftly and firmly. Here are a few examples of overt and covert challenges to your leadership role and what to do:

A decision is made without your knowledge. If you learn that a decision has been made that you should have been privy to, talk with the person and make your displeasure clear. “I just learned that you authorized a reduced price for Acme. That’s a decision I should have been involved in. Let’s go over the types of decisions you can make autonomously and the ones I need to be part of.”

An issue that has been closed is reopened. Resistant team members will often attempt to reopen a decision as a way to test your authority. You can discourage that behavior with this approach. “We made a decision on that issue last week. What is leading you to raise it again now? Let me reinforce that we need to move efficiently and my expectation is that once a decision is made, everyone is on board and executing it. Dissent is welcome, but only before the decision is made.”

A team member resists your leadership passive-aggressively. Often, resistant team members don’t have the courage to challenge you directly. Instead, they show irreverence with subtle and not-so-subtle body language such as turning away from you in meetings, rolling eyes, or disengaging from the conversation. When that happens, start with a subtle response such as sitting directly beside or across from the person in the next meeting or walking around behind the person while you’re talking. If resistance persists, provide direct feedback in a one-on-one. “In the last couple of meetings, you have been sitting at the back of the room and only providing one word answers to my questions. I’m concerned that you’re not making the transition to me being the leader of the team. What are you willing to do differently to show you’re on board?”

A group of people gang up on you. It’s distressing enough to deal with one passive-aggressive team member, but that stress is amplified if multiple people are questioning your leadership or badmouthing you to one another. If you face this challenge, repeat the process of meeting with everyone individually and then addressing the issues in a team meeting. Be direct in your feedback and don’t be afraid to make people a little uncomfortable: “I am concerned that you are challenging my decisions and that your pushback is encouraging others to do the same. What’s going on for you? How do we get things back on track?” If there are things you’ve been doing that have contributed to the resistance, take responsibility for them. Use a team meeting to share the themes and then to reinforce the ground rules you set at the beginning: You expect people to address these types of issues with you directly in the future.

Your organization is demonstrating confidence in you by making you the leader of your team. Earn that confidence by balancing the humility to listen and learn and serve your team with the courage to assert your role as a leader when required. Valuable team members will adapt. Those who don’t may need to find another place to contribute.

Piecing Together the Tesla Strategy Puzzle

These days, Tesla is the darling of the automotive world. But many of its strategic moves — A factory in Nevada that will crank out many times more batteries than the company can use? Turning over its patents to competitors? — can still seem quixotic, if not self-destructive.

As a former owner of the Tesla Roadster and now an owner of the Model S (and the former chairman/CEO of a large semiconductor company) I have enjoyed the cars but wondered at some of these major “moves” the company has made. But recently I had an epiphany – or at least, got an email. A message sent out by the company suddenly made Tesla’s long-term strategy clear to me. And that strategy is so stunning that it may revolutionize ground transportation and, if the company can pull it off, make Tesla one of the most valuable corporations in the world.

Let me explain. From the start, the mass-market acceptance of battery-powered cars has faced four great obstacles:

The limited range of the batteries;
The time it takes to charge the battery packs;
The need to emplace a sufficient number of battery stations;
The requirement for owners to replace the battery pack, at huge cost, after several years of use and corresponding degradation.

These four challenges have seemed insurmountable — at least in the near term — and consigned electric cars to the status of a boutique industry selling to local commuters.

The email I received from Tesla couldn’t have been more unassuming. It simply invited me and my Model S to participate in a “pilot” battery swap program at Harris Ranch, Calif. The cost? “Less than a full tank of gas for a large sedan.” The time for the swap? “Three minutes.” But as I considered the offer I realized, with a lightning bolt of clarity, how everything could now unfold to Tesla’s great advantage.

Let’s review a few of Tesla’s strategic moves:

Rolling out thousands of “Supercharging” stations around the world. A major complaint about Tesla and its competitors was “range” and the inability to get from San Francisco to Los Angeles without stopping for a 20-hour lunch while recharging at a 110-volt outlet. By deploying “Superchargers” at strategically and geographically spaced locations, Tesla owners could find one of these stations, plug in for free, and enjoy another 270 kilometers with just 30 minutes of charging. But two unsolved problems lingered for owners: first, finding that next station and, then, spending 30 minutes killing time, while watching others fill up with gas in five minutes and speed off on their journey. That half-hour kept Tesla and others from selling much beyond the early adopters and true believers.

