Marina Gorbis's Blog, page 1486

When Human Judgment Works Well, and When it Doesn’t

My last post here, the descriptively-titled “Big Data’s Biggest Challenge? Convincing People NOT to Trust Their Judgment,” generated a fair amount of commentary. So I think it’s worthwhile to devote a couple follow-on posts to the reactions, questions, and objections raised in response to my contention, which was (and is) that we should generally be relying a lot less on the judgments, diagnoses, and forecasts of human ‘experts,’ and a lot more on the outputs of cold, hard, data-driven algorithms.

A good place to start is with the simple question of where this contention comes from — why am I so convinced that we should be relying less on experts and more on algorithms? The simple answer is that both the theory and the data support this conviction.

Let’s take the data first: In my previous post I highlighted that there have been a raftload of studies comparing the predictions of human experts vs. those of algorithms, and that in the great majority of them the algorithms have been at least as good as or significantly better than the humans. In a meta-analysis conducted by William Grove and colleagues of 136 research studies, for example, expert judgments were clearly better than their purely data-driven equivalents in only eight cases.

Most of these studies took place in messy, complex, real-world environments, not stripped-down laboratory settings. Commenter Sean Kennedy pointed out that “… many of our decisions have to be made under much less than ideal “big data” conditions. Data is often lacking, low-quality, or conflicting.” This is true, and what’s amazing is that these are exactly the conditions under which algorithms do better than people.

Why is this? Let’s turn to the theory.

A number of people noted that Nobel prize-winner Daniel Kahneman’s work, nicely summarized in his 2011 book Thinking Fast and Slow, influenced their thinking a great deal. Me, too: Kahneman made gigantic contributions, and his book should be required reading for anyone seeking to understand how to make themselves and their organizations work better.

For our purposes here, Chapter 22 is paydirt. It’s titled “Expert Intuition: When Can We Trust It?” Kahneman conducted a lot of the work underlying it with Gary Klein, who was and is quite fond of experts and their intuitive abilities — much more so than Kahneman. What’s really interesting, though, is that the two of them ended up in complete agreement about the conditions required for good intuition to develop. There are two of them:

an environment that is sufficiently regular to be predictable
an opportunity to learn these regularities through prolonged practice

Medicine meets the first of these criteria, since human biology changes very slowly, but (Kahneman contends) the stock market doesn’t — it’s just too chaotic and unpredictable. And within medicine, some specialities provide better and faster learning opportunities (the second criterion) than others. As the chapter states, “Among medical specialties, anesthesiologists benefit from good feedback, because the effects of their actions are likely to be quickly evident. In contrast, radiologists obtain little information about the accuracy of the diagnoses they make and about the pathologies they fail to detect. Anesthesiologists are therefore in a better position to develop useful intuitive skills.”

Kahneman drives this point about learning home with his conclusion that “Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice.”

With this background, we can now see two main reasons why algorithms beat people. The first is that, as Kahneman writes, “Statistical algorithms greatly outdo humans in noisy environments for two reasons: they are more likely than human judges to detect weakly valid cues and much more likely to maintain a modest level of accuracy by using such cues consistently.” In other words, people often miss cues (i.e. data) in the environment that would be useful to them, and even when they are aware of such cues they don’t use them the same way every time. In other words, the fact that most real-world environments are messy and noisy does not favor human experts over algorithms; in fact, just the opposite.

The second reason is that fast, accurate feedback is not always available to a human expert. To continue Kahneman’s example, a radiologist won’t always know if the lump she was looking at eventually turned out to be cancer (the patient might have moved on to another care provider, for example), and she certainly won’t know quickly. Similarly, an interviewer won’t always get the feedback that the person he hired flamed out on the job two years down the road.

But well-designed algorithms can and do incorporate feedback and results over a long time frame, which helps explains why algorithmic approaches to pathology and talent management work so much better.

So where does this leave us? Well, if Kahneman’s theory is right, and if people don’t have any inherent data collection or processing superiority over automatic means, then we’re in this situation:

But if there is still something special about our innate data collection and/or processing abilities (and I think there is, at least for now), then we’re here:

Which one do you think it is?

How to Find, Assess, and Hire the Modern Marketer

As a marketing leader, your new normal doesn’t necessarily look entirely like traditional “marketing”. The field of marketing has embraced a significant amount of change, and right at the heart of that change is a new era of data (and big data) and analytics—and a new type of marketer has emerged.  To be competitive, the modern marketer possesses a different set of skills and experiences when it comes to data and analytics (not simply metrics).  Finding, assessing, hiring, training, and motivating this new type of marketer are now critical factors for those of us building an analytical culture and the marketing organization of the future.

Who is the modern marketer?

Regardless of the role in marketing, the expectations related to data and analytics need to be consistent. While there will always be more advanced analytical and technical positions, there is a new baseline for all marketers. The skill set includes a knowledge of data management principles and analytical strategies, and an understanding of the role of data quality, the importance of data governance, and the value of data in marketing disciplines. Today’s marketer needs to go well beyond reporting and metrics, and be more proficient in a full range of analytics, which may include optimization, text, sentiment, scoring, modeling, visualization, forecasting, and attribution.

Marketers need to have experience with the technology, tools, and design approaches that leverage data and analytics. Campaign design, multi-channel integration, content performance, personalization, and digital marketing can all be driven by fact-based decision-making, ideally with direct accountability to results and the ability to very quickly react and adjust to the demands of the customer and the market. The marketers I am referring to have a distinct blend of creativity and reasoning talents; they are inquisitive, inventive, and enthused by a culture that is advanced and agile.

