Marina Gorbis's Blog, page 1402

Deregulation Won’t Boost Entrepreneurship

When politicians around the world talk about supporting entrepreneurs, one idea is repeated more than almost any other: improving business regulations.

According to this line of thinking, entrepreneurs would be much more successful if governments would just get out the way. The most commonly cited ways to do this include making it easier to file the paperwork to start a business, and reducing the amount of administrative bureaucracy and restrictions that entrepreneurs encounter.

Until recently, evaluations of these regulations have been conducted at the national level. Unfortunately, this makes them incomplete. In many countries, business policies vary a great deal among individual cities, which is where companies actually operate.

A new report from the U.S. Chamber of Commerce Foundation has taken steps to address this issue. Its authors used a well-known international framework to evaluate the regulatory environment for entrepreneurs across a number of U.S. cities.

This new analysis illustrates how large the differences among cities can be. For example, in Chicago, it takes 32 days for an entrepreneur to start a business, while in Detroit it takes just 4. In New York, it usually takes founders 511 days to enforce a contract, but in Atlanta it requires only 167.

The authors consider metrics like these to be important barometers of the local business climate. According to the report, the data can even act as “a proxy for a city’s competitiveness.”

Yet, one U.S. city stands out like a sore thumb. San Francisco requires entrepreneurs to submit to more bureaucracy than almost any other city. Construction permits in San Francisco typically cost over $100,000 for businesses. Like other cities in the state of California, local founders must also make dozens of individual payments to tax authorities. Overall, San Francisco received a total score of 41.3 out of 100 on the report’s “Regulatory Climate Index.” That’s less than half as good as top-ranked Dallas.

Of course, entrepreneurship is booming in San Francisco. During the last decade, founders in the city have built a number of highly successful companies like Twitter and Dropbox. Data on the Silicon Valley region, which includes San Francisco and neighboring cities with very similar regulatory policies, shows that nearly half of all venture capital investments in the U.S. are placed into local companies. Much of this capital is providing a good return. Last year, more than 280 tech companies in the area were acquired.

The story is quite similar in New York City. It costs over $1,300 to start a business in one of the five buroughs. New York also adds administrative costs to commercial real estate transactions that include a mortgage recording tax of 1.925% and property transfer tax of 2.625%, something that does not exist in cities like Dallas and St. Louis. The total regulatory climate score for New York City is 34.7, which is even worse than San Francisco.

However, New York is now the number two city for venture capital investing and had the second largest number of tech acquisitions in the country last year. It also hosts more Fortune 500 companies than any other city in the world.

This disconnect between regulatory scores and the success of local entrepreneurial companies shouldn’t come as a surprise. In fact, the best entrepreneurs don’t really care about the local regulatory environment.

Last summer, our team at Endeavor Insight surveyed and interviewed 150 entrepreneurs from some of the fastest-growing companies in the U.S. We asked them why they decided to start their companies in the specific cities where they did, and evaluated the factors they mentioned. Only 2% of the entrepreneurs in our study reported that the quality of the business regulations in their cities influenced their decisions.

This doesn’t mean that regulation has no bearing on entrepreneurship. It simply demonstrates that other factors are far more important. The entrepreneurs at the fast-growing companies we surveyed highlighted three things in particular. First, they wanted access to a talented workforce, especially technically trained employees like engineers and software developers. The next resource they valued was proximity to potential customers. This was especially important for B2B companies and was a big reason people moved to cities known to be hubs of specific industries. Finally, entrepreneurs also prefer to live in places that enable them to have great quality of life by providing natural or cultural attractions and connections to others. (Several also noted that these attributes also attract great employees.)

It is very tempting for policymakers to focus on regulatory policies when they set out to support entrepreneurs. However, as the examples of Silicon Valley and New York City demonstrate and research with the best entrepreneurs confirms, the effects of changes in these areas are not likely to have large impacts.

Policymakers who want to support local entrepreneurs should look instead to other solutions. The best place to start is to focus on the three areas outlined above: access to talent, access to customers, and a high standard of living. Leaders who want specific ideas for improving these things should speak directly with local entrepreneurs who lead high-growth companies. After all, the challenges that cities face are often unique, and these founders have the firsthand experience that matters.

How to Give Your Team Feedback

Business books, magazines, and blogs are chock full of advice about how to give feedback to individuals, but how do you do the same for your entire team? What type of constructive criticism is appropriate in a group setting? How much is too much? And how should your colleagues help?

What the Experts Say

Providing feedback isn’t solely the team leader’s responsibility, according to Mary Shapiro who teaches organizational behavior at Simmons College and is the author of the HBR Guide to Leading Teams. For starters, that would be impractical. “You can’t be the only one holding everyone accountable because you can’t possibly observe everything that’s going on,” she says. Second, if you’re the only one praising or critiquing, group dynamics suffer. “You want to give everyone the opportunity to say his piece,” she says. Your job as manager is to ensure that team members are “providing regular constructive feedback,” says Roger Schwarz, an organizational psychologist and the author of Smart Leaders, Smarter Teams. “There needs to be an expectation within the team this is a shared leadership responsibility,” he says. Here are some principles to help you lay the groundwork for ensuring and enhancing this effective team practice.

Set expectations early

“When a team works well together, it’s because its members are operating from the same mindset and are clear about their goals and their norms,” says Schwarz. At the start of a new project, help your direct reports “decide how they’re going to work together” — and importantly, how they will “hold each other accountable,” says Shapiro. She recommends coming up with an “explicit agreement” about how the team will handle issues like the division of labor and deadlines. Stipulate, for example, that if a colleague knows he is going to miss an important deadline for his portion of a project, he must email the team at least 24 hours in advance. “If someone doesn’t follow through on the expectations the team created, he’ll get feedback from the group about what happened because he fell short.”

