Marina Gorbis's Blog, page 1476

How Work Saved One Woman’s Life

The Story Behind a Food TrendA Toast StoryPacific Standard

Four dollar toast? A hipster travesty! A sign of Silicon Valley indulgence! These may be your initial reactions to, well, expensive hot bread sold in San Francisco. But hold those thoughts. This lovely piece by John Gravois tells a story about the business that's credited with starting the toast trend, an entrepreneurial triumph that demonstrates how work can save your life. 

Trouble Coffee & Coconut Club has a small menu, serving primarily coffee (no nonfat milk allowed), Thai coconuts, and cinnamon toast. There's very little seating, and phones aren't allowed — essentially, people have to talk to one another. And that's just how owner Giulietta Carrelli designed it, though not because of a fad. Carrelli, a lifelong sufferer of schizoaffective disorder, started Trouble with $1,000 and the ability to make coffee. The coconuts are served because she subsisted on them for much of her adult life (and, in her own ad hoc study, she discovered that more people would talk to her in public if she held a coconut); the coffee is about communication; the cinnamon toast is about comfort. After frequently being fired and kicked out of apartments, she now has something to be responsible for and a place to be every day, surrounded by friends, customers, and employees (who all have a share in the business, as well as dental insurance). It hasn't been easy, certainly. But Carrelli built Trouble in order to live — and to live very differently than critics might assume the proprietor of an "artisanal toast" establishment would. 

The Return of Cultural Anonymity Inside the Angsty, Affirming World of WhisperNew York Magazine

You may not be familiar with Whisper, an app that gets more page views per month than LinkedIn, Wordpress, and Upworthy combined. But among the under-25 crowd, it’s enormously popular. Kevin Roose sets out to investigate why, and in the process highlights a shift toward increased anonymity among social media's younger set as they balk at self-promotional, parent-rich networks like Facebook. "People are cognizant of their digital footprint," says Whisper CEO Michael Heyward, “and as they see things like Whisper and Snapchat and Bitcoin, they like that it's culturally anonymous."

People will sometimes send out Whispers — photos overlaid with a line of text — to talk about topics they'd never feel comfortable discussing on Facebook. Of the Whispers Roose sent, the one that got the biggest reaction was based on a lie. But he notes: "If you can get past the phonies and posturing, there's a point to Whisper. Put simply, it's a place to unload baggage without consequences. Unlike on Facebook or Twitter, nobody will fire, judge, or humiliate me because of what I post there." This, in many ways, is tremendously refreshing. 

Holacracy Revisited Hierarchy Is Good. Hierarchy Is Essential. And Less Isn't Always Better LinkedIn

Bob Sutton begs to differ with anyone who declares hierarchy to be dead. In response to the recent chatter about "holacracy," he points out that even in quote-unquote non-hierarchical organizations, "there is still a hierarchy, and certain people have more decision authority than others." At Zappos, the holacracy idea didn't bubble up from the bottom, after all; it's being imposed from the top. That's often the case: "The top dog wields his or her power to push greater responsibility and accountability down to lower levels." Even middle management has its value, he says. When Google founder and CEO Larry Page cut out a bunch of managers in an effort to reduce "friction," the result was frustration and confusion. "More than 100 engineers reported to a single overwhelmed executive." In truth, Sutton says, "a well-managed hierarchy is among the most effective weapons for getting rid of the friction, incompetence, and politics that plague bad organizations." —Andy O'Connell

The Road to NowhereThe Revolt of the Unpaid Intern The Boston Globe

Later this year, the U.S. Court of Appeals for the Second Circuit in New York will take on a fight between unpaid interns and Fox Searchlight. The case is one of a handful that portend significant changes in internships, a way of life for a lot of American students and post-students. More than 1 million young people in the U.S. intern each year, about one-third to one-half of them for no pay, writes Melissa Schorr. Those who take issue with the unpaid nature of internships contend that companies have pressed their advantage too far during a stagnant economy and that students are led down a path that ends nowhere.

