Marina Gorbis's Blog, page 1407

You Probably Can’t Tell the Difference Between a Bot and a Person

Winning Friends and Influencing People How Advanced Socialbots Have Infiltrated TwitterMIT Technology Review

Ah yes, those pesky Twitter bots. While it may seem fairly obvious to you whether a follower is a real person or not, Carlos Freitas and other researchers created 120 socialbots and found that a significant proportion "not only infiltrated social groups on Twitter but became influential among them." Only 38 were suspended by Twitter and more than 20% picked up 100 followers or more. They also received similar or higher Klout scores than "several well-known academics and social network researchers" and were the most successful when generating synthetic tweets (rather than just retweeting).



This suggests that "Twitter users are unable to distinguish between humans and bots," which is concerning in light of the proliferation of services that measure interest and opinion on social networks. "The worry," according to the Tech Review, "is that automated bots could be designed to significantly influence opinion" about such things as politics and products.

Mostly by Arguing How Greylock Partners Finds the Next FacebookNewsweek

When the CEO of Sprig, a start-up focused on meal delivery, finally made it to the boardroom of the VC firm Greylock Partners to pitch his business model, everyone argued about it. But that was a good thing: Intense debate over conflicting views is an accepted part of the process at Greylock and occurred regularly when the company made its biggest and most successful bets on Facebook, Pandora, and Airbnb. Katrina Brooker describes this process and many other inside details in her anatomy of the firm, which is made up of former engineers and start-up founders and is seen as the golden ticket for any fledgling company in Silicon Valley.



And while the competition among VC firms to fund the next big thing is fierce, Greylock has an advantage, as Medium’s Ev Williams notes: "The thing I heard, time after time, was David [Sze, a Greylock partner] was always trying to do the right thing for the entrepreneur." This includes having an in-house recruiting firm to locate the best engineering talent for the start-ups it funds, a huge boon in a wildly competitive job market.

The Comfort of CrowdsAre Smartphone Users the Missing Link in Building Efficiency? Greentech Media

Have you ever been too cold at work and wandered around looking for a thermostat, only to realize that your workplace climate is controlled by unseen microchips that think they’re a lot smarter than you are? They aren’t smarter, of course — you’re the best judge of your own comfort, just as you’re the best judge of your lighting levels. In this piece from Greentech Media, Jeff St. John describes a start-up, Crowd Comfort, whose software allows human beings to talk to their buildings via smart phones about such things as heat, light, and air flow.



Using an app, employees can signal where they’re located in a building and report on their comfort or discomfort. Because they remain anonymous, they have the freedom to report how they really feel. (First the physical climate, next the emotional climate? Wishful thinking.) A big selling point, the start-up hopes, is the energy-saving potential: If you’re a facilities manager, you can lower the temperature by 1 degree and see whether anyone reacts. If people are still comfortable, you’ve saved your firm some heating costs. Buildings consume three-quarters of the all the electricity used in the U.S., so the energy savings could be significant. —Andy O'Connell

George Washington Approved! Spy vs. SpyThe New Yorker

Fellow history nerds, rejoice: James Surowiecki has written a delightful piece on economic espionage throughout history. In particular, he argues that China's recent theft of trade secrets from the United States probably sticks in America's craw because "that's pretty much how we got our start as a manufacturing power, too." He cites examples like Samuel Slater's knowledge of Arkwright spinning frames, Francis Cabot Lowell's infiltration of British mills, and the actions of America’s "most effective industrial spy," Thomas Digges, who was lauded by George Washington for his "activity and zeal." Recently, Surowiecki notes, the U.S. has been all about enforcing stringent intellectual-property rules. But "as our own history suggests, the economic impact of technology piracy isn't straightforward," with examples of patents and trade secrets both helping and hurting innovation.

Above It AllPatek Philippe Crafts Its FutureFortune

The 175-year-old Swiss watchmaking company Patek Philippe gives a whole new meaning to “high end.” It floats in a cloud of superlatives: Last year the company unveiled its most complex wristwatch to date, a timepiece that has 686 parts, is encased in 18-karat white gold, sports a double dial with a cloisonné face, and costs more than $1 million. The company holds the record for a watch sold at auction — $11 million. Owners of Pateks have included Queen Victoria, Pope Pius IX, Joe DiMaggio, Leo Tolstoy, Albert Einstein, Marie Curie, Andy Warhol, Eric Clapton, Jack Welch, and Vladimir Putin.



Yet Patek is also a company of contradictions — while it maintains a reverence for its past, vowing to service any watch dating back to 1839, the company remains focused on the future: In its R&D department, 80 engineers, technicians, and drafts people develop new movements and functions using such technologies as 3D printers. This piece by Stacy Perman, excerpted from a new book, touches on a few modern-day challenges facing the company, such as smart watches, but it’s hard to take those threats seriously. Somehow Patek seems to exist on a different plane from the rest of this grubby world. —Andy O'Connell

BONUS BITSViews from Modern Work

Opportunity's Knocks (The Washington Post)
Friends Without Benefits (The Baffler)
How the Recession Shaped the Economy in 255 Charts (The New York Times)

What Big Data Needs to Do to Grow Up

We are in an Information Revolution — and have been for a while now. But it is entering a new stage. The arrival of the Internet of Things or the Industrial Internet is generating previously unimaginable quantities of data to measure, analyze and act on. These new data sources promise to transform our lives as much in the 21st century as the early stages of the Information Revolution reshaped the latter part of the 20th century. But for that to happen, we need to get much better at handling all that data we’re producing and collecting.

