Marina Gorbis's Blog, page 1430

Study: Female Executives Make Progress, But Mostly in Support Functions

Sixty percent of the top U.S. companies now have at least two women on their executive committees. Eight companies (including IBM, Pepsico, Lockheed Martin and General Motors) have a woman CEO.  But closer inspection shows there’s a long way to go.

My gender consultancy firm, 20-First, has just published its annual Gender Balance Scorecard (pdf) of the top 300 companies in the world across the US, Europe and Asia. As usual, we try to broaden the focus from the current buzz around corporate boards to the more relevant metric of the gender balance of executive committees.

By focusing on the top management of a company – people who have worked their way to the top and have executive responsibility for its results – the report offers a clear picture of the attitudes and environments that companies have built – or haven’t – to gender balance their leadership teams.

 

Of the 1,164 executive committee members of America’s Top 100 companies, the ratio is still 83% men to 17% women. And two thirds of these women are in staff or support positions (65%) such as HR, Communications or Legal. Only 35% are in line or operational roles – and there has been no significant change in these percentages over the last three years.

Meanwhile, Europe’s companies, while progressing on Board balance in some countries because of quotas (or the threat of them), are still struggling to balance their executive teams. Less than a third (29%) of European companies have at least two women on their Executive Committees. However, this is better than the 20% in 2011. None have a female CEO. Of the 1,025 executive committee members of Europe’s Top 100 companies, the real story is the continued and absolute (89%) dominance of men. Of the 11% that are women, the majority (58%) are in staff or support roles, a tiny bit better than the 65% in the US.

Asian companies lag far behind their Western counterparts. The top Asian (including Australian) companies are still the preserve of men. The vast majority (89%) of companies have less than two women on their leadership team. Of the 1,099 members of Executive Committees, 96% are men. Of the 42 women who are sprinkled among them, two thirds of them are in staff roles.

 

To determine these ratios, the survey tracks companies along six phases of the gender journey:

Asleep – Some companies haven’t even started the journey; we put them in our ‘Asleep’ category. These companies are still, in 2014, pictures of imbalance. They are run by an exclusively male team.
Token – Less than 15% of both genders on the Executive Team. In this category, the individual(s) is in a staff or support function rather than a line or operational role.
Starting Smart – These firms also have less than 15% of both genders in the mix, but they are in a central core or operational role, sometimes even CEO.
Progressing – These companies have reached a minimum of between 15% and 24% of both genders on their top team.
Critical Mass – These are companies that have achieved a balance of at least 25% of both genders, but less than 40%.
Balanced – The rare companies that have achieved gender balance, with a minimum 40% of both genders on the Executive Team. This is where balance at the top begins to reflect the reality of 21st century customers, leadership and talent and gives companies the competitive edge to innovate and deliver value sustainably and globally.

You really have to search hard for signs of progress in the gender-balance journey at Balanced levels. Only nine well-known companies are now run by women out of 300.

 

The differences across geographical regions show the impact of national culture on the prioritization of gender balance. This is less true by sector; the most balanced companies cover a range of sectors.

Leadership is the key variable in improving the balance at the top. The companies that have become balanced or achieved critical mass have been proactively adapting their corporate cultures and mindsets to the 21st century. We salute their success. And hope it will offer good role models to the rest.

China Shows a Decline in Workers’ Share of Economic Output

In many industrialized areas in China, the labor force’s “share” of GDP, meaning the proportion of provincial output that is distributed as wages, rather than going to capital and government, fell between 1997 and 2007, say Wei Chi of Tsinghua University and Xiaoye Qian of Sichuan University. For example, in Guangdong, it fell from 49% to 39%; in Chongqing, from 57% to 48%; and in Sichuan, from 56% to 46%. Past research has shown a connection between low labor share and widening inequality in China. Moreover, a low labor share poses problems for China’s goal of transforming its economy to rely on consumption rather than exports.

Don’t Let Incumbents Hold Back the Future

Like many other people, I thought the (thankfully temporary) decision by the French Council of State to force Uber and other app-based car summoning services to bake in a 15-minute delay, so as not to compete unfairly with taxis, was a classic example of Eurosclerosis, of Gallic dirigisme run amok, and lots of other bad and un-American things.

