Marina Gorbis's Blog, page 1494

Stop Me Before I “Innovate” Again!

The Wall Street Journal is out with a funny (and brutally honest) takedown of a word that has achieved almost-mythical status among business thinkers like me. That word is innovation, and it’s quickly losing whatever meaning it once had.

Journal writer Dennis Berman begins by citing Kellogg CEO John Bryant, the respected head of a well-run company, who was describing one of its “innovations” for 2013. What was the game-changing, head-spinning new offering that Kellogg unveiled? The Gone Nutty! Peanut-butter Pop-Tart. That’s right, a world that has had to survive for decades with Pop-Tart flavors such as strawberry, raspberry, and cinnamon, can now revel in the spirit of innovation that delivered a Pop-Tart with peanut butter.

Somewhere, Henry Ford and Steve Jobs are taking notes.

Now I would never dismiss the virtues of sugary breakfast foods, and it’s hard to argue with the business performance of Kellogg over the last ten years. But if the CEO of a major company can call Gone Nutty! an innovation, then what isn’t an innovation? What does the word even mean anymore? As Berman aptly puts it, “Next time your boss starts droning on about innovation, it might be helpful to stop and analyze: Is she talking about building the next iPod or the next Pop-Tart?”

Words matter — in business and in life. I’ve always found that companies that aspire to do extraordinary things, leaders who aim to challenge the limits of what’s possible in their fields, develop a “vocabulary of competition” that captures the impact they’re trying to have, the difference they’re trying to make, the future they’re hoping to create. Almost none of these companies and leaders use the word “innovation” to describe their strategy — implicitly or explicitly, they understand that it has been sapped of all substance. Instead, they offer rich and vivid descriptions of what they hope to do, where they hope to get, and why it matters.

Robert MacDonald, the most creative and opinionated insurance-industry executives I’ve ever met (yes, I know, he doesn’t have tons of competition), likes to say that the art of doing something new is a matter of “reminiscing about the future.” That is, conjuring up a set of ideas and practices that are so original that established companies can’t begin to make sense of them, let alone respond to them — and painting a vivid picture of what your organization can become if it delivers on its change-the-game agenda. That was the spirit behind LifeUSA, MacDonald’s memorable contribution to an industry whose record of innovation is pretty forgettable, and it’s a spirit shared by most of the genuine innovators from whom I’ve learned.

It’s also a spirit, oddly enough, best captured in a famous tribute to the Grateful Dead rock band. The Dead hold an iconic spot in the history of popular music by virtue of their unique sound, devoted fan base, and ahead-of-its time business model that generated almost all of its revenue from live performances rather than studio records—a model that bands, executives, and academics still learn from today. (One business-school professor actually wrote a book called, Everything I Know about Business I Learned from the Grateful Dead.)

Back when the band was at the height of its powers, Bill Graham, the legendary rock promoter, was asked why the Grateful Dead were so successful. “They’re not just the best at what they do,” he replied matter-of-factly. “They’re the only ones who do what they do.”

I can’t think of a better way to describe the mindset required to do something genuinely creative in business, whether it’s starting a cutting-edge insurance company or developing a truly new-and-better breakfast food, than Bill Graham’s insight about the Grateful Dead. Creativity guru Saul Kaplan, founder of the Business Innovation Factory, warns that too many competitors in too many fields are content with being “share takers”—tweaking at the margins to win a little more business. (That, to me, is what Gone Nutty! Pop-Tarts are all about.) Organizations that do something genuinely creative, he says, are “market makers”—they create a one-of-a-kind presence, a unique offering, unlike what anyone else can do.

That, to me, is what “innovation” is all about, and why the use of the word in everyday business life feels so empty. According to the Journal, Boston Consulting Group polled 1,500 executives about how innovative their companies were, and asked them to rank their organizations on a scale of 1 to 10. More than two-thirds of respondents gave themselves a 7 or higher. Seriously? I guess Ivy League schools are not the only organizations that engage in rampant grade inflation.

Meanwhile, the article continued, in a recent conference call with shareholders, Hewlett-Packard executives described the troubled company’s plans to cut costs, streamline the organization, and rejigger the product portfolio. During the course of the call, they used the word “innovation” 70 times! If there were a Lifetime Achievement Award for Buzzword Bingo, HP would have retired the cup.

So here’s my challenge as we approach the New Year: Why don’t we ban the word “innovation” from the business lexicon for 2014? Let’s force ourselves to be more authentic, more rigorous, more persuasive, as we describe new products, new business models, new solutions to old problems. Now that would be an innovation!

Find Your Inner Mandela: A Tribute and Call to Action

Don’t just mourn Nelson Mandela. Learn to be Nelson Mandela.

He was the consummate turnaround leader. As the first democratically-elected president of post-apartheid South Africa, he took on and reversed the destructive symptoms of decline, a larger version of what goes on in any organization or community sliding downhill – suppression of information, group vs. group antagonisms, isolation and self-protection, passivity and hopelessness. He began the turnaround with messages of optimism and hope, new behaviors at the top (he even cut his own salary), and new institutions that created more communication and accountability. He created a new constitution with a participatory process that included everyone. He reached out to former enemies, visiting the widow of a particularly odious apartheid leader for tea. He ensured diversity and inclusion of all groups in his Cabinet. He brought foreign investment back to South Africa and empowered the disenfranchised black majority to take positions in those enterprises.

