Marina Gorbis's Blog, page 1405

Why It’s Getting Harder to Find a Small Home in the U.S.

The proportion of big homes being built in America has increased: Mega-houses of 4,000 square feet and more accounted for more than 9% of new homes last year, compared with 6.6% in 2005, and 3,000-to-4,000-square-foot houses made up 21.7% of new homes, up from 15.6%. Meanwhile, dwellings of 1,400 square feet or less made up just 4% of the new-home total, down from 9%, according to CNN. Yet many young people are closed out of the home market because of high prices, difficulties getting mortgages, or student-loan debt.

The Digital Opportunity Staring Credit Cards in the Face

Credit card companies could be doing a much better job of saving us from ourselves.

It’s well known that very few consumers are familiar with the terms of their credit card agreements and that even fewer are aware of those terms’ implications. Pop quiz: What are your favorite card’s interest rate and fees? If you were to charge $1,000 to it and make only the minimum payment each month, how long would it take you to pay it off?

We couldn’t answer those questions either. This lack of awareness can get people into deep trouble. Without realizing what they’re doing, consumers can quickly amass huge, expensive debts, and the consequences can be far-reaching. Recent history has demonstrated the dangers posed to the economy as a whole by poorly understood financial products.

That’s why Congress has been requiring credit card companies to be more transparent. For example, the 2009 CARD Act stipulated that each monthly statement include a “minimum payment warning” spelling out how much time and money it would take to pay off a card by sending in just the minimum. Here’s an example of such a disclosure, which shows the high long-term cost of accumulating credit card debt (in red):

But this disclosure policy and others like it are designed for a world that’s rapidly disappearing: that of paper statements and postal mailings. Although consumers are going paperless in droves, a customer paying a credit bill online via a PC or a mobile app can almost always do so without ever being shown the minimum payment warning. Here’s what a typical online payment page looks like on a computer screen:

To see the minimum payment warning, a customer would have to find and download an electronic version of the paper statement.

Although the federal legislation doesn’t require it (the law focuses on monthly statements, which are central to the paper-statement world), credit card providers should post the warning where it can be easily seen. If a disclosure is important enough to be on the first page of a paper statement, it should be on the corresponding online payment page and mobile-app screen. But there’s a bigger point: The credit card companies are missing a valuable opportunity to make consumers smarter about debt.

Unlike a paper statement, a web site can turn a data point into a function that aids decision making by spitting out dynamic, personalized information. People are already—and increasingly—using such online tools to help translate personal data into good decisions. FitBit, for instance, takes complicated health goals such as weight loss and distills them into something as simple as tracking the number of steps you take each day. The tool works because it makes a difficult task much easier to manage. Other tools tell us which foods are healthiest, which driving route is fastest, and which new TV series will hook us.

Apply that concept to financial decision making, and you can see how effective it might be for credit card companies to turn the minimum payment disclosure into an online tool. Consumers could use it to see the ramifications of paying the minimum or any other amount that fits their financial circumstances, like so:

A few credit card companies are beginning to take their online offerings in this direction. Capital One recently launched the Credit Tracker, which allows customers to simulate how financial decisions might affect their credit scores. This is a laudable development, but such tools are incomplete, and hardly an industry norm.

Which brings us to the question of whether the credit card companies want consumers to be smarter about debt. Some would argue that they don’t, that their business model is built on extracting hefty interest payments from us, even if it means driving us and the economy to ruin. Certainly the companies’ decision to follow the letter, but not the spirit, of the CARD Act by leaving the minimum payment warning off of online bill-payment screens suggests a cynical disregard for consumers’ financial welfare.

But improved financial literacy should be in the companies’ interest. In a world where card companies are often perceived as the bad guys, this is a way for a company to differentiate itself as a consumer advocate and build a more engaged, loyal customer base. Sure, such efforts would come at a cost. But the potential upside is large: making consumers smarter about their use of credit and reducing default risk, in addition to building a stronger brand. Credit card companies have an opportunity to present themselves not only as providers of credit but as educators.

And in that role, they need to see the internet’s vast potential as a tool for education as well as for easing the management of difficult things. In fact, there are other tools that card companies could build as well. For example, they often provide customers with end-of-year spending analyses—displaying how much of your expenses went toward gas, entertainment, groceries, and so forth. An online tool could allow customers to set spending goals and benchmark their spending against a set of peers of their choosing, encouraging smart financial decisions.

The internet has opened up consumers’ and corporate leaders’ thinking about the meaning of disclosure. Credit card companies should take a lesson from what other consumer companies have done and truly enter the digital age as leaders in improving financial decision making.

Your Work-Life Balance Should Be Your Company’s Problem

Seven out of ten American workers struggle to achieve an acceptable balance between work and family life, reports a new study published in American Sociological Review, funded by the National Institutes of Health and the Centers for Disease Control and Prevention. That number has been climbing over time, to a point where employees — especially parents — feel stressed, overwhelmed, and maxed out. In “Changing Work and Work-Family Conflict: Evidence from the Work, Family, and Health Network,” researchers asked what can be changed in the workplace to address this growing health and productivity problem. They conducted a large-scale experiment in a Fortune 500 company and found that work-family conflicts don’t need to be solely employees’ individual, private troubles, but can be resolved systemically with a little  management leadership.

