Marina Gorbis's Blog, page 1335

The Underlying Psychology of Office Politics

All organizations are political – and to some degree, they always will be. The underlying reasons are psychological. First, work involves dealing with people. That means finding a compromise between what they want and what we want; and it’s often a zero-sum game. Second, humans are emotional creatures, biased by unconscious needs and riddled with insecurities. As the great Dale Carnegie, who probably knew more about the art of politics than anyone else, once observed: “When dealing with people, remember you are not dealing with creatures of logic but creatures of emotions.”

As a result, office politics tend to eclipse formal organizational roles and hijack critical organizational processes, making simple tasks complex and tedious, and organizations ineffective; wearing people out and accounting for a significant portion of work-related stress and burnout. Indeed, we all know people who have perished for their inability to navigate office politics in spite of being talented, hard-working and having the best of intentions. In that sense, one may regard politics as an inevitable force of nature to which we must adapt in order to survive.

This Darwinian take on office politics was first highlighted by the psychologist Robert Hogan, who observed that the universal dynamics underlying workplace relationships boil down to three basic evolutionary needs or “master motives.” First, the need to get along, which promotes cooperation and makes us group-living animals. Work, the modern equivalent of a hunting tribe, provides a major context for affiliation and bonding. Second, the need to get ahead, which results from the power struggle within groups. Some individuals are more willing and able to be in charge of a group, but their power will sooner or later be challenged by other group members, resulting in internal competition and friction. Furthermore, tensions are also created by the desire of group members to be accepted and loved by the leader, resulting in group members fighting to climb up the group hierarchy. Finally, groups – and, especially, large groups like organizations – provide individuals with a formal system for finding meaning. That is, an ecosystem of knowledge which works as a lens through which we see the world. Given how much time people spend at work – no less than a third of their adult life – organizations are essential to fulfill this third evolutionary need, that is, the quest for meaning.

Sigmund Freud noted that although humans are social animals, living with others does not come easy. He compared people to a group of hedgehogs during the winter: they need to get close to each other to cope with the cold, but if they get too close they end up stinging each other with their prickly spines. This very rule governs the dynamic of office politics. You can’t go it alone, but working with others does require some discomfort.

So does this mean that office politics are inevitable – that if we can’t beat politics, we might as well promote them?

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Not exactly. It’s important to recognize that untrammeled politics have a corrosive impact on the organization. This can be hard for leaders to realize: because most organizations promote individuals who are politically savvy, managers and senior executives tend to perpetuate rather than inhibit office politics. If you are rewarded for playing the game, you surely have no incentive to stop playing. But to most employees, politics signal a discrepancy between what should be done and what is really done, defeating their own sacrifices and efforts. This leaves most employees demoralized and united only against their bosses or senior leadership… not a good position for a company to be in.

Conversely, in less toxic companies, leaders manage the tensions within groups to enhance team performance and, in turn, organizational effectiveness. To do this, the best managers recognize the psychological underpinnings of office politics and do two things in response: they manage the way they themselves behave, and they are careful about how they motivate others. People who are perceived as apolitical display high levels of congruence between what they say and what they do, and they are also good at rewarding others for what they were required to do, while holding them accountable for what they fail to deliver.

As such, good leaders focus on the bright-side personality characteristics associated with their ability to navigate office politics: social skills, emotional intelligence, and intuition. They recognize that the more secretive, selfish, hypocritical, hierarchical, and incompetent they appear in the eyes of employees, the more political the organization will become. So they are driven to come across as competent, transparent, approachable and altruistic.

And in motivating their employees to try harder, they avoid pitting employees against one another and instead focus on out-performing common adversaries: the company’s competitors. They do this through articulating a meaningful mission — a vision that resonates and motivates people to achieve a collective goal. This keeps the team focused on beating their competitors, rather than each other.

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The World’s Housing Crisis Doesn’t Need a Revolutionary Solution

From Lagos to London, people are stuck in inadequate homes or pay so much of their incomes for housing that they forego other necessities. Lack of access to decent affordable housing is an issue in rich and poor economies. Even in rich countries, low-income families in inadequate housing have higher levels of unemployment and their children are more likely to do poorly in school and quit sooner than other students. High housing costs squeeze middle-income families, and in the costliest cities, even households earning far more than the median income can be financially stretched by rent of mortgage payments, limiting the growth of the local economy.

For decades, policy makers and private-sector leaders have tried to solve the affordable housing problem, yet it has only grown more severe and is on track to expand dramatically as urbanization plays out in developing economies. Today, about 330 million households worldwide are stuck in slums or inadequate housing or are paying too much of their incomes for housing; by 2025, this number could rise to 440 million households and about 1.6 billion people — or one-third of the entire urban population. Simply to replace or refurbish the world’s substandard housing and build the homes needed to accommodate new low-income urban households by 2025 could cost $9 trillion to $11 trillion, not including land, which could raise the cost to $16 trillion.

However, we believe that there is a plausible alternative, because there are clear solutions that — under proper management — can narrow the affordable housing gap substantially by 2025. In our research, we identify four “levers” to manage affordable ho

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Overcome Your Biases and Build a Great Team

I had an unlikely journey to the top. Born in India, I arrived in the U.S. in January 1968 as a young 22-year old with $8 in his pocket and an undergraduate degree in mechanical engineering from IIT Bombay. Thirty-one years later, I became Chairman and CEO of a global Fortune 300 company. How did this happen? I was fortunate, to be sure. But there is a deeper lesson to my story that I hope will help others build exceptional, and exceptionally diverse, teams. Ironically, my story is a story of overcoming my own biases about diversity—and then using these hard-won insights to build one of the most diverse leadership teams and board of directors in the world.