He knew that he was an icon and shaped a culture for others. His goal was to change behavior, not only laws. The head of what was then Daimler Chrysler South Africa, who had returned to his native South Africa after apartheid ended, motivated a hostile, unproductive black work force by engaging with them in their dream of building a Mercedes for Mandela. This was all about culture, not about financial incentives. People raised their aspirations because Mandela encouraged them.

He also understood the power of forgiveness. Despite 27 years in prison, he emerged with his sense of justice intact — but no discernible bitterness. He maintained his faith in people no matter what, that people would come right in the end, he said. His Truth and Reconciliation Commission was a masterful organizational innovation, permitting people to come forward to admit atrocities and then go forward to make a fresh investment in future improvement. He made the rare transition from revolutionary to statesman. He resisted pressure to simply switch roles from oppressed to oppressor and instead focused everyone on pride in the nation they shared and on working together for larger common goals. His wearing of the colors of the formerly all-white rugby team in South Africa’s 1995 victory over New Zealand was a dramatic healing gesture.

He didn’t cling to power. He empowered. He announced during the election that he would serve only one five-year term – a remarkable action not only in Africa, a continent riddled with corrupt leaders who refuse to cede power, but also for someone who had waited so long and given so much to reach that position. Some observers faulted him for this, because his successors were no Mandela. But he made his point – that many must serve and become leaders, and that a nation is larger than any one person.

He continued to advocate for service after he left office. He asked former U.S. President Bill Clinton to help bring a national service program like AmeriCorps to South Africa. That was the start of City Year South Africa in Johannesburg, featuring young people working in schools to improve outcomes for those who had been left behind. As a City Year trustee, I saw firsthand the positive energy Mandela unleashed.

In a mere five years in office, he couldn’t transform everything. But he could start programs and create institutions that would shift other people’s actions to a more productive path. He could serve as a role model, conveying messages through his personal actions and his words about what kind of behavior, what kind of culture, would characterize the new South Africa he envisioned.

Mandela’s legacy is larger than racial justice and more widespread than his country or continent. His legacy lies in the lessons about leadership he left for all of us. We can pay tribute by channeling him: Discouraged because things don’t break your way? Consider Mandela’s 27 years in prison. Unwilling to give up the perqs of power? Recall Mandela’s no-more-than-five-years promise. Tempted to crush the competition, eviscerate enemies, or publicly humiliate those who make mistakes? Find your inner Mandela, forgive, and move on.

As children, many of us read the powerful, disturbing novel about the evils and tragedies of apartheid in South Africa, Cry the Beloved Country by Alan Paton. Now the beloved country cries for the death of the leader who ended apartheid. Imagine a Mandela for the Middle East, or multiple Mandelas in the U.S. Congress. There would be more collaboration, more truth and reconciliation, more focus on common goals rather than divisiveness. That would be a gift for the world. The best way to mourn Mandela is to start a movement to transform the culture of leadership, and ourselves.

New York’s Train Derailment is a Reminder of the Importance of Sleep Health Policy

It will take months for the National Transportation Safety Board (NTSB) to examine all the evidence from Sunday’s fatal derailment on New York Metro North line in order to determine its cause. In the meantime, however, the press conferences, the media coverage, the statements by work colleagues and Union officials are giving us a picture that fatigue may have played a central role. One particular reported fact is of interest from the perspective of corporate sleep health policy: the Metro North train driver, William Rockefeller, changed from the afternoon shift to the day shift two weeks ago.

We will have to wait for the NTSB final report, of course, to know if this change was a contributing factor to the derailment. However, we do know that managing these kinds of shift changes with the tools of circadian biology can help avoid negative impacts on occupational performance.  For example, we know from research that rotating shifts with the clock is better than rotating shifts against the clock. Mr. Rockefeller’s shift change was against the clock – afternoon shift to day shift rather than afternoon shift to night shift – which is associated with greater sleepiness and more frequent accidents.  (Go here for more discussion on the sleep health aspects involved with the Metro North tragedy story.)

Whether or not sleep ends up implicated in this particular tragedy, its role in accidents more generally is beyond dispute, and not limited to railroads or to the transportation industry. Business professor Christopher Barnes reminds us that sleep deprivation was identified as a significant contributing factor in the Three Mile Island and Chernobyl disasters. The Exxon Valdez accident is also widely recognized as an incident in which sleep deprivation played a major contributing role.

In addition to sleep deprivation, diagnosable sleep disorders also impact business directly in terms of lost productivity, accidents, and healthcare costs. Ron Kessler recently reported that the cost of insomnia to the America economy is $63 billion annually. A meta study by McKinsey found that obstructive sleep apnea is responsible for a $65 bil to $165 billion hit annually to the American economy.

As sleep touches everyone, sleep health touches all businesses from the local pizza shop to global financial services. That is why we at the Harvard Medical School Division of Sleep Medicine are reaching out to corporations to collaboratively set standards for corporate sleep health policy. Low cost measures by companies such as requiring healthcare providers to include sleep health questions as part of employee annual physicals can ensure that sleep health is integrated as the third pillar of health and wellness, alongside diet and exercise.

The recognition of sleep’s importance as a matter of corporate policy won’t happen overnight, but it must happen. The result will be happier and more productive workers, more profitable companies, and fewer accidents.

The Mistakes Behind Healthcare.gov Are Probably Lurking in Your Company, Too

Post-launch fiasco, followers of the Healthcare.gov experiment seemed locked in a pointless pattern of irrational expectations, finger pointing, witch-hunts, and spasmodic new deadlines (i.e., more irrational expectations). Fortunately, in the news this week, the situation seems to be turning around (although some are still skeptical). What’s to be learned sorting through the wreckage?  The failed launch points to four common mistakes leaders must strive to avoid.