Nearly 700 employees from an information technology department participated in the experiment. These were highly skilled, middle-aged workers with professional and technical degrees. They worked long hours, with over 25 percent logging more than 50 hours per week. Some worked remotely but reported pressure to be visible at the office to demonstrate work and team commitment. The research team randomly assigned these employees to two groups. Those in the “treatment” group were then given greater control over when and where they worked, and more supervisor support for their family and personal lives. The control group’s working conditions remained unchanged.

Over a six-month period, the people in the treatment group experienced a significant reduction in work-family conflict — that chronic sense of being pulled in two different directions. Crucially, employees who were more likely to be vulnerable to work-family conflicts (parents and people with less supportive supervisors initially) benefitted most from the intervention. Parents reported working one hour less per week than non-parents, but others did not have to increase their workloads to accommodate parents. People in the treatment group also reported that they felt they now had adequate time to spend with their families while managing their workloads. Overall, they felt more in-control and less overwhelmed.

For people working every day to balance complicated lives, this might not sound like news — but here’s why it is. This is the first study to offer evidence based on a randomized trial that workplace interventions, such as increased schedule control and supervisor support, can reduce employee work-life conflict. The randomized, experimental method allowed researchers to eliminate competing explanations for their findings — explanations, for example, like lower initial stress or the possibility that some workers quit to take less stressful jobs elsewhere. The study is also the first experiment to change the way people and supervisors work to benefit employees’ work-family balance. By altering factors in entire workplace groups or departments, the research shows that there is a way to move away from “Mother may I?” workplace flexibility — individual accommodations that a person negotiates with his or her boss — and toward systemic change in an organization that benefits all.

Numerous benefits of lowering work-life stress have been documented, in physical health and mental health (including reduced hypertension, better sleep, and lower consumption of alcohol and tobacco), as well as decreased marital tension and better parent-child relationships. So it’s surprising that two other new studies report weakened company commitment to employees working flexibly. While more than 8 in 10 employees in new survey from the Flex+Strategy Group cited negative impacts on worker loyalty, health, and performance when a company does not permit work-life flexibility, almost half of the respondents sensed ambivalence and declining commitment to it from their employers. Further, a Boston College study found that, while telecommuting and flexible hours are often negotiated between individual employees and their supervisors on an as-needed basis, companies have cut back on some critical work-life balance options like reduced hours, part-time work, job sharing, and paid family leave.

What employees sense about their managers’ and companies’ commitment to work-family-life balance reflects the organizational culture and its leadership. Returning to the American Sociological Review study, the people in the experimental group who were given more control over when and where they worked, almost doubled their average hours of work at home (from 10 to almost 20 per week). These technology workers had the tools to telecommute prior to the workplace experiment, but they either had not been given discretion to do so or had not felt comfortable doing so. The “permission” granted by the experiment freed workers to think about new ways of working, and many did so. The experiment also “unfroze” managers from old ways of doing things.

In the end, adjustments in management thinking about when and where work gets done, and about support for employees’ lives outside work, led to the work-life holy grail: design of system-wide flexibility (to relieve pressure for people who need it), without burdening those working conventionally, and without requiring individual workers to figure out alone how to balance everything.

In Defense of Routine Innovation

Almost every discussion of innovation today inevitably turns to the topic of “disruption.” Academics write about the power of disruptive innovation to transform one industry after another. Consultants have set up practices to focus specifically on helping companies become disruptive innovators. Venture capitalists tout their latest investments as potential disruptors. Even executives of large corporations talk about the need to make their behemoths into nimble disruptors.

It is, of course, with good reason that disruptive innovation draws our attention.  Disruptive innovation — generally defined as innovation that fundamentally transforms the way value gets created and distributed in an industry — has the promise to catapult start-ups into multi-billion-dollar enterprises and topple seemingly untouchable giants, all at the same time. The promise of becoming the next Google, Amazon, or Apple (and the threat of becoming the next, Kodak, Polaroid, or Barnes & Noble) is certainly enough to make us take notice.

Yet all the excitement about disruptive innovation has blinded us to one simple but irrefutable economic fact: The vast majority of profit from innovation does not come from the initial disruption; it comes from the stream of routine, or sustaining, innovations that accumulate for years (sometimes decades) afterward. An innovation strategy has to include both. Let’s examine a few examples.

Intel is certainly one of the great disruptors of all time. Its microprocessor fundamentally altered the structure of the personal computer industry. Yet, its strategy for almost three decades has largely been that of a sustainer, not a disruptor. Its fortunes have been built upon its successes in pushing the technological frontier of the microprocessor. But its essential value proposition — a higher-performing, high-margin product — has not changed.

