Marina Gorbis's Blog, page 1328

Mindfulness Can Literally Change Your Brain

The business world is abuzz with mindfulness. But perhaps you haven’t heard that the hype is backed by hard science. Recent research provides strong evidence that practicing non-judgmental, present-moment awareness (a.k.a. mindfulness) changes the brain, and it does so in ways that anyone working in today’s complex business environment, and certainly every leader, should know about.

We contributed to this research in 2011 with a study on participants who completed an eight-week mindfulness program. We observed significant increases in the density of their gray matter. In the years since, other neuroscience laboratories from around the world have also investigated ways in which meditation, one key way to practice mindfulness, changes the brain. This year, a team of scientists from the University of British Columbia and the Chemnitz University of Technology were able to pool data from more than 20 studies to determine which areas of the brain are consistently affected. They identified at least eight different regions. Here we will focus on two that we believe to be of particular interest to business professionals.

The first is the anterior cingulate cortex (ACC), a structure located deep inside the forehead, behind the brain’s frontal lobe. The ACC is associated with self-regulation, meaning the ability to purposefully direct attention and behavior, suppress inappropriate knee-jerk responses, and switch strategies flexibly. People with  show impulsivity and unchecked aggression, and those with  between this and other brain regions perform poorly on tests of mental flexibility: they hold onto ineffective problem-solving strategies rather than adapting their behavior. Meditators, on the other hand, demonstrate , resisting distractions and making correct answers more often than non-meditators. They also show more activity in the ACC than non-meditators. In addition to self-regulation, the ACC is  to support optimal decision-making. Scientists point out that the ACC may be particularly important in the face of uncertain and fast-changing conditions.

(Source: Tang et al.)

(Source: Fox et al.)

The second brain region we want to highlight is the hippocampus, a region that showed increased amounts of gray matter in the brains of our 2011 mindfulness program participants. This seahorse-shaped area is buried inside the temple on each side of the brain and is part of the limbic system, a set of inner structures associated with emotion and memory. It is covered in receptors for the stress hormone cortisol, and  that it can be damaged by chronic stress, contributing to a harmful spiral in the body. Indeed, people with stress-related disorders like  and  tend to have a smaller hippocampus. All of this points to the importance of this brain area in resilience—another key skill in the current high-demand business world.

(Source: Hölzel et al.)

These findings are just the beginning of the story. Neuroscientists have also shown that practicing mindfulness affects brain areas related to perception, body awareness, pain tolerance, emotion regulation, introspection, complex thinking, and sense of self. While more research is needed to document these changes over time and to understand underlying mechanisms, the converging evidence is compelling.

Mindfulness should no longer be considered a “nice-to-have” for executives. It’s a “must-have”:  a way to keep our brains healthy, to support self-regulation and effective decision-making capabilities, and to protect ourselves from toxic stress. It can be integrated into one’s religious or spiritual life, or practiced as a form of secular mental training.  When we take a seat, take a breath, and commit to being mindful, particularly when we gather with others who are doing the same, we have the potential to be changed.

[image error]

What Marissa Mayer Got Wrong (and Right) About Stack Ranking Employees

Yahoo CEO Marissa Mayer has been criticized for implementing the practice of stack ranking, most notably in an excerpt from Nicholas Carlson’s upcoming book, Marissa Mayer and the Fight to Save Yahoo! that was published in the New York Times. Most of the criticisms of stack ranking center on the seeming arbitrary nature of the practice, which requires managers to grade their people on a bell curve, with a mandatory proportion of both 5s (excellent employees) and 1s (underperformers), regardless of the actual distribution of performance. According to critics, stack ranking produces excessive and unproductive internal competition, and discourages employees from helping their peers.

Yet stack ranking suffers even more fundamental problems. The fact is that the implicit assumptions required for stack ranking to make sense simply don’t apply in the real world.

Let’s consider a common situation in which stack ranking seems to make sense: education. College courses are often graded on a curve, a fact that draws little protest. I can recall one college physics final exam I took where the median score was 17 out of 100; “stack ranking” made a lot more sense to me than simply failing 90% of the students. Yet the context of a college course could not be more different from that of the workplace. Consider the differences:

College course:

Every student completes the same assignments and takes the same exams
The main purpose of the course is to teach and evaluate the students
Receiving one or two failing grades has few consequences; students can re-take failed classes

Workplace:

In most cases, each employee’s job is different, even if they have the same job title
The main purpose of the company is to create value
Receiving one or two “failing grades” has disastrous consequences and likely means the end of the employee’s tenure

Stack ranking employees who have very different roles, using largely subjective measures that have little to do with actual value, and making critical and irreversible decisions based on those rankings, tends to produce the negative effects cited by the critics.

Instead, managers should treat employees like allies:

Each key employee should be on a personalized tour of duty with a specific mission objective that improves both the company’s business and the employee’s career prospects.
Managers should evaluate each employee based on their progress towards and accomplishment of their mission objectives. This connects the evaluation to the actual work being done, and the actual value being created.
Managers should meet with each employee on a regular basis to discuss the progress of the tour, and to confirm that the mission objective is still relevant to the business and the employee’s career. Either party should have ample opportunity to surface any performance concerns, and to take steps to address those concerns, rather than waiting for an artificial quarterly or annual stack ranking process.

This personalized, organic approach actually helps employees reach their full potential, rather than simply attempting to weed out underperformers.

That being said, I can understand why Mayer tried stack ranking at Yahoo. The alliance framework both relies on and is designed to increase the trust between manager and employee. Companies that adopt the principles outlined in The Alliance typically follow a measured, incremental approach. As trust increases, they can broaden the scope of an alliance-based set of programs.

