Marina Gorbis's Blog, page 1469

Eight Essential Questions for Every Corporate Innovator

One of the first, and most lasting, pieces of career advice I received came from Linda Bush, my first project manager when I was a wee pup working at McKinsey & Company. “Ask a lot of questions,” Linda advised me. “You might think you are being annoying, but it’s the only way you learn. And trust me, people will tell you when you have crossed the line.”

There’s nothing quite like asking a good question. Bush’s advice helped me in those early days to learn about technical tasks (the magic of pivot tables in Excel), the seeming banalities of the working world (the mysterious expense report), and the subtle nuances of a profession (“Why did you say that then?”). Research by Hal Gregersen and Jeffrey Dyer in fact shows that questioning is one of the behaviors that successful innovators share.

So I’ll pose a question now: What questions should corporate innovators use to increase their odds of success? There are some classics out there, such as Peter Drucker’s (“If we weren’t already doing it this way, is this the way we would start?”), Ted Levitt’s timeless contribution (“What business are we really in?”), and the question Andy Grove asked to transform Intel (“If the board brought in a new CEO, what do you think he would do?”).

Beyond those classics, consider using the following questions to help you crystalize the entire innovation process from beginning to end — by improving your ability to spot new growth opportunities, pinpoint disruptive threats, shape compelling offerings, and commercialize your ideas.

Identifying New Growth Opportunities

What problem is the customer struggling to solve? Steve Jobs famously said it is not the customer’s job to know what he wants. I agree. It is the innovator’s job. One of the clearest signs of an opportunity for innovation is someone demonstrating that a problem is important to her by spending time or money trying to solve it and expressing frustration (either vocally or visibly) because existing solutions fall short.
Which customers can’t participate in a market because they lack skills, wealth, or convenient access to existing solutions? A time-tested path to disruptive growth is to compete not against fierce competitors, but against what we call nonconsumption. Making it simpler, easier, and more affordable for people to do what they historically have been trying to do is a great way to create growth. Doing so for people who are locked out of a market is what made companies like eBay, Google, and Southwest Airlines the powerhouses they are today.

Identifying the Threat of Disruption

Where are we overshooting the market by providing features that users don’t care about and don’t want to pay for? One of the central tenets of disruptive innovation is that companies innovate faster than people’s needs change. People will always take better products, but when they can’t use or don’t want to pay for the premium features, it creates opportunities for simpler, cheaper solutions.
If you were going to disrupt your company, how would you do it? Despite the fact that the concept has been in the public domain for close to 20 years, disruption still seems to blindside far too many companies. What is particularly punishing is that the disruptors are almost always in plain sight but tend to be discounted by the market leaders. (As late as 2008, the CEO of Blockbuster said “I’ve been frankly confused by this fascination that everybody has with Netflix….Netflix doesn’t really have or do anything that we can’t or don’t already do ourselves.”) Asking this simple question – and looking for companies that are making headway with a disruptive model – may at least inoculate you to some degree against this threat.

Designing Compelling Offerings

Who has already solved the problem you are trying to address? You might think this question helps you drop an idea entirely, but it actually suggests the opposite. One mistake many innovators make is they think that they get extra credit just for doing something original or uniquely difficult. Innovation is something different, surely, but something different that creates value for a customer and the company. And you want to find the quickest path you can to value creation. Follow the advice of the great Spanish artist Pablo Picasso, “Good artists copy; great artists steal.” Odds are someone in the world has already solved the problem you’re seeking to address in some other context. Inspiration might come from a different industry, country, or company, but when you find it, applying that approach to your problem can short-circuit innovation development times dramatically.
What can you do that few other companies in the world can do? The ferocious pace of entrepreneurialism makes it increasingly difficult for companies to innovate at the same speed as the market in which they participate. Speed alone is insufficient. Companies should seek to innovate better than the market in which they participate — by taking advantage of a trusted brand, unique access to a distribution channel, or proprietary technological know-how. Zeroing in on what makes you unique maximizes the chances of creating a powerful and compelling offering.

