Marina Gorbis's Blog, page 1431

Help Your Employees Find Flow

Holacracy. Results-Only Work Environments. These new, more flexible ways of working may be a step too far for many organizations. Still, greater employee freedom can create a better sense of “flow,” which enhances engagement, retention, and performance. This can be achieved by loosening your grip on work practices — but you don’t have to let go completely: remove obstacles, set boundaries and meaningful goals, then let work take its course.

Stefan Groschupf, founder and CEO of Datameer, a big data analytics company, talked with me about how he tries to reduce negative interruptions and increase “flow.” His industry is one of the most pressured to recruit and retain top talent. He’s finding that the organization is more productive (e.g., has more leads generated in marketing or has engineers moving through projects more quickly) with active management of interruptions and engagement to enhance flow.

Mihaly Csikszentmihalyi, author of the landmark Finding Flow, describes the feeling of flow this way:

Imagine that you are skiing down a slope and your full attention is focused on the movements of your body, the position of the skis, the air whistling past your face, and the snow-shrouded trees running by. There is no room in your awareness for conflicts or contradictions; you know that a distracting thought or emotion might get you buried face down in the snow. The run is so perfect that you want it to last forever.

Flow has been tied to performance by improving concentration and motivation. But when you’re constantly interrupted, it’s hard to find a state of flow. One workplace study found an average of almost 87 interruptions per day (an average of 22 external interruptions and 65 triggered by the person himself). Then, on average, it takes over 23 minutes to get back on task after an interruption, but 18% percent of the time the interrupted task isn’t revisited that day. For some, interruptions “form the genesis of the work,” so it’s hard to say that all interruptions are bad — but work design and management needs to offer the opportunity and knowledge to manage interruptions.

Groschupf’s techniques for combating interruptions and fostering flow are straightforward: allowing people to switch off email, fewer meetings, and focusing on smaller chunks of work. These strategies, however, wouldn’t be as effective if just one person made these changes to his or her individual work. The key is that the whole organization is on board. Groschupf says that they have clear organizational goals — and that all employees know engagement and flow are important to reach those goals.

And yet the CEO is skeptical of the hype around gamification — the latest engagement fad. “What’s behind gamification? It’s flow.” He believes that if management can create an environment where employees love the experience and feel fulfilled in their jobs, then engagement, retention, and performance will follow.

He’s learned that turnover is usually not about the money. “It’s about achievement.” Games and flow are characterized by relatively short challenge-and-reward cycles. This approach is similar to the recommendations in Teresa Amabile and Steven Kramer’s recent book, The Progress Principle, where they demonstrate that even small wins fuel motivation. Groschupf works to build those powerful little wins into the business. He’s not controlling the work, but he is setting the rules for making the work more engaging.

As a data-driven business, Datameer is always tracking results, so people can see their progress and how it fits into the rest of the organization’s work. Groschupf notes that it’s helpful being a young company – Datameer has been able to build measurable processes as it goes. He acknowledges that it would be harder to add these tools on to legacy systems. But I’ll offer that practices enabled with collaborative goal-setting tools like Work.com are one way to add some of this capability to an existing system.

The approach at Datameer is not just tool-and-metric-based. There is also a human dimension to their practice. Groschupf says, “It’s a learning process. You can’t just go to someone and say that the way we run this company is data driven. There is a human element. As you get new folks that might not be knowledgeable, it’s important to socialize them and help them understand.”

Loosen your grip on tactics like meetings and email, and focus on reducing interruptions and increasing engagement. Create shorter and more visible challenge-and-reward cycles and let employees go with the flow.

The Secret Ingredient in GE’s Talent-Review System

GE is often highlighted as an organization that develops some of the most effective leaders. Most companies have a version of the talent-review system we use at GE. But judging from what I hear from managers of companies that visit us to benchmark our system, the difference between our approach and theirs does not lie in forms, rankings, tools, or technologies. It lies in the intensity of the discussion about performance and values. The debate, the dialogue, and the time taken to have an exhaustive view of an individual − evaluating them based on both what they accomplish and how they lead − are far more important than any of the mechanics. The heart of our system has always been about the enormous time commitment the organization and the leadership devote to the conversation about people.

As the custodian of the talent-review process, I have been lucky to observe this at close quarters. Here is what I’ve learned.

