Marina Gorbis's Blog, page 1389

Why So Many U.S. Firms Are Buying Smaller Competitors Abroad (Hint: Think Taxes)

A generic drug maker based in Pittsburgh has become the latest American company to undergo an “inversion”: By buying a smaller company abroad—in the Netherlands, in this case—Mylan will be able to incorporate outside the U.S. and pay lower taxes, according to The New York Times. In the past two years, nearly 20 large firms have announced similar plans. Although Mylan says its merger is driven mostly by strategic considerations, the tax benefits are large: The company’s effective tax rate on its operations abroad would decline from 25% to 21% in the first year, then to the high teens after three to five years.

In China, the Right Political Ties Count

No one who has done business in China will be surprised to learn that relationships with government matter. Executives in China devote a substantial amount of time to interaction with government, even with the country’s ongoing economic liberalization.

A new paper measures the return to firms from political connections in China, and sheds light on when they do and don’t pay off. Yes, political ties can sometimes improve firms’ chances of success, but not all connections are equally important.

Researchers from The Hong Kong Polytechnic University, Rotman School of Management, and the National University of Singapore Business School sought to quantify the effect of political connections in China, looking specifically at the TV manufacturing industry from 1993 to 2003, a period of significant liberalization. They looked at whether firms had a former government employee on their leadership team, or whether a former executive of the firm was now employed in government. With that data they were able to compare firm performance — whether the firm went out of business in a given period, as well as its revenue — before and after these political connections were formed.

Most interesting, the researchers distinguished between ties to local government and ties to national government. They found that ties to local government were associated with higher rates of firm survival as well as, in some cases, increased revenue. By contrast, ties to national government had no effect on either metric of success. These results held even after accounting for firm size, age, degree of state ownership, and level of diversification.

Notably, local ties were most likely to improve the odds of survival for poorly performing firms. And the positive effect on revenue was only found for firms that were already performing well. This suggests that political ties are more effective at keeping companies afloat — even struggling ones — than at helping them to excel.

The authors offer multiple reasons why connections to local government would matter more:

Local governments directly experience the benefits and costs of firms’ operations in their jurisdictions with, for example, stronger firm performance increasing local employment and tax revenues. Local governments often have greater discretion than their central equivalents and therefore are more likely to focus on local issues and to address the needs of local firms.

National government agencies, in contrast, have a wider breadth of concerns and interests to balance, making them less responsive to the interests of any one firm or even industry.

Another way of explaining this difference comes from a 2010 HBR article on doing business in China by Lynn Paine:

Executives often believe that obtaining government support for big business deals is just a matter of forging high-level connections or lining the right pockets. Connections are no doubt useful, but experienced leaders know that they must also demonstrate their project’s contribution to China’s development.

It’s impossible to discuss political ties in China without noting the widespread corruption of local government, and the bribery scandals that have resulted. It’s conceivable that some of what this study is capturing isn’t merely the impact of a revolving door between government and industry, but rather a proxy for that corruption.

Nonetheless, the takeaway for firms looking to build leadership teams or assess partners in China is that not all political connections are equal. Time spent cultivating local ties may yield higher returns, whereas for national government, offering strategic value is more critical.

The Right Way to Unplug When You’re on Vacation

Vacations are for unplugging: we all need to escape the daily grind from time to time, after all. But that doesn’t have to mean unplugging from the entire internet. In fact, you may have a more enjoyable and meaningful vacation by staying connected–as long as you’re staying connected to fun, friends, and family, rather than to work.

That takes a combination of planning, tech tricks, and self-discipline. In an ideal world, you’d work-proof your devices and online activities so that you could use the phone, computer or internet without coming into contact with any work-related stuff.

But many of us simply aren’t in a position to take completely off-the-grid downtime, so you’ll need to figure out just how disconnected from work you can be so you can appropriately minimize the frequency and duration of your work-related check-ins and trigger each of those check-ins manually (so you won’t be tempted to respond to the ping of each incoming message). It will also be essential to draw a clear line between work and personal technology use.

Plan before you go.

Whether you’re planning to disconnect from work completely or simply to keep your work time minimized, you need a clear plan for how you’re going to use your devices while in vacation mode.  Ask yourself these questions:

What’s the least amount of work connectivity I can get away with? Understand your office culture and separate your colleagues’ expectations from your own anxiety. If the idea of ignoring all your work email fills you with fear, is that because you like to be in touch, or because you really could lose your job if you disconnect? What is the minimum connectivity that will be accepted at your job?

What do I still want to use technology for while I’m away? Make a list of the specific ways you want to use your phone, tablet or computer while you’re on vacation and limit your tech use to what’s on that list. (This will focus and constrain your tech use more effectively than making a list of online activities to avoid.) For example, I am using the fantastic app RoadTrippers to organize my family’s itinerary and activities, an Evernote notebook as my personal travel guidebook, Yelp as a travel journal, and Facebook to stay in touch with friends. (Read the rest of my list here).