Commercializing Your Idea

What assumption are you making that, if false, would blow your strategy up? Every idea is partially right and partially wrong. Promising ideas often fail to make it to market because the innovators cannot find out what part is wrong and make adjustments fast enough. To speed their way to market, good innovators adopt the scientific method. They clearly identify the biggest uncertainties behind their idea and rigorously design and execute experiments to test their assumptions. And like good scientists, they study unexpected outcomes as much as expected ones.
How can you learn more affordably and efficiently? Experiments need not be complicated and expensive. A phone call to an expert can shine light on a critical operational assumption. Showing customers a rough mockup of an idea can give you an early read on their interest. Making some effort to seek simple and resource effective ways to learn may make the difference between successfully getting to market and running out of money before you ever do.

“Don’t just do something, stand there.” It’s a phrase that young medical students might hear to remind them that sometimes doing nothing (immediately) is the best course of action. The rush to take action before a root cause of a symptom is clear can cause more harm than good. While innovation should no doubt be pursued actively, taking the time to consider these and related questions can be a great way to focus activities and tilt the odds of success in your favor.

Strategic Humor: Cartoons from the March 2014 Issue

Enjoy these cartoons from the March issue of HBR, and test your management wit in the HBR Cartoon Caption Contest at the bottom of this post. If we choose your caption as the winner, you will be featured in the next magazine issue and win a free Harvard Business Review Press book.

“It’s neither new nor improved, but we could charge more.

Perhaps that would be a good differentiator.”

Crowden Satz

“It’s not exactly a retirement plan.”

Scott Masear

“Why hire me? Because I’m passionate about detergent brighteners.”

Crowden Satz

And congratulations to our March caption contest winner, Paul Nevels of Kingwood, Texas. Here’s his winning caption:

“To reverse the trend, we all need to be on the same rampage.”

Cartoonist: Paul Wales

NEW CAPTION CONTEST

Enter your own caption for this cartoon in the comments below — you could be featured in the next magazine issue and win a free book. To be considered for the prize, please submit your caption by February 13.

Cartoonist: Susan Camilleri Konar

The Best “Management Lessons” Story You’ll Ever Read

A Roll of the Polyhedral Dice Everything I Need to Know About Management I Learned from Playing Dungeons and Dragons Quartz

Such as: Often, the best candidate for a given job isn’t the person who's most skilled at fulfilling its primary requirement, but instead is a more well-rounded individual, a lesson learned from character creation in D&D, writes Christopher Mims: "A complete set of 'perfect' stats [in a new character] is vanishingly improbable, and most of the time you’ll have a mix of strong and weak ones." And: A diverse team is essential to survival, a point underscored by the impossibility of winning in D&D unless you have a warrior to beat things up and absorb damage, a wizard to fight magical foes and occasionally drop the hammer on something big, a cleric to heal your party members, and so on. The game, 40 years old this month, appears to be about Orcs and warhammers, but, says Mims, it's actually about the experience of growing older — and that's what's so appealing about it. "Its ordered universe...is catnip to teenage geeks who are trying to make sense of the adult world." —Andy O'Connell 

Wage WarsThe Techtopus PandoDaily

If you're interested in a compelling, robber-baron-esque narrative about how Silicon Valley’s preeminent tech companies conspired to drive down engineers' wages (duh, you are), look no further than this deeply troubling account from Mark Ames. Using court documents, Ames shows how top brass from Apple, Google, Intel, Adobe, Intuit, and Pixar ended up agreeing not to poach one another's engineers, thus causing stagnation in wages, and often for the specific purpose of maintaining their profit margins. In addition, there's a fair amount of bullying going on, with Steve Jobs in particular telling Google's Sergey Brin that "if you hire a single one of these people that means war." (Yes, the piece includes emails. A whole bunch of them.) Perhaps one of the more interesting characters in the entire probably illegal saga is Bill Campbell, Intuit's chairman, the co-lead director of Apple, and adviser to Google, who used his wide connections and ability to build trust to broker many of the "Do not recruit" deals. Google's Eric Schmidt called him "the definition of trust." Ames paints him more as "a scheming consigliere carrying out some of the drearier tasks that the oligarchs he served were constitutionally not so capable of arranging without him."

My favorite kicker: When HR recruiters made the ghastly mistake of reaching out to engineers at other companies, they were made examples of and fired. 