How do you interview and assess for the modern marketer?

When assessing marketing candidates, there are some techniques that could help you “test” for the modern marketer. As you evaluate their experiences, look for examples of campaigns, projects, and other key accomplishments that highlight the role that data and analytics had in decision-making and evaluation. It is time for all marketers (not just the creative side) to have a “marketing analytics portfolio” that could demonstrate the use of data in the design phase, the types of analytics employed as part of strategic decisions, the testing strategies applied, and the performance assessment. It is important for marketers to be able to articulate and demonstrate how they know they influenced change and learned from failed efforts. Marketers tend to focus on the visual and the message, which are both critical. Modern (and analytical) marketers can explain the what, how, and why, or why not.

It is important to use both verbal and written assessments to gauge a candidate’s technology and analytical “IQ” in addition to their marketing savvy. I would suggest requesting written responses to questions such as:

How do you approach decision-making as it relates to marketing planning and investments?
What is the difference between metrics and analytics?
What analytic approaches have been most beneficial in your marketing efforts?
How would you describe “marketing data”?
What role does technology played in marketing?
How does marketing deliver value to the organization?
How has data and analytics changed for marketing?
What type of advanced analytic techniques have you been exposed to in your marketing career?

The modern marketer needs to be think more like an architects, engineers, or scientists. Designing, testing, diagnosing, analyzing, and adapting can and should be daily functions in the marketing environment. Evidence of this evolution is shown in the titles that marketing has begun to adopt: experience architect, data scientist, web engineer, web curator, marketing technologist, marketing analytics manager, and customer experience manager.  Marketers today are managing a customer life cycle, dialogue and relationship in an environment where almost everything is measurable. The ability to use data and analytics to thoroughly understand, personalize, and constantly improve that relationship is fundamental to their success. It is an amazing time to be a marketer—and to hire them.

Talent and the New World of Hiring

An HBR Insight Center




Make Sure Your Dream Company Can Find You
Never Say Goodbye to a Great Employee
What Boards Can Do About Brain Drain


How an Auction Can Identify Your Best Talent

Why the Overconfident, Even After Being Exposed, Continue to Dominate

Overconfidence can be dangerous, leading entrepreneurs to risk too much in new ventures and CEOs to engage in too many acquisitions of other firms, yet overconfident people continue to occupy positions of power. A team led by Jessica A. Kennedy of The Wharton School suggests why: Overconfidence engenders high status even after overconfident individuals are exposed as being less competent than they say they are. In a series of experiments, overconfident people suffered no loss of status after groups received clear, objective data about participants’ true performance on a task.

Don’t Abandon Innovation — Simplify It

My fellow HBR blogger Bill Taylor recently made a pitch for all of us to stop using the word “innovation” in 2014.  Despite his plea, I suspect this word isn’t going anywhere.  It’s too important as a driver of growth and renewal. What can be done, in the spirit of Bill’s admonishment, is to stop getting tangled up in all of the variations, nuances, tools, techniques, models, frameworks, and paradigms of innovation.  Somehow we’ve taken a simple concept — the idea of systematically finding, encouraging, and implementing new ideas for growth — and we’ve made it horribly complex.  And of course, by complexifying innovation, we’ve probably started to kill it.

To reverse this trend, we need to simplify the ways we approach innovation in 2014 – by better defining what it is (and isn’t), what it takes to carry it out, and what is needed to enable truly new thinking to thrive.   Here are some thoughts about how:

First, avoid innovation creep. The starting point for simplifying innovation is to refocus on its most basic dictionary definition: “the act or process of introducing new ideas, devices, or methods.” One of the ways that we’ve bollixed up innovation is by letting almost any kind of change fall under the innovation umbrella, whether it is a new wrinkle in packaging, a small process improvement, or an add-on service.  These are all good things, but they should be part of the normal course of business and the drive for continuous improvement.  Innovation on the other hand, needs to be truly new, discontinuous, disruptive, and value creating.  So let’s stop putting “operational,” “incremental,” and “adjacent” improvements under the innovation umbrella.

Second, demystify the process. Having a clear path to new ideas is what helps make innovation work.  Companies that are good at innovation — such as Intuit, 3M, and Google — tend to do the same few things:

They continuously generate a lot of ideas based on input from internal and external sources (ideation).
They develop the few ideas that have the potential to solve problems for customers and be commercially viable (selection and design).
They quickly develop prototypes and models that can be tested both in the laboratories and with customers (rapid experimentation).
They iteratively refine the innovations, and make decisions about whether to fail or scale, based on pilots and additional tests (incubation).

There are variations on these activities, and lots of specific tools that can be utilized, but the basic steps are pretty similar.  In fact, if you look at the hundreds of start-up courses that have sprouted at business schools, innovation centers, and research labs, they all have the same basic flow.  Unfortunately, in the rush to capitalize on the current interest in innovation, consultants and academics have created all sorts of esoteric language and secret hand signals that make the process more complicated than it needs to be.  That doesn’t mean that innovation is easy — just that it doesn’t have to be a black box that can only be unlocked by a wizard or guru.

Third, be clear about how managers can best enable innovative thinking.  Again, the key ingredients are straightforward:  Robust and regular interaction between people from different areas (e.g. marketing and engineering); support and encouragement for internal entrepreneurs (including giving them some amounts of time and freedom); recognition and rewards both for people who succeed at innovation and those who fail smart; and targeted investments for projects that warrant further exploration.  These aren’t necessarily easy steps, and may be foreign to many companies, but they also don’t require a wholesale revamping of the corporate culture, a mythical CEO, or relocation to Silicon Valley.