Consider the more than $44 billion projected by Gartner to be spent on big data in 2014. The vast majority of it — $37.4 billion — is going to IT services. Enterprise software only accounts for about a tenth.

The disproportionate spending on services is a sign of immaturity in how we manage data. In his seminal essay, “Why Software is Eating the World,” Marc Andreessen pointed out that for each new technology wave, the money eventually shifts to software. Software spending represents an industrialization and packaging of work that would otherwise happen manually, as one-off services, within each organization. As markets mature, more of the processes move to partners and other providers, so the industry leaders can spend their time and energy on high-value processes that contribute to their competitive differentiation. Software is part of a broader ecosystem that lets businesses focus on activities that are core rather than context. Core, in Geoffrey Moore’s definition, is what a business’s customers cannot get from anyone else; context is all the other stuff a business needs to get done to fulfill its commitments.

To understand what that path to maturity might look like for big data, it’s helpful to look at another, similar transformation. Data is the raw material that we attempt to turn into useful information. We can learn something from the manufacturers who turned raw materials into achievements as complex as automobiles.

The earliest automobile manufacturers were “vertically integrated,” which is to say they pretty much did everything themselves. Contrast that with today’s automobile manufacturers, which source parts from a global marketplace of independent suppliers. A manufacturer like Ford might have more than a thousand Tier 1 suppliers.

By calling on a rich ecosystem of industrialized products and services, automobile manufacturers can focus on the high-value, core activities that differentiate their products while driving down the total costs of production. This shift has led to a dramatic increase in automobile capabilities, without a corresponding increase in costs.

Over the years, the automobile industry has embraced numerous innovations to achieve this transformation. These include:

Standardization: From parts to specifications and protocols, standardization is the essential first step in building a mature ecosystem.
Quality testing and controls: Standardization also includes the concept of quality controls, testing protocols, and acceptance testing to enforce adherence to standards.
Design for manufacturing/design for assembly: Integrating manufacturing and/or assembly processes into product design has reduced manufacturing and assembly costs at the source.

The shift from vertically integrated manufacturing (doing everything in-house) to integrated and collaborative design, manufacture, and assembly has enabled us to build larger, more advanced and complex goods than ever before. It has reshaped our communities and lives.

Can we make a similar shift with data?

When businesses try to manufacture real insight and value from raw data, most are like the early manufacturers, doing nearly everything in-house. Despite recent technological advances, the task of turning data into information is characterized by vast inefficiencies.

That’s why we see such a huge spending on services — we haven’t figured out how to automate and industrialize different parts of the data processes. We treat nearly every data-related task as a high-value, core process, for which we must spend on specialized services. It’s all core, no context.

Until we find ways to start treating some of the data tasks as contextual — to industrialize those processes — then we will be limited in what we can accomplish with data.

To industrialize these processes, we will need advances comparable to those that have occurred in manufacturing, including:

Data standardization, particularly industry-specific standards and taxonomies.
Data quality processes, such as advances in data integration/cleansing and quality control.
Third-party data services (i.e., data clouds or “industrialized data services” in Accenture terminology) that enable data sharing and exchange at scale, between applications and organizations.
Vertical data applications that understand all aspects of data relating to a specific task (e.g. IT Security).
Data assembly, meaning dynamic assembly of raw data, processed data, and contextualized data.
Industry cooperation in sharing the data that is “context” and common to all players.

 

With the ability to standardize data (akin to parts standardization in manufacturing) and use those standards in multiple applications, companies can begin to partner, outsource and collaborate on much of the work of involving in turning data into insight. The more that companies can share and repeat the context processes around different types of data, the more resources they have to invest in the higher-value, core data processes.

If Your Brand Promises Authenticity, You Better Deliver

Your culture might be positive. Your brand messages might be powerful. But the greatest potential your organization has is the special case when culture and brand are completely aligned. The slightest divergence between them can undermine even the most brilliant (and expensive) marketing campaign.

Imagine: A large coffee chain spends millions on a strong marketing campaign that tells customers everywhere their local café will be just like home. The ads are brilliant, showing a place where I can read and relax, think and work, or just hang out for hours with friends with no pressure to give up my seat just because my latte is long gone. Then imagine if I go there and received a friendly, “Good morning! How can I help you? What would you like?” from a woman with the name badge “Margot.” I order something and hear, “Your drink will be ready in a minute. You’ll find the milk and sugar over there. Have a great day.” As I turn to collect my drink, I see a “friendly” suggestion that I don’t use my laptop during peak hours. In this case I’d end up with two things – a latte and dissonance.

It might be excellence customer service, but it would be nothing like my home. At home people are friendly and familiar, rather than polite, I use my laptop whenever I like for however long I like, and I certainly know where to get the milk. While before their campaign I would have been happy with great customer service, in this case I’d feel a lack of authenticity. I might even feel less attached to this chain that I did before they spent months and millions convincing me of something that wasn’t true… at least not according to my personal experience. On the other hand, if I have an experience that matches and reinforces the brand promise, my connection to this chain is stronger than ever. The leaders’ commitment to not just providing excellent customer service but to actually shaping their organizational culture decides which my experience will be.