Investing in a giant battery plant in Reno, Nevada. Five billion dollars and 10 million square feet? Come on. Tesla could roll out new cars faster than Ford rolls out F-150s and it still couldn’t justify a battery factory that gigantic. Tesla even calls it a “gigafactory.” Maybe that would make sense if the company had managed to create a new, low-cost industry standard around its battery pack form-factor and power, by making them sufficiently attractive to all other electric car makers. Imagine a single, interchangeable battery for every electric car on the road. But could Tesla get others on board for that? In fact, it has a plan for that …

Opening its patents to the competition. In June, 2014, Elon Musk turned over all of Tesla patents to the company’s competitors. Why? Because he knew that the International Electrotechnical Commission (IEC) and American National Standards Institute (ANSI) would never standardize on a single company’s proprietary designs. It was a lesson the industry was taught 40 years ago by Hewlett-Packard when it turned over its Interface Bus design to the IEEE. The resulting IEEE-488 standard — which enable you to, say, connect your computer to your printer, kicked off the PC revolution, which allowed HP to become very rich.

With the action taken by Tesla last year, standardizing on the open Tesla specifications seems a standards committee no-brainer. Likewise, state and Federal governments will likely enact legislation supporting the “Clean Air Act” to adopt these battery standards to encourage the transition of gas-powered to electric-powered vehicles. Presto: the Tesla gigafactory finds its volumes.

Battery swap. That still leaves one last problem, one that has been asked since the introduction of the Toyota Prius: “After 10 years, do I really have to replace the battery pack for $10,000?” Now the genius of Tesla’s strategy becomes clear — and it all comes together with the battery swap program to which I received that invitation. Anything being done in this “pilot” battery swap could be done at every Exxon, Shell, and Valero station in the world. Its batteries and robotically automated swapper stations will quickly become the global standard because the patents are open to anybody, competitors will want to be part of the service from the start, and swapping will be an important new revenue source for service stations. Most of all, electric car owners will demand it not just for the speed, but to escape that $10k replacement cost.

Some people believe that the battery swap program is DOA. (See, for example, this Fortune article from June.) Personally, I suspect that Musk’s remark on its lack of immediate uptake — “People don’t care about pack swap” — was casually offered, if not a smoke screen. The problem with the “failed” battery swap program in Harris Ranch had nothing to do with the idea of a swap and everything to do with the location. Reality is that you cannot make it to Harris Ranch from any densely populated California City like San Francisco, San Jose, or Los Angeles unless you are willing to make the trip, in the summer, with no other electrical draw on the battery pack such as radio or air conditioner. Additionally, most Tesla owners have figured out how to live their lives by driving between their own chargers and the Tesla supercharging stations. Yet, all Tesla owners know that over time the battery pack will degrade and need to be replaced at their cost of several thousand dollars. Ask these owners if they would like a low-cost battery swap program and my guess is that 100% would agree to have their cars towed to Harris Ranch if necessary.

So the idea is right on, even if the pilot location was not. Once the swap progam is ubiquitously deployed, everybody wins, but Tesla wins most of all. Because for Elon Musk and Co., this will be like owning the gasoline franchise for America. Only this time, the “gas” won’t come from largely inaccessible corners of the world, but from one very large building outside Reno, Nevada.

Oh yeah, did I mention that Tesla also makes cars?

Why Talking About Strategy “Execution” Is Still Dangerous

Operational tough guys like to tease effete strategy types by voicing the claim that: “A mediocre strategy well-executed will always trump a great strategy poorly executed.”  It’s a good sound bite, to be sure, but how can they tell that a strategy is “great” if it is “poorly executed” and presumably produces mediocre or worse results?

They can’t.  The question is fundamentally unanswerable; there is no objective basis by which a strategy can be declared “great” in the event that its results are bad. If the pudding was mediocre, it is hard to argue that the recipe was great.  And even when the results are good, you can’t be sure the strategy is: if you are the CEO of an oil company and the prices of oil skyrocket then your company’s results could still be great as long as your strategy is anything but terrible.  Bottom line, making claims about the greatness of failed strategies or judging the relative values of strategy versus execution are not useful expenditures of brainpower.

Yet the idea that a poorly executed strategy could still have been great persists, which suggests that there may be some subtle truth to be ferretted out.

