Marina Gorbis's Blog, page 1496

Overcoming Feedback Phobia: Take the First Step

Situation 1: Asking for it

You’re sitting at your desk when an e-mail pops up from your boss that cryptically states, “Please come to my office; we need to talk.” What’s the first thing you think?

For most people it’s, “Oh no – what did I do now!” or “Good gosh, what went wrong!” Of course it is possible that your boss wants to praise you, ask your opinion on something, or just discuss an issue, but the vast majority of people will assume they’re being called in to be called on the carpet for something or another. This assumption causes many people to avoid feedback all together — and not just those whose bosses actually do criticize them a lot or those who are  insecure about their performance. Generalized “feedback phobia” is widespread.

This is a pity, as research clearly shows the advantage of receiving feedback on an ongoing basis. In our data, collected for more than a decade, we consistently find that leaders who ask for feedback are substantially more effective than leaders who don’t.  In a recent study of 51,896 executives, for example, those who ranked at the bottom 10% in asking for feedback (that is to say, they asked for feedback less often than fully 90% of their peers) were rated at the 15th percentile in overall leadership effectiveness. On the other hand, leaders who ranked at the top 10% in asking for feedback were rated, on average, at the 86th percentile in overall leadership effectiveness.

The best leaders appear to ask more people for feedback and they ask for feedback more often.  Rather than being fearful of feedback, they are comfortable receiving information about their behavior from their bosses, their colleagues, and their subordinates.

Situation 2:  Dishing it out

It’s 8:45 am, and you are sitting at your desk. Right on time an Outlook reminder pops up announcing “Performance discussion with Darcy Pearson, 9:00 am.” You groan out loud and then think to yourself, Darcy’s performance has been terrible. Her attitude is bad, she has no energy, and her output is substandard. You feel dread in your stomach. Your anxiety is high. Your blood pressure is rising. Inwardly you say, They don’t pay me enough to do this job.

You’re thinking that no matter what you say or how you say it, the meeting will go badly. Your only thought about a possible solution is, The sooner I start this, the sooner it will be done. Sound familiar?

Most people can come up with several traumatic stories from their pasts in which they have given or received unconstructive, negative feedback. These terrible experiences embed themselves into our psyche and become a source of anxiety.

On the other hand, most people can also remember a time when someone gave them helpful feedback that contributed to a marked improvement in their effectiveness and influenced their success.

The ability to give honest feedback in a helpful way is closely aligned with employee engagement. In another recent study of 22,719 leaders, we found that those who ranked at the bottom 10% in their ability to give honest feedback to direct reports received engagement scores from their subordinates that averaged in the 25th percentile. Their subordinates disliked their jobs, their commitment was low, and they frequently thought about quitting.  In contrast, those leaders who were judged better than 90% of their peers at giving honest feedback had subordinates who ranked at the 77th percentile in engagement (clearly feedback, while important, isn’t everything.)

How Good Are You at Getting and Giving Feedback? Assess Yourself

Knowing that it’s important to give and receive feedback is one thing. Knowing whether you do it well is another.

As a start, we have developed a self-assessment, which you can click on here that can measure your desire for giving and receiving positive and negative feedback. It also measures your overall feelings of self-confidence, since that trait correlates strongly with the desire to give and receive feedback.

This being a self-assessment, most people will not surprised by the results. Still, it will likely make the impressions you have about yourself very clear, and a clear view will often motivate people to improve. We invite you not only to take the self-assessment, but to share the results and insights you gain in the comment section below.

It’s Not OK That Your Employees Can’t Afford to Eat

It wasn’t that long ago that in most companies, especially large ones, a fair amount of time was spent worrying about whether the company’s practices towards employees were fair. One of the functions of human resource departments was to advocate for the interests of employees.

The motivation wasn’t entirely altruistic. Since WWI, employers figured they could keep unions out by giving employees virtually all of the wage and benefits they would have gotten from joining unions. Even without that concern, though, the leadership of the company considered it part of their job to strike a balance between the other demands on the business and the needs of employees.  They were one of the important stakeholders in the business, along with customers, shareholders, and the community around them.