Let’s take the introduction of the x386 in 1985 as the starting point for the sustaining strategy (although one might argue that the x386 was itself just a sustaining innovation, relative to earlier generations). How has this strategy worked? Well, since 1985, Intel has generated cumulative operating income before depreciation of $287.4 billion.

Is Intel’s growth slowing today? Sure. Is it facing threats today from companies that are making chips better suited to mobile computing? Absolutely. Might it decline in the coming decade? Certainly a possibility. But, how many companies out there (or their investors) would pass up the opportunity to have generated close to three hundred billion in cash?

Another example is every innovation pundit’s favorite company to criticize today: Microsoft. Again, the company has its origins as a disruptor. But for much of its history, Microsoft has been an incredible sustainer. It has built and defended its competitive position by reinforcing its Windows/Office franchise. Its specific tactics have evolved over time, but the basic strategy has remained the same.

It is hard to pinpoint the exact point that Microsoft became a sustainer because it has been a sustainer for so long. Let me be generous to it and take the introduction of Windows 3.1 in 1985 as the transition point. (Many will argue, correctly, that there was not much novel about Windows and that, Microsoft did not really do anything ”disruptive,” in the true sense of that word, since the introduction of DOS). Since 1985, Microsoft has generated $325 billion in operating profit cumulatively before depreciation. Not bad for a mere sustainer.

Is Microsoft’s growth slowing? Absolutely. Has it missed out on really key growth markets like search? Undeniably. Does Linux threaten it in corporate servers? Big time. Is the move toward mobile a potential disruptor for Microsoft? Certainly. Like Intel, these are challenges the company must navigate, but how many companies in corporate history have earned $325 billion over three decades? None as far as I can tell.

Then there’s Apple. The iPhone has got to be the single most successful consumer electronics product in history. Since 2011, Apple has generated $150 billion in cash flow, much of that from the iPhone. But was the device disruptive? There were plenty of smart phones and PDAs around long before the iPhone (the Palm Treo, Nokia 9000, etc.). Why did the iPhone succeed? The answer is pretty simple: It was better. It was better designed aesthetically and functionally. It was beautiful and far easier to use than the alternatives. And later, with the opening of the Apps Store, the iPhone became a much more versatile device.

There was no big disruption. The iPhone did not change the value proposition of the business; it did not create a new market or enter an existing market with a low-end alternative (a classic disruption strategy). The idea behind the App Store — allowing and making it easy to install third-party software on a device — has been around since the beginning of the computer industry. The iPhone has been extraordinarily successful, but it’s hard to argue that it was “disruptive.”

My intention is not to diminish or dismiss disruption. But there is far more to the innovation game than disruption. If you disrupt and can’t sustain, you don’t win.

There are many examples of initial disruptors in an industry that did not sustain their advantage because they were unable to rapidly build upon and improve their initial design. EMI invented the CAT scanner but was crushed by GE, which brought to bear its superior engineering experience and distribution in diagnostic imagining. There were dozens of early personal computer manufacturers in the late 1970s, but most of them failed after IBM entered the market. The early internet search companies (e.g., Lycos) were surpassed by Yahoo, which itself got crushed by Google because it had a far superior search algorithm. Palm and Nokia lost out in smartphones because they failed to win at this brutally competitive game of rapid evolutionary (sustaining) innovation.

In creating an innovation strategy, managers should strive to achieve the optimal balance between disruptive and sustaining efforts. There is no magic formula. Young start-ups are not going to beat an Apple or Google at its own game. They need to find an alternative value proposition, and disruptive strategies are likely the only route there. (This is why it makes sense for venture capitalists to obsess about disruption).

But once a company is established, innovation strategy means understanding how to leverage distinctive existing strengths to generate value and capture value. It means understanding how your repertoire of R&D skills, intellectual property, operating capabilities, relationships, distribution channels, and brand can protect and extend the value from innovation.

Playing to your strengths is a fundamental principle of strategy, and applies to innovation as well. Of course, there is a trade-off — another fundamental principle of strategy. If you play to your strengths, you will exclude certain options (Apple is probably not interested in putting Android on its phones anytime soon).  Sometimes, with 20-20 hindsight, excluding a particular option turns out to be very costly. But management, unlike academic research, is not practiced with 20-20 hindsight.

Strategic thinking about innovation requires carefully understanding and evaluating the risks and benefits of leveraging existing capabilities and resources. It certainly does not mean allowing your existing resources to drag you into oblivion as the competitive landscape changes. But neither does it mean blindly observing the often-repeated mantra: “You should eat your own lunch before someone else does.”  Sometimes, your own lunch is pretty good and the right strategy may be to protect and extend it as long as possible. A company that is a great sustaining innovator has no reason to be ashamed.