People largely make decisions based on their experience. We know that if somebody’s body language is sending a different message to the words they’re saying (“I’m really happy to be here with you today,” said with a flat facial expression) their audience will typically believe their body language (“You are not”, concludes the audience, “Your boss made you come”).Equally, if an organization sends a message that is different from a customer’s experience, that customer tends to believe their experience – and they are likely to feel less positive about that organization than if they had just had a nice enough experience without any brand messages.

Across all industries, organizational authenticity is powerful, and it’s achieved by cultural architects: leaders who ensure alignment between culture and brand. The companies I’ve worked with who do this exceptionally well ensure they have a few simple keys in place:

Recognize that culture can and should change. A powerful culture is not one that is fixed. Too often people think they have a strong culture if they’ve spend decades nurturing the one that’s been ingrained since the firm’s humble beginnings. But strategy changes and culture should change with it.When called in to advise a large transatlantic law firm, I discovered they were fiercely directed by a strategy consultancy (at the end of intensive research into sector changes and their firm) to build true collaboration into their individualistic, competitive culture. If they didn’t, they would simply not be able to sustain their position as a leader in the field. External changes meant the market demanded collaboration, and internal efforts meant clients expected it. Successful strategic changes and a strong marketing team had positioned the firm as offering a seamless service across departments and global locations. If client experiences didn’t match the brand promise, they would not survive. The culture had to change.
Teach others to be cultural architects, too. Leaders throughout the organization need to know what culture really is, that it can be purposefully built, and how to do it. This is something I believe should be in every leadership development program, but rarely is. One executive in charge of “People” or “Talent” (no matter how fabulous they may be) can’t be solely responsible for facilitating the desired culture; it’s the responsibility of every leader to be shaping the organization’s most powerful tool.
Go beyond banner values.  Having three positive words written on the wall and across the bottom of marketing materials is not a shared understanding of culture. Meaning comes from the honest conversations and daily behaviors that mean those values are really lived. Not long after one large US bank acquired a Chinese bank, the SVP in charge described to me the challenge they faced when, after the merger, they realized “Customer Focus” and “Customer First” were two very different things in terms of how the bank’s members behaved. Culture is more than banner values.
Put skills second. Use the organization’s culture as the starting point for designing training and development, and upon that foundation then address skills gaps.In the same way that hiring processes send a message to job candidates about that organization, training and development experiences send a message to participants about the organization’s true culture – what it really values and wants to be.

When all organizational members have a shared understanding of the culture and the cultural goals– what it really looks like in practice, what it means and why it’s important to their and the organization’s success, people can take calculated risks, become more creative, and can make decisions on their own without constantly consulting a rulebook.

As I finish writing this I smile, knowing I’m about to experience the impact of an excellent cultural architect who I’ll probably never meet. In a few minutes, when I walk out of the office and go around to my local café, I’ll see Margot. She doesn’t wear a name tag – she doesn’t have to. I know she’ll be there today, because I know she doesn’t go to university on Wednesdays. She’ll make me my regular latte, remembering the soy milk, and ask where my daughter Saskia is today — and then probably cheekily tell me I should stop work and go to the park with my three-year old on this sunny London afternoon. Maybe I will.

Strategy Is Iterative Prototyping

Managers have no way of predicting with any certainty what will happen with respect to an industry and its likely evolution, customers and their likely preferences, a firm itself and its potential capabilities and cost structure, and competitors and their likely responses/actions.  We just can’t do it.

One common response to this reality is to ignore the inherent complexity: simplify, analyze, and then make a plan. That typically doesn’t end well, because complexity and unpredictability undermine the plan almost as soon as it is made. A second response is to throw up one’s hands, declare the situation too complicated to make a decision, and adopt an unhelpful interpretation of “emergent strategy,” the modern strategy scourge.

The third approach is to recognize that while the world is complex and uncertain, abdication of choice is not a productive response. This third way treats strategy as prototyping. Prototyping is a tool for progressively shortening the odds of a course of action and minimizing the costs along the way. An organization produces a succession of prototypes to test an idea, gain insights, improve the prototype, test again, gain insights, improve, and so on until the idea is ready for prime time.

The same can hold for strategy. A strategic possibility — a set of answers to the five key questions of strategy (what is our winning aspiration, where will we play, how will we win, what capabilities must we have, and what management systems are required) — is, in fact, a prototype. At first, it is a conceptual prototype. Strategy can be thought of as moving from the conceptual realm to the concrete realm through the process of iterative prototyping.

The first iteration of prototyping involves asking what would have to be true in order for the initial answers to those five questions to be sound and then testing those answers without actually putting the strategy into action. The answers can then be modified and enhanced.

The refined prototype can be tested again, modified, tested again and so on. And with each iteration the tests move further into the realm of action and the marketplace. Aspects of the strategy can be tested by actually doing things with customers — and gaining more understanding to hone and refine the strategy with each iteration.

In fact, the prototyping should never stop. It is ongoing, as you receive new data from the market, your competitors and within your organization. It is better to think of your strategy as not set in stone but rather as the most recent prototype being tested by the latest marketplace experience. That way strategy will never get out of sync with the competitive environment.

Why We Humblebrag About Being Busy

We have a problem—and the odd thing is we not only know about it, we’re celebrating it. Just today, someone boasted to me that she was so busy she’s averaged four hours of sleep a night for the last two weeks. She wasn’t complaining; she was proud of the fact. She is not alone.