But then I read James Surowiecki’s recent column about the regulatory barriers that geek chic car company Tesla is facing as it tries to set up its own showrooms in New Jersey and many other states, and I became a lot less confident that we in the U.S. are doing a great job of letting innovation flourish without counterproductive meddling and stonewalling.

Surowiecki quotes Yale economist Fiona Scott Morton as saying that “There isn’t a rational argument for why a new company should have to use [existing] dealers. It’s just dealers trying to protect their profits.” So why is it the case in 48 states today that “direct sales by car manufacturers are restricted or legally prohibited, and manufacturers are often prevented from opening a dealership that would compete with existing ones?” Because that’s how today’s auto dealers want it, and they’re organized and affluent enough to sway the lawmaking process. Opensecrets.org, for example, lists the National Auto Dealers Association as #19 in its list of ‘Top All-Time Donors’ to candidates, parties, and leadership PACs.

The dealers say that they couldn’t compete if the car manufacturers were allowed to sell directly to consumers (the examples of successful dealers in countless other industries evidently give them no confidence or playbook) and that they’re standing up for “family-owned businesses.” But ‘family-owned’ definitely doesn’t mean ‘small’; in Texas, for example (the stage for another battle involving Tesla), a prominent political contributor is a billionaire who “owns the world’s second-largest Toyota franchise and operates in Texas, Oklahoma, Louisiana, Mississippi and Arkansas.”

Whether or not you care about Uber and Tesla, you should care about business innovation and disruption because they’re a primary way that progress happens and that people become better off over time.

Incumbents, of course, don’t want to be disrupted. And they’ll throw up all manner of barriers and smoke screens to try to prevent it from happening. They’ll enlist politicians, regulators, PR agencies, and everyone else they can think of to help with their campaigns to maintain the status quo.

They’ll do this all over the world, even in innovation-friendly countries like the U.S., and they’ll do it more and more often as we head deeper into the second machine age and the scale, scope, and pace of technology-based innovation and disruption pick up.

They’ll work hard to, as my friend Tim O’Reilly puts it, protect the past from the future. We should work hard to oppose this trend, and to protect the future from the past. A first step in this work is to be skeptical of claims from incumbents that when they protect themselves from upstart disruptors they’re also helping us out. Most of time, they’re not.

Can Charisma Be Taught?

Brain GamesThe Charm HackerMatter

Olivia Fox Cabane is an introvert who was an outcast in school. Today she earns six figures teaching people, mostly up-and-coming Silicon Valley leaders, how to be charismatic. Her story is not only an inspiring one of adapting self-help narratives and neuroscience to "trick" her own mind; it’s also a tale couched in almost a century of management thinking about who can and can't be a leader. Sixty years ago, Matter's Teresa Chin writes, "somebody like Olivia would have been better off seeking a profession in which she could mostly avoid people." It was, in part, the rise of the technology industry that gave charm a new urgency, because tech companies needed managers on the inside who were "technical and charismatic." Indeed, "perhaps only in Silicon Valley would a group of engineers think they could hack their way to charisma with a series of neuroscientific shortcuts."

Where the Heart IsHow a Chinese Company 3D-Printed Ten Houses In a Single DayBusiness Insider

3-D printers are most often thought of as small, personal replacements for large, industrial manufacturing machinery. But a number of researchers and private companies are taking the opposite tack, exploring applications that require constructing 3-D printers on a massive scale. Researchers at the University of Southern California have built a printer that can create a house in 24 hours, laying out a concrete structure according to a programmed pattern. In Amsterdam, Dutch architects are constructing a 13-room house from 3-D printed Lego-like plastic blocks. Now the Chinese firm WinSun Decoration Design Engineering has built a truly massive 3-D printer – 500 feet long, 33 feet wide, and 20 feet high – to produce entire neighborhoods, printing out the parts needed to build 10 homes in 24 hours from concrete produced out of recycled materials. Envisioned as housing for the poor or displaced, the homes are sturdy and, at $4,800 a piece, radically cheap. –Andrea Ovans