This truth is rooted in the fact that at its most basic level, strategy is about making choices under uncertainty and competition — and the choices need to be made from the top of the organization to the bottom. Managers (and many academics) distinguish between these choices, calling those made by senior managers “strategy” and those made lower down the pecking order “execution.” But all the choices, irrespective of where they are hierarchically located, are in fact strategic choices, as I have frequently argued, including in the pages of HBR.  In the real world, there is no meaningful distinction between strategy and execution.

And yet it is true that a strategy is only as good as the weakest link in the choice-making chain. If a lower level of the organization makes poor choices, it doesn’t matter how brilliant we might think the choices of the levels above happen to be. The results will be a function of the weakness of the choices at that lower level.

This is why people might reasonably believe that “a mediocre strategy well-executed will always trump a great strategy poorly executed.” Intuitively, they might appreciate that every choice matters. So if “well-executed” simply means that that choices lower down a given strategy’s cascade of choices are pretty good, then a strategy whose choices at the top were mediocre could indeed trump a cascade that starts off great with great decisions at the top but then has a very poor one somewhere down the chain.

But although the people who are peddling the idea that execution is different from strategy may be touching on an important truth, the distinction they make between execution and strategy is still wrong-headed because it diminishes the likelihood that the people low in the strategy cascade will actually make good choices. In my own experience, I’ve found that when you call a choice strategic, people pay more attention to it and think about the choice as a choice. Calling their decisions “execution,” by comparison, makes people feel that they do not in fact face or make choices and so they think less about what they’re doing. Since the strategy’s success is a function of the quality of the weakest choice, the “strategy” and “execution” distinction is in fact dooming the strategies of those who subscribe to the distinction.

A Proven New Model for Reimbursing Physicians

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About 35-45% of health systems’ total costs stem from practices that don’t benefit and may even hurt patients — such as questionable or unjustified treatments, unproven variation in treatment delivery, redundant or otherwise unnecessary testing, and reimbursement for services that result from bad health outcomes.

At Pennsylvania-based Geisinger Health System, where I was CEO for 15 years, changing our model for physician reimbursement was one way we aimed to combat such practices and achieve value-based care. Physician reimbursement is just part of a complex puzzle, of course, and our experience at Geisinger is not the only viable approach, even to that one piece. But we nonetheless learned some valuable lessons in this important area. I’d like to describe our model, using some of the hard data that illustrate its success, and then to offer my analysis of the underlying elements that made it work.

The Model and Its Results

Changing Geisinger’s physician reimbursement model meant focusing on how we pay the physicians we directly employ and how our insurance company reimburses the impaneled doctors we don’t employ. While our own physicians are still largely reimbursed on a fee-for-service basis from non-Geisinger insurance payers, since 2002, we’ve been using the following 80/20 compensation model:

80% of total cash compensation is based on the usual piecework metrics: panel size, number of patients seen, number of work units performed, and so on.
20% of total cash compensation (an arbitrarily chosen threshold) is linked to how well physicians improved quality and reduced costs. Toward this end, we track both hospital-based care and improvements in health outcomes for outpatients with multiple chronic diseases (who are served in our community-practice service line).

For hospital-based care, each of our 28 areas that provide intervention services, such as coronary artery bypass graft (CABG) surgery, annually choose a specific innovation target. And 20% of their compensation is linked to achieving that strategic goal (unrelated to fee-for-service compensation). For instance, for elective CABG, the selected goal in 2006 was for all patients to successfully meet 120 best-practice treatment requirements that are known to be critical to achieving optimal health outcomes. The goal was reached, and the result was a 67% relative improvement in the mortality rate and 18% lower costs. Physicians received their 20% innovation bonus.

Insight Center



Measuring Costs and Outcomes in Healthcare
Sponsored by Medtronic

A collaboration of the editors of Harvard Business Review and the New England Journal of Medicine, exploring cutting-edge ways to improve quality and reduce waste.

For the community-practice service line, beginning in 2006, physicians committed to achieving nine best-practice treatment goals that have known associations with better outcomes for patients with type 2 diabetes. Within three years (by 2009), 99% of our 30,000 type 2 diabetes patients achieved at least seven of our nine goals. The result: 141 strokes and 306 heart attacks were prevented, and 166 patients avoided diabetic-related eye disease. Again, the physicians received their 20% performance bonus.