Since the financial crisis of 2008, most established firms have reduced costs, focused their resources, and become more lean and efficient.  Now, however, they face the challenge of how to grow — which will require the development and implementation of truly innovative products, services, and business models. Making that happen might be hard work, but that doesn’t mean innovation has to become a dirty word.

How Regular Exercise Helps You Balance Work and Family

Matthew Beason is a well-respected executive at a non-profit with a multi-billion dollar endowment. On top of continual domestic travel, countless dinners with donors, and constant planning meetings, Matthew is also a married father of four children. While his work schedule sometimes leaves him exhausted, Matthew consistently attends school and athletic events and is, while at home, fully there for his family.

Likewise, Luke McKelvy, owner of newly formed McKelvy Wealth Management, has a busy schedule of meeting with current and prospective clients and setting up his new business. Luke is the married father of two children, twin boys under the age of two. Like Matthew, he manages to square the priority he places on his family’s happiness with the demands of work he considers important.

Matthew and Luke have pulled off the neat trick of successfully integrating work and life mainly through a skillful alignment of their priorities. But something else about them, it turns out, has probably helped: their adherence to regular exercise. New research by my colleagues and I (forthcoming in Human Resource Management) demonstrates a clear relationship between physical activity that is planned, structured, repetitive, and purposive – to use Caspersen and colleagues’ seminal definition of exercise – and one’s ability to manage the intersection between work and home.

My colleagues and I surveyed a population of working adults to gather input regarding both their exercise habits and their experience of resolving work and home demands. Briefly, those respondents who reported regular exercise were less likely to experience conflict between their work and home roles.

That’s a somewhat counterintuitive finding. An exercise regimen is, after all, yet another draw on scarce time – and often deleted from professionals’ lives for exactly that reason. How could adding it to an already busy schedule help resolve work/home tradeoffs?

The pathways became evident in our research. First, and least surprisingly, exercise reduces stress, and lower stress makes the time spent in either realm more productive and enjoyable. In Luke’s words, “exercise allows me to leave my cares behind and provides me with time to think.” A reduction in stress is tantamount to an expansion of time.

Second, we found exercise helping work-home integration via increased self-efficacy. The term refers to the sense that one is capable of taking things on and getting them done – and although self-efficacy is a matter of self-perception, it has real impact on reality. According to psychologist Albert Bandura, people with high self-efficacy are less likely to avoid difficult tasks or situations, and more likely to see them as challenges to be mastered. Our research suggests that people who exercise regularly enjoy greater self-efficacy, and it carries over into their work and home roles. The theory resonates with Matthew. As he puts it, “an hour of exercise creates a feeling that lasts well beyond that hour spent at the gym.” Or take it from Luke, who competes in triathlons: “When I accomplish something during an exercise training session, I feel more confident in my professional and personal life.”

So see this as another reason to stick to that New Year’s resolution to exercise. Or if that wasn’t already your intention, consider what form of regular exercise would work best for you. Some people make it their habit to exercise prior to starting the workday because it’s so easy to find reasons not to exercise later in the day. (I am personally fond of high intensity interval training, in part  because of its short duration workouts. I combine a few HIIT sessions with a couple of runs per week.) Others benefit from a break in the workday, especially when they can take advantage of on-site workout facilities. Matthew’s exercise routine entails heading out on his lunch break to run up and down the steps at a local football stadium. According to him, breaking up the workday with exercise “makes my problems get smaller” in the afternoon. Still others like the “wind-down time” of exercising after work. Luke tends to go for a bike ride or swim laps in the pool of his local fitness center after leaving the office. Whatever time and setting you prefer – taking long walks , joining a yoga or pilates class – the key is to engage in a level of exercise that dissipates stress and adds to your sense of what you are capable of.

Managers and HR professionals should take note, as well. It’s important to organizational performance that people find ways to successfully integrate work and home demands. This research suggests that companies will benefit from removing constraints on employee exercise. By embracing more flexible working hours, for example, workplaces and supervisors can make it easier for people to find time for physical activity. More proactively, employers can encourage new habits like walking meetings or using the stairs as stairmasters. They might even offer “booster breaks” for employees to spend 10-15 minutes participating in stretching, breathing, and light aerobic routines.

Perhaps more than anything, employers can help by getting the word out that exercise isn’t a selfish indulgence that inevitably requires some sacrifice on either the work or home front.  What we found was overwhelming support for a positive relationship between regular exercise and satisfying management of the work-home interface. It isn’t only that exercise supports better physical health. Through its direct impact on increased self-efficacy and reduced psychological strain, exercise leads to better integration of professional and personal lives.

The start of a new year is always a great time to think about what we want to see happen in the coming year, and to resolve to pursue those objectives more actively. If you have been feeling torn between resolutions to exercise more and to be a better working parent or spouse, then this should come as great news: You can do both. Here’s to your success and happiness in 2014.

Headhunters Reveal What Candidates Want

Given the shortage of talented executives, how can companies attract the best and brightest? What do executives look for in new employers? How does a company become a destination of choice for talent in the aftermath of the financial crisis?