Why are typically rational people so irrational in their behavior? The answer, I believe, is that we’re in the midst of a bubble; one so vast that to be alive today in the developed world is to be affected, or infected, by it. It’s the bubble of bubbles: it not only mirrors the previous bubbles (whether of the Tulip, Silicon Valley or Real Estate variety), it undergirds them all. I call it “The More Bubble.”

The nature of bubbles is that some asset is absurdly overvalued until — eventually — the bubble bursts, and we’re left scratching our heads wondering why we were so irrationally exuberant in the first place. The asset we’re overvaluing now is the notion of doing it all, having it all, achieving it all; what Jim Collins calls “the undisciplined pursuit of more.”

This bubble is being enabled by an unholy alliance between three powerful trends: smart phones, social media, and extreme consumerism. The result is not just information overload, but opinion overload. We are more aware than at any time in history of what everyone else is doing and, therefore, what we “should” be doing. In the process, we have been sold a bill of goods: that success means being supermen and superwomen who can get it all done. Of course, we back-door-brag about being busy: it’s code for being successful and important.

Not only are we addicted to the drug of more, we are pushers too. In the race to get our children into “a good college” we have added absurd amounts of homework, sports, clubs, dance performances and ad infinitum extracurricular activities. And with them, busyness, sleep deprivation and stress.

Across the board, our answer to the problem of more is always more. We need more technology to help us create more technologies. We need to outsource more things to more people to free up own our time to do yet even more.

Luckily, there is an antidote to the undisciplined pursuit of more: the disciplined pursuit of less, but better. A growing number of people are making this shift. I call these people Essentialists.

These people are designing their lives around what is essential and eliminating everything else. These people take walks in the morning to think and ponder, they negotiate to have actual weekends (i.e. during which they are not working), they turn technology off for set periods every night and create technology-free zones in their homes. They trade off time on Facebook and call those few friends who really matter to them. Instead of running to back-to-back in meetings, they put space on their calendars to get important work done.

The groundswell of an Essentialist movement is upon us. Even our companies are competing with one another to get better at this: from sleep pods at Google to meditation rooms at Twitter. At the Annual Meeting of the World Economic Forum in Davos this year, there were — for the first time — dozens of sessions on mindfulness. TIME magazine goes beyond calling this a movement, instead choosing the word “Revolution.”

One reason is because it feels so much better than being a Nonessentialist. You know the feeling you get when you box up the old clothes you don’t wear anymore and give them away? The closet clutter is gone. We feel freer. Wouldn’t it be great to have that sensation writ large in our lives? Wouldn’t it feel liberating and energizing to clean out the closets of our overstuffed lives and give away the nonessential items, so we can focus our attention on the few things that truly matter?

People are beginning to realize that when the “more bubble” bursts — and it will — we will be left feeling that our precious time on earth has been wasted doing things that had no value at all. We will wake up to having given up those few things that really matter for the sake of the many trivial things that don’t. We will wake up to the fact that that overstuffed life was as empty as the real estate bubble’s detritus of foreclosed homes.

Here are a few simple steps for becoming more of an Essentialist:

1. Schedule a personal quarterly offsite. Companies invest in quarterly offsite meetings because there is value in rising above day-to-day operations to ask more strategic questions. Similarly, if we want to avoid being tripped up by the trivial, we need to take time once a quarter to think about what is essential and what is nonessential. I have found it helpful to apply the “rule of three”: every three months you take three hours to identify the three things you want to accomplish over the next three months.

2. Rest well to excel. K. Anders Ericsson found in “The Role of Deliberate Practice in the Acquisition of Expert Performance” that a significant difference between good performers and excellent performers was the number of hours they spent practicing. The finding was popularized by Malcolm Gladwell as the “10,000 hour rule.” What few people realize is that the second most highly correlated factor distinguishing the good from the great is how much they sleep. As Ericsson pointed out, top performing violinists slept more than less accomplished violinists: averaging 8.6 hours of sleep every 24 hours.

3. Add expiration dates on new activities. Traditions have an important role in building relationships and memories. However, not every new activity has to become a tradition. The next time you have a successful event, enjoy it, make the memory, and move on.

4. Say no to a good opportunity every week. Just because we are invited to do something isn’t a good enough reason to do it. Feeling empowered by essentialism, one executive turned down the opportunity to serve on a board where she would have been expected to spend 10 hours a week for the next 2-3 years. She said she felt totally liberated when she turned it down. It’s counterintuitive to say no to good opportunities, but if we don’t do it then we won’t have the space to figure out what we really want to invest our time in.

A hundred years from now, when people look back at this period, they will marvel at the stupidity of it all: the stress, the motion sickness, and the self-neglect we put ourselves through.

So we have two choices. We can be among the last people caught up in the “more bubble” when it bursts, or we can see the madness for what it is and join the growing community of Essentialists and get more of what matters in our one precious life.

Why the High Air Fares? Don’t Blame High Profits

In part because of high fuel costs, the global airline industry’s average net profit margin comes to less than $6 per passenger, according to figures released by the International Air Transport Association and reported in the Wall Street Journal. Other factors reducing airlines’ margins are a slump in air cargo and slack growth in high-margin business travel. In response, airlines are purchasing more fuel-efficient planes, slowing capacity growth, and packing aircraft more tightly than ever.