Second Chances (and First Ones, Too) South Korea Shuns Moms at Peril as Workforce ShrinksBloomberg

This data-packed piece follows the challenges of Cho Yoon Sun, South Korea's minister for gender equality, who is charged with a daunting task: helping the government meet its targets of creating 1.65 million jobs for women and pushing the female employment rate from 53.5% to 61.9% by 2018. Cho is facing a litany of challenges. For one, there are few women in companies’ top ranks. Hyundai has 246 executives; only one is a woman. Women represent 37% of the Korean workforce, but only 17% of managers (though, in a positive step, Samsung recently promoted 15 women to the executive level). And issues like sexual harassment and the cult of long hours and after-work drinks are still pervasive.

One of Cho's biggest goals is to prevent mothers from dropping out of the workforce. While she considers herself lucky to have been able to afford child care, most women aren't as fortunate. Companies with 500-plus workers, or with 300-plus female workers, are required to have nearby child-care facilities. In reality, only 40% do, a number Cho wants to raise to 70%. And there are programs, like one at Starbucks, that hire women who have been out of the workforce after having kids. Jeong Eun Suk, who quit her job after delivering her second child, says, "I was gripped by a sense of loss for the 10 years I spent working and had a tough time overcoming the feeling that I'd given up something so precious so easily." Jeong recently started a flexible management position at one shop. "I feel lucky to be given another chance," she says. 

Disruptor of the Year?The Key to SnapChat’s Profitability: It’s Dirt Cheap to RunWired

Any student of disruptive innovation can tell you that the key measure of how successful a new business is likely to be is not early volume, revenues, or number of customers, but unit profitability. And on that measure, argues Vijay Pandurangan in this intriguing analysis, the company to watch is Snapchat. To many, Snapchat’s business model remains a mystery: How can it make any money when it deletes the asset most social media companies are capitalizing on — its users’ data? The answer lies in Snapchat's costs, which Pandurangan figures are an order of magnitude lower than the $400 million a year he estimates Facebook spends to store and make available the 350 million or so images its users post each day. Advertisers really need only users’ metadata, and Snapchat can provide that using advanced infrastructure protocols without having to pay millions to store all those conveniently disappearing photos. (Apparently, the NSA uses a similar approach, strapped taxpayers may be grateful to learn). So Pandurangan calculates that Snapchat has the potential to serve up the same number of customers to advertisers as Facebook — at a mere $35 million a year. And that doesn't even take into account further cost savings it could employ as it scales up. —Andrea Ovans

Tigers on a Gold LeashThe Songs Behind Lorde's SongsForbes

The surprising thing about the reported $2.5 million value of the publishing contract won by 17-year-old Ella Yelich-O’Connor, who, under the stage name Lorde, won a Grammy last Sunday for Song of the Year, isn't that it's so huge. It's that the value isn't even bigger. As writer Zack O'Malley Greenburg puts it, "It’s always a risk [for an artist] to go with a smaller player in the business and to accept a smaller check." A smaller check? When Lorde's song "Royals" went nuts last year, music publishers were apparently falling all over themselves trying to win her business. But in November she signed with Songs Publishing for less than some of the industry heavies had been offering. The Columbia MBA who founded Songs Publishing a few years ago had sought to create an agile entity capable of outmaneuvering the industry giants, and he succeeded, at least in Lorde's case. The company says it thinks in terms of relationships, not transactions. It sees Lorde as a "decades-long artist" rather than as a short-term hit machine. Lorde apparently liked the sound of that, and she's now certifiably one of the true royals in the singer-songwriter world. —Andy O'Connell

BONUS BITSDigestifs

Lean In: The Movie (Slate)
How To Win A Football Prediction Contest: Ignore Your Gut
(Data Colada)
These Guys Build the World's Tallest Flagpoles for Authoritarian Regimes (Vice)

The Signals that Make Tech Start-Ups So Homogeneous

“Startups don’t have time for diversity.”

This statement, from an entrepreneur and investor, and a self-described man of color himself, is a succinct summation of one of the core elements of misguided thinking underlying the problem of homogeneity in the tech startup world.  But it also just scratches the surface.

When he made this proclamation in a room full of people working diligently to diversify the technology industry, it was both alarming and sadly somewhat expected. Saying that startups don’t have time for diversity is in many ways saying that product comes first, human beings second, and that diversity is more of an issue of eventually checking the right boxes than it is an issue of creating a place where people of a wide variety of backgrounds feel comfortable bringing their authentic selves to work.

While it is true that startups are often trying to beat the clock to launch and capture a segment of the market, that ticking clock is the exact reason why being thoughtful about diversity matters so much at the beginning.