There is no doubt that shareholder activism as well as court cases sympathetic to shareholder interests pushed publicly-held companies to pay more attention to maximizing stock prices. But when exactly did the shift in corporate attention in the direction of shareholder concerns lead to virtually ignoring the needs of employees?

Let’s be clear about the wage levels that are associated with not having enough to eat. A family of four with one breadwinner is eligible for food stamps if they earn less than $2500 per month. That is the equivalent of a $15 per hour job and a 40 hour work week.  The government has determined that full-time workers earning less than that do not have enough money to feed their families on their own. If that breadwinner earns less than $16 per hour, they are also eligible for Medicaid assistance to provide healthcare. Depending on where they live, that breadwinner is also eligible for subsidies to help pay for housing.

Jobs paying $15 per hour are not the concern, though. Those are routinely seen as good jobs now. The concern is those jobs paying at or around the minimum wage, $7.25 per hour or only $1160 per month for a full-time job. About 1.6 million workers in the U.S. are paid at that level, and a surprising 2 million are actually paid less than that under various exemptions. If you are an employer paying the minimum wage or close to it, the Government has determined that your employees need help to pay for food, housing, and healthcare even if they have no family and no one to look after but themselves.  As we’ve been reminded this season, many of those workers also need help from families and coworkers to get by.

No doubt the reason low-wage companies continue to pay low wages is because there are plenty of workers willing to take jobs at those wages, and the need to pay more to avoid the risk of being unionized is largely gone. But “can” and “ought” are not the same thing.  Nothing about the minimum wage implies that it is morally ok as long as you pay at least that much. It simply says that the government will prosecute you if try to pay less than that level.

A longstanding principle in all developed countries including the U.S. is that labor is not like a commodity where taking advantage of the market to squeeze down prices is a fact of life. Employees have human rights that do not disappear when they enter the workplace. Even in business law, principles like the “mechanic’s lien” say that employees should be paid before other creditors because they are more vulnerable than businesses and do not get profits to compensate them for risks.

One of the things that I find surprising is how many companies that pay poverty-level wages or thereabouts to their employees spend a good deal of effort to be good corporate citizens in other areas. They try to make their operations “green,” lessening their impact on the environment, some even sponsor anti-poverty programs in Africa, and so forth. They just don’t seem very interested in the poverty among their own workforces.

Board of directors are responsible for making the trade-offs among stakeholders of businesses. If you are a member of the board of directors of a company that pays its workers so little that they need government subsidies to survive, isn’t that a little embarrassing? Most of these companies want to refer to themselves and their employees as a kind of family, but what kind of family allows its members to go hungry? And what prevents you from doing something about it?

Why We Hate to Give the Same Gift to Multiple People

In an experiment, a majority of people with two gift options gave each of two recipients different gifts, even though one of the presents was clearly less appealing than the other and the giftees had no way of comparing them. People persist in giving different gifts to different recipients in an attempt to be thoughtful by treating each person as a unique individual, write Mary Steffel of the University of Cincinnati and Robyn A. LeBoeuf of the University of Florida. The effect was attenuated when givers were encouraged to focus more on what the recipients would really like.

What Smart Boards Do When Investors Knock

Bulls in a china shop—or catalysts for change?  The divides created when activist investors muscle their way onto boards as varied as those of Hewlett-Packard, J. C. Penny, and Yahoo can run as deep as those on Capitol Hill. Has Ralph Whitworth of Relational Investors restored shareholder value at HP?  Did William A. Ackman of Pershing Square Capital Management destroy value at J.C. Penney?  Has Daniel Loeb of Third Point rebuilt value at Yahoo?