Within several years of offering this mixed-payment incentive, we saw better outcomes at a lower cost for 18 common treatment interventions, due to mitigating unjustified variation in hospital-based care. For outpatient care, optimizing management of high-risk chronic diseases yielded consistent 30% absolute declines in the need for acute-care hospitalization and rehospitalization. Even more important, we saw significant decreases in the percentage of patients with prevalent chronic conditions (such as type 2 diabetes, congestive heart failure, chronic obstructive pulmonary disease, and hypertension) who progressed to “long-term medically ill” status. The reduction in the total cost of care did not stem from restrictions in access to care, but from real improvements in health outcomes.

In 2010 we began to extend our pay-for-value 80/20 model to the physicians we don’t directly employ, both inside and outside Pennsylvania, most notably the private-practice primary care physicians impaneled by our insurance company. For Geisinger-insured patients with multiple chronic diseases, up to a 15% increase in the private practitioners’ total compensation could occur if our version of chronic disease management redesign was accomplished. Within one year, the hospitalization rate for these patients decreased by 30% — similar to our experience with the employed physicians.

Keys to Changing Physician Behavior

These successes weren’t due to compensation changes alone. Our new care pathways were effective because they were led by physicians, enabled by real-time data-based feedback, and primarily focused on improving the quality of patient care. Stepping back, I would highlight six essential elements of our new reimbursement model for physicians:

We worked to encourage payer and provider to work together to create value for patients who traditionally incur high costs and have poor outcomes. For example, we aimed to identify and eliminate erythropoietin (EPO) treatment for the 20% of anemia patients who could just as well be treated with iron supplements, thereby decreasing EPO side effects and dramatically reducing costs.
We used specific data from both the insurance company and patients’ electronic medical records. Admittedly, this process is not a simple one, particularly if the insurance company and the provider group are not connected. But once we had it, this critical data was shared as feedback with providers at the time they were actually caring for their patients, identifying which physicians and which practices were achieving the best results in chronic disease management. We then extended the successful methods to the other caregivers.
We tied a substantial amount of total compensation (15% to 20%) to value-based outcome improvements, not piecework reimbursement for services. And if our fee-for-service reimbursement from the non-Geisinger insurers goes down, there is no reason why the value-based compensation cannot be increased.
The men and women who actually work in the service lines themselves chose which care processes to change. Involving them directly in decision making secured their buy-in and made success more likely.
Patient-care metrics were followed in real time, and quality- and cost-of-care outcomes were monitored annually.
Cost reduction was always a consequence of our practice redesign, but it was the goal of improving patient outcomes that fundamentally motivated our physicians to change their behavior. And it was an engaged physician leadership that drove the care redesign.

Are these ingredients in changing physician behavior the final word on physician reimbursement models? Of course not. Indeed, using reimbursement incentives to change doctors’ behavior is itself only one of the necessary elements in the broader shift from volume-based to value-based care. My hope is that sharing what we did at Geisinger will help other institutions in their own efforts, tailored to their own needs and their own patient populations.

New Managers Need a Philosophy About How They’ll Lead

Being promoted to manager is a good sign you’ve been successful to date — however,  the road from this point forward gets trickier to navigate. Your job is no longer just about getting the work done. You’re more likely now to find yourself juggling conflicting demands, delivering difficult messages, and addressing performance problems. While there is no guidebook of straightforward answers to your new challenges, having a clear philosophy can provide a firm foundation from which to operate.

With respect to your career, a philosophy is simply a cohesive way of thinking about your role. Very few people take the time to establish one. Most managers live in a reactive mode, responding to issues based on gut feelings, past experiences, and examples set by others. The success or failure of this approach is often determined by your temperament (some people are naturally more gifted managers than others) and the caliber of your role models—two factors largely out of your control. Whether you’ve been lucky in these areas or not, having a core philosophy can help guide you through the day-to-day and the job’s tougher moments.

The idea of “servant leadership” is a great place for new managers to start. Robert Greenleaf coined the term 35 years ago, but the concept is still vital and empowering. Granted, “servant” doesn’t sound nearly as powerful as “boss,” but it has the potential to deliver far more of what most of us are really after: influence.  The reason is simple. When you have a servant mentality, it’s not about you. Removing self-interest and personal glory from your motivation on the job is the single most important thing you can do to inspire trust. When you focus first on the success of your organization and your team, it comes through clearly. You ask more questions, listen more carefully, and actively value others’ needs and contributions. The result is more thoughtful, balanced decisions. People who become known for inclusiveness and smart decisions tend to develop influence far more consistently than those who believe they have all the answers.