Which accounts will I disconnect from? It’s easier to disconnect from entire networks or accounts than to ignore work-related correspondence once it hits your radar. So once you know what you want to keep doing—and how much you can stop doing—identify which accounts you’ll stay away from and plan accordingly, setting up vacation messages or alerts as necessary. If you use email, social media, or text messaging for a combination of personal and professional conversations, get clear up front about how you’re going to draw the line between what counts as work and what counts as play.

What do I and my fellow travelers expect from one another? Your work colleagues aren’t the only ones you need to consider. If you’re traveling with friends or family, get clear up front about your technology game plan. Agree on when it is and isn’t ok to use your devices – for example, you may agree that it’s fine to read the morning news on your tablet over breakfast, but not ok to check sports scores over dinner.  Setting shared expectations about tech use is especially important if you or your fellow travelers have kids you’re trying to keep offline or off-screen.

Prepare to leave.

The work of disconnecting begins well before your vacation. Here’s how to set expectations – and set up technology – to increase the odds that you’ll be able to unwind without unplugging completely.

Plan some out-of-cell-range travel. Whether it’s a few days at an off-the-grid cabin or a few hours in a wifi-free plane, it’s great to be truly incommunicado for at least some portion of your vacation. This allows you to sincerely set the expectation that you will not be reliably reachable, making it easier to assert control over how much or how often you’ll check in.

Set up a vacation email address. It’s hard to avoid your work email while you’re on vacation if opening your inbox is the only way you can access certain information or check if there’s a crisis with a key client. You may find it easier to avoid peeking if you set up a separate account to use during vacations. Share the address only with the people you really want to stay in touch with while you’re away (like your spouse, house-sitter, or traveling companions). Use mail rules and filters on your work account to automatically forward any travel-related emails to this address (flight confirmations, for example), as well as any key messages (like any email message from a key client or from the company CEO).  Just make sure you don’t reply to messages from your secret address, or share that address with more than a couple of people, or it defeats the whole purpose.

Set up a smart out-of-office reply. When you set up the vacation auto-responder message on your primary work account, write a message that helps you avoid the dreaded backlog that typically awaits your return: let your correspondents know that you may not review all the messages you receive in your absence, and that they should email you again after X date if they need a reply. As a courtesy, provide an alternate way of addressing their issue more quickly, such as contacting your assistant or colleague. If this isn’t a possibility given your clients or prospects, set up a more conventional message for external correspondents and then set up rules and filters so that their messages are automatically filed in a separate folder where you can review them promptly without being sucked into the rest of your inbox. (My ebook Work Smarter, Rule Your Email tells you how.)

Move travel info out of your email. TripIt is an itinerary manager that you can connect directly to your email account; it monitors incoming emails for anything that looks like a travel confirmation, and puts it into an itinerary you can access from the web or the TripIt app on your phone or tablet. Not only does this keep you out of your inbox, but it gives you a more convenient way of tracking travel details or sharing them with your fellow-travelers.

Set up a check-in schedule. If you are planning to check your business email or voicemail during you holiday, set up a schedule in advance. Maybe you’re going to look at your email for 15 minutes every morning, or twice a week after the kids have gone to bed.  Talk with your traveling companions about this schedule so they know when you’re going to be in work mode. And share your game plan with your colleagues, so that they know if and when you will be checking work-related email.

Pack only personal devices. The easiest way to separate work from play is to leave your work phone and work computer at the office. This doesn’t mean having to go out and buy new hardware; for your phone, for example, you can buy a pay-as-you-go SIM card, so that you can use the device without using your work number. Similarly, you can set up a separate user profile and account on your computer. Another trick is to get a set of walkie-talkies: that way you can stay in touch with the rest of your travel party, even if you turn off your phone or go out of cell range.

Adjust while you’re away.

The moment your vacation begins, implement your disconnection game plan by making the following tweaks to your devices.

Turn off notifications. Disable any work-related notifications on your phone and computer for the length of your vacation. On a Mac or iOS device you can disable notifications on an app-by-app basis or by using do not disturb; Android users can turn off notifications for individual apps or download an app that lets them turn off notifications globally. Windows users can get away from notifications by using an alternate user account on their computer, or by turning off reminders associated with an individual application like Outlook. And don’t just do this for email and calendar reminders: I share Evernote notebooks with some of my colleagues, so even though I disconnected from email over my last vacation, my work brain got reactivated when Evernote notified me of a new note titled “Things to discuss with Alex when she gets back.”

Limit access to work-related accounts. You can go a step beyond turning off your notifications and disconnect from certain accounts altogether. For example, since all my work-related social media accounts are connected to HootSuite, I sign out of HootSuite for the duration of my trip, and use an alternate app to check my personal Twitter account – and only my personal account.

Get yourself on board.