When Innovation Is Strategy

An HBR Insight Center




Customer Complaints Are a Lousy Source of Start-Up Ideas
The Industries Apple Could Disrupt Next
Start with a Theory, Not a Strategy
The Case for Corporate Disobedience

Negotiating Is Not the Same as Haggling

There’s a popular misconception that in a negotiation you can either “win” or preserve your relationship with your counterpart — your boss, a customer, a business partner — but you can’t do both. People assume they need to make a choice between getting good results (by being hard and bargaining at all costs) or developing a good relationship (by being soft and making concessions to build the relationship). Thinking that way is dangerous, however, because you need both: You have to be able to stand firm and maintain important relationships.

Too often, a typical negotiation goes something like this:

Party 1: Here’s what I want.

Party 2: Here’s what I want.

Party 1: OK, I’ll make this small concession to get closer to what you want. But just this one time.

Party 2: OK, since you did that, I’ll also make a small concession. But just this one time.

Party 1: Well, that was the best I can do.

Party 2: Me too.

Party 1: I guess I need to get my boss involved (or find someone else with whom to negotiate).

Party 2: I may need to walk away, too.

Party 1: Maybe there’s something I can do. What if I make this additional concession?

Party 2: That would help.

Party 1: I’ll need to get a concession from you then.

Party 2: OK. What if we agreed to split the difference?

Party 1: It’s a deal.

Sound familiar? This is a common approach, often called “positional bargaining.” People believe that if they go into the negotiation looking stern and unmovable, and then make small planned concessions and not-so-thinly veiled threats along the way, they’ll have more influence and get the results they want. But in my view, that isn’t a path toward negotiation that gets you what you want. It’s simply a haggle, a concessions game that forces you (and your counterpart) to compromise.

Positional bargaining isn’t all bad. It can be quick and efficient. It requires little preparation other than knowing what your opening offer is, what concessions you’re willing to make, and any threats you might use. And in the end, it always feels like you got something, because if your counterpart played his role, then he conceded as well. In fact, positional bargaining works great when you are negotiating simple transactions that have low stakes and you don’t care about your ongoing relationship with the other party (think about agreeing on a price for that leather couch off Craigslist). But that doesn’t describe the majority of situations.

In almost all business negotiations — resolving a conflict with a customer, convincing others of a change in policy, agreeing on a budget for next year, for example — there is a lot more at stake, and chances are strong that you’ll need to continue to work with the other party going forward. If you were to try to use positional bargaining in those situations, you wouldn’t get impressive results.

That’s because there are serious downsides as well. Positional bargaining rewards stubbornness and deception; it often yields arbitrary outcomes; and it risks doing damage to your relationships. Most importantly, it causes you to miss the opportunity to get more value out of the negotiation than you originally expected. In other words, you won’t be creative and find ways to expand the pie because you’ll be so focused on exactly how to divide it up.

Perhaps most dangerously, there is an underlying assumption in this approach that you’re in a zero-sum game: If you gain something, the other party has to give up something in return. In the vast majority of negotiations we’ve worked on, there is always more value to be created than originally thought. The pie is rarely — probably never — fixed.

To negotiate more effectively, you need to shift your approach away from this combative and compromising approach and toward a more collaborative one. The figure below shows how to reframe key questions about the negotiation with this approach in mind. For example, instead of asking yourself, “What am I willing to give up?” you might think more creatively and wonder, “What are different ways we can resolve this?” This helps ensure you aren’t shrinking the pie but expanding it.

This shift leads to an approach where two parties come together to jointly solve a problem — decide on a contract, create the parameters of a new job, or delineate the conditions of a partnership. Together they dig to fully understand each other’s underlying interests, invent options that will meet everyone’s core interests (including those of people not even in the room), discuss rational precedent, and use external standards to evaluate the possibilities — all while actively managing communications and building a working relationship.

At first read, this may sound like a “soft” approach to negotiation. In fact, it is just the opposite: It takes discipline and toughness to truly get creative and to apply sound decision-making criteria. Taking a joint problem-solving approach does not require, or even condone, sacrificing your own interests. It is about being clear about why you want what you want (and why the other party wants what they want) — and using that information to find a high-value solution that gets you both there.

The benefits of this approach include better solutions, improved working relationships, greater buy-in and commitment, and more successful implementation of solutions.

Of course, there are drawbacks as well. This approach requires more preparation, deeper skill, and real discipline. You may feel uncomfortable at times as you use what may be an unconventional approach. Your counterpart might be uncomfortable as well. She might even interpret your openness to collaboration as weakness and think she can take advantage of you. But if you take a disciplined approach to negotiation, she won’t. In fact, you’ll shape the negotiation and get the results you seek, and often much better ones than you ever expected..

This post is adapted from the forthcoming HBR Guide to Negotiating .

Does Race or Gender Matter More to Your Paycheck?

In 2013, American women made 82 cents to every dollar a man made and 80 cents to every dollar made by a white male; up from 79 cents and 77 cents, respectively, in 2012, according to the Bureau of Labor Statistics. However, white and Asian people, regardless of their gender, make more than blacks and Hispanics – regardless of their gender.

So when it comes to pay gaps, do race and ethnicity trump gender? I set out to find out.