Setting irrational expectations. To expect anything as complex as this particular project to emerge fully functional on day one was the first (and perhaps most important) failure. I’ve seen this mistake numerous times in other industries — from a customer service fiasco by a major telecommunications company that launched DSL at too large a scale to NASA’s failure to recognize the implications of a foam strike in the Columbia shuttle tragedy.

Like these other complex challenges, the more we learn about the process of building Healthcare.gov, the more we understand why the initial launch failed.Communications between the Centers for Medicare and Medicaid Services (CMS) and the hired private IT company, Consultants to Government and Industry (CGI) were tangled and mistrustful, making simple requests for access and information cumbersome and time consuming. The two major players didn’t share priorities: CMS prioritized the October 1st deadline above operability. And the New York Times lists “weak leadership” at Medicare as another complicating factor.

Playing the blame game. The CMS monthly status reports leading up to October 1 (especially the report for August, 2013) reveal increasingly desperate language and blame shifting. Medicare officials, the New York Times reports, “began to suspect that staff members at CGI were intentionally trying to hide flaws in the system to cover up for their inability to meet production deadlines.” CGI staff members express barely concealed frustration with repeated requests for access and with constant heckling emails from CMS staff. Within CMS, Deputy CIO for IT Henry Chao’s group emails employed all caps and direct finger pointing, like this one dated 9/26: “I need Monique to get this in sync…ironed out now — I DO NOT WANT A REPEAT OF WHAT HAPPENED NEAR THE END OF DECEMBER 2005 WHERE MEDICARE.GOV HAD A MELTDOWN (THIS IS TO GET YOUR ATTENTION IF I DIDN’T HAVE IT ALREADY).”

Following old-fashioned buck-stops-here logic, post-failure investigations hoisted mangers like Kathleen Sebelius onto the chopping block, (unsurprisingly) failing to reveal any solutions for Healthcare.gov’s problems. Moreover, it’s simplistic (and just plain wrong) to seek a single culprit.  As one computer expert with intimate knowledge of the project told New York Times reporters, “Literally everyone involved was at fault.”

Rolling out instead of cycling out. Healthcare.gov is a good example of the importance of learning small and fast, rather than rolling out a risky new product or service launch all at once. Cycling out in phases includes the expectation of early failures – and demands all hands on deck to learn from them along the way. A roll-out, in contrast, implies that something is all set, ready to go — like a carpet. All it needs is a bit of momentum to propel it forward. For complex initiatives, of course, this is simply not the case. Getting people motivated enough to change is not the real challenge; it’s getting them engaged enough to learn — to become part of a discovery process.

CGI and CMS, like countless organizations under pressure (deadline, bottom-line, or finish-line), employed an organize-to-execute mindset instead of an organize-to-learn mindset, which made it difficult for managers to change their approach, especially in the middle of a crisis. On-the-job learning is necessary to discover and use new answers simultaneously. Managers must make it clear that they understand that excellent performance does not mean not making mistakes — it means learning quickly from mistakes and sharing the lessons widely.

Losing sight of the big picture. Finally, in all of the hoopla over the website, many lost site of the original goal: affordable care for more Americans. For this goal, it seems there is reason for cautious optimism. In spite of the website fiasco, data released by the CMS Office of the Actuary in September, 2013 reveal significantly lowered per capita healthcare expenditures in all three payer categories (a growth rate of 1.3 percent vs. the long-term historical average growth rate of 4.5 percent).

These and other similar trends led columnist/economist Paul Krugman to predict improvements in healthcare spending, in part due to the Affordable Care Act: “The news on health costs is, in short, remarkably good,” he wrote. “You won’t hear much about this good news until and unless the Obamacare website gets fixed. But under the surface, health reform is starting to look like a bigger success than even its most ardent advocates expected.”

The predictable traps described above can be avoided with four leadership actions:

Set compelling, but realistic, expectations. Novel complex initiatives will encounter stumbles and falls along the way to success.  Let people know to expect them. They’re an essential part of the learning process!  The job is to work closely together to learn fast — and improve faster.

Identify lessons, not culprits. There’s always plenty of blame (i.e., factors contributing to a failure) to go around, and it’s almost always a poor use of time to seek out and punish culprits.  Although satisfying to some, it distracts from the core work of learning and improving.  Instead of “who did it?” ask, “What happened?  What can we learn? What should we try next?”

Design learning cycles.  For novel initiatives, design to identify intelligent failures (those that occur in novel territory at a small scale) quickly, then catch and correct them before the next cycle starts.  Celebrate intelligent failures as a source of innovation.  Recognize that the timeline for completion can be ambitious but it is necessarily uncertain; build in time for recovery.

Emphasize what’s at stake. Reminding people of the big picture helps them understand why it’s worth forging ahead through the trials and tribulations of learning.

Sometimes the best launch is a bit bumpy, a little less glamorous — and certainly more than a little frustrating — but, in the end, the best route to success.

Three Ways to Say No to a Reference Request

Christopher, a seasoned real estate executive, left his job in early 2013 to move to a competitor’s firm. Less than three months later, he received a call from his former boss Theo — in search of a reference letter himself. Christopher was dumbfounded — he had left his former firm precisely because of Theo, a terrible manager whom colleagues found intolerable.