As Stacy-Marie Ishmael of The Financial Times astutely pointed out, if a startup is not thoughtful about what type of organization they want to build when they are three white men, before they know it they will be forty five white men, and they will wonder why they are not attracting any significant numbers of women or people color to work at their company.

When a startup is not thoughtful from the very beginning about the type of company they want to build, what type of people they want to attract, and how they want to treat their employees, they risk falling prey to the subtle (and not so subtle) pattern matching, and copycat policies and behaviors that keep the industry homogenous.

It all starts with the hiring process.

If you are a white male hiring through the network of friends you made at your Ivy League school, then you are most likely going to find yourself hiring additional white males. If you have a team of white males and ask them to refer their friends, just by the nature of their network, they are more likely to refer people who are also white and male.

When women and people of color are then trying to decide whether or not to work at your company, your team page filled with nothing but white male faces isn’t going to send them the signal that this is a place where they would necessarily feel comfortable.

Then there are the other signals that convey to people from non-dominant groups that they may not be welcome. Consider what the following signals might say, for instance, to women considering working for your company:

Advertising that your corporate event will include women being on hand to fetch beer.
Listing on-the-job alcohol and video games as top office perks.
Using aggressive words like “warrior” or “ninja” in your job descriptions.

This is not to say that women don’t enjoy beer or gaming, or consider themselves badasses on the job. But consider whether you’re marketing to the majority of the technology industry — the same people everyone else is competing for — or whether you are reaching out to new (and more diverse) talent.

If a potential employee decides to look past the issues of homogenous “About Us” pages and gender-skewed job description language, they might then find themselves asking questions about benefits, leave policies, and expectations of face time, and it is here that the subtle hints often thrive.

There are startups, for instance, that serve dinner nightly at the office or that do team-building social gatherings on nights and weekends (hints that you probably don’t – or shouldn’t – have a family and kids to go home to). There are many startups whose personnel policies make no mention of maternity, paternity, or childcare leave (except where mandated to mention unpaid leave under FMLA) – often because the policy template that they received from their attorney (the same template being distributed to many other startups), failed to include those types of leaves in the first place.

Added together, it is easy to see how all of these signals—even those that seem subtle or innocuous—contribute to the ongoing lack of diversity of all types in the technology industry.

A skeptic might argue that things like foosball tables, beer fridges, and team dinners are essential parts of organizational culture. But while it is true that every company reserves the right to practice whatever (legal) rituals it would like, and that not every ritual contributes to homogeneity, startups who make the choice to blindly engage in rituals without considering their impact are setting themselves up to fall into the trap of creating workplaces that both lack diversity and fail to honor it as something more than a checkbox.

In the face of ample evidence that diverse workforces produce better results than homogenous ones, we can make an argument for diversity as both a business imperative and a moral imperative, but we will not make headway within the technology industry until we, in greater numbers, loudly challenge the notion that   thoughtfulness and diversity are things that we don’t have time for.

How Virtual Teams Can Create Human Connections Despite Distance

In a recent Unify survey of knowledge workers, 79% of respondents reported working always or frequently in virtual teams, but only 44% found virtual communication as productive as face-to-face communication.  The vast majority connected via email, phone, or conference calls even though 72% said video would make teamwork easier.  Only 34% of people use video to collaborate with coworkers. And 43% feel confused and overwhelmed by the mishmash of collaboration technology at their disposal.

I’m seeing a new generation of technology emerge that can make dispersed teams more productive than collocated teams.  Forrester Research’s Henry Dewing says some enlightened users are beginning to prefer to meet in their video and web conferencing platforms instead of in a physical conference room.

However, to make virtual teamwork work this well, you’ll need to move your team to a new set of behaviors, not just to a new generation of technology, with human engagement as the first priority.

The behavior gaps that keep virtual teams from reaching their goals fall in three buckets:

1.   Setting ground rules for managing virtual communications

2.   Aligning personal and professional goals

3.   Strengthening relationships to enable the candor required for true collaboration

Setting Ground Rules

Do a personal and professional check-in: While it’s common for employees who are co-located to chat about what’s going on in their lives, sharing a recent success at work or a personal story before a meeting begins, it’s much less common among virtual teams.

But this efficiency-driven approach to team collaboration overlooks something important: Humans are intensely social beings. They need to feel connected. Personal sharing is one of the easiest and most overlooked ways to create that connection, especially when staff are remote.