“The worst infractors have no intentions to train or hire and are just looking to take advantage of free labor,” says Nathan Parcells, cofounder of the website InternMatch. But a change in the ground rules for internships could have unintended consequences for students just learning the ropes: One employer says that if his firm were forced to pay its interns, “the relationship would be different and additional expectations would have to be fulfilled.” —Andy O'Connell

Grandmothers Do Booth Babes Don't Work TechCrunch

Spencer Chen wasn't convinced that the scantily clad women his company hired to market products at tech conferences helped his company generate leads. So when, by chance, he got two booths at a trade show, he conducted an experiment: One booth was staffed by "professional booth babe talent" and the other by "show contractors that knew the local area and had established people skills." Among the latter, one VP noted with revulsion, was a grandmother. The results? The "babe" booth "generated a third of the foot traffic … and less than half of the leads," while the grandmother team "had a consistently packed booth that ultimately generated over 550 leads, over triple from the past year." Chen eventually replicated his results throughout the year.

Chen says "booth babes" intimidate men, are "lazy," are generally ignored by business and product execs who just need to get work done, and develop low-quality leads. "I'm not here to participate in the bigger social debate on whether exploiting women as booth babes is bad for us all in the long run," he writes. But he says he can "offer you a sound business reason” to try a different approach: “Booth babes don't convert." 

BONUS BITSFood (and Other Weighty Issues)

There Is No Shortage of History When it Comes to Velveeta (Smithsonian Magazine)
Free Food at Work Is on the Rise — But Not Everyone’s Happy (New York Post)
Thirteen Facts About the Economics of Obesity (Businessweek)

Do You Know What Makes Your Company Distinctive?

Every company has a limited amount of time, money, and resources that it can invest in innovation. That’s why they should focus their energies on opportunities that will set them apart from their competition — that is, they should innovate where they differentiate.

One company that does this exceptionally well is USAA, a financial services firm, which offers its services to military personnel and their families. Given the unpredictable and transient nature of the lives of its customer base, USAA knows that being easy to do business with is critical to its success. Its differentiator, in other words, is world-class customer service.

This commitment to service drives the company’s innovation efforts. It developed an app, for example, that allows military members to deposit checks from their cell phones – a major convenience for anyone serving overseas.  Although you may enjoy the same convenience with your own bank, you can thank USAA for it. They were the initial developers of this technology and hold the patent for it.

The company also designs its business model around the needs of military members. One quarter of its new hires either served in the military or come from a military family. This allows the company to better understand the needs of those who serve. They also offer free financial advice to those who are being deployed, or returning to civilian life. Last year, its not-for-profit Educational Foundation conducted close to 850 financial management presentations to nearly 50,000 attendees in the military community. And its Survivor Relations Team helped over 50,000 family members cope with the death of a loved one last year.

This clarity of focus is why in 2012 USAA achieved 98% customer retention, and 95% of their customers said they will stay with USAA for life.

So what about your company? Is it differentiating itself? Is it investing a sufficient amount of its innovation efforts to make it a reality?

When defining your differentiators, consider the following:

Your differentiator must be difficult to replicate. Although you want to distinguish yourself from others, make sure you aren’t simply doing the heavy lifting for your competition.

A service contract firm that that fixes broken water heaters, for example, thought incorrectly that its differentiator was the unique way it bundled its services. Unfortunately, this differentiator was too easy for its competitors to duplicate. But when it dug deeper, it determined that its true differentiator was its repair network. It took years to build solid relationships with the individuals who fix the boilers and would take an outside firm equally as long. With this knowledge, the company shifted its innovation efforts to focus on nurturing this network. This created an unassailable competitive position.

Your customers determine your differentiator. I often hear large companies claim that “leadership” or “culture” is their differentiator. But customers do not buy these; they buy the products and services that result from a great culture/leadership. If you believe your culture is your differentiator, ask yourself, “What does your culture make possible that is of value to your customers?” Or, how does your leadership translate into something that customers would say sets you apart?  Your answers will provide critical insights into your unique value.

You can’t catch your competition. It’s difficult to beat the current market leader in its area of differentiation. So choose a different angle.

When Progressive Insurance decided to compete against the bigger players in the late 90s, it didn’t try to match their strengths. Instead, it launched its Immediate Response Vehicles, a unique service where claims adjusters travel to the site of the accident to provide immediate and accurate claims assistance. This helped position Progressive as a market leader today.

Cascade your differentiator to the lowest levels of your organization. It is vogue in the business world to say that “innovation is everyone’s responsibility.” Unfortunately, this often translates into innovating anything, including irrelevant tasks like the speed of paper filing. This detracts from the bottom-line as it is wildly inefficient. Instead, make everyone aware of your differentiator and translate it in a way that helps all individuals prioritize their work.