The biggest obstacle to disconnecting isn’t technology: it’s your own level of commitment or compulsion when it comes to work. If you work 80 hours a week, 50 weeks a year, you may find it pretty hard to get your head out of the office – and even harder to break the Pavlovian association between hearing the ping of an incoming email and immediately shifting into work brain.

That association is exactly why it’s so useful to develop strategies that put your devices in vacation mode. You probably don’t leave Oreos in the cupboard when you’re dieting; for the same reason, it’s best to put work out of arm’s reach when you’re on vacation. Instead of relying on sheer willpower to keep you from checking in on work, you can use your vacation tech setup – and a little up-front planning – to support your efforts to minimize work time.

With that setup in place, you’ll be able to enjoy the benefits of online connectivity and digital tools, as well as the benefit  of disconnecting from work. And instead of apologizing for bringing a phone on vacation, you’ll be able to relax even with your devices in tow.

Speed Up Your Product Development Without Losing Control

It can often seem like digital technology is making every aspect of business move at warp speed. There are real benefits to this real-time business capability: getting to market faster, capturing value quicker, more immediate responsiveness to customer needs. For example, in a previous post I described how Amazon’s ability to continuously release software changes (8000 per day, one every 11 seconds) will crush competitors who are making a batch change every six weeks. But what about the risks? Doesn’t high speed carry the inherent risk of loss of control?

Not necessarily. As Andy Singleton, CEO at Assembla, explained to me, continuous deployment can be both cheaper and lower risk. It’s cheaper because of automation and because small development teams need less coordination and oversight. And the risk can be managed through a new kind of tool called “feature gates.”

Here is a quick look at how Google and HubSpot have managed to achieve remarkable speed in product releases while simultaneously reducing risk.

Google’s Automated Test Machine

For decades, large IT projects have crashed and burned because planners could not anticipate all of the interdependencies of new software in the extreme complexity of large software code bases. To test new software before release, managers of large projects use elaborate test procedures run by teams of “quality assurance” professionals.  This traditional testing takes weeks or months, and still misses errors. To manage new software releases at their huge scale, Google has replaced traditional testing systems that depend on people with a testing machine, known as a “continuous integration” system.  It is a copy of their production system that runs special programs that test the way component services work together. Continuous integration and automated testing is important for all modern, large scale software development.  Google’s operation stands out for its scale. Their test system is continuously compiling and deploying more than 5000 components (services), and running 100 million test cases per day.

Google’s test machine is built and run by a “test engineering” group, whose size is about 15% of their total developers. This group only builds the automated test systems – they don’t do the actual testing. The test engineers think a lot about creating incentives that motivate developers to fix bugs and write effective tests. For example, they provide dashboards that report on bug counts by developer. As developers make changes, they are tested with the most recent version, which includes all the other changes. If a test finds problems, it can tell developers whom to contact to resolve them – directly, without using middle managers.

Google combines automated testing with a related process that requires a human peer to review code changes. Together, the automated testing and peer review provide a high level of quality control that frees Google developers to actually work on the needed changes themselves. Every developer at Google has the power to make changes to any product – or multiple products – subject to the rules of testing and review. In some cases, they can go from an idea to a software release in 48 hours.

HubSpot’s Small Development Teams and “Feature Gates”

HubSpot provides “inbound marketing” software tools to small and medium-sized businesses to attract prospective customers to their websites. Singleton told me how HubSpot reengineered their aging, single software application into a vibrant matrix of 200 small software “services” (an architecture like Amazon’s and Google’s), which has enabled them to go from traditional new software release cycles, measured in weeks, to a stream of 100 changes per day. HubSpot replaced their old software with new code in about one year, incrementally ramping up new services and steadily winding down the effort on the old codebase. The new HubSpot product quickly surpassed the old product, and is now adding features and invading related categories at a rate that makes it a serious threat to competitors.

HubSpot has organized its developers in small teams (a “tech lead” and two programmers) around small software functions (“services”). There are about 20 of these teams, each of which maintains about 10 services. The teams are empowered to do as much as possible, as quickly as possible. They have end-to-end responsibilities, including design, programming, testing, release, monitoring, and responding to production problems. They get operational information about the services they own — such as speed and errors — on a real-time dashboard, and they get customer questions and complaints.

“Feature gates” are a sophisticated, proprietary tool they use for configuration, release, and monitoring. The tool enables them to turn specific features on or off, for everyone, for groups, or for individual customers. A switch decides who can access new software depending on its status, such as “hidden” (nobody sees it), “test” (only internal testers), “beta” (selected external testers), and “unveil” (everyone sees it). New features may go through an extended period of various kinds of testing (beta testing, usability testing, or “A/B testing”). Feature gates both provide support and manage risk by letting developers build and release hidden features continuously without waiting for reviews by testers or product management.