First I explored weekly median earnings by age as well as gender and race/ethnicity. Younger workers, aged 16 – 24, are more likely to be in minimum wage jobs because of lack of experience or less education; if one demographic group had a remarkably younger workforce, that would skew their average income lower.  In 2013,  men and women had the same percentage of workers between 16 – 24 years of age (8.7%) – but the percentage varied much more widely by race/ethnicity. Hispanics, the group with the lowest wages in the chart above, have the highest percentage (12.4%) of workers between 16 – 24 years of age. Asians, who have the highest earning power, have the lowest percentage (6.5%) of workers between 16 – 24 years of age.

But the correlation between age and earning power breaks down when you look at whites and blacks. The white workforce is younger than the black workforce — 8.8% of their full time workforce is between 16 – 24 years of age compared with blacks at 8.0% — and yet whites earn considerably more. (In addition, it’s worth noting that the unemployment rate for black youth is 26.6% almost double the unemployment rate of white youth at 13.5%.). While age may play a role in the lower weekly median earnings for Hispanics, it does not explain the lower median wage for blacks.

Next I turned to education to help sketch a fuller picture. According to census data, educational attainment is lower for Hispanics and blacks; but comparable for men and women.  So at first blush, education appears to explain the pay gap between the races (though not, importantly, the genders).

To see how much education matters to the pay gap, I held education levels constant across both race and gender and excluded workers aged 16-24 (who may not be finished with their schooling).  The results are visualized below. Greater education does increase earnings, however, education is not “the great equalizer” it has often been made out to be.  Earners with the least amount of education have the smallest pay gap – lack of an education affects everyone about equally, resulting in poverty. But having an education has the most benefit for men, especially white men.

Only now was I starting to get an accurate picture of the wage gap in America – or rather the wage gaps, plural. The oft-used simple chart at the top of this post provides a misleading picture of the status of white women on the earnings pyramid. This second chart shows how men, regardless of race or ethnicity, earn more than women of any race when education level is held constant, with one exception – Asian women. Asian women with bachelor’s and advanced degrees are the only women who make more than one group of men–black men, who earn the least in comparison to their male counterparts at every level of education.

This chart exposes one other important myth: that companies have to pay more for talented women of color. In discussions of affirmative action cases and throughout my career, I have heard both from right-wing bloggers and middle-of-the-road human resources professionals that a premium is paid to attract and retain women and minority talent and especially, women of color. The central argument is that because there are assumed to be so few “qualified” candidates who are both female and nonwhite – and because companies can count women of color towards multiple diversity targets — competition for those candidates means they end up with significantly higher salaries. Setting aside the question of whether there is, in fact, a shortage of qualified women of color, it should by now be obvious that those women aren’t getting paid a premium. In fact, black and Hispanic women vie for last place on the earnings pyramid at every level of education, and the gender pay gap actually increases with higher education for black, white, and Hispanic women.  Routinely, when pay equity analyses are done for corporations, the employees whose actual salaries are greater than two standard deviations higher than their predicted salary (based on job-related variables such as market value, time served, and performance ratings) are white men.

More Robots Won’t Mean Fewer Jobs

Ever since the earliest concepts of humanoid robots were introduced into popular culture, the idea of robots replacing people in various capacities has never been far behind. Science fiction movies tend to portray the dark side of this imaginary equation, with robots eventually becoming smarter than their human makers and deciding to eliminate them in some grand fashion. While this concept has sold a lot of movie tickets, the reality is a lot less sinister. The same holds true for the debate surrounding robots taking jobs.

Arthur C. Clarke, a famous science fiction writer from the 1950s, is reported to have said, “We overestimate technology in the short term, and we underestimate it in the long term.” This sentiment has been borne out repeatedly over time. Despite the incredible advances in artificial intelligence, mechatronics, and human-machine interaction made over the past several decades, as a society we tend to overestimate what robots are capable of today. The simple act of tying one’s shoes can be taught to a 5-year-old in minutes, but the combination of cognitive and physical interpretations that need to happen to make this task second nature to the child are incredibly difficult to replicate inside the control system of a robot.

So while it’s possible today to program a traditional SCARA industrial robot to perform a physical task in a way that is superior to a human doing it (for example, moving an object faster and in a blink placing it more precisely than a person can), the downsides of this approach the high cost and technical difficulty preclude it from being used universally throughout a facility to “replace all the people.” There are simply too many parts of the process (whether that process is in a manufacturing plant or in the checkout line of the local fast food restaurant) that require a human’s dexterity, reasoning, and intuition to effectively replace an entire workforce with machines today.

That said, it is becoming increasingly feasible and cost-effective today for robots to assume many of the repetitive, labor-intensive tasks that are part of many people’s jobs. “Smart” robots that can work safely next to people, are aware of their environment, and are able to modify their behavior according to those circumstances are fortunately becoming more and more commonplace. And yes, I do mean fortunately, because it is often these tasks that define the least meaningful and rewarding aspects of a person’s job.