To answer these questions, we surveyed several dozen senior search consultants at a top global executive-placement firm in 2010. As a group, they were 57% male and 43% female. They represented a wide range of industries and regions. (For more on the survey respondents, see “Who We Surveyed” below.) Experienced search consultants typically interview hundreds (in many cases thousands) of senior executives; they assess those executives’ skills, track them over time, and in some cases place the same executive in a series of jobs. They also observe how executives negotiate, what matters most to them in hiring contracts, and how they decide whether to change companies. We asked the search consultants what strong candidates look for in prospective employers.

The answer turns out to be far more nuanced than mere wealth accumulation and career advancement. The factors that executive candidates assess when evaluating an employment opportunity fall into three categories: the firm (platform and track record, current and future prospects, people and culture), the job, and the compensation. These factors are interrelated, and most candidates willingly make tradeoffs. One consultant said that a candidate may accept a less-than-perfect job if it is in a sound industry and at a firm with a track record of success “even if the role is only 60–70 percent of what they are ideally looking for.” Another concurred: “You might take a great job with great pay with a lesser company. Alternatively, you might take a less interesting, lower-paying role with a great company.” Some consultants said that the weighting of such considerations typically varies with age and seniority. As one put it, the decisive factors “depend on where individuals are in their own life cycles and personal wealth. Do you want to take a bit of a gamble with potential upside, or do you want to play it relatively safe?” Another astutely summarized two ways that life-cycle scenarios play out: “Younger candidates who are quickly moving up the ranks are interested in reputation, but may take a calculated risk to gain interesting exposure to something cutting-edge or highly challenging simply to obtain the skill, knowledge and experience, whereas an older executive is less inclined to take risks that could negatively impact his or her reputation.”

Platform and track record. How strong is the firm’s track record? What is its reputation? Working for a successful company is of the utmost importance to executive-level candidates, many respondents said. According to one consultant, job candidates focus most intently on “the past success—of the CEO and of the company. People want to be associated with success and not failure. Successful companies attract the best people, and, as they say, ‘success breeds success.’”

Candidates also look at firm resources likely to help a new executive succeed and deal effectively with clients, notably the brand, the firm’s reputation, and its external relationships. And they also consider the company’s platform with an eye to the opportunities it provides for growth and advancement. As one respondent put it, job candidates “look for an overall platform—that is, not just a job but an opportunity to continue to evolve beyond the specific role discussed.” The firm’s platform is of particular importance in some service industries. One consultant commented, for example, that “within the investment-banking community, it is all about platform and brand.”

Others emphasized the risks associated with joining a given firm, and the desire to avoid an Enron-type situation. Candidates look at “reputation and brand,” one consultant stressed, “as a wrong choice here can be disastrous.” Another, who works with legal executives, said, “Lawyers and compliance people are focused on reputation in a number of ways, e.g., the brand of the company, the reputation that the firm has in terms of its adherence to rules and regulations, and the reputation of people that work there.”

Current and future prospects. Candidates also appraise a firm’s future prospects, market competitiveness, and business strategy. Is it well positioned? As one consultant put it, candidates look at the “strategy of the company—is it viable? Are they changing enough?” Another elaborated: “If the company is not currently performing, [candidates] will look at ownership structure, board capability, the CEO (if not going for that appointment), the leadership team and its competency, and whether the organization is able to articulate a clear strategic intent.”

Job candidates also look at whether the company is well positioned for the future. “Executives want to work for a winning company, or a company that is poised to be the ‘next Google,’” one consultant said. “They want to be part of the management team that drives its growth, and be recognized for the added expertise that they bring to the team.” He offered an example: “I recently recruited a VP Sales and Marketing from a well-known consumer technology company to be the president and COO of a small but fast-growing smart-grid consumer technology-products company. He saw the upside in this hot market sector and the opportunity to lead and mentor a young team.”

People and culture. When assessing a firm’s culture and people, many candidates raise the question of fit. Typically, one consultant said, candidates ask, “Is this a place where [I am] going to fit in and, most importantly, enjoy working and contributing?” Another said that the question of fit extends beyond immediate colleagues to encompass the ethos and direction of the firm: candidates want “to share with the owners the same values and vision for the company” and to agree on its overall strategic direction.

Candidates want to work with people they respect and can learn from. Thus the prospective boss (or bosses, in matrix organizations) is the single most important individual in the firm. “The future boss needs to be a person who the candidate can look up to,” one consultant said, “and from whom he or she can learn something.” Another unequivocally called this the most decisive consideration: “The absolute most essential criterion is a respect for the people a candidate will be working with.”

A few consultants mentioned an organizational culture that values work/life balance. One said that some candidates look for “a genuine culture of care, which often comes across in the interview process”; a sign of such a culture is the “understanding that spouse and children have a place in a career.” Some candidates also seek inclusive cultures that welcome diversity and authenticity in leadership style. Some executives want to join companies with collaborative cultures while others prefer individualistic-based organizations.

The job. When it comes to the job itself, the single most sought-after characteristic is opportunities for career advancement and personal growth. “What do good executives look for in new jobs?” one respondent asked rhetorically. “Change, variety, and some element of diversity, i.e., something new and different that will continue to challenge them, make them grow, and make them learn more about their own abilities and the world out there.” Other consultants asserted that a desirable job should offer professional challenges: “a stretch and learning opportunity,” “upside potential to grow professionally,” and “possibilities for personal development and growth.”

Candidates consider their likelihood of succeeding and having an impact. They assess the training and development that the position offers, the resources that would be available to them, and the degree of autonomy the job entails; they think about how the outside world would perceive them in the role, particularly if it is highly visible. “As an extension of, ‘What is in this for me?,’ executives are very focused on legacy,” one consultant said. “‘What will the world say about this . . . on the day I join . . . if I turn this around . . . if it goes sideways?’” They also want to assure themselves that they have the skills to do the job and, in the case of turnarounds and restructurings, to do it quickly.