Create opportunities for regular check-ins

There’s no hard-and-fast rule about how often your team should meet to review how things are going, but in general, “it’s better to start out with more structure and relax it over time, than to start out with too little structure and have to impose it later,” Shapiro says. When you’re in the early stages of creating a project plan, schedule regular check-ins as part of the timeline. “If the team is running smoothly you can always cancel the meeting.”

Ask general questions

Giving and receiving feedback is a skill and most people are not naturally good at it, says Shapiro. “One of your goals is to develop your team’s capacity to give feedback and help people get used to articulating how they feel the team is doing.” Take baby steps. At the second or third check-in, ask the group general questions such as, “On a scale of one to five, how well is the team sharing the workload? What needs to change?” As the leader, you’re the moderator of this conversation. Once team members have spoken, offer your two cents about “where the team excels and where it faces challenges,” Schwarz adds.

Work your way up to structured reviews

As your team gets accustomed to working together and sharing feedback, “you need to do a deeper dive into how team members are doing at the individual level,” says Shapiro. Ask each person to prepare specific reviews of colleagues to be read aloud at the next meeting. “Every team member should say one thing they appreciate about the other members and one thing that would be helpful if they did differently.” The aim is to help “people understand how their behavior is impacting others,” she says. “If they hear the same kind of feedback from multiple people, that is powerful.” When it’s your turn, Schwarz recommends validating your observations with others. “Ask: ‘Are you seeing things the same way?’ Get other people’s reactions.”

Keep performance issues out in the open

The management mantra for giving individuals feedback is: “Praise in public, criticize in private.” But in team settings, this goes out the window, according to Schwarz. “In the traditional view, it’s inappropriate to raise issues in a meeting that would make people uncomfortable or put people on the spot.” But your job as a leader is not always to make people feel comfortable. When teams have problems, “it should all be out in the open,” he says. “You alone can’t help people improve; there needs to be a group plan.” After you’ve “harnessed the power of the group” to prompt change, one-on-one conversations with struggling colleagues are then in order, says Shapiro. “Say to them: ‘What did you hear from the team? How are you going to do things differently? And how can I help?’”

Foster team relationships

Conflicts between coworkers are inevitable. But “you can’t just say, ‘I’ll handle it,’ because [as the manager] you can’t solve a problem to which you’re not a primary stakeholder,” Schwarz says. “You can coach people on how to have difficult conversations, and you can help facilitate those conversations, but team members need to address issues where the interdependencies lie.” Help colleagues build trust before problems arise by encouraging open conversation. And, when there is conflict, make sure they understand, they need to “give feedback directly to each other.” says Schwarz. Adds Shapiro: “The only way good work gets done is through good relationships — the better the relationship, the better the work.”

Debrief every project

At the end of a project or when your team is disbanding, schedule a final check-in to discuss “what worked and what didn’t, what should we bring forward and what should we do differently next time,” says Schwarz. Take careful notes: the information gleaned in this session should not only be part of the organization’s final project review, but also part of each team member’s annual performance appraisal, says Shapiro. The objective is to “provide closure on the team and also determine what each member needs to do to further develop,” she says.

Principles to Remember

 Do:

Make sure your team understands that feedback is a shared leadership responsibility
Schedule routine check-in meetings
Keep the tone positive by encouraging team members to say what they appreciate about others’ contributions

Don’t:

Start meetings with your own feedback for the team — allow everyone else to first express how they think they’re doing
Shy away from  performance issues — address them openly with the group
Get in the middle of personality conflicts — help facilitate difficult conversations

Case study #1: Create opportunities for team and individual reflection

Once every quarter, Laree Daniel — chief administrative officer of Aflac, the insurance company — assembles an ad hoc team around a particular customer incident for an in-depth feedback session. “I take a customer case study in which we either did very well or very poorly, and I gather everyone that touched the customer in some form,” she says.

First, Laree makes sure everyone is up to speed. Team members are given a packet of information that includes a write-up of the incident, transcripts of phone calls, copies of customer letters, and copies of the company’s responses. Next, she poses a series of questions to the team: What worked well? Where were the gaps? What can we do better?

The goal, she says, is to get the team to reflect on the company’s behavior from both the customer’s perspective and shareholder’s. “This isn’t about blame and I’m not scolding anyone,” she says. “I am the facilitator and I make it a neutral environment.”

During these feedback meetings, colleagues often have epiphanies. “They realize: ‘I didn’t know [my behavior] would have that impact,” she says. “It becomes a dynamic learning experience.”

The feedback and information she picks up from those meetings are used to make process improvements. “Often the best ideas come from those people who were closest to the work.”

Case study #2: Focus on empowering your team

David S. Rose, the angel investor and CEO of Gust — a platform for the sourcing and management of early-stage investments — has a simple approach when it comes to giving group feedback. “The goal is not to depress the team,” he says. “I try to keep everything upbeat and lay out our strengths and our challenges.

A few years ago, for instance, he was involved in leading a 15-person technical team at a software company. The group’s biggest issue was its disappointing B2B product suite. “Customers were unhappy and the front-end salespeople were being yelled at,” he says. “As a team, we had some good individual contributors but we needed to get better at working together. I couldn’t just walk in and give feedback along the lines of: ‘These products are terrible; you’re all fired.’ We needed to identify the organizational problems and come up with a prescription for a path forward.”

He broke the team into subgroups of two or three people, and he tasked each with brainstorming how to manage a particular inter-team challenge. The subgroups then provided feedback to everyone else; based on that, the team developed a strategy to improve workflow and communication. “We came up with a plan and the whole team felt empowered,” he says. “We knew what the problems were and we figured out how to solve them.”