How should Christopher respond? Could he, in good conscience, say yes to providing a letter of reference to someone he didn’t like or respect?  Could he say no, and tell Theo off?  Christopher listened politely, vacillating between surprise and schadenfrude, racking his brain for a way out of a seemingly no-win situation.

Saying “no” these days isn’t easy.  Most of us are terrible at it.  There are plenty of people who assure us we’ll be happier if we say no more often. The challenge isn’t entirely philosophical — we know we should say no more often. It’s tactical: how do you actually say no when you’re put on the spot?

If you find yourself in the unenviable position of being asked for a reference letter you have no interest in, or ability to write, there is a way out.  In fact, there are three ways out — three excuses that are perfectly suitable.  They include:

1. Not being willing or able to spend the time

2. Not knowing someone well enough

3. Not being able to provide a glowing review

Not willing to spend the time. It’s not that you don’t have a little extra time on your hands; it’s that you’re not willing to take the time from what’s important to you — whether it be mission-critical tasks at work or a spending time with your family.  Steve Job was famous for saying “no” to 1000 things and using “no” as a strategic business decision. If the ultimate sign of success is an open calendar, think of this “no” as a move towards freeing up your most valuable asset.   Play the travel card, the closing a deal card, or the family card — concede that you don’t have the ability to serve as a worthy reference or write an adequate letter of recommendation because it’s takes too much effort away from what you are truly focused on in the moment.

Not knowing someone well enough. The best references come from people who know you, your character, and your work product extremely well.  If you’re asked to vouch for someone you don’t know well, the chances of you knocking it out of the park are extremely low.  It’s in no one’s best interest for you to spend your political capital endorsing someone you don’t know intimately or can’t speak about genuinely.

So be honest, and decline on behalf of the other person’s best interests: “Medha, I wish I could help, but I really don’t think I know you well enough to provide as strong a reference as you probably need and deserve.  I’d encourage you to reach out to someone who knows your work style/product/ethic better.  As much as I’d like to help, I think you’ll be better served with someone else.”

Not being able to provide a glowing review. Finally, if you are Christopher and you simply can’t find enough (or any) good things to say about your former boss, it’s in everyone’s best interest to bow out early.  Tell Theo that you’d love to help, but you recognize that the letter of reference you’d provide likely wouldn’t reach the level of praise he’s shooting for.

It makes for a tough conversation for sure.  But ultimately, it shows that you have Theo’s best interest at heart.  The option of saying yes and then badmouthing your boss isn’t really an option — that’s a below the belt tactic you should avoid at all costs.

So take the high road.  Have the difficult conversation upfront, but know that your conscience stays intact and Theo’s future job prospects aren’t lampooned by you.  It’s one thing to decline endorsing someone; it’s another thing entirely to say yes and then jeopardize their future.

Amazon Turned a Flaw into Gold with Advanced Problem-Solving

“It’s not that I’m so smart, it’s just that I stay with problems longer.”

– Albert Einstein

Several years ago, Amazon was struggling with scaling its e-commerce infrastructure and realizing that many of its internal software projects took too long to implement, a major pain point from a competitive standpoint.

Andy Jassy, acting as a chief of staff for Amazon CEO Jeff Bezos, was assigned the task of figuring out why. What he realized was that what many of these teams were building wasn’t scaling beyond their own projects. For each new project, a team would have to reinvent the wheel.

Jassy and Amazon could have come up with a solution to this internal scaling problem and stopped there. But the team went beyond that, figuring that if they were having difficulty with certain technology infrastructure problems, it was highly likely that other companies were experiencing similar problems. Thus, if they could solve these issues for themselves, they could potentially also solve it for others.

So Amazon started to develop an architecture that could be re-employed over and over again by different engineering teams for different projects. These services allowed Amazon the retailer to move more quickly than it had previously.

But the company didn’t stop there, choosing instead to turn its solution into a new business line, offering cloud computing as a service. And so Amazon Web Services was born. Today, AWS generates roughly $3 billion in annual revenue and adds more infrastructure daily than it took to run all of Amazon in 2003 when it was a $5.2 billion retail business with over 7,800 employees.

The lesson of course is that Amazon didn’t stop by solving its problem, but found a “breakthrough solution” that opened up new business opportunities.

Eight Levels of Problem Solving

It’s not easy to create culture that, like Amazon, sees opportunities instead of problems. But it helps to start with a simple motivational framework to focus people on assessing their own problem-solving abilities. Even better is to begin to reward them as you see their problem-solving abilities progress.

What level problem solver can you be?

Level 0 – Can’t see the problem

Level 1 – See the problem and raise it

Level 2 – See the problem and define it clearly (a problem well defined is a problem half-solved)

Level 3 – See the problem, define it clearly, and identify the root cause

Level 4 – Plan ahead to avoid the problem or derivative problems re-occurring (prevention is better than a cure)

Level  5 – Find a practical and viable solution to the problem

Level 6 – Find a breakthrough solution to the problem (for example, one that saves more than it costs, or opens the way to other breakthroughs)

Level 7 – Take initiative to implement the solution or develop the breakthrough

Level 8 – Look beyond problem prevention – create new opportunities from continuous improvement  (Think 3M, or the Amazon example above.)

Andy and the team could have stopped at Level 3, but instead, they did an internal assessment of their core competencies, which obviously included retail. But when the company dug deeper, it realized that it also had a competency in running infrastructure, backed by an extremely strong technology team.  They were moving up to Level 5. By recognizing that others likely shared their need, they were thinking up to Level 8. The result was a new business opportunity – a breakthrough solution — now worth tens of billions of dollars.