Finally, candidates compare the prospective job to their current positions, asking themselves, “Is the move a step up in terms of their career and kudos?” Is it “a step up in responsibility—either in P&L size, geographic footprint, increased portfolio, etc.?” One consultant speculated that many job changes represent efforts to rectify the shortcomings of current positions: “More moves arise from dissatisfaction than arise from a better opportunity arising out of the blue.”

Compensation. Consultants differed on the importance of compensation to prospective executive hires. At the executive level, some argued, compensation is no longer decisive. One asserted that it is less often a negotiating point than a mere matter of adhering to industry pay norms: “Compensation can often be a ‘non-issue,’ so long as the offered package is truly reflective of the market and the situation.” Another shared an anecdote:

A CEO was interviewing a candidate for a position. They had been going for almost two hours, talked about everything between earth and sky, and created some very good chemistry between them, but compensation never came up. As the candidate was leaving, he turned to the CEO and said, “Oh, by the way, when I go home my wife will ask what this job pays. What shall I tell her?” He got the job.

Some consultants said that compensation per se matters less than certitude that the firm’s compensation system is fair and transparent. Candidates want assurance, one said, that they will “be rewarded and compensated according to the results delivered.” Another said that candidates want to “influence [the compensation] payout substantially by their own performance/actions.” According to a third, the most decisive factor in compensation is the candidate’s current compensation: “Compensation must be equal or greater [than current compensation], with longer-term positive prospects.”

Some consultants, by contrast, said that compensation is of paramount and growing importance in attracting an executive. “Executives have become, quite simply, even greedier—[taking] a fairly unashamed approach to securing as much for as little as possible,” one said. Another commented that paying above industry standards can be a key selling point: executives often ask, “Does the company pay above market average?” And some executives want to be compensated for any additional risks they would be taking on and/or for the transaction costs of switching firms.

Talented and experienced senior executives typically enjoy multiple employment options. Companies compete for qualified candidates, in part because executive talent is in short supply worldwide. Thus, no longer it is enough for organizations to be great in one thing to attract the best people. They need to be great on many dimensions to be a destination of choice for stars.

———

Who We Surveyed

The senior search consultants we spoke with represented a broad range of industries, including industrial (28%), financial (19%), consumer (13%), technology (11%), corporate (6%), functional practice (6%), education/social enterprise (4%), and life sciences (4%). They worked in 19 different countries from every region of the world, including North American (34%), Europe (28%), Asia/India (26%), Australia/New Zealand (6%), Africa (4%), and South America (2%).

Talent and the New World of Hiring

An HBR Insight Center




Make Sure Your Dream Company Can Find You
Never Say Goodbye to a Great Employee
What Boards Can Do About Brain Drain


How an Auction Can Identify Your Best Talent

Life After the Death of a Colleague

You Realize the True Nature of Your WorkplaceWhat Happens When One of Your Coworkers DiesThe Billfold

Six things, according to Michael Hobbes in this thoughtful essay about something we hope never happens (but most likely will). First, at least in Hobbes's office, someone tells you that Colin, the guy in communications, died. It's an awkward and difficult conversation. Second, "We are terrible." By that Hobbes means that people gossip and speculate: How did it happen? Why? Did departmental restructuring cause too much stress? And what about the coworker's private life? Third, there's mourning: in this case, an uncomfortable tribute video in which coworkers discuss saying "hi" in the halls and engaging in small talk while warming up lunches, and they share laments about not getting to know the deceased. "He seemed nice," reports Colin's boss, a testament to how much we don't know about the people we spend most of our waking hours with.

Fourth, everyone talks about experiences with death, and the stories bring people momentarily closer. Fifth, it's over. Work beckons; Colin becomes a $40,000 salary surplus in the budget. Sixth, a coworker quits, realizing that she'd rather be closer to her real family — that is, to people who are important to her, realizing she'll never have that kind of bond with the people she sits with every day. In the meantime, everyone goes about his or her business warming up lunches in the microwave. 

It's Risky NOT to Take It The Risky Business of Paternity LeaveThe Atlantic

We know that women's wages take a hit when they take time off to care for new babies. Do men's wages do something similar if they decide to stay home for a period of time? Yup, according to research from family sociologist Scott Coltrane and his colleagues. While the loss isn't as big as the one women face, men will likely earn less over a lifetime if they take family time off. So if you’re a man, why would you want to stay home? Because it's better for your spouse, your kids, and yourself — just not in the masculine workaholic way. Sure, you won't make as much money as your colleagues who go the traditional route. But when fathers are involved in child care, women "enjoy more wealth, power, and authority in society at large." Kids grow up with worldviews that are more gender-balanced and, research indicates, with social and cognitive advantages. A recent Swedish study even found that men who take paternity leave live longer than men who don't. 

There Are No Boring Products, Only Boring DesignersHow Home Depot Copied Apple to Build an Ingenious New Bucket Wired

Home Depot may look like a big-box retailer, but in the days before Bob Nardelli tried to make it into one by dramatically cutting costs, it was actually an innovator, competing not on price against the neighborhood hardware store but by making formerly exotic tools and hard-to-find building materials available to anyone with a pickup truck. After forcing Nardelli out in 2007, founder Bernie Marcus got the company back on the competing-by-boosting-margins-through-innovation road. But this time, his competition was Amazon, which was even better at making the widest possible selection of high-margin merchandise (notably power tools) available to everyone (and customers didn’t even need the truck).