Within nine months, he says, the products were in far better shape.

Working with Your In-Laws Isn’t Always a Terrible Idea

When Walmart’s Rob Walton, board chairman of the family-controlled company, appointed Greg Penner to vice chairman last week, he was going to bat for his son-in-law, underscoring the important role that in-laws can play in the game of family business.

It isn’t always that way. In-laws in many business families often find themselves at a disadvantage. As nearly every married (or formerly married) person recognizes, tensions with in-laws are common, whether you work together or not. When working in the family’s business, in-laws (who sometimes call themselves “out-laws”) have two strikes against them. They have to live up to the standards and expectations set down for non-family employees; at the same time, they are viewed by non-family employees as having all the perks that come along with being part of the family. Essentially they have the worst of both worlds.

And yet some in-laws can and do avoid a third strike; some even manage to hit a home run.

What does it take for an in-law to survive and thrive, as Walmart’s Greg Penner has?  We decided to find out. We called up a number of in-laws (and their spouses) to ask: “What are the keys to success for being an in-law who makes it in a family business?”

We quickly learned that there is no single in-law experience. Successful involvement in the business depends on a number of factors, including each in-law’s competence, personality, expectations, and opportunities in the business, as well as a family’s philosophy about whether or not to allow in-laws in the company. We found that different in-laws can even have positive or negative experiences within the same family business. And yet after talking with our client families, we found that the successful in-laws often play by the following rules:

Play for another team first. Work experience outside the family is often a prerequisite for being – and feeling — successful in a family business, and for maintaining a sense of personal identity. This experience is critical not only for developing competence and skill, but also for building a reputation, self-confidence, and credibility both with the family and with non-family employees. As one CEO put it: “I came in as an accountant, and I felt pretty good about that because I didn’t feel like they were having to train me to try to find a place for me.” The importance of this work experience was emphasized time and again — even by in-laws who had made it to the top of the heap but who had not worked outside the family business.

Negotiate like an agent. Given the infamously porous boundaries between the family and the business in a family-controlled enterprise, successful in-laws draw an invisible but firm line between their personal and work lives. As one top executive put it: “When you negotiate for compensation, clarify compensation, clarify benefits, clarify your role, clarify your career plan, clarify your goals, and be honest and candid about it. Don’t treat it as a family decision to buy a summer home. Act just as if you were negotiating with Oracle.” The more transparency, professionalism, and clarity that you achieve, the better placed you will be to shape your career in the family business.

Be clear about structure and policies. Several in-law executives attributed their success to the fact that they did not report to a family member. If you must do so, then be sure that the family has a strong employment policy and that it is supported by the board. The policy needs to address to whom you are responsible, what your responsibilities are, and what recourse you have if there is a family member in charge of the company who is undermining your efforts in the business. Remember: Structure is your friend!

Be smart about geography. It’s a truism that familiarity breeds contempt, but it also happens to be the source of good advice. A number of in-laws we spoke to, and their spouses, attributed their success to the fact that the in-law worked physically far away from the family center. Distance not only makes the heart grow fonder, but it allows for personal and professional growth and maturity in a way that is not always possible when one is at HQ, under the magnifying glass of the patriarch or matriarch.

Be patient. Take a hard look the make-up of the family whose business you are thinking of entering. If there is already a favorite son or daughter, there may be no room for a male or female in-law executive. “If there are other ‘real’ family members working in the business, you may get sidelined,” warned one in-law. “At least you won’t be deeply involved in the succession process.” And yet it doesn’t always turn out that the heir apparent is either good enough or smart enough or interested enough to wait around to take over the business. “I tell every employee, including in-laws, to be patient and to do the job better than anyone else could do it,” said one CEO. “You will be paid handsomely, and if this doesn’t work out, you’ll be in a position and will have the confidence to go work somewhere else.”

Find a confidante outside the family. When you work for a family business, you just can’t bring the job home with you – it’s often too sensitive for a spouse to be forced to take sides between you and his or her family of origin. “Maybe it’s because your partner has grown up thinking that her father knows everything and is the smartest guy in the world, but when you run up against that, you’re in trouble,” said one in-law CEO. “You really need a good friend that you can talk to if you hope to make it in a family business.”

If all else fails, you can always follow the practice of an in-law of one client family: Keep a signed copy of your resignation letter sitting in your desk. “Whenever it’s clear to anyone that I’m not the right guy for the job, I’ll just walk into the patriarch’s office and hand over my letter,” this executive said. Having an exit option is important, whether it is your own money, an outside business, or employable skills. The additional security gives in-laws – and their spouses — the distance they need to be able to walk away from an unhealthy situation.

The in-laws we talked to were successful and have made it to the top. They took pride in working for a family business. Once you realize that you have a lot of room as an in-law to influence the future of your career in the business, you’ll feel much better, and likely be much more effective. From that point on, it’s a whole new ballgame – both for you, and for the business.

Choose the Right Words in an Argument

When addressing a conflict with a colleague, the words matter. Sometimes, regardless of how good your intentions are, what you say can further upset your coworker and just make the issue worse. Other times you might say the exact thing that helps the person go from boiling mad to cool as a cucumber.

So, when things start to heat up with a colleague — you don’t see eye-to-eye on a project or you aren’t happy with the way you were treated in a meeting, for example ­— how can you choose your words carefully? To help answer this question, I talked with Linda Hill, the Wallace Brett Donham Professor of Business Administration at Harvard Business School and faculty chair of the Leadership Initiative. She is also the co-author of Collective Genius: The Art and Practice of Leading Innovation and Being the Boss: The 3 Imperatives for Becoming a Great Leader.