For example, TUG robots from a company called Aethon in Pittsburgh are in hundreds of hospitals across the U.S., taking dirty dishes and sheets from patients, and allowing the nurses and aides who did that previously to spend more quality time with their patients doing what they do best – administering care. The PackBot from iRobot largely took over the life-threatening task of investigating roadside bombs in places like Iraq and Afghanistan, saving the lives of many soldiers in the process. And my current company’s robot Baxter is now performing many of the simple, repetitive packaging and material handling tasks that used to take up the time and effort of factory workers in the many facilities who have adopted this technology over the past year. As a result, those same people are being redeployed to other tasks within the plant, in some cases with a promotion and a new job description to show for it.

In each of these cases, the robot has effectively assumed the responsibility for the dull, dirty or dangerous task – but has not replaced the human responsible for getting that job done. The robot in this equation is a tool – not at all unlike what a PC is for an office worker, a tractor is for a farmer, or a nail gun is to a home builder. All of those technologies were once speculated to be replacing or at least reducing the need for the humans that wielded them. Yet all of those professions still exist today, and the workers in those fields are better, happier, and more productive because of them.

Which brings me back to part two of Mr. Clarke’s assessment, that we underestimate the value of technology in the long term. I believe we do this today as well, and it concerns me that we as a society are not producing robots and other technologies quickly enough to ramp up to the expanded needs we will soon have for them.

Over the next 40 years, we are going to see a dramatic drop in the percentage of working-age adults across the world. And as baby boomers reach retirement age, the percentage of folks in retirement is going to change dramatically in the opposite direction. That means there will be more people with fewer social security dollars competing for services, and fewer working people available to deliver those services to them.

We will need robots to help us deal with this reality, doing the things we normally do for ourselves but that get harder to do as we get older.  Things like getting groceries, driving cars to visit people, and helping us move around more safely and efficiently as physical ailments settle in.

Before you dismiss this vision for a highly automated society, think about it the next time you put a load of laundry into your washing machine or hit the start button on the dishwasher as you head off to bed. These are tools that have automated unpleasant and time-consuming aspects of our lives, and given us more free time to pursue more productive or pleasurable activities.

A generation ago, these machines were looked at with skepticism and sometimes ridicule. Today, they are staples of modern life that most of us would be hard-pressed to live without.  I hope and fully believe we will be saying the same thing about robots a generation from now.

Narrowing the Chasm Between PR Professionals and Wikipedia

Public relations and communications professionals—and the academic programs that train them—find themselves operating in a radically new environment. As Emily Yellin describes in her book Your Call Is (Not That) Important to Us, “public relations” was the phrase initially used to describe customer service. But, over time, most PR work focused on pitching journalists who worked for professional media organizations. As a result, a symbiotic relationship was established, with communications professionals providing information, context, statements, and experts for journalists working on stories, who—in return—were paid to wade through the various pitches from PR pros to find what would best aid their story and, presumably, their audiences.

Now, PR professionals are trying to figure out how to build relationships with members of actual publics, rather than solely with other paid professionals who see coordinating with corporate communicators as part of their day jobs. One of the most important of these publics is the Wikipedia editor community.

Corporate representatives have earned Wikipedia editors’ skepticism—and, increasingly, cynicism—with a steady stream of missteps. Consider:

Employees, entrepreneurs, and agency partners have flooded the site, pasting in marketing copy for every company product, adding the official bio for each and every senior executive, and including voluminous details of every CSR initiative to their organization’s corporate page.
Some corporate representatives have been caught trying to remove unflattering information from their company’s pages, or adding unflattering information to competitors’ pages.
A few organizations in the PR industry have overtly sold their ability to “create and fix Wikipedia pages” in ways that violate the very spirit and purpose of the Wikipedia project.

Not all of these are acts of bad faith (although some of them certainly are). Many of the more venial sins are the result of a widespread lack of understanding and education about Wikipedia’s standards about conflicts of interest.

If you’re used to emailing with media professionals, the democratization of information that Wikipedia represents brings with it some notable challenges:

One of the most popular information sites on the Internet doesn’t have an editorial hierarchy to appeal to for retractions or incorrect information.
Wikipedia is a “publisher” that takes no legal responsibility for any existence of misinformation on its site (meaning is has no vested interest in prioritizing updating an inaccuracy or mischaracterization).
The expansion of content at the site has grown at a rate much higher than the community of dedicated editorial volunteers can fully vet.
Not only is Wikipedia’s open-editing policy significantly different from traditional models, but the project also aims for accuracy and objectivity and has a communally accepted conflict-of-interest policy.

Wikipedia editors who have dealt with, or repeatedly heard about the influx of conflict-of-interest edits have grown resistant to listening to edit requests even from transparent PR professionals who are trying to bring their concerns to more objective editors “behind the scenes,” rather than making edits directly or who are seeking factual updates to the page (replacing 2013’s annual revenues with 2014’s, for instance, based on sourced official information).