For more, watch my interview with Amazon’s Andy Jassy. 

The Best Morale Boost $3 Million Can Buy

The extravaganza takes place in the bathroom. A lady is crooning an ode to the “the only place where I can stay, making faces at my face; a special place where I can stay and cream, and dream.”

“My Bathroom”

A gaggle of gentleman salesmen hang onto every word, erupting in applause.

Courtesy of Blast Books 

This song, “My Bathroom,” was composed by Sid Siegel and was just one of the inspirational tunes featured in American-Standard’s 1969 stage and video show “The Bathrooms Are Coming!”

Courtesy of Blast Books 

Performed at the company’s “Distributor Principles Conferences” in Las Vegas, the musical, as described by Steve Young and Sport Murphy in their book Everything’s Coming Up Profits, involved both a Greek goddess named Femma being “implored… to start a bathroom revolution” and references to a Cornell professor’s research on water closet ergonomics. (Spoiler: The professor’s work was sponsored by American-Standard.)

“The Bathrooms are Coming!” is one example of an industrial musical, an elaborate Broadway-style show that was commonplace at company conferences in the U.S. between the 1940s and 1970s.

When cost wasn’t an impediment, the performances were sometimes recorded, pressed, and distributed as souvenirs to “recreate the magic and reinforce the message back home,” writes Young. Independently, Young and Murphy began collecting the rare vinyl. I recently spoke with Sport Murphy over the phone.

“You start to think, my god, what were these people thinking?” True. “But the absurdity of these things is kind of like their way of bonding. You know: ‘I spend every day trying to convince people to buy this bathroom suite, and here’s this song that turns it into this big, lush cartoon.’ And they appreciated it because it’s something they could all relate to.”

Industrial musicals weren’t merely about camaraderie and a few chuckles. “There was a lot of minutia that had to be crammed into the shows,” says Murphy. “There were catchphrases that had to be hammered into the head of the employees, just like advertising does to the general public.” Songs were important devices for remembering a product’s key new features, like this one from the 1956 GE appliance show “It’s a Great New Line!”

“Ive Got a Wide Range of Features”

Or for improving sales techniques, per this 1959 gem from the Oldsmobile show “Good News About Olds”:

“Don’t Let a Be-Back Get Away”

They were also intended as a steam valve to acknowledge and dissipate on-the-job stress, like this one from 1961′s Coca-Cola show “The Grip of Leadership”:

“Hot Seat”

And to complain about government policy and interference — a not-so-subtle point made by this number from the 1976 Exxon Convention:

“Efficiency”

Corporate musicals came to fruition in the wake of World War II, when there was a desire for, as Young writes, “lots of stuff, which American corporations were eager to supply.” The performances also arrived on the heels of story-driven shows like Oklahoma!, which debuted on Broadway in 1943. “It’s a genre that Americans associated with class and with prosperity, so that sort of aesthetic gave it its emotional hook” with big companies, Murphy said.

The U.S. was also feeling pretty darned united. “You’re talking about an entire generation that, between the depression and the war, had gotten into the mindset that we really need each other, we trust our leaders,” he explained. “And the least significant person in the organization is as important as the most prominent one.”

Of course, industrial musicals wouldn’t be an American story without enterprising businessmen looking to boost efficiency and increase profits. According to Murphy, the emergence of music in American corporations can be tenuously traced to National Cash Register at the turn of the 20th century and its founder James H. Patterson, who “had this very paternalistic ideal towards his company.” This ranged from creating more humane conditions for his factory workers and providing extensive training to his sales staff to demanding loyalty and exercising a maniacal sense of control, firing people left and right. Part of his strategy included what Murphy calls “pep talk shows.”

“They would show slides, people would sing songs, and they evolved into theatrical productions that were essentially intended to be morale boosters” while hammering home the company ethos and lauding efficiency in the workplace.

Patterson fired a certain Thomas J. Watson, who later went on the lead IBM for more than 40 years. Watson’s IBM also used music as a central component in company culture, perhaps most famously creating this epic songbook in 1935 that includes “Ever Onward,” the official IBM rally song, as well as odes to senior executives set to well-known tunes (listen to four of them here).

Murphy credits IBM’s use of music as a kickstarter for other companies, particularly those like Mary Kay Cosmetics and Fuller Brush Company that relied on salespeople who needed to stay motivated.

More complicated theatrical wonders like “The Bathrooms Are Coming!” were the achievement of ambitious producer Jam Handy. After swimming in two Olympic games (1904 and 1924), Handy became obsessed with the psychology of employee motivation during his time in the Chicago Tribune’s advertising department, says Murphy. This led to his association with James H. Patterson, who became a mentor.

Handy made a good living producing short films for companies like General Electric, Chevrolet, and Coca Cola in the 1930s, and shifted his focus to making military films during World War II. “After the war” writes Murphy, “the consumer boom opened numerous new opportunities for the company as more and more corporations and agencies sought the Jam Handy magic.” By the 1950s, Jam Handy Productions was “the nation’s largest employer of theatrical talent, producing as many as 20 sales conference shows yearly.” Other production companies followed suit. And as more big corporations started embracing the performances they orchestrated, the industrial musical as written about in Everything’s Coming Up Profits was born.