But Mayer was an outsider CEO, brought in to turn around a company in crisis. And one of the biggest issues afflicting Yahoo when she arrived was a broad complacency and tolerance for low performance. She needed to shrink the organization and get rid of underperformers. Stack ranking gave her a simple and scalable tool to accomplish those objectives, albeit at a cost in terms of employee satisfaction. In the case of Yahoo, the benefits of stack ranking may have outweighed its negatives, at least in the short term.

Now that Mayer has been Yahoo’s CEO for nearly two-and-a-half years and has had time to build relationships and trust with the rest of the organization, the time may be right to phase out stack ranking, and start adopting a more productive approach.

[image error]

To Make Money with Digital, Be an Innovator – Not a Strategist

For many companies considering how digital technologies could or should transform their business models, the questions they face are questions of unprecedented uncertainty, where past experience may be no help.

It’s uncomfortable terrain for many strategists. But it’s familiar territory to innovators, who’ve spent decades wrestling with the problem of how to manage uncertainty when there is little to guide them in getting their new offering to a new audience or market.

But unless your company competes on the basis of continuous innovation, like, say, Apple or Amazon, your innovators probably work separately from your strategic thinkers. That’s a shame, because the discipline of the innovation process is tailor made for addressing the wealth of unknowns that moving to a digital business model entails.

For over a decade now, we’ve been studying how the best innovators manage uncertainty, and in the course of our research we’ve seen three traps strategists fall prey to in fashioning digital business models, which they could avoid if they approached digital business modeling as an exercise in innovation.

Trap 1: Replicating What You Did Before

The greatest temptation is to replicate your current business model digitally. That’s understandable, since making your existing resources do more makes good financial sense and often makes good strategic sense, especially to strategists who have seen the wisdom of moving carefully from core to adjacencies.

But if you think of a digital business model as an innovation, rather than as an extension of your core strengths, it becomes easier to think of the shift as an opportunity to take advantage of new capabilities, rather than leverage old ones.

Innovators lower the risks of moving beyond their comfort zones by breaking down new-product development into a series of small, low-risk, low-cost experiments designed to test the assumptions behind a new offering. This same approach can be used to test out the assumptions behind a new business model  before going full bore over some cliff.

Insight Center





Making Money with Digital Business Models

Sponsored by Accenture


What successful companies are doing right

Take the shift from print newspapers to online media portals. In the early days, many publishers assumed they could set advertising rates online the same way they did in print, on the basis of the volume of readers. The prospect of lowering production costs, by not having to print and distribute paper, combined with the ease of (theoretically) reaching a larger audience online, led many to assume that the online versions of their publication would be even more profitable than the print versions. Some further assumed that first movers had the advantage online, and rushed to get big fast.

But those assumptions turned out to be famously flawed, as advertising dollars were spread far more thinly across a proliferation of sites, and publishers found they could not even replicate their print revenue streams, let alone scale up. Incentives for the sales team turned out to be radically different, as well, as large, in-person bulk ad buys gave way to a series of small, semi-automated sales transactions.

Still, the new medium represented new opportunities waiting to be explored, even for incumbents. Salt Lake City-based Deseret Media, for instance, experimented with creating a free online local classified website, in the process building capabilities in web design and user interfaces. In this way, the 165-year-old newspaper succeed in creating a site that most viewers agree is easier to navigate than Craigslist, and as a result, KSL.com is the only local newspaper classified site to beat out Craigslist in one of the 40 largest U.S. markets.

Trap 2: Build It and They Will Come

On the other side of the coin is the temptation to just jump right in and build something awesome and expect everyone to see its obvious merits, just as you do.

But bankruptcy courts are littered with seemingly clever software programs and apps that were written in the mistaken belief that customers would want them.  Successful innovators take a step back, before building, to deeply understand what problem they could really solve with the new digital offering.

Our favorite way to think of this is in terms of what Clay Christensen has famously called the “job-to-be-done.”  Essentially, this is the view that all successful products and services satisfy a functional, emotional, or social job a customer needs to do by either mitigating some pain or creating some gain, and by doing so better than other available alternatives.

It’s the “better than other alternatives” that matters most in digital business models, we’d argue. Take, for example, Instagram’s recent success. Instagram clearly allows for social connection, but so do many other online services. So what job is it doing that other sites do not do as well?  Anyone who has written a blog understands how much time it takes to craft high-quality material. Twitter, arguably reduces the pain of self-expression down to 140 characters, which for many purposes is enough to get the job done.  But with a few clicks on Instagram, users can not only send a picture (possibly worth a thousand words), but through the use of filters and simple effects easily and conveniently multiply their powers of self-expression, as well as get social validation through the feedback function.

Trap 3: Thinking the Sale is the Finish Line

Enlightened strategists have always focused not only on the point of sale but on the entire consumption chain before the sale, mapping out how customers would become aware of, evaluate, and purchase a new offering. But we’ve noticed that even enlightened leaders often miss or ignore what happens after the sale — service, support, and disposal. For digital business models, however, the “virality coefficient” — the rate at existing users recruit new users — may make how you connect to customers after a sale the key to success or failure.

For example, when Dropbox first launched as an innovative file storage, syncing, and sharing service, its executives assumed they could simply acquire customers using Google AdWords. But competitors had bid up the cost of keywords so much that it was costing Dropbox between $300 and $500 to acquire a customer who paid $100 a year in subscription fees. Recognizing that the business model was unsustainable, co-founder Drew Houston proposed another approach, one used by PayPal during the dotcom boom to acquire customers: Dropbox offered 250MB of free storage for referrals (both to the giver and recipient of the referral).  Adoption of Dropbox shot through the roof and customer acquisition costs fell to pennies on the dollar.