Hill explained that the words we use in confrontations can get us into trouble for three reasons:

First, the stakes are usually high when emotions are. “With conflict, there are typically negative emotions involved, and most of us aren’t comfortable with those kinds of feelings,” she says. Our discomfort can make us fumble over our words or say things we don’t mean.

The second reason that we often say the wrong thing is because our first instincts are usually off. In fact, it’s often the words we lead with that get us into so much trouble. “That’s because too often we end up framing the issue as who’s right or who’s wrong,” she says. Instead of trying to understand what’s really happening in a disagreement, we advocate for our position. Hill admits that it’s normal to be defensive and even to blame the other person, but saying “You’re wrong” or “Let me tell you how I’m right” will make matters worse. “We’re often building a case for why we’re right. Let that go and focus on trying to resolve the conflict,” she says.

Third, there’s often misalignment between what we mean when we say something and what the other person hears. “It doesn’t matter if your intent is honorable if your impact is not,” Hill says. Most people are very aware of what they meant to say but are less tuned into what the other person heard or how they interpreted it.

So how do you avoid these traps? Hill says it’s not always easy but by following a few rules of thumb, you’ll have a better chance of resolving the conflict instead of inciting it:

Say nothing. “If the emotional level is high, your first task is to take some of the emotion out,” she says. “Often that means sitting back and letting someone vent.”

The trouble is, Hill says, that we often stop people before they’ve gotten enough of the emotion out. “Hold back and let them say their piece. You don’t have to agree with it, but listen,” she says. While you’re doing this, you might be completely quiet or you might indicate you’re listening by using phrases like, “I get that” or “I understand.” Avoid saying anything that assigns feeling or blame, like “Calm down” or “What you need to understand is.” If you can do this effectively, without judging, you’ll soon be able to have a productive conversation.

Ask questions. Hill says that it’s better to ask questions than make statements. Instead of thinking about what you want to say, consider what you want to learn. This will help you get to the root cause of the conflict and set you up to resolve it. You can ask questions like, “Why did that upset you?” or “How are you seeing this situation?” Use phrases that make you appear more receptive to a genuine dialogue. Once you’ve heard the other person’s perspective, Hill suggests you paraphrase and ask, “I think you said X, did I get that right?”

Own your part. Don’t act like there is only one view of the problem at hand. “You need to own your perception. Start sentences with ‘I’ not ‘you,’” Hill says. This will help the other person see your perspective and understand that you’re not trying to blame them for the problem. Instead of saying “You must be uncomfortable”, try “I’m feeling pretty uncomfortable.” Don’t attribute emotions to other people. That just makes them mad.

So, how do you choose the right words to use in a conflict? Of course, every situation is different and what you say will depend on the content of what you’re discussing, your relationship with the other person, and the culture of your organization, but these suggestions may help you get started:

Scenario #1: You have a criticism or dissent to offer. Perhaps you disagree with the popular perspective or perhaps you’re talking to someone more powerful than you.

Hill suggests you get to the underlying reason for the initiative, policy, or approach that you’re disagreeing with. Figure out why the person thinks this is a reasonable proposal. You can say something like, “Sam, I want to understand what we’re trying to accomplish with this initiative. Can you go back and explain the reasoning behind it?” or “What are we trying to get done here?” Get Sam to talk more about what he’s up to and why. Then you can present a few options for how to accomplish the same goal using a different approach: “If I understand you correctly, you’re trying to accomplish x, y, and z. I’m wondering if there’s a different way to approach this. Perhaps we can…”

In a situation like this, you also want to consider the venue. “You may be able to have a more candid discussion with someone if it’s one-on-one meeting rather than in front of a group,” she says.

Scenario #2: You have bad news to deliver to your boss or another coworker. You missed a deadline, made a mistake, or otherwise screwed up.

Hills says the best approach here is to get to the point: “I have some news to share that I’m not proud of. I should’ve told you sooner, but here’s where we are.” Then describe the situation. If you have a few solutions, offer them up: “These are my ideas about how we might address this. What are your thoughts?” It’s important to own up that you made a mistake and not try to point out all the reasons you did what you did.

Scenario #3: You approach a coworker about something he or she messed up.

Here you don’t want to launch in right away, Hill says, but ask permission to speak to the person about what happened: “Mary, can I have a moment to talk to you about something?” Then describe what happened. You can say: “I’m a little confused about what occurred and why it occurred. I want to discuss it with you to see how we can move this forward.” Use phrases like “I understand that X happened…” so that if Mary sees the situation differently, she can disagree with your perspective. But don’t harp too long on what happened. Focus on figuring out a solution by engaging her with something like: “What can we do about this?”

Scenario #4: You approach a colleague about feeling mistreated or you’re upset about something he or she said.

Hill points out that this is a good place to talk about the difference in intent versus impact. After all, you don’t know what your coworker’s intent was; you only know that you’re upset. You can start off with something like: “Carl, It’s a little bit awkward for me to approach you about this, but I heard that you said X. I don’t know whether it’s true or not. Regardless, I thought I should come to you because I’m pretty upset and I thought we should talk about it.” The focus shouldn’t be on blaming the person but airing your feelings and trying to get to a resolution: “I want to understand what happened so that we can have a conversation about it.”

If Carl gets defensive, you can point out that you aren’t questioning his intent. “I’m not talking about what you intended. I thought it was better to clear the air, rather than stewing about it. Would you agree?”

Scenario #5: A colleague yells at you because of something you said or did .

This is where you might stay quiet at first and let them vent. People usually run out of steam pretty quickly if you don’t reciprocate. Keep in mind though, Hill says, that you never deserve to be yelled at. You might say: “I realize that I’ve done something to upset you. I don’t respond well to being yelled at. Can we sit down when I can be better prepared to have a conversation about this?”

