Marina Gorbis's Blog, page 1475

Finding a Job When You’ve Been Out of Work a While

While the economic recovery has marched steadily along, job growth continues to be anemic (see the latest Bureau of Labor Statistics report). So there are still plenty of people out there looking for work. How can they find the right match in this market?

Finding a new job is a lot like finding a new girlfriend or boyfriend, I would argue. Just as modern romances often begin on big websites nowadays, so do new jobs. While you might not think an economist’s input is going to help you find romance (though see my tips here), I would argue the same principles hold if you are looking for a job.

Today, I will focus on the idea of “adverse selection” – or hidden information. In a dating context, consider a person who has been on a dating site a long time or a middle-aged person who has been single his or her whole life. What does this mean? It could mean the person has had bad luck but it could also mean that the person is not capable of maintaining a long-term relationship. For better or worse, people draw inferences along these lines when choosing mates. The old adage “where there’s smoke, there’s fire” may or may not hold for any given person, but the assumption that it holds is enough to kill a relationship.

It turns out that firms draw exactly the same inference all the time when picking employees. Long-term unemployment becomes a self-sustaining situation because people who are out of work a long time are assumed to be bad employees. You can lose your job at the height of a recession, go six months to a year looking for work as the recession continues, and then you have to face the fact that employers will see you as “damaged goods.”

Many job listings explicitly state that people who have been out of work for a while should not apply (or at least that currently employed people are preferred). One recruiter told the New York Times that his clients are “looking for someone who’s gainfully employed, who’s closer to the action.”

A recent economic study (with findings similar to other studies) looked at the response of employers to (fictitious) resumes that were identical other than the length of unemployment the person was experiencing. The likelihood of an “applicant” being called for an interview went down dramatically with the time since the person last worked. After eight months of unemployment, the chances of getting an interview were about 45% less than after one month of unemployment.

Firms also draw inferences based on the way employees lose jobs. Another economics study grouped people who lost their jobs into two categories—those whose employer had permanently shut the facility and those whose employer had downsized but continued operations. They showed there is less stigma to losing a job when a company shuts down. These people were just in the wrong place at the wrong time and there is no reason to think that they were bad at their jobs, with the possible exception of those who ran the company. People whose firms continued operating, on the other hand, were assumed to be less productive. As a result, they were out of work longer and they were reemployed at lower wages.

There are several take-aways from these examples and studies.

Look for a new job before you lose your old job. You will never be in a stronger position to find a job than when you have one. (Granted, this only works if you, you know, have a job.)
Don’t lie on your resume, but try to put a positive spin on periods of unemployment (or be vague about them, if feasible.) Read over your resume and ask yourself what inferences and assumptions people will make about you. Then spend some time figuring out how to make those assumptions as positive as they can possibly be.
Do something while you are looking for your dream job. It’s better to be working (or otherwise productive in a way that will reflect well on your resume) than to be spending all your time looking for the perfect job. After all, by the time you find that job, they may not give it to you if you have been out of work a long time.

Struggling at the (Computer) Games of Life

Ever since I first heard about Knack, the Palo Alto startup that makes computer games designed to measure whether you’re likely ever to amount to anything, I knew I had to play the games and find out whether I’m likely ever to amount to anything. But I was also scared, for two main reasons:

1. The games might get it wrong. Other than an occasional round of Mario Kart Wii, I never play video or computer games. As a result I’m no good at gaming. My ineptitude would, I feared, work against me when I played Knack’s games, preventing all my wonderful qualities from shining through. Knack’s CEO and founder, Guy Halfteck, assured me that this wouldn’t be the case. “In our data-analytic work, we’re actually factoring out your game-play experience,” he promised. Did I believe that? Well, mayyybe. But my really big fear was that:

2. The games might get it right. What if playing a computer game for 10 minutes really can deliver a spot-on assessment of one’s strengths and weaknesses? Along with identifying your natural leanings a la Myers-Briggs or StrengthsFinder, Knack’s games are supposed to measure plain old aptitude. And you can’t really study for them. Basically, they leave nowhere to hide.

I dwell on these fears because these games could end up mattering, a lot. In recent HBR.org posts, both Andy McAfee and Michael Staton suggested that Knack game results could supplant college degrees as signals of employability. In an article in the December Atlantic, Don Peck described Knack’s success in identifying successful idea generators at Royal Dutch Shell, and depicted such game-based assessments as part of a revolution in people analytics that would transform hiring over the next decade.

I first met Halfteck at a conference late in 2012, and got him to send me a link to one of his company’s games last spring so I could play it and have my performance assessed. Then I hemmed and I hawed, and hawed and hemmed. It wasn’t till December, spurred by a promise to a colleague to write something for HBR’s Talent and the New World of Hiring Insight Center (promise since broken, as the Insight Center ended a couple weeks ago) that I sat down with my laptop one evening and fired up Wasabi Waiter.