During my tenure (1999-2009) as Chairman and CEO of speciality materials company Rohm and Haas, we had one of the most diverse leadership teams in our industry—and perhaps in corporate America—with the top 50 composed of more than a mere sprinkling of men and women from all parts of the world and in every skin color—white, yellow, brown, and black. On the board, we had two accomplished women (Dr. Marna Whitington and Dr. Sandra Moose), one African American (Rick Mills), one Latino (Jorge Montoya), one European (Dr. Ronaldo Schmitz), one Asian (myself) and one Canadian (Dr. John McArthur). The leading executive recruitment firm Egon Zender, as part of talent evaluation at the time of Dow Chemical’s merger with Rohm and Haas in the Spring of 2009, described us as the “best CEO university” they had ever seen.

But Rohm and Haas wasn’t always like that. When I left my post in Philadelphia to move to London in the Spring 1979 to work as finance director of our troubled UK subsidiary, I was told, “Raj, you don’t know what it’s like,” by Germans, Italians, French, and other European colleagues of mine who assumed that no one other than white American men and possibly white English men (because they spoke the language and made eloquent presentations) had an opportunity to advance to the top rungs of the company. And in the years since then, I have faced the same statement from women and minorities (African-Americans, Latinos, and Asians) as well as by my two adult daughters (one a medical doctor and the other a civil rights lawyer and both successful in their own way).

Over time I have reflected on my own journey as well as that of my company in terms of diversity, and this is what I have concluded in terms of what works and what does not work and, more importantly, why diversity is more than a moral imperative —it is a business imperative based on increasing evidence that companies with diverse boards and leaders outperform their peers over time:

Your organization must strongly believe that diversity is critical for long-term success. In order for a company to access the best possible talent they must access the broadest possible talent pool. To achieve this, they must retain and promote solely based on performance and potential of the individual, irrespective of country of origin, color of skin, gender, or sexual orientation.

Understand that it takes two to tango and mere tokenism does not work. Companies must assure an even playing field for every employee to realize their potential and contribute towards the success of the organization. This requires total transparency in the way individuals are assessed, developed, and promoted. Mere words and policies are not sufficient. Tangible evidence is required. In the case of Rohm and Haas this process began in earnest in 1985 with the appointment of a Greek national, Dr. Basil Vassilou, to head our operations in Europe; followed by a Cuban, Henri Martinez, heading our Latin American operations starting in 1988; an Indian American (myself) heading up Asia Pacific operations in 1993. We really accelerated our efforts by sending a woman, Dr. Nance Dicciani, to head our European operations in 1999 (first in the senior ranks in our industry to hold such a senior position); a Venezuelan (Rueben Salazar) and Korean (YiHyon Paik) to head our operations in Japan; an African-American (Charles Hill) as CFO of our subsidiary in Japan; and the list goes on and on. This gave a clear message to the organization that the only consideration to advance in the company was performance and potential of the individuals and their deep commitment to the core values of the company.

Significant responsibility lies with the individuals as well—and this lesson took time and effort for me to learn. Individuals must believe that the playing field is even, and that if they work hard and smart and deliver on their commitments there is no limit as to how far they will advance. They have to be prepared to accept honest feedback on their development needs. There is no place for doubts and cynicism. In my case, I had to slay my own demons over time: extreme deference to authority, super-careful reticence in expressing my views, the belief that only white or American men will get top positions. It took time and both internal and external intervention. Within the company, I was fortunate to have a few outstanding mentors including CFO Fred Shaffer, who recruited me in 1971, two successive CEOs Vince Gregory and Larry Wilson, and head of European Operations, Dr. Basil Vassiliou. They pushed me hard and almost demanded that I put my self-imposed limitations behind me otherwise it would be a loss to the company and to me. External intervention came from a leading psychologist and executive coach, Dr. Karol M. Wasylyshyn, starting in 1987. To be honest, I was very apprehensive to start with, but became an avid believer in the value of external intervention. In fact, Karol provided intervention and coaching for a period of nearly 25 years from 1986-2009 to many of my colleagues with great impact.

Expand the traditional notion of mentoring. The notion that the best mentoring comes from successful individuals who are similar to you— a woman mentoring a woman, an Asian mentoring an Asian— is a flawed assumption. The best mentoring comes from successful individuals who are perceived as mainstream in the organization. For example, a successful white male in a U.S. or a European company, a top Korean manager in a Korean company—they can assist a person of diverse background help gain insight into the culture of the organization and serve as a wise counsel.

Recognize that a diverse leadership team delivers superior long-term performance. There is now increasing evidence supporting this assertion. Diverse teams have deeper dialogue, they consider a fuller range of options, and they avoid the pitfalls of myopic thinking. I can strongly support this based on my own experiences. The diverse board of Rohm and Haas was instrumental in asking the right questions when the Haas family and trusts made their desire to divest company ownership. They insisted that we look at broader stakeholder implications, retain the best advisors early, take sufficient time to explore all options, and negotiate a sale contract that would be enforced under all conditions. Over the course of our 15-year diversity journey, our company performance far exceeded the S&P 500 as measured by Total Shareholder Return (TSR)—our 15-year return ending March 31, 2009 was 13% compared their 6%; our 10 year return was 12% compared to their -3% ; and our 5-year return of 18% was off the charts compared with the S&P’s -5%. What is even more gratifying is that Rohm and Haas executives who chose to leave after the merger with Dow have reached the highest levels at many companies around the world.

Commitment to diversity is a journey and it takes time. Results are not achieved instantaneously but require ongoing efforts including making a few bold decisions along the way. The business environment has evolved enormously in the last decade with globalization, technology changes, and the emergence of leading companies from around the globe—amplifying the need for more diverse teams. This means that you have to recruit, retain, and promote the best talent, understand diverse needs of the customers, and better understand the competitive environment. I have absolutely no doubt that the future will be ever brighter for organizations that truly have diverse leaders at all levels.