Beware the Tentacles This Is How Bureaucracy Dies Fortune

Gary Hamel says it's disheartening to go inside "one of America's youngest and fastest growing IT companies" and find that it already has 600 vice presidents, a pretty strong indicator that the "tentacles of bureaucracy" are rapidly encircling it. He doesn't say which young, fast-growing company he's talking about, but I guess it doesn't matter. He takes aim at every company where the ratio of managers to frontline employees is rising, where decision cycles are getting longer, where cliques of managers are accumulating more and more power, where rules are proliferating, and where "legal has to sign off on everything." This is how opportunities to be nimble and innovative are squandered, he says, and how companies become irrelevant. In Hamel's view, every company should be like the internet: decentralized, non-bureaucratic, flexible, and empowering. Companies should value initiative, innovation, and passion, he says, over obedience, diligence, and, yes, even expertise. –Andy O'Connell

Sleeping on the FloorWhy One Polish MP Is Working as a Handyman in London Christian Science Monitor

When the European Union expanded 10 years ago to include Poland and nine other countries, the UK expected an influx of Polish workers, but it was caught off guard by the size of that influx. An estimated half million Poles have migrated to Britain, and a Polish member of parliament, Artur Debski, came to London recently to find out for himself what draws his countrymen and what it's like for them to scrounge for work in the United Kingdom. He slept on someone's floor, got rejected when he tried to open a bank account, and finally landed a temporary job that requires a 43-minute commute. But he can see the appeal of it. Despite all the hardships, life in Britain is more alluring than trying to get by in Poland, with its shortage of opportunities and lack of freedom. The moral of the story is stark: "This is a big problem for my country," Debski says. "We are losing the young people who are our future." –Andy O'Connell

Good Signs? Microsoft's New CEO: Adding What Was MissingDatamation

When IBM touts its products, it presents testimonials from real customers. When Microsoft showcases its products, it relies on hypothetical companies as examples, maybe because the people who design Microsoft products often don’t use them or ever see anyone else using them. That may change under new CEO Satya Nadella, says Rob Enderle in this smart take on early signals coming from Microsoft’s new management. At his first major presentation, Nadella distinguished himself from Steve Ballmer by yielding the floor to his division leaders, a deft way to send a message that the company won't be bounded by the limits of its chief executive. Even more telling, Enderle argues, is that the executive presenting Microsoft’s data analytics offerings was COO Kevin Turner – not an engineer, but an end user. –Andrea Ovans

BONUS BITSYour Week in Tweets

How a Middle-Aged IT Guy from Peoria Tweeted His Way Into a Writing Job on Late Night With Seth Meyers (Vulture)
Treat, Don't Tweet: The Dangerous Rise of Social Media in the Operating Room (Pacific Standard)
The Naked Truth About US Airways' Social Media Policy (U.S. News and World Report)

Why Entrepreneurs Will Beat Multinationals to the Bottom of the Pyramid

C.K. Prahalad and Stuart Hart’s seminal book The Fortune at the Bottom of the Pyramid gained a wide audience when it was published in 2004 and has continued to be widely read ever since. Its iconic phrase, “bottom of the pyramid,” entered the English lexicon. The book was a call to action to the world’s largest companies to develop new products for the four billion people living on $4 a day or less—a market representing what was in effect the new frontier for corporate expansion.

What was the result of this stirring cry a decade ago?

On the fifth anniversary of the book’s publication, Professor Prahalad was interviewed by Knowledge@Wharton. He was asked “what impact have your ideas had on companies and on poor consumers?” Prahalad asserted that the impact had been “profound,” citing the $200 laptop computer, the spread of cell telephones, and Kenya’s M-PESA text- messaging funds transfer service. But the concept of the $100 laptop was a project that emerged from MIT, not a large company, and was judged a failure; cell phones spread rapidly through developing countries was a result of local entrepreneurship, not multinational initiative; and M-PESA was a Kenyan innovation.

Five years further along, there is scant evidence that multinational corporations have expanded any further into the bottom-billions market. We believe they’re unlikely to do so, and that entrepreneurs working solo or in teams are far better positioned to go serve these customers. The reason is that multinationals face the constant temptation to apply their substantial resources to extend the reach of their existing businesses, rather than starting from scratch. Entrepreneurs, by contrast, start from scratch almost by definition. For reasons we’ll describe, that approach is essential to successfully serving the bottom of the pyramid.