It starts with the attention given to the individual appraisal. Managers are expected to dedicate time to prepare for a detailed discussion of a direct report’s performance and values, strengths, development needs, and development plans. Most employees spend over 1,800 hours a year working for the manager and the company. Is it unreasonable to expect the manager to spend at least a few hours thinking about and discussing the performance appraisal as part of a larger commitment to helping the employee be more successful? (More about that in a moment.) Individual appraisals are considered enormous opportunities for the candid, constructive conversations that employees deserve.

It is not uncommon for a manager’s assessment and feedback to be questioned by his or her own manager, if the commentary does not appear to reflect the individual accurately. I have seen our top leaders return an appraisal because it did not do justice to the feedback on the individual. Such a disconnect is the worst thing that can happen because it is a reflection of the manager, or the HR manager, as much as it is of the employee. This practice of multi-level engagement ensures that the quality of the appraisal is honest and comprehensive.

We continue to use a nine-block grid with quadrants that capture levels of performance and values not as a means of a forced ranking but as a way of facilitating differentiation. Here is how it is done. As our businesses and functions go through the process, the leaders justify the positioning of talent in different quadrants of the grid. The system allows us to link the grid straight to the appraisal. The chairman sets the overall tone and expectations, and leaders across the company make suggestions, comments, and additions to the feedback. While each leader may only have visibility into his or her particular business, the system ensures consistency and provides a consistent view and assessment of talent across the company.

Most of our leaders, including the chairman, spend at least 30% of their time on people-related issues. It’s part of our operating rhythm. These discussions are rich in making calls on leadership, succession, opportunities for development, organization and talent strategy, diversity, and global talent builds. The discussions also afford us the opportunity to assess performance more closely and holistically − including market factors, internal factors, organizational complexity, and risk elements. More importantly, it is the business leaders who take the lead on these discussions, not the HR person. This is consistent with our philosophy that talent development and assessment is a key business agenda, not just an HR activity.

Some skills are more important than others to be a great leader. As I have observed these discussions, some of the patterns are becoming increasingly obvious to me. For instance, the difference between a great leader and a good one is not just about intellectual capacity; it is often about judgment and decision-making. Likewise, a hunger to win, tenacity, customer advocacy, and resourcefulness can trump some of the skills we often look for − analytical skills, for instance. Such traits are best unearthed through discussions and become important considerations for future talent mapping.

Effective talent review is an intensely human process that calls for extensive demands on a leadership’s time. There are no formulas or equations. The power lies in giving people the attention, candid feedback and mentoring they deserve through a company-wide commitment to human-capital development.

The Two Questions Every Manager Must Ask

When something seems too good to be true, it usually is. And management techniques, practices, and strategies are no different. When you read a business book or attend a presentation on a particular management practice, it is a good habit to explicitly ask, “What might it not be good for?” When might it not work; what could be its drawbacks? If the presenter’s answer is “there are none,” a healthy dose of skepticism is warranted.

Because that’s unfortunately not how life works, and that’s not how organizations work. It relates to what Michael Porter meant with being “stuck in the middle”: if you try to come up with a strategy that does everything for everyone, you will likely end up achieving nothing. If you focus your strategy on, for instance, achieving low costs, you will likely have to sacrifice delivering superior value on other dimensions, and vice versa.

Similarly, “doing well by doing good” – enhancing your firm’s financial performance by achieving superior corporate social responsibility – is often easier said than done. When confronted with an ethical decision – e.g. whether to dump toxic waste in a developing country, where it may not be illegal, when all your competitors do so as well – it sometimes costs you (a lot of) money to do the right thing. Dozens of academic studies have tried to establish a positive link between corporate social performance and profitability, but for every study that finds a (modest) positive correlation, there is one that doesn’t.

But it seems some organizations do pull it off.

Take the company Aravind Eye Care in India. It was founded in 1976 specifically to provide cataract eye surgery. They modeled their operations on McDonalds: high volume, highly efficient operations, based on division of labor and cost efficiency. It is a very profitable operation; the company has a gross margin of 50 percent. Yet, the remarkable thing is that they treat 70 percent of their customers for free. The 30 percent that do pay are relatively affluent people who can afford the operation, but who receive pretty much the same service. In fact, the company goes out of its way to actively recruit non-paying customers. It goes to look for them systematically in the countryside and transports them to their clinics for free.