At an event marking my 25th anniversary with Rohm and Haas, I made the following observation to my colleagues: “You have made me feel at home anywhere, when I started out feeling out of place everywhere.” This is the ultimate statement of having achieved a truly diverse culture.

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Making Business School Research More Relevant

In a landmark 2005 Harvard Business Review article, USC business professors Warren Bennis and James O’Toole argued that the skills imparted by most business schools were not relevant to students and their eventual employers. The authors blamed business schools’ scientifically rigorous research into arcane areas – studies whose theories didn’t have to be proved to work in the real world, only to the academic journals in which they hoped to get published (and, they maintained, on which tenure depended). Do management professors “believe that the regard of their peers is more important than studying what really matters to executives who can put their ideas into practice?” Bennis and O’Toole wrote. “Apparently so.”

Nearly 10 years after the article was published, we believe this problem is even more acute, and that as such business schools need to get serious about making research more relevant to business. The best way do that is to emulate the world of medical research: conduct research and then put it into practice with real companies.

The rise of rigorous research in business schools has fostered an unfortunate paradox: business schools have become increasingly disconnected from practice. The reason is that business school faculty are almost exclusively rewarded on two metrics. First, they are rewarded for the number of scientific papers that they write that are published in prestigious journals that are exclusively controlled by, and read by, other academics. Second, they are rewarded by their citation count—the number of times their articles are cited by articles from other professors.

These incentives play a powerful role in how business schools are ranked. In fact, professors are often terminated during tenure evaluation if they do not perform well on these two dimensions. These incentives mean business professors spend most of their time searching for research topics they think will interest other business professors, conducting that research, and attending academic conferences to promote their work to other professors and increase citation counts. Professors who attend industry conferences or immerse themselves in the practice of business decrease the chances of performing well on publication and cite counts.

The result of this scholarly activity is a closed system. Business faculty create a body of knowledge that is scientifically novel, interesting, and important. But far too often, the research doesn’t address the real problems of entrepreneurs, managers, investors, marketers, and business leaders.

While many business professors view putting research into practice as incompatible with modern research universities, they only need to look across their campuses to academic medical centers to see that this view is outdated. Medical schools understand that patients are not well served by research driven solely by biologists, chemists, psychologists, and other research faculty who never treat patients.

Academic medical centers integrate research with practice through what the medical community refers to as “translational research.” Translational research takes scientific research conducted in the lab and makes it useful to people. Fully integrated translational research faculty are tenured professors who practice medicine and use the latest scientific techniques to answer questions about those techniques from practicing physicians. In addition, they often coauthor research papers with basic scientists and collaborate on clinical initiatives with clinical faculty.

The work of translational medical scientists means the knowledge production engines of medical schools advance basic science, applied science, and the practice of medicine. Why should business research and business professors be any different?

Five changes would initiate a new era of highly relevant business school research:

Create translational business faculty appointments for professors who are trained in scientific research techniques and also want to be involved in business practice.
Create and treat as prestigious translational business journals. Then make sure business school “scientists,” translational scientists, and practitioners jointly make publication decisions.
Create translational business doctoral programs to build a cadre of future faculty who integrate research on business with practice by doing both.
Actively seek out businesses to fund studies, and reward faculty who obtain corporate-funded research and thus reduce the reliance on university funding.
In evaluating faculty performance, include business consulting activity (that comes out of research) and its impact on businesses.

To be sure, corporate funding of medical research for some time has been accused of biasing findings in favor of for-profit interests. Corporate-funded business school research has the potential for conflicts of interest as well. But the way to resolve them is through full disclosure of funding sources and high research standards. The academic journal referrees of any business study should look closely at whether its findings and research methodology could have been biased. For their part, researchers must specifically explain how their methodology eliminated such bias.

Getting business professors to change their research agenda requires deans who embrace fundamental institutional change. While such change is never easy, the good news is that business schools have a strong scientific capability to build upon. They only need to apply that capability to issues that are much more relevant to the organizations that will employ their graduates.

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Your Biggest Social Media Fans Might Not Be Your Best Customers

If you think your careful attention to social media analytics, monitoring, and customer relations means you know your customers better than ever before, think again. Rather than enlightening you about your customers, all that social media data may actually be misleading you—because it’s only showing you a narrow and atypical slice of your social media audience and your customer base.

That’s the key insight in a new report my coauthor Vision Critical President Andrew Reid and I released last week, What Social Media Analytics Can’t Tell You About Your Customers. The report provides long-overdue context about who you are actually hearing from when you tune in to your social media audience. Our big finding was that even if your social media audience is largely made up of people who are also your customers (which in itself can be hard to ascertain), those customers who you actually hear from on social media are not representative of your customers as a whole.

In fact, almost 90% of what you hear on social media comes from fewer than 30% of social media users. That 30%—the people we call enthusiasts—are the vocal social media users who post 5 times a week or more. And they’re fundamentally different from the quieter social media users who make up the vast majority of your social media audience (and potentially your customers): the dabblers, who post two to four times per week, and the near-silent lurkers, who post once a week or less. But don’t mistake quiet for irrelevant: even though they are barely posting, the vast majority of lurkers and dabblers peruse Facebook at least once a day.

Understanding the differences between these three kinds of social media users is crucial not only to your social media strategy, but to the way you approach customer intelligence. Whether you’re trying to understand how to serve, market to, or engage your customers, you need to understand the expectations and attitudes of all of your customers.