How to Negotiate with Someone More Powerful than You

Going into a negotiation with someone who holds more power than you do can be a daunting prospect.  Whether you are asking your boss for a new assignment or attempting to land a major business deal with a client, your approach to the negotiation can dramatically affect your chances of success. How can you make the best case for what you want?

What the Experts Say

“There is often strength in weakness,” says Margaret Neale, the Adams Distinguished Professor of Management at Stanford Graduate School of Business. Having power typically reduces a person’s ability to understand how others think, see, and feel, so being in the less powerful position actually gives you a better vantage to accurately assess what the other party wants and how you can best deliver it. And when you do your homework, you’ll often find you’ve “underestimated your own power, and overestimated theirs,” says Jeff Weiss, a partner at Vantage Partners, a Boston-based consultancy specializing in corporate negotiations and relationship management, and author of the forthcoming HBR Guide to Negotiating. Here’s how to negotiate for success.

Buck yourself up

“Often we get fearful of the threat of competition,”says Weiss. We worry there are five other candidates being interviewed for a job, or six other vendors who can land a contract, and we lower our demands as a result. Do some hard investigation of whether those concerns are real, and consider what skills and expertise you bring to the table that other candidates do not. The other side is negotiating with you for a reason, says Neale. “Your power and influence come from the unique properties you bring to the equation.”

Understand your goals and theirs

Make a list of what you want from the negotiation, and why. This exercise will help you determine what would cause you to walk away, so that you build your strategy within acceptable terms. Equally if not more crucial is to “understand what’s important to the other side,” says Neale. By studying your counterpart’s motivations, obstacles, and goals, you can frame your aims not as things they are giving up to you, but “as solutions to a problem that they have.”

Prepare, prepare, prepare

“The most important thing is to be well prepared,” says Weiss. That involves brainstorming in advance creative solutions that will work for both parties. For example, if the other side won’t budge from their price point, one of your proposals could be a longer-term contract that gives them the price they want but guarantees you revenue for a longer period of time. You also want to have data or past precedents at your disposal to help you make your case. If a potential client says they will pay you X for a job, having done your research allows you to counter with, “But the last three people you contracted with similar experience were paid Y.” Preparation gives you the information you need to “to get more of what you want,” says Neale.

Listen and ask questions

Two of the most powerful strategies you can deploy are to listen well, which builds trust, and pose questions that encourage the other party to defend their positions. “If they can’t defend it, you’ve shifted the power a bit,” says Weiss. If your boss says he doesn’t think you are the right addition to a new project, for instance, ask, “What would that person look like?” Armed with that added information, says Neale, “you can then show him that you have those attributes or have the potential to be that person.”

Keep your cool

One of the biggest mistakes a less powerful person can do in a negotiation is get reactive or take the other person’s negative tone personally. “Don’t mimic bad behavior,” says Weiss. If the other side makes a threat, and you retaliate with a threat, “you’re done.” Keep your side of the discussion focused on results, and resist the temptation to confuse yourself with the issue at hand, even if the negotiations involve assigning value to you or your product. “Know what your goals are and direct your strategy to that and not the other person’s behavior. You have to play the negotiation your way,” Weiss says.

Stay flexible

The best negotiators have prepared enough that they understand the “whole terrain rather than a single path through the woods,” says Weiss. That means you won’t be limited to a single strategy of gives and gets, but multiple maneuvers as the negotiation progresses. If the other party makes a demand, ask them to explain their rationale. Suggest taking a few minutes to brainstorm additional solutions, or inquire if they’ve ever been granted the terms they are demanding. Maintaining flexibility in your moves means you can better shape a solution that’s not only good for you, says Neale, but also makes them “feel like they’ve won.”

Principles to Remember

Do:

Put yourself in their shoes — it’s crucial to understand what’s important to the other side
Remember your own value — you are at the table for a reason
Ask questions — you’ll get valuable insight into their motivations and interests

Don’t:

Wing it — nothing beats good preparation
Depend on a single strategy — develop a range of responses to push the negotiation in your favor
Copy aggressive behavior — if they make threats or demands, stick to your goals

Case Study #1: Do your homework

Ben Koeneker knew the odds were stacked against him. Then the head of business development for a midsize Midwest telecom company, he was trying to convince Siemens, the multibillion-dollar electronics conglomerate, to give his firm an exclusive distribution contract for a new business communications product.  At the time, his $28 million company was known more for refurbishing than distribution. “We were tiny,” he says. “We were the ant shouting at the elephant.”

Koeneker did copious amounts of research prior to sitting down at the table. He researched Siemens products and why their current channels of distribution weren’t working well. He also made sure he knew that his own company could deliver on every level, preparing counterarguments for any doubts that might arise. “I knew we couldn’t pretend we could do something we couldn’t do,” he says.

When the negotiations began, he emphasized the pros of his company’s distribution model, rather than the cons he felt currently existed in Siemens’ current method. “If you spend too much time talking about the negatives, you’re basically telling them that they’re doing their business wrong.” He also pointed out that signing with his firm would free up money to devote to marketing, which he knew from his research was something that Siemens wanted.

A turning point came when a senior Siemens executive said that while he was impressed with the proposal, he wondered if Koeneker’s company could scale effectively if the product line took off. Two rivals to Koeneker’s firm, the executive said, were bigger and could more easily handle growth. “I turned to him and said, ‘Are those two companies interested in distributing your product at this time?’” Koeneker says. “I already knew the answer from my research that those companies had turned them down.” He followed up by adding that while his firm was small, it was better thought of as “boutique,” with the unique ability to focus completely on the Siemens brand.