This, while the clinical quality of their service – the cataract operation – is second to none. Similarly, other medical clinics are operating in India – for instance in heart surgery – that combine extremely efficient, low-cost operations, but at very high quality in terms of clinical outcome. To such an extent that various National Health Service hospitals in the United Kingdom are considering sending their patients to India; to save money, while providing them with superior quality treatment.

How can these organizations combine higher quality with lower costs? How can they combine doing well by doing good, and treat 70 percent of patients for free at 50 percent gross margins? The trick is that their business models are built for the long-term. Paradoxically, in the long-run, the lower costs enable them to provide better quality.

Ask yourself this: Could Aravind Eye Care make more money if it did not treat the 70 percent non-paying patients? Although it may seem that this would save them a lot of costs, in fact, the answer is very likely “no”. Every organization learns with experience. We call this effect “the learning curve”. With experience, firms increase the efficiency and quality of their production. These curves have been documented for airplanes, cars, bottles, pizzas, and so on. And cataract eye surgery is no exception.

It is because these clinics treat such very large number of patients, the company runs down its learning curve very quickly, giving it a substantial competitive advantage. Moreover, the vast number of patients enables it to divide labor to the extreme, creating specialist roles and highly-experienced people in all parts of the procedure. The 70 percent non-paying customers form the basis of this advantage. Consequently, the company would likely not be able to attract the 30 percent paying customers without them.

It is often said that Aravind’s paying customers subsidize the 70 percent that get the operation for free, yet, in many ways, it is the other way around: Treating the vast numbers of non-paying patients enables the company to deliver the quality that attracts the ones that do pay.

What enables companies such as Aravind to combine all of these things? Didn’t I say at the beginning of this piece that “when something seems too good to be true, it usually is?” and that “it is always a good habit to explicitly ask what might it not be good for?” Yes, but that is because there is a second question you should always ask, when considering a particular management technique, practice, or strategy, and that is: “What might its long-term effects be?”

What might seem a good idea in the short-run does not always work in the long term – and vice versa. Unfortunately, most companies make decisions based on their short-term consequences, because that is what they can see and measure. If, like Aravind, you optimize your business model for the long haul, you might be able to deliver superior quality at lower costs. And even do some good for society in the process.

Easing the Load of the Battery-Powered Soldier

Batteries account for about 30 of the 90 pounds of gear carried by U.S. soldiers and Marines, Navy official Roger M. Natsuhara tells the Wall Street Journal. That’s because a lot of their equipment, from infrared viewers to communicators, is powered. The military has now developed unrollable photovoltaic panels for recharging batteries, so that fewer batteries are required and, thus, fewer have to be thrown away—an important security issue, because a trail of dead batteries shows the enemy where soldiers have been.

Why the Financial Services Industry Is Showing More Women in Its Ads

Financial services firms want to reach more women; so I conclude from data presented by Pamela Grossman of Getty Images at SXSW this year. According to data collected by Getty, financial firms are buying 20% more stock photos of women today than they were five years ago. At the same time, the share of men shown in their advertising has declined.

Of course, we live in a wildly diverse world; we want to be inclusive and broad minded ourselves; and we therefore want our providers of financial advice, energy, and technology to reflect those values. We prefer Morgan Stanley or CitiGroup to be talking to all of us, showing us that they have transcended their traditional, mostly white and male clientele. According to Chris Edwards, former Group Creative Director for Arnold Worldwide, we also want visual evidence that the professionals at these firms are as diverse as the clientele they seek. Advertising images reinforce and extend these efforts.

Financial institutions portray women today as competent and self-confident, and often feature attractive, middle-aged advisors talking to couples in which the woman is similarly well dressed and clearly attentive. According to Dr. Emma Firestone, who has studied the audience perception and response to images and words in media and entertainment, from a cognitive perspective, “It makes sense for advertisers to present women as strong, well-educated consumers. This is appealing to women who see an attractive self-image reflected back at them, and to men, who are flattered by the idea that smart, self-possessed, and financially secure women are their own life partners.” Men are much more likely today, than decades ago, to be comfortable with and appreciate their spouses as full partners in their own financial decision-making – at the same time, imagery of supportive female financial advisors plays into comforting stereotypes of the woman-as-helpmeet, perhaps humanizing an industry consumers view as confusing or even threatening.