To remain competitive, almost all “Software as a Service” and online service providers will need to move to continuous delivery like Google and HubSpot have. The leaders, such as Amazon and Facebook, have already made the switch, with major transformations going on at places like LinkedIn and Netflix. Industries that rely to a great extent on software-based services, such as banking, are not far behind, with a rising number of competitors building and testing new products online.

It is just a matter of time before we see these models being applied across industries, in hardware and other products. For example, chip designers are running continuous integration through their chip simulations, and adding optional features to their chips that can be switched off or on during manufacturing. More broadly, as more and more management practices are transformed by digitization, cutting-edge software development tools and practices such as these will facilitate more open and flexible product management generally.

Why Marketing Needs to Hire a Corporate Folklorist

Early last year, I helped craft a presentation for a gathering of senior managers at a clothing company. Looking for a hook, I asked questions about previous eras when its leaders faced challenges like the ones they face today.

“Oh, you need to talk with our corporate historian,” their head of communications told me.

The historian held the keys to drawer after drawer of artifacts from every era of the company’s existence — sewing machines, product sketches, vintage ephemera, love letters from fans, even the world’s oldest pair of dungarees. It was stuff with a story to tell, and she used it precisely for that purpose. She traveled the world giving presentations that featured these artifacts to illustrate the company’s brand promise through a visceral experience that no brochure or blog post could match.

Given how fashionable storytelling is today, you’d think every market-centered company would have a person like this on staff to manage the collective memory of its brand. But in my experience, not many do, and that’s a shame. Artifacts and stories articulate a company’s identity, purpose, and value to customers and communities in a very real, powerful way. Making these past and present narratives accessible to current and future audiences is an important role because it captures the spirit of the organization and uses that to develop an even stronger brand. This role is so important, in fact, that companies should give it executive-level visibility, authority, and resources.

Who do you hire for this critical function? Certainly you need someone with the research and communication skills to collect, curate, and publish stories and their associated symbols (visuals, audio, video, spoken and written word, and more). But the job also requires a “macro” perspective: the ability to weave historical accounts, cultural practices, and current events into a cohesive corporate canon.

You could think of this role as a “corporate historian,” “official archivist,” or “chief storyteller,” but I prefer “folklorist.” Folklore, in a cultural sense, is the sum total of anecdotes, artifacts, and rituals that unite a group of people — the common language that creates shared meaning. Part journalist, part librarian, and part storyteller, the folklorist is much like the cultural anthropologist who studies the language, myths, and rituals of a society, or the ethnographic researcher who investigates the habits and mind-sets of target audiences. Using similar methods of observation, analysis, and documentation, the folklorist would be responsible for capturing and publishing the oral, written, and visual history of a company and how it serves its constituents — customers, partners, influencers, and employees.

Given the skills and span of responsibility required, this function should sit in the marketing department. Every touch point in the marketing mix — including advertising, executive communication, demand generation, sales enablement, and customer support — benefits from an injection of folklore because stories are a potent vehicle for persuasion. And, of course, marketing is in the best position to integrate the stories into a holistic content management strategy for the organization.

The problem is, organizations’ stories are usually scattered far and wide. R&D and engineering teams know the chain of events that led to important innovations, but those anecdotes remain locked in status reports that rarely reach other departments. Sales teams glean quotes from customer conversations about product impact, yet these testimonials often travel without the richness of scenery and symbols that lend drama to a narrative. Marketing copywriters craft content all day long that converts corporate messages into compelling vignettes fed by insights from social media and market research. But the long view — how the company originated, how its markets evolved, and what lessons it learned along the way — often lives in the memories of veteran employees who may tell their tales to coworkers over coffee but don’t necessarily have a pulpit for broader communication.

These individual story streams don’t converge in most companies. In nearly 25 years as a marketing consultant, I’ve encountered only a few organizations with anything like a folklorist on staff. Those that have one are usually industry titans like IBM, Boeing, and GE, whose category-defining legacies warrant historic preservation; consumer-focused brands like Nike, Levi Strauss, and Coca-Cola, whose many cult followers justify the creation of a tourist destination; or startups with an ambition to build a lasting culture, like Zappos or Airbnb. (Perhaps not coincidentally, these companies also have created brands that are highly valued in the marketplace and beloved by their customers.) But a corporate folklorist’s work goes beyond documenting innovations, entertaining visitors, or even building a culture. It’s also about promoting a common understanding of the organization’s values and purpose.

That’s a goal all businesses should have.

The New Marketing Organization

An HBR Insight Center




What Makes a CMO Powerful


Strategies to Attract Superpower Marketing Talent
Why Marketing Needs More Introverts


Should Marketing or R&D Have More Power?

How Valuable Are Your Customers?

Not all customers are created equal. If you’ve ever run a business (or even just been a customer yourself), then you know that some customers provide more revenue (and incur fewer costs) than others. Figuring out which to focus on and invest in is critical if you want to maximize your profit.