Scenario #6: You’re managing someone who engages in conflict regularly and is annoying or upsetting the other people on your team.

Sometimes you have a hothead on your team — someone who seems to even enjoy conflict. Of course disagreements aren’t always a bad thing, but you need to help the person explore how he might be damaging his reputation and relationships. You can try something like: “I like having you around because from where I sit, you raise important issues and feel strongly about them. I also know you’re well-intentioned. I’d like to talk you about whether you’re having the impact you want to have.” Get him to think through the consequences of his regular battles.

 

Of course, even if you follow this advice, sometimes there just aren’t the right words and it’s not possible to have a constructive discussion. “Occasionally, you need to let it go and come back to it another time when you can both have the conversation,” says Hill. It’s OK to walk away and return to the discussion later, when you’re ready to make a smart and thoughtful choice about the words you want to use.

A Key Ingredient for Creating Start-Ups: Young People

The presence of young workers appears to be necessary for the creation and growth of new firms, particularly in industries where young people have key technical skills, say Paige Ouimet of the University of North Carolina and Rebecca Zarutskie of the Federal Reserve Board. For example, in the electronics industry, a 5% increase in the share of youth in the population leads to a 1-to-2-percentage-point increase in the rate of new-firm creation, according to the researchers’ analysis of U.S. Census data.

Three Ways to Actually Engage Employees

Nobody washes a rental car.

People will go the extra mile only if they feel they have ownership. It’s much the same in the workplace. Employees who take ownership of their work — and who feel that what they are doing matters — are far more likely than others to feel engaged on the job.

You can have great talent that is appropriately teamed. You can eliminate structural barriers to effective collaboration, and you can design meetings and other interactions so that people can actually get things done. But if your company’s employees don’t have a sense of ownership and engagement, all the other steps won’t make much difference. By the same token, if you can increase the average level of engagement in your organization, you will likely see the productivity of your entire workforce increase.

How powerful is engagement? Look at DaVita, a market leader in providing dialysis treatments for kidney patients. Fifteen years ago, Total Renal Care (as it was then known) was unprofitable and short on cash, and half of its executives had recently quit or been fired. So new CEO Kent Thiry set about building a different kind of company.

He began to speak of DaVita as a village and himself as mayor. He involved employees in changing the culture (a group of 800 representatives chose the new name.) He made a point of recognizing hundreds of employees every year who went the extra mile for patients. DaVita’s “wildly spirited nationwide meeting, in which thousands of employees celebrate awards, mourn the death of patients, and connect with the emotional side of their work, is truly something to behold,” reports one journalist. At these meetings, Thiry often hollers out three questions for attendees to answer; one is “Whose company is it?” The huge audience yells back in one voice: “Ours!”

Fueled by this kind of engagement, DaVita’s performance over the past 15 years has been truly remarkable. Revenues have risen from $1.4 billion to $11.8 billion, earnings from $-30 million to $663 million. Patient outcomes have improved, employee turnover has declined, and DaVita has consistently been listed on Fortune’s annual compilation of Most Admired Companies.

Not every company is going to take DaVita’s route, but nearly every organization can foster greater engagement. Here are a few tips that often escape the conventional wisdom on the subject:

Talk about your company’s impact, not its financial results. Shareholders may care about financial performance, but employees are more often motivated by the impact their organization has on the world around them. That’s particularly true of younger employees, the Gen Xers and Millennials who make up more and more of today’s workforce. At a recent conference, Dell founder Michael Dell spoke of the billions of patients who received better health care and the billions of students worldwide who had access to better education as a result of Dell’s information technologies. He said nothing about the benefits to Dell’s bottom line.
Reward inspirational leadership as much as effective task management. Research shows that people who work for inspiring leaders are more committed, satisfied and productive. They are also less likely to leave their jobs. In short, employee engagement is directly related to leaders’ ability to inspire people — and it is pretty much unrelated to leaders’ effectiveness at assigning and managing tasks. So foster inspiration. Reward executives for raising people’s eyes to the horizon as much as you reward them for holding their noses to the grindstone.
Cultivate employee advocacy, not employee satisfaction. Employees who say they are “satisfied” may or may not feel engaged. Satisfied employees come to work every day, put in their time, and may even enjoy themselves, but they aren’t always willing to go the extra mile. A much better measure of engagement is how likely employees are to recommend their workplace to a family member or friend, a metric known as eNPS because it’s a sibling of the well-known Net Promoter System. Just as Net Promoter gathers regular, direct feedback from customers, eNPS gathers regular, direct feedback from employees, enabling managers to take action to boost engagement and advocacy. Bain research shows a direct relationship between employee advocacy and customer advocacy, so there is likely to be a payoff in customer loyalty as well.

Executives often think of engagement as “soft,” but it’s both measurable and powerful. And it’s the often-missing link in companies’ attempts to increase the productivity of their human capital.

The Rise of the Hands-On Dad

If you’re a dad who works, this is a good time to celebrate. Not only because it’s Fathers’ Day, but because caring about fathers and their needs is no longer a touchy-feely, Phil Donahue kind of thing. Businesses, researchers, the media, and all manner of celebrities have been throwing the spotlight on men who enjoy full lives honoring the importance of both work and family.

Let’s start with the pioneering companies now offering generous paid parental leave to new dads — firms such as Yahoo (8 weeks), PwC (12-14 weeks), and Bank of America (12 weeks). Deloitte and other leading companies support dads with informational resources and parenting groups.  And many other companies are paying much more attention to men’s issues in their diversity and work-life programs, even if they haven’t yet fully articulated robust policies for dads.  These companies are not addressing working dads’ concerns because they want to be charitable. They understand that a balanced approach to employee management and workplace flexibility are important ways to attract and retain key talent while avoiding the performance declines associated with chronic overwork.