To lure people back into the stores, Marcus recruited hot-shot design firm Herbst Produkt (which numbers Facebook among its clients) to reconceive humble products as radically more useful, exclusive Home Depot merchandise (that you can’t get on Amazon). First out of the gate probably couldn’t be humbler (or more ubiquitous): the five-gallon bucket, shrunk to 3.5 gallons and redesigned to be easier to lift and pour (with a patented grip at its base). Take a look at the video here and you can judge for yourself how revolutionary it might be.  But can the “Big Gripper” turn Home Depot into the next Apple Store (without the huge PR campaigns that Apple uses to introduce its products)? Stay tuned. —Andrea Ovans

Drive and Happenstance Holiday Party Dress Central: How We Started Rent the Runway Fortune

I'm not sure why I read every entrepreneur story that comes along, given that I'll never be an entrepreneur myself. It must be that I like the combination of happenstance and drive that seem to be part of each start-up's creation myth. The two young women who founded Rent the Runway a few years ago met (by happenstance) at B-school (Harvard Business School — that's the drive part), and one of them heard her sister say she craved dresses that were way beyond her budget (another happenstance). The founders figured there must be a way to solve this problem, so they came up with a business that rents dresses, Daniel Roberts writes in this excerpt from his book Zoom. The idea was to help customers feel beautiful, affordably. Clothing designers fought the concept, but our two heroes persevered (more drive), and today the company has more than 3 million members and is growing at nearly 100% year-over-year. Rent the Runway has been compared to Netflix, but cofounder Jennifer Hyman says there's a big difference, and it has to do with emotions: "Netflix is a very rational business,” she says, “and everything that we are doing is about delivering an emotional experience." —Andy O'Connell 

No Job Titles, No Managers, No HierarchyZappos Is Going HolacraticQuartz

At Zappos’s Q4 meeting, in addition to an employee-performed Lion King event, there was a presentation by CEO Tony Hsieh in which he announced that the company is going Holacratic, adopting "a radical, 'self-governing' operating system where there are no job titles and no managers." The goal, writes Aimee Groth, is "radical transparency" in which employees "have the flexibility to pursue what they're passionate about." While Hsieh will have to give up some power in order to make the system work, the upside is that he'll get to see his company completely differently, without the barriers of titles and hierarchy. This doesn't mean that it won't be a challenge. While companies like Medium have adopted the approach, Zappos will be the largest company to give Holacracy a try (Medium has 50 employees; Zappos has 1,500).

So why is Hsieh making this move? He says that companies have three org charts: the org chart on paper, the real org chart, and the org chart it would like to have in order to operate more efficiently. Holacracy, he says, can "process tensions so that the three org charts are pretty close together.”

BONUS BITSHiring Decisions

Attention, Job Hunters: Do You Live With Your Mom? (The Wall Street Journal)
Japan's Homeless Recruited for Murky Fukushima Clean-Up (Reuters)
On Defensive, JPMorgan Hired China's Elite (The New York Times)

Who Will Create the Future?

Who will offer the world more than a dead end?

Consider: Walmart is the biggest employer in America.

The typical Walmart “associate” (sorry—I meant Highly Exploited and Vulnerable Person With No Access to Healthcare, Job Security, Or Other Benefits, All of Which Are Subsidized By the Public Purse, Who’s Sometimes Locked in the Store Overnight) earns the princely sum of about fifteen and a half thousand dollars a year.

Fifteen thousand five hundred dollars is less than the average income…in Botswana. Other countries with higher average income than the typical Walmart employee earns? Lebanon, Malaysia, Gabon, and Barbados.

Perhaps, you protest: but not everyone in the US works at Walmart! Why, the nation’s full of super brainiac quantum rocket scientists! Who—justifiably deserving of their riches—are cracking tough, vexing problems, tackling noble, grand endeavors! Undertaking world-changing work! Like…like…ah, inventing highly leveraged synthetic financial products, finding better ways to deny healthcare to the elderly, creating the next housing bubble, making gigantic talking billboards, creating “sympathize” buttons for those awkward occasions you have to display real human emotion, and dreaming up reality TV shows that are even more stomach-churningly grody than the fast not-quite-food advertised in them.

No wonder heading to the office instills most of us with a heady, spine-tingling sense of dread, horror, resignation, and regret.

What’s happening to us?

Yesterday’s noble paragon of prosperity—the USA—isn’t finished. But what you might call its model of growth—its how and why of prosperity; what it means; why it counts; and where it is found—sure is.

America’s Way—or at least what it’s devolved to in the last decade or three—is a dead end. It’s a cul de sac—one that we’re driving around and around in…endlessly.

You know the endless “debates” the talking heads have had on cable news, every night…for the last thirty years…about the same topics…taking the same sides…offering the same failed ideas…over and over and over and over again…until most of us would rather eat our own socks than turn on CNN? You know how you know exactly what every major newspaper columnist is going to write…before you even read it…before you even open your laptop…before you stopped bothering to read the paper? You know how both “left” and “right” at this point seem like deviously not-quite-different brand names for two treacly flavours of high-fructose-corn-syrup-society-substitute that are actually marketed by the same McGovernment-Lobbying-Complex? You know how middle class incomes haven’t risen in decades…while people are working harder than ever…while their kids are deeper in debt, their prospects less stable, their opportunities quietly winking out?

