Marina Gorbis's Blog, page 1324

When It Comes to Digital Innovation, Less Action, More Thought

A few years ago, we had an idea for a new business opportunity. One of our colleagues owned a restaurant and was complaining about the amount of money he lost because expensive bottles of liquor often went missing (the industry calls this “shrinkage”). This is a problem affecting tens of thousands of restaurants — an attractive target market. So, like good innovators, we began working on a solution to our colleague’s problem by building an automatic liquor inventory-management system.

We partnered with a company in a Singapore that had expertise in RFID technology, and began to put together a solution involving tags on bottles, a customized storage unit that could read the tags, and a software management system. The system would give owners real-time inventory information, which would help them to identify shrinkage early. Wall-mounted cameras near the storage locker would allow them to see precisely when a bottle left the locker, which would serve as a strong deterrent. A matching tag reader in the bar allowed the software to send out alerts when a bottle was removed from the storage locker but never showed up at the bar.

As we went through various iterations of the solution and spending mounted, it became increasingly clear that there were good reasons why no one had tackled what seemed like an obvious opportunity. The integration between the tags, the storage unit, and the software was technologically tough to pull off. What’s more it required busy bartenders, who weren’t particularly interested in making their jobs more complicated, to scan new bottles before putting them in the locker. Integrating our software into the myriad inventory systems used by restaurants across the United States was even trickier. When we finally had prototypes to show customers, they balked at the idea of investing in expensive hardware when they could simply hire an individual consultant to provide occasional advice about stopping shrinkage. In 2009, we decided to shut the business down.

Insight Center





Making Money with Digital Business Models

Sponsored by Accenture


What successful companies are doing right

Our failure highlights a hidden challenge facing innovators today. The simplicity and affordability of innovation has led to too much action without thought.

Starting our business wasn’t free by any means, but by tapping into low-cost designers in India, partnering with the company in Singapore with the enabling RFID technology, and using off-the-shelf software, we were able to develop the first version of our solution relatively quickly and cheaply.

And today, almost a decade later, the cost of starting such a business has radically decreased. Imagine starting a computer hardware business today. An entrepreneur can rent computing capacity from Amazon Web Services, find skilled designers via eLance, accelerate software development with GitHub, place targeted advertisements on Google or Facebook, and tap into a legion of contract manufacturers. Scaling a business still requires hard work and investment, but an entrepreneur can develop the first version of a solution and approach early customers on very lean budgets.

That would seem to be good news for innovation, and in many ways it is. But it has also created the ever-strengthening impression that the only way to learn is by action. Paralysis by analysis, the bane of many a large organization, should certainly be avoided. But so too should doing without thinking. In fact, doing without thinking is arguably even more dangerous because you can squander time and money by tripping over traps that could easily have been identified if only you’d done the right work beforehand.

Before you fling your minimal viable product out into the world to see what happens, at the very least make sure you have done the following:

Identify offerings comparable to what you envision that have struggled commercially and find out why. Perhaps you’re about to make the same mistake.
Consider why it is that the large companies that could have gone into the space you’re contemplating haven’t. Is it possible they know something you don’t?
Talk to someone who knows more than you do about the key part of your business, such as your target customer, distribution channel, or business model. Are there hidden risks?
Document, with a degree of detail, a single transaction. Who is your first customer? How will he hear about your idea? How will she obtain it? How will you support him if he’s not happy?
Devour publicly available financial statements for companies competing in markets related to yours. How do people make money? What big investments are typically required? Are you missing an important ingredient that is necessary to compete? Are you underestimating what it will take to get to market?
Create a hypothesis for how you will make money, and describe it to a savvy friend. Ask that friend to poke holes in it.

A company that aspired to bring a sustainably oriented product to the university market shows the benefit of proper upfront thinking. The team was developing a plan to pilot the business. As they mapped out a transaction, they imagined that it would take a few months for them to close their first sale. But since they’d never sold to the university market before, they thought to check their assumption with some people in their network who had relevant experience. A couple of calls to experts suggested that the product the company contemplated crossed several internal jurisdictions, and could therefore take years to sell, not months. The business model wouldn’t make sense with such a long sales cycle, so the team decided to consider other target markets and entirely different models.

This kind of learning can happen very quickly. While it doesn’t replace the very vital lessons that comes from prototypes, pilots, and other mechanisms that get you as close to the realities of the market as possible, it certainly enhances learning from those activities.

If an ounce of prevention is worth a pound of cure, perhaps an ounce of preparation is worth a pound of prototypes.

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Stop Playing the Victim with Your Time

It’s just not fair. There’s always too much to do. Everyone just keeps piling more work on me. I feel so helpless.

Sound familiar? If so, you’re not alone. Many people feel like they have a crushing number of requests coming at them from every side that make them a victim to their circumstances. They see forces outside themselves as the reason that they don’t have time to exercise, can’t leave work at a reasonable time, or just generally struggle to get everything done. Although there are occasionally situations that are outside of your control — that recent bout with the flu, for example — most aren’t. And even though it can feel gratifying in the short term to blame others for your situation, this attitude toward your time investment will leave you truly powerless in the long run.

When you play the victim with your time, everything around you suffers. You’re constantly on edge in your interactions with others because you fear that they’ll pile yet one more thing on your already heavy load. Since you don’t believe you can ever say, “no,” your “yes” comes out of a place of obligation and resentment, not wholehearted commitment. Since your situation seems so difficult, you don’t attempt to plan or work more efficiently because you believe that you will have to work all the time no matter what and are convinced that it’s impossible to get everything done. You eventually stop trying because you believe no matter how hard you try — you’ll fail.

In my work as a time coach, I’ve seen that individuals often have a much greater ability to influence their situation than they realize. But the breakthrough only happens when they start exerting their personal power instead of waiting for something around them to change. It’s similar to when people who find themselves in debt blame the credit card companies, instead of accepting that they had a choice in spending more money than they had. Only by accepting that they can — and need — to change and then taking steps to do so can that balance go down.

The way to break out of this victim mind-set is to stop blaming others, and instead, take ownership of your time and take responsibility for changing yourself. Here are three practical steps to take back control of your time:

Observe your reaction. Become aware of how you respond when your time investment becomes misaligned with your priorities. Do you always look for someone to blame? My boss always gives me too much to do. Do you pity yourself? Poor me, yet another stressful day. I’ll get some ice cream to make myself feel better. Do you reject advice or suggestions? How dare my wife suggest I could work differently to get home earlier. That’s just not possible. Do you ever say no to a new project? Do you ever set boundaries? Do you ever ask for support?