One of the most remarkable aspects of the whole phenomenon is how much money companies pumped into them. Steve Young notes that the first show composer Hank Beebe orchestrated in 1956, for the next year’s Chevy models, had a budget of $3 million, more than the half to three-quarters of a million that was spent on the average Broadway show during the same time period (the high price was largely due to the fact that the entire production bounced from sales conference to sales conference across the country). All shows weren’t necessarily as expensive, however; this 1955 Milwaukee Journal article covers a $250,000 Oldsmobile show that toured for 10 weeks and featured a storyline involving “an Arabian Nights used elephant dealer.”

Oldsmobile told the Journal almost every car dealer across the country saw the show, spreading a consistent message about new products nationwide. “They had a fine time, saw pretty girls and nice scenery and heard good songs and watched expert dances,” writes the article’s author. “But they also got a pretty strong, impressive sales message.” Indeed, most composers hired by companies had some flexibility in the music, but not in the messages themselves.

And while there isn’t hard ROI data on revenue made based on the content of the shows, according to Murphy it made a strange economic sense to those involved: salesmen were (hopefully) motivated to sell more, while actors, musicians, and composers got paid a union wage. Some, like Fiddler on the Roof co-composer Sheldon Harnick, wound up on Broadway.

Things began to fall apart when both business and popular culture changed dramatically between the 1960s and ’90s. For one, the shows struggled to retain their “cool” factor during the ’60s, often lagging a few years behind trends, and making a bit of a mockery of all things mod or psychedelic. “It would be these guys with very obviously long blonde wigs and granny glasses playing really bad simulations of The Birds,” says Murphy. And why would you stage an elaborate show with fake songs when you could just hire a famous musician to perform instead?

From a 1966 Chrysler Corporation conference, courtesy of Blast Books 

One can also imagine that the peculiar gender politics of songs like “My Bathroom” were starting to strike the nerves of an increasingly diverse workforce as time inched closer to the turn of the century and sales conferences weren’t merely boys clubs. (Though Mary Kay slowly developed its own quasi-religious conferences, complete with songs, by the 1980s.)

But perhaps the biggest reason industrial musicals crawled into historical oblivion has to do with a change in the employer-employee relationship (not to mention the place of the U.S. economy in the country’s culture).

“It was likely a chicken-or-egg situation,” Murphy theorizes. “The shows probably motivated people, but it was also coming from a corporate culture that felt a sense of belonging. In the bigger corporations, they had a real stake in keeping their employees happy and loyal. They would rather have a lifetime employee who really understood the business and believed in it, rather than a series of revolving door specialists who would come and go.”

In a letter Hank Beebe wrote to Murphy and Young upon the publication of their book, he remarked that the text brought to life “that [era's] civilization — its extravagance, its confidence, its belief that the future belonged to those who reached for it. Even the belief in the corporation as a force for good comes through, a belief that recent history has not exactly upheld.”

Whether or not you buy into this nostalgia, Thomas J. Watson’s lyrical approach would probably be lost on the IBM of today. As the Washington Post reports, Watson once listed the company’s values in the following order: respect for the employee; a commitment to customer service; and achieving excellence. By 1994, when Louis V. Gerstner Jr. headed the company, he orchestrated an epic turnaround, putting shareholder value and customer satisfaction at the top of the list. Employees and community were at the bottom. The most recent two CEOs placed investor returns at the top of their priority lists.

But I’m sure there’s a song for that somewhere.

Small Businesses Need Big Data, Too

If you run a small or medium-size business, chances are you haven’t felt a need to invest in extensive customer data, relying instead on your well-honed intuition to help you hold your own against data-rich, bigger competitors. A lot of small-firm owners and managers feel that way, and in many cases they’re justifiably proud of their competitive intangibles—a gut sense of the market and the flexibility to change quickly.

What you may not realize is that investing in data and learning how to use it might be transformative for your business. In research we conducted with Gillian Armstrong of the University of Ulster and Andrew Fearne of the University of Kent, we found not only that small businesses benefited from the precision offered by customer data, but also that exposure to data encouraged owner-managers to share insights with employees and get them involved in companies’ competitive thinking.

Of course, for the smallest businesses, access to extensive consumer data can be prohibitively expensive, a point we’ll address in detail in a subsequent post. But cost isn’t the only barrier. Small firms tend to find the whole concept daunting—they know they lack the expertise and the time resources to make good use of the information. Our three-year project was designed to build awareness among small firms about the value that data could have for their businesses.

Funding from a regional UK government agency enabled us to get over the cost barrier: It allowed us to provide loyalty-card information from supermarket giant Tesco, free of charge, to seven firms in the Northern Ireland region of the UK. These companies, ranging in size from seven to 45 employees, sell such things as dairy products, baked goods, vegetables, and desserts to Tesco and another grocery chain, Sainsbury’s (we tasted some pretty amazing soups during the course of our research—a tough job, but someone has to do it).

The data, provided by analytics firm dunnhumby, covered such things as consumer life stage and lifestyle, market-basket analysis, and best-performing stores for the small firms’ products.

The formalized structure of loyalty-card data within a statistical format requires firms to take a more formalized and struc­tured approach to marketing planning—that’s a challenge for small companies. Owner-managers were encouraged to attend workshops, and one of us (Christina Donnelly), after being trained by dunnhumby, worked one-to-one with owners and managers to help them retrieve the most relevant data from the loyalty-card database and analyze the information, so that the companies could answer questions such as “How is my category performing?” “What is the most popular flavor of bread?” “What type of consumer buys a product similar to mine?”