A personal/professional check in at the beginning of meetings makes people feel part of a team. It’s probably the easiest way to overcome the isolation that can creep in when people don’t work together physically.

Don’t allow multitasking:  Research shows that multitasking during conference calls is extremely common. In some studies, as high as 90 percent of people acknowledge they do other things during these calls, from a wide range of places, including the kitchen, the pool, and yes, the bathroom.

I can’t emphasize enough how important it is for collaboration that everyone be mentally present and engaged during meetings, not working on another project or checking email.  As a manager, if you set that as an expectation from the outset—and call on people often to share their thoughts—chances are good they will.

Limit mute whenever practical: Besides encouraging general disengagement, the dead air of mute kills any attempt at humor and eliminates the bonding value of shared laughter.

Getting Alignment

Melding personal and professional goals: Much as some business leaders would like to believe that people are motivated exclusively by the business’s long-range objectives and will selflessly devote their full energies to a project because that’s what’s best for the company, it’s just not so.

The more closely a leader can tap into and align her staff’s personal goals with the business goal, the more committed and engaged her people will be. For instance, an up-and-coming employee might be told that if a new project turns into a viable business, she’ll be promoted to run it. I’ve also boosted team engagement at clients by focusing on the mission employees and many organizations share to serve customers exceedingly well.

Making work more joyful by full engagement with the virtual project team should be one of the goals shared.

Striking the personal/professional life balance:  People are slowly becoming more comfortable talking about the new work/life blend that comes with working remotely.  “When you’re on a large conference call and a baby cries or a dog barks or a doorbell rings, people don’t make comments quite as much anymore,” says Forrester’s Dewing.

I’d go further than that. I’d recommend you focus for a moment on the bark, the cry, or the ring. Use it as a reason to engage in a way that goes beyond the initial “personal/professional check in.” Sharing about Spike the dog helps people bond, relax, and trust each other.

I know a very successful CEO who runs his company remotely—and readily admits he wears pajamas most of the morning. He doesn’t assume work is getting done because employees spend long hours in the office. The new work/life balance means that you do what you need to do at the time that’s most convenient. If that means taking your kid to the dentist at noon—or making a call to Singapore at midnight—so be it.

Creating Candor

We’ve all been in meetings where the real conversation only starts after the meeting ends. But shame on you if you’re one of those managers who’s responsible for creating a climate where employees don’t feel they can speak their minds.

Achieving candor is hard enough for co-located teams. It’s all the more challenging in a virtual environment. But make no mistake, candor is the #1 indicator of team productivity.

To keep the conversation candid.

Appoint someone to be the team’s “Yoda”: Add a bit of levity to meetings by turning to the Yoda of the day at critical points during the meeting and ask, “So, what’s going on here that nobody’s talking about?”

Reward naysayers: Give warm, generous praise to team members who aren’t afraid to speak their minds when everyone else appears to be in agreement on an issue.

Leverage confidentiality: During the transition to candor, it can be helpful to ask team members to share thoughts anonymously. Keep in mind that employees who are used to unresponsive managers will be watching closely to make sure the facilitator doesn’t subtly dismiss issues or minimize their importance.

As you work to make this transition, it’s important to keep in mind how deeply ingrained many human behaviors are. In the early days of the human species, if you weren’t part of a tribe, you risked being eaten by a predator. Forming groups is a core component of who we are. Trust me: No team will achieve greatness as individuals working independently.  We need to get people to let their guard down, to be more vulnerable and thus open to connection to their virtual tribe, which translates into “because I like you, I want to help you.”  That starts true synergy.  “I’m willing to make small compromises for you.” Not for some greater good, for you. And with greater openness to each other’s point of view we can bounce ideas off each other candidly and get some real innovation going.

Technology has too often been disruptive. It sets us on edge and discourages us from coming together. But I’m seeing tools leverage the relationships and discussion threads captured in team interactions over time to foster very human connections. Tech will help the baby crying become our team’s kid crying.

Simplify Outdated Corporate Processes

Unlike suburban housing developments or modern cities, organizations don’t grow with some sort of rational, master plan. They evolve naturally over time. In urban areas, this organic development leads to a chaotic mess of narrow, twisty, confusing streets and dead-ends instead of a broad, easy to navigate grid. Just think of old European cities (or even Greenwich Village in New York).