Once you’ve identified your differentiator, use it to prioritize your innovation investments. By doing so, you’ll eliminate less critical opportunities, while devoting more resources to innovations that will see greater returns.

The Right Way to Answer “What’s Your Greatest Weakness?”

Thomas Jefferson once said that “honesty is the first chapter in the book of wisdom”. Though truth-telling abounds in grade school platitudes, it seems scarcer the older we get. But this decline in honesty — let’s call it dishonesty — isn’t necessarily innate. Dishonesty can be taught. In my experience, I’ve noticed that, of all culprits, college career centers are exceptional traffickers of such miseducation. In the process, they’re hurting their brightest students’ chances of making it in the world of startups by convincing them to give dishonest answers to tough interview questions.

Full disclosure: I work at a startup, and it’s my job to quickly build a team of the right people. Throughout my earlier career in larger companies, honesty and being self-critical have always been obvious qualities to look for in candidates, but it wasn’t until I joined Medallia that I realized their special significance for startups. Brandon Ballinger’s now famous blog post about his experience with Y Combinator’s Paul Graham shows why. To cut a long story short, Graham told Ballinger (to his face) that his startup idea sucked — a tough-love approach Ballinger now extols. Why? Well, in a startup, it’s much more comfortable to be a “team player” than “the bad guy,” as Ballinger describes it. The real hard work in a startup, however, is being able to openly admit that the current strategy is just not working — no matter how uncomfortable it is, or how much has been invested in getting to that point.

In other words: one of the biggest dangers for a young company is that a roomful of smart people who aren’t being honest could easily be steering their rocket ship into the ground.

And yet college career centers continue to operate in a 20th century world in which top talent was funneled into careers in mature, staid organizations and industries. These are cultures where people are much more likely to divulge their net worth than a weakness. While a mature organization might have once been able to get by with a “don’t stick your neck out” culture, that attitude is simply lethal to startups.

Nonetheless, the importance of this simple truth seems to still be elusive for the Office of Career Services at many of the nation’s top colleges and universities. Besides guidance on basic items like resumes, cover letters, how to dress, and how to eat, many of these schools are providing either no advice or bad advice on how to adequately answer important questions. Take a very common question that I always like to ask, for example:

What is your greatest weakness?

Even if you’ve only had just one professional interview in your life, then you’ve probably still been asked some version of this question. Do you remember how you answered? Did you say that you work too hard? That you have perfectionist tendencies? Or that you’re too passionate? Be honest.

The truth of that matter is that a quick search of career center websites indicates that students are being encouraged to apply this type of spin to their answers. Even for those that advocating for honesty, there’s often still the contradiction that one’s answers must always be positive. The result of which? Answers that focus on lesser skills (but still skills) rather than actual problems or challenges. One school goes as far as to call it an “angelic weakness.” And if you’re pressed to give a real answer about a flaw, nearly every career center in the universe has apparently decided that “public speaking” is an appropriate response.

Others are more direct at giving the advice that everyone seems familiar with — to make weaknesses into strengths (and vice versa). Northwestern tells grad students, “Turn a negative into a positive.” Boston College advises students to “Turn your weakness into a positive (for example) ‘Because I tend to procrastinate, I have learned to work well under pressure in order to always get work done on time.’”

This is terrible advice. Responses like these tell me little about how a candidate faces challenges and immediately implies a lack of sincerity. It doesn’t demonstrate to me how they think — beyond their ability to creatively avoid being honest or self-critical. It indicates to me that they’re not willing to stand up and say what’s not working — the opposite of what a startup needs. That’s why my recent interviews with college graduates have all started to follow the same pattern. I start with two sentences: “Forget what your career center has taught you about interviews. I want to have a real conversation with real answers, and I promise to do the same.” The candidates take a minute to evaluate whether I’m somehow tricking them. If they lean into their discomfort and take me at my word, the level of conversation improves dramatically — we have a great time getting to know one another in an authentic way. I’m not really looking to find out whether their organizational skills could use improvement, or that they struggle with presenting to large groups or even leading large teams. I’m trying to find out whether they have self-awareness; whether they are able to be critical; and most importantly, whether they’re able to tell the truth — when it’s difficult.