The game involves serving different meals to guests depending on the expressions on their faces. I initially couldn’t figure how to move my waiter (turns out you just have to click where you want him to go), and my 14-year-old son walked over to check what was going on. He helped me on the first round, then took over, to the great relief of the characters in the game, who finally started getting the meals they wanted.

It was easy to see some of the things the game was measuring. There’s lots of research relating the ability to recognize facial emotions and social skills. The hectic serving and disposing of plates seems to be about showing how you handle multiple tasks and juggle priorities. The various unannounced features allow a player to display resourcefulness and curiosity. And Halfteck claims that every little pause and click a player makes conveys some kind of information.

Since my son had assumed my Wasabi Waiter identity, I asked Halfteck to send me another invite. In the meantime, I played a Knack game designed for iPhones and iPads, Balloon Brigade. This time the player’s job is to fill up and lob water balloons — initially to water flowers, later to extinguish hordes of marauding, flaming imps. Here’s what it looks like:

The seeming straightforwardness of Balloon Brigade restored my confidence. My balloon-filling contraption never caught fire. I extinguished lots of flaming imps. There were things I never figured out — such as what the difference was between the two buttons at the bottom of the contraption (and as I look at the above image, I see a third button that I never noticed while playing). But I was starting to feel like less of a failure.

So I took on Wasabi Waiter again. It went okay. I did get flustered when my restaurant got crowded. But I was able to serve most of the people most of the time. My customer-satisfaction ratings improved. I did, however, completely misread a couple of customers’ faces.

A few days later, I got this report from Knack (HBR’s art department has moved the images around a bit to fit better in this space and switched them from green to blue to fit with our house style, but they are otherwise unchanged):

The scores, Knack said, were percentiles calculated with reference to a sample group representative of the “general adult population of employees and job-seekers in the United States.” It was grading on the curve, thus. I clearly wasn’t outstanding at anything, but I was pretty good at “task efficiency” and worst at “social intelligence.”

That sounded a little like I should be working on the assembly line at a factory where I’m the only assembly-line worker. When I asked Halfteck to elaborate, he emailed back that task efficiency actually “predicts your competency in reasoning logically, thinking critically, processing novel information quickly, and solving problems.” Okay, that sounds better — in a later conversation he termed it “cognitive throughput.” My low social intelligence score, though, “means that jobs that involve frequent interaction with clients, subordinates, or others will not be the best match.” And my “signature score” of 61, Halfteck wrote, means I’m “in the top 40% in terms of employability in professional/knowledge jobs.” Wow! The top 40%!

I then forwarded the report to my current boss, HBR editor-in-chief Adi Ignatius, and a former boss, recently retired Time Inc. editor in chief John Huey, to find out if they thought it rang true. I included Halfteck’s explanation of what “task efficiency” meant, but my high score there still was something of a red flag. Wrote Huey:

I would say “efficient” is among the last words I would choose to describe anything about you. Au contraire, your inefficiency seems to me the only thing that holds you back.

He then wrote a bunch of nice things about me that seem too self-congratulatory to repeat here, concluding, “Task efficiency? Bah humbug!”

Adi (sorry for the inconsistency, but in my world Huey has almost always been referred to by his last name and Adi always by his first) agreed that while I was good at reasoning and thinking and all that, I didn’t always do it quickly but instead “tend to get bogged down in process and in longer projects.” (This is undeniable. I wrote a book once. It was supposed to take me two years. It took more than five.) Adi also thought I was perfectly conscientious and gritty, whatever that means. But he did conclude with the warning:

Since you only got a 61 overall, we probably need to talk offline about HBR’s ROI on JF.

I think that’s a joke. But that 61 did bother me. Back in the days when I took standardized tests, my percentile ranking was a lot higher than that. So I went back to Halfteck, who by now must have been feeling a bit like he was playing guidance counselor to a very old high schooler, and asked what might explain the difference. It was a combination, he said, of

Knack simply being better than SATs and such, “because what we measure is actually richer; we can look at other vectors of optimization.” (Of course he’d say that, but there are lots of questions about the predictive usefulness of current standardized tests.)
The SAT and similar tests giving more weight to education than Knack’s games do.
The usual cognitive decline that comes with aging.
The fact that “we’re still working on making the measures more robust.” In other words, Knack could be wrong.

In other words, basically, I’m one out of four. And in general, I have to admit that my scores didn’t feel nearly as off to me as they did to Huey and Adi (and you’ll note that neither of them said anything to dispute my low “social intelligence” marks).