Connecting to customers after the sale may mean transforming a one-time sale into a recurring subscription revenue model. Alternatively, it may mean giving away part of the business for free, recognizing that both the additional referrals and data captured (which, with permission, might be resold to advertisers) may have more value in the long run than the short-run sales.

Or not. It might turn out, as the newspapers found, that giving something away for free doesn’t automatically lead to revenues from anyone else. That’s why the only way to resolve these kinds of questions is to test them out on the cheap. Fortunately, if digital business models are risky, they are easy to experiment with.

Some of our students, for example, believed there was a need for an improved collaborative project management tool (akin to Base Camp).  But was that so? To find out, they launched a website that merely described what their software would do and then offered a year’s free access to anyone who sent referrals of five other potential customers who also signed up. In four weeks, 140,000 people signed up for their no-name startup. That number rose to 300,000 soon after, exceeding the growth rate of Base Camp itself. But the important thing here isn’t that experiment worked – it’s that if it hadn’t, the students would have found out that their idea wasn’t the next Base Camp before they’d committed serious resources to it.

Every time you introduce a new value proposition to a new audience (or change some key element of your business model) you introduce uncertainty.  Introducing a digital business model often introduces uncertainties not only of degree but of kind, shifting the effort out of the realms of strategy and into the realms of innovation.  Innovators know they need to manage uncertainty differently than they manage the execution-oriented part of the business. It’s a lesson that strategists might profitably apply, too.

[image error]

How France Used Unemployment Benefits to Kickstart Entrepreneurship

France produces fewer start-ups than the average developed nation, and has historically had a higher rate of unemployment. Critics are quick to blame both on its generous welfare state. But in 2001, the nation’s policymakers were able to boost entrepreneurship, according to a recent paper. And they did it by making welfare policies even more generous.

Unemployment insurance had been a substantial deterrent to entrepreneurship in France, because individuals without jobs ceased to be eligible for it if they founded a business. So the French Ministry of Labor enacted a series of reforms which allowed founders to continue to draw unemployment benefits during the first three years of their business, subject to some restrictions, and to remain eligible for such benefits if the business subsequently failed.

The reforms appeared to have an almost immediate effect: the rate of new firms created rose by 25%. But researchers at MIT, Berkeley, and HEC Paris set out to determine whether the increase was actually caused by the policy change. They wondered whether some of the change could have had to do with the state of the economy, or whether the quality of the new businesses was lower as a result. They found that at least a large part of the increase was directly a result of the policy, and that the new businesses seemed at least as productive and sustainable as older ones. Moreover, they estimate that the change boosted the nation’s economy by €350 million per year, at a cost of only €100 million annually.

To measure all this, the researchers broke up the data (from 1999 to 2005) by industry. The idea was that it would be comparatively easier for the unemployed to start a business in an industry where small firms are already prevalent. (Starting a business in an industry made up of larger firms would require more capital than was provided by unemployment insurance.) If the increase in entrepreneurship was really caused by the reforms, it ought to be more dramatic in industries with more small firms. And that’s just what they found.

They used the same approach to measure the quality of the businesses. Start-ups founded after the reforms in industries with more small firms — the ones more likely to have been the direct result of the reforms — were just as likely to stay in business, to grow, and to hire as those in industries with more large firms. The entrepreneurs were equally as well-educated in both groups as well. Perhaps most importantly, the new firms were more productive and paid higher wages than the average incumbent.

“Our most conservative estimates suggest that about 12,000 additional firms are created every year thanks to the reform,” the authors conclude.

There is a narrow lesson here, and a broad one. The narrow one for policymakers is that welfare programs can in fact distort entrepreneurial incentives, but dismembering those programs isn’t the only or best option. This is consistent with previous research, which found that expanding government-sponsored health insurance encouraged more people to start businesses. And that leads to the broader lesson.

Because entrepreneurs inevitably take risks, we tend to think that people who aren’t comfortable with large amounts of risk wouldn’t make good entrepreneurs. The data doesn’t support that view. Research from the UK has shown that in fact, entrepreneurs are more cautious than the general population. “Higher risk-taking increases the propensity to launch a business, but does not correlate with greater start-up success,” wrote Tomas Chamorro-Premuzic, a professor at University College London, in a previous HBR article, citing a meta-analysis of several studies. “In fact, conscientious and prudent founders tend to do significantly better.” And in France’s case, the entrepreneurs who were enticed to start something once the financial risks were lessened were just as qualified and successful as those already in the game.

In that sense, this research is an argument about what entrepreneurship is and isn’t, and who’s qualified to do it. Entrepreneurs will always take some risks, particularly with their time and reputations. But starting a business is about more than that, and it shouldn’t include being forced to go broke in the process.

[image error]

You’re Never Too Experienced to Fake It Till You Learn It

Novices emulate favorite bosses and colleagues in an effort to look and talk as if they know what they are doing — even when they have no clue. It’s how they develop and grow (just as children do, first imitating their parents, then their peers). But this natural — and efficient — learning process tends to break down as people gain experience and stature. As we become more certain about what we “know” and who we are, the idea of mimicking others feels artificial, even distasteful. So we stick with what’s natural and comfortable. And that’s precisely what gets us in trouble as we hit career transitions that call for new and different ways of leading.