And what about private-equity partners and sovereign-wealth managers who come on boards of large publicly-traded firms—not as activists but in the wake of taking a stake?  Consider TPG, the American-based PE firm that acquired a significant fraction of China’s Lenovo after its 2005 purchase of IBM’s personal-computer division.  TPG took a seat on the board, and by all accounts its principal played a strategic role in helping Lenovo grow to become the world’s largest PC producer.  Elsewhere, at Chrysler by way of one well known counter-example, private equity has had a less sure impact on value creation.

Whether major investors on a board add or subtract value has become a contentious debate of the era, fueled by a sharp rise in activist campaigns.  Law firm Wachtell Lipton identified 27 activist-investor initiatives in 2000, but more than 200 in 2013.  The firm also estimated that more than a hundred hedge funds have now migrated into the activist camp.  Even Microsoft is soon to have a hedge-fund activist, ValueAct Capital Management’s president G. Mason Morfit.

We believe this is a good moment to reframe the question from whether an activist adds value to how directors and executives can draw the best from active investors on the board:  What can board leaders do to prepare new activists for their governance role?  How should directors best work with the activists in guiding company strategy and taking major decisions?

This reframing has become especially important because the primary function of boards at many large publicly-traded companies has expanded over the past decade from monitoring management to partnering with management.  In many boardrooms, directors now engage more actively with company executives in setting the tone, defining the strategy, and building talent at the top.  It is no longer enough just to keep executive feet to the stockholder fire.

As companies’ inner sanctums have been so reconfigured, boards function less as a passive aggregation of a dozen shareholder-hawks—and more as a forcefully led team of business contributors.  As we report in Boards That Lead, the role of the non-executive chair or lead director has morphed from titular to orchestrator, from one of formal stature to that of team leader.  Board leaders at many firms meet with incoming directors to inform and prepare them for their governing duties, and this can be particularly important for investor activists given their penchant for short-term value extraction.

When activists move from outside critic and cajoler to inside fiduciary and counselor, it is now up to the board leader to mold the more diverse boardroom players into a productive team.  Still rivals, yes, but nonetheless a working group that can partner with management to drive value.

For the board leader, no rocket science is required, just active listening and a readiness to take charge, focusing the board on strategy and performance instead of personal conflicts, of working with the executive team rather than allowing anybody to attack or micro-manage it.  If any director, activist or otherwise, still edges toward dystopia, it is the business of the board leader to isolate the dysfunction.  In one case, a new activist began to place daily calls to the chief executive—until the lead director intervened.  A board that defers to a bull in the boardroom is a board that has failed in its emergent mission of leading the company, not just monitoring it.

Activist investors are sometimes ready to embrace the new calling.  Seasoned directors have reported to us that activists freshly on their board have occasionally confessed that they were genuinely surprised and impressed with the substance of boardroom deliberations.  Directors were actually bringing more strategic thinking to the table than the activists had appreciated before coming in from the cold, and that was exactly what the activists wanted more of.

Some activists are less likely to seek a seat in the first place if they know that a board leader is indeed leading the board, and that the board is no longer a passive player or pawn of management.  For that, regular personal contact between outside activists and the board leader can help, though that is still a work in progress.  Too few boardrooms have even one or two directors who are “camera-ready,” in the estimation of Abe M. Friedman, formerly head of corporate governance at BlackRock and now an advisor to companies on investor strategies.  Still, more directors are likely to become better informed about their firm’s strategy and more able to articulate it to the activists who increasingly want to hear personally from directors about the inner workings of their boardrooms.

Investor activists on the board are likely here to stay and more can be expected—not in large numbers but certainly in some numbers—and even at the bluest of the blue chips, not just struggling players.  They have already knocked at the door of Apple, Dupont and Kraft, and if not this year at a given company, then maybe next.

Directors and investors, in our view, can make the most of an activist presence if they see the boardroom as a place of mutually assured construction rather of destruction—and if they then commit to making the board a working partner of management and not just a monitor of it.

How to Reinvent Yourself After 50

I was manning a booth at the Harvard Club of New York’s authors’ night when an older woman approached and picked up a copy of my book, Reinventing You. She paged through it for a moment, then put it down. “Too late for me,” she said abruptly, and walked away.