We were able to uncover the blind spots of social media analytics by working with three global brands to combine detailed feedback from their customers with Facebook profile data from those same people. This effort revealed a massive asymmetry between the fans and customers who get heard through social media dashboards and analytics, and the reality of who’s on Facebook. Even more important, it allowed us to develop the first data-driven picture of how vocal and quiet social media users differ from one another, in ways that matter to your business.

Enthusiasts are the people that social media analytics do a good job of capturing—because they (OK, I’ll admit it: we) are actively participating on social media sites. Those enthusiasts tend to be eager shoppers. They’re more likely to be looking for that next great buy, and to make that purchase in a big box store. They are also avid users of their mobile devices — they’re more likely to whip out their mobile phones to comparison shop while they’re inside a store. They’re also selective about the types of TV programs they regularly view, and are likely to consult friends and family in their purchase decisions, and more likely to share their own opinions in turn. These are the people that you will most likely see represented in your social media intelligence.

But’s what’s missing is the data on your dabbler and lurker fans and customers — that’s much less likely to show up in your analytics. Lurkers tend to be more reluctant shoppers, and social media is less likely to have spurred them to make a purchase. And unlike enthusiasts, you’re unlikely to find them shopping at a big box store. They’re less interested in their mobile devices than in their TVs; they watch more types of TV programming, and follow fewer topics on Facebook (though, interestingly, they’re just as likely to play online games). They’re less inclined to turn to friends and family for shopping advice offline, and less interested in sharing their own views with online friends.

Dabblers fall squarely between these two extremes. But like lurkers, they’re often missed by social media analytics: because they post so much less than enthusiasts, they account for only 10% of what you hear on Facebook, even though they make up almost 20% of the Facebook audience.

These differences mean that you can’t use enthusiasts as a proxy for your customers as a whole. Particularly when the signals you pick up on social come from customers who disagree, you need to find ways to contextualize what you’re hearing on social with every other source of customer insight you can get your hands on: transactional data, customer feedback, click tracking, and so on. Not to mention actual conversations with as wide a range of customers as you can possibly engage.

It’s only when businesses combine all of these sources of insight that they really will know their customers better than ever. Social media analytics may remind companies why it’s crucial to understand their customers—but the differences between enthusiasts, dabblers, and lurkers means that social media can’t deliver that understanding.

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Mindfulness Mitigates Biases You May Not Know You Have

Researchers can’t seem to get enough of mindfulness. Studies have linked it to heightened creativity, improved concentration, lower stress, better working memory, and increased compassion. Now, new research also shows that it helps us overcome biases we’re not even aware we have.

The study, published in Social Psychological and Personality Science, suggests that mindfulness meditation can reduce implicit bias—and the negative behaviors that it causes.

There are competing definitions of what mindfulness means, but it boils down to paying attention to what’s happening around you at a given moment, instead of operating on autopilot. By concentrating on the present, you’re more likely to act thoughtfully, and therefore less likely to succumb to automatic evaluations based on previously established associations.

Older studies have connected mindfulness with reduced automatic processing and less prejudicial behavior, but researchers Adam Lueke and Bryan Gibson found that mindfulness can also lessen implicit bias. Implicit attitudes are based on automatic associations, and they influence behavior more than we realize. Even as we assert egalitarian values or condemn discrimination, automatic processing often colors how we evaluate and treat others.

Lueke and Gibson explain that a group who listened to a 10-minute mindfulness exercise exhibited less bias on the race and age implicit association tests (IATs) than those who didn’t—without even focusing on the biases themselves.

The 72 participants were white college students who didn’t know what was being studied beforehand. The test group listened to a recording that made them aware of their heart rate and breathing. It told them to accept these sensations and thoughts “without restriction, resistance, or judgment.” The control group listened to a 10-minute recording about history. Then both groups completed the race and age IATs, which captured response times in pairing positive or negative words with black or white faces and then with old or young faces.

The mindful group showed less implicit racial and age bias than did the control group, and this was, in part, due to a reduction in the automatic activation of negative associations (i.e., black-bad, old-bad). This confirmed older research that mindfulness makes one less reliant on previously established associations. But the researchers were surprised to also find that the mindful group was less able to see differences between the faces than the control group, which seems to suggest that when you’re less likely to automatically associate black and old with “bad,” race and age are also less detectable.

The ability to curb implicit bias and weaken negative associations by simply being more mindful could help prevent all kinds of negative effects. Previous research has shown how implicit out-group bias can make someone more likely to shoot at a black suspect in a simulation or become more aggressive in a video game.

Implicit attitudes even predict some negative behaviors in the workplace better than explicit attitudes. For example, they are more predictive of discriminatory hiring decisions, lack of trust in out-group members, and hostile body language toward stereotyped out-group members. As Lueke explained, “People high in implicit bias will tend to maintain distance, not make as much eye contact, fidget, remain terse in their responses, and generally give non-verbal cues that are indicative of discomfort.” And this happens even if they consciously want to communicate in a non-biased way.

So how do you become more mindful? As Lueke said, “We often have other things on our mind regardless of whether we are at work or not; our to do lists, that date we went on the night before, mulling over that crazy episode of ‘The Walking Dead’ we saw, wondering what we are going to have for dinner tonight.” Silencing and focusing these thoughts is a practice. But even if you’re busy, there are really basic steps you can take—anywhere, anytime—to make you more aware of the present.

Past experiences have a way of influencing our decisions and immediate reactions in ways we don’t fully understand and may not even realize. It’s important to acknowledge this and find ways of making ourselves less reliant on them.

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A Testable Idea Is Better than a Good Idea

The most irritating innovation insight I’ve had seems paradoxical, but it’s true: good ideas are bad for innovators. Honest.

