Marina Gorbis's Blog, page 1450

Self-Promotion for Professionals from Countries Where Bragging Is Bad

In India, it’s crabs in a bucket — the one who tries to escape is pulled down by his compatriots. In Australia, it’s tall poppies — and the tallest one gets its head whacked off. In Japan, the nail that sticks out gets hammered down. Almost every culture has its own metaphor about what happens to people who are judged by their peers to be overreaching.

In the U.S., known for its embrace of assertive self-confidence, it’s a different story, however. Personal branding is seen as a positive way to differentiate oneself in the American workplace. But for foreign professionals who grew up with a vastly different set of cultural mores and who now need to succeed in the United States or other contexts where personal branding is important, this can be quite a difficult adjustment.

In our travels as professors and speakers, we’ve often heard the same refrain. “I understand that personal branding is important,” executives and managers often tell us. “But I just can’t bring myself to do it!” It’s no wonder. Andy’s research has indicated that personal branding, or self-promotion, is one of six major areas of cultural difference that cause discomfort for people around the world. One Indian manager in Andy’s research, for example, compared personal branding to “committing a sin” — perhaps an extreme reaction, but still indicative of how hard it can be to do personal branding, especially if you come from a country like China or India or Korea where modesty, composure, and self-control are more culturally valued characteristics than the ability to toot your own horn.

But the benefits of personal branding — including taking control of how you’re perceived by others, and making them understand the unique contribution you can make — are vast. So how can foreign professionals reconcile their values with personal branding? Here are a few points to keep in mind.

Rebrand the act of personal rebranding. Particularly if you grew up in a culture that emphasizes humility and modesty, the idea of drawing attention to yourself — especially to tout your accomplishments — may seem distasteful. However, a key way to mitigate these feelings is to “rebrand” the very act of personal branding itself. For example, instead of thinking of it as blatant self-promotion, think about who else, besides you, can benefit from your efforts. For example, university professors who write books end up promoting their university in the process.  And if you’re viewed as a sought-after expert in your field, clients will often hire your company just so they have access to your skills.

Authenticity matters. Part of the reason personal branding raises so many hackles is its association with salesmanship — the idea that you’re packaging yourself to appear attractive to “buyers,” and may be willing to sacrifice your true self to do so. But that’s not what personal branding is.  On the contrary, what we’re talking about is thoughtful, honest self-assessment, which many people genuinely believe in. If you have a clear picture of how you can contribute and make others aware of it, you’re actually taking a stand against being a finger-to-the-wind glad-hander. You’re demonstrating enough honesty and authenticity to be clear on where you excel, where you don’t, and the real value you can offer others. Being authentic is also a way to honor those who have helped you become who you are — your bosses and mentors, or even your teachers and parents. By thinking about personal branding as honoring the time and effort they put into your development, it can make the act itself feel more legitimate.

Strike a compromise with yourself. Although you may come from a culture that shuns self-promotion, chances are, there’s some part of you that sees the benefits.  So, strike a compromise with yourself and find a way to do personal branding that works for you.  In our work, we’ve seen a variety of different ways that professionals who were initially uncomfortable with the idea have ended up embracing personal branding by making a few simple adjustments and customizing or personalizing their approach. Andy recently met a young professional from Nepal who was very uncomfortable branding herself and her personal achievements in the U.S., since she came from a culture that emphasized the group over the individual. Her solution was to actually blend and combine these two perspectives.  She would emphasize her individual accomplishments but only in the context of what the group as a whole was able to achieve — and in the end, this blended solution was successful enough for her to find a job.

The adjustments go both ways: when Dorie visited Asia on a recent speaking tour, she had to reprogram some of her American habits. Stateside, she accepts compliments with a simple, appreciative “thank you” — any self-deprecating remarks (“oh, it wasn’t actually that good”) would be viewed as insulting the person making the compliment and indicative of a serious lack of self-esteem. In Asia, however, the mitigating remark is a closely-watched sign that determines whether or not you’re perceived as a jerk. It pains her to tamp down the self-confidence that’s so prized in American culture, but she makes a point to try.

Some people reject personal branding out of hand because they believe it conflicts with their most cherished values. But by keeping the principles above in mind — and reframing what it means to self-promote — you can ensure you maintain your integrity but still get noticed for all that you do.

Do People Really Want Smarter Toothbrushes?