I spend most of my days reading and writing in near-solitude. That is, there may be others around at the office and home, and I do meet people for lunch and do interviews in person or over the phone. But most of the time it’s me and a computer or iPad or book. I used to have a job where I went to lots of meetings and had a few people who reported to me, but I begged to be relieved of that and, later, to move 200 miles away from my colleagues (I’m now the lone editorial employee in HBR’s advertising sales office in New York). I think I am pretty curious and open-minded, so that score makes sense. As for risk, in my career I have worked for four large and stable media companies (stable when I worked there at least, except for my last few years at Time Inc.) and America’s oldest and the world’s richest university. That sounds risk-intolerant to me. If lacking grit means I go out of my way to avoid trying, unpleasant situations, that sounds like me, too. I’m not sure what to make of those conscientiousness and stability rankings, but in general Knack’s assessment does seem to be directionally correct. And to come up with all of that by simply having me play games for 10 to 15 minutes is staggering.

Halfteck, a lawyer and economist with multiple Ivy League degrees, says he decided to found Knack after going through a months-long interview process for a job at a hedge fund, only to be turned down. ”The feedback they gave me didn’t make any sense to me,” he told me. “I was very frustrated because I thought I had the potential to be a leader at that company.” That kind of frustration with current hiring processes is pretty common, among both job seekers and those doing the hiring. Anything that could shift things in the direction of matching talent better with jobs, as Knack’s games probably could, ought therefore to be applauded.

Except that … what if these game assessments were really good — almost perfect at predicting job success. And what if every employer used them? Maybe Halfteck would have gotten that hedge fund job, and never started a company. Then where’d we be? Disappointment and failure make us better and stronger, right?

“There is value in serendipity, there is value in randomness,” Halfteck said when I ran that argument by him. “The fact that our systems are not perfect is a good thing.” But what about, he went on, the surely far larger numbers of people who didn’t start companies after failing to get jobs they would have done well in? What about the gains to society from those who know from an early age what they want to do and are contributing to their fields in a big way by their 30s (presumably before their cognitive throughput starts slowing down)? Shouldn’t we want more of that?

Yeah, we should. And all indications are that we will be getting more, thanks to Knack’s games and countless other coming improvements in talent analytics. I’m just unclear on whether I should be sad to encounter this revolution in how people are matched to their jobs so late in my career, or grateful to have been allowed to do so many cool things over the years despite my now-obvious mediocrity.

An Activist Investor Lands in Your Boardroom — Now What?

Activist investors, though neither barbarians at the gates nor corporate raiders, can still seem very unwelcome. Anxiety, fear, even dread are among the predictable reactions in the executive suite and boardroom when they unexpectedly appear.

But as we have suggested elsewhere, activists are here to stay, and are increasingly prominent players on the equity landscape—sometimes even inside the company boardroom. More than 200 activist-investor initiatives hit companies in 2013, a seven-fold increase over a decade earlier.

Contrary to the adverse experience of some governing boards, activist investors can actually prove to be a leadership asset on the board rather than a disruptive force—providing the boardroom is well-managed and led. We have especially come to appreciate this fact from the experience of one major company and its successor—Motorola and Motorola Solutions— that have had more than their share of investor activists at the table in just the past five years.

Founded in 1928, Motorola diversified over the decades from car radios into a host of communication technologies, ranging from equipment aboard Apollo 11 to the best-selling RAZR mobile phones. But Motorola’s markets were transforming in the mid-2000s, and chief executive Greg Brown and his board decided in March 2008 that the company should be split in two: Motorola Mobility would take its mobile phones and related devices, and Motorola Solutions its mission-critical data and communication products.

It was the directors’ decision to make, but it was one helped to catalyze into reality by Carl Icahn. Founder and primary owner of Icahn Enterprises, Icahn had been tagged a corporate raider for his hostile takeover of TWA in 1985. But in recent times a better sobriquet has been that of activist investor.  He acquired large blocks of stock in companies as varied as Apple, Biogen, Time Warner, U.S. Steel, and Yahoo, and then shouldered his way onto the boards of some.

After Icahn Enterprises initially acquired a 4 percent stake in Motorola in 2007, the company invited Icahn allies Keith Meister and William Hambrecht onto its board in April 2008, shortly after directors had approved the breakup. As Brown explained to us, he believed in Motorola’s separation, he had recommended it to the board, and he was clearly ready to do it. Because it was the “mother of all decisions,” it was also one whose execution could have been slowed or even stalled by its own gravity.

Here is where the activist voices came in, supporting the separation and facilitating its execution. While the breakup was an historic action that Brown and the board had concluded was essential, Icahn’s representatives helped enable Brown to achieve the parting.