Recognize your role. Understand that you are the decision maker when it comes to investing your time. There are certain situations where you simply need to do what it takes to get things done for a short time. That could be when you’re approaching a major deadline, preparing for a new product launch, or drafting annual reports. But overload doesn’t need to be the norm. It’s not everyone else’s fault if you have too much to do and you don’t communicate that to anyone else. It’s yours.

You and Your Team



Getting More Work Done


How to be more productive at work.

Even in top consulting firms known for their rigorous work schedules, there’s room for open communication about time. For example, Boston Consulting Group established a formal global program called PTO (Predictability, Teaming, and Open Communication), which helps establish priorities and time-off goals for each team member. One component of this program is for team members to work together so that each one of them can have a period of time each week when they’re completely off the project. To help make this happen, the teams have weekly check-ins that include talking about how they’re feeling and the value they’re delivering to clients. Each person recognizes their role to openly and honestly communicate about their needs, instead of expecting others to automatically know when they’re overloaded. You must take on the same responsibility in your own organization with regards to your own time, even if you don’t have a formal program encouraging you to do so.

Commit to self-mastery. Regardless of how you’ve behaved in the past in certain situations or with specific people, you have the opportunity to make the future different. Make a commitment to change; choose to respond your environment instead of simply accepting whatever comes your way.

Instead of becoming a victim, take ownership of the situation and your time. This could look like speaking up when you feel that someone makes an unreasonable request so that you don’t end up overloaded. Have your project list on hand when you go to meetings so that if a new project is proposed, you can evaluate its importance in relation to your other commitments. If it doesn’t seem like there’s sufficient time for the new work, propose a discussion about priorities during the meeting or bring it up later with the appropriate parties.

Also, set clear rules and boundaries to prevent taking on too much from others. For example, if you manage staff members who tend to turn in work at the last minute with many errors, require that they turn in items earlier. That allows you to send it back to them to make corrections instead of doing them yourself because you’re on a tight deadline.

Finally, if you’re in a situation where setting better boundaries isn’t possible (such as a job where you’re on call 24/7) and you’re finding your time investment troubles unmanageable, you may need to consider whether you’re in the right job. There are some positions that will not create a sustainable lifestyle for you no matter what you try to do. It’s OK to decide to get out.

By taking responsibility for your time investment choices, you stop wasting energy blaming others and start directing it toward a productive response toward the people and situations around you. With that focus, you can have enough time for what’s most important to you.

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Robert Reich on Redefining Full-Time Work, Obamacare, and Employer Benefits

One of the U.S. Congress’s first acts of 2015? Trying to redefine what counts as full-time work, from 30 hours a week up to 40. It’s part of the latest attempt by Republicans to alter Obama’s signature healthcare law, the Affordable Care Act, and has already passed the House of Representatives. But it has also had the perhaps unexpected effect of putting the divide between full- and part-time workers front and center in American politics.

I asked former Clinton Labor Secretary and UC Berkeley professor Robert Reich about the debate, and what it means for employers, employees, and the future of American work. An edited version of our conversation follows.

The House has voted to change the definition of full-time work. It seems like the Senate may as well, and Obama has threatened to veto it. Why does the definition of full-time work end up mattering so much to our politics?

It matters under the Affordable Care Act because if full-time work is defined as 40 hours a week, employers can avoid the employer mandate [to provide health insurance] by cutting the work week down to 39 hours. It’s harder for them to do that if full-time work is defined as at least 30 hours. And of course if employers can avoid the employer mandate relatively easily, that means that more workers lose employer coverage, which, in turn, means that more workers have to rely on the government with regard to their health care, either through the Affordable Care Act or through extended Medicaid. That, in turn, puts a large and potentially growing burden on the federal budget, and could cause the deficit to expand.

Government has been a driving factor, along with unions, in defining how we think about what a workday looks like. How has that definition evolved over time?

Much of the tumultuous labor history of the 19th century centered on not just wages, but also on hours. At the center of all of that was the eight-hour workday. When Henry Ford moved to a 40-hour workweek in 1914, that went hand in glove with his increase in wages. And he did both for the same reason: he thought that workers would be more productive and that they would be more satisfied and loyal. And then by the late ‘30s organized labor began focusing on not only wages but also the conditions of work. The great GM strike of 1937, for example, was more about working conditions, such as sick pay and bathroom breaks and so forth, than it was directly about wages. Another important marker was the 1938 Fair Labor Standards Act where you had, for the first time, a national standard, which was a 40-hour work week, time-and-a-half for overtime, a minimum wage. There was a ban on child labor. Social security had been passed just three years before and social security was not just the social security for retirees, it was also disability insurance, worker compensation.

It was clear that in the 1930s we were thinking both about wage security, but also about benefits and various forms of social security, provided by government and ultimately by the private sector as well. I think the big change that started in the 1970s was the change in the employment contract itself, because you had a dramatic drop in the percentage of workers who were in the private sector and unionized. And that meant that you no longer had a system of prevailing wages or prevailing benefits. And we see from the 1970s onward a movement toward where we are right now, and that is more workers who are without benefits coming from their employment contract, whose wages are less a function of collective bargaining than they are a function of the workers’ own individual bargaining leverage, which is extremely small if the worker has no particular educational advantage over any other worker.

Is this part of a larger divide over how full-time workers and part-time workers are treated? Or  is it just a specific policy debate over how the ACA works?

It’s a broader debate. The ACA certainly brings it into relief, but the more fundamental question is two-fold. First, are workers assets to be developed or are they costs to be cut? Some employers regard even low-wage workers as potential assets. These employers are not only concerned about the costs of turnover and recruiting and training employees who might otherwise leave, but they’re also aware that employee loyalty and relational capital [are] very important to their business, even with regard to frontline workers or workers who are relatively low paid. Other employers have taken a very different approach. They regard workers as costs to cut. They are concerned that payrolls are too high. They look to cutting payrolls as the easiest and most direct way of improving performance. Some empirical work has been done as to which of these views pays off. I don’t think there’s any question that over the longer term, employers who view their workers assets to be developed do better. But let’s face it, we’re working in a very short-term world right now and so there are many forces that are creating incentives for employers to join the camp of regarding workers as costs to be cut.

The other factor here has to do with what level of employee we’re dealing with. Many firms regard their lowest wage employees as fungible. Even if their view is that their talent represents an asset to be developed, they don’t regard their frontline workers or low-wage workers as talent, they regard those workers as fungible costs. And so you get this second divide in terms of where employers draw the line between their so-called talent and their fungible costs.

Economists tend to talk about health benefits as if they are totally fungible with wages. If that were true, and employers could get away with cutting a 40-hour work week down to 39 hours and no longer having to pay for benefits, they would have to offer superior wages to make up for it. What’s missing in that kind of economic reasoning?