At first, I didn’t believe it either. What could be bad about good ideas? Then, in my work with organizations and executive education students, I started paying even closer attention to how successful innovation initiatives really take root and flourish. The results—in companies ranging from financial services to industrial equipment to consumer products to digital media—gradually changed my mind. Organizations that encouraged, talked up and celebrated good ideas were consistent—almost pathological—innovation underachievers. To be sure, there was serious discussion, debate and analysis around good ideas and how to make them better. But the actual outcomes typically underwhelmed and underperformed, as in “It seemed like a good idea at the time.” These firms, teams, and groups made improving good ideas central to their innovation effort.

By contrast, the successful innovators I observed spent less time on identifying and developing good ideas and more time testing their hypotheses. In fact, these teams and groups made the testable business hypothesis the center of their innovation effort.

As I define it in The Innovator’s Hypothesis, a business hypothesis is a testable belief about future value creation. It is not a search for truth or fundamental understanding; a business hypothesis suggests a possible or plausible causal relationship between a proposed action and an economically desirable outcome. If there is not an explicit and understood measure or metric for that new thing, it is not a testable business hypothesis. And if it isn’t in writing, agreed upon, and shareable, it’s not a business hypothesis. Many good ideas fail on all counts above.

A testable hypothesis may be a very good idea but even a very good idea is rarely a testable hypothesis. The difference isn’t subtle. Almost a decade ago, as I was gradually sensing this counterintuitive concept, I informally began testing this hypothesis.

I asked small innovation teams at a large IT firm to come up with either their best good ideas or simple experiments to test business hypotheses that they thought their bosses would find important. The results surprised me. Many of the good ideas were very, very good. They were definitely worth developing. But the experiments and their testable hypotheses were ready to go. They provoked a completely different kind of action-oriented discussion than the good ideas. Indeed, a couple of the experiments (as I recall) embodied some aspects of the good ideas. The difference? We could do something with them beyond talk! Testable hypotheses seemed a faster and, frankly, better gateway to innovative action and active innovation. Testable hypotheses encourage and facilitate active experimentation and learning in ways that good ideas simply cannot. Getting organizations to think and act around testable hypotheses instead of good ideas is how organizations have healthier conversation and collaboration around innovation.

There was no ‘”aha!” moment. But there was a slow recognition that defining a testable hypothesis requires more rigor than coming up with good ideas to improve products, services and or user experiences. What’s more, a testable hypothesis comes with accountability built in: the hypothesis needs to be tested. It will pass or fail that test. Ideally, you’ll learn either way. But what’s the accountability for a good idea? The fact that a lot of people think it’s a good idea? That’s a popularity contest.

The harsh reality is that good ideas have to be tested. Why not insist that people undergo the rigor and discipline of crafting a testable hypothesis? That’s how good ideas get converted into real value.

If you want to quickly, cheaply and productively transform your organization’s innovation culture, forbid any and all discussion of good ideas and insist people start framing their innovation proposals in the form of a testable hypothesis. Try it.

Of course, there’s absolutely nothing new about thinking in terms of testable hypotheses. That is, of course, what science has been about since Francis Bacon. There’s nothing even novel about the testable hypothesis in business innovation—look at any interview given by Amazon’s Jeff Bezos or any history of Google. Indeed, look at market-leading financial service firms such as Capital One.

But these firms had founders who intimately and intuitively appreciated the importance of both experimental design and design of experiments. They recognized that every prototype they built was also a testable hypothesis. To paraphrase one of the most famous maxims in military history, “Innovation amateurs talk good ideas; innovation experts talk testable hypotheses.” Which would you rather be?

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10 Remarkable People on Having a Career That Matters

Every year, HBR interviews 10 people who’ve had fascinating careers. Here, a few highlights from 2014.

British fashion designer Zandra Rhodes has never been afraid to stand out. Her eponymous clothing line soared in the 70s, only to shutter its doors in the 90s. But she’s moved on to other projects, and today’s hottest designers credit her influence.

We talked with her about overcoming setbacks through hard work.

“Keep going by whatever means you can. Don’t let people crush you. Have an inner belief in yourself. In the end, what you do will come through. We suffer today from people wanting fame rather than earning fame through their work. Your work is what you’re there for, and you should do it regardless. If it brings you something else, that’s a plus.”

Alain Ducasse runs a global empire of more than 20 restaurants with a collective 19 Michelin stars. We asked him about his reputation as a tough boss. “It is true that I am demanding and not always nice,” he admitted. “If a colleague opts to do poor work when he could have performed very well, that upsets me.”

Still, he says, “You shouldn’t focus on supervision….“You must allow people to evolve, help them grow, make them feel gratified.”

He also told us that, at 27, he was the sole survivor of an airplane crash. He spent a year in a hospital being treated for serious injuries. It was a defining moment.

“You spend your time lying in bed, but you are not tired, so you are able to think nearly 24 hours a day, with nothing to disrupt you. I had to keep working, even if I might never walk again. I managed my restaurant from my hospital bed, by writing the menus, for example. It really improved my ability to delegate, and I understood that I was able to lead without being physically present. My career would not have been the same had the crash not occurred.”

Ruth Reichl has been a cook, a food critic at the LA Times, Editor of Gourmet, and a novelist, among other ventures. We asked her how she knew when a dramatic career move was the right one.

“I always thought they were the wrong ones,” she explained. “When I was offered Gourmet, I told one of my adopted mothers, ‘It’s just not the right time. If it were a year down the road, I would do it.’ And she looked at me and said, ‘Ruth, it’s never the right time.’ It’s the best advice I’ve ever gotten. It’s the things that scare you the most that you have to do…One of the secrets to staying young is to always do things you don’t know how to do, to keep learning.”

And she admits she “was not initially the best manager.”

“It took a while for me to understand that management is an art… I learned that you really can’t expect everyone to be just like you. The big secret of management is to find what people do best, not to fit them into a mold. Find out what everybody on the staff does well and tailor their jobs to them, instead of the other way around.”