Over the past six months of my book tour, it’s a question I’ve heard often. Isn’t professional reinvention just for young people? What if I’m too old? How can I spend years training for something new, when I’m already near retirement? It’s true: reinvention is different later in your career. But that doesn’t mean it’s impossible.

In fact, it’s increasingly essential for any professional who aspires to remain in the workforce for any length of time. Steven Rice, Executive VP of Human Resources for Juniper Networks, told me he specifically asks job applicants, “How are you adapting, and approaching your next reinvention curve?” The reasons, he says, is that, “People have to reinvent themselves to fit into the new context of work.” After speaking with hundreds of Baby Boomers (and beyond) who want to reinvent themselves but fear it’s too late, I’ve identified several key points for older workers who hope to make a transition.

Understand you do have enough time. Some people think it’s not worth it to undertake any major changes later in life. Others disagree — such as my mother, who decided to get braces in her 50s, because she could be “either two years older, or two years older with straight teeth.” If money isn’t a concern, there’s no reason you can’t explore wildly new areas. (One friend’s father recently received his PhD at age 66.) If you’re still earning for retirement, you can absolutely pursue reinvention, but may want to consider more subtle shifts, such as taking classes on the side to expand your skills, rather than taking several years off to get a doctorate.

Of course you’re overqualified — own it. I’ve heard from many over-50 “reinventers” who have been turned down for jobs in new areas because they’re overqualified. Frankly, you can see why. Once someone has been a powerful executive, it’s flummoxing to understand why they’d settle for anything remotely less prestigious (short of true economic desperation). Wouldn’t they be resentful all the time? Instead of ducking the issue, I advise older professionals to lead with it. “You might wonder how I’d respond to being managed by someone younger than me, when I used to manage a large staff,” you could say. “That’s exactly why I want this job and part of the value I bring. Having been a manager, I understand the pressures and frustrations they face, so I can be an even better employee. And I’m eager to learn about this new area from someone with real expertise in it.”

Get with the times. Why should you be active on social media? Because — for better or worse — it is no longer optional. It’s even more critical for executives over 50 to have a social presence because it’s increasingly viewed as a proxy for staying current professionally. If your digital footprint is lacking and you don’t have a presence on basic sites like LinkedIn or Twitter, you’re likely to be dismissed as a Luddite. Indeed, even the basic notion of writing a resume is becoming antiquated; your “shadow resume” is Google.

Connect with your past. We all know professional opportunities are likely to come from our existing network of contacts. But many don’t realize some of the most valuable information and opportunities come from “dormant ties,” or people we’ve lost touch with from the past. As Wharton professor Adam Grant writes, “Just like weak ties, dormant ties offer novel information: in the years since you last communicated, they’ve connected with new people and gathered new knowledge. But unlike weak ties…the history and shared experience makes it faster and more comfortable to reconnect, and you can count on them to care more about you than your acquaintances do.” It may be time to reach out and reintroduce yourself.

Surprise people. On the other hand, your strong ties – the people you currently work with closely – may have developed fixed ideas about who you are and what you’re capable of, especially if you’ve been working in the same company or industry for a long time. If you want to reinvent yourself, you need to upend those assumptions, and hopefully do it in a dramatic way, so they’re sure to notice. Make a point of taking on an unexpected leadership role, taking a class in a new subject like computer programming, or explicitly requesting an assignment that intrigues you (your boss and colleagues may have grown to feel over the years that they “know what you’re interested in,” so it’s time to prove them wrong). Make them stop and question their assumptions about you.

Reinvention after 50 is more than possible; it’s critical to keeping your skills fresh and your work fulfilling. Between staying current with social media, owning your history, reconnecting with old contacts, and shaking up the ossified view that current colleagues may have of you, you’ll soon be ready for the next chapter in your professional life.

The Growing Business of Marijuana

Sandal-clad hippies in tie-dye shirts. Stoners so high they can barely put a sentence together. Foreign drug runners, gun-toting gangsters, and hardcore criminals.