In the world of sports, things might have looked bad a couple of months ago. That was when sports radio personalities Boomer Esiason and Mike Francesa harshly criticized NY Mets player Daniel Murphy for missing the first two games of the 2014 season, because he was on paternity leave. But the outcry that followed showed that their opinions were no longer the norm. As the story made it to national newscasts, Twitter lit up with reactions – over 95% of them rallying behind Murphy and his family. Elsewhere in sports, pro golfer Hunter Mahan left a $1 million tournament he was leading when his wife went into early labor. Over a hundred Major League Baseball players make use of MLB’s paternity leave policy, which was instituted in 2011. Several football players publicly declared they’d miss games to be at the birth of their children.

Meanwhile, some manly celebrity dads, such as Brad Pitt, Mark Wahlberg (cover of the current “fatherhood” issue of Esquire), and Prince William (who took paternity leave from the Royal Air Force when his son was born), are redefining what it means to be a model dad—achieving career success while being highly involved at home. Their public statements and actions are helping change society’s image of what it means to be a “real man.” Goodbye strong silent type; hello modern dad, equally comfortable carrying briefcase, gym bag, or diaper tote.

The entertainment industry is following suit. In 2012, NBC ran the sitcom “Guys with Kids” and last summer A&E premiered “Modern Dads,” both having fun with the new reality of men as primary caregivers for their families. Traditional sitcoms and dramas now highlight far more realistic depictions of modern working dads who are both successful in their careers and highly involved as parents.  Phil Dunphy of “Modern Family” is a great example.

Back in the real world – or almost, anyway – the scholarly community is digging into daddy issues. Researchers at Boston College, the UC Hastings School of Law, Wharton and other major universities have led the way by examining the unique challenges faced by working fathers. A solid 20 percent of the program at the upcoming Work and Family Researchers Network conference is specifically focused on working fathers. Three recent (and really good) academic books:  Superdads by sociologist Gayle Kaufman; Baby Bust by Wharton’s Stew Friedman; and The Daddy Shift by Jeremy Adam Smith. (And by journalists, Do Fathers Matter? by Paul Raeburn and, forthcoming, Stretch Out by Josh Levs, a response to Sheryl Sandberg’s Lean In.)

All the evidence that fathers need balance is finding its way to policymakers’ ears. Three US states—California, Rhode Island, and New Jersey—now provide for paid parental leave for both men and women. The FAMILY Act, which has been proposed in the U.S. Senate, would apply this model nationwide. The White House is hosting a Working Families Summit this month to bring together public policy advocate and industry experts to recommend Federal action for working families, and this week hosted a full-day Working Fathers event (where I am proud to have been a panelist).

The news media are picking up on the zeitgeist, and in turn raising awareness of fatherhood issues. For instance, the Today Show, Bloomberg BusinessWeek, Esquire, and The Atlantic all extensively and repeatedly covered fathers’ work-family concerns. Glassdoor.com, Forbes, and Fortune routinely laud and highlight companies with progressive work-life programs. In the past few months in my own role as a fathers’ work-family advocate, I have published pieces with Time, The Wall Street Journal,  Huffington Post, and The Good Men Project, as well as Harvard Business Review – and been invited to talk about working dads’ issues on MSNBC, NPR, and CBS This Morning.

In fact, there is so much media attention being paid to working dads who are striving for both professional success and parental involvement that The Guardian’s Alex Bilmes recently wrote an article complaining that that modern society is placing too much pressure on him, a traditional low-involvement dad, to be more hands-on. You know an issue has reached a tipping point when the old guard starts a backlash.

Does this all mean we can declare victory? (Or as the kids would say: Are we there yet?) No, there’s still a long way to go.  The change has been slow up to now, as social change so often is. But I have the sense that this increased attention on working fathers will only pick up speed.  So this weekend, along with any handmade cards or well-intentioned car washes that might come your way, take time to enjoy the good news that it’s more possible than ever before to have a great career, and be a great dad.

Start-Ups Need a Minimum Viable Brand

Sometimes it seems like Steve Jobs’ notorious reality distortion field has extended to all of Silicon Valley. Some eager entrepreneurs think their new product is so brilliant and so unlike anything else out there, that they just need to make it available and people will start clamoring over it. Other start-ups develop a core technology that has myriad possible uses and they’re not quite sure which will be most appealing, so they plan to just put it out on the market and let customers decide.

Approaches like these overlook the importance of brand strategy as the foundation for a successful launch. Having a brand strategy in place ensures that your internal team is aligned around the same goals, and helps determine how you plan to differentiate your product and win loyal customers. Real artists may indeed ship, as Jobs famously exhorted his team, but savvy businesspeople don’t do so without at least a basic brand strategy in place.

It may be tempting to skip brand development in the rush to get a new product to market. Most entrepreneurs are as short on cash as they are on time and they don’t think they can afford to spend either to attend to brand-building. And some people mistake product strategy for brand strategy, without realizing that a compelling brand is comprised of so much more than a product idea.

Since launches should be grounded in a brand foundation while at the same time being pursued with agility and speed, today’s entrepreneurs require an alternative to a complete, robust brand platform. Tech start-ups employ the Minimum Viable Product (MVP) concept, made popular by Eric Ries in The Lean Start-Up, to test product hypotheses with minimal resources. Using a Minimum Viable Brand (MVB) concept can ensure those hypotheses are grounded in strategic intent and market insights.