Pele is a soccer legend, and led Brazil to three World Cup victories. He says he “never wanted to be a leader.” But it came naturally. “I just tried to pass on my best to the other players.”

Yet he never became a team captain. “Reporters at press conferences would always ask me about that, and I would tell them, ‘Listen, I don’t need to be captain. If we have another player as captain, then there are two leaders in the game.’”

Biologist J. Craig Venter made waves in 1998 when he and his for-profit company challenged the public Human Genome Project to a DNA-sequencing race. (It ended in a tie two years later.)  Fired from that firm in 2002, he now runs a nonprofit and two biotech companies. We asked him about setting audacious goals.

“The goals are only considered to be audacious by other people. I consider them to be achievable. …One of my early teachers described my method as jumping off a high diving board into an empty pool, expecting my team to have the pool filled before I hit the bottom. I think the best people like to work on multidisciplinary teams where they can bring their expertise to problems and projects much bigger than themselves.”

And as for the controversy and criticism?

“You have to believe in what you’re doing and your own processes. My military service in Vietnam taught me a lot. I was one of the lucky people to serve there and return. As a medic I dealt with thousands of young men who didn’t make it back. So I learned at an early age that the worst thing you can lose is your life and that taking risks and suffering setbacks is part of moving forward. One of the things I jokingly say is that I know so much because I’ve made so many mistakes.”

Bobbi Brown launched her cosmetics line in 1991 because she was sick of red lipstick. Four years later, she sold the natural-look brand to Estee Lauder – but retained full creative control.  We asked her how she stays ahead of the curve.

“I’ve learned that the best thing for my company is to do what I believe in… Don’t put something on the market just because everyone else is doing it. Do what you think is right.”

Norman Lear reinvented American television in the 1970s with All in the Family and a string of other true-to-life sitcoms. A producer, director, and activist, he’s relished a life behind the scenes.

We talked with him about managing his bosses:

“There were times when they raised reasonable questions and the solution made the show better, but with the questions that were just silly, I stood my ground. It didn’t make sense to me that some faceless executive would be responsible for a decision that affected my show and its relationship with the audience. They used to tell me, ‘It won’t fly in Des Moines’ or ‘There will be knee-jerk reaction in the middle of the country.’ But one thing that played well for me is that I spent months in Iowa, making the film Cold Turkey. So I was able to say, ‘Don’t tell me about Des Moines. I know Des Moines. I know the middle of the country. Don’t give me this bullshit.’”

Boris Johnson was a magazine editor at 35, a shadow cabinet minister at 39, and the mayor of London at 43.

We asked him how he sees leadership: “You’ve got to understand an issue very well and be able to simplify it and make people understand it and believe in it the way you do. If you can do that, you’re at the races.”

He also cites the power of momentum. “The forces of inertia are so huge, we need to have a clear agenda, so as soon as one thing is done, we’re starting the next.”

Educator Salman Khan – who left his hedge-fund job to found the wildly successful online learning nonprofit Khan Academy – talked with us about the importance of work-life balance. “I’ve been up on stage at speaking events and said, ‘I have to go give my kids a bath now,’ and everyone is shocked. But if I can’t have dinner with my kids, give them a bath, and read them a book before bed, something is wrong in my life.”

He also challenges the notion that kids today have worse attention spans:

“We think that because this generation has Facebook, Twitter, and mobile phones, they don’t have attention spans. But it’s clear from the studies that we never really had the attention spans the classroom-based lecture model expects of students.”

Comedian John Cleese is perhaps best known for his work on Monty Python, Fawlty Towers, and the Oscar-nominated script for A Fish Called Wanda. But he does everything from corporate trainings to stand-up to memoir. We asked him about working alone versus working with a team.

“When you collaborate with someone else on something creative, you get to places that you would never get to on your own. The way an idea builds as it careens back and forth between good writers is so unpredictable. Sometimes it depends on people misunderstanding each other, and that’s why I don’t think there’s any such thing as a mistake in the creative process. You never know where it might lead.”

When he asked him about his legacy, his answer surprised us. He said he hoped his friends thought he was “reasonably kind.” Really? we pressed, Nothing about your contribution to the world of humor?

“No,” he replied. “I don’t regard any of that as anything other than an amusing way of passing the time. I love the fact that I’ve made people laugh, but the important thing, ultimately, I do believe, is a relatively small number of really close relationships.”

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What Executive Assistants Know About Managing Up

As an executive assistant, your job is to help the executive do her job better. But as an employee, this is only one aspect of your job. You’re doing lots of other things that aren’t necessarily in service of your boss. I spoke with Melba Duncan, president of The Duncan Group, a retained search and consulting firm specializing in senior management support resources, and author of The New Executive Assistant, to learn what it takes to be a successful executive assistant – and what other employees can learn from these masters of managing up. Here’s an edited version of our conversation:

What does someone who spends all of his time managing up have to teach someone who spends only some time thinking about managing up?

Managing up lands on everyone’s desk depending on your level of ambition and your willingness to expand within your role. You have to learn how to anticipate and read the moment. Executive assistants know what the executive has to do every single day, what must be completed, what’s the goal, what are the deadlines. They are willing to respect someone else’s point of view and work within that parameter. Assistants who are terrific at what they do are very, very collaborative. They understand the business that they’re in and the motivation of the executive. And they learn this from always communicating with the executive.

What sets executive assistants apart from employees or team members trying to manage up? Is it that assistants are managing someone else’s life and employees aren’t really doing that?