For those candidates who don’t buy in, however, I spend the majority of the interview trying to pry off their layers of canned responses. I leave the interview wondering: Who are you? And what’s worse — I’ll never know. Because they’ll never get the job.

Nest and Google’s Customer Service Problem

“…Google does not offer live customer support at this time…”

That’s the recording you’ll eventually receive (after you’ve gone through two decision trees) if you call the Google headquarters phone number, the only number listed on Google’s “Contact Us” page.

Really? Google—as in Android, Chromebook, Google Glass, Google TV—does not have live customer support? No, it doesn’t. Google’s intense focus on data and technology and advertisers since its founding meant that it didn’t need retail customer support. So not having it wasn’t really a problem. But Google just bought Nest for $3.2 billion. Nest was created by Tony Fadell, the former Apple superstar often referred to as “the father of the iPod.” Nest makes an internet-connected learning thermostat for the home that can be controlled by your smartphone. It recently launched a smart smoke detector as well. This acquisition of technology was really an acquisition of retail customers— real people—and a new market for them, so now Google does have a problem.

We have four Nest thermostats in our home. I love almost everything about them. The big, backlit screen means I no longer need a magnifying glass and flashlight to see what the temperature is. The precision of the control means there’s not a three-degree variance between what I want and what I get. The fact that I can control it from my phone means I can change the temperature in any room from my bed, or from Rome. It tells me how long it will take to get the room up to the desired temperature. And the design is absolutely gorgeous.

But the main thing I don’t love about Nest is the the way it handles customers. Tech support is really important for this product, which is complicated to install, set up, and maintain. Playing middleman between your thermostat, your home electrical system, and your heating and air conditioning system is not for the faint of heart. Questions arise like, “Which wires are connected to the thermostat: Rh, W1, Y1, G, C, O/B, AUX/W2, or Rc?” You get warnings like, “Do not touch this part of your furnace or the world will come to an end.” My mom is comfortable adjusting the settings on her smartphone. She wouldn’t be comfortable down in the basement connecting the green wire to the red wire on the furnace’s electrical panel.

Sadly, the tech support that Google acquired in the deal is nowhere near up to the task. We had to have an independent contractor come out and install our thermostats. Then we had to have him come back because we had no luck with Nest’s people. (One of them seemed to think it was my job to get an HVAC license, not his to help me understand.) Because the contractor was new to the product and wanted to learn about it, he came three times. But he didn’t have to (we paid only for a single visit), and if he hadn’t, we wouldn’t have a working system. As in, no heat during the polar vortex.

I wrote a letter to Tony Fadell about all this and sent it FedEx to Nest headquarters. I never got a response.

Compare this with Apple tech support and customer service. I have problems with Apple’s new Pages program. I wrote a letter to Tim Cook a couple of weeks ago. I got a reply in two days from a senior product engineer who is now soliciting feedback and advice from me about the program. And Apple’s telephone tech support is the gold standard. Apple Voice Pass recognizes your phone number and says, “Hello Dan,” the moment it picks up. It knows your serial numbers so you don’t have to repeat them to the tech person. It tells you how many minutes you’ll be waiting, and I’ve never had it be more than three. It allows you to have Apple call you, so you don’t have to wait. The technicians are friendly and know what they’re doing. My mom calls them all the time. And then, of course, there are the Apple Genius bars where you can speak face-to-face with someone, product and problem in hand.

Google’s disinterest in customers could make Nest’s subpar tech service even worse. Whereas Apple is interested in the customer, Google is interested in data—it’s in its DNA. That’s where it created its success. But Google’s lack of customer focus is its Achilles’ heel. As far back as 10 years ago, after being frustrated time and time again by Google’s “Blogger” product, and having no customer support to turn to, I finally quit using it. This disconnect is particularly problematic for home automation products. I won’t consider buying the Nest smoke detector. I’m not willing to mess with my kids’ lives if the tech support on that product turns out to be substandard, too.

Google just bought entry into the home automation market. It could be very exciting, not just for Google, but for all its customers and potential customers. But in the absence of superior customer-service capabilities, their purchase is worthless.

And this is what business pundits consistently overlook. Tony Fadell is a great product designer. But there’s more to a great technology product than technology and gorgeous design. If Google doesn’t wake up to this gaping hole in the future it has planned for itself, one day that headquarters recording will be saying, “Google does not offer home automation products at this time.”