Google acquired Motorola Mobility in 2011 for a better than 60-percent premium, and Brown remained as chair and CEO of Motorola Solutions, overseeing its 23,000 employees and $8 billion in annual revenue. Amply rewarded for their activism, Icahn and his allies exited the boardroom, but a new activist investor soon came knocking. It also sought a seat on the board, primarily concerned that the firm’s intrinsic value had still not been fully appreciated by investors.

ValueAct Capital, a San Francisco hedge-fund with more than $11 billion under management had made a habit of investing in a limited number of companies that appeared undervalued or not fully understood by investors—and it now wanted into not only Motorola’s stock but also its boardroom.  ValueAct acquired nearly 6 percent of Motorola Solution’s shares and later upped that to 10 percent.

When ValueAct called to propose a board seat, Brown was surprised. He had not anticipated another activist joining the board so soon after one had left. As Brown thought about it and warmed to the idea, his attention turned to the activist’s potential contribution in the boardroom. Would the new activist be strategically aligned and prove to be a good fit? Would the activist bring the kind of expertise and experience in working with management that was essential for any new board member?

Brown conducted the due diligence required of a director candidate. A partner with ValueAct, Bradley E. Singer, looked very appealing with a good track record of value creation.  He had earlier served as chief financial officer of two publicly-traded companies—Discovery Communications and American Tower Corporation—and would bring additional financial experience on capital allocation. Singer came on the board in October 2012. From the inception of Motorola Solutions stock at the end of 2010, its price rose by some 90 percent over the next three years, roughly twice the rise of the S&P 500 benchmark.

Greg Brown reports that the investor activists who have served on his board have all had an affirmative impact on his firm’s performance. Not surprisingly, other company leaders with activists at their gates have since reached out to him, and Brown would pose two questions to those who are considering whether to bring an activist in from the cold:

1. Are the firm’s strategy and activist’s agenda well aligned?

2. If the strategy and agenda are aligned, will the activist add an expertise that the board’s needs, and will the activist work well with the board’s culture?

Activist investors need not be a short-term extortionist nor a wrecking ball in the boardroom, and from Greg Brown’s experience at Motorola and then Motorola Solutions, we have a proof of concept. Brown cautions that each engagement with an activist must be treated as unique. But we also appreciate from his several experiences that activist investors—when well-vetted and well-aligned in a well-led boardroom—can function in ways that private-equity principals have long served in their target boardrooms.

In doing so, activist investors are not just benefitting from a company’s leadership. They are also contributing to it, a new force that is transforming boards from largely ceremonial into shareholder monitors and now into company leaders.

Dennis Carey and Michael Useem are co-authors with Ram Charan of Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, HBR Press, 2014.

Investors May React Emotionally to Corporate Responsibility

In an experiment, graduate business students who studied a fictional retailer’s finances valued the company at $25.92 per share if they were told it had an above-average record on such corporate-responsibility issues as labor and the environment, and just $19.14 per share if its performance on those measures was said to be below average, according to a team led by Mark E. Peecher of the University of Illinois at Urbana-Champaign. But the valuation gap disappeared when the participants were encouraged to think carefully about the company’s CSR, suggesting that the high valuations in the above-average case were “unintentional” and based on emotions. “One wants to avoid being overly swayed by” CSR, the researchers say.

The Cultural Perils of Clockwatching

Although I have researched cultural differences for many years, it is only recently that I have come to see how my American obsession with punctuality and clockwatching can sometimes lead me astray. The truth is, time may be of prime importance in some cultures, but in others it is firmly subordinated to the needs of the moment.

Let me share two experiences I had that brought this truth home to me.

I was to give a keynote speech in Denver, Colorado, to a group of approximately 500, mostly American, managers. The afternoon before the event, Danielle, the conference organizer, had shown me a stack of cards she would be holding in her lap during my 40-minute talk. “I’ll hold up a sign every ten minutes,” she explained, showing me cards that read “30 minutes,” “20 minutes,” and “10 minutes” in bold black characters. The sequence concluded with “5 minutes,” “2 minutes,” and “0 minutes.” It was evident that the big black zero on the final card meant in no uncertain terms that my time was up.

I understood Danielle perfectly. She is a typical member of my (American) tribe, and I was very comfortable with the idea of monitoring each minute. My speech went beautifully and my American audience was suitably appreciative.

A few days later I was dining with Flavio Ranato in a restaurant overlooking Brazil’s fifth-largest city, Belo Horizonte. We were planning the presentation I would give the next day to a large group of South Americans. “This topic is very important to our organization,” he told me. “The participants will love it. Please feel free to take extra time if you like.”

I didn’t quite understand, as I had already tested my presentation with the I.T. support person, and the agenda was already printed. “I have 45 minutes scheduled. Could I possibly take an hour?” I wondered out loud.

Ranato responded with a shrug: “Of course, take the time you need.”