However, there is a trapdoor in this picture. The rise in strong feminine images in financial advertising also coincides with some very negative portrayals of men in the industry: the testosterone-driven traders and gamblers who led us over the financial cliff in 2008.  As Christine Lagarde, Director of the International Monetary Fund has famously stated, only partly in jest, if the firm had been called “Lehman Sisters” there might not have been the same resulting devastation to world economies. There has been extensive coverage of research suggesting that if financial firms had fewer men, those firms would have taken on less risk. Both headlines and Hollywood have also focused on the antics of a few particularly macho financial executives, from the “Wolf of Wall Street” to the “London Whale.” It may be that today’s financial firms are trying to portray a “feminized” face to distance themselves from stereotypes like these.

But it’s not all “optics” – more and more women are actually taking on breadwinning roles. Grossman touched on several demographic factors supporting the trend: one-third of working women earn more than their husbands, 40% of households with children under 18 are headed by a women; and female students account for 57% of undergraduates in the United States. More women have also taken on more responsibility for retirement planning, in part due to market and retirement plan upheaval; in 1978, the IRS created the structure in which the federal government essentially shifted the burden of retirement financing from employers to employees. Without the safety of defined benefit pension plans in a era of diminished job security, most Americans, as couples or individually, need to be much more active players in the dialogue about their own asset allocation and investment options well in advance of retirement.

Mark McKenna, Head of Global Marketing at Putnam Investments, says he’s also seen women assuming prominent roles in the personal finance sector; whether they have been stay-at-home moms or asset builders in their own names, women often have primary control of the finances and they generally outlive their spouses. The statistics are staggering: Baby Boomer women control over 60% of the country’s wealth; women make 80% of the US collective household buying decisions; 41% of the 3.3 million Americans with incomes over $500,000 a year are women; and they account for over 50% of all stock ownership.  The financial services industry needs to reflect these realities and speak directly to women.

Of course, it’s not enough to show women in their advertisements; the next step is for financial services firms to effectively engage women with products and services tailored to their needs and desires, including a risk profile that’s distinct from men’s. While men are more interested in wealth accumulation, according to a large-scale study by BCG, women focus on long-term financial security for themselves and their families. They value being heard and respected by their financial advisors and place trust as a very high priority. Offering more images of women in advertisements is a clever marketing step to improve sales; serving these clients well is the key to building that business over the long term.

The Quick and Dirty on Data Visualization

Displaying data can be a tricky proposition, because different rules apply in different contexts. A sales director presenting financial projections to a group of field reps wouldn’t visualize her data the same way that a design consultant would in a written proposal to a potential client.

So how do you make the right choices for your situation? Before displaying your data, ask yourself these five questions:

1. Am I presenting or circulating my data?

Context plays a huge role in how best to render data. When delivering a presentation, show the conclusions you’ve drawn, not all the details that led you to those conclusions. Because your slides will be up for only a few seconds, your audience will need to process them quickly. People won’t have time to chew on a lot of complex information, and they’re not likely to run up to the wall for a closer look at the numbers. So, think in broad strokes when you’re putting your charts together: What’s the overall trend you’re highlighting? What’s the most striking comparison you’re making? Those are the sorts of questions to answer with projected data.

Scales, grid lines, tick marks, and such should provide context, but without competing with the data. Use a light neutral color, such as gray, for these elements so they’ll recede to the background, and plot your data in a slightly stronger neutral color, such as blue or green. Then use a bright color to emphasize the point you’re making, as in this example:

It’s fine to display more detail in documents or in decks that you e-mail rather than present. Readers can study them at their own pace — examine the axes, the legends, the layers — and draw their own conclusions from your body of work. Still, you don’t want to overwhelm them, especially since they won’t have you there in person to explain what your main points are. Use white space, section heads, and a clear hierarchy of visual elements to help your readers navigate dense content and guide them to key pieces of data.

2. Am I using the right kind of chart or table?

When you choose how to visualize your data, you’re deciding what type of relationship you want to emphasize. Take a look at this chart, which shows the breakdown of an investment portfolio:

In the pie, it’s clear that this person holds a number of investments in different areas — but that’s about all you see.

Here are the same data in a bar chart:

Now it’s much easier to discern how much is invested in each category. If your focus is on comparing categories, the bar chart is the better choice. A pie chart would be more useful if you were trying to make the point that a single investment made up a significant portion of the portfolio.