In my research on how experienced managers and professionals step up to bigger leadership roles, I have observed both the value and the difficulty of returning to our youthful, fake-it-till-you-learn-it strategies. The only way to pick up the “softer” skills that we need to lead with greater impact is to observe and emulate people who already have them, trying their strategies and behaviors on for size before making them our own.

Take, for example, Clara, an HR specialist who was promoted a level above her boss to become her company’s director of operations. The new assignment meant managing people who had been her superiors and overseeing functions, like finance, in which she had no expertise. “I understood in theory that a good manager should be able to manage areas without understanding the technicalities of the work,” she told me, “but in practice this made me feel like a fraud.”

At a loss for what to do, Clara decided to emulate people she saw as effective leaders. When she met with the finance manager, one of her new direct reports, Clara greeted her warmly, putting an arm around her shoulders as she’d seen her own boss do in the past.  And in her first staff meeting, she tried out the blunt and direct way of speaking that she’d frequently noticed other directors in the company using.

“I went home exhausted each day from playing the role of ‘Director of Operations,’” she said. It was depressing — even embarrassing at times. Still, she persisted, adjusting her tactics along the way. After about a year, in the course of leading a successful meeting, she realized she had grown into the role. “As I began to gain confidence in my own ability to do this job, I also began to fall into a leadership voice that felt more like my own and less like an imitation of my former bosses.”

This kind of identity stretch-work comes more naturally to some people than to others. Psychologist Mark Snyder identified the profile and psychology of “chameleons,” people who are naturally able and willing to adapt to the demands of a situation without feeling like a fake. Chameleons have core selves defined by their values and goals but have no qualms about shifting shapes in pursuit of their objectives. Then there are the “true-to-selfers,” as I call them, those who view situational demands that push them away from what they do naturally as threats to their authenticity. Their self-definitions are more all-encompassing, including not only their innermost values, but also their leadership styles, speech, dress, and demeanor.

Further Reading







HBR Guide to Office Politics

Communication Book
Karen Dillon


19.95



Add to Cart





Save
Share

A quintessential chameleon, author Michael Lewis famously describes how imitation helped him transform himself from an inexperienced trainee into a highly successful bond salesman in his best-selling book Liar’s Poker. “Thinking, as yet, was a feat beyond my reach. I had no base, no grounding,” Lewis writes. “So I listened to the master and repeated what I heard, as in kung fu. It reminded me of learning a foreign language. It all seemed strange at first. Then one day, you catch yourself thinking in the language. Suddenly words you never realized you knew are at your disposal. Finally you dream in the language.”

People gravitate more readily to chameleon strategies like Lewis’ earlier in their careers, when it is easier to accept and express ignorance. With experience and success, our habitual ways of thinking and doing become more entrenched and our work identities solidify. We value authenticity, so we continue to act in accordance with our sense of who we are — even when it becomes patently ineffective. Unfortunately, the effort we put into protecting our “true” identities can really hold us back later in our careers, when we’re trying to build on past successes to take on new and bigger roles or responsibilities as leaders.

Suppose you have become known (and been rewarded) for your ability to use rigorous analysis to figure out solutions to organizational problems. What happens when you’re suddenly expected to start selling your good ideas to diverse, skeptical stakeholders outside your area of expertise? Intellectually, you know you need to persuade and inspire, but you just can’t bring yourself to do it. So, you put more work into your facts and figures — and when your ideas repeatedly go unheard, you conclude that the organization and its key players are “political.”

A better option is to look around to identify people who are good at selling their ideas — and watch carefully what they do and how they do it. People who use this strategy concentrate their efforts first on reproducing the behavior they have observed, even if they don’t fully understand it. Then with practice, like Lewis, they try “to get inside the brain of another person.” In their minds, they’re not being inauthentic — they’re simply evolving so they can get the job done. After a while, they find they have acted their way into a new way of thinking. They haven’t just developed their persuasion skills; they now value a different way of working and see themselves as the kind of people who are good at getting others on board.

By definition, transformative learning starts with unnatural and often superficial behaviors. When we are working at improving our game, a clear and firm sense of self is a compass. It helps us navigate choices and work toward our goals. But when we are looking to change our game, a rigid understanding of authenticity is an anchor that keeps us from sailing forth. By viewing ourselves as works in progress, we multiply our capacity to learn, avoid being pigeonholed, and ultimately become better leaders. We’re never too experienced to fake it till we learn it.

[image error]

Corporate Empathy Is Not an Oxymoron

In a transparent world dominated by social media, corporations are feeling the need to become truly responsive to the needs of their customers and employees. The corporate world is an increasingly immediate, intimate, and interactive space. The call for companies to engage in authentic dialogue is becoming louder. And yet this desire to change is hampered by the fear of appearing weak and vulnerable, meaning that most businesses still suffer from an empathy deficit. As the CEO of a British bank confided at last year’s World Economic Forum, “We all know it’s important to be empathic, but how do I galvanize 48,000 people in my UK operations — most of whom think that empathy is for wimps?”

Enlightened companies are increasingly aware that delivering empathy for their customers, employees, and the public is a powerful tool for improving profits, but attempts to implement empathy programs are frequently hamstrung by the common misconception of it as “wishy-washy,” “touchy-feely,” and overtly feminine. So empathy is de-prioritized, and relegated to the status of just yet another HR initiative that looks good in the company newsletter. It is seen as a soft and frilly add-on rather than a core tool.

An additional problem facing CEOs is that many see empathy as an intangible quality, and as such hard to quantify. If you can’t measure empathy then it is very difficult to assess how much empathy your company is delivering, and where the greatest empathy deficits lie.