You know how you probably wake up, blearily punch your alarm clock, curse your stars…and head to a “job” that—if you’re lucky enough to have one—makes you want to gnaw your own leg off, beat your boss over the head with it, and do a victory dance, because you can’t bear the thought of even another microsecond of another totally pointless meeting about a utterly useless product whose only purpose is to earn yet a few more pennies for brainless robo-shareholder-bots …every single day, over and over and over again?

That’s what I mean by a cul de sac. That’s what I mean by a dead end. America used to set an example for the world. But that example today? It’s a nowheresville of prosperity. A Potemkin Town of plenitude.  A twilight zone of human possibility.

And nations today should be mortally, lethally afraid of getting stuck in it. More worried, in fact, about getting stuck in it than they are about marveling at how pretty the tree-lined boulevards approaching it are.

Many, it seems, are choosing to bypass the neighborhood entirely. China’s “capitalism”—more properly, a kind of mercantilism—seems designed to thumb its nose at America’s failed model entirely. Dubai’s a neofeudal kingdom built on modern-day indentured servitude, brushed under the glittering spires like so much worthless sand. Singapore? A benevolent technocracy, which bears little resemblance to a liberal democracy. And so on.

The point isn’t that these nations are, as though the global economy were a horse race, “surging ahead”. Indeed, they may not be at all. But the economy isn’t a race. It is an act of exploration—and then, of creation. And so: their erstwhile paths forward may equally well prove to dead ends—and I’d bet many already are.

And so the great question this decade, for the smallest of all human concerns, at least—the political economy—is this: who will offer the world more than a dead end? Who will pioneer a way forward—past the barren exurbs America’s stuck in? Who will offer the world—its teeming billions, its hungry slums, it’s crowded, surging masses—a future?

Are we—yes, you and I, each one of us—up to that challenge? I don’t know. Here’s what I do know.

I wouldn’t pay someone fifteen and a half thousand bucks to shove boxes of disposable junk around a warehouse. It wouldn’t free them. It would shackle them; and obligate us to jealously guard the key. And so it would not just be unfair to them—it would be unfair to the people both of us could and should be, at our fullest, truest, noblest, worthiest, highest.

And if that’s all America can offer to the world’s billions, then, well, they can—and rightly should—stop looking to America as the globe’s shining flame of prosperity.

The future’s made of us. And so, from now, until the end of time; it is nothing less than the only power we—fragile, small, brief—might be said to have.

The power to laugh at fate. And create the future.

Overcome the Eight Barriers to Confidence

To get a more confident You in the new year — or a more confident company, community, family, or team — first know what gets in the way. The best resolutions will go nowhere without the confidence to stick with them.

Confidence is an expectation of a positive outcome. It is not a personality trait; it is an assessment of a situation that sparks motivation. If you have confidence, you’re motivated to put in the effort, to invest the time and resources, and to persist in reaching the goal. It’s not confidence itself that produces success; it’s the investment and the effort. Without enough confidence, it’s too easy to give up prematurely or not get started at all. Hopelessness and despair prevent positive action.

To muster the confidence to work toward your goals, avoid these eight traps:

Self-defeating assumptions. You think you can’t, so you don’t.  A British Olympic runner is so rattled by a misstep that cost her a contest that she dropped out of the next. A company team decides that a popular world leader is so far out of their league that they don’t issue an invitation to speak at their customer event. Talented women sometimes “leave before they leave,” as Sheryl Sandberg puts it, assuming that they won’t be promoted (or succeed when they have children) so they start behaving like they’re departing years before departure, thus foreclosing their options. It’s one thing to be realistic, it’s another to behave like a loser before entering the game.

Goals that are too big or too distant. I know how often leaders say they want to tackle BHAGs — “big hairy audacious goals.” But having only enormous goals can actually undermine confidence. The gap between a giant goal and today’s reality can be depressing and demotivating. Confidence comes from small wins that occur repeatedly, with each small step moving you closer to the big goal. But the small steps must be valued and turned into goals themselves. Winners think small as well as big.

Declaring victory too soon. This is the dieter’s dilemma: lose the first few pounds, and feel so good that you reward yourself with chocolate cake, and when the pounds go back on, you feel so discouraged that you have more cake to feel better. I saw this pattern in a college football team that was coming off a 9-year losing streak (yes, 9 years!). After winning the first game in nearly a decade, a team member shouted that now we’ll win the championship. First, of course, they had to win the next game — which they didn’t. Step-by-step discipline builds confidence.

Do-it-yourself-ing.  It’s a trap to think you can go it alone, without a support system and without supporting others. Losing teams have stars, but they focus on their own records, not how well the whole team does; the resulting resentments and inequalities provoke internal battles that drag everyone down. To build your confidence, think about building the confidence of others and creating a culture in which everyone is more likely to succeed, whether through mentoring them or recognizing their strengths. Giving to others boosts happiness and self-esteem, as numerous research studies show. Supporting them makes it easier to ensure that they support you.

Blaming someone else. Confidence rests on taking responsibility for one’s own behavior. Even in difficult circumstances, we have choices about how to respond to adversity. Whining about past harms reduces confidence about future possibilities. When the blame game is carried out within companies, everyone loses confidence, including external stakeholders. Confidence is the art of moving on.

Defensiveness. It’s one thing to listen and respond to critics; it’s another to answer them before they’ve done anything. Don’t defend yourself if you’re not being attacked. Apologize for your mistakes, but don’t apologize for who or what you are. Instead, take pride in where you’ve come from and lead with your strengths.