That’s right. And in most instances non-assistant employees are not expected to. As an assistant, you know that you are managing the life of someone else, and you are there to make a difference.. Your role is to put out fires, fill the gaps, anticipate the executive’s needs, and exercise judgment based on those needs. You are a business partner, you understand the politics of a situation, and you understand how business functions, as a whole. You’re expected to know exactly what your boss is thinking and why. This individual presents a window to the executive’s office. Executive assistants are in a strategic support role but they also play a strategic management role.

If you have not reached that level of business relationship, it’s a little different. It doesn’t mean you shouldn’t exercise the same ideas and the same intellect. It just means that the experience is perhaps more task-driven than relationship-driven.

How can the rest of us create similar partnerships with our bosses?

By focusing on their contributions and taking responsibility for results. They have to constantly demonstrate that they are indispensable, and demonstrate their relevance to the work. Employees need to be able to apply diplomacy and good judgment in responding to all circumstances, predictable and unpredictable, as they occur. You must know what your boss’s job is and how it supports the needs of the organization, so you’ll be able to assist when you can and reduce stress and setbacks.

What are the top skills that make an executive assistant successful? And do those apply to other employees?

The very best executive assistants use their intuition, judgment, business knowledge, motivational techniques, and personal leadership to become an integral element of the executive’s professional and personal life. They adapt their technological skills to create and manage time-saving solutions. They want to be constantly improving. They have to be reliable and have self-discipline. These skills apply to those who choose to pursue challenging careers at all levels.

You and Your Team





Managing Up




Best practices for interacting with your boss.

The main principle that drives the talented assistant is a commitment to continuously improve. Assistants think, act, and work with others to minimize crises, make decisions, and save executives time. This attitude and skill set applies to all employees. Employees should work together for the overall success of the group. If they really want to emulate the executive assistant, they will come early and stay late, pick up another’s slack for the benefit of the group, turn goals into an action plan, and then confirm and execute. They will state what they’re going to do and meet those expectations; they will avoid shortcuts, tell the truth, and have the courage to tell executives what they think.

If a person is trying to make the boss’s job a little easier, should she act the role of the assistant? Could that backfire or would it help an employee who is trying to manage up?

I think it can help employees. But you have to have good judgment and discretion. If you have an idea and you want to share it with your boss, make sure your timing is on point. It’s up to the employee to step up, because you can’t expect someone who is managing a team or a project to know each person’s level of competency. I say this all the time. Step into the space you want to be in. You have to tell people what you do well, whether it’s within your role or outside of it. If you see you have a talent for writing, then draft an email saying, “I can answer this email on your behalf.” Observe how your boss responds. You’ve just educated that person that you have a writing skill.

You said in your HBR article that executive assistants have to step out of their comfort zone and that executives have to be willing to delegate. Is gaining trust a challenge?

Yes, executives have to be willing to delegate, but executives don’t know what you know. So it lands on the desk of the assistant to educate that executive about what he or she is capable of managing. Your role is to reduce or manage some of the executive’s functions, in order to give that person more time.

There are some executives who will not let go. This is their nature. That gives the executive assistant a little more of a challenge. You just have to be more delicate. Maybe you say, “I just handled that call; I knew the answer you wanted to give because we discussed it. I hope that’s OK.” You educate that person in how you can respond under pressure. Some executives need complete trust before they will let go. So you have to convince them that it’s OK.

Are the boundaries different for other employees and their bosses? An assistant would be expected to pick up the phone at 10 p.m., but what about another employee?

Part of being an executive assistant or a business partner is that you are aware of everything that’s happening all the time, even if it’s three o’clock in the morning. I do believe in today’s world that shutting down and not being available is not acceptable. I would like to think that employees who really want to be successful will remain flexible and available.

I understand about work/life balance. I call it work/life integration. You have to know what you need, and then you have to communicate that. For example, if you need personal time on Sunday mornings, then you need to make the executive aware that you won’t be as accessible on Sunday mornings. Or you need to get someone to cover for you. Taking care of yourself is essential. You come first.

Do you think in general women are better at managing up than men?

I don’t believe that’s true at all. I think it’s the person. I think it’s what motivates somebody to want to help someone else.

You also wrote in your piece that finding out about the temperament of an executive prior to accepting a position is very important, as well as stating clearly while you’re interviewing how you expect to be treated. Is that particularly true for executive assistants because of the relationship?

I think it’s broader. It’s important for everyone to know who they’re going to be reporting to, what is that person’s management style, and what is the culture of the organization. The assistant, and the employer, have the right to ask about that in the interview: e.g., “When someone disappoints you, how do you let that person know? What’s your style?” I think everybody should ask that question.

Personal assistants are known for doing whatever executives ask but they have to push back on some things. How do you say “no” to requests from your boss?

It’s important to know how to say “no” when you can’t do what is being asked, or when you may have a better solution or idea. Listen to the request, and indicate that you understand what is important to the executive. Think about whether you are willing to compromise. Show respect for your boss’s point of view, and then clearly state why you can’t fulfill his/her request. Maybe it’s about priority management, or the request crosses your personal boundaries. Saying “no” respectfully becomes your competitive advantage, because it shows your social intelligence, intuition, and regard for others. But stay firm once you’ve made a decision.

You said that having an executive assistant can drastically improve the productivity of an executive and of the organization as a whole. If more employees start managing up, would that produce similar positive results?

I think that it would. There are many assistants, and many individuals, in companies who don’t realize how important they are to that company. Every time you expand in a role, you add more value to yourself, to the management, and to the company. But it’s up to you to ask for more responsibility.

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What the Insurance Industry Can Do to Fix Health Care

Health insurance companies are uniquely positioned to save the day in our ailing health system. Yes, you heard me correctly: health insurers.

Health insurers — or “payers” — are reviled nearly universally. Confused by “explanation of benefits” forms and denials of coverage and frustrated by rising deductibles, co-pays, and costs of care, consumers rank their experiences with health insurers below those with cable companies and internet service providers. Physicians and other care providers — who are constantly negotiating price of services and filling out piles of paperwork — don’t like payers much either.