This is a misconception. Empathy can be measured, and your business’s empathy quotient can be assessed, allowing CEOs to pinpoint their companies’ strengths and weaknesses, and see how they rank alongside their competitors. Empathy should be embedded into the entire organization: There is nothing soft about it. It is a hard skill that should be required from the board-room to the shop floor. Corporations must demonstrate empathy across three channels: internally, to their own employees, externally, to their customers, and finally to the public via social media.

We define empathy by three components: customer, employee and social media. The combination of these, with equal weighting, across the three channels–internal (employees), external (customers), and social–gives us a company’s “empathy quotient.” We then applied our thinking to the 100 best-known companies in the UK, where we’re based.

Which, then, are the most empathic and least empathic household names? And what does this tell us about the way the corporate world is dealing with its empathy deficit?

While confirming many of our expectations, the results revealed a number of interesting surprises. The top places were not all taken up by trendy tech brands, and the bottom was not dominated by multinational banks. The sector that fared worse was the telecoms, with Vodafone and BT scoring particularly badly. Employee and customer satisfaction are the casualties of the race for short-term profits that is endemic in that sector. Their social media strategies tell one part of the story: they are over-reliant on unhelpful canned responses which merely shunt customers to more traditional forms of contact, such as call-centers.

The highest performing company was LinkedIn. It was striking that LinkedIn actually has a strong presence on the rival platform Twitter. One might expect them to force customers exclusively onto to their own channels of communication—which is the policy of both Twitter and Facebook. Instead, the company makes an effort to go where their customers are, even at the risk of being seen to endorse a rival product. This approach shows that LinkedIn empathizes with its customers’ interests and choices.

Other surprises included Twitter, which flails in a mediocre mid-table spot—with its primary empathy failure being its inability to engage with its own customers on its own platform. Few would have been surprised to see the airline Ryanair down at 99th. The only shock there was that the technology retailer, Carphone Warehouse, did even worse.

We expected the small and medium-sized companies to come out on top, guessing that larger companies would be the least empathic. But large companies were evenly distributed and well represented at both ends of the scale. There is absolutely no evidence that being big automatically makes you un-empathic. Empathy is most definitely not a problem of scale, but more an indication of management priorities.

Very few companies are good all-round empathizers. Even LinkedIn underperformed on our customer interaction score. The index highlights that each of the hundred companies had room for improvement. Two particular findings deserve emphasis: Customers are unforgiving of poor service and inauthentic communications (got that, telecoms?). And companies that see empathy as a single-dimension issue of employee relations will fail to realize the broader benefits of becoming more empathic across the other two channels.

Methodology

The Lady Geek “Empathy Quotient” is inspired by Simon Baron Cohen’s “Empathizer” and ‘”Systemizer” model. We built our model to measure levels of empathy in large consumer-facing companies with a significant presence in the UK. The Empathy Quotient combines three data streams to generate each individual company ranking. Each source summarizes one important aspect of empathy: customer, employee, and social media. All data sources are given the same weight when constructing the overall score and final quotient.

The employee and customer perspectives are sourced from nationally statistically representative samples in the UK and from publicly available data. The social media data is extracted from public communications made by the company. Our algorithm classifies empathic and unempathic interactions on Twitter.

Prior to combining these measures they are first standardized to address any inherent differences in the way that the data was collected and recorded. The standardized measures are combined and finally ranked.

Our data partners include Glassdoor and Survation. All surveys were conducted online. The sample size was over 1,000 nationally representative customers, each employee review was based on at least 25 employee reviews. The social media data was extracted from 10,000 tweets over a 2 week period.

This index can be really useful in locating the strengths and weaknesses  of individual companies and using them as a basis of comparison. The management at Mercedes, for example, should be asking itself why it comes in at a relatively modest 35th, while Audi’s results put it in third place, and consider an expansion of its investment in social media which is where Mercedes is underperforming.

The good news is that the empathy deficit can be reduced. Empathy can be learned and companies can improve. With prioritization and commitment, companies can measure where they are and chart a path to becoming more empathic. Enlightened leadership can create a more empathic culture. Rene Schuster, former CEO of Telefonica Germany, puts it this way: “Empathy is not a soft nurturing value but a hard commercial tool that every business needs as part of their DNA. Our aim is to make every interaction our customers have with us an individual one.” Schuster implemented a Germany-wide empathy training program that led to an increase in customer satisfaction of 6% within 6 weeks. Even companies within the worst performing sector in our Index can show rapid improvements given focused management attention.

Empathy pays, and it pays best when it comes from the top.

[image error]

Knowing When to Fire Someone

George is the most talented, productive executive Roy ever had to fire.

George had pulled off a string of celebrated victories and won a reputation as a strong performer. Having been hired to lead his hospital’s compliance program as regulations grew increasingly complex, he had put the policies and procedures into order, achieving a goal that had eluded the organization for years.

Roy was grateful that this burden had been lifted off his shoulders. In fact, he was so smitten that he didn’t notice what else was going on — that George (and for the record, this is a composite case) had alienated colleagues and failed to create the sense of urgency needed to persuade employees to complete the required training. George’s excellent work was of little value if it wasn’t fully implemented throughout the organization.

As other team members started to complain, Roy made repeated attempts to coach George to improve his interpersonal and communication skills, but George rebuffed him.

It took Roy a while to see the corrosive impact of George’s more subtle deficiencies and to make up his mind about what to do. Roy was well aware of the cost and disruption of a termination. He spent so long weighing the issues that he nearly caused irreparable damage to his team’s collegiality, reputation, and performance.