That, combined with the fact that there are nowhere near enough volunteer editors to fully vet the information that is added and edited on the site on a daily basis, means requested edits or additions made “the right way” can languish for months.

Meanwhile, corporate representatives grow ever-more frustrated at incomplete, incorrect, or outdated information sitting on one of the most popular sites on the internet for months on end, while their requests go unanswered, and may face increasing pressure to find someone who can “fix it.”

In response to this untenable situation, representatives from several leading communications firms gathered in Washington DC in February with some of Wikipedia’s volunteer community and scholars who study the issue. We talked candidly about the strained relationship, and how we might start fixing it.

As a result, 11 agencies (I work for Peppercomm, one of the agencies involved)—who, combined, manage well more than a billion dollars in annual fees—have committed to a clear statement about how seriously we take the goals of the Wikipedia project and the ethical standards each of our firms adhere to.

The statement, published today, commits our organizations to act in adherence to Wikipedia’s guiding principles, policies, and guidelines.

We have promised to continually seek greater understanding of the project’s goals for our employees and clients, and to investigate and seek corrective action in any instance where a potential violation of Wikipedia’s policies arise based on the work of our respective agencies. And we have committed ourselves to push our industry as a whole to have more deliberate conversations about a high standard of ethical engagement with the Wikipedia project (and similar initiatives) as well as better education in our field for what the Wikipedia project is striving to achieve.

We realize that we will have to show Wikipedia editors, rather than just tell them, that this is our commitment.

But we hope this statement is a first step toward a productive conversation about how ethical corporate communicators can productively serve the editor community. We hope we are making it clear that much of our industry—and, at the very least, our respective agencies—take the principles of the Wikipedia project (and other open-source projects like it) seriously and similarly support those ideals. And we hope that putting this stake in the ground helps drive others in our profession to follow suit and to foster a better education about what ethical engagement with the Wikipedia community looks like.

We don’t want the Wikipedia editor community to ever cease being skeptical and asking critical questions; such instincts are crucial for maintaining the principles behind the site. But we do hope to establish a trust so that corporate communicators can better use our resources to improve Wikipedia when and where it’s appropriate, while working in conjunction with editors who can be objective on the pages in question.

What Uber Should Do With the Money

By now, you’ve likely heard of Uber’s staggering US$1.2 billion funding round that values the business at US$ 18.2 billion. One can debate the merits of the valuation, but whatever your opinion, the folks at Uber will have a ton of resources to fund their next strategic move. So to us the interesting question is what Uber should do with the money and, perhaps more importantly, what it shouldn’t.

Let’s look at some of the options. Ones that Uber should probably look at include:

Value proposition: Uber’s 20-25% commission is high by most standards. The fact that incumbent taxi medallion owners and black car booking agents had even more usurious rates helped Uber get away with this pricing model. This is not going to last. Uber’s next competitors will be other apps (perhaps one that might be baked into a mobile operating system or a mapping product) and these will be far more serious competitors than the old ones. Further, Uber’s product by its very nature has limited sticking power; it will need to continually upgrade its experience and charge lower commissions if it wants to retain its dominant position in the US and elsewhere.

International markets: Uber is the big daddy of ride-hailing platforms in the US, but its dominance is far from global. In many international markets it faces strong competitors. Rocket Internet-funded EasyTaxi is prominent in many markets in Asia and South America; GrabTaxi is building market share far faster in Singapore; China has its own homegrown players.  Intermediation platforms like Uber are natural monopolies, which means getting to scale early on is critical. Given that Uber already lags behind in many international markets, it will take substantial resources to get up to speed in these markets.

Culturally sensitive local teams: Uber must acknowledge that it is not just a technology company, it is a real-world intermediary in a decades-old industry. As with previous disruptions of existing industries there will be winners and losers. This has important political consequences and handling these requires a culturally sensitive, country-specific strategy. For instance, the arguments around market efficiency that Uber makes work far better in Germany and the US than in France, where customers value equality and fairness over efficiency. Uber must use some of its resources to build culturally sensitive and locally empowered teams that can effectively create country-specific strategies, rather than simply bringing its aggressive playbook to new markets.

There are also some talked-about options that Uber should probably not explore:

An on-demand courier service: One of the most talked-about avenues for Uber is to use its instant on-demand platform to match supply and demand for transporting products as well as people. Our research into the economics of such peer-to-peer transport systems indicates that while the model is great for achieving very quick delivery times, it is also a poor use of transport infrastructure and makes little sense for all but the most time-sensitive deliveries.

Self-driving cars: The technology is definitely impressive, and some have called for Uber to invest in this trendy new area. While the experience of a self-driving car feels futuristic and magical, they don’t make business sense in an era of decreasing real wages for semi-skilled labor (like drivers). Further, Uber has the DNA of a business model innovator, not that of a technology company, which means this move is unlikely to work.

We have been Uber users and fans from the very early days. We see it as a game-changing transportation innovator in the tradition of Henry Ford, whose business model (standardization, mass production, welfare capitalism) made the automobile accessible to ordinary people.   The next few years will reveal whether Uber will realize this potential.