Recently, Procter & Gamble’s Oral-B announced the release of its first ever web-enabled toothbrush. Setting a new standard for dental hygiene, the next SmartSeries toothbrush will include a smartphone app, helping users to know if they are brushing too hard or if it’s time to brush another area of their mouth. If that’s not enough, the new Oral-B connected toothbrush experience also suggests nearby dentists for you, gamifies teeth cleaning, and even provides weather updates. Sounds exciting, but does it make sense for the customer?

Call them user needs, customer requirements, or jobs-to-be-done, understanding what a customer wants and is willing to pay for is more important that ever now that the Internet of Things is upon us. Decades ago, Harvard professor Theodore Levitt popularized the rationale behind why people buy quarter-inch drill bits: “People don’t want quarter-inch bits. They want quarter-inch holes.” And the challenge now is that the actual drill might connect to the cloud, collect information about your drill usage, and tell your friends on Twitter that you just used your drill, too. Technology advancements are quickly outpacing traditional use cases, making the design and development of meaningful products harder than ever.

To create truly meaningful IoT-based products and experiences for customers, companies must understand their needs, which starts with three important questions.

Who is my growth customer?

As basic as it sounds, the first step in understanding customer needs is identifying your real customer. Although attracting early adopters is essential for early success and encouraging virality, growth customers—the people who are likely to buy the next generation of products—are crucial for building a sustainable business. Said differently: it’s easy to find a few hundred customers who will buy a new connected product; it’s much harder to find a few hundred thousand customers who will buy future iterations of said product. For some product categories like lighting and heating, evolving to a connected experience is a natural transition, and current customers will be the growth customers. But for other types of products, the growth customer for a connected experience is less clear.

Several years ago, Marc Andreessen, co-founder of Netscape and venture capital firm Andreessen Horowitz, wrote a famous post about the importance of product-market fit. Worth noting, he emphasizes, “In a great market—a market with lots of real potential customers—the market pulls product out of the startup.” Ultimately, knowing who the customer will be over time allows a company to build a truly differentiated product. And as the number of products and new market entrants rapidly increase in the IoT space, differentiation will be crucial for all parties involved.

What problem am I actually solving?

With the growth customer identified, the next step is to develop a strong understanding of the problem to solve, especially through exploratory research with potential users. Traditionally, designers have promoted ethnographic approaches with extreme users, while Lean Startup practitioners advocate for just “getting out of the building.” In either case, the general logic is the same: go talk to some real people. Understanding which problem is especially important in IoT: as advances are made in computing power, battery life, and network infrastructure over time, the problem a company is focused on solving provides a North Star for evolving the product roadmap and the overarching business, too.

As Thor Ernstsson, founder of Casual Corp and veteran of various healthcare and gaming startups, points out, “In the earliest days, customers buy into the aspirational vision of a company, even more so than its current products.” And as the customer base grows, a clear aspirational vision and direct customer feedback about problems help more established companies—including those in the connected space—“mediate the inherent tension between a focused value proposition and expanding feature lists.”

How is this better than analog?

Through sensors and the cloud, connected devices allow companies to build experiences that have a richer interaction and more meaningful connection with the customer, his or her devices, and the environment around them. But that direct relationship requires the voluntary exchange of personal data and some loss of anonymity – and the benefit of that exchange in value must be clear to users.

For example, Disney’s MyMagic+ allows Disney vacationers to use RFID-based MagicBands to enter parks without paper tickets, open hotel rooms without keys, and purchase souvenirs without taking out a credit card. And despite all of the amazing benefits, a large number of Disney visitors have expressed strong resistance to being tracked. Carla Diana, an IoT luminary and author of Leo the Maker Prince, has said, “For any connected experience, you have to answer the question, ‘Why is this better than analog for the customer?’ If you can’t answer that question, your desired customers won’t be able to either.”

Going back to Oral B, is the company being mindful of customer needs in introducing a smartphone-connected toothbrush? Maybe. In evolving its products, P&G should keep in mind the writings of Dieter Rams, the legendary designer who worked for Braun (which until recently was P&G’s brand for electric toothbrushes before Oral B). Among his 10 Principles of Good Design, Rams stated that, “Good design is as little design as possible” because it concentrates on the essential aspects and prevents products from being burdened with non-essentials. For P&G and other companies entering the connected space, balancing great technological features and “as little as possible” will be a major opportunity to shine and differentiate moving forward.