Roy eventually realized that keeping difficult people around can undermine what should be a leader’s number one objective: maintaining a positive and productive work environment. If Roy had used a tool such as a simple worksheet to help him evaluate the costs and benefits of keeping George on board, he might have determined that George’s impact on the team’s productivity and esprit de corps outweighed the value of his contribution much sooner, to everyone’s benefit.

In The No Asshole Rule, Robert Sutton makes a case for banning jerks from the workplace because of the devastation they can inflict on coworkers’ emotional well-being and work quality. But skillful individuals don’t have to be full-blown tyrants to wear out their welcome.

Working with people who refuse to accept criticism is one of the thorniest management issues a leader can encounter. What may start out as a modest deficiency — one that could be easily addressed with performance coaching — can shift to an insurmountable management challenge when the employee resists feedback. The original performance issue soon becomes compounded by dysfunction in the manager-employee relationship, making the situation much more difficult to assess.

Because terminating someone is such an important and complicated strategic decision, it helps to have an objective way to measure the impact of a difficult employee, including a dispassionate evaluation of the disruption caused by turnover. Using the worksheet to quantify the factors in a termination decision can help you evaluate the costs and benefits of individuals’ performance, their impact on team dynamics, and bottom-line results. You can list such factors as the employee’s likelihood of improvement, the drain on your energy, and the cost of replacement. The tipping point comes when the cost of keeping an employee is greater than the disruption of letting him or her go. Such a tool could have helped Roy make the decision about George a lot sooner.

Or consider Jeff, a human-resources executive in a large global company (another real, but disguised, case): One of his managers, Karen, had a very strong skill set and brought passion and deeply relevant experience to her role. She performed well initially, but as the demands of her job grew, she lost focus and had increasing difficulty completing complex projects.

Unable to manage her time well, Karen became a demotivating influence on her team members, failing to keep them informed. For close to a year, Jeff tried to help Karen get back on track. Despite being an HR expert and well acquainted with best practices in delivering feedback, he was unable to overcome her defenses and motivate her to work on her deficits. Worse, these conversations generally left her moody and unpleasant to be around.

Karen wasn’t a jerk at all. She was well-liked, but she was so defensive when getting feedback that she couldn’t work on addressing the problems. Over time, Jeff found himself doing more and more of Karen’s job himself. He continued to compensate for her gaps for way too long because the cost and disruption of making a change were so great.

However, Karen’s teammates grew resentful as her deficiencies began to affect the group’s ability to deliver. Jeff knew it was his obligation to minimize obstacles in the way of the team’s performance, particularly as the team was expected to produce more results with fewer resources. Equally important, Jeff felt drained by confronting Karen’s crankiness, especially when his effort had little chance of producing positive results.

Clearly, doing his subordinates’ work was not the best use of Jeff’s time, and facing Karen’s moods was not the best use of his energy.

So in spite of her skills, experience, and institutional knowledge, and notwithstanding the disruption that a vacancy would cause, Jeff fired Karen. Eventually, Jeff’s decision was fully validated by the significant positive impact of Karen’s successor. Jeff’s only regret was that he had squandered so much time avoiding making the decision.

Leaders are responsible for managing the resources under their control. In most cases, the single greatest resource they manage is people, with compensation and benefits consuming as much as 80% of operating budgets. To sustain energy and engagement, and to retain the best talent, leaders must endeavor to make work life as manageable and as palatable as possible for themselves and their teams. Coming to grips with the need to fire a colleague, particularly when you’ve invested so much of your own effort to remediate his or her weaknesses, is one of the toughest management decisions you’ll ever have to make.

[image error]

The Type of Innovation That Builds Nations

Innovation drives economic growth.

This logic has risen to dominate the discourse in development circles, with government leaders, policy influencers, and development-minded business leaders fully embracing innovation as a panacea for unemployment and economic underperformance. Looking back on 2014, it is not difficult to see this globalization of the innovation mindset at work. India’s Narendra Modi recently called for a revival in Indian manufacturing and greater innovation to stimulate growth. Nigerian businessman Tony Elumelu recently launched a $100M Pan-African entrepreneurship grant program to unlock Africa’s economic potential. Start-up accelerators are almost as likely to be found in emerging nations as in Silicon Valley. Meanwhile, NGOs are increasingly emphasizing the role of innovation in their work.

But does greater innovation equal sustained macroeconomic growth and prosperity, all the time or even most of the time?

This question requires urgent clarification and may well be the difference between the developing nations that replicate the blistering success of China and the East Asian tigers, and those that crumble under the weight of their demographic booms.

There is reason to believe that while innovation can be pivotal to macroeconomic prosperity, not all kinds of innovation are created equal. But correlating innovation in itself with macroeconomic growth is misleading, as my co-authors and I discuss at length in a recent piece in Foreign Affairs. To understand how innovation truly interacts with prosperity, we should first distinguish between different kinds of investments in innovation. In simple terms, there are three types: sustaining, efficiency, and market-creating investments (see more in the HBR article “The Capitalist’s Dilemma”).

Of these, sustaining innovations (which replace old products with new and better ones) and efficiency innovations (which allow companies to make and sell established products for less) help companies serve their existing customers better, but do not address the needs of the majority of the population.

Market-creating innovations, conversely, are primarily focused at making products and services accessible to non-consumers or those who are under-served. For example, India’s Narayana Health and Kenya’s M-PESA transformed how healthcare and financial services were made accessible to non-consumers. Both introduced new business models that provided a “good-enough” solution for non-consumers, instead of going after customers that were already well-served. As they scaled their new business models, new value networks were created with net new jobs and economic uplift.