Organizations grow in a similar fashion. Processes and pathways that were once simple and easy to negotiate when there were only 10 or 20 people in the company, become complex, inefficient, and time-consuming when the company grows to 500 or 1000 employees. Each individual increase in process complexity may make sense, but in aggregate, they significantly affect performance. Your once-nimble company becomes a lumbering behemoth that has to appoint a committee to determine how many committee meetings to hold. Pretty soon, you’re reading Facebook posts about how tough it is to deal with you, and eventually, a competitor is eating your lunch.

Bulldozing an historic neighborhood to lay down a soulless grid is bad for a city’s ambiance, but it’s not bad for a company. In fact, rebuilding your processes from the ground up with a focus on simplicity is a powerful way to improve your competitiveness and energize your staff. Netflix, for example, eliminated all the administrative labor and financial expense that went into managing paid time-off. As described in Patty McCord’s recent HBR article, the company got rid of the standard policies and tracking system and instead simply relied on employees’ judgment:

When Netflix launched, we had a standard paid-time-off policy: People got 10 vacation days, 10 holidays, and a few sick days. . . . But then Reed [Hastings, the CEO] asked, “Are companies required to give time off? If not, can’t we just handle it informally and skip the accounting rigmarole?”

Netflix did something similar with their formal travel and expense rules. The company’s policy is five words long: “Act in Netflix’s best interests.” The elimination of the formal process and “expense account police” saved time and money.

Of course, these are HR-related policies. What about processes that are more central to a company’s operations, such as product development, customer service, or materials purchasing? You can rebuild and simplify these processes just as easily by mapping them and identifying ways to eliminate handoffs between departments. Here are three principles to keep in mind.

You’re not a small company anymore. Focus on the big picture. The product development team in a sporting goods company I worked with had to deal with elaborate engineering change orders (ECOs) for even the most basic spec changes. At one point in the company’s history, these ECOs were a valuable way to track modifications and ensure that they were agreed upon. But as the company grew and communication channels were formalized, they outgrew their usefulness: between the electronic and paper forms that had to be filled out and filed, their sleek product development process looked more like a barnacle-encrusted scow. The company simplified the actual ECOs and set a higher threshold for requiring their use. The result? The developers and engineers spent more time on their core functions, reduced the number of errors and miscommunications, and reduced product development lead time by one month.

Drive authority down into the organization. Processing chargebacks from customers was a time consuming ordeal for another client, requiring three separate approvals before the credit memo could be issued. At one point in the distant past, of course, these were processed much faster, with fewer sign-offs—but as the company grew, the desire for greater oversight created a sclerotic system that bogged down the entire process. After a redesign that put more authority in the hands of the customer service agent closest to the customer, process lead-time was cut by 75%. Moreover, the change actually improved oversight of the important few customers and shipments by improving the “signal to noise ratio.”

Do a reality check on your processes. The purchasing department of another client took orders placed by customer service reps (CSRs), entered them into a spreadsheet, sent them back to the CSR for confirmation, and then submitted them to the factory for production. When this process was established years earlier, it ensured that customer orders didn’t outstrip production. Major improvements in manufacturing, however, enabled the factory to produce exactly to customer requirements. We changed the process to allow CSRs to submit orders directly to the factory, freed up the purchasing department to focus on other aspects of production, and reduced lead-time by one week.

Remember: many (most?) of your processes aren’t the result of intelligent design. They’re not necessarily the best or most efficient way to get the job done. Redesigning them with an eye towards simplicity will yield enormous benefits to your employees and your customers.

People Who Join the Labor Force in Recessions Are Happier with Their Jobs

In a study of U.S. survey data from 1975 through 2008, Emily C. Bianchi of Emory University finds that people who entered the work force when the economy was faltering are more satisfied with their jobs in later years. For example, graduating from a university when the unemployment rate was 9.7% as opposed to 7.0% is associated with a 9% increase in one measure of job satisfaction. People who graduate in tough economic times are subsequently less likely to ruminate about how they might have done better and are more likely to feel grateful for the jobs they have, Bianchi suggests.

Research Shows Which TV Ads Are Likely to Make Multitaskers Buy

Over the last few years, consumers have increased, not decreased, the time they spend watching television content. This might sound like good news for advertisers, save for two important caveats. First, while attention time dedicated to TV content has been rising, this is not the case for people actually paying attention to the ads on the screen. Second, when consumers are watching TV they are increasingly dividing their attention between the TV set and other devices, particularly tablets and other mobile devices. A 2011 Nielsen Co. survey showed that as much as 40% of time watching TV is spent on such media multitasking activities, and it’s likely that this behavior has accelerated over the past three years.