To Play or Not to Play? It’s a Management Question, Really

"Free" Time The Overprotected KidThe Atlantic

This week we're going to talk about play, in three takes. Seriously. 

First is the aforementioned Atlantic feature by Hanna Rosin that's less a diatribe about helicopter parenting (my fear, given the title) and more a historical and organizational look at how kids spend their free time. Rosin notes that even though women work more hours than in the ’70s, both mothers and fathers spend more time with their children today. Play is no longer a day-long reprieve from adults; rather, it's highly organized and supervised, and it takes place at the most aesthetically boring playgrounds imaginable, ostensibly to prepare our wee ones for modern middle-class life. 

This leads to the second article, from Quartz (disclosure: it's an excerpt of an HBR press book) which explains how Lego came to recognize that parents were staging their children's play — and that kids, when left to their own devices, carved out "pockets of oxygen, away from adult supervision" in the activities (and objects of those activities) that they valued most. This knowledge led to a new strategy for the struggling company. 

Last is this thickly worded essay from Heather Havrilesky about the cultural meaning of the word "play," how we enact it, and whether we've lost our way. In adultland, her examples range from the gamification fad in business and management to thirty-something kickball leagues. And when it comes to both adults and children, "play often boils down to hard work," which, frankly, it probably shouldn't. 

Name Dropping Interactive: How Influential Is Your School?Time

Speaking of play (no comment on what kind of play it is), here's Time's which-school-is-more-influential game: Enter the names of two schools, and an algorithm tells you which one has had greater impact, as measured by its graduates’ renown. Along with an influence score for each, you get a fun list of famous alums. Business schools are in the database, along with undergraduate schools, divinity schools, law schools, med schools — you name it. Just don't try crossing the border to, say, McGill, or the algorithm will draw a blank. 

And how expensive is all of this educating? Take a look at The Awl's tuition-inspired NCAA bracket for more on that. —Andy O'Connell

"Project Will Be" Better Phrasing for Online FundraisingFree Range Thinking

The Pebble smartwatch raised $10 million, making it Kickstarter’s most successful fundraising effort. The PC-based game Ninja Baseball, on the other hand, only got to a third of its $10,000 goal. Why was one a hit and the other a bust — was it something about how the pitches were phrased?

For a study entitled "The Language that Gets People to Give," Georgia Tech assistant professor Eric Gilbert and doctoral candidate Tanushree Mitra designed software to scrape the text from the thousands of Kickstarter projects launched since June 2012. After taking into account a number of variables like project duration, they found that of the 9 million phrases they had captured, 20,391 had predictive qualities. From these they isolated the top 100 phrases that, they say, correlated significantly with funded — and underfunded — projects. The most powerful phrase (by a wide margin): “Project will be.”

What? They don’t sound like magic words to you? Gilbert and Mitra suggest that what makes the phrase so powerful is that it evokes the persuasion principles of  authority — that is, by reading that "the project will be produced by…" you will be impressed by the professionalism behind the project and be more likely to give. Or not. In any case, it’s easier to imagine what’s wrong with the biggest turn-off phrase, which was "dressed up." —Andrea Ovans

And Everyone ElseYour Kindness Is Good for YouPacific Standard

Here at HBR, we think a lot about generosity and kindness within companies. And for good reason, as this gorgeous essay from Casey N. Cep reminds us. She weaves together a personal narrative, scholarly research, and a convocation speech from George Saunders to explore the benefits of kindness and how we can embrace it daily. She emphasizes that kindness isn't necessarily about what we say; our silence or invisible actions, particularly in our digitally driven lives, can be just as important. And when we're more mindful about this, the benefits to others — and to ourselves — can be truly outsized. 

Let's Hope SoCan Rebekka Bay Fix the Gap?Businessweek

A younger incarnation of myself treasured the Gap, the only clothing store in my local Maine mall that wasn't JC Penney or Sears. Today, even as a cardigan-clad adult with backward-facing style, I’ve become aware that there's nothing special about the store. The Gap has noticed the same thing, particularly since upstarts like H&M, Zara, and Uniqlo began offering more fashionable clothing at affordable prices. As one industry analyst notes, "They had made khakis cool, but then you could get khakis everywhere. They had become a victim of their own success. Their brand became meaningless." But the company may have a secret weapon: Rebekka Bay, a Danish fashion designer who is in charge of this spring's clothing line. She's charged not only with making distinctive-yet-simple garments — "I think we can do less, and do it so much better," she explains about her philosophy of bringing integrity back to the store's clothes — but with helping the Gap get its identity back. 