These are the images many outsiders have of the medical marijuana industry.

I should know: Many of my former colleagues, friends, and family members mentioned these stereotypes in 2011 when I accepted a job helping launch a new publication covering the business aspects of this emerging sector. In all honesty, I shared some of these concerns as well. As a long-time business journalist in the mainstream media, my professional and personal reputation was on the line. Moving from a daily metro newspaper to a “pot” publication caused some head-scratching among many acquaintances – even though I was entering a  $1 billion-plus industry at the time.

To be sure, I certainly did run into some people who fit this description in the early days of our publication. And I still do now.

But here’s what is most surprising to many about the marijuana industry: It’s filled with straight-laced people who built careers – and started successful companies – in other fields. And more are joining every day.

Professionals from the banking, finance, investing, and accounting worlds. Interior design specialists, journalists, and healthcare veterans. Technology, marketing, retail, HVAC, construction, and manufacturing pros. The list goes on.

In the past few weeks, a cannabis-focused private equity firm hired a former DEA agent and a publicly traded marijuana company brought on a former executive at Yahoo and Microsoft as its president. A former Congressman is also bidding for three dispensary business licenses in Massachusetts.

The reason for the mainstream interest is simple: This is a legitimate business with many attractive opportunities, and it’s now one of the fastest-growing industries in the country.

U.S. medical marijuana sales hit an estimated $1.5 billion in 2013 – up about 15% from the year before, according to our 2013 Marijuana Business Factbook.

Impressive, but that’s only the start. Overall marijuana sales in states where cannabis is legal could double in 2014 to hit $3 billion, according to our estimates, as Colorado and Washington begin selling cannabis to adults 21 and over.

Earlier this year, we projected that sales will hit $6 billion by 2018. However, the outlook has improved drastically since then (in large part because the federal government said it will take a hands-off approach to states that legalize marijuana for adults). Marijuana legalization could spread like wildfire, and industry sales might therefore end up being much higher.

What’s more, these figures are just for marijuana transactions. Hundreds of millions of additional dollars are being spent on professional services, ancillary products and other offerings. Like any industry, the medical cannabis sector needs everything from lawyers and accountants to human resources professionals, insurance specialists, and consultants. There are hundreds of other companies making packaging, equipment to extract cannabis oils from the plant, inventory software, you name it.

Here are some other reasons why many are bullish on the industry’s potential:

Efforts are underway in a handful of other states – including heavyweight California – to legalize marijuana for general adult use, while several others (such as New York) are pursuing medical marijuana legalization. The dominoes are falling. Currently, 21 states and the District of Columbia have passed laws allowing the use of medical cannabis. In the coming years, more than half the country will have legalized medical or recreational marijuana.


Poll after poll shows that the overwhelming majority of Americans feel that medical marijuana should be legal. Earlier this fall, a Gallup survey found that 58% also support the legalization of cannabis for adult use – the first time a clear majority of the population has favored legal marijuana. In 1969, when Gallup first asked the question, just 12% of respondents backed the idea.


Companies are beginning to expand beyond their home markets and into other states. The founders of California-based Harborside Health Center – the most successful dispensary in the US with sales of more than $20 million – are hoping to branch out into new states as soon as possible. Dixie Elixirs, which makes marijuana-infused sodas, ice cream, and other products,  and dozens of other businesses are expanding nationally as well.


This could become an international industry in the near future, boosting business opportunities for U.S. firms. Uruguay recently became the first country to legalize marijuana possession, use and sales, while Canada has opened up its medical cannabis business to the free market. Other countries also are weighing marijuana legalization or relaxing cannabis laws.

That’s not to say everything is rosy.

Don’t forget: Marijuana is still illegal at the federal level. The risks in the business are huge. Executives could face criminal prosecution, and investors could lose everything overnight if the federal government or local officials crack down. That’s why average interest rates on loans to medical marijuana businesses hover between 20% and 30%.