The tendency for too many multinationals is to design products for the bottom of the pyramid by stripping features from existing products. But this approach seldom works. In our experience, products and processes must be designed not merely to reduce prices by, say, 30% below developed world prices, which might be achieved by removing features; success requires prices close to 90% less. As you can imagine, this puts pressure on product design, and this focus has become the centerpiece of “zero-based design” which seeks to build inexpensive products from the ground up. Entrepreneurs, unconstrained by pressure to expand existing brands and product lines, are better positioned to utilize this approach.

This zero-based design approach also avoids a reliance on preexisting business models. One of the greatest challenges at the bottom of the pyramid is “last mile” distribution. A large number of the world’s poor live in villages without much infrastructure. Delivering products in this environment adds to the cost, making it further unlikely that preexisting product lines can be tweaked and brought to market successfully. By designing products from the ground up, entrepreneurs are better positioned to consider the challenges of distribution early on, and account for them in their products and business model.

Moreover, most multinational corporations are, inevitably, bureaucratic enterprises riddled with barriers to doing things differently. If someone far down the chain of command does devise a great solution to a problem the company had never before considered, it’s a fairly sure bet that his idea will be vetoed somewhere up the line. (Remember the two guys named Steve who took their idea for a personal computer to HP? Whatever happened to them?) The difficulty is compounded if the proposed project requires a wholly fresh approach to design, marketing, and distribution and must be carried out in an exotic locale in an unfamiliar language and confounding culture. Somewhere up the ladder in the corporate hierarchy, someone is sure to balk.

Finally, success in nascent markets requires a commitment to agility and constant refinement. This means not only tweaking products, but everything about the business. Here again, entrepreneurs are able to incorporate their learning more quickly, as opposed to multinationals whose teams often have to run changes up the flag pole.

For all these reasons we believe it will be new companies more than old ones that help those living on a few dollars a day move out of poverty. Of course, we’d love to be proven wrong – there’s certainly plenty of room at the bottom of the bottom of the pyramid for experimentation and collaboration. For companies of any size serious about these markets, it is critical to remember that lessons learned selling to richer consumers likely do not apply.

Midsized Firms Can’t Afford Bad Bets

CEOs of midsized companies who make big bets can lose the farm. The executives of Fortune 500 companies might be able to lose the same bet with impunity, and the founders of venture capital-funded startups are only renting the farm (with the VC’s money) anyway. But for a midsize company, an ambitious investment that you don’t have the wherewithal to execute on can be fatal.

These travails don’t just happen to declining midsized firms making the business equivalent of a Hail Mary pass. In fact, rapidly growing midsized companies are even more vulnerable to running out of cash while gunning for growth than are shrinking firms. Even what appears to be a small investment risk can turn into a big one, especially when information technology comes into play.

That was the case at a toy importer that was pressing the growth pedal to the metal. The company was hell-bent on entering a new market but knew it had to automate its warehouse to do so. Warehouse automation systems are big and complicated; if they don’t work, you’re worse off than before since it becomes almost impossible to ship product. Unlike a Fortune 500 company that can spend tens of millions of dollars on external consultants to help implement such a system, this company was stingy with its IT dollars. It put one of its executives in charge of the project and told him to team up with the head of IT, even though neither had ever run a project this large or complex.

The project budget paid for the software and not a lot more. The timeline was unrealistic, so the installation took a month longer than planned. And when the company did the cutover – right before its customers’ biggest selling season – the system just . . . didn’t . . . work. The malfunction caused major delays shipping toys to retailers. Not surprisingly, many of those retailers refused to pay when the toys finally did arrive, too late for the holiday season. The importer lost millions of dollars and began running out of money. Its growth had been derailed.

This particular toy importer violated every one of the rules that govern the success of a midsize company’s strategic initiative: It gave an unproven team an unrealistic budget and asked it to do a highly technical, risky, but mission-critical job without strong external partners or a proven implementation process.

In contrast, one California manufacturer of data storage equipment grew by making a much less reckless bet. BlueArc was venture-funded, but in 2008 VC money was getting hard to find. (The chill winds of the Great Recession were blowing through Silicon Valley, too.) BlueArc’s devices were high-end, but its management believed it needed a mid-priced product to get it through the recession. However, cash flow from operations had shifted from positive to negative, the company’s cash pile was dwindling, and the new product would demand R&D investment.