BONUS BITSWhat the Numbers Say

Analyzing Babysitting Price & Gender Data (Priceonomics)
The Price of Music (Re/code)
Who Had Richer Parents, Doctors or Artists? (Planet Money)

What Great Corporate Wellness Programs Do

In a recent HBR post, “In Defense of Corporate Wellness Programs,” doctor and entrepreneur Rajiv Kumar took on the doubters about the value of workplace wellness programs. But as designers and researchers who have spent the better part of two years creating a system of healthy living for a huge national populace, we think he didn’t take his defense far enough. Not only are wellness programs valuable for the organizations and their employees, as his data states, they are our biggest hope for fixing a national health crisis.

Thanks to their reach and influence on employees, workplaces have a unique power to reframe the mindset around health itself — from one of sickness to wellness. “Companies are a microcosm of society and an important and unleveraged setting for health improvement and risk reduction,” says Dr. Ron Goetzel, a leading expert in the field of health and productivity management. With 150 million Americans going to work every day, corporate America is not only in the best position to change our nation’s health, but has a responsibility to do so.

As part of a project with the Department of Defense, we recently researched over 20 award-winning and recognized workplace wellness systems, at companies such as Johnson & Johnson, L.L. Bean, and Safeway. We saw these leading organizations owning the responsibility to change how people interact with healthcare, in a way that government or healthcare organizations have been unable to do.

The organizations with the greatest success are managing to shift people’s relationship with health from one where health is something thought about and “practiced” annually at the doctor’s office, to one where health is practiced daily through small lifestyle habits. The more proactive stance toward health they have established feeds off of itself and enhances employee lives, even while reducing future costs. For the organizations in our study, this translates into average annual health care cost increases of 1 to 2 percent compared to the 7 percent national average.

How have they done this? Here are three approaches we discovered that appear to be key.

Put it in Surround Sound

The best wellness programs bring the built environment, company policies, and leadership messaging under a single mission of wellness. When USAA’s Enterprise Medical Director Dr. Peter Wald joined the organization 12 years ago, he found many discrete resources for wellness — mini gyms, cafes, and health experts – already in place. Once he tied them under the mission of prevention, putting health in “surround sound,” as he likes to say, the program took hold within the organization. Safeway redefined its core business from “a grocery company with a wellness program,” to “a wellness company that happens to sell groceries,” and the program took off. The CEO, along with the leadership team, ensures that health and wellness are kept top of mind, and leaders work hard to tie all wellness activities back to a broader company strategy. Safeway made large capital investments in a state-of-the-art fitness center, a preventative-care health center, and health-focused cafeterias to support the organizational mission. Creating a seamless wellness experience has resulted in participation rates of over 80 percent.

Keep it Personal

When health is made personal and put in real-life terms, people discover the value that health can hold in their lives — and that provides the strong call to action. Johnson & Johnson, which has one of the longest-standing wellness programs in the country, understands that people don’t strive to get healthy because it’s the right thing to do in some abstract sense. “Health is usually a means to an end,” says Adam Glauberg, Director of Global Health Services at Johnson & Johnson. The individual wants to be there for family, to get off diabetes medication, to perform better at work. If the company can tap into those personal motivations, it can better communicate the value of health. J&J uses a platform called “Energy for Performance in Life,” a training program designed by the Human Performance Institute division of Wellness & Prevention, a Johnson & Johnson company, to teach employees how to maximize their energy to improve their performance both at work and at home. The program is designed to be less clinical and more lifestyle-oriented than many health-oriented interventions. Making the program more relevant to everyday life dramatically increased the number of people engaging in it; it has now reached 90 percent employee participation.

Make it a Collective Effort

Wellness needs to be done with employees, not to them, or the effects won’t last. When employees feel a system is their own, engagement increases. The best programs actively design for “grassroots” partnership and harness the power of shared accountability to sustain engagement. L.L. Bean empowers its employees in different locations to design their own wellness initiatives relevant to their department’s needs. If a worksite is able to get at least 15 people interested in a new program, it receives funding and support from corporate to run that program locally. This kind of empowerment encourages many employees to become health and wellness representatives in their location — initiating activities such as Zumba and yoga and recruiting other employees to join in their collective wellness efforts. Building such community health champions helps spread the message and ensures the program’s reach. It also keeps people accountable and gives them the support they need at those inevitable derailing moments.