Well, the market is not, by any measure, perfectly competitive. The labor market, especially, has a lot of stickiness to it. Workers are not perfectly substitutable. A lot of people cannot move easily from where they are now working to another opportunity. The labor market also is very weak. There are millions of people who are no longer even in the labor market. They have given up looking for work, but they could come back in if demand picked up. Wages are, as a result, very low. Most of the new jobs that have been created in the United States pay less than the jobs that were lost in the great recession. So for all these reasons the notion that if I, as an employer, have to pay less in one domain or one dimension, I have to make it up in another, simply doesn’t hold true.

What about from the workers’ perspective? In a pre-Obamacare landscape the argument is very clear. If you aren’t able to get health insurance at work, particularly if you don’t qualify for Medicaid and depending on your health status, you may be denied coverage or charged an exorbitant rate in the private market. Today community rating is in place and the private exchanges are subsidized. What does the equation look like from a worker’s perspective, in terms of just how much they really want to be on that employer plan versus the exchanges?

We don’t know very much yet. We’re going to find out a lot more over the next few years. But the preliminary evidence seems to show that workers are relatively indifferent as to whether they’re on an employer plan or are getting their insurance off an exchange. Their real concern is cost, not just the cost of premiums, but also copayments and deductibles. One story that has not been adequately talked about, and a problem that hasn’t been adequately addressed, is that we see deductibles and copayments skyrocketing. Even though many workers today are getting insurance who might not have got insurance before on an employer-based plan, they are indirectly paying a great deal because of the size of the copayments and deductibles. And I might add this is also the pattern with regard to employer-provided insurance.

The U.S. is unique in terms of employer-sponsored health insurance. But does this kind of divide, about the benefits that accrue to full-time workers versus part-timers, have a corollary in other countries?

There’s not much of a corollary. If you look at other advanced nations, you see that, because of various forms of national health insurance, employer benefits don’t figure in nearly as much. Meanwhile there is much more part-time and temporary work in the United States, for a variety of reasons, some of which are sociological. Americans are working longer hours — at least Americans who are employed are working longer hours on average than Europeans or even Japanese workers. American workers are also working on weekends and at night to a much greater extent than European or Japanese workers. In fact the latest data show that 29% of American workers work weekends, 26% work at night. These are the highest percentages of any industrialized nation.

How does all of this relate to the challenges that we might face if the “sharing” or access economy – Uber, Airbnb, etc. — ends up growing?

It’s definitely growing. We’re seeing, with regard to a majority of workers in America, that they are moving toward a world in which they have few, if any, employer benefits. They are more freelancers and independent contractors, temporary workers, and part-time workers. Their remuneration is set in what’s essentially a price auction, a spot auction market, [and] varies from day to day or even from week to week. Now if you’re young and well-educated, this kind of a system may be quite attractive. There are many young, well-educated people who don’t want to be as regulated as a typical full-time employee. They want to be more entrepreneurial, they don’t mind that they have to pay for the equivalent of all their benefits. But the older the worker, the less educated the worker, the more the worker has a family or other dependents, that worker is likely to regard this emerging system as a far greater burden and a far greater challenge, because most people have bills they have to pay that are fairly regular. But if their compensation is variable, they can find themselves in very big trouble.

I want to go just back to one point you alluded to awhile ago. Many of the benefits that became part of the standard American labor contract date back to World War II and the days when about a third of our private sector workforce belonged to a union. Those benefits were included in contracts for two important reasons: first because there were price controls and the benefits were a way of circumventing the price controls, at least with regards to labor. The second reason had to do with taxes. It became a very attractive feature of labor contracts to provide these benefits, because many of these benefits were not taxed, as were regular salaries and wages. So that much of the benefit structure we have today is a legacy of the Second World War.

If you could wave a magic wand and put in place the support and welfare policies that you believe are necessary, would you be comfortable with this broad idea of switching risk mitigation from the company to the government, and letting the contracts between workers and companies be more fluid? Or do you think that there’s a risk in going in that direction?

I would definitely support that direction. I think that’s the direction we have to move in, for a number of reasons. First, the benefit structures that we still have in place amount to a very large tax subsidy going to the highest paid workers. Most low-wage workers are not getting tax-subsidized benefits. That makes no sense — that’s an upward redistribution that is socially unjustifiable. Secondly, these benefit systems are very inefficient. They keep people locked into jobs that they don’t necessarily want, or they prevent people from taking opportunities that might otherwise be available. They impede mobility in the labor market. I think it makes a great deal of sense to move away from these employer benefit systems to benefits that are provided through government, either directly or indirectly.

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Why Target’s Canadian Expansion Failed

It was a brief stint for Target in Canada. Less than two years after opening there, Target announced last week that it would close its 133 Canadian stores. Some Canadian Target customers responded emotionally to the news on Target Canada’s Facebook website (“totally heartbroken,” “please don’t go,” “good riddance,” “you obviously don’t understand Canadians”).

Target CEO Brian Cornell decided to close the stores after determining that they would not become profitable until at least 2021. The market exit will stop Target’s continued losses in Canada and help the company focus on its strategic initiatives in the U.S. such as smaller stores in urban places, mobile and online, and its cheap chic merchandising focus—to “be cool again,” as Cornell told Target employees in the fall.

What caused the retailer’s problems in Canada, and what are the lessons learned?

In Target’s annual 2012 report, then-CEO Gregg Steinhafel mentioned Target’s “two years of exceptional dedicated and hard work” to prepare for the international expansion. However, in the end, the market entry seemed rushed and oversized, with 124 stores opening within ten months.

The Canada expansion was announced in January 2013 when Target bought the 220 leases of Zellers, a declining and now defunct Canadian discount chain, from Hudson’s Bay. Target opened its first stores just a couple of months later despite the enormous remodeling work required. Maybe taking over the Zellers leases was too good an opportunity to pass up. But it may have led Target to launch with a bigger footprint than advisable.

Global expansion had been on Target’s mind for some time, and growth through physical stores rather than e-commerce seemed to be the retailer’s preferred path. Canada in particular held appeal as it is not only geographically close and mostly English-speaking but also because Target is familiar to the many Canadians who had visited the stores in the U.S. In addition, Canada was less affected by the recession than the U.S., increasing the appeal of a Canadian venture. What Target may not have fully appreciated was that the Canadian discount sector is a particularly tough market. Unlike the luxury segment, the discount market is fairly saturated by competitors such as Wal-Mart, Costco, Giant Tiger, and Sears.