Many companies use a calculation called customer lifetime value (CLV) to determine how much a customer is worth in comparison with others. Even if you don’t have to calculate CLV yourself (there are lots of tools that will do the math for you), it’s important to understand the concept so you can decide whether to use it when making marketing and sales decisions.

So what exactly is CLV? Here’s a basic definition: The amount of profit your company can expect to generate from a customer, for the time the person (or company) remains a customer (e.g., x number of years). At its core, CLV is the present value of all future streams of profits that an individual customer generates over the life of his or her business with the firm.

This is a useful number to have. By comparing the CLV across customers, you can determine which are more or less profitable to you, thus segmenting your customer base. Knowing each customer’s profitability is the first step to managing them. You can then decide on where to focus your marketing, product development, customer acquisition, and retention efforts.

The math behind CLV is not something you can do on a cocktail napkin, but the interactive illustration below can calculate it for you — and help you understand how the various elements of the calculation influence the final number. (Note: There are multiple ways to calculate CLV. This interactive illustration shows you one way.)

To use the interactive, adjust the sliders on the left hand side to see how each factor influences the CLV over five years and expected customer contribution margin for each year. 

Now imagine you own a print shop and you’d like to figure out which set of your customers are more valuable to you: small businesses that buy from you semi-regularly or larger businesses that only use you a few times a year for significant purchases. Start by figuring out the CLV for the first group.

On average these smaller businesses purchase from you 10 times a year and spend $200 on each order. Set the average number of purchases per year slider to 10 and the average spend per purchase one to $200.

Your average gross margin on these orders is 41% (set the slider accordingly). Now the question is how much do you spend marketing to your customers and how effective are your efforts? Your total marketing budget is $10,000 for the year and you have a total of 500 customers, so your direct marketing costs per customer per year are $20. You send out postcards to local businesses to acquire new customers and you find that for every 100 cards you send, you get two new customers. So set the acquisition response rate slider to 2%.

You’ve done a nice job retaining customers over the years, so you have an 80% retention rate for this type of small customer. (Set the average customer retention rate slider to 80%.)

Now the last thing you need to determine is your discount rate. When you calculate a CLV, you assume an average annual revenue from a customer for a certain number of years. But the revenue you receive in the future is less valuable than it is today. The discount rate in the CLV equation calculates the present value of that future revenue and is tied to the current cost of money. Different companies will use a different rate, but let’s say you feel optimistic about where the economy is headed so you choose a 10% rate.

You can see that for this set of customers the CLV over five years is $699.

To compare that with your larger customers, adjust a few things in the interactive illustration:

These businesses only purchase printing from you once a year, so move the average number of purchases per year slider to 3.
But they spend almost twice as much, so adjust the average spend per purchase to $400.
Your margin on their orders is slightly better so move the average gross margin slider to 50%.
Your mailings to these businesses yield a higher response rate so adjust the acquisition response rate to 4%.
Direct marketing costs per customer per year, average discount rate, and average customer retention rate all stay the same.

Now the CLV is $732, slightly better than the other group. This may mean you want to spend more time focusing on these large customers, perhaps setting up a customer loyalty program or making other efforts to retain even more of them.

And perhaps more importantly you can use the interactive before to see how you might influence the CLV by doing things like increasing the number of purchases per year (just one additional purchase yields a CLV of $1,157!), decreasing marketing costs, or improving your acquisition response rate.

This post adapted and reprinted material from Core Reading: Customer Management, HBP. No. 8162, by Sunil Gupta, which is part of Harvard Business Publishing’s Core Curriculum in Marketing.  Copyright © 2014 by the Harvard Business School Publishing Corporation; all rights reserved.

Beware the CEO Who Is Showered with Awards

Firms run by CEOs who had won major awards (such as CEO of the year) showed significant declines in stock prices, return on assets, and ability to meet market earnings expectations in the 3 years after the awards were won, according to research conducted by economists Ulrike Malmendier and Geoffrey Tate and reported by Adam Grant of Wharton. After CEOs win awards, they spend a lot of time on prestige-increasing tasks that may distract their attention from leading. Malmendier and Tate found that a CEO’s odds of writing a book nearly double after he or she wins an award.

Adapt to a New Culture – but Don’t Go Too Far

One of the most popular pieces of advice that people receive when operating across cultures is, “When in Rome, Act Like the Romans.” This advice essentially means that in order to be successful in a situation different from your own, you need to adapt to the local customs, whatever they happen to be. But what happens when you don’t have a perfect read on what these customs or rules exactly are?

Imagine the following: Cheng, a Chinese professional, is starting a new job as a management consultant at a major strategy consulting firm in the U.S. Cheng is explicitly told that he needs to show his leadership potential in meetings with senior colleagues and partners by outwardly expressing his opinions and even, on occasion, directly disagreeing with his superiors. Cheng realizes this, despite how uncomfortable it feels, and decides to go for it. The first chance he gets, Cheng tells his boss how “crazy” his idea is and how a much more sensible strategy would incorporate various other features that he did not consider in his analysis. As uncomfortable as it was to call out his boss in this way, Cheng feels proud about having expressed himself.