Market-creating innovations offer rapid growth and job creation, and by definition impact a larger swath of the population. Not only do they build new domestic value networks from scratch, but, when executed successfully, some market-creating innovations can be disruptive in foreign markets. The defensible cost models they develop and their knack for going after non-consumption often blindsides global competitors. This allows tiny economies to punch above their weight and build globally relevant companies.

Because companies and entrepreneurs are the vehicles for innovation, leaders in developing nations are right in reviewing how policy and other factors drive innovation. However, our research calls for a more intelligent approach towards the promotion of innovation. Rather than seeking innovation for its own sake, there needs to be a clear priority for the right kind of innovation.

Market-creating innovations are almost always harder to execute – in pursuing non-consumers, they are more often bound to the myriad infrastructural and social challenges that most developing nations face. They do not come together automatically; executing them consistently and successfully requires unparalleled collaboration between policymakers, investors, entrepreneurs and other stakeholders – but the rewards are more than worth it.

[image error]

When a Public Mistake Requires an Old-Fashioned Apology

Everyone makes mistakes. We make bad decisions and insensitive statements, we speak before we think, and we let our emotions get the best of us. But since we hold very senior executives to a higher standard, when they mess up, it often becomes a public spectacle.

Consider the case of AOL CEO Tim Armstrong. On August 9, 2013 — a time of disappointing quarterly results — he held an all-hands conference call with 1,000 Patch (AOL’s hyper-local news division) employees. During the meeting, which was called to announce layoffs and site closings, Armstrong publicly fired Patch’s creative director for apparently recording the meeting. This “brutal” firing created a firestorm of negative publicity both for AOL and for Armstrong. Several days later, Armstrong issued an apology to all AOL employees, in which he admitted that he had “acted too quickly … [and] learned a tremendous lesson … .”

Six months later, Armstrong was forced to apologize for another incident. In announcing his plan to delay retirement contributions, he mentioned the high cost of health care benefits and cited two individual cases in which the company paid $1 million dollars to care for “distressed babies.” Not only were his remarks callous, they also violated the privacy of the employees involved. After another round of disastrous publicity, Armstrong again issued a statement saying, “I made a mistake and I apologize for my comments.” He also reversed his decision to delay retirement contributions.

Of course, Armstrong is not the first, last, or only senior executive who has made troublesome public remarks. Tony Hayward, the former CEO of British Petroleum, famously complained that he “wanted his life back” in the midst of the 2010 oil spill. (He later apologized to the families of the workers who had died in the tragedy, as well as the thousands of people whose lives were totally disrupted.) Former Harvard President and Treasury Secretary Lawrence Summers had to apologize in 2005 for his contention that “innate differences” between men and women accounted for the under-representation of women in the sciences. Senior advertising executive Justine Sacco was fired for posting an insensitive and racist tweet about AIDS in Africa. And more recently, Microsoft CEO Satya Nadella apologized for suggesting that women should not speak up about pay inequities.

Further Reading







HBR Guide to Office Politics

Communication Book
Karen Dillon


19.95



Add to Cart





Save
Share

None of these executives intentionally tried to inflame their employees, their customers, or the public. But no workplace is perfect. Managers berate subordinates in meetings. Colleagues make snide remarks about each other. People send emails, texts, or tweets without giving sufficient consideration to how the messages will be received or whether they are sending them to the right people.

The question then becomes how to recover from one of these moments. A written and public apology is a good first step, particularly if you’ve offended thousands of people, but it’s not enough. The next step is to proactively seek out the few people who have been most affected and talk to them privately. Public apologies are impersonal. People who have been hurt need something more human. They want a genuine, direct apology.

Armstrong, for example, reached out to the AOL employees who were inappropriately singled out for the high cost of treating their newborn babies. As one of them later reported, “I really feel like he spoke to me … not in his public role as CEO … but in a heartfelt way as a father of three kids to a fellow parent … I appreciated it and I do forgive him.” Similarly, after one of my clients publicly humiliated a subordinate during a staff meeting, he sent an apology to all of his staff then also met one-on-one with the person involved.

The third step in the recovery process is to find out whether the poor behavior was a one-time slip, or part of a recurring pattern. Occasional mistakes can be forgiven, but if the same behavior occurs a number of times, an apology will ring hollow. If you really want to make amends and repair your reputation and authority after a public mistake, work with a coach, counselor, or trusted friend to assess problematic situations and figure out what triggers them.

Hopefully, AOL’s Armstrong has figured out if there were any underlying catalysts to his insensitive remarks. My client realized that his high performance standards caused him to behave irrationally when there was a shortfall in results — he’d take out his anger on whoever had responsibility for that area. Once he began to understand this pattern, he was better able to step back and calm down before discussing the issues. This prevented embarrassing moments and also created a better environment in which to solve problems.

The real key to moving forward is to accept that you’re not perfect, and that future mistakes are probably inevitable. Without this mindset, executives can easily convince themselves that they were actually “misunderstood” or there was poor communication — that it wasn’t really their fault. But without taking true accountability, executives won’t learn from their mistakes, and the next public gaffe isn’t far away. When executives do admit their flaws, they’re better able to fix their mistakes and reclaim respect.

[image error]

How and Why We Lie at Work

Although every society condemns lying, it is still a common feature of everyday life. Research suggests that Americans average almost two lies per day, though there is huge variability between people. In fact, the distribution of lies follows Pareto’s principle: 20% of people tell 80% of the lies, and 80% of people account for the remaining 20% of lies.