To entice shoppers to switch, Target had to differentiate itself from all the other discount retail choices. It also had to address two kinds of customers in Canada: those already familiar with the retailer from their U.S. encounters and those new to the brand. While Target did a great job marketing its launch with a multiplatform ad strategy—TV, print, billboards, social media and so on— introducing itself as the new neighbour (notice the localized spelling), its execution was flawed.

The store locations were often out of the way, and stores weren’t up to par with Target’s U.S. look. The new stores also struggled with distribution challenges and shelf replenishment, leading to stock-outs. Particularly for Canadians familiar with Target, the poorly stocked shelves, an assortment that differed from the U.S. stores’, and, often, higher prices than in the U.S. all combined to discourage traffic. These issues also made it hard to win customers who were new to the brand. First impressions count, and once customers are disappointed it’s hard to win back their trust. Given the executional issues, Target wasn’t able to implement its differentiated U.S. concept in Canada.

As Target found, international expansion is difficult, even for top retailers. Tesco’s Fresh & Easy stores in the U.S. went bankrupt; Best Buy closed its stores in the UK after less than two years; Wal-Mart pulled out of Germany and South Korea; and Carrefour left Algeria and Thailand.

Still, there are many globally successful retailers. Their success is based on a competitive advantage achieved principally either through differentiation of merchandise or customer experience (Apple, J. Crew, Michael Kors, Louis Vuitton, Galeries Lafayette) or cost/price leadership (Wal-Mart, Amazon, IKEA, Aldi, H&M, Zara, Uniqlo). In addition, successful global expansion requires deft adaptation to the local markets — the customers, competition, culture and customs, local laws, and so on.

Consider J. Crew’s approach when it entered Canada in 2011. It opened one store in Toronto and then gradually added stores across the country. Like Target, J. Crew had customers that were familiar with J. Crew and unhappy with its Canadian prices, which were 15% higher than in the U.S. But J. Crew responded quickly, absorbing the duties on online purchases and offering a flat shipping fee to reduce the cross-country price differential. It also reverted to allowing Canadian customers to shop the U.S. J. Crew website in U.S. currency.  As a result of its careful market entry and execution, J. Crew has been a great success in Canada, growing from one to 16 stores within three years and adding a men’s collection to its original women’s-only line.

In the end, Target struggled with the translation of its successful U.S. concept to Canada and execution there. A slower rollout of stores, the model that worked so well for J. Crew, might have helped it to gain experience in the market and adjust its strategy before expanding further.

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The Flaws in Obama’s Cybersecurity Initiative

President Obama’s new raft of proposals aim to address the growing concern that America is not taking tough-enough action against the increasing cybersecurity problem of nation-states and criminals (usually criminal gangs) attacking U.S. consumers and organizations. The evildoers’ motivation for doing so is most often money, but intellectual property is also being filched, and the internet is also being used for anything from identity theft to illicit political objectives.

The cornerstones of the proposal are to:

Prohibit the sale of botnets and similar tools
Give the courts the power to shut down networks assembled for cybercrime such as those involved in “distributed denial of service” (DDOS) attacks
Protect companies that share information with the government about computer threats from liability

He also calls for better cooperation between companies and the government when tackling cybercrime.

The problems are certainly real. We are losing on the battleground of cybersecurity. For example, the gains that IT contributed to the GDP of the Netherlands in 2014 were wiped out by the even larger cost of cybercrime. Cybercrime has now become widespread enough to be a drag on growth in many countries. By some estimates, it costs between $500 billion to $1 trillion worldwide. That’s bigger than the GDP of 75 countries combined.

But how much can any government do to address the problem of cybercrime?  And will these proposals do anything to fix the situation in the U.S.? Many of the criminal gangs (and certainly nation-states) lurk beyond U.S. jurisdiction — or at least, beyond the capacity of law enforcement to track them down in large numbers. Therefore, criminalizing many of the activities and products associated with cybercrime is likely to have more symbolic value than actual effect.

This is a limitation that would be faced by any country’s government, except perhaps the one where the crooks live. Russia, for example, has an exploding underground cybercrime industry. Trend Micro’s findings are that you can buy a botnet outright for about $700, or rent one for an hour for $2 — enough time to do serious damage. Trojans that let you spy on incoming and outgoing texts will run you $350.

Every country now has its own special wares to peddle. Brazil is apparently the place to go if you’re in the market for some banking malware. China’s gangs have their own special portfolio to sell. In terms of the competition between Russia and the United States, the homes of the biggest criminal hosts, Russia is winning bigtime. In three months in 2012, Russia’s share of malicious hosts rose by around 10%, and the United States lost 10% of its bad boy computers. There’s ample evidence that for every cybercriminal activity that gets squashed in the United States, an offshore competitor takes it — at cheaper rates. And even those rates are falling fast as more players and countries compete for their share of the pie.

In other words, Obama’s proposals are tackling a problem that was already diminishing in the U.S. The bad guys that really cause problems for Americans (and everyone else) are beyond the long arm of the law.

But what of the part about encouraging companies to share information about cyberthreats with the U.S. Department of Homeland Security by offering them “targeted liability protection”? That has to be a good thing, right? Well, the thing is that it’s already happening. In the United States, many company groups already share information — without government involvement — concerning cyberattacks and threats.

Each of these industries is dealing with its own kind of ugly crook, looking to use its specialized expertise to exploit vulnerabilities peculiar to that industry. The Retail Cyber Intelligence Sharing Center has been up and running since last year, when some 30 large retail companies got together and decided to share information on threats with each other. The oil and gas industry are doing something similar through ONG-ISAC (an acronym likely brought to us by the spawn of the same marketing-savvy engineers that coined TCP/IP and PCMCIA). And FS-ISAC does the same thing for the financial services industry, a particularly important sector for Willie Sutton reasons.

It makes sense for companies to form their own cybersafety industry groups to combat their particular threats. Individual companies are also putting great effort into safeguarding their value, though the facts about and nature of their work is often secret.

A bigger issue is that cybercrimes are grossly under-reported and fear of liability is only one part of the problem. Companies just don’t see the governmental resources available to successfully prosecute the kinds of cybercrime they experience, and the track record probably supports that view. Why share information with the government if it won’t help your situation?

There are also hosts of not-so-wacky conspiracy theorists who worry about any governmental involvement with the internet. (Some of them actually think the government is using it to snoop on us!) They also worry that if Congress passes a bill when prompted by a crisis, there are almost always additional consequences:  usually giving the government more power than we would like.

Nevertheless, a few things make this part of the proposals much more palatable. First, there are many cybercrimes that aren’t just industry specific. Lots of nasty stuff would simply fall through the cracks if left to individual industries. We might not see innovations and changes that affect all of us, and we not might be as good at communicating new general threats more publicly.