Shortly after, they inked the contract.

Case Study #2: Know your value

Management coach Ginger Jenks didn’t want to lose her client. Michael* had asked her to work on a side consulting project, but balked at her proposed fee. Though he had been paying her usual rate for several years, he went into “hard negotiation mode” for the extra work, Jenks says. “He told me he could get someone else for less than a third of my price.”

Jenks valued Michael’s continued business, but she knew she wasn’t willing to lower her rate. “I was fairly confident that he wanted me to do the work,” she says, “and I was certain that I did not want to feel ‘nickel and dimed’ on the project.” She decided her strongest strategy was not to take it personally that he was acting so insulted by her price. “I knew it was just a negotiating tactic on his end.”

When they met again to discuss terms, Jenks held fast to her initial proposal. She knew from hearing him relate stories of past negotiations that he respected strength and tenacity. She also knew that he valued good work above all else, and likely didn’t want the hassle of finding someone new.

At the table, Jenks stressed their great track record together, suggesting that if he could find someone who could do as good a job as he knew she would do, he should go elsewhere. Throughout, Jenks reminded herself that negotiating “is a little like dating,” she says. “If you are too interested, you lose power. But if you can remain calmly interested but still detached, that creates power.”

Michael thought it over for a few days, and then accepted Jenks’s original proposal. “It’s critical to remember that you have something the other person wants also,” she says. “Even if you aren’t in the power position, you have something to offer.”

*not his real name

Focus On: Negotiating




To Negotiate Effectively, First Shake Hands
The Simplest Way to Build Trust
Even Small Negotiations Require Preparation and Creativity
Make Your Emotions Work for You in Negotiations

The Secret History of White-Collar Offices

Nikil Saval, editor at n+1, on how gender, politics, and unions have affected the American workplace since the Civil War. For more, read his book, Cubed: A Secret History of the Workplace.

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Can GM Make it Safe for Employees to Speak Up?

In early April, following the news of faulty ignition switches and recall of more than 6 million cars, GM CEO Mary Barra announced a “Speak Up for Safety” program. “GM must embrace a culture where safety and quality come first,” Barra said at a company town hall meeting. “GM employees should raise safety concerns quickly and forcefully, and be recognized for doing so.” (Since April, the number of vehicles the company has recalled for a variety of reasons has doubled.)

In an industry that involves selling machines that transport humans at fast speeds, the notion that employees wouldn’t be encouraged to discuss safety seems odd. But the company’s transition to a culture that dissuades silence has been slow. As Harvard Business School professor David Garvin explains, “Culture is remarkably durable and resistant to change.” But at GM, and at many other large organizations, the challenges may be especially complex.

As Mary Barra put it to her employees, following today’s release of Anton R. Valukas’s three-month internal investigation, “The lack of action was a result of broad bureaucratic problems and the failure of individual employees in several departments to address a safety problem…Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch.”

In other words, it wasn’t a cover-up or a deliberate attempt to thwart safety; it was just the way GM did business, with “no demonstrated sense of urgency” and “nobody [raising] the problem to the highest levels of the company.” But even though Barra attempted to blame a few “individuals,” her underlying message hints at the importance of company — and industry — culture.

A fundamental problem at many American car companies is a legacy of reacting slowly, protecting executives from bad news, and focusing on cutting costs. And the sheer complexity of building cars also plays a role — David Cole, the former head of the Center for Automotive Research (and son of a former GM president), insists that this is really what’s behind the ignition switch error and why it was so hard for the company to get to the bottom of the problem.

But that’s exactly why it would be a mistake to look past organizational behavior and culture at GM: It is utterly inevitable that things will go wrong, according to Harvard Business School professor Amy Edmondson. This is “not because people screw up, but because of the immense complexity of what we do,” she told The Washington Post. “The phenomenal number of interacting parts, interacting people and continuing changes in technology mean that we will always have failures, full stop.” (Consider: there are bugs in your smartphone, too – another complex device – but they won’t kill you.)

And yet we have a canon of research and experience telling us that while mistakes always happen, it’s the environment in which they occur that really makes the difference. And it’s really hard for leaders to change that culture, even when they become aware of the problem.

The classic example of repeated institutional failure, of course, is NASA. “If you think about the Challenger space shuttle explosion [in 1986], the incident was attributed to cultural issues: an unwillingness to speak up and accept dissonant voices,” says David Garvin. “Then, 17 years later, we have the Columbia explosion. Culture is tough because it gets embedded.”

Conversely, says Garvin, there are programs like SUBSAFE for the U.S. Navy’s nuclear submarines. “At NASA, you had to prove something was broken, which is hard to do,” he explains. “At the nuclear submarine program, the working mantra is ‘prove to me that it’s right, that it’s workable.’ That’s a very different mindset.”

Each mindset requires very different types of communication — and proving that something works requires raising open-ended questions. In order to show that something is broken, however, you may feel you have to be completely confident in your facts. Garvin notes that this is where Edmondson’s work on implicit voice theories comes into play. These are “theories we have in our heads about the risks of speaking up. Things like: Don’t embarrass the boss in public. Don’t go up the chain of command. Everything must be done before you present it.”

“These theories are hard to dislodge, and you need leaders who explicitly invoke the kind of behavior they’re asking for,” Garvin says.