BlueArc’s top team remained confident because they knew the company was strong in three critical areas:

The ability to predict the market. BlueArc’s CFO, Rick Martig, and other executives gathered market data to support the investment in the mid-tier data storage product. Poring through the IPO documentation of several larger competitors that had introduced similar devices, they produced a set of financial data that showed the growth and profitability of competing products. That helped BlueArc raise another $28 million in VC funds. Then it cut general and administrative expenses and sales staff to contain operating losses. The company’s leaders promised the board of directors (largely, their VCs) they would make further cuts in areas not related to the new product if the company fell short of its sales and profit targets.
Their ability to execute. The R&D team that had brought the company’s successful higher-priced data storage system to market had no doubt that they could pull off a lower-priced version. Blue Arc’s R&D had a track record of success; it was a proven team.
Forecasting acumen. Martig was a seasoned CFO with years of forecasting experience in technology firms. He knew where the surprises would come from, and he built them into the forecast.

BlueArc’s new product hit the market and was an instant success. The company achieved its forecasts which, after 18 months, enabled it to break even. By 2011, the company revenues were $86 million, and it filed for its own public stock offering. But before that could happen, a much bigger competitor made an offer that the VCs couldn’t refuse, one that was a strong multiple of revenue.

Like the toy importer, BlueArc made a major investment risk: developing and launching a new product while cash was dwindling. But the difference was that BlueArc’s bet was highly informed and far better executed than that of the toy importer.

It had to be. Most midsize companies – especially those that aren’t VC-funded – never recover from ambitious investment bets gone bad.

Your Tendency to Put Things Off May Have Been Inherited

46% of the trait of procrastination is due to genetic influences, according to a study of hundreds of sets of twins. The research also lends support to a theory that procrastination, in its tendency to undermine adherence to long-term goals, is a byproduct of impulsivity, which may have had an evolutionary origin: Hunter-gatherers had an advantage if they acted swiftly to satisfy their survival needs. Your genetics don’t necessarily condemn you to a life of procrastination: The 46% figure means procrastination is only “moderately heritable,” according to the researchers, led by Daniel E. Gustavson of the University of Colorado.

Privacy Is a Business Opportunity

Technology innovation and the power of data analytics present tremendous value, but also new challenges. While a digital economy requires businesses to rethink priorities and practices, this doesn’t have to be a burden. Instead, privacy protection should be a practice as fundamental to the business as customer service. Privacy is an essential element of being a good business partner. It may take time for this idea to sink in at the highest executive levels of some companies, but the conversation is advancing rapidly after a number of recent high-profile data breaches.

Consumers are now not only second-guessing the security of their personal information when they make routine shopping trips, but are also extending this lack of trust to how they perceive the stores and brands they once preferred. Discussions of privacy and security policies are now happening in boardrooms across the globe, and many of these conversations are zeroing in on what should be done to integrate privacy as an added value to the business.

The added value of privacy is intrinsic no matter where your company sits in the digital economy. From consumer goods manufacturers to healthcare services entities, any business will benefit from proactively tackling privacy issues in one of three primary ways: protecting your brand, offering a competitive advantage from integrating privacy and security features into products and services, and  creating new products and services designed to protect personal data.

There have been many breakdowns in security or privacy causing significant, and even irreparable, damage to companies’ reputations. For context, Young & Rubicam (Y&R) estimates that brand value represents nearly one-third of the $12 trillion in market capitalization of the S&P 500.

Y&R evaluates brands on four pillars of health, one of which is esteem – the respect, regard and reputation that fulfill the promise of the brand. Most businesses, passively or actively, spend years earning the trust of their customers, partners, employees and shareholders, all of whom contribute to financial stability and growth. When an incident related to privacy occurs, it is a direct blow to the brand’s esteem and its financial value.