Uncomfortable, I decided that my talk should last 60 minutes, not 45. I went back to my hotel room and adapted my presentation accordingly.

The next day at the conference, I noticed immediately that the agenda on the door still said I had 45 minutes. So I sought out Ranato in the crowd. “I just want to make sure I understood correctly,” I said. “Did you want me to take 45 or 60 minutes?”

Ranato just laughed. “Do not worry, Erin,” he reassured me. “They will love it. Please take whatever time you need.”

“I will take 60 minutes,” I replied.

When my presentation began (after a number of unanticipated delays), the audience was boisterously appreciative. During the Q&A session at the end they waved their arms to ask questions and provide examples. Carefully watching the large clock at the back of the room, I ended after 65 minutes.

Ranato approached me. “It was great, just as I expected. But you ended so early!”

Early? I didn’t get it.

“You should have gone on longer! They were loving it!” he insisted.

Later that evening, Ranato and I had an enlightening discussion about our mutual incomprehension.

“You gave me 60 minutes. To me, it would be disrespectful if I took more time than scheduled without getting explicit permission,” I explained.

“But we are the customers,” Ranato responded. “We are paying you to be here. If you see that we have more questions, isn’t it simply good service to extend the presentation?”

I was confused. “But if you haven’t explicitly told me, how do I know that’s what you want?”

He looked at me curiously, as it started to dawn on him how much of a foreigner I was. “They were so obviously interested. Couldn’t you tell?”

The impact of differing attitudes toward time can be enormous. The assumptions Ranato and I made about scheduling caused us to have completely contrasting definitions of “good customer service.”

No matter what country you come from, you want to keep your customers happy. Understanding how your international clients think about time — and adjusting your expectations accordingly — is critical to doing that successfully.  And while people in every culture want you to be both structured AND flexible, in some cultures — such as the German, Dutch, British, Danish, Australian, and my own American cultures — we tend to value structure over flexibility. But in many of the world’s fastest growing countries, such as Brazil, India, Indonesia, Russia and Nigeria, there is much more emphasis put on being flexible than on being structured.  In these cultures strongly emphasizing punctuality signals an inability to adapt and even a lack of priorities.

So from now on when I give a presentation in one of these, I give myself a good talking to before I arrive.   “Adaptability over punctuality” I remind myself.  I try to ignore the clock and focus on giving whatever the client seems to want at that moment, no matter what we agreed on beforehand.

The Key to a Better Board: Team Dynamics

The belief that there is a direct connection between the board of directors and organizational success has been gaining ground lately, evidenced by the pressure shareholder activists have been exerting on boards for transparency as well as the “zombie director” movement to remove underperforming directors from boards.

But research into what actually makes for a better board — and ultimately, a more profitable organization — remains surprisingly scant. As a result, most companies rely on the “same old” approaches to screening for board directors, recruiting friends and others who they believe have appropriate experience and expertise.

There may, however, be a better way of not only screening for appropriate board directors, but managing the board’s interactions to generate economic value. My recent research provides evidence of what directors (and academics) have intuitively known for years but have been unable to verify — namely that the quality of board members’ interactions are crucial to board success. In an earlier study described on hbr.org, I found that board members who didn’t know each other before joining the board were more likely to engage in productive cognitive conflict. This finding helped craft my subsequent research inquiry: What impact does board dynamics have on financial outcomes?  My research provides strong evidence supporting three findings:

“Cultural intelligence” of individual directors, or their predisposition to working well in teams, is critical in generating high-quality team dynamics (more below);
The quality of board-level team dynamics is highly correlated with firm profitability; and
Boards that are able to function effectively as a team have an 800% greater impact on firm profitability than any one well-qualified board director — in other words, and consistent with Aristotle’s observation, the whole is greater than the sum of its parts.

I measured board dynamics with a new 30-item Team Dynamic assessment tool developed by Tony Lingham, an associate professor at Case Western Reserve University’s Weatherhead School of Management, where I’m working on my doctorate. I surveyed 182 randomly chosen directors who, between them, served on the boards of 572 U.S. firms and had an average of 12 years of board experience. I asked them to rate their board’s interactions along ten behavioral attributes — engagement, active listening, individuality, relationality, solidarity, understanding, action, planning, power and influence, and openness. Then I asked them what their boards’ interactions in those areas would have to be like for them to be maximally effective. The diagnostic tool measured the gap between those two scores, and I found that boards with smaller gaps between the current dynamic and the maximally effective dynamic were more effective and their companies more profitable than those boards where the gap between current and desired dynamic is high.  At this point, I have personally worked with over 25 board teams, and the results are consistent — improve dynamics and overall board performance, creativity, innovation and satisfaction are enhanced.