3. What message am I trying to convey?

Whether you’re presenting or circulating your charts, you need to highlight the most important items to ensure that your audience can follow your train of thought and focus on the right elements. For example, this chart is difficult to interpret because all the information is displayed with equal visual value:

Are we comparing regions? Quarters? Positive versus negative numbers? It’s difficult to determine what matters most. By adding color, you can draw the eye to specific areas:

We now know that we should be focusing on when and in which regions revenue dropped.

4. Do my visuals accurately reflect the numbers?

Using a lot of crazy colors, extra labels, and fancy effects won’t captivate an audience. That kind of visual clutter dilutes the information and can even misrepresent it. Consider this chart:

Can you figure out the northern territory’s revenue for year one? Is it 17? Or maybe 19? The way some programs create 3D charts would lead any rational person to think that the bar in question is well below 20. However, the data behind the chart actually says that bar represents 20.4 units. You can see that if you look at the chart in a very specific way, but it’s difficult to tell which way that should be — even with plenty of time to scrutinize it.

It’s much clearer if you simply flatten the chart:

5. Are my data memorable?

Even if you’ve rendered your data clearly and accurately, it’s another challenge altogether to make the information stick. Consider using a meaningful visual metaphor to illustrate the scale of your numbers and cement the data in the minds of your audience members. A metaphor can also tie your insights to something that your audience already knows and cares about.

Author and activist Michael Pollan showed how much crude oil goes into making a McDonald’s Big Mac through a striking visual demonstration: He placed glasses on a table and filled them with oil to represent the amount of oil consumed during each stage of the Big Mac production process. At the end, he took a taste of the oil to drive home his point. (To add an element of humor, he later revealed his prop “oil” to be chocolate syrup.) Watch the video here:

Pollan could have shown a chart, but this was more effective because he gave the audience a tangible visual — one that triggered a visceral response.

By answering these five questions as you’re laying out your data, you’ll visualize it in a way that helps people understand and engage with each point in your presentation, document, or deck. As a result, your audience will be more likely to adopt your overall message.

Persuading with Data

An HBR Insight Center




To Tell Your Story, Take a Page from Kurt Vonnegut
Don’t Read Infographics When You’re Feeling Anxious
How to Tell a Story with Data
To Go from Big Data to Big Insight, Start with a Visual

Bonuses Should Be Tied to Customer Value, Not Sales Targets

Why would you eliminate sales targets as a way to evaluate, motivate, and reward your sales staff?

That is perhaps the most frequent question I’ve received since 2011 when GlaxoSmithKline changed the link between the bonus pay of our pharmaceutical sales professionals in the United States and the numbers of prescription sold for a particular medicine. It is after all a well-established incentive plan used across a spectrum of industries.

But at GSK and across the pharmaceutical industry, we have a very special responsibility to patients and caregivers. They depend on us to do more, feel better, and live longer. It is that responsibility and the crucial importance of trust in our relationships that means we are judged to a higher standard than many other industries.

I have seen the good that our industry does in transforming the lives of patients living with diseases such as cancer, HIV, asthma and diabetes. But I have also heard doctor complaints that our incentive systems are not focused on the interest of the patient.

We are, of course, concerned that some see perceived conflicts of interests in the way we run our business, particularly related to incentive plans for our sales professionals and the financial links we have with health care practitioners.

So, we realized that “how” we do our job is just as important as what we do. Ultimately every leader knows that you get the behavior you reward. At GSK, we’ve decided that bonus incentives for our sales professionals should be tied to the value we bring in ensuring that patients are appropriately treated with our medicines.

This patient focus is a core value for us, along with transparency, respect, and integrity. So instead of specific prescriptions sold, we began to reward our representatives for their patient focus, understanding of their customer, problem solving, and level of scientific knowledge as measured by tests and other assessments. That approach may not seem like radical thinking, but when we changed our focus away from numbers of prescriptions sold to patients well served, it set us on a different path that, thus far, we walk alone.

Critics may say it took a settlement with the U.S. Department of Justice over past sales and marketing practices to reach that conclusion. But we dropped sales targets well before the settlement, recognizing that traditional sales incentives were out of line with society’s expectations for our industry, and we had to change. Ultimately, past practices affected customer trust and satisfaction and, as a result, damaged the reputation of our industry.

As a global business with shareholders and major investments in research, sales are important to us. I watch the sales numbers and I’m concerned if they dip. But our value metrics are important to our long-term growth, and we hope they will help restore trust in our company and our industry.