Banking and payment processing are significant issues, and many businesses that handle marijuana directly have to operate as all-cash businesses.

Additionally, marijuana is one of the most volatile industries in the corporate world. State and local regulations change constantly. Cities can enact bans on MMJ businesses without much warning. And the costs of doing business in a heavily regulated industry can be prohibitive.

But the potential is so immense that many are flocking to cannabis. One day, I have no doubt we will see household brands develop. There will be retail marijuana chain stores a la Starbucks and cannabis-infused beverage brands like Coke. Major players in other industries – possibly Big Pharma and Big Tobacco – will most certainly enter the industry down the road. Marijuana companies will trade on the major stock exchanges, and they’ll have global businesses.

Soon enough, the industry will grow up and get buttoned-down. But for the professionals who can stomach the risks, the time to get in is now. They’ll get in on the ground floor of a brand new industry, and help determine its shape . You don’t have to be smoking something to see that as the chance of a lifetime.

The Lies We Tell Ourselves About Creativity

No One Actually Wants You to Be Creative :(Inside the BoxSlate

Americans love to give lip service to creativity, celebrating imaginative artists and innovators and calling for "out of the box" ideas. Yet when we encounter creativity in real time -- before we know whether an unusual or outlandish idea will pay off -- we’re all too quick to reject it, argues Jessica Olien. She runs through a litany of evidence that becomes more and more depressing, but she comes to a surprisingly optimistic conclusion, thanks to research out of Cornell that shows being rejected leads creative people to conclude that conformity is overrated and thus liberates them from the need to fit in. True, this often doesn't lead to happiness -- but it does lead to more creativity. "To live creatively is a choice," Olien concludes. "You must make a commitment to your own mind and the possibility that you will not be accepted. You have to let go of satisfying people, often even yourself." I find those words oddly comforting. But maybe I'm just being creative. —Sarah Green

Like? Uber Might Be More Valuable than Facebook Someday. Here's WhyNew York Magazine

I'm fairly sick of hearing about Uber, the on-demand car service that inevitably comes up in any conversation about innovative start-ups. Uber is the future, blah blah blah. I get it.

But do I? Kevin Roose makes a darned good argument that the company is perfectly poised from the standpoints of valuation, technology, and strategy to conquer big cities — and the way we get around — in three steps. Step one: Uber must dominate the taxi business, which it's already edging toward with a new program to give low-interest loans to 200,000 potential UberX drivers. That will solve the problems of supply and driver-force stability in one shot. Step two: Convince us that owning isn't in our interest — and that goes not only for cars but for things like outdoor grills, which Uber could deliver for that one summer BBQ you’d like to have. Step three: It's speculative, but it could involve self-driving cars and predictive transportation — if you have a meeting in your calendar, an Uber car would be waiting for you at a given time. "It would be like something out of a sci-fi movie," Roose writes. "And Uber would be standing at the center of it all, collecting a cut of every transaction." 

How Long Can You Fail?The Seven-Year GlitchSports Illustrated

Matt Millen was a great NFL linebacker, and after that a very good TV and radio football commentator. Then William Clay Ford, the owner of the Detroit Lions, asked him in 2000 to become the team’s general manager — the guy responsible for drafting players and hiring coaches. At first Millen said no, citing his lack of qualifications. When Ford asked again a year later, he accepted.

What followed was seven years of epic failure. As Millen explains at great length to Sports Illustrated’s Michael Rosenberg, who berated him regularly in print during those years, he wasn’t qualified for the job and his instincts and approach were all wrong. He just didn’t have what it takes. And he was left in the job for so long that now he will forever be the standard for failure as a GM. "Ultimately, if he could make one change to his general-manager tenure," Rosenberg writes, "he wouldn't be a general manager." A revealing tale of what happens when you get promoted above your level of competence, and then stay there.  —Justin Fox

They're BaaaackReckoning to Revival: How U.S. Workers Rebuilt an IndustryBloomberg

This is the story of the Jeep Grand Cherokee, the people who make it, and the