OfficeMax learned this lesson the hard way when last year they sent a direct mail advertisement to a potential customer, Mike Seay. Inadvertently, and through the use of a data broker, the mailing was addressed to “Daughter Killed in Car Crash or Current Business.” Just a year earlier, Mr. Seay’s daughter had in fact died in a tragic auto accident. The mailing made global news with some calling the letter a “gross insensitivity,” “tragic incompetence” or “bewildering stupidity” on the part of OfficeMax. In response, OfficeMax replied that the information came from a third-party data broker and they did not know why this form of address was used, as they had not asked for any such personal information. OfficeMax did not reveal the name of the data broker, but doing so would not have insulated OfficeMax’s brand from harm.

Subsequently, many privacy advocates and regulators have pointed to this example to highlight the need for companies to make privacy a priority. Companies need to pay careful attention to privacy-related activities before an incident like this happens. Attention includes not only putting in adequate control mechanisms to prevent issues, but also building up positive brand associations with privacy and security. There are three main mechanisms to do this, and at Intel we are pursuing all of them.

Gaining a competitive advantage. Companies can gain a considerable edge by focusing on the interests of individuals. At Intel, we focus on the individuals who use the digital devices that use our microprocessors and chipsets.  We want to understand how our technology affects peoples’ lives.  In our research, we consistently hear that people are hesitant to use technology in new and innovative ways because of privacy and security concerns, specifically for electronic health records and online banking.  For Intel’s technology to achieve its maximum potential we need to focus on how to address these concerns and demonstrate those privacy and security controls as a competitive advantage.

Today, privacy is an active area of marketing for the technology industry. Companies compete on the basis of how long they retain personal data, whether they share data with third parties, the extent to which they encrypt data at rest and in transit, and whether they provide products and services where personal data is automatically deleted or expires.

And the protection of privacy is no longer the concern of just technology companies. The shift to a fundamentally digital economy means that, regardless of the sector you are in, your ability to protect individuals will distinguish your company from competitors who have taken a passive approach or who ignore their responsibilities.

Healthcare is an obvious example. Today’s regulatory environment increasingly encourages electronic medical records to improve service quality, increase efficiencies and reduce costs. In the not- too-distant future, some healthcare provider will surely earn a reputation among consumers and within the industry as the company that takes the greatest care to protect their patients’ information. We will likely see similar scenarios in other sectors, such as protecting the driver’s personal data in the age of the connected car and ensuring privacy for students in a digital education system.

New privacy products and services. We are already seeing new products and services from startups and established companies alike that are born from the public’s desire for privacy protections. As we move rapidly into the Internet of Things age – in which connectivity and intelligence are woven into the world around us – individuals will need products to manage their online reputations and protect their identities.

New applications for smart phones and other connected devices will allow individuals more choice over who learns what about them, and what information about them is shared with the connected environment around them. A whole new revenue stream could be generated by giving individuals the ability to keep certain details to themselves. Sure, Dunkin Donuts can offer a free donut when I’m about to drive by, but I would like to control who gets access to that information coming from my phone and how that data is used.

Other companies may focus on providing purpose-driven identification. A jazz club may restrict attendance to only those over 21 years of age, but they do not need to know my name and address to let me in the door.

Behind the scenes, new products and services will target back-end data operations, securing data at its source to prevent a breach long before a customer can be affected.

Winning with privacy. Not unlike the failure of “green washing” that has taken hold related to environmental issues, those who want only to profit off privacy and security issues without providing value will lose. They will be the exception and they won’t last long.

But the businesses who use data in responsible ways to create new solutions and business models – those who place the needs and the protection of their customers and society first – also understand that long-term success will depend on their ability to earn the confidence of their customers.

For example, a GPS application in your car could collect and provide powerful information for you and everyone else driving by, delivering real-time traffic travel route recommendations during commute hours. But a driver may be less enthusiastic to know the application is also sharing driving habits with their insurance company, which could adjust rates based on that information. The business that applies the right formula of risk and reward will win.

For decades, great customer service has been about delighting your customers with friendly staff and business policies. In this digital global economy, the game has changed.

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How to Have an Honest Data-Driven Debate

Malcolm Gladwell of bestselling Tipping Point and Outliers fame proposed a delightfully provocative way to begin his onstage debate with Sports Gene author David Epstein about whether practice or genetics is the better guarantor of professional success. But instead of launching directly into argument, said Gladwell, they’d start by summarizing their opponent’s best arguments. The exceedingly careful, precise and thoughtful characterizations of each other’s position that followed proved remarkably entertaining and informative. More importantly, it facilitated one of the best-reviewed and most absorbing panels at MIT Sloan’s highly-regarded Sports Analytics Conference.