Our employees quickly recognized that this change aligned with our values. But implementing a new approach without a pattern or road map to follow admittedly was painful at times. We had to identify new metrics to evaluate aspects of employee performance such as problem solving, business acumen, and demonstration of our values. It is one reason we are encouraged by the positive response of health care professionals. I accompany representatives to visit doctors and have heard their reactions firsthand. Some doctors have even reopened their doors to GSK representatives. We believe this new way of working has become a core strength for us.

That’s why we are now working to extend that practice to thousands of sales representatives in 140 countries around the world and are taking the additional step of halting payments to physicians for speaking to their peers on behalf of our medicines. That’s no small commitment, but my experience in the United States over the past two years has strengthened my belief that this is the right path for our company as well as the patients we serve, wherever they live in the world.

Renewing focus on our values by reshaping employee incentives is helping us do more to help doctors help their patients. We are not the only industry that needs to better meet society’s expectations.  Every one of us in the corporate world must look at our business through the eyes of our customers and nimbly respond to their changing expectations.

Clumsy Feedback Is a Poorly Wrapped Gift

People on your team offer you gifts – not just at special occasions, but all year. These gifts aren’t tangible, and they’re not wrapped up in lovely boxes with beautiful bows. These gifts are nicely wrapped in a compliment, or, more often, not-so-nicely wrapped in a criticism or complaint.

Effective leaders open these gifts, regardless of the wrapping, to learn what they are doing that’s negatively affecting others on their team. For example, when your boss says, “You did a great job on that presentation,” the compliment is the wrapping. You can go past the wrapping and open the gift to learn more by saying something like, “Thanks. I’m curious, what did I do that was great? I want to make sure to keep doing it.”

Many of us judge a gift by its wrapping, so when it’s poorly wrapped – when it looks bad, sounds bad, or feels bad, we don’t open it. If, in a performance appraisal meeting your direct report says, “My division would have hit all our numbers this year if I had more support from senior leadership,” you may ignore the comment or respond with a dismissive remark. But when you respond this way, you turn down some of the most valuable learning opportunities you can receive.

Why do we reject these potentially valuable gifts?

They are vaguely worded. Research shows that leaders consider negative feedback more useful if it is specific. But gifts are often purposely vague, so the givers feel that they are taking less risk. Because we equate vagueness with being less helpful, we are less likely to open the gift.
They come as a surprise. Gifts don’t often come with a heads-up such as, “I’d like to give you some feedback.” They just get tossed into the conversation without warning. When they seem off-topic or feel unexpected, we are less interested in exploring the gift and less prepared to respond.
They feel inconsiderate or threatening.  The same research shows that leaders are also less likely to consider feedback if it is given in an inconsiderate manner. A gift like, “My division would have hit all our numbers this year if I had more support from senior leadership” can seem ungrateful or sting. That leads us to respond defensively; either we ignore the gift or reject it by saying something like, “We’re here to talk about your performance, not mine.” We want our negative feedback delivered perfectly; if it’s not, we let our own defensiveness undermine our ability to learn and improve.

How do you open gifts rather than turn them down? Try these steps:

Notice when people say things that lead you to feel upset, surprised, or threatened. When you feel this way, there is a good chance that you’ve just been given a gift that’s poorly wrapped.
Focus on the potential, not the delivery. When you focus on how the gift was delivered, it’s easy to dismiss it as off-topic, ungrateful, or whiny. But rejecting a gift doesn’t make the underlying issue go away; it just prevents you from becoming aware of it and being able to address it. There is a Talmudic saying, “Who is wise? He who learns from everyone.” Suspend your judgment about the wrapping, and focus on your opportunity for learning.
Respond with curiosity. This leads you to open the gift by saying something like, “I thought I was fully supporting you, but it sounds like I wasn’t. What was I was doing – or not doing – that you thought wasn’t supportive?” When you respond with curiosity and compassion, you learn things that people were previously unwilling to discuss with you. Discussing these previously undiscussable issues enables you to solve problems that were previously unsolvable.

When you accept a person’s gift – no matter how poorly wrapped – by responding with curiosity and compassion, you are giving a gift in return. You are creating the trust needed to talk about things that really matter and that will lead to better results. This type of gift is priceless.

Ever Notice That UPS Trucks Rarely Make Left Turns?