While many advertisers are rightly nervous about multitasking, there could be new opportunities to benefit from this trend. My recent working paper with researchers Jura Liaukonyte and Kenneth Wilbur tries to pinpoint what, exactly, these benefits might be – and how they can be achieved.

It turns out there’s both good news and bad news when it comes to the answers: Our research found that, among multitaskers, certain types of ads are more (or less) effective in terms of driving TV viewers online. And in one of our most surprising findings, we learned that there is no single ad type can accomplish both the tasks of increasing the number of visitations to the website and the number of online purchases.

To come to these, and other, conclusions, we constructed a massive dataset of television advertising in 2010 (the year tablet sales skyrocketed). We also focused on five industries that represented $4.2 billion in U.S. TV ad expenditures and accounted for most of the e-commerce that year: Apparel, telecom, travel, pizza, and online services and content. To measure the effect of TV ads on online behavior immediately after an ad was aired, we matched TV advertising data with the website visits and online purchases of 100,000 participants on a second-by-second basis.

We also classified ads into four types:

A direct-response ad with a product-focus, intended to showcase particular products and features
An action-focused ad, intended to induce an action such as search, visit, or buy
An imagery-focused ad, which makes use of stunning images and sensory stimulation
An emotion-focused ad that engages by evoking specific feelings

The results: Among multitaskers, we found that the imagery-focus ads are the least effective of all four ad types in terms of driving online purchases. They don’t increase the number of people that visit the brand’s website and actually reduce the likelihood that TV viewers will momentarily purchase any product. Of course, imagery-focus ads are known to be among the most traditionally effective types of TV ads because they are good at engaging viewers with strong visuals. But it is precisely this effect on engagement that makes viewers pay greater attention to the TV rather than switching attention to a lower and self-paced media such as the Internet.

Among the best ads to drive multitaskers to the brand’s website are action-focus ads. It turns out those ads that urge people to go online, versus those that do not, actually accomplish their goal to a great extent. The downside is these ads are not more persuasive than other ad types at getting people to actually make a purchase. For some brands, action-focus ads can indirectly increase sales in the short term, particularly if the website is designed to complement the TV ad. This is the case of a Target ad urging people to go online. Within two minutes of the ad appearing on TV, there was a 30% spike in direct website visits by those who typed “Target.com” and indirect visits by those who used a search engine.

A significant portion of these incremental visitors made a purchase on the website during their visit.

Product- and emotion-focus ads carry similar impact, though emotion-focus ads are a bit more effective. Both types increase the number of purchases online, but also result in fewer total visits to the website. In other words, people who decide to visit the brand’s website are more inclined to purchase, but the ad itself does not increase a TV viewer’s desire to visit the website immediately. It turns out that a focus on product or brand can be persuasive when consumers eventually decide to shop, but it does not motivate multitaskers to act impulsively.

Importantly, no single ad type can accomplish both tasks of increasing the number of visitations to the website and the number of purchases.

So what does all this mean for advertisers? Well, like most things, it really depends on what product you are selling, your brand, your audience, and your strategic goals. If you sell online and have a reason to believe that you are advertising to a multitasking audience, then TV ads that were created to operate under high levels of attention, such as imagery-focus ads, will not work. This is the case for young viewers, as they multitask most of the time, and for older viewers, who multitask early in the morning and in the evening. In these cases, one should opt for action-focus ads regardless of the brand or industry.

The chart shows the impact of each type of ad on online sales for various brands studied. Brands such as Amazon and eHarmony, a dating website, have a stronger incentive to use particular types of ad content. For them, choosing the appropriate creative execution can mean the difference between higher or lower online sales. For brands in other industries, such as Papa John’s, a pizza delivery chain, the type of ad used doesn’t matter as much.

Importantly, advertisers can actually benefit from the increasing trend of consumers engaging in media multitasking by crafting more appropriate ads. Lower, or divided, attention is not necessarily bad news as long as advertisers target the most effective content to their audience, and use the TV ad as a springboard for consumers to engage with the brand online and ultimately make a purchase.