For example, the fastest growing malware targets smartphones. With the right hack, your phone can be used to bug you or see what its camera sees. Not a great sales pitch for a conflicted phone industry. How about cars getting hacked? What about Skype-enabled TVs peering into thousands of homes and the streams being sold on the dark web? We might want companies to share that kind of information with the government — and us — without too much fear of reprisal.

Probably more important than our internet-of-everything gadgets are the power, water, sewage, manufacturing and transportation networks. A surprise, broad attack might put us, if only temporarily, somewhere between now and the Middle Ages. And even though governments are trying hard to protect this infrastructure, we’d probably want any hint of a private breach likely to be correlated with a broad-scale, warfare-like attack shared centrally (sooner rather than later).

In summary, I believe Obama’s proposals are well-intentioned. Information sharing is, on balance, a good thing. They at least start to address a set of problems that will impact the next generation even more than ours and may be the basis for some fundamental research. But I just doubt that they will be very effective in combating cybercrime.

So what is the answer?  We know it is a global problem requiring a global solution. We know we need more global cyber capacity to fight cybercrime. International cooperation is critical. Global information sharing is also important — and we are doing some of it. A better understanding of the psychology of how insiders are coaxed, blackmailed, or tricked into sharing access to their computer systems would help organizations defend themselves. Good technology exists and will help, if we use it. Most important is education: Everyone — individuals, employees, companies, and boards of directors — needs to understand the new dangers.

One of the best results of Obama’s initiative may be to put the cybercrime issue a little higher on everyone’s agenda. If it spurs more good guys to learn and focus on the challenges, this second-order effect may have the greater impact.

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How We’ll Really Feel if Robots Take Our Jobs

Visitors staying at Starwood’s Aloft Hotel in Cupertino, California, not only have the luxury of humans greeting them and toting around their luggage. They also may be taken care of by a robot bellhop, named Botlr, who is mainly charged with delivering toiletries to guests’ rooms and eliciting smiles along the way.

Of course, by referring to a robot as “who,” I’m already starting to blur the line between humans and machines, something Brian McGuiness, Aloft’s global brand leader, was keen to address in a recent interview with my colleague. “This isn’t going to replace associates or our talent,” he said. “For us, it was really just to augment the team that’s there.”

Despite assurances like these, there’s palpable nervousness among us workers about whether or not robots and algorithms will eventually take our jobs (including yours truly, but I’m generally nervous about everything). This is evidenced, and perhaps brought on by, the number of news reports about hot new bots, a depressed job market still inching out of a global recession, and a much-discussed “skills gap” when it comes to STEM fields. (The Upshot’s Claire Cain Miller does a nice job of putting all of these trends into context.) Even experts are pretty divided about whether or not robots will take our jobs.

The “enormous doom and gloom” about “botsourcing,” as Harvard Business School’s Michael Norton puts it, is part of the reason he and Kellogg School of Management’s Adam Waytz set out to study the emotions surrounding the question of robots in our workforce. “Much like the debate over outsourcing — when jobs previously performed in one country are outsourced to workers in another country — we found that people had strong emotional reactions to the notion that robots were poised to ‘take over.'”

In a series of experiments, Norton and Waytz tested exactly how these emotions work, and particularly whether the type of work being performed — described as either “thinking” or “feeling” jobs — changed how a person felt about a robot taking their job.

The researchers turned to members of Amazon’s Mechanical Turk, the online task marketplace, to help answer these questions. Because jobs posted on the platform can vary from “evaluating advertising materials to generating a list of Bach compositions,” there’s a built-in range when it comes to emotional and cognitive tasks. The researchers then bolstered this range by presenting tasks to users as either “requiring the capacity for thinking and the ability to be rational” or requiring “the capacity for feeling and the ability to be emotional.” They then asked how comfortable they would be with a robot taking a task in general, and then specifically about taking a task they were originally supposed to perform.

“We were surprised by how consistent our results were,” reports Norton. “Again and again, we saw that while people were somewhat comfortable with robots performing ‘thinking’ types of jobs (like accounting), they became much more opposed when we asked them about robots performing ‘feeling’ jobs (like elementary school teachers).”

But in a twist, they also found that some simple reframing can alter emotional reactions. “People’s views were somewhat flexible,” says Norton. “We found that people were less opposed to botsourcing of teaching jobs when we described the same job as requiring more thinking skills (numbers) than feeling skills (the mentoring.”

This is something businesses should keep in mind. While their research certainly doesn’t indicate that people are wildly excited about robots in the workplace, “companies considering botsourcing are wise to — if possible — limit the practice to jobs that people deem suitable for robots: those that do not require emotional intelligence.”

Norton and Waytz’s work augments the growing scholarship about what it means as robots become part of our workforce, be it in manufacturing or traditional knowledge work. We know, for instance, that how we design robots matters when it comes to emotion; in one case from Carnegie Mellon University, researchers found that people anthropomorphized a treat-delivering robot aptly named “Snackbot,” building levels of trust and rapport. Snackbot’s presence also changed how people related to one another, changing the organizational dynamic.

In another example, a researcher found that people rated robots with male names higher than robots with female ones if the robot was performing security work. Gender bias, it seems, is alive and well with artificial intelligence, too.

What all of this boils down to is the fact that the robots-and-jobs question isn’t merely an economic or macro-societal one; it’s also a fairly complicated management issue. And while groups like The Future of Life Institute are laying the groundwork for the ethical creation and use of robots, it seems like similar considerations should be considered when it comes to robots at work. The ethical management of robots, in other words, and how robots will ethically manage us.

After all, as Norton and Waytz point out at the end of their research, humans are remarkably prone to becoming emotionally attached to AI. In the 1960s, MIT’s Joseph Weizenbaum created ELIZA, a computer program capable of conversing with humans via a chat mechanism. It mimicked Rogerian psychotheraphy — think answers like “Who else in your family hates you?” when you complain that your mom hates you.

Weizenbaum, who died in 2008, was said to have been “stunned to discover that his students and others became deeply engrossed in conversations with the program, occasionally revealing intimate personal details,” according to an obituary written in The New York Times. Their attachment to ELIZA didn’t change much, when they were clued into the fact that they weren’t talking to an actual person.

In the end, the programmer became a critic of artificial intelligence. But the blurring of what the human mind can only do —  and what we’ll accept as its alternative — hasn’t gone away. As Norton tells it, reflecting on ELIZA’s legacy, “even for jobs that people typically believe require human emotional intelligence, research may still uncover ways in which even the most emotional jobs might be botsourced.”