So let’s stop challenging the validity of comprehensive wellness programs, and instead celebrate our most wellness-oriented organizations for stepping up to a national health care crisis. Our society depends on their reach and influence to help move practice forward, and to reframe the conversation from a focus on sick care to a focus on well care. Already, these programs have made deeper inroads into large, intractable health care problems than anyone else – and with the Affordable Care Act making new provisions for wellness programs, there is hope for greater support and incentives. Let’s give workplace wellness programs the support that will keep them, and the people in them, healthy.

Three Imperatives for Good Project Managers

We all have good ideas. The hard part is making them happen.

HR departments love handing out worksheets on how to plan your time. Management gurus have written hundreds of pages of advice on how to better manage your week, your day, and your hour.

But what happens when you try and apply that advice to your team or organization? How do you deliver complex, multi-level, multi-year programs of work across teams and business units that may be, quite honestly, in chaos?

I sat down with three senior executives leading major projects at complex, fast-moving organizations  and asked them what they do to be effective. They had all worked across multiple industries in their careers, run successful projects (and also some that had failed), and extracted lessons that made sense at every organizational level.

Here are the three tips they said had the biggest impact:

Be strategic, not tactical. The biggest mistake most managers make is that they spend their days and nights focusing on tactics when they really need to think about strategy. Tactics are important. They relate to the details, the fine-grain specifics to execute against a tight deadline. But strategy asks whether the milestones being created are the right ones. In the case of one media business, teams were overweight with technical project managers and lacked strategic thinkers who could prioritise what mattered. The results were hundreds of milestones that related to product launches without an overall picture of which products were the most important to customers. Strategy is all about making trade-offs. In a world where you can’t do everything, what are the one or two things you really need to focus on?

Talk about the red. In most organizations, managers spent their time sitting in steering committees hearing about how great things are going. That’s a waste of time. Talking about “red” is nearly always a more useful conversation than talking about “green”. In one government department I talked with, senior executives realized this meant changing the culture around failure. People were so afraid about losing their job that they weren’t able to do their job properly. When senior leadership started normalizing failure, employees felt more comfortable flagging when things were going off track –and working out how to fix them. Let’s be clear: it can be pretty demoralizing talking about failure all the time. Senior leaders need to know how to thank people who use their time well, and focus on the things that matter –especially the bad news.

Have leading, not lagging, indicators. Red is good. But amber is much better. Many managers aren’t able to tell their bosses if a project is off target, over budget, or past schedule until it has actually happened. Far more useful is to have lead indicators. These are triggers built into project plans so that managers have foresight into what’s going wrong as it’s happening. The key thing here is to focus on goals that really matter. If budget savings are what you care about, create lead indicators that phase in incremental savings. If being on schedule is the highest priority, create lead indicators that focus on completion to deadlines. In a cost-savings program in a major mining company, one manager built an intricate plan that culminated in big-buck savings in the final milestone. That’s no good. Much better is to break this final milestone into mini steps. Building good lead indicators means thinking about what really matters and giving that issue sufficient visibility.

We all want to be effective in our organizations. But ask yourself: are your current tools working? Following these three principles is a good step towards turning good ideas to great execution.

How Technology Creates Jobs for Less Educated Workers

Conventional wisdom holds that new technology requires highly educated workers. There is little doubt that new technologies have taken a heavy toll on less educated workers not only in manufacturing industries, but also in routine white-collar jobs. In many cases, these workers had accumulated valuable experience that has now become obsolete.

Yet it is a mistake for managers to assume that they need to hire highly educated workers to handle new technology; employees gain much critical knowledge about new technologies through experience on the job and such learning often does not require a high degree of education. Managers need to understand the role of technological maturity, the value of experience, and how employees’ technical skills develop under different business models. Indeed, economic research shows that new technology increases the need for more educated workers at first, but, as technology matures, less educated workers are hired in general.