We found that prior to being exposed to the loyalty-card data, the small businesses tended to be dominated by their owner-managers, who made decisions on the basis of their past experiences and any consumer information they could get their hands on. For example, one firm, having been asked by a retailer to produce a range of ready meals, simply looked at other products on the market and tried to imitate them. In other cases, the small firms followed guidelines laid down by the big retail buyers.

Once they were given access to loyalty-card data, most of the small firms took to it immediately. They were quick to adopt a more formalized approach to marketing planning. They were able to envision long-range innovations, rather than reacting to competitors’ or the retailers’ actions. One small-firm owner said the data had changed the company’s ideas about how to grow its consumer base. Another said, “Now we know precisely who our target consumer is.”

A yogurt maker, for example, learned by analyzing the data that older adults were a key market for its products, so when the company’s representatives visited supermarkets for in-store tastings, they no longer tried to entice younger shoppers and instead focused on older people. The tactic improved the events’ productivity.

But the small firms didn’t abandon their reliance on experience. Instead, the data complemented the owners’ and managers’ intuition, giving them new confidence.

Moreover, the data amplified the firms’ inherent entrepreneurial nature. Workplaces became more collegial: Most of the owner-managers shared the card information with their firms and encouraged employees to get involved and offer new ideas.

Big Data threatens to create a deep divide between the have-datas and the have-no-datas, with big corporations gaining advantage by crunching the numbers and small firms left to stumble in the dark. The small firms we worked with were well aware that they were at a severe disadvantage to big competitors that had the financial muscle to buy into loyalty-card data and the resources to use it.

Governments and universities can play important roles in bridging the divide, providing funds and expertise so that small firms can get access to, and learn to interpret, data. Our project is an example of a fruitful collaboration—among the University of Kent, the University of Ulster, dunnhumby, and the government funding body. The quality of the learning is important. A key reason why this project worked was the one-to-one help for the owner-managers. Data is only as good as the people who use it.

For small and medium-size firms that do manage to acquire consumer data, there’s still more work to be done: They need to be sure to encourage employees to participate in thinking about how to use the information competitively. We saw firsthand that inclusivity energizes firms, driving innovation.

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How to Manage Impossible Clients

If you provide some kind of service to clients (as most of us do), you’ll know from experience that some of your beloved masters are easier to work with than others. Some are delightful, some forgettable, and a few you proclaim as downright impossible.  Although your view of the client depends on a multitude of factors (such as your relative levels of experience, your disciplines, and the nature of the project), I will go out on a limb to say that there really is such a thing as an “impossible” client — someone who exhibits one or more “bad behaviors” that make the collaboration more difficult than it needs to be and frustrates your ability to perform the service you have been engaged to provide.  For many of us, when clients act this way, our primal instincts kick in and we’re tempted to respond with even worse behaviors of our own.

There is a better way.  Impossible clients can, in fact, be managed; but only if you resist the temptation to fight fire with fire.  Instead, deliver — and let your talent speak for itself.  If you fulfill your end of the bargain, it’s much easier to find positive outcomes when clients behave badly.

Here are four typical “impossible” behaviors, and ways of responding that I have found effective:

Impossible Behavior #1: Self-Barking (aka Micromanaging)

I worked in the United Kingdom for a couple of years, and there learned a favorite client-related expression: “You don’t hire a dog and bark yourself.” Unfortunately, that’s exactly what some clients do — insert themselves where unneeded, micromanage, sometimes even perform the work they hired you to do.

Temptation: Take offense. Start a pissing contest of competence display. Out-perform your client to demonstrate your superior abilities.

Better plan: Continue to do your work, unfazed. Wait for your (eventually desperate) client to ask for help when the going gets rough. Let your skill and talent speak for themselves.

If you are better at your job than your client (you are, right?), you can be content in doing your work, and then laugh and privately roll your eyes when your client inevitably says something like, “Well, I had to get the ball rolling…”

Impossible Behavior #2: Feedback Deluge/Drought

Either your client inundates you with feedback — I once developed a book with five authors and received a marked-up manuscript from each — or starves you and leaves you blindly wandering down a potentially wayward path.

Temptation: In the case of deluge, complain that you can’t possibly be mindful of so much criticism. In the case of drought, demand more input and refuse to continue until you get it.

Better plan: When deluged, negotiate a process in which the client’s feedback (no matter the amount) is pre-synthesized and delivered in digestible chunks, so as to be (or at least appear to be) more manageable. In the case of drought, don’t make any assumptions. Ask for feedback directly, early, and often.

You may not always be pleased with (or agree with) the feedback you hear — especially when you’re hearing too much of it or none at all. But keep in mind that your mission is to collaborate, and that your goal is not to train your client, but to do the best possible work you can. Feedback implies a discussion and a back-and-forth, and will always improve the outcome.

Impossible Behavior #3: Deadline Dichotomy

Impossible clients are careless about deadlines — they don’t necessarily deliver the materials you need on the agreed upon schedule (thereby delaying your process and disrupting the cadence of your work), but no matter how laggardly they may be, your deadlines do not budge. If you miss a milestone, the client hangs a millstone around your neck.

Temptation: Whine. Accuse the client of foot-dragging and being unreasonable. Plead/negotiate/demand more time.

Better plan: Create a realistic timeline to start. Overestimate how long it will take you to complete a task by a factor of two. Work late or on weekends when you have to.