Getting Excellence to Spread

Bob Sutton, Stanford University professor, talks about his book, Scaling Up Excellence: Getting to More Without Settling for Less (coauthored by Huggy Rao).

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Every Leader’s Real Audience

You deliver a big public speech to a group of potential investors who can make or break your results. You prepare it knowing that it could be a milestone in the turnaround of your institution. But who else is listening most intently? Your own team of implementers. They couldn’t care less about ringing rhetoric quotable by future generations. They want to know whether to update their resumes or renew their commitment to the work.

U.S. President Barack Obama is a larger example of the position faced by many turnaround CEOs who must sell their agenda to stakeholders through public communications. They must rally their own troops first, before the promises they present have a prayer of coming true.

Obama’s 2014 State of the Union address was delivered before Congress and watched by a global audience.  He emphasized opportunity — the minimum wage, education for job skills — and U.S. competitiveness (manufacturing centers, and transportation and infrastructure investments). Regardless of whether you agree with the content, I was struck by the possible impact of the speech on turning around a demoralized executive branch. The true test of the speech’s effectiveness is not the public critiques immediately afterwards, but what its impact will be on his immediate team and thousands of key public servants. The speech had to lean toward them anyway, because his “Year of Action” is designed to bypass Congress. But if they did feel motivated by the speech, their energy and determination as they hustle to take action could even have an unanticipated, counter-intuitive consequence: Positive results, however small, could end up garnering enough public support to influences members of Congress to get back to work with related legislation.

Regardless of a leader’s level of influence (President of the nation, founder of a new venture, or head of a business unit) or the scope of the communications forum (a national television broadcast, a Q&A with reporters, or an advertising campaign), leaders must speak to the people who aren’t there in person but are hanging on every word.

These are the people who will carry out your agenda, and their motivation rests on what you say to the public. They must explain it to their family and friends. Their reputations are at stake as well as yours.

The best leaders convey four key messages to associates with their public communications:

“I care about your work. Your work is important.” Obama did this for his implementers by affirming, not denigrating, public service. Keeping the focus on employees’ work is why new General Motors CEO Mary Barra will talk only about cars, not herself, and The Weather Company CEO David Kenny returned science to the center of the company.

“I won’t give up, and you shouldn’t either.”  This is a variant of the tongue-in-cheek mock-Latin saying, “illegitimi non carborundum”  (don’t let the bastards wear you down). Opponents and barriers must be put in perspective: they exist, but they can’t stop everything. This is the message Obama was sending to his team when he said of the Affordable Care Act, with a bit of a laugh, “Let’s not have another 40- something votes to repeal a law that’s already helping millions of Americans like Amanda. The first 40 were plenty.” In the audience, you could see Secretary of Health and Human Services Kathleen Sebelius appreciating that message.

“Even in the worst circumstances, there’s something we can do.” Obama said in his speech, “America does not stand still, and neither will I,” of his plan take whatever actions he can that don’t require Congressional participation. Even if these actions are relatively small, I have proposed often that any action is better than none. Keep moving, and change is possible. Even small wins keep people motivated.

“I stand behind you. My job is to make yours successful.” This message is subtle, but it is implicit in the resolve that a leader projects in stating a plan that will work. Leaders must turn a long-term vision into a practical set of short-term steps that are credible — that’s the essence of turnarounds, as I show in my book Confidence.

There’s a little nuance to these statements. One mistake leaders can make is to act as if big public communications are all about themselves. It’s the Carly Fiorina trap: she put herself in HP ads soon after becoming the first woman CEO, while long-time employees fumed. The team takes the opposite position — they often think that communications should all about them. They will be sensitive to the number of “I’s” versus “we’s” that the leader uses.  Yet – and this is paradoxical – teams also want their leaders to be forceful and decisive in taking responsibility for improving the situation. This requires a few strong “I’s,” like “I will.” In this speech, President Obama, who has often been criticized for expecting that Congress pick up and flesh out his broad ideas, was a forceful user of “I will” — a good sign for the implementation of his agenda.

So how do you know when to use “we” and when to say “I”? It’s important to use “we” when describing positive accomplishments, and “I” when taking responsibility for stumbles and indicating resolve to make changes. The people on your team know the difference, and they’re listening carefully.

Leaders have been learning (though not fast enough) that their ostensibly private utterances and emails can break their careers.  Leaders also must understand that their public utterances can make their careers — if they remember their real audience.