A few hours later, Cheng gets a message to meet his boss in his office. Is Cheng’s boss likely to praise him for a job well done or chastise him for speaking about him publically in an inappropriate manner?

The answer is clearly the latter. Cheng went too far in his behavior, and unless he has a very smart “forgiveness strategy,” he’s likely to land in his boss’ doghouse. Cheng knew that he needed to be more assertive with his boss than he otherwise would have been in China, but he wasn’t able to adjust to the appropriate American level. If in China, you are supposed to act with a 1 or a 2 on a seven-point scale of assertiveness, and in the United States the appropriate level is a 5, Cheng produced a 7.

This story is emblematic of so many other similar stories that I hear in my work teaching and training people to function successfully overseas. Individuals attempt to adapt their behavior to match a particular culture but end up pushing too far, making larger mistakes than if they had just stayed true to themselves. It’s the problem of what I call “over-switching.”

I see this over-switching phenomenon quite often in my work as a business school professor. It happens when students who are generally quite deferential with professors in their native country realize that the U.S. standards are more informal, but they inaccurately calibrate where that level of informality actually is. It also happens often in interviews and cover letters. Students from countries where self-promotion is taboo learn that it’s required in the U.S., but don’t quite understand to what extent self-promotion is acceptable. I remember helping one foreign-born student with her application essays, where the first attempt was low on the self-promotion scale (talking about how “we” achieved certain individual results instead of “I”), but in the second attempt, she leapfrogged well past the level of acceptability to become overly self-promotional (touting her single-handed accomplishments on what was obviously a group-oriented endeavor). Although the student was embarrassed to see the difference, she also appreciated the feedback because it helped her calibrate her behavior the next time around to the appropriate style.

Individuals need to take steps to avoid over-switching and decrease the likelihood that it will interfere with their success abroad. One essential strategy is to develop a detailed sense of the “cultural code” — the correct and appropriate interpersonal style — for whatever key situations you’re working in. How assertively are you expected to act in your role in this setting? How directly are you expected to communicate, and with how much emotional expressiveness? Of course, the rules for how to behave are not the same in all situations you encounter in a foreign culture. Taking Cheng’s case as our example, some work cultures are extremely informal with very high expectations for assertiveness on the part of employees. Others are much less so. Some bosses also have styles that are more or less conducive to the behavior that Cheng exhibited in this situation. The overall goal is not to just learn how the new culture is different from yours. It’s to calibrate the specific level of difference and to learn how to acclimate your behavior to that particular level.

But even if you do work hard at mastering the cultural code, mistakes are still inevitable. You must also find ways to mitigate the brunt of these inevitable faux pas. Do what you can to develop a sense of rapport or, when possible, a relationship with the person you’re interacting with. Express genuine interest in the new culture and bond over areas of mutual interest, such as sports or family. And in certain cases, if the relationship allows, see if the other person might even be able to mentor you about cultural differences and the appropriate level of accommodation.

Over-switching is a natural part of the adaptation process. The trick isn’t to make it go away; it’s to try your best to convert these inevitable errors into valuable learning opportunities.

How to Prepare for Maternity Leave

It can be stressful to step out of your job for three months, no matter how happy the occasion. How can you be sure that you’ve prepared those around you for your absence? And how can you set things up so you don’t return to a complete mess? How much do you rely on others versus putting things on hold? Do you need someone to replace you?

What the Experts Say

“Part of running a 21st-century company with a twenty-first century work force is establishing systems that allow for women to go out and return from maternity leave with minimal impact on the company or on their careers,” says Joan Williams, founding director of the Center for WorkLife Law at the University of California’s Hastings College of the Law. Yet few organizations offer clear guidelines on the nuts-and-bolts of managing leave. Often, you’ll need to figure out how to prep colleagues, outsource work, stay in touch with the office, and re-enter with minimal disruption entirely on your own. It’s a challenge, particularly for the many women who start families at the same time they’re taking on greater professional and managerial responsibilities. But “planning for your maternity leave is an opportunity to demonstrate to everyone that you’re in the game,” says Carol Walker, president of the consulting firm Prepared to Lead, which trains young executives. Here’s how to take ownership of the process and ensure a smooth transfer of responsibilities before you leave, while you’re away, and when you come back.

Know your rights

If you’ve worked somewhere for more than a year, the Family and Medical Leave Act (FMLA) allows for 12 weeks of unpaid leave to care for a newborn or an adopted or foster child. However, these laws only apply to companies with 50 or more employees, so small businesses or start-ups with smaller staffs may have very different expectations. Further complicating the process is the fact that laws pertaining to maternity leave and disability vary from state to state, so as soon as possible, learn about the law and about your company’s own policies. Even if there are no formal guidelines that apply to your particular situation, all is not lost. Find out what other employees before you have done and understand that you will need to negotiate the specific terms of your leave whether you work at a large or small company.