The Team Dynamic assessment is a proprietary tool offered by Lingham’s firm, Interaction Science. I’m currently testing whether a similar diagnostic offered by Team Coaching International delivers equivalent results. Specialized team coaching can improve the dynamics of teams of all kinds — as yet unpublished research by Lingham shows that a single, two-hour team coaching session designed to address the gaps identified by the team diagnostic assessment can improve team dynamics scores  from 48% to 191% within one month.  These improvements proved to be sustainable over time.

To measure a director’s predisposition to working well in teams, I turned to the cultural intelligence assessment originally developed by Purdue University’s P. Christopher Earley (see “Cultural Intelligence” by Earley and Elaine Mosakowski in the October 2004 HBR). The questions I asked were drawn from the 20-Item Four Factor Cultural Intelligence Scale published by the Cultural Intelligence Center. CQ grew out of the concept of emotional intelligence, and appears to more applicable to team interactions than the more didactic manager-employee relationships targeted by EQ. CQ assesses a person’s ability to make sense of unfamiliar contexts and “fit in.”  What I found was that board members’ CQ scores were a much stronger predictor of boards’ team dynamics, as measured by the team assessment tool, than their professional qualifications or their social/business networks alone.

The lessons here are pretty clear. Boards can improve their performance by focusing on team dynamics. The key steps to take are:

Determine your board’s dynamic.  If it’s healthy, great!  If it’s weak, there’s work to be done to best position the board to meet its fiduciary responsibilities — that is, to have a positive bottom-line impact.

Rethink your recruiting criteria.  My prior research showed that recruiting “strangers” to boards tends to generate higher levels of governance quality. This research implies that boards should screen directors for CQ to ensure that the director has the skill and motivation to work well with the existing board.

Get team coaching.  If there are gaps in your team dynamics, team coaching really can help. Transforming a weak board to a strong board is not investment-intensive, and the benefits are significant.

After Your “Daddy Days” End

What’s not to like about paternity leave? So-called “daddy days” offer precious time to bond with a new baby, cement new household routines, and lay the foundation of a family’s life.

But what happens when paternity leave ends? Dad returns to a workplace where the norm of the ideal worker is one who is dedicated, unencumbered, and happy to work long, inflexible hours. And often the family defaults to an arrangement where mom shoulders the baby’s needs – especially if she’s still at home – despite dad’s effort during paternity leave. Because all-or-nothing workplace cultures prevail, mothers often end up feeling like single parents, an outcome rarely acknowledged. Further, those long work hours for fathers sometimes push mothers out of their jobs in the paid labor force. And even if mom hangs in there, she faces the real threat of overload or becoming maxed out by the second shift of housework and child care, and the third shift of tending to family emotional needs and her own mental task of holding everything together. To make matters worse, a man who doesn’t dig deeply into his new role of father, as much as his wife expected, can expect her to love him a little less.

What to do, then, to prevent new parents from reverting to ingrained, gendered behavior patterns, replete with disappointment, exhaustion, derailed careers, and worse? One solution is for dads to make use of flexible work options offered by employers, so they can continue providing their families daddy hours after daddy days end.

A recent survey of 866 adults by Harris Interactive for Mom Corps (a talent acquisition firm) found two-thirds reporting their companies would accommodate a request for a flexible work schedule to take care of kids, or for other reasons. In fact, more men than women (50 versus 44 percent) said they would consider flex work options (flexible hours, part-time, contract work) instead of a full-time, traditional-hours job, in order to better achieve their needed and desired work-life fit. More than two-thirds of the men included flexibility in their list of “most important” considerations when looking for a new job and deciding where to work. Indeed, 43 percent of them considered quitting or had quit a job because it wasn’t flexible enough. Another study shows the idea of working flexibly to create work-life balance gaining in popularity – so much so that even male senior executives in Fortune 500 companies said they would forgo pay for it. There are like-minded men at the other end of the career spectrum, too, as I found doing research for The Custom-Fit Workplace, young men searching for their first jobs and still only anticipating fatherhood, but including hours flexibility and paternity leave in the job attributes they consider necessary.

It has long been the case that workers hesitated to ask for flexible options, because they felt it would hurt their chances of advancing in a workplace. There’s good news, though, on this front. Research by Alison Konrad and Yang Yang, published in the Journal of Organizational Behavior and honored with the 2013 Kanter Award, finds that people who use flexible work options are promoted more than others. This result surprised even the authors, given prior research. Various studies have shown that parents who signal their need for family-friendly accommodations (such as flexible work hours, shifted schedules, and parental leave) are stigmatized, with implications for their raises, bonuses, and promotions. Konrad and Yang conclude, however, that “the ongoing positive effects of conservation of time and energy resources for employees outweigh the initial short-term negative effects of signaling and stigmatization.” They believe the flexible work options facilitate a productive process whereby people with lower stress and richer home lives perform better at work. (Indeed, a large body of research shows that using work-flex enhances job motivation and performance.) They also suggested a possible correlation between people who signal their need for flexibility and people with higher promotability: both might stem from underlying, desirable strengths in taking initiative, self-management, and commitment to getting work done well.