Make the Most of Scarce Data-Mining Talent

The immense promise of big data to reveal new opportunities and deliver practical business results has so far been focused on technologies and models, and less on the human challenges of staffing roles and  processes to take advantage of big data’s promise. The technology may be abundant, but developing, recruiting and hiring the people to use it is becoming an acute challenge for Fortune 1000 companies. Defining the roles, recruiting talented practitioners, setting up center of competence structures, establishing data governance across business units, and tying advanced data and analytics (AD&A) to the results of those businesses is lagging the deployment of tools and the collection of the data.

The Talent Gap in Big Data

By 2018, the United States alone could face a shortage of as many as 190,000 people with deep analytical skills according to a study by the McKinsey Global Institute. The study also found a looming need for over 1.5 million managers and analysts who understand big data and how to apply it to business operations. More than 70% of the Fortune 1000 companies surveyed by NewVantage Partners said it was “very difficult” to source analytical skills, with more than a third of the respondents saying their current level of AD&A skills are less than adequate.

To some extent, higher education is stepping into the gap. North Carolina State University worked with locally-based SAS — a leader in business analytic software — to offer a Master of Science in Analytics (MSA). Other universities are establishing similar programs, but until the supply of qualified candidates catches up with demand, most organizations are focusing on the internal development of big data skills by creating data literacy programs to establish a baseline level of knowledge for all their employees and setting professional tracks to build data skills and nurture career paths to retain their existing specialists.

Human resources departments are also looking globally at traditionally analytically-intensive sectors ranging from meteorology to medicine and finance to find talented candidates. This talent isn’t cheap: a top data scientist can command a $300,000 salary in the current market.

The Nature of the Roles in an AD&A Organization

There are clear categories of staff roles required to drive a successful advanced data and analytics agenda. Companies that are far along in advanced data and analytics have adopted a roughly similar model organized around a center of excellence with three types of talent:

1. Technical and Data Specialists: These positions range from data quality managers who ensure the collected data are clean and accurate to business solution architects who assemble the data and organize it so it is ready for analysis.

2. Analysts and Data Scientists: This includes the foot soldiers of the function who sift through mountains of data seeking insights and the “ninja” scientists who create sophisticated models to predict customer behavior and allow advanced customer segmentation and pricing optimization.

3. Business Analytics and Solutions specialists: These people are aligned by domain and sometimes sit within the business units they serve. This category would include insights analysts who turn models into actions and are the primary interface between the center of excellence and the business units.

Form a Center of Excellence to Extend Scarce Resources

Advanced organizations are making the most of their scarce resources by centralizing their analytics organizations into centers of analytic excellence (COEs) to act as a hub to serve business units and departments. Success in companies that have adopted a COE model depends on strong leadership by a leader who can break down silos and foster a strong culture of customer service for internal customers who may lack confidence in the value and trustworthiness of data models. The best COEs measure performance not on volume or speed but by their impact on business success. COEs need clear governance on how advanced data and analytical decisions are made, laying out how impact is measured and constantly reviewing the COE’s agenda to ensure the business units are using the team in a way that leads to practical results.   

The lessons we have learned from our work in big data is that success comes when companies make strategic hires from hotbeds of data-driven cultures such as Silicon Valley to identify and recruit the new breed of leaders who understand the technology, science and data behind advanced data and analytics.  Successful big data practitioners leverage strategic partnerships to obtain scarce talent across geographies while sourcing globally with the understanding that the analyst and scientist roles are especially dispersed. Finally, big data success requires a change in culture to be driven from the top to retain the new breed of data-driven managers while convincing the rest of the organization to be more oriented and aligned around big data and its potential.

Achieving Impact by Changing the Business Culture

Most important, COE leaders are acting as change leaders to drive data-driven approaches into the business, and shift the culture from art to science. Some leaders are achieving this by focusing on the business units that can become reference cases across the entire corporation. In addition, leaders are praising and rewarding the individuals and groups in their company who have made the transition to advanced analytics and big data. With techniques like these, COE leaders are creating a wave of front line change.

For Senior Leaders, Fit Matters More than Skill

A recent CEB survey of C-suite executives indicates that organizations will require significantly higher performance—23% improvement, on average, in performance ratings— from their executive-level direct reports in the new year. How well are executives prepared to rise to that challenge?  Less than 20% of C-suite leaders had confidence their executives could stand the test.