A MVB is comprised of the core elements of a brand that are necessary to ensure internal focus and alignment as well as external relevance and differentiation. A framework for defining and developing a MVB is the “6 What’s”:

what we stand for – our brand essence
what we believe in – our defining values
what people we seek to engage – our target audience(s)
what distinguishes us – our key differentiators
what we offer – our overarching experience
what we say and show – our logo, look, and lines (messaging)

These six elements cover the basic tenets that should be clearly articulated and commonly understood within an organization prior to it finalizing and launching a new product – and they leave out a fuller dimensionalization of the brand which isn’t necessary at first. Usually the MVB should be established through a couple of focused work sessions among the company leaders and perhaps a creative resource and an external facilitator to provide an objective perspective.

Several principles should inform the development of the MVB elements:

First, every organization should be brand-led and market-informed. Contrary to popular opinion, customers don’t own brands; companies do. Of course customer perceptions of a brand determine the strength and value of a brand, so brand managers must carefully cultivate the proper perceptions. But it would be a mistake to leave it to customers to determine the defining attributes and values that comprise the brand.

As the developer of a new product or solution, a business leader must have a point of view about what their brand stands for and the value they’re offering. This point of view should guide everything the organization does. If they don’t have it figured out, it’s unlikely customers will. A brand strategy may start only as a hypothesis that gets validated – or not – by market reaction, but it should be clearly defined before the product is introduced. That’s what “brand-led” means. “Market-informed” means that the founder’s point of view should be informed by market understanding. Customer insights, competitive dynamics, and broader contextual factors like socioeconomic trends should shape the brand strategy, but not drive it.

The MVB should be guided by the principle that focus is essential for new product viability. A brand should be positioned in a specific way to a specific target customer. Some entrepreneurs may fear that focusing their brand appeal will alienate potential customers – especially when market demand is unclear. But the exact opposite is true. When brands embrace and embody a clear identity and unique positioning, they attract people who are most likely to be loyal, high-quality customers. Think Red Bull, with its buzz-building marketing campaigns, and Harley-Davidson, with its loyal customer base. Actively segmenting the market and seeking out a particular target not only helps with resource allocation, but also cuts through all the noise out there and sends a powerful signal to those customers. After an initial launch, it may be necessary to refine the brand focus and rethink customer targeting, but being open ended from the start is a surefire way for a new product to end up meaning nothing and appealing to no one.

Finally the MVB should be grounded in emotional appeal. There are very few, if any, truly new-to-the-world ideas anymore, which means new products are usually based on nuance or detail, e.g., a new feature or functionality. The problem is, customers rarely notice details and even more rarely value them as much as their creators think they will or should. Of course, novelty usually generates some appeal in the short-term, but decreasing customer attention spans and aggressive competitive imitation makes it difficult to sustain appeal of a new product detail over time. To be perceived as truly distinctive, a brand must convey more compelling, sustaining differentiation and the best way to do so is through emotion. Tying product details to emotional values and seeking emotional connections with customers cultivates more meaningful, sustained customer relationships. (Apple does a great job of this, as the following ad conveys:

The approach to developing and launching a new product is certainly different in today’s information-rich, technology-fueled, and time-constrained business environment. Start-ups now create, evaluate, and refine their offerings iteratively, often expecting to have to reset or pivot as mistakes are made and information is gleaned. But being agile and responsive doesn’t require a ready-fire-aim approach when it comes to brand strategy. An MVB provides the right balance of structure and flexibility.

How the Software Industry Redefines Product Management

Quick, name a product that was developed without using software. It’s difficult, if not impossible. Software has become a crucial part of almost all goods and services. It’s used to design and develop just about any product you can think of, from consumer goods to industrial equipment – or any service or experience ranging from retail customer service interactions to luxury hotel stays. Likewise it’s central to buying most anything these days, and is a growing part of the customer and business experience generally.

But have you thought about the implications of this trend for management practices? The rapid pace of change in software (e.g., new product releases every day, not every year), has caused an increasing pressure on product development in other areas, and on management in general, to change more continuously as well. Indeed, software is emerging as the proving ground for the future of management practices, the way auto manufacturing used to be the proving ground for new management practices (think of the Toyota Production System).

For an example, I spoke with Andy Singleton, CEO of Assembla, a firm that helps software development teams build software faster. He told me the story of Staples vs. Amazon. As you might expect, Staples has a big web application for online ordering. Multi-function teams build software enhancements that are rolled up into “releases” which are deployed every six weeks. The developers then pass the releases to the operations group, where the software is tested for three weeks to make sure the complete system is stable, for a total cycle of nine weeks. This approach would be considered by most IT experts as “best practice.”

But Amazon has a completely different architecture and management process, which Singleton calls a “matrix of services.” Amazon has divided their big online ordering application into thousands of smaller “services.” For example, one service might display a web page, or get information about a product. A service development team maintains a small number of services, and releases changes as they become ready. Amazon will release a change about once every 11 seconds, adding up to about 8,000 changes per day. In the time it takes Staples to make one new release, Amazon has made 300,000 changes. This represents a truly disruptive management and operating model. Just as Southwest Airlines, for instance, has a low cost, point-to-point operating model that disrupted its hub-and-spoke competitors, Amazon has a radically different and better operating model that will crush any competitors who are making one change in nine weeks, while it is making changes every eleven seconds.

Amazon’s approach of continuous product changes opens new possibilities for sensing and responding to the market. Singleton told me that in his industry, they call this “data-driven product management.” He explains, “Product management is transitioning from a process that involves setting strategy and forecasting response, to a much simpler process where we can experiment and directly measure the response of customers to product changes.” In traditional product management, smart people (marketing, engineering, strategy, product managers, R&D) come up with new products and lob them over the wall to operations to put into production. The functional silos and serial process breed miscommunication, slowness, and make it hard to fix problems. Continuous delivery of new software enables experimentation and direct measurement of the response of customers to product changes, creating integrated teamwork, speed, closeness to customers, and facilitating quick fixing of problems in real time.