Neglecting to anticipate setbacks. Confidence involves a dose of reality. It is not blind optimism, thinking that everything will be fine no matter what. Confidence stems from knowing that there will be mistakes, problems, and small losses en route to big wins. After all, even winning sports teams are often behind at some point in the game. Confidence grows when you look at what can go wrong, think through alternatives, and feel you are prepared for whatever might happen.

Over-confidence. Confidence is a sweet spot between despair and arrogance. Don’t let confidence slip over into the arrogant end. Over-confidence is the bane of economies (e.g., the irrational exuberance that preceded the global financial crisis), corrupt leaders (who assume they’re so necessary that they won’t get into trouble for a small expense account fudge), or individuals who swagger and feel entitled to success rather than working for it. Arrogance and complacency lead to neglect of the basics, deaf ears to critics, and blindness to the forces of change — a trap for companies as well as individuals. Sure enough, like the old proverb that “pride goeth before a fall,” the slide into a losing streak often begins with a winning streak. A little humility goes a long way to moderate arrogance and keep just the right amount of confidence.

Remember, it’s not enough just to feel confident. You have to do the work. But with an expectation of success, you can try new things, form new partnerships, contribute to shared success, and revel in small wins that move you toward bigger goals.

Africa’s Companies Need to Become More Like Training Schools

Youth unemployment is an issue that keeps many African politicians awake. Though data unavailability and informal economic activity make estimates difficult, youth unemployment rates in sub-Saharan Africa are believed to hover around 30-50% (and even higher in parts of North Africa). The World Bank puts the figure at 38% in Nigeria, while the Economist projects 55% for young black South Africans. This is set against the backdrop of a fast-growing youth population, expected to double from a base of 200 million by 2045. Africa’s youth are at a crossroads, and today’s decisions will determine whether they become a demographic dividend or a ticking time bomb.

Companies and entrepreneurs can bring a sustainable solution, while unlocking massive economic opportunity, but a change is required from today’s status quo.

In June 2013, some Harvard Business School classmates and I launched a social enterprise (WAVE: West Africa Vocational Education) targeted at the youth unemployment issue. We identified two sides to the problem: the jobs gap and the skills gap. On the one hand, decades of policy failures and stunted private sector growth have led to a shortage of formal jobs; on the other, many youths leave schools and universities wholly unprepared for employment. Our organization focuses mainly on plugging the ‘skills gap’: we identify, train, and place underprivileged youths in emerging industries like the hospitality sector. However, our experiences so far have highlighted opportunities for even broader impact through a different approach to in-house training at African companies.

A ‘Training-Heavy’ Strategy

Today many African companies employ a ‘Training-Light’ approach. In the hospitality sector, for example, they invest upfront into luxury real estate and equipment, but rarely into training programs. Some may have short onboarding programs for new employees; at best some multinational companies will budget similar training budgets as in their developed market businesses. But there is a marked lack of a holistic training strategy that over-invests in response to the challenging African environment, and prioritizes continuous learning and customer feedback.

Instead African companies need to adopt a ‘Training-Heavy’ strategy, which positions enterprises as remedial schools and emphasizes continuous, metric-based learning. There are many reasons for African companies to step back in 2014 and rethink their training approach:

The current system is broken. Many schools and universities pump out students who cannot string together coherent sentences. Companies that fail to take training seriously will face personnel issues sooner or later
A good training strategy is directly linked to reducing the unemployment problem. Companies who take the lead will find themselves on the right side of public policy momentum as government concern about the youth unemployment issue deepens
A good training strategy is a competitive advantage. In his work on interdependence vs. modularity (pdf, page 13), Harvard Professor Clay Christensen predicts that firms with integrated architectures perform very well in under-served markets with ‘not-good-enough’ products. Many emerging markets in Africa fall into this ‘not-good-enough’ category. In such an environment, companies should see training as an R&D investment – part of their secret sauce – rather than a distracting expense.

There are four essential elements of a ‘Training-Heavy’ strategy:

Train early and often. The inferior quality of many schools necessitates early access to youths through internships, short-term placements and even school-based training programs. By finding high potential candidates early, companies can develop them for many years before bringing them onboard. As soon as the new hire is made, companies should emphasize the employee’s position as an apprentice and present each day as a learning opportunity. Regular job functions should be topped up with frequent top-up training sessions, and continuous access to e-learning.
Use mentors and feedback. Mentorship is well-established within many African cultural norms, and exists in some form in many companies. However, companies should be careful to promote mentor-mentee relationships that are based on competence and company experience rather than external factors like age. Many companies also need to work hard to lower the cultural barriers towards giving and receiving feedback. Company executives can set a good example by being transparent in receiving feedback from subordinates.
Metrics are your best friend. Companies need to identify objective metrics to assess the progress of employees – without metrics any training strategy will be haphazard and unsuccessful. These metrics should be linked to value drivers for the company’s business: for example in the hospitality industry, companies need better metrics on customer satisfaction and how individual employees may have contributed or detracted from it. Today, many hotels and restaurants even lack simple feedback forms, and have absolutely no idea how their customers feel.
Align Culture and Incentives. Ultimately, most transformational initiatives will fail if the company’s culture is not aligned. Company leadership should frequently communicate training and development as priorities and promote objective measurements of employee progress. Compensation, promotions and other rewards should be tied to employees’ performance on the identified metrics.

Africa’s companies and entrepreneurs hold the key to making a real dent on the youth unemployment problem. But first, more companies must take training seriously and embrace a ‘Training-Heavy’ strategy. In my next post, I will address the status quo changes required for entrepreneurs.