Develop a game plan

Prepare a list of your core responsibilities, dividing them into the tasks that can be assumed by others and those that aren’t so easy to delegate, such as client relationships, expertise-related functions, and mentorship of direct reports. Begin to think of whom among your subordinates, peers, and superiors might be best suited to each role and consider hiring someone to cover your leave if necessary. “Many times it can feel as if it’s more trouble to find a replacement,” Williams says, “but a temporary employee often brings something unique and valuable to the organization.”

Talk to your boss first

Although you may be eager to share the news of your pregnancy with colleagues, talk to your boss first. And, if you intend to come back to work, make that immediately clear; emphasize that you’re a committed employee who wants to return. “From the outset, stay engaged and demonstrate that you’re going to work to make your maternity leave successful,” says Walker. This initial conversation should be the first of many that you have as you work out the details of your leave and navigate any complications that may arise.

Get buy in from colleagues

Talk candidly with your coworkers, particularly your direct reports, and let them know this is an opportunity for them to step up and assume responsibilities that may have otherwise been months or years away. “There’s a big difference between dumping work on someone and incorporating goals into someone’s development plan,” says Walker. Listen to any concerns and be open to the possibility of changing your plan if someone expresses interest or shows aptitude for a particular role.

Communicate clearly with outside stakeholders

Once you’ve decided who will handle your outward-facing functions, especially client relationships, reach out to those external parties as soon as possible. Set up a time to introduce them to people who will be their contacts in your absence. Set a timeline for transferring the relationship — first working in tandem, then handing off — and expect some bumps along the road as you slowly step out of the picture.

Be in regular, planned contact with your team

While it’s perfectly within your rights to be incommunicado, not everyone feels comfortable being completely out of touch during leave. Walker believes that the more practical approach is to maintain contact in a way that’s convenient for you, either by email or perhaps with a short call each week. “It’s incredibly stressful to get up to speed after being away for 3-4 months,” Walker says. “Spending half an hour to check in and debrief isn’t a huge intrusion and can be valuable for everyone involved.”

Do:

Find out as soon as possible if you’ll be able to take leave under the FMLA and research any additional relevant laws in your state
Be the first to tell your boss the news — assume that once one person knows, everyone will know
Treat maternity leave as an opportunity for growth — for both you and your team

Don’t:

Assume that everyone will be eager to take on additional responsibilities —explain why you think certain tasks are important and well-suited for particular colleagues
Follow your initial plan to a T — be open to changes
Disappear completely — even though you may be legally entitled to do so, find a way to maintain contact with your colleagues and stick to it

Case study #1: Continue to help others grow professionally

Allison Falender is a technology manager at Shell, who is currently planning a maternity leave for the birth of her third son in September.

Since her professional responsibilities have grown exponentially since her middle child was born, she started planning much earlier this time around. “I work in a global role and I’m directly responsible for five employees as well as supervising several others together with my counterpart in London,” she says. “I told my boss when I was eight weeks pregnant, so we had a full seven months to prepare, to resolve any concerns that might come up, and to explore solutions as a team. Since maternity leave is temporary, I’ve always approached it as a development opportunity for the people I work with.”

In addition to slowly transferring her regular responsibilities to superiors, peers, anddirect reports, she’s carefully planned around one aspect of her job that isn’t easily performed by others. “I’m a US patent agent and a liaison between technology and the intellectual property office,” she explains. So, almost immediately after announcing her pregnancy, she began training two of her employees to perform that role when she’s out of the office. “Even when I come back from maternity leave, they may continue,” she says.

Allison plans to use email to stay in touch with her team during her leave. “Mentorship is an important part of my job, and I want to be available to answer questions even if my response time is a little slower,” she says. “Being an integral member of my team and continuing to be available to my employees, many of whom have come to Shell directly from graduate school, is very important to me.”

Case study #2: Balancing the professional and the personal

Natalie Baron* negotiates maternity leave from both sides of the table. She’s responsible for human resources at an investment management firm with more than 200 employees, and she’s a mother of three so she understands that balance is key.

After her first baby was born, she took 12 weeks “off the radar.” Although she doesn’t regret the uninterrupted time she spent bonding with her son, she now acknowledges that she underestimated the impact of that decision. “Even though I wasn’t the head of my department at the time, when I returned to work, not having maintained my connection to my colleagues had created real distance between us.”

By the time her second child was born, Baron was running HR at a different company and in a crunch period at work. “Compensation season starts on November 1st, and my daughter was born on November 2nd,” she explains. Because she was privy to a great deal of confidential information, hiring a replacement was out of the question.

So, with support from her COO and a junior member of her team whose specialty was compensation, she worked from home for a few weeks, and then returned to the office the first week of January. The shorter, more connected leave felt comfortable because she was better prepared, both professionally and personally, the second time around. She knew what to expect of a newborn and had trusted childcare lined up.