Consider, for example, the licensed practical nurse (LPN, also known as licensed vocational nurse in some states). Many hospital managers have stopped hiring LPNs, arguing that they lack the education needed to handle new technology. The American Nurses Association has urged replacing LPNs, who require from 9 to 18 months of training depending on the state, with associate degree nurses who have two years of college training. The Association argues that technology has made the LPN position obsolete.

But a strange thing happened on the way to obsolescence. From the 1970s through the 1990s, the number of LPNs remained flat or fell slightly, depending on which statistics you look at. Since 1999, however, the number of LPNs has risen nearly 50% and wages have grown substantially. The reason: a combination of new technology and a new business model. New technologies, including advances in in electronics, fiber optics and anesthetics, allowed the widespread adoption of techniques for minimally invasive surgery. Using these techniques, surgical patients recover quickly enough to return home the same day, avoiding an expensive hospital stay.

Much of this technology has been around for a long time. For example, endoscopy has been used since the nineteenth century. But recent improvements have made the technology much better and, with that, a new business model emerged, the “ambulatory surgery center.” Centers specializing in just one type of surgery—knee surgery, eye surgery, etc.—grew much more proficient because the surgeons and other healthcare providers learned through experience. This meant that medical outcomes improved while avoiding the extra cost of a hospital stay and the complications that tend to arise from more invasive procedures. Better quality at lower cost opened up a profitable opportunity and, once insurance and government reimbursement was changed, this opportunity generated explosive growth. In 1983 there were 239 freestanding ambulatory surgery centers in the US; by 1996 there were 3,300. In 1983, 380,000 ambulatory surgical procedures were performed at freestanding centers and at hospitals. In 2006 there were 53 million.

But this new business model demanded different sorts of skills. Management experts Clayton Christensen, Jerome Grossman and Jason Hwang label the transition from the hospital to outpatient surgery as an instance of a more general transition from “intuitive medicine” to “precision medicine.”  Hospitals treat all sorts of patients with all sorts of symptoms. Many diseases, however, are difficult to diagnose with certainty, and once a diagnosis is made, not all therapies work for all patients. Medical professionals often have to make a tentative initial diagnosis, start a therapy, and then possibly modify both the therapy and the diagnosis depending on how the patient responds. This is “intuitive” medicine, and it requires highly trained professionals to make complex judgments about the patient’s condition. In this situation, LPNs can assist the medical professionals by performing routine tasks monitoring and caring for patients, but there is little the LPN can learn because the patients differ so much from one to the next.

The ambulatory surgery centers, by contrast, work in specialized areas where diagnoses are well identified, patients are screened for complications, therapies are well known and medical outcomes are predictable, if not always successful. Physicians can reliably diagnose nearsightedness or carpal tunnel syndrome, and treat these ailments with laser eye surgery or endoscopic hand surgery, respectively. The procedures are standardized and the outcomes are predictable.

This is precision medicine and LPNs play a different role. Because the procedures are standardized, an LPN learns valuable skills on the job. Because specialization limits the range of circumstances they encounter, LPNs can learn faster and better, acquiring skills that, though narrow, are more valuable. Through experience, an LPN can better anticipate the needs of the medical professionals, can monitor and care for the patients more effectively, and can identify signs of impending problems and alert the medical professionals.

In this environment, LPNs learn on the job. In the late 1970s, an LPN with 15 years’ experience earned only 11% more than an LPN with less than five years. LPNs apparently learned little that was valuable on the job then. But today, the average LPN with 15 years’ experience earns 37% more than one with less than five years. Experience has become quite valuable, even though these workers have relatively little education. And most of the growth in jobs for LPNs has been at ambulatory care centers.

This pattern is more general within the healthcare sector as the trend to precision medicine has grown, aided by new diagnostic and preventive technologies. Increasingly, doctors and dentists are performing a smaller share of the work and a variety of mid-skill providers, from LPNs and dental hygienists to nurse practitioners and physician’s assistants, are performing more. Over the last two decades this shift has created two million new jobs for mid-skill healthcare providers, beyond the growth arising from overall expansion of the healthcare sector. Moreover, the value of experience has risen for these occupations, just as it has for LPNs.

In other words, the trend in healthcare is to shift work away from the most educated workers toward less educated workers, contrary to the conventional wisdom. Mid-skill healthcare providers have important education, to be sure. Nevertheless, managers need to understand that the benefits of new technology are often realized through new business models that depend on learning on the job.