When and How To Let a Conflict Go

There’s lots of advice about how to tackle difficult conversations but there are certain discussions you’re just better off not having at all. Some conflicts with co-workers, neighbors, or spouses should be left alone; knowing when to let it go is just as critical as knowing when to engage.

The decision of whether to bring up and try to resolve a conflict — difficult feedback you’d like to give, a criticism you want to offer, or a case you feel you need to make — should be a rational decision. Therefore the first question to ask yourself is: Am I too emotional right now? If you’re angry or upset ­— or your colleague is — it’s not a good time to engage. It won’t help if either of you is yelling or pounding the table. There’s lots of research (see here and here) that shows that our emotional and rational minds work in parallel – when our emotional mind is on top, rationality goes out the window.

In these cases, instead of productively discussing the issue at hand, we end up in a negative emotional spiral, where both sides escalate the conflict, say hurtful things or even make threats, and aren’t able to disengage. This is spurred on by our natural mimic reflex. We start to imitate the emotions someone else is expressing. When you’ve gotten to this point, it can be almost impossible to clear the air.

But heightened emotions aren’t the only reason to walk away from a conflict. The goal of engaging in a conflict discussion is to reach a resolution. If you don’t think you can change something with the conversation, it may not be worth having. If your colleague is stuck in her ways and has never demonstrated a willingness to concede, what do you gain by pushing her yet again? If the damage is already done ­— say the project was defunded last week and you’re just finding out about it — it’s probably better to let it go.

The exception to this advice is when it will make you feel better to express your opinion even if you know it won’t change the circumstances, for example, if you want to go on record as opposing the defunding. Integrity is important in professional settings and you may need to speak up as a matter of principle. But before you do that, think about collateral damage: Will engaging in the conflict damage your reputation or hurt your colleague’s sense of self-worth?

If you decide to let go of a conflict, what do you do instead? Do whatever you can to leave the situation, or at least postpone the conversation. You might say something like: “I’m not ready to have this conversation right now. I’m going to step outside to clear my head and then perhaps we can meet tomorrow to talk about this.”  You can take a walk. I had one student tell me that he walked around in freezing cold weather instead of engaging in a workplace battle and it helped him address the conflict constructively later on when he cooled off. You may want to vent with a friend or a trusted colleague — someone who can talk you down or give you insight into why the other person is behaving the way he or she is. If you choose not to confront the issue directly, you need to tell yourself: “I chose to let this go. I’m not going to ruminate or retaliate because it was my decision to let go.”

Of course, whether or not to engage is not always up to you.  If it’s the other party who’s having the problem, you may not be able to completely avoid having the conversation. The person may approach you after a meeting, or catch you on the phone. The best you can do in these situations is to stop yourself from getting into the negative emotional spiral. When Anne Lytle, Debra Shapiro, and I were studying dispute resolution in the late 1990s, we found people used several ways to avoid or break up a negative emotional spiral.  Since then I’ve seen them work in many real-life conflicts.

First, it’s important to remain calm. It’s hard not to yell back when you’re being attacked but that’s not going to help. To help you remain calm while your colleague is venting and in the process, perhaps even hurling a few insults, visualize your coworker’s words going over your shoulder, not hitting you in the chest. You might physically take a step aside. Don’t act aloof; it’s important to still indicate that you’re listening. But if you don’t feed your counterpart’s negative emotion with your own, it’s likely he or she will wind down. Without the fuel of your equally strong reaction, he or she will run out of steam.

To defuse an emotional situation, it can help to talk about the process instead of the content. You might say, “You can yell at me and I can yell back at you but this isn’t going to solve our problem. Let’s try to see how we might fix this.” Label the interaction in its current state as unproductive and then suggest you set that process aside.

In our research on conflict resolution, we saw that most people started the conversation out on an emotional level—claiming that they’d been mistreated, framing the discussion in terms of what’s fair and what isn’t, and sometimes making threats. That behavior just cued the other party to make threats back. When you open with negative emotions, you’re virtually guaranteed to enter the conflict spiral. So you had better know how to break it. Try not reciprocating. Instead of threatening back or making your own claim to fairness, focus on interests—what you and your counterpart actually want from the situation and why. You might say something like: “Help me understand why this is such a problem.” By getting at the underlying issues, you can remain rational and hopefully defuse your colleague’s anger.

You might need to counter a claim your colleague is making — “I do think this new policy is fair,” for example — but then immediately acknowledge that you see things differently. “I have a completely different perspective, but clearly you think this is unfair, so talk to me. How can we fix this?” Focus the person on the underlying causes of the problem and what you can do together to solve it.

There’s a limit to the abuse you can — and should ­— take from a colleague. These tactics work to avoid or break up conflict spirals and therefore limit that abuse.  But, they also go further, in that they redirect the conversation from emotions to interests — what’s causing the emotions — and so they open the door to resolving the problem.