With the daddy hours provided by flexible working, new families can continue molding the structure and roles that parental leave initially made possible. Fathers can spend meaningful time parenting their children over the long haul of nearly two decades, not just a few days or weeks bonding with them as infants.

Flexible work arrangements offer another benefit, too, according to economist Claudia Goldin. In her presidential address recently to the American Economic Association, she pointed to its potential to close the pay gap between men and women. Her extensive research shows that while the last century saw “a grand gender convergence” – with the differences between men and women narrowing in labor force participation, paid hours of work, hours of work at home, life-time labor force experience, occupations, college education, and earnings – that convergence process has lately stalled. Since the 1990s, research has found no closing of the gender pay gap, even when considering workers of the same occupation and age. Why? Goldin’s research shows that “hours of work in many occupations are worth more when given at particular moments and the hours are more continuous.” Goldin proposes that employers stop disproportionately rewarding people who work particular continuous segments of time. Instead, if total hours worked are the same, pay the same. She sees some progress toward this goal in some industries—science, technology, health care—but asks for more, challenging the private sector to offer flexible work hours free of wage penalties to both mothers and fathers patching together a real presence in their children’s lives.

After all, when mothers earn more, pressure lifts from fathers to replace those lost wages by working during what could be daddy hours. Bigger paychecks for wives give husbands more power to choose jobs and careers that offer flexibility. If dads use more hours to care for those they care about, they can demolish outdated norms of masculinity and work-flex stigmas – and get more hugs at home. Everyone wins.

How an American Express Executive Drives Growth

As group president of enterprise growth at American Express, Dan Schulman is trying to expand the brand to serve non-affluent customers who he says are paying too much for existing financial services. Prior to joining American Express in 2010, Schulman was CEO of Virgin Mobile and Priceline. Excerpts:

HBR: Why did you decide to come to Amex?

Schulman: The global head of human resources at American Express was on the board at Virgin Mobile, where I was CEO. After we sold Virgin Mobile to Sprint, he suggested I talk to Ken Chenault, the CEO of American Express. In our first meeting, Ken talked about all of the changes that could potentially sweep through the financial services industry. Specifically, he saw that the advent of digital technologies was going to fundamentally alter the way people conduct commerce, pay for things, and manage and move their money. Ken believed that bringing in somebody who had experience in mobile, software, and telecom—and who could come to the  payments industry with a fresh eye and really think about things without any of the history—would be helpful to American Express. For me, it was a great opportunity to leverage an iconic brand and some incredible assets to try to imagine what a new future of financial services might look like.

What have you accomplished so far?

It’s important to understand the context. Three years ago there was a lot of hype around how people were going to start utilizing their smartphones as a payment method—you’d tap your phone at the point of sale to make a payment. It was a technology-driven form factor. Instead of thinking about technology for technology’s sake, we studied the real consumer pain points in the market. There’s a group that we call the “new middle class”—it consists of 100 million Americans, and 2.5 billion people across the world, who live on the edges of the financial system. They’re unbanked or under-banked or, as we call it, unhappily banked. The things we take for granted—cashing checks, paying bills, putting money away in savings—are incredibly difficult for them to do. There’s a saying that “It’s expensive to be poor,” and it really applies to these segments of the market. My team and I tried cashing checks at check-cashing places, and paying bills by money order. It’s incredibly inconvenient and time-consuming—it’s practically a part-time job just to manage and move your money.

One way we tried to address this is with a product called Bluebird that we launched in partnership with Walmart.  It’s an alternative to traditional banking products and is built on our Serve software platform that allows people to load money into a digital account in any of 15 different ways. You can direct deposit a portion of a paycheck. You can make deposits at Walmart cashiers. You can take a photo of a check and deposit it. Once you have money on our digital platform, it works as a prepaid card. You can buy goods online and offline. You can withdraw cash from ATMs, many of which don’t charge a fee. You can pay bills. You can set up a savings plan. We have over 1 million Bluebird accounts, and over $1 billion has been loaded onto this product. More than 85% of Bluebird customers are new to American Express, and half are under age 35. So it is expanding our franchise. We are moving from being an “exclusive” to an “inclusive” brand.

 American Express CEO Ken Chenault describes your unit as a start-up within the company. What’s the key to succeeding as an entrepreneurial unit in an older business?