A large part of the problem, our research suggests, has to do with the high failure rate of outside hires. Intuitively, people know it takes longer for outside hires to come up to speed than internal candidates. But our research shows just how dramatic the problem really is. Outside hires take twice as long to ramp up as a leader promoted from within. Astoundingly, C-suite executives report that only one out of five executives hired from outside are viewed as high performers at the end of their first year in house. And ultimately, of the 40% of leaders who are hired from outside each year, nearly half fail within the first 18 months. The direct and indirect costs of the failures are staggering, far exceeding the cost of the search that found the executive.

Why do leaders hired from outside fail so often?  And why do they struggle to reach rising performance expectations?  Do they lack the requisite skills?  Do they struggle to integrate into the organization’s culture?  Studying more than 320 leaders in 36 organizations, we found a surprising answer: External leaders fail because they just don’t work well with the people on their teams.

We’ve seen this problem before – a new executive arrives at the organization, and a mismatch between his work style and priorities and those of his new colleagues, together with his inability to tap into informal and formal sources of organizational power, prevents him from being as effective in his new role as he was in the last. Within months, he is excluded from key networks and loses valuable information and leverage, quickly reducing his chances of succeeding. Isolation starts the downward spiral of underperformance.

Two new tools for recruiting may help solve this problem.  First, leading companies are changing their hiring criteria — focusing not just on skills and cultural fit but also on network fit—how well the potential hire will fit with the way his or her new colleagues work. Hiring for this more colleague-centric type of fit can improve performance at the two-year mark by 30%, our research shows. It has more than twice the impact of assessing only for general culture fit.

One company that successfully developed an objective definition of “executive fit” is Ingersoll Rand. Newly hired leaders at the global manufacturer had all scored high on tests of leadership competencies but had struggled to apply those skills within the specific dynamics of their new teams and peer groups.  So Ingersoll Rand shifted its approach to assessing potential leaders, focusing not just on qualifications but on four new “fit categories” — knowledge, values, career experience, and leader behaviors — which in combination produced a more complete view of the executive’s style and how she is likely to approach work.

Ingersoll Rand recognizes that to fit, an executive does not always have to have the same style as the team. The company has two types of fit: “conformist,” same as the in-house team, and “complementary,” which might be called for when the purpose of bringing in a new executive is to spark some productive disruption in the way the current team is working.

In addition to changing how candidates are assessed, leading companies are also changing the way they think about the recruiters doing the assessing. We’d expect to see in-house recruiters having a clear advantage in selecting for network fit since they live in those networks in their own work lives. Yet, according to our study, less than one-third of in-house recruiting teams did better than outside firms at predicting a successful fit. In the rush to fill open positions, many in-house recruiting departments are not incorporating their knowledge of how existing teams work in making final selection decisions.

Coca Cola has a new strategy for asking in-house recruiters to take responsibility for network fit. It requires them to report to management on not just how fast they are filling positions but also whether the new hire’s performance is up to expectations after they’ve been in role for one year. The recruiting team reports this “quality of hire” performance metric for both external hires and internal placements, ensuring that in all selection decisions, recruiters and managers ask not just “Is the individual right for the job?” but also ‘Can the individual perform on the job?” The lessons learned by reviewing this metric have made Coca Cola’s in-house recruiters more effective than outside search firms in guaranteeing that new executives perform well.

Not surprisingly, these efforts by leading companies to beef up the effectiveness of in-house recruiters is reflected in a general decline last year on spending  on outside search firm services (which was down 40% in 2013, on top of a 25% drop in 2012). Top companies are now using outside firms less for identifying specific candidates and more as consultative experts, to help them define appropriate skill requirements and cultural and network fit factors for consideration in a given industry or market. Like Coca Cola, many companies are now realizing that only internal staff know their working environment well enough to pick the best fit executive to lead the business.

In the new work environment of 2014, success will be driven even more by teamwork and collaboration. If you are not evolving your organization’s approach to recruiting to keep up, you’ll find your new leader hires may do more harm than good.