I don’t let clients know exactly how long it takes me to do what I do. This is not to deceive them, but because my pace is born of decades of practice, and the amount of time spent is not equivalent to the amount of value delivered. (I realize this differs from profession to profession.) We once tried to develop a fast-track approach to the development of book proposals and found that, on average, it took twice as long as the standard process. Why? We were so focused on the deadlines we couldn’t focus on the work itself.

Impossible Behavior #4: Credit Grabbing/Blame Assigning

When the project is completed successfully, the impossible client takes credit for it and downplays your role. If the work falls short, the client makes sure you and your firm are prominently mentioned.

Temptation: When things go well, thrust yourself forward. Seek credit. When things go wrong, fade back. Place blame. Tell the “real story” behind your client’s back.

Better plan: Compose a written agreement that specifies exactly how you/your work will be acknowledged in public materials. Or, decide to keep a low profile, even remain anonymous. Let the work speak for itself. Let the client shine.

Everyone wants recognition for the work they do, but your main task is to fulfill your promise. If you do that, the chances are better (although not 100%) that the client will speak well of the work and of you, and that word will get around. Recognition is warming. More work keeps the heat on.

A final thought. In the study of resilience, there is an argument that holds that disruption and difficulty can bring positive outcomes and new opportunities. I have found this to be the case with impossible clients. They are, of course, not really impossible at all: just difficult, trying, exasperating perhaps. But in every engagement I’ve had with an impossible client, I have found or developed better ways to collaborate, communicate, and to bring impossibility back into the realm of the possible.

Would You Rather Have Brazil’s Economic Problems or America’s?

It’s been a great millennium for Brazil, so far. The country’s economy has boomed, wages have risen sharply, and joblessness has fallen to levels that economists deem pretty close to “full employment.” Government policymakers have kept deficits relatively low and inflation in check — at least by Brazil’s historical standards. And the World Cup and Olympics are coming! Yay!

But there’s trouble ahead — and not just because Brazil may not be entirely ready to host the World Cup and Olympics. Two of the main drivers of a country’s economic growth are the size of its workforce and the productivity of its workers. In Brazil, rapid growth in the working-age population and rising labor-force participation have been boosting GDP for years, but have now pretty much run their course. The country’s fertility rate has fallen from 4.1 births per woman in 1980 to 1.8 now, and that decline has meant fewer people entering their working years. And full employment means that labor force participation simply can’t go much higher.

I heard these arguments from Marcelo Carvalho, BNP Paribas’ chief economist for Latin America, earlier this fall in São Paulo. He was speaking at an HBR Brasil conference on Brazilian competitiveness, and his message was pretty gloomy. The country’s only hope of continued economic success, he said, was strong productivity growth. But it hasn’t been getting that lately. To illustrate, Carvalho showed a variation of the chart below:

His message was that Brazilian workers have been getting a gift that can’t just keep on giving. My reaction, though, was that the chart looked awfully familiar, in an upside-down sort of way. As in, Isn’t this the exact opposite of what a chart of productivity and wages would show in the U.S.?

Sure enough, it more or less is. The lines are flatter in the U.S., as befits an already very developed, very rich economy. But in sharp contrast to the situation in Brazil, productivity has been rising faster than wages in the U.S. since 2001 — which lends a helpful perspective to the often downbeat discussion over the economic future here:

In fact, productivity growth has been outstripping wage growth in the U.S. for decades. Some of the gap has to do with our ever-costlier health-care system: Overall worker compensation has risen faster than wages, with health-insurance bills making up much of the difference. But labor has also lost ground to capital in divvying up national income. Millions of people have been dropping out of the labor force. And rising income inequality has been keeping productivity gains out of the hands of the typical worker.

So down in Brazil, productivity growth is economic problem No. 1. Up here, it’s not — or at least hasn’t been for the past 15-20 years, since the Great Productivity Slowdown of the 1970s and 1980s gave way to a modest but very real productivity boom. Productivity growth will be a problem if it stops, and every time it slows for a few quarters there are those who proclaim that the productivity dividend from the rise of computers and the Internet has already been paid out. I can’t shake the feeling, though, that we’re still in the very early stages of the digital reordering of everything. And the U.S. economy seems to be taking greater advantage of that reordering than any other, with the U.S. investing more intensively in IT than any other country, and U.S.-based companies at the forefront of most interesting digital developments.

I’m told that all articles on productivity must at some point recite economist Paul Krugman’s line from his 1990 book The Age of Diminished Expectations:

Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.

At the most basic level, then, the U.S. economy has been delivering the goods to raise living standards. It just hasn’t been delivering them to all the right addresses, instead funneling the productivity windfall into fortunes for a few and a lot of medical spending of dubious value. The former may or may not be a necessary accompaniment to economic disruption and growth; the latter definitely seems like a silly waste. What they have in common is that their solutions are at least as much political as economic. That doesn’t mean they’re easy solutions — if Eric Brynjolfsson and Andy McAfee are right and we’re all about to be replaced by machines, the political challenges will mount even as productivity skyrockets. But it still seems like it’s a much better position to be in than not having any productivity growth at all.

Back in Brazil, where productivity stopped rising in 2008, there doesn’t seem to be any simple prescription for getting things moving again. Carvalho talked about increasing investment (investment’s share of GDP is lower in Brazil than any other major Latin American economy), which would surely help. But productivity growth also comes from other, harder-to-pin-down sources — technology, government regulation, management techniques, education, societal norms. It’s the most important determinant of living standards, yet it’s really hard to manufacture on demand.