You and Your Team



Becoming a Manager

How to step up and stand out.

Servant leadership is most powerful when applied to managing employees. The first step in embracing this mindset is to stop thinking that your employees work for you. Instead, hold onto the idea that they work for the organization and for themselves. Your role as servant is to facilitate the relationship between each employee and the organization. Ask yourself, “What will it take for this employee to be successful in this relationship?” And, “What does the organization need to provide in order to hold up its end of the bargain?” When these questions drive your thinking, you advance both parties’ interests. (The same principles apply to managing products, supply chains, and customer relationships, but we’ll keep our focus on employees here.)

Does servant leadership prohibit telling people what to do or correcting their behavior? On the contrary, it means that you must do these things to facilitate an individual’s success within the organization. The key is that your mind is in “servant mode” when you perform the daily tasks of management.

For instance, assigning work should be a thoughtful process that balances business goals with an individual’s interest, skills, and development needs. Not every routine task has to be so thoroughly considered. But whenever significant assignments are made, putting them into context maximizes their impact. An employee who understands why she has been asked to do something is far more likely to assume true ownership for the assignment. When she owns it, you become more guide than director. You ask how you can support her and how she would like to report progress rather than tell her these things. An employee who believes her boss understands her strengths, values her input, and encourages her growth is likely to stick around for the long-term.

Clearly, the servant approach to assigning tasks requires more thought and preparation than simply dishing them out. It takes time. But remember that you are actually multitasking—you are making sure the work gets done while simultaneously strengthening the individual’s relationship with the organization.

Adopting the servant philosophy should also make it easier to provide corrective feedback. You are merely a facilitator, and facilitators aren’t angry, frustrated, or resentful when they deliver feedback, because it isn’t about them—it’s about the relationship between the two other parties. For that reason, exercising the servant frame of mind makes development conversations feel less personal. You aren’t disappointed in your employee’s actions; you are simply explaining how they get in the way of what he’s trying to accomplish for himself and the organization. When your only agenda is setting someone else up for success, your words tend to be received more openly. True upset happens when either party’s interests are allowed to suffer over time without intervention. It must be the manager’s primary concern to balance those interests.

By definition, developing a reputation takes time. However, when you are consistent with the servant approach, people know what to expect from you and trust ensues. Trust, combined with the smart, inclusive decision-making discussed earlier is a surefire way of gaining influence.

We’ve just scratched the surface of the many challenges that you will confront as a first-time manager. There is simply no way to anticipate them all. But a core servant leadership philosophy will provide critical guideposts to help you manage in real time. Whatever your temperament, a serving mindset will keep you out of the reactive and self-protective patterns that can impede your success. Servant leadership may not appeal to those who are attracted to a more traditional idea of power, but it should be the choice of those interested in influence and results.

A One-Page Exercise to Get Stress Under Control

“I have so much to do that I live in constant fear of dropping the ball, failing to meet expectations, or worse.” This is a common refrain I hear from the executives and physicians I work with who are struggling to juggle the relentless demands of meeting professional, family, social and community obligations. Too many frantic days can leave you feeling exhausted, unbalanced and unfulfilled — like you’re trying to do so much that you end up doing none of it well.

And I know how they feel. As geeky as it may sound, I must confess that when the sheer heft of my to-do list overwhelms me and life feels like it’s spinning out of control, I clean out a closet. Or two. It makes me feel like I have command over at least one small corner of my existence. Once that closet has been cleared of items that no longer serve a useful purpose and the essentials are carefully arranged, I breathe a sigh of relief because I know what’s there and I can get to what I need quickly and effortlessly.

Wouldn’t it be great if you could clear out the clutter and create that kind of order in your whole life? I thought so, so I created a one-page document to facilitate that. It allows you to view your short-, medium-, and long-term goals all in one place along with your plans to achieve them. (Click here if you’d like to download a high-resolution version of this exercise from my website.)

I provide more a more detailed explanation on how to fill it out in my book, but here’s the quick-and-dirty version. Divide a page into three columns. On the left-hand side of the page is your self-assessment. Here you can write down an inventory of your talents, interests, principles, and purpose.