After the Challenger explosion, there were new requirements put in place, but none of them required major changes to the organization itself. More than a decade later, and under a culture sociologist Diane Vaughan says fell “back on routine under uncertain circumstances,” a piece of foam broke off the Columbia shuttle and hit a section of the wing during liftoff. Repeated requests for photos and data of the shuttle to discern any problems that might occur during reentry were dismissed. In a recent New York Times video on both disasters, one former engineer, Rodney Rocha, recalls asking why his request was rejected. The manager’s answer: “I don’t want to be a Chicken Little about this.”

At NASA, notes Rocha, “part of our engineering culture is that you work through your chain of command. I will regret always why I didn’t break down the door by myself.”

At GM, despite the company’s insistence that its culture is changing, there are a few key sticking points worth examining.

First, Maryann Keller, a former auto analyst, notes that, historically, GM hasn’t invested in root-cause analysis. While working on her 1989 book on GM, she shared this story that an engineer imparted: “They were having a problem with enormous warranty claims for a window washer motor. The original response from GM was not to look for the root cause because that wasn’t part of the company’s thought process. No one asked, ‘Why are they failing?’”

Instead, she said, “their proposal was to build another factory to make window washer motors.” And the reason the motors were failing in the first place? “To save a few pennies, someone had changed the design of the motor so that there was no internal way to cool it. So it had to use the washer fluid itself to cool down.”

Keller notes that root-cause analysis has gotten better, but the lack of it illuminates the industry’s mentality that you “build a car to the specifications that have been accepted for that segment of the market, make sure your bill of materials equals a certain cost, and whatever happens after that is extraneous.” American car companies, she says, have tolerated high warranty claims based, in part, on an attitude that “if something happens along the way, so be it. It’s not my job.”

Second, Keller says that for years it was considered bad for your career if information filtered up to the highest ranks. “I had people tell me that everyone would know about a problem, but no one would speak about it,” she explains. “The goal was to insulate the senior executives and hope that nothing happens.” It’s telling, as the AP reported yesterday, that the director of vehicle safety at GM was four rungs down from the CEO prior to the recall. Both Ford and Chrysler’s hierarchies place safety directors closer to the CEO, and management experts told the AP that “safety ranks higher at other companies as well, especially food, drug, and chemical makers. At some, the safety chief has direct access to the CEO.”

But although changing a corporate culture is hard, it is not impossible with the right leadership. Just take this now-famous story about Ford CEO Alan Mulally. As Fortune first reported:

“Mulally instituted color coding for reports: green for good, yellow for caution, red for problems. Managers coded their operations green at the first couple of meetings to show how well they were doing, but Mulally called them on it. ‘You guys, you know we lost a few billion dollars last year,’ he told the group. ‘Is there anything that’s not going well?’ After that the process loosened up. Americas boss Mark Fields went first. He admitted that the Ford Edge, due to arrive at dealers, had some technical problems with the rear lift gate and wasn’t ready for the start of production. ‘The whole place was deathly silent,’ says Mulally. ‘Then I clapped, and I said, ‘Mark, I really appreciate that clear visibility.’ And the next week the entire set of charts were all rainbows.”

It’s a striking moment, in which a subordinate was allowed to admit failure and the boss praised him for it — something Edmondson says is crucial to developing a culture that can learn from failure and communicate more openly. In a case study related to her research at Children’s Hospital in Minneapolis, Edmondson chronicled the efforts of one executive to maneuver workplace norms. As Garvin explained to me, this executive borrowed the concept of blameless reporting from aviation. “If you have a near miss, and you file it with the FAA within 10-14 days, you are exempt from punishment.” He says the hospital executive instituted something similar, and worked to distinguish blameless acts from blameworthy ones to maintain accountability while encouraging employees to speak up.

GM is seemingly not there yet, despite the company’s insistence that today’s culture is markedly different than it was before its 2008 bailout. Sure, Mary Barra told employees, “If you are aware of a potential problem affecting safety or quality and you don’t speak up, you are part of the problem. And that is not acceptable. If you see a problem that you don’t believe is being handled properly, bring it to the attention of your supervisor. If you still don’t believe it’s being handled properly, contact me directly.”

But everything we know about speaking up shows that doing what Barra has asked people to do is completely and utterly terrifying. And while the first steps are important — the Speak Up for Safety program and hiring a new safety chief — transitioning from hiring someone in that role to embedding a safety culture throughout GM is far from guaranteed. “A strong safety culture stems from psychological safety — the ability, at all levels, to speak up with any and all concerns, mistakes, failures, and questions related to even the most tentative issues,” writes Edmondson. “Simply appointing a safety chief will not create this culture unless he and the CEO model a certain kind of leadership.” The stick of firing a handful of people isn’t enough to send the message — the CEO must also use the carrot of publicly praising employees who speak up.

At the same time, many of the people I spoke with are optimistic about Barra’s ability to lead going forward. “You hope a crisis brings change,” says Maryann Keller. “But GM has had a hard time internalizing that past crises were their fault.” And because Barra isn’t from the financial side of the company that’s obsessed with counting beans, Keller hopes she’ll have better insight into how difficult it is to put cars together — how tough it is to talk about things that go wrong.