All this makes insurers unlikely heroes. But we need someone to cut through the complexity of the current system, demand true value from providers, and create better options for consumers. Insurers increasingly look like the folks who can do the job and reinvent their business at the same time.

How? They can use their market power (they direct the bulk of health care dollars) and understanding of different consumer segments to create innovative products, services, and partnerships that address consumers’ needs. In the process, they can help move us all toward a low-cost, value-based health care system. Here are some specific ideas on what payers could do:

Act as true partners to value-based providers. Most payers today are piloting new economic models that pay providers not for the services they provide but for the value they create. Most, however, are neglecting a key opportunity: helping providers change their operating model. To succeed in value-based care, providers need data, analytics, smart clinical-care teams, and managerial support. Insurers are well-positioned to provide all this. They can also help providers become more efficient and assist them in navigating the tricky financial transition from fee-for-service to fee-for-value economics. Most important, insurers can help the very best provider organizations succeed by using them as the core of attractive, competitively priced insurance products.

Offer options for low-cost, convenient care. One area of waste in health care is the use of physician offices and hospital emergency departments to treat minor conditions such as sore throats, urinary infections, and allergies. Payers can make it easy for their members to get care 24/7 in more appropriate settings by partnering with retail, urgent care clinics, and telehealth providers. They can also offer the data connectivity needed to keep the consumer’s primary care provider in the loop. Oscar, the New York health insurance company launched last year, received fanfare in the press over its sleek offering, which includes unlimited phone and video calls with physicians and a “doctor on call” service that provides prescriptions by phone or e-visits. A number of retail pharmacy chains are also actively pursuing retail health and wellness clinics in stores to boost growth.  Walmart has been piloting low-cost care clinics offering a $40 office visit that could dramatically reset the cost bar if scaled broadly.

Cover new wellness- and prevention-oriented treatments. Such options can serve as effective adjuncts to traditional benefits and encourage the trend toward more self-care. Aetna, for example, has offered mindfulness and yoga training to 6,000 of its employees. Its research shows that lower employee stress improved productivity by 69 minutes per week and gave an 11:1 return on investment. Similarly, articles in The New York Times, TIME, Scientific American, JAMA, and The Huffington Post cite growing evidence of the efficacy of meditation programs.

Explode the PPO model. Today the gold standard for health insurance is a preferred provider organization, a huge collection of doctors assembled to provide something for everyone but no special benefit to anyone. Insurers can do a better job for consumers and create real value by developing hassle-free mass customization. In this new model, consumers can choose from lifestyle-based curated options that offer trade-offs across risk level, health-savings options, primary-care models, alternative networks, network breadth, coaching and navigation programs, rewards programs, contract length, and incentive structures. Transparency tools and crowd-sourced reviews will spotlight value and multi-modal coordinated care delivery (think care teams that seamlessly work with telehealth providers, health coaches, and retail clinics) will help cut costs considerably. Consumers will be able to trade their own health engagement into benefit dollars and rewards that they can use seamlessly. While true à la carte insurance customization is not yet a reality, private exchange platforms are starting to provide a stepping stone to get there. For example, Maxwell Health, a new private exchange platform, presents a beautiful interface with lifestyle-focused packages that make product selection simple and tailored for you.

Sell convenience and personalized service. Most health care could hardly be less convenient. Now that consumers have unprecedented purchasing power (rise of public and private exchanges) and bear unprecedented costs (mounting high deductibles and premiums), they expect iPhone-like service. There is tremendous opportunity for payers to make the health care experience simpler and more supportive with online appointment scheduling, clear data and reviews, personalized suggestions, navigation apps with predictive decision support, reward programs, peer-to-peer support, and many other tools. Making the consumer experience better is smart for payers too. They can build stickier consumer relationships and generate new opportunities to address consumers’ growing health and lifestyle needs.

Power healthy behavior change. Some 50% of the determinants of health are driven by lifestyle and personal behaviors. Changing people’s behavior is a tall order but is necessary to improve health care. There are already examples of innovators that are succeeding, such as Omada Health with weight loss for pre-diabetics and Zipongo with healthy eating. We’ve only begun to deploy behavioral science, advanced wearable/monitoring technologies, and machine learning to understand the behaviors and motivations of different groups to predict and prevent acute events and connect people with the solutions that work best for them.

Serve as the bridge between new tools and consumers. In the first half of 2014, venture capital investment in digital health grew by 176%, spawning new consumer-centric companies with interesting approaches to consumer health. But there’s a chasm between these unscaled point solutions and the consumers who could use them. Payers can bridge the gap, using Amazon-style analytics and personalization to better understand consumer types and then connect them at the right place and time to the best-suited offerings. Better yet, payers don’t need to build the bridge themselves: A growing set of powerful consumer-engagement platforms (e.g., WellTok and Optum’s Rally) are moving along this path.

Payers have economic incentives to do everything I’ve described. The Affordable Care Act puts limits on the margins they can earn from their traditional business (Oliver Wyman estimates payer margins may shrink by a third), and an evolving marketplace means that they will face significantly more competition — from each other, health care providers, and new entrants that see an opportunity to capture growth in a $3 trillion market. The options I’ve described would let payers move into non-regulated markets and potentially generate revenue from discretionary consumer spending — a growing pot of money they have not accessed much.

Can they win consumers over? One advantage of being in an industry people don’t like is that there are many opportunities to pleasantly surprise the consumer. The good news is that the things that will make consumers happy — more convenience, customization, support for doctors, coordination of care — can all contribute to attractive new business opportunities while making the health care system more efficient, effective, humane, and sustainable.

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