In the middle section of the page, record your goals and priorities in all areas of your life including the four big buckets: family and relationships; career; community; and mind/body/spirit. This will give you an easy way to visualize the balance you’d like to create along those important dimensions over time.

Finally, you will write down your strategies and the steps you will take to accomplish your goals in the action section in the right-hand column.

You and Your Team



Stress

Don’t let it get the better of you.

As you fill out this document, remember this is a custom life closet. You are free to change the timeframes or label the shelves however you’d like to best suit your unique needs.

A closet seemed the perfect metaphor for arranging those priorities. It allows you to put everything that is most important to you in one place where you can see and manage what you want to do. It also gives you a way to regularly weed out the dated items that block your view of what matters most to you. Afraid you’ll forget to tend to one of your major goals? Just put it on a shelf and you no longer have to worry. It will sit there in plain sight waiting until you’re ready to tackle it down the road.

This closet isn’t just another report you’ll complete only for it to sit on the shelf. It is the shelf. It provides a framework to visualize what’s most important to you at defined time intervals and to consider how you will balance career, relationships, community, and mind/body/spirit activities. I direct students in my corporate business-and-life strategy courses to complete the closet and set recurring appointments on their calendars to remind them to review them regularly. This way, they keep their goals up to date and ensure they are on track to accomplish them.

Every now and then, it’s essential to step back and consider what’s really important to you. If you never clean out your closet, you will run out of room for new clothes – or the next exciting project that would keep your work current, innovative and optimally effective.

Fortunately, taking the time to contemplate your goals, record them, develop strategies to achieve them, and sort them by level of priority can alleviate the stress of not knowing how or when you’re going to get everything done. And doing so can be as simple as sorting out your suits and sweaters.

The Unexpected Influence of Stories Told at Work

Growing up on a Missouri farm, Walt Disney developed a love for drawing after his neighbor, a retired doctor known as “Doc” Sherwood, paid him to draw pictures of his horse. Disney later became a newspaper cartoonist and commercial artist, where he learned how to make commercials from cutout animations. His fascination with animation inspired him to establish his own cartoon studio and eventually become the face of the golden age of animation.

I heard this story during my onboarding process when I worked as a research consultant at Disney Imagineering a few years ago. In the weeks after I heard the story, I found my mind returning to it whenever I was feeling uninspired by the work I was doing.

Examples like this one illustrate how even simple stories can be an effective source of inspiration. In fact, they can be even more powerful than that: stories can influence our decisions and behavior. By presenting vivid examples of people who faced the challenges we face, they not only last across time but also are contagious.

That behavior is contagious is a well-known finding in psychological research, even in contexts in which we believe our actions are primarily determined by our internal motivation. Consider the case of dishonesty. Simply seeing another person cheat can lead us to cheat, even if we care about being honest. My colleagues Shahar Ayal, Dan Ariely, and I demonstrated this in a series of laboratory studies.

In one study, we asked a group of college students to solve 20 math problems in a very short time. No one could realistically solve all the problems within the allotted time. We told participants that we would pay them for whatever problems they reported they had solved. The money they could earn was placed in an envelope on their desks. After the allotted time was up, students were supposed to check their own performance, pay themselves, shred the test, and leave. The math task, however, was just a pretense for the real experiment, which concerned cheating.

Shortly after the students began working on the problems, one of them (a paid actor) announced to the room: “I’ve solved everything. What should I do?” Everyone in the room knew this was impossible and concluded that he had blatantly cheated. He also took all of the cash available to him, as if he had achieved a perfect score, and left without any consequences.

Seeing their presumed peer cheat increased the overall level of cheating in the room. We were able to conclude this by comparing the students’ self-reported performance (which, on average, was equal to about 15 math problems out of 20) to that of students in a control condition (which, on average, was seven math problems), where there was neither an actor nor a shredding machine. One of the people conducting the experiment checked students’ work before paying them. We replicated the same finding in later studies that used a fake shredding machine (so that we could determine for sure that people cheated by over-reporting their performance).

The morale of the experiment: dishonesty can be contagious when we witness one of our own engaging in unethical behavior.

Behavior can be contagious even when it’s simply described in a story. Organizational founders and executives often share their own stories and examples of past behavior in their companies. Examples abound. At McKinsey, employees are highly familiar with stories about long-time managing director Marvin Bower’s integrity, and at Starbucks, stories are widely told about CEO Howard Schultz’s commitment to employee welfare. Stories can also come from employees low on the organizational hierarchy. At Ritz-Carlton hotels, for instance, employees widely share stories about doormen, cleaning, and maintenance staff, and other employees going above and beyond for customers or for one another.