Super Bowl Ads Are Less Effective Than Others

Before-and-after interviews with more than 1,000 customers in 2012 and 2013 indicate that 80% of Super Bowl ads fail to increase purchases or purchase intent, according to research firm Communicus. That’s about 20 percentage points worse than the average of ads the firm tests. One limiting factor for Super Bowl commercials is that they tend not to run regularly after the game; another is that brand association sometimes gets lost in the highly entertaining story lines, the firm says.

Diagnose Your Customer Culture

What happens when you deliver poor customer experiences and get complaints? You might ignore your customers —  or worse, blame them — and lose them for life. Or you might fix their problems and earn their loyalty. What you and your employees will do depends on your customer culture.

In truly customer-centric companies, all individuals (regardless of their roles) base their decisions and actions on the belief that what’s best for the customer is best for the business. New evidence shows how a strong customer culture drives future business performance and supports market strategies. Our research, based on a quantitative study across more than 150 businesses, spanning various industries and functions, identifies seven cultural factors that drive customer satisfaction, revenue and profit growth, innovation, and new product success. These are important predictors of future results and early indicators of risks and opportunities related to retaining customers and acquiring new ones. Our research on highly customer-centric businesses like Amazon, Virgin and salesforce.com tell us that these factors are disciplines that, if practiced and embedded, create superior value for customers and sustainable growth in value for stockholders. They can be measured and benchmarked for any organization:

1. Customer Insight:  Does the company have a deep understanding of its current customers’ needs?

The Chateau Elan Resort in Georgia offers “silver service without the gloves” — a customer experience set amongst vineyards, in a relaxing atmosphere where any request is answered with “consider it done.”  The insight that customers prefer to ask any of the staff about booking a restaurant, ordering a taxi, or getting extra towels in their room led the resort to empower all staff to quickly and directly fulfill customers’ requests by working as a collaborative team.

2. Customer Foresight:  Will the company lead the market with new services before customers recognize their own changing needs?

Salesforce.com understands how customers such as Stanley Black and Decker (SBD) are trying to innovate and lead in their own marketplaces. For example, it has developed technology that allows SBD service people to remotely diagnose and troubleshoot problems on customers’ mobile devices. Customers can share live video of their problem with SBD via a smartphone using the saleforce.com platform, which enables real-time service. Imagine having a power drill that automatically signals SBD when the battery needs replacing, a toolbox that can be remotely locked or unlocked, or the ability to track the location of tools at different job sites. All are important productivity enhancers for professional builders. Salesforce.com had the customer foresight to create the technology that makes them possible.

3. Competitor Insight:  Does the company monitor, understand, and respond to its competitors’ strengths and weaknesses?

The Virgin Group enters industries such as financial services, radio stations, and balloon travel, amongst many others, based on an intimate insight into the strategies and capabilities of incumbent competitors. Its value proposition as the “fun” alternative based on “brilliant basics with a touch of magic” differentiates it from rivals.

4. Competitor Foresight:  Does the company actively consider potential competitors when making decisions about customers?

Amazon.com, one of the world’s most customer-centric companies, has strong competitor foresight, opening its platform for use by new emerging competitors and pre-empting existing and new competitors with new offers. For example, Amazon recognized the potential threat from Apple in the tablet market. Apple was looking to do to books what it had done for music by supplying both the reading device (the iPad) and the content via its iBookstore. Amazon’s foresight led to the development of the Kindle, designed to keep Amazon out in front as not only the preferred source for books, but also the preferred supplier of book reading devices.

5. Peripheral Vision: Are your employees actively encouraged to signal threats and opportunities observed in the external environment?

The very essence of Google’s peripheral vision is symbolized by Google Glass, which incorporates cutting edge technology and innovation for customers from internal ideation, partners, and acquisitions.

6. Cross-Functional Collaboration: Are your people working cross-functionally to solve customer problems and deliver better service to customers?

Swedish-based Ikea embodies collaboration in its vision, values, and strategy. High performers who cannot collaborate are fired. Recruitment is based on propensity to collaborate and work with people first, skills second.

7. Strategic Alignment: Do staff members fully understand and buy in to the company’s vision, values, and strategy?

When Westpac, one of Australia’s largest banks, developed a new vision to “delight customers,” it found that was easy to say, hard to do. It had to include “customer” as a corporate value, develop customer measurement systems to capture advocacy and loyalty, and train staff to interact more effectively with customers for relationships, as well as realign remuneration systems. All that was needed to create alignment around vision and strategy for effective execution.