Gladwell’s gimmick of forcing people to fairly communicate their rival’s case is rhetorical old hat. But the rise of Big Data and analytics concomitantly demand its operational resurrection and revival. The need is urgent and global. If there’s a single pathological behavior I consistently see undermining the real and potential value of data and analytics, it’s the rampant intellectual dishonestly and argument I hear in project reviews and board rooms worldwide. Deliberate misrepresentations, mischaracterizations and ad absurdum distortions of fact and interpretation are more common than rare.  Passion and commitment are “go-to” executive excuses for grotesque exaggeration and dishonest summary of inter-organizational opposition. Powerpoint presentations become poisonous invitations to quantitative brawls. The dominant metric of analytic effectiveness is “winning the argument” rather than creating any kind of meaningful or measurable insight.  Does this represent a serious failure of leadership? You bet. But that’s numeracy’s new normal. It’s why Gladwell’s gimmick so successfully stimulated the MIT sports crowd of geeks, nerds and quants.

The cure is simple and compelling: Managers and executives confronting serious strategic, operational or cultural disagreements on issues that matter should insist that their people be able to convincingly make their opponents’ case. This is not a joke, a gimmick or an intellectual exercise. It’s a public declaration of integrity: Fairly presenting a 360-degree view — both sides of a polarizing argument or wedge issue — is essential to honest and honorable discussion. The best and only way you can be confident your evidence and arguments are understood is by hearing them fairly and accurately made by the very people who disagree with them. That doesn’t mean that they’re persuaded or convinced by them. But it typically guarantees that there’s been a serious investment made in grasping them. Conversely, the best and surest way to demonstrate your own command of the debate is by offering a synthesis and summary of your rival’s case in a manner that leaves them nodding in agreement. There is no shortcut or substitute for that mutual recognition.

I’ve pushed for this in many organizations and unhesitatingly observe that it radically and dramatically elevates the quality of discussion and debate. Intriguingly, the greatest resistance to this comes from managers and executives reflexively dedicated to concepts of authenticity:

“Oh, no!” they piously declare, “It would be dishonest for us—or our colleagues—to have to make an argument we don’t believe in. We won’t do it!” To the contrary, they insist, their passion and dedication are every bit as important as the facts in evidence as to why their position deserves to win. You will not be surprised to learn that these tend to be organizations where politics and power play bigger roles than either analytic rigor or data-driven insight in determining what decisions get made. Confirmation Bias uber alles.

Dan Ariely, the Duke behavioral economist who authored Predictably Irrational, recently addressed this in his Wall Street Journal letters column in a radically different context: “A large body of research on cognitive dissonance has shown that people who are forced to argue for an opinion opposite to their actual one feel so uncomfortable with the conflict that they’re likely to change their original opinion.” I can’t and won’t say that research is consistent with my own empirically anecdotal experience — although I emphatically agree that the overwhelming majority of managers and analysts I’ve worked with are, indeed, uncomfortable arguing against their declared beliefs. I’ve rarely witnessed such contrarian conversions. That said, however, I have seen greater reluctance to characterize enterprise rivals as “morons,” “idiots who don’t know what they’re talking about” and “jerks who don’t really understand the business.” The discipline of being forced to argue the other side doesn’t necessarily create empathy or sympathy but it does — more often than not — create recognition that there are real reasons for disagreement. My experiences suggest that these recognitions lead to greater mutual respect and healthier outcomes than fratricidal debates where dismissing and/or demonizing rivals is culturally accepted and encouraged.

If your organization is having an important argument that gets everybody hot and bothered, don’t encourage compromise or collaboration. Insist that the most passionate and articulate advocates from each side make the other’s case. Force the best and the brightest to publicly demonstrate just how well they understand the other. You — and they — will be amazed at what you’ll learn. If they can’t — or won’t — do it, you’ll be amazed at how irrelevant even the best data and analytics ultimately prove to be.

Persuading with Data

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