Our Economic Malaise Is Fueling Political Extremism

The head of the fourth biggest and fastest rising political party in the world’s second most powerful economy is a racist. An aide to the Prime Minister of one of the world’s most promising societies is caught on camera kicking a protestor to the ground. The world’s largest democracy proudly elects a man who rode a wave of religious extremism. The head of yet another is a man whose calls for ethnic purity are becoming more strident. And that’s leaving out the rise of extremist parties in Greece, the U.S., France, and elsewhere.

What’s going on here?

Here’s my crude, rude version of events: history is repeating itself.

We’ve seen this before: a broken financial system that has created huge economic imbalances. Debtor nations that owe creditor nations impossible amounts, who would have to gut their very societies, and the futures of the people in them, to pay off those impossible debts. And debtor nations and citizens alike that are angry — furious — at the injustice of it. Out of this dangerous cocktail rises extremism, and eventually, war.

The great John Maynard Keynes saw all this as plain as day — after World War I, he predicted that a debt-saddled Germany wouldn’t take it lying down. After World War II proved him right — when not only Germany, but other economically gutted nations succumbed to nationalism and fascism  — Keynes tried to design a new global financial system, creating the IMF and the World Bank. Their goals were to prevent exactly the vicious cycle above: imbalances, debt, servitude, extremism, and violence. The IMF was to prevent the buildup of debts and credits; and the World Bank was to invest the surpluses of rich countries in poor countries. We can argue, half a century later, about the sins of these great global institutions — yet, contrary to what today’s conspiracists and fantasists believe, they were not created to oppress; but precisely to prevent oppression from darkening into vengeance.

Yet, today, the situation Keynes foresaw is repeating itself — only more subtly. The problem today isn’t a small number of creditor nations, to whom the vast benefits of global wealth are flowing. It is a small number of super rich individuals: oligarchs, monopolists, scions. In a sense, the same problem, of vast, unjust imbalances, has reemerged; this time beyond national boundaries. Today, the super-rich and their empires span multiple nation-states; whisked from home to home and country to country by private transport, they use different infrastructure (who cares if roads and airports are crumbling when you’ve got a helipad?), play by different rules (do tax laws really matter if your assets are all offshore?), and even different methods of wielding political influence (why knock on doors when you can fund your own super-PAC?).

While the super-rich are vastly disproportionately enjoying the fruits of global prosperity, too many are being left behind. What is common in societies with extremists on the rise? The poor and the middle feel cheated — because they are. In the sterile parlance of economics, their wages aren’t comparable to their productivity — but more deeply, their lives are literally not valued in this system. And so they turn, in anger and frustration and resignation, to those who promise them more.

In all these societies, social contracts prize growth over real human development. Economies “grow”; but the benefits of growth are enjoyed vastly disproportionately by a small coterie of people — usually those politically connected; at the very top of a socially constrained pecking order; a caste society. We are told this is capitalism; in fact, it’s a perversion of free markets I call “growthism.” And while the size of TVs and shopping malls may improve for the poor and the middle, life usually doesn’t. They feel stuck — one paycheck away from penury; one illness away from bankruptcy; one dull, meaningless day at a time at a deadening job. The economy may be growing; but their well-being is not improving; they are asked to work harder and harder; but they do not grow smarter, richer, tougher, wiser, smarter, fitter. Their human potential — the one great gift each of us may be truly said to own — is being stifled.

This, then, is a broken global financial system. It is broken in the sense that the social contract it offers is a fools’ bargain; in which the blind pursuit of growth is asking too many to watch too few get unimaginably rich, while their own human potential is thwarted. And as Keynes foresaw, a financial system that breaks down and corrodes social contracts inevitably fuels great tensions between societies. It leads to vicious spirals of extremism, nationalism, and ultimately, perhaps, war. And today, we seem hell bent on playing out that greatest of human tragedies again; judge for yourself where in that downward spiral we appear to be.

So. My story goes like this. Economies stagnate in real human terms; a tiny few get very rich; life stands still for most; economists call it “growth” and declare it success. Stagnation sparks anger: extremists stoke it; and so the world is ablaze in a new age of extremism.

All as predictable as the sunrise.

And yet. Extremists are hucksters: alchemists of prosperity. They promise us something for nothing; plenitude without peace; taking without giving; that all is a zero-sum game; that we must bully and bluster our way into human possibility. And so we are worse than fools if we are seduced by them; we are cowards.

The paradox of prosperity is this. Imagine a lush field that goes fallow. The tribes begin fighting over the last few dried, cracked stalks of wheat. They fight one another tooth and nail. Until, at last, one is victorious. The field is theirs; but there is no longer any wheat; just handfuls of dust. The others starve. They will do anything for the dust. Until one day, a man says: “Why, the dust! It is rightly ours! Let us take it from them!” And so they do. And the spiral of violence and impoverishment never ends.

One day, generations later, the starving tribes wonder: Why didn’t our grandfathers plant another field?

The paradox of prosperity is this. It is at times of little that we must plant the seeds of plenty; not fight another for handfuls of dust. And it is at times of plenty when we must harvest our fields; and give generously to all those who enjoy the singular privilege of the miracle we call life.

(Nope, extremists; that’s not communism — not government redistribution of dust. It is, as Keynes foresaw, just common sense).

I believe a very great deal about the unsure path of human history will be decided in the uneasy years to come. And so I believe our challenge is nothing less than this. A story as old as time; and as familiar as twilight. To stop fighting over fistfuls of dust, and decide to plant another field instead.