Customer culture is as fundamental to business performance as breathing is to living. It is the life force of your business — no matter what your industry sector. Knowing how to measure it, and its impact on performance, is key to your company’s success.

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

Salman Khan on the Online Learning Revolution

The founder of the Khan Academy talks with HBR senior editor Alison Beard. For more, read the Life’s Work section in the January-February issue of HBR.

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Why Can’t We Stop Working?

I hadn’t seen Jim in two years. When we reconnected recently, I was shocked. The handsome, dapper professional I knew had gained 30 pounds and started smoking. Bursting with nervous energy, he told me about his business travails — work so busy he was staying regularly until 10 at night, and a billionaire client sapping his energy and causing him grief. But the project with the billionaire would soon be over, he declared. “That’s great!” I said. “So you won’t have to deal with him again.” Well, Jim allowed, there might be another contract with him in the works.

It wasn’t about money. We were standing in the middle of his vacation home, enjoying prime mountain views. Business was booming; he only wished it were possible to spend more time up here at his dream home, and perhaps to start dating and meet someone. But, of course, it was possible. For some reason, he was choosing not to — and Jim’s not the only one.

As Harvard Business School professor Clay Christensen described in his mega-bestseller How Will You Measure Your Life?  (with Karen Dillon and James Allworth), the ROI of work is immediately apparent. You get instant feedback and, oftentimes, instant gratification in the form of raises, promotions, new contracts, or general approbation. The arc of family life is different. In the moment, it can be banal, boring, or discouraging.

Harvard happiness researcher Daniel Gilbert has shown that children don’t increase parents’ short-term happiness; in fact, on a day-to-day basis, parents prefer almost anything (from watching television to exercising) to spending time with their kids. Work is certainly one societally sanctioned excuse. Yet, says Christensen, many professionals are dismayed to wake up in midlife and discover frayed relationships, divorces, and alienation from their family. We have to grasp the difference between the short and long-term rewards of work and our personal lives.

Another challenge, says Shawn Achor, author of The Happiness Advantage, is that we misunderstand the relationship between happiness and success. We assume that professional triumph comes first: I’ll be happy when I make SVP! I’ll be happy when I get into the right graduate school! I’ll be happy when I make the 40 Under 40 list! But that’s actually backward. Instead, he writes, “Happiness is…the precursor to greater success. Every single relationship, business and educational outcome improves when the brain is positive first.” In other words, success is a result of happiness, not the other way around. And yet, so many executives work tirelessly, questing for a goal — happiness —  that doesn’t come from professional achievement.

For many top performers, the idea of dialing back on work is also disturbing because they fear it will torpedo their career. Partly, of course, this anxiety is exaggerated. Since humans fear loss more than they covet gain, it’s easy to frame any deceleration as the loss of our career potential and a potentially disastrous mistake. But to complicate matters, in some particularly competitive fields like investment banking or corporate law, long hours truly are mandatory. And, culturally, we’re regaled with examples like Tesla’s Elon Musk, a twice-divorced father of five who took one vacation during a four-year period.

Even when it’s not all about us, the pressure to keep working full-tilt can be intense. As one successful consultant friend told me, “There are a lot of people that depend on me — the people who report to me, the people I mentor, and my clients. It’s very hard to turn away from them and let them down.” Indeed, when he recently cut back his travel schedule due to several family health crises, he got significant pushback from his colleagues. “I get emails and phone calls every day: we missed you at the meeting.” Grappling with divided loyalties can be challenging. “It hurts because some of them can sound scolding,” he says, “but I have to stick to my plan.”

Even when we know working to excess isn’t good for us, it’s hard to cut back. Most of us aren’t as extreme as the investment bank intern who died in London after allegedly working 72 hours straight to impress his bosses. But according to Christensen, we may not be that different, either: it’s a matter of degree, and timing. Overwork may not kill us tomorrow, but —  if left unaddressed — it may kill our most important relationships in 10 or 20 years.

How do we strike a balance, particularly when work itself can be so gratifying? (My consultant friend says his intense schedule is the result of his desire to “make a difference in people’s lives, and I am good at it. That is very hard to give up and it keeps a lot of people happy.”) True success means recognizing our real, individual priorities and, as best we can, living them out today instead of pinning our hopes on some mythical future state of “I’ll be happy when…”