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Help Your Overwhelmed, Stressed-Out Team

Is your team stressed out? These days, everyone seems overwhelmed and way too busy. But even when your team members have a lot on their plates, they don’t have to sacrifice their health or happiness. What can you do to reduce your team’s stress? How can you help them focus on what really needs to get done?

What the Experts Say

As a leader, it’s your job to help your people find balance. Of course, you need results, but you also want a team that’s not at constant risk of being burnt out. Research shows that memory, attention, and concentration suffer when people try to manage the constant stream of communication and distraction that’s a regular part of the workplace. Julie Morgenstern, productivity expert and author of Never Check E-Mail in the Morning, sees this every day: “Almost everyone struggles to focus at work,” she says. “We want to think, write, and strategize, but because these functions require deep thinking and uninterrupted time, we stay busy with the tasks, meetings, and messages that pop up all day long rather than tackling really important projects.” Liane Davey, vice president of team solutions at Knightsbridge Human Capital and author of You First, agrees, noting that an overly busy office can kill morale and leave employees disengaged and less capable of getting everything done. It’s on you, the manager, to help your people cut through the chaos, reduce stress, and make sure your team can accomplish its most important work.

Focus your team on the things that matter

The first step, says Davey, is to identify the unique contribution your team makes to the organization. Begin by asking, “What does the company expect from my team that no other group can accomplish?” Don’t answer this alone in your office. Involve your team. Once you all agree on your team’s purpose, it becomes the guiding principle for how everyone should spend their time and the litmus test for what work team members should take on and what they should let go.

Further Reading




Manage Your Team’s Collective Time

Productivity Article

Leslie Perlow

Companies that make time management a group effort increase productivity as well as morale.




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Edit their workload

Evaluate each project based on whether or not it’s in what Davey calls “the sweet spot” — what you’ve previously identified as your group’s unique purpose, what they’re good at, and what’s important to the larger goals of the organization. “It’s the manager’s responsibility to develop an action plan that allows everyone to be more productive and to insulate their teams from low-priority work that may trickle down from senior management,” she says. When a new assignment comes your way, don’t automatically say yes. “Remember to consider each project with an eye to whether or not it takes advantage of what your team, and only your team, has to offer,” Morgenstern says.

Schedule uninterrupted work

“When you get distracted by something at work,” says Morgenstern, “it takes at least 20 minutes to refocus on the task at hand.” Encourage your team to set aside an hour or more (Morgenstern’s team gives it three hours) each morning for quiet, proactive work. “Be sure everyone understands that there are to be no interruptions unless it’s an emergency,” she recommends. By making it a group goal, you increase your collective focus and prevent backsliding. Also check that your team members know how to break larger projects up into smaller tasks that can be accomplished in the amount of time you’ve set aside for strategic work each day. “Once they use this time effectively,” she says, “their productivity will improve.”

Fix your meetings

“Meetings can be a huge waste of time,” says Davey. To avoid that problem, “every meeting should include standing agenda items to allow for productive discussions and decision making about the team’s core assignments,” she says. Morgenstern suggests that managers establish no more than three objectives, decide who needs to be there, set limits on the duration of meetings, and use the last 15 minutes to clarify how the participants will move forward. Above all, make sure a meeting is really necessary. “Sometimes an email or memo can accomplish the same goal in a much shorter amount of time,” she suggests.

 Set limits on e-mail

Technology has created an always-on culture, where work bleeds into evenings and weekends. But that can be counterproductive if your people never feel they have a break. Morgenstern suggests setting boundaries on the work day and limiting after-hours emails to urgent issues. “So many people are addicted to their phones, but over time, most people realize that there’s very little that can’t wait and that it’s far more important to connect to what’s meaningful to us both personally and professionally,” she says. The brain is actually wired for rest, adds Davey. “Without taking time to recharge, we create unsustainable levels of stress and anxiety.”

Lead by example

When setting new norms for your team, you need to walk the talk yourself. “The movement against busy starts at the top,” Davey says, pointing to the way Jeff Weiner of LinkedIn schedules time for what he calls “nothing.” Talk to your team about what you’re doing and why, Morgenstern recommends, and if one of your strategies isn’t working, admit it, try something different, and move on. Show that you’re committed to making a change both individually and as a group. “It takes a while to break these habits,” she says, “but once you all get used to a deeper sense of accomplishment, you’ll never go back.”

Principles to Remember

  Do:

 Agree on what’s unique about your group’s skills and experience
 Reduce or eliminate assignments that don’t align with your team’s purpose
 Schedule time for high-level, strategic work

  Don’t

E-mail your employees at all hours — set limits on technology use
Call meetings without an explicit purpose — stick to an agenda
Underestimate the importance of your own behavior — you set the norms on your team

Case Study #1: Set a good example

“As an organization and an industry, we’re as plugged in as we can possibly be, so we have to be deliberate about managing the flow of information and staying clear about our priorities,” says Lindsey Turrentine, vice president and editor-in-chief of reviews for CNET. “Otherwise, the work won’t be as good.”

In order to protect her staff from getting overwhelmed, she makes sure they know what they’re supposed to deliver and sets clear timelines for the work. “That way we’re able to meet our daily responsibilities and stay focused on our mission of creating innovative ways to deliver information to consumers.”

She regularly blocks off time in her own calendar and sets CNET’s internal instant messaging system to unavailable when she needs quiet, focused time. And she encourages her team members to do the same as long as they make themselves available at other times and coordinate with each other. “It’s not enough to simply set the limits,” she adds. “You need to take time to explain what you’re doing and why. It’s my job to make sure the work gets done and that my staff can walk away at the end of their shifts knowing that someone else is prepared and ready to take the baton.”

Case Study #2: Make time for your most important work

“Our employees were really struggling to manage their workload,” says Steven Handmaker, Chief Marketing Officer at Assurance, an independent insurance brokerage. Too many emails, too many meetings, and too many interruptions had brought everyone to their breaking point. Management decided to bring in a consultant to help. His recommendation: implement priority-work time.

Every employee at every level was encouraged to schedule a certain number of hours to complete important projects. “The consultant suggested 15 hours per week,” Steven says, “which was a huge shock.”

Nevertheless, the leadership team, including Assurance’s CEO, began scheduling priority-work time in their calendars, and employees enthusiastically followed suit. “It took about six months for the entire company to get used to the new system,” Steven says.  Most employees now have eight to ten hours on their calendars blocked off each week, and everyone is responsible for supporting their colleagues and employees in doing the same. If Steven sees that his team isn’t planning and using priority-work time, it’s his responsibility to speak to them and find out why.