I’d offer two key lessons. First, don’t define the battle as “old” versus “new.” Too many people go into existing organizations and define success as recreating what is there. To be successful as a startup organization within a large, established culture, you really need to think about how you leverage the assets that are there. For us, it’s our network, our relationships with merchants, and our fraud and risk capabilities. The power of being a startup within a big company is that you can take advantage of those resources and assets.

The second thing is you need to bring in new talent sets. For us, it was really thinking about software as the priority going forward. The products of our future are all based on software platforms, and the cards are really access devices to those software platforms. So we needed to bring in people who really understood software platforms, and team them up with people who understood the legacy systems of American Express. If you can attract new talent, and blend it with the existing talent, that can be very powerful.

Often new growth initiatives wind up disrupting the larger existing business. Is that the case with your organization?

In many ways, what we’re working on will really strengthen our existing business of affluent card members. If you think about our business as software platforms, you can imagine new ways of using things like Membership Rewards points. With the right software, you can utilize them as a virtual currency that you could use for everyday purchases. Most American Express members think of their rewards points as something to use for travel (primarily airlines or hotels), but now you can swipe your card and use Membership Rewards points for a taxi ride in New York City, or for shopping on Amazon. So we are not only working to address new segments of the market, we’re also seeking ways to put more volume on our existing assets and reinforce our value proposition for existing customers.

Target recently became the latest company to suffer from a large-scale breach of financial data. How are stories like this one changing the way customers think about their relationship with financial services providers?

In addition to my job at American Express, I’m also chairman of the board of Symantec, one of the leading players in anti-virus and cyber-crime prevention software, so I know firsthand just how sophisticated many of these attacks can be. I do think that in a digital future, consumers will increasingly turn to brands that they trust. Trust, security, and service are even more important in a digital world. At American Express, having 60 years of experience in fraud and risk management is something that we’re really leveraging in our platform. It’s going to be a bigger and bigger issue as we move more of our lives online.

Mindful Culture through Simple Exercises

When we started our first restaurant in 2004, our goal was to create a place where people wanted to not just eat but also to work. Just like Southwest Airlines or Starbucks, we recognized that a happy staff means happy customers and a more productive, profitable business. But what would this employee-centric vision look like in practice?

We decided to start at the beginning – the moment our servers, cooks, baristas and bakers walk through the front door – with a “clearing” exercise inspired by Eastern meditation and yoga practice. People partner up and ask each other two questions. One is designed to pin point any distracting thoughts or emotions (for example, “What’s bothering you today?”), the other to bring people into the positive “present” (for example,“What are you grateful for?”).

The idea is to help everyone be more mindful of themselves and others, a practice that not only yogis and monks but also Harvard psychologists, such as Ellen Langer and Susan David, have long encouraged. Employees learn to listen to and connect with one another, which not only creates an immediate bond and better working relationship between them, but also inspires them to use the skills they’ve just practiced to better serve our customers across the seven establishments we now run.

Whole Foods is another company that cares deeply about employee well-being, so we weren’t entirely surprised when David Lannon, the company’s executive vice president of operations and a loyal patron of our flagship restaurant, Café Gratitude, approached us to ask how we’d managed to cultivate such engaged employees, who were, as he described it, both willing and able to forge “deep connections” with customers.

Soon, he brought us in to conduct workshops for the senior team at the northern California Whole Foods headquarters.  The sessions focus on four principles, all reinforced through simple exercises like clearing:

Profit = love of sharing
Awakening = love of transformation
Sustainability= love of the Earth
Service= love of community

Initially, the Whole Foods team members were a little skeptical. But they now do these exercises a few times of week. Lannon has told us that it’s particularly helpful for him as a leader because “when you’re the boss your reaction is to go into problem-solving mode and not really listen as closely as you should to your employees. It’s easy to just give them a solution. But when you’re really present in the conversation instead, employees feel more connected to you and you can solve problems more effectively together.”

Our hope is that all companies realize the difference that these simple practices can make in cultivating a mindful culture that boosts the wellbeing and productivity of everyone involved in their business, from CEOs to frontline staff, suppliers to customers, and – at the end of the day – even shareholders as well.

Culture That Drives Performance

An HBR Insight Center




Employees Perform Better When They Can Control Their Space
Motivating People to Perform at Their Peak
Employees Who Feel Love Perform Better
Creating a Culture of Unconditional Love

Upward Mobility Can Be Hazardous to Your Health

A study of hundreds of low-income American youths shows that at age 19, those who had been rated as diligent and academically successful were less healthy than peers who had been labeled aggressive, difficult, and isolated, a team led by Gregory E. Miller of Northwestern University writes in The New York Times. Highly motivated people from low-income backgrounds often feel tremendous internal pressure to succeed, but behaving diligently all the time may leave them feeling exhausted and sapped of willpower, and they may let their health fall by the wayside, the researchers say.