“I took stock of my own life but I also had the perspective to understand that other people would continue to go to work and have responsibilities regardless of my decision,” she says. “There are points in your career at which you have to show up, and your leadership is tested. I could have taken a longer maternity leave, but I would have failed the business and would have missed out on an opportunity to build my credibility at a critical time.”

*not her real name

Resumes Are Messing Up Hiring

While we are surrounded by a wave of new disruptive technologies and apps, HR still hasn’t improved how it evaluates the prospective workforce. Traditional hiring processes that revolve around CVs are no longer sufficient – they don’t pinpoint the right qualities demanded of leaders today, and their dated criteria obscures many talented individuals from even hitting the radar.

There is nothing inherently wrong with resumes – they highlight applicants’ past achievements and experience. But while CVs are good at showcasing formal skills, they’re not very useful for identifying values and behavior. Resumes generally don’t distinguish between skills (knowing how to do something) and competencies (doing it really well and with great reliability and ease).

Sam Mead, co-founder of London-based start-up, Saberr, which specializes in workforce science, reiterates this problem with CVs – and by extension, the now ubiquitous application systems. They only show the eligibility but not the suitability of a candidate. And while resumes can match an applicant’s skills to the role, they are poor at predicting how well the applicants will interact with the company’s culture and future colleagues.

CVs have led recruiters to focus too much on grades, university reputations, and prior work experience. The problem with these hiring criteria is that they’re biased toward applicants from more wealthy backgrounds. These families usually have better connections and networks, can provide better education opportunities, and can afford to pay reputable universities’ tuition fees. In addition, children who have grown up in the upper echelons of society are also much more used to the social norms that guide successful “acceptable” behavior.

This process is no longer reliable; it has turned income inequality into career opportunity inequality, and recruiters are losing opportunities to tap a wider talent pool. As much as they claim to be interested in taking in talent from a broad spectrum of backgrounds, the practice of using resumes to select candidates can exclude those who can’t afford education or taking unpaid internships. Very often, they end up in lower-paid jobs with limited future prospects. So the better jobs tend to stay in the hands of those from wealthier backgrounds. A recent study in the UK, for instance, shows that 3 out of 4 judges, 2 out of 3 doctors, 3 out of 4 finance directors, and 1 out of 2 chief executives come from fairly well-off families.

What can be done about this?

Companies truly interested in hiring people from diverse backgrounds must abandon the conventional practice of filtering by résumé. Recruiters must seek proof of competencies to find the most promising candidates, those capable of becoming sense-able leaders with skills needed to succeed in a rapid-moving, interdependent world.

New tools and hiring processes can help recruiters find more diverse talent pools and reach candidates who may have previously been excluded from consideration. If hiring companies pay less attention to skill- and history-focused résumés and focus instead on the socio-emotional, cognitive, and behavioral traits of applicants, those from economically underprivileged backgrounds would have much broader job prospects. This garners higher professional effectiveness and also distributes and diversifies the social strata of labor.

And more companies can use smart data to improve the recruiting process. Some are already paving the way, with examples ranging from large multinationals like Coca-Cola, which uses data-driven strategies to increase innovation in its Atlanta HQ, to start-ups like Seedcamp, which uses psychographics (the study of personality, interests, etc.) to identify teams with the greatest chance for success, to tech companies like Kestral in Australia, which identifies the strongest performers through team optimization processes.

Successful placement also greatly depends on “fittingness,” so recruiters need to take other off-resume elements into account. Saberr pays attention to applicants’ core values and specific behavioral traits, in order to create a metric mapper – the main element of their data-driven HR Strategy. Using algorithms to process fundamental values and behavioral compatibility, as well as diversity, the company predicts how strong the interpersonal relationship between the applicants and the potential employer can become. The company does this by administering a survey for applicants and the employer, which maximizes the potential match, and by looking at soft skills and moving away from more conventional credentials or past experiences. The algorithm allows the company to “project” how the new hires will fit into the environment.

Large technology corporations like IBM are also helping build “social businesses” to determine fittingness (which IBM defines as the “ability to create more effective work experiences through social collaboration and digital experience”) by harnessing the power of social media and an individual’s web presences. And companies like Quid in San Francisco are using semantic analysis to analyze and visually depict where the most attention, creative energy, and financial resources are being spent online. While private equity investors and advertising firms are the primary users of this tool, it has huge potential for the recruiting profession, because it could allow staffing executives to see where candidates are devoting their professional energies.

While many privacy questions still have to be sorted out, the likes of Saberr, IBM, and Quid point to the future of human resource acquisition and development, through their use of smart technologies that help predict prospective employees’ behavior and their integration into the work community – something resumes can’t always do. These game-changers are helping organizations embrace talent wherever it surges, transforming the way companies recruit and source the workforce.