How successful has priority-work time been? “What we know for sure,” says Steven, “is that our employees are happier. We’ve received awards from Fortune, the Chicago Tribune, and from industry organizations for being a great place to work. But we also see internally that the rapid adoption of this practice means that it’s been successful. We respect how hard everyone works, and part of that is simply letting people do their jobs.”

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Your Customers’ Behavior Is a Competitive Advantage

At a reception for JetBlue’s most frequent Mosaic flyers, I had the opportunity to listen to the airline’s top management discuss its ambitions to improve operations and enhance customer experience. The discussion was excellent and — on a whim — I asked one of the most senior executives what JetBlue’s customers could do to improve the airline. He paused for a long moment and essentially responded, “The most important way our customers could improve the airline would be by being more polite.” He talked about how stressful and debilitating it was for ticket agents, gate agents, and flight attendants to deal with rude and ill-mannered flyers. Nicer customers, he maintained, would make for a nicer experience for everyone.

Lo and behold, JetBlue recently announced a series of in-craft “jetiquette” videos for its flyers. The hope and expectation, of course, is that these visual “nudges” will preemptively smooth the air travel’s rougher edges. “We wanted to say, ‘We’ve all been there. We get it, and let’s talk about it,’” declared one JetBlue executive about #FlightEtiquette. “It’s a universal truth of flying.”

As big a fan as I am about organizational learning and the need to relentlessly refresh and renew employee human capital, I’m an even bigger fan of investing in how customers and clients create value. Making customers better makes better customers. Improving employees and associates is smart business. But so is improving your customers and clients. What — and how — your customers learn to make your business run better should be every bit as important as what—and how—you want your employees to learn, as well. Customers need to learn from you almost as much as you need to learn from customers. Serious customer experience design debates in organizations should focus almost as much on customer learning as customer delight.

This point was powerfully reinforced when listening to Nadia Shouraboura, former head of Amazon’s Supply Chain and Fulfillment Technologies and founder of Hointer, an innovative “digiphysical” retail startup, at an Intel roundtable on the future of retail experience. Shouraboura mentioned almost in passing that Hointer’s Seattle store makes a point of digitally keeping track of which customers like being approached by salespeople and which ones prefer to be left alone. But she noted that the data indicated that, “customers who liked being left alone ended up asking more questions than those who liked being helped.”

To me, that behavior’s not counterintuitive or unusual at all: most prospects and customers want the power to choose when to seek help and ask questions. The issue isn’t whether or when retailers should physically approach in-store customers, it’s what expectations retailers want to cultivate and inculcate in their customers with regard to assistance. In other words, Hointer is figuratively — if not literally — training its customers to shop on their own terms. Hointer’s salespeople are as much information resources as people who sell.

That distinction’s not subtle. As both a technology and retailer innovator — not unlike Amazon! — Hointer is educating its shoppers to shop in a different way with different norms and different expectations. The product of that education is not just a more sophisticated Hointer shopper, but a shopper who may now become impatient with the delays, inefficiencies, and inferior experiences proffered by other retailers. That’s where value-added differentiation and competitive advantage come from. That’s why helping customers learn can be as strategically important as learning from customers.

This is where a lot of UX design strategies fall short. Yes, Amazon, Apple and Facebook use data and analytics to learn a lot from and about their customers. But does anyone doubt that Steve Jobs, Jonny Ive, Jeff Bezos and Mark Zuckerberg have done a fantastic job of educating and training their best users and customers to — with apologies to TBWA/Chiat/Day — “Behave Different”?

If a smarter, more knowledgeable or more polite customer can measurably reduce the friction of commerce — or measurably increase the ability to get value from an innovation — than that may be a much better investment than boosting the smarts, knowledge or good manners of an employee. The two aren’t mutually exclusive, of course — but they certainly aren’t the same.

Debate all you want about how best to communicate and sell the virtue of your products and service offerings. But never forget to seriously debate how even tiny investments in improving customers might lead to large-scale insights in improved customer experiences.

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Office Politics Is Just Influence by Another Name

Most of us cringe when we think about office politics. It’s a disgusting, immoral mess that we try to avoid. After all, who wants to participate in backstabbing, lying, cheating, blaming, sucking up, and playing people against each other? Or maybe you take a slightly less offensive view of office politics and see it as controlling agendas, building covert alliances, protecting access to key leaders, and holding “meetings before the meeting.” No matter what your take, it’s not surprising that honest people don’t want to get involved.

But are politics at work inherently dirty?

The truth is that just being a member of an organization is a political act. And in fact, we must influence people at work all the time. It’s how we get things done. And to influence, we must have power, the real currency in workplaces. Most people want it. All of us need it. In healthy organizations, we “get” power, or are granted power, by virtue of our ability to inspire and provide vision. We also get power as a result of what we can do for people. In companies that value people and results, we are granted power because we help to create a vibrant climate and a resonant culture that is ripe with hope, enthusiasm, and a can-do spirit. In such companies power is used well – for the good of people and the enterprise.

Office politics is really just the art of influencing others so we can get stuff done at work. And, despite the bad rap that politics gets, successfully engaging in politics requires the development and use of good qualities. For example, Gerald Biberman’s research found that those who engage in office politics are more likely to have an internal locus of control — they believe they can influence people and outcomes, which motivates them to get into the mix and try to get things done through others. At best, such confidence is grounded in self-awareness, self-management, and a desire to move people for the good of all. The combination of emotional intelligence and, what the late great David McClelland, called socialized power, can result in influence strategies that make people enjoy working together toward common goals.

Linda Hill and Kent Lineback, authors of Being the Boss argue that leaders should stop avoiding office politics. They note that people who actively steer clear of politics don’t do what the best leaders always do — build strong, positive relationships that serve a purpose beyond simple friendship (although that’s nice, too). My co-authors and I call these relationships “resonant”.

Resonant relationships are bonds we build as a result of truly seeing people and valuing them for who they are. These powerful relationships are grounded in empathy as well as authenticity and mutual respect. In such relationships, we come to know what drives people and what they value, and can hence inspire, motivate, and influence in a way that makes them feel valued. People who avoid office politics miss out on all of this, as well as on receiving help, benefiting from mutual support, and even having fun. Rob Ashgar, writing for Forbes, takes it step further, arguing that office politics is the art of getting along with others and of putting yourself in positions where your work will be noticed. That’s not bad. That’s simply a smart thing to do.