These stories are positive examples of organizational members upholding company values. Others are stories in which the protagonist violated the organization’s values. In a recent field experiment conducted by Sean Martin of Boston College, over 600 newly hired employees at a large IT firm were presented with stories of organizational members as part of their onboarding process. Some stories had a main character who occupied a high-level position in the company. Others were about a person in a low-level position. In addition, the stories varied on whether the protagonist engaged in behaviors that upheld or deviated from the organization’s values.

The result: stories about low-level organizational members engaging in values-upholding behaviors were more likely to encourage similarly positive behaviors and reduce deviant actions than those about high-level organizational members. But when the stories were about organizational members engaging in deviant behaviors, fewer value-upholding behaviors were observed if the story was about a high-level rather than a low-level member. It seems we are especially lifted up by stories of those at the bottom behaving generously and particularly discouraged by stories about higher-ups misbehaving.

Even reading works of fiction can have a marked influence on a person’s behavior. Research by Geoff Kaufman of Dartmouth College and Lisa Libby of Ohio State University found that individuals who lose themselves in the world of a character often alter their attitudes and thoughts to resemble those of the made-up person. “Experience-taking” — that is, feeling the emotions, beliefs, and internal responses of those we are reading about — can lead to real changes in the lives of readers. In one study, participants who related strongly to a character who worked hard in order to be able to vote were more likely to take part in a poll themselves.

Telling and listening to stories are traditional, even ancient, means of passing on wisdom and culture. As the research I’ve discussed suggests, stories can help organizations more effectively communicate both simple and complex knowledge about values, norms, and the solutions to difficult problems. In most organizations, there are plenty of untapped stories that could be told that would change behavior for the better.

Becoming a Manager in a New Country

Becoming a manager for the first time is no easy task. One day you’re happily doing your own work and achieving your own goals, and then, suddenly, your work life does a 180: Instead of focusing on yourself, you have to focus your attention on others. You have to motivate others, build relationships with your team, and give effective feedback. You need to have empathy and understanding, but command respect. You need to be direct and assertive, but not so much that you crowd out others’ contributions. You need to take responsibility, while at the same time giving others the autonomy to grow. The changes can be dizzying and often require an entirely new set of skills.

Imagine now that you have to do all of this in a foreign country, not only outside your personal comfort zone, but outside your cultural comfort zone as well. It’s doubly difficult to command authority and lead a team for the first time in a new culture where the nuts and bolts of how to manage are completely different.

I know a new manager in Korea, for example, who thought he was being a great boss by singling out an employee for impressive accomplishments, but in actuality, ended up embarrassing the employee, who felt mortified for being praised in front of the group. This is just one instance of when something might work in one cultural setting — the United States, in this case — but can completely flop in another.

So what can new managers in foreign cultures do to ease what will inevitably be a challenging transition?

You and Your Team



Becoming a Manager

How to step up and stand out.

The first thing to do is to get a grip on the cultural challenges you’re dealing with. This entails understanding as much as possible about the new culture — rules for communication, how meetings are run, how people typically give and receive praise, etc. But it’s equally important to learn about the background of the particular people you’re going to be working with. Are your team members “locals” — people who speak one language and have primarily lived and worked in their country of origin? Or are they “cosmopolitans” who have lived, studied, traveled, and worked around the globe and who may speak multiple languages fluently? Maybe you have a mix. You should become familiar with the cultures of the people on your team, and in doing so, develop a sense of what might make them tick. Of course, national cultural background is just a rough guide and will be a stronger influence for some people than for others. You should develop a detailed understanding of personal backgrounds and personalities as well to create a more complete picture.

Then, consider how you may need to adapt your own style of working. This might mean acting in a way that runs counter to what you’re used to — or what you imagine managers from your own culture would do in a particular situation. For example, a new German manager I know struggled for months trying to motivate his American employees. From this manager’s perspective — and frankly, from the perspective of many Germans I know — employees shouldn’t be praised for simply doing their jobs. They should only be praised for extraordinary effort and accomplishments. But that’s not what his American employees in the U.S. expected. Instead, they craved positive feedback, even about relatively minor, everyday accomplishments. When this German manager failed to provide it over a series of projects, he nearly lost the team.