An estimated 90% of the turns made by UPS delivery trucks are right turns, and that’s intentional, according to the Washington Post. Left turns are seen as inefficient, because they leave trucks sitting in traffic longer. The logistics company says a policy of minimizing left turns has helped it save more than 10 million gallons of fuel over the past decade. Left turns (in countries where people drive on the right) are dangerous, too: New York City officials say left turns are 3 times more likely than right turns to cause a deadly crash involving a pedestrian.

How GE and IBM are Playing Global Development to Win

Most big corporations follow global development trends. Where there is economic growth, there is opportunity, and the companies that can predict where growth will take place are better positioned to take advantage of it. That is the reactive approach to economic development.

In the last few years, a more powerful dynamic has gained traction. CEOs are proactively engaging with emerging market government to spur economic development and create opportunities for their companies. In the fast growth markets of Asia, Africa and Latin America, national governments are responding to a more empowered citizenship, and looking for corporate partners to achieve their development goals. Companies that fill that need effectively are doing more than reacting to development. They are playing development to win.

General Electric is a good example. Four years ago, GE initiated a strategy to compete more effectively in Africa, one of the fastest growing regions in the world in terms of GDP.  GE did more than take advantage of growth as it came. The company’s leadership moved proactively to accelerate it and shape it. “If we see a country where reward outweighs the risk, we want to invest,” CEO Jeff Immelt says in Success in Africa. GE spent months understanding the development priorities of countries where it planned to invest. Partnering with those governments, the company sought out discussions at the ministerial and head-of-state level to identify and work on the country’s most significant infrastructure challenges. The results are encapsulated in a “Country-Company MOU,” which describe key challenges the country faces and the role GE will play in helping meet them.  For example, the two parties identified the challenge of national electrification and committed to work together to bring $10 billion of investment and 10,000 megawatts of new power online, along with local manufacturing and training. Emerging market infrastructure is a segment many Western companies have ceded to China, but GE is winning contracts because it is playing development to win.

IBM is doing something similar in data analytics. CEO Ginni Rometty took the top job in 2012, and identified Africa as a locus of technological growth early in her tenure. IBM identified a set of “Grand Challenges” facing the continent that could be addressed through superior data analytics, including water and sanitation, energy management, financial services, transportation, public safety, healthcare, and agriculture. Last month, IBM launched a dialogue with the government of Nigeria. It was co-hosted by the Minister of Technology and included ministers from the cabinet charged with meeting the Grand Challenges IBM identified. Rometty, on her second trip to the region in three months, led the session for the company. IBM is speeding the region’s growth, and helping shape its direction. That is playing development to win.

I recently spent some time with Bob Diamond, the former CEO of Barclays. Now head of Atlas Mara, he’s positioning the investment company to play development to win. Earlier this year, they raised $325 million in the public markets and this month acquired BancABC, a bank with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. “Governments want banks who will lend to businesses and homeowners,” Bob explains, “That’s what we intend to do. The private sector is growing in Africa and we plan to enable that in multiple countries.”

Playing development to win does have costs. It requires an up-front investment of money and time to understand the growth challenges within each host country or region and to establish the government and civil society relationships needed to act on those challenges. It also demands senior management and board involvement. Companies playing development to win have CEOs traveling to the region 2-3 times per year, supported by engagement of the full management team. Furthermore, the returns on investment are long term. For a large company, it’s common to invest for a decade or more before shareholders see material earnings. The anticipated scale of new business has to be large enough to warrant that.

Playing development to win should not be mistaken for corporate social responsibility (CSR). Sustainability and core values support any great company, but expanding long-term earnings by meeting big development challenges takes more. At a company that’s playing development to win, business units are leading the effort, enabled by sales, marketing, finance, supply chain management, CSR, and social investment.

Some might see playing development to win as cynical or undermining the cause of inclusive growth. It’s neither. Cynicism would be to bet against development. The companies playing development to win need the institutions and policies with which they are engaging to yield tangible results. If the government of Nigeria fails to deliver widespread, low-cost power, the fallout for GE will be significant.

Playing development to win will be the hallmark of great companies operating in emerging markets. Over the next decade, they will be the companies addressing the most pressing challenges in countries where the potential for growth is ripe. As a result, they will shape the landscape in which they compete, attract and retain superior talent, build stronger brands and enjoy stronger relationships with customers in the fastest growing global markets.