Further Reading







HBR Guide to Office Politics

Communication Book
Karen Dillon


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Politics, then, can be okay to engage in. Unless, of course, your organization is toxic (which too many are). If the politicos in your organization are Machiavellian types you’ll notice lots of lying for personal gain, self-aggrandizement, clever flattery, and people taking delight in crushing weaker team members and enemies. Research suggests that Machiavellian individuals tend to have lower emotional intelligence — particularly when it comes to empathy and recognizing emotions. These people — and there are a lot of them, to be sure — are destructive, self-centered horrors to work with. How can you protect yourself from these people? To start, engage your social awareness skills and ferret them out. Don’t be fooled by their flattery. Then, you’ve got to have clever strategies for avoiding them or beating them at their own game, without becoming manipulative yourself.

We can’t avoid politics and we should not, because if all of the good people stay out of the game, the Machiavellians and the narcissists win. Worst of all, if you choose to opt out, you may be putting your relationships — and your ability to influence others — at risk.

So, get in the game. Be authentic, and claim your right to guide and inspire others. Broaden your group of friends at work. Learn what it takes in your organization to influence individuals and groups. Do something for somebody else, every day, without thought of personal gain. Treat politics like the game it is, with all the seriousness and ethics it deserves.

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Make It Easy for Decision Makers to Approve Your Deal

Imagine you’ve been offered a way to purchase $1 lottery tickets for a penny each. How many would you buy? If you were operating based on rational self-interest one could argue that you would buy as many tickets as possible. How could you refuse an opportunity with so much upside and so little downside? Similarly, the role of the dealmaker is to find a way to drive the “cost” of the deal down to as close to zero as possible — so the decision maker can’t possibly refuse to buy that ticket.

It’s harder than it sounds. In order to make it happen, you need to understand the dynamics of the cost of the deal. In my experience, this is where people go wrong — they misinterpret the nature of the cost to the person sitting across the table. Getting to yes requires knowledge about the decision maker, but it’s not necessarily the knowledge you’d think.

In the first of now four pieces I’ve done for HBR, I outlined the stakeholder types you will encounter in the effort to close a big deal. Next, I went through a more detailed examination of the motivations of two of those stakeholders, the champion and the blocker. Now, I’d like to close the loop and talk about the decision maker, the final gatekeeper in the triumvirate. Based on many years as a business founder, executive, and advisor, I would argue that getting the deal closed requires an appreciation for one key principle about decision makers that many of us get wrong.

It’s as simple as this: Getting the green light on a deal is more about mitigating professional risk for the decision maker than it is about accentuating the business benefits of what you are offering. In other words, addressing the downside is more important than touting the upside.

Our understanding of how organizations think and act doesn’t always make this distinction between the interests of the enterprise and its managers. For example, The Wall Street Journal might typically report something like the following: “Exxon Corporation has announced that it is moving forward with development of oil fields in Kazakhstan in order to meet the world’s demand for oil.” Fair enough: Exxon does want to find and sell more oil. But the statement also seems to imply that Exxon is a “person” that makes such decisions purely rationally in its interests. News flash: There is no Exxon-level decision maker, there are only the people running Exxon and making the decisions based on their professional interests.  Corporations don’t make decisions, people make decisions.

When you or I decide (or even a billionaire decides) to make a personal investment, the thought process is very focused on the desired return. Will I get good value for my money? In a corporate decision, however, the decision maker is playing with the house’s money, not his or her own, so the financial and/or opportunity cost is almost irrelevant. The risk that looms largest is not about losing money; it’s about losing your job or shedding prestige.

So how do you reduce professional risk for the decision maker and get your deal done? By understanding three different levels of deciders and what motivates each of them at a personal level.

CEO, President, COO (Top Dogs):  These highest order decision makers are the big picture thinkers. They care about pleasing boards and shareholders. Public perception and legacy are what is important to them. In order to reduce a Top Dog’s risk profile, think about the individuals to whom they turn for advice and validation. These include:

Advisors—Top Dogs rarely know much about the details of the deal, so they rely on their lieutenants for counsel. Getting these individuals, who attend to the Top Dog, on your side is a crucial step one. Cooperate with them, show them respect, and give them the ammunition they need to look good to the big boss.

Shareholders—External credibility and public recognition is what helps Top Dogs shine around investors and customers. If a close competitor is doing a similar deal, for example, or others in the industry are aligned with the strategy or direction, it will help Top Dogs bring shareholders on board.

Board members—In the end, this is who Top Dogs really aim to please. If the deal goes south, the questions the board will always ask is: Did you do your due diligence? Two things: First, create a story or narrative that will help Top Dog’s position the deal and feel good about public perception. Second, create a strong case that will enable them and their lieutenants to say yes to the deal. (Remember it’s not about eliminating the risk of failure, it’s about providing a strong narrative for the Top Dog so that if something goes wrong, their decision can be defended.)

CSO, CFO, CIO, IT, Ops (Practice Leaders): Typically, these decision makers run cost centers as opposed to generating revenue. Practice Leaders care about avoiding mistakes, looking smart within their domain, and maintaining internal credibility. These are the people who have been hired to make sure things don’t go wrong. In general, they tend to be the most conservative and apt to say no to deals. How do you reduce downside risk for a group so attuned to potential loss? Provide them with voluminous documentation to make sure that they have a protective paper trail behind them. Your job is to think of everything that could go wrong and create solutions to address each of those scenarios. As with Top Dogs, Practice Leaders have lieutenants with deep domain expertise. These domain experts are where you should be cultivating your champions — get them on your side and not only will they advocate for you, but they will also help insulate the Practice Leader should the deal go wrong.

Sales, Marketing, GMs, Product (Business Leaders):  These decision makers are directly involved in generating revenue and they are judged based on the numbers. One the one hand, meeting budget projections is make-or-break for Business Leaders because it impacts their compensation and upward mobility. On the other hand, they have the latitude to fly below the radar and experiment. Timing is what dealmakers need to think about when they sit across the table from Business Leaders. Most Business Leaders have P&L goals that were established in the prior year — and anything that puts those projections at risk is a tough sell. If things are going well for the business leader, then he/she may be inclined to take a risk. Sometimes Business Leaders need to do a deal in order to make their year look better, other times they are out scouting for a new venture to help them start their new fiscal year off right. As long as the decision is contained within their fiefdom, business leaders are the easiest group to convince. They are always looking for ways to break out from the pack and become the next Top Dog.

Whether you are dealing with a Top Dog, Practice Leader, or Business Leader, getting a decision maker to say yes is all about building a platform of credibility that minimizes their professional risk and allows them to feel good about the deal. It is not necessarily that the platform improves the deal’s potential for success (although that is certainly part of it), but it gives them something to point to in case things go south. Remember, for a person in a position of power, it is more about protecting them from what can go wrong than it is about what can go right.

 

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