Fortunately, the German manager recognized this and thought about how he could adapt his style of management. He started to offer praise to his American employees, even for “small wins.” At first it felt awkward and unnecessary, but over time he got used to it. And, most importantly, the change in his behavior made a real difference: His American team worked harder and started to trust him.

In other cases, adapting your style can take the form of a cultural “blend.” Consider this example from India. A new manager — an American, who deeply believed in a participative style of management — erroneously applied this philosophy to a culture and a group of employees who were not at all used to participation. In fact, when the American asked his new Indian employees to participate in decision making, they assumed he must not know what he was doing. Instead of building a sense of camaraderie — which was his original intention — the strategy backfired, and he ended up losing the respect of his colleagues.

But he took steps to correct the situation. He created a blend between his participative nature and his Indian employees’ preference for hierarchy. Instead of asking team members to always share their ideas (which would be purely participative) or simply telling them what he thought (hierarchical), he required each employee to provide him with three suggestions, which he would then consider when making the ultimate decision. This gave him the participation he craved but in a style that worked in the new context. New managers need to be ready to adapt their behavior like this in order to find ways of being effective without compromising their integrity in the process.

There’s no question that becoming a new manager in a new culture is challenging — and at times even overwhelming. But it also can be a tremendous learning opportunity. By better understanding the culture and people around you, you can create a new style of managing that works in your unique environment, right from the start.

Your Company Culture Shouldn’t Just Be Great—It Should Be Distinctive

Just as brand differentiation helps attract customers, culture differentiation helps attract the right employees. But while it’s popular to focus on corporate culture, not many companies have a truly distinctive culture. This is the equivalent to a marketing department saying, “We need to have a strong brand”—without articulating what that strength will rest on.

So many corporate values statements include the same words: respect, trust, fun, integrity. Maybe also diversity, work-life balance, and community service. Free snacks and pick-up games are expected at every technology company; nursing mother’s rooms and on-site gyms are increasingly common perks on corporate campuses. This is all great, but if every company seems the same, how are prospective employees to know which companies are really the best fit for them?

Leaders and HR managers can borrow the principles of good marketing to create a culture that’s more distinctive—one that will attract and retain the right people. Leaders should start by identifying the specific cultural dynamics that will produce the results they desire, and then clearly articulate and actively cultivate them. By doing so, they create a powerful edge in the war for talent—one that’s often more powerful than pay, and one that directly drives performance. People thrive in a culture that fits them, creating a self-reinforcing upward cycle.

Companies with clearly defined cultures are also good for customers, because they allow employees to create distinctive customer experiences. For instance, the number one “Family Core Value” at Zappos is “Deliver WOW Through Service.” The company says “We seek to WOW our customers, our co-workers, our vendors, our partners, and in the long run, our investors.” In pursuit of this goal, Zappos recognizes the need to be “a little unconventional and innovative.” Its unique internal practices, including publishing an annual culture book that employees write and allowing employees to decorate their offices however they like, produce a differentiated culture. This culture has, in turn, informed its unique customer experience design—examples include providing surprise shipping upgrades and not tracking the call times of its customer service reps so they can spend as much as needed with customers.

Vanguard has taken a very different approach. The company was able to produce consistent results for its clients through the Internet bubble and the Great Recession because its culture preaches caution. Vanguard operates from a belief and loyalty to the small investor and trains its advisors to forsake short-term gains if they sacrifice long-term stability.

Or consider Amazon, whose culture has been raked over the coals in the media in recent weeks. The culture at Amazon may be ruthless and exacting—even “callous,” despite CEO Jeff Bezos’s denial. But the company’s hard-driving performance culture may be one reason it has consistently produced breakthrough innovations and consistent growth and continues to attract brilliant, mission-oriented employees.

The disciplines that inform brand differentiation in marketing can apply to culture differentiation as well:

Conduct competitive analysis to determine potential advantages and differentiating attributes—or better yet, identify white space where no one is playing.
Use segmentation to identify the types of people who share the company’s values and their distinguishing characteristics that can be used to target them.
Clearly articulate the value proposition—explain not just what the company does, but why it matters.
Don’t be afraid to use personality and take risks to stand out.

An unusual culture—even one that outsiders might criticize— is nothing to apologize for. In fact, it’s an advantage in attracting the right people.