Indeed, many of the hospitals that attempted to eliminate LPNs in recent years have since backtracked, complaining of a shortage of highly educated nurses. As Peter Cappelli has found,  managers across a wide range of industries face similar skill shortages. The healthcare example suggests that rather than complaining about a “skills gap,” managers either need to step up to providing training or they need to re-examine their business models.

Do You Need to Hear a Musical Group to Judge Its Quality?

Research participants who watched silent videos of chamber-music ensembles were 26% more accurate at guessing which ones had been winners of past musical contests (such as the Saint Paul String Quartet Competition) than people who had watched both audio and video of the groups, says Chia-Jung Tsay of University College London. Participants who listened to audio without video were the worst at guessing the competition winners. In evaluating the groups without sound, the viewers were apparently responding to what they perceived as strong leadership and indications of group unity, such as the players’ proximity and similarity of appearance—probably the same factors that had influenced the judges of the competitions, Tsay says.

The Fight Over Tesla Shows How Little Value Dealerships Add

Last week New Jersey started enforcing a ban on direct sales by Tesla Motors of its path-breaking model S. Tesla’s direct sales have also run into hot water in a number of other states: Ohio lawmakers are debating a ban on Tesla’s direct sales and Texas, Arizona, and Virginia are also opposed. Proponents of a ban on direct sales claim that they are acting in the interest of customers. But is it the interests of customers they’re following or rather the bidding of the powerful car dealership lobby?

Car dealers and more generally intermediaries represent an extra layer of companies in the supply chain that clearly increases costs to customers. But in many cases they also serve important functions in a supply chain and can create more value than the inefficiencies they cause.  Let’s look at whether these functions are needed in the car market:

Search and discovery: In the same way eBay helps turn one person’s junk into another person’s collectible or AirBnb makes your empty guest room a hotel room, intermediaries can help buyers find sellers. Beyond finding the right seller, an intermediary might help match the buyer to the best product for her, providing important guidance and product information. In disaggregated markets with many sellers and buyers and where search costs are high, intermediaries provide considerable value.  But the car market is no longer like this.  With product information widely available on the Internet, numerous knowledgeable automobile blogs, websites, most customers can investigate different cars themselves. Further, the test drive can be done via a few product galleries (as is the case with Tesla). The rest of the dealership infrastructure is, basically, redundant from a search and discovery perspective.
Relationship management and trust: In markets with many small unknown sellers and buyers intermediaries can create trust between the buyer and seller and help facilitate transactions where none would have happened otherwise. The Hong-Kong based intermediary Li and Fung’s entire business model is based on orchestrating trust based relationships between garment factories in Asia and other low cost locations and established clothing brands. Again this is not the case with the auto-industry. Most sellers are very established companies with strong reputations and do not need local dealerships to help establish trust with the customer.
Local inventories: Intermediaries can hold inventory in order to provide instant delivery to customers. This was a major role of car dealerships when cars were made to a few limited standard specifications. Today, cars can be increasingly customized. In most European markets a majority of cars are made to order: a customer places the order and the car is then manufactured to exact specifications and shipped directly. This is increasingly happening in the US with higher-end cars and also with cars popular with the younger generation that prefers an individualized product rather than a cookie-cutter vehicle.
After-sales service: Historically, car dealerships and intermediaries have been an important interface for maintenance of cars. But cars have become much more reliable than they were when most of the dealership network was set up. A new well-engineered car rarely needs any special maintenance in the first 7-8 years of its life. And with a large established certified network of repair shops, a car dealership is not necessary to provide the limited maintenance a car might require.

To sum up, our assessment of the ways in which you would expect dealerships to add value suggests that there no pressing case to be made for protecting car dealerships from market forces. In the same way as when travel agents were disintermediated by websites and direct sales, the quintessential auto dealership may now be counting its last days, only creating more inefficiencies in the supply chain than the value it provides.

The process of intermediation and disintermediation in different industries is an essential part of innovating business models. It is these innovative business models that have created industries where none existed before and created immense value for customers. State governments in Texas, New Jersey and Virginia by intervening in the process are not only retarding the innovative processes at the heart of new business creation, but may also be harming their constituents.

Identify Your Primary Customer

Robert Simons, Harvard Business School professor, says companies still struggle to choose the right customer. For more, read his article.