But the implications of this approach clearly go beyond the process changes for product management (what Singleton calls “Continuous Agile”). The approach naturally entails a faster management system that will increasingly disrupt traditional management systems based on hierarchies and command-and-control, which are inherently internally focused and slow. As Singleton told me, “The technology world is a cult of innovation. We see that innovation drives success in business, and in the larger economy. Software is an almost-pure form of innovation. We call it ‘soft’ because we can change it and reshape it easily.”

The software management practice of continuously releasing new product changes is opening up revolutionary new possibilities for management generally, pointing to a future in which organizations in almost any industry can deliver a steady stream of breakthrough innovations.

A Crisis Doesn’t Bring Colleagues Together

No Band of BrothersWhen the Going Gets Tough, Supervisors Pick on their Weaker Staff British Psychological Society

A crisis occurs; layoffs ensue. Colleagues are gone. The rest must adapt. But how? Does the shared crisis bring people closer together? Sadly no, new research by Pedro Neves of the New University of Lisbon suggests. Rather, supervisors vent their frustrations by bullying the most vulnerable of the employees in their charge. Data from employee surveys at 12 large to medium-sized Portuguese companies in industries ranging from financial services to construction showed a clear pattern: Individuals with lower self-confidence and fewer coworker allies received more abuse (as indicated by their agreement with assertions like "My supervisor blames me to save himself/herself embarrassment" and "My supervisor tells me my thoughts or feelings are stupid").



What to do? Apart from recommending that organizations hold supervisors more accountable, Neves suggests that the vulnerable take steps to protect themselves by making friends — since it’s the expectation that no one will come to their aid that makes them targets. —Andrea Ovans

Forgetting Is a Virtue The Case for an Absent-Minded InternetThe Boston Globe

The human brain is fantastic at forgetting. As The Globe's Leon Neyfakh writes, "scientists have definitively shown that forgetting unnecessary information is a crucial component of learning." What if the internet worked the same way? Neyfakh explores emerging thinking around the idea that, as one researcher put it, "forgetting should be more integrated into digital systems." There are several strong arguments and methods for this. One of the first is from Viktor Mayer-Schonberger, who in 2009 argued that we will eventually live in fear of being judged on everything we've ever done or said. Meg Ambrose, an assistant professor at Georgetown, argues that the courts should handle requests that information be taken down. Intel's David Hoffman proposes a regulatory body for such things. Martin Dodge, a University of Manchester lecturer, says computer memory should be designed to be patchy and gradually lose information. And, finally, researchers in Germany have created ForgetIT, software that looks for "unimportant content" to set aside, condense, or delete — what they call "managed forgetting," in which the software learns what a user deems important.

So Many Layers of Meaning Adding Female Characters to New 'Assassin's Creed' Would 'Double the Work,' says UbisoftThe Verge

Video game companies are no strangers to complaints about a lack of female characters. But the explanation Ubisoft gives in this case is particularly troubling: "Technical director James Therien said female assassins were on the company's feature list until 'not too long ago,' but were cut as a matter of 'focus and production.'" Because the game focuses on a male character, Arno Dorian, he became the "common denominator" when it came to design. "It's not like we could cut our main character," says creative director Alex Amancio, "so the only logical option, the only option we had, was to cut the female avatar." It is, in many ways, a very relevant way of talking about gender at work. No doubt, those creating the game were probably under the gun. But it's worth remembering that what seems at the time like a good management decision can say a lot about how your company views the world and who is at the center of it.

There's an App for That Sore ThroatDoes Oscar Sound Cooler Than Aetna? New York Magazine

When health care start-up cofounder Joshua Kushner had a sore throat, he didn't call a doctor. Instead, using an iPhone app, he sent a request to his doctor, who called back within 15 minutes and asked him to check to see whether there were white spots on the back of his throat. There were, and the doctor prescribed Amoxicillin. Behold Oscar, the digital-first health insurance company that has 16,000 subscribers and an estimated year-end revenue of $72 million. It features membership cards that arrive in an iPhone-like box, a medical information "Facebook," health provider rankings, and penetrable bill information. It is, as writer Matthew Shaer notes, "a harbinger of health care as it is likely to exist in the era of Obamacare: aggressively marketed, conspicuously consumerist, bristling with 'functionalities' that digital natives understand and appreciate."



Far from wholly celebratory, however, Shaer also explores some of the company's unsettling implications: putting health histories into the cloud, the Silicon Valley ethos of sharing and openness, the possibility that data could be monetized, and the company's cobbled-together foundation.

Step Right Up Tickets for Restaurants Alinea

Eateries can take reservations over the phone, online, or using software like OpenTable. So why would Alinea, a Michelin three-star restaurant in Chicago, turn to an unproven ticketing system called Next? Turns out it was wildly successful — and Nick Kokonas took to his restaurant's blog earlier this month to explain why. One of his big takeaways is that it created a transparent process and built loyalty because most reservation strategies "are predicated on two people lying to each other" about available tables (you know you've been upsold drinks in the bar). The same is true for the online system: How many times have you clicked "make a reservation" only to have a screen pop up that says "there are no tables within 2 hours of your requested time"? With Next, customers see all the tables available from the start, and they can buy tickets based on what's available.



There are many more business lessons in this piece, ranging from pricing best practices and the pluses of creating direct connections between a restaurant and a patron (instead of through third-party software). And Kokonas shares some compelling data, most notably a drastic drop-off in no-shows after Next was implemented.

BONUS BITSDads

Working Dads Need "Me Time" Too (HBR)
Father's Day Cards Are Out of Touch with the Modern Man (Quartz)
The New Dad: Take Your Leave (Boston College Center for Work & Family)