So how do you deal with a coworker you suspect of lying? It depends on the type of lie, and the type of liar, you’re dealing with.

Frequent liars have two salient characteristics. First, they are morally feeble, so they don’t see lying as unethical. Second, whereas most people lie when they are under pressure (e.g., anxious, afraid, or concerned), recurrent liars do it even when they are feeling good or in control of things – because they get a kick out of it. For these reasons, studies have found that frequent liars are more likely to admit to lying. If there’s nothing wrong with it, why hide it?

If you’re dealing with a frequent liar, he or she probably has strong social skills and a fair amount of brains. For example, neuropsychological evidence suggests that lying requires higher working memory capacity, which is strongly related to IQ. As Swift said, “he who tells a lie is not sensible how great a task he undertakes; for in order to uphold one lie he must invent twenty others.” Accordingly, effective lying also requires a vivid imagination, particularly when it comes to producing excuses and bending the truth; studies have indicated that creative people and original thinkers can be more dishonest. As Francesca Gino and Dan Ariely have noted in their research, “a creative personality and a creative mindset promote individuals’ ability to justify their behavior, which, in turn, leads to unethical behavior.”

In addition, effective liars tend to have higher levels of emotional intelligence, which lets them manipulate emotional signs in communication, monitor their audience’s reactions, and avoid something called non-verbal leakage – when our body language doesn’t match what we’re saying.

The key point with frequent liars is not to pinpoint whether they are telling the truth, but whether we can predict what they are likely to do. I may say “I enjoy working with you,” and I could be lying. However, so long as I keep pretending that I like working with you when we work together, then who cares about how I really feel about you? When lies are based on objective facts – “I graduated from Stanford” or “I will finish this project by Monday” – then they are self-defeating, because they damage the reputation of the liars when they are found out; so while it can be tempting to feel responsibility to punish the liar, recognize that simply exposing the lie may have the same effect.

Systematic liars are therefore as problematic as people who are systematically late: all you need to do is work out their typical patterns of behavior and plan around them. Unless you want them to stop lying to you, in which case you can gently expose their deceptions to show them you are not as stupid as they think.

Further Reading







HBR Guide to Office Politics

Communication Book
Karen Dillon


19.95



Add to Cart





Save
Share

An infrequent liar has a different psychological makeup. Many of their lies are the product of insecurity. These are lies motivated by fear, and they provide temporary psychological protection to the liar’s ego. For a trivial example, when asked whether you know someone important or have read a popular book, you may instinctively answer “yes” in order to avoid rejection. But this in turn actually increases your insecurity – what if you’re found out? – which will increase your probability of continuing to lie in the future.

Such insecurity-driven lies are often an attempt to gain status – exaggerating an achievement or claiming undue credit for a project. Status-enhancing lies are also often used to establish or maintain close bonds with others, for instance by making empty promises (offering help you can’t follow through on) or framing oneself as an insider rather than an outsider (saying bad things about Joe even if you don’t mean them, just to get along with Jane.)

The best way to deal with insecure liars is to make them feel accepted. Insecure liars are extremely self-critical, so it takes time and effort to compensate for their neurotic perfectionism and make them feel appreciated. Show them that you value them for who they are, rather than who they would like to be.

Whether you are dealing with a frequent liar or an insecure liar, there are a couple of important caveats. First, remember that while most of us perceive lying as a deliberate attempt to misrepresent the truth, as Nietzsche noted, “the most common lie is that which one lies to himself; lying to others is relatively an exception.” Both pathological liars and insecure liars are capable of self-deception. A great deal of psychological research suggests that people will generally act “dishonestly enough to profit, but honestly enough to delude themselves of their integrity.” Furthermore, it is quite plausible that the evolutionary basis of self-deception was to enhance our ability to deceive others, since it is much harder to persuade others of anything when we have not been able to persuade ourselves. To paraphrase George Orwell, “if you want to keep a secret you must also hide it from yourself.” And when someone is capable of distorting reality in their favor, they are not technically lying, just incapable of – or unwilling to – see the truth.

The key decision, in such situations, is whether we should help the individual see things in a different way. Truth can be taxing from a psychological point of view, when it inflicts a wound to the person’s ego. As Diderot pointed out: “We swallow greedily any lie that flatters us, but we sip only little by little at a truth we find bitter.” Before you accuse a colleague of lying, ask yourself whether he’s actually deliberately misleading others – or just sincere in a mistaken belief.

The second big caveat: not all lies are immoral. In fact, lies may be pro-social – “Mm, this is delicious!” or “Your new boyfriend seems nice,” or “That looks great on you.”  Lies can even be ethical, such as when Nazis knock on the door and ask about the Jews hiding in the attic. This is why adults teach children to appreciate white lies and to develop a healthy degree of dishonesty, and why many people become “too honest” after they’ve had a couple of drinks. Indeed, successful interpersonal functioning often requires the ability to mask one’s inner feelings. Total honesty can take the form of amoral selfishness. Self-control is a moral muscle that not may inhibit not just dishonesty, but also honesty, when the goal is to behave in socially desirable or altruistic ways.

It is easy to get upset when someone lies to us, but there are many shades of dishonesty, and many motivations to lie. There are also many ways to react to a lie. Yes, you may feel insulted at being the target of deception, but reacting emotionally or confrontationally can backfire. A better approach is to politely demonstrate to the liar that they have failed to deceive you. Or just pretend to have fallen for it, which effectively means to deceive them back.

[image error]