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The Crisis Management Lesson from Toyota and GM: “It’s Our Problem the Moment We Hear About It”

Delay in confronting crises is deadly. Corporate leaders must have processes for learning of important safety issues. Then they must seize control immediately and lead a systematic response. Crisis management is the ultimate stress test for the CEO and other top leaders of companies. The mantra for all leaders in crisis management must be: “It is our problem the moment we hear about it. We will be judged from that instant forward for everything we do—and don’t do.”

These are key lessons for leaders in all types of businesses from the front page stories about  Toyota’s and GM’s separate, lengthy delays in responding promptly and fully to reports of deadly accidents possibly linked to product defects.

The news focus has been on regulatory investigations and enforcement relating to each company, but the ultimate question is why the company leaders didn’t forcefully address the possible defect issues when deaths started to occur.

On the recent regulatory front:

Toyota just agreed to pay $1.2 billion in a deferred prosecution agreement with DOJ and accept a safety monitor for failing to disclose to regulators—and indeed misleading them—about accelerators that became stuck on certain types of floor mats or because of certain elements in the accelerator itself.  The problem of uncontrolled speeding and deadly crashes began to appear in 2007, but it took four years, and deceptive statements, before Toyota disclosed earlier understandings about the causes and recalled millions of vehicles. The company has also settled class actions and has individual suits still pending.
GM delayed from 2005, when the issue first appeared, until recently to recall 1.6 million Chevy Cobalts with an ignition defects  that, under certain conditions, would  turn off the engine  suddenly and disable airbargs, leading to  a number of crashes and at least 12 deaths. The company is now facing the prospect of multi-front investigations from Congress, the National Highway Safety Administration and the Justice Department about why and how years passed before GM addressed the issue. New GM CEO Mary Barra has personally taken over the internal investigation, oversight of litigation and the response to government entities. She has said in a video to employees: “Something went very wrong in our processes in this instance, and terrible things happened.” Although, in contrast to Toyota, GM is just at the beginning of extended regulatory and possibly enforcement actions, the delay in dealing with the ignition issue is, like Toyota’s accelerator issue, likely to be a major problem for the company in years to come.

But, the deeper question is why these delays occurred in the first place. And it is on this question that business leaders should ponder whether they have robust systematic processes in place for personally leading or overseeing these threats to people and to the company.

The importance of thinking seriously about this set of issues is driven home by the failure of GM to address the ignition issue, even though the example of Toyota’s delay and lack of candor on the accelerator issue was a huge international story three plus years ago.

In a nutshell, CEOs and other top business leaders (with oversight of systems and processes by the board) must have a well-thought out approach to managing this type of health and safety crisis.

Preventive systems and testing should be in place to reduce the issues to an absolute minimum.


As Toyota and GM have belatedly done, the CEO should appoint a head of safety and rapid response teams to receive reports of serious harms to persons or property that may be linked to product issues.


Just as the general company ombuds system reports concerns to the top of the company about serious commercial, legal or ethical issues, the rapid response team should take any issue of potential consequence to the CEO or other high business leaders.


Most importantly, the CEO or top business leaders should then form appropriate multi-functional teams relating to: design problems and solutions; internal personnel and processes; duties to regulators; management of litigation; a communications strategy with various constituencies; and any other relevant functions.


The CEO or top business leaders must have prompt, periodic, direct reports until there is a good understanding of the interrelated issues. Then they must make decisions on an appropriate response. On these important safety issues, the CEO should also keep the board informed.


Both during formulation of the strategy and after, the CEO or top business leadership must ensure that all communications to all constituencies must be strictly accurate. It is better to say nothing—and develop accurate facts—than to issue deceptive or incomplete statements.


Once decisions are made about strategy, the CEO must oversee implementation to make sure, as appropriate, that it is meticulously carried out, changing systems both with respect to specific issues and more broadly as necessary, dealing humanely with people injured, and  communicating fully and transparently with regulators, media, and other constituents.

To take these fundamental steps is to pass the stress test. And the striking examples of Toyota and GM are an occasion for companies to review whether processes are in place to ensure that they are taken in the event of such a crisis.

Many commentators are speculating about whether the Toyota settlement with the Justice Department will be the template for a future GM resolution. To me, the more critical question for all companies is how expeditiously to handle these crises at the outset in order to avoid the unconscionable delay—and the searching regulatory problems that follow, as the Toyota and GM cases show.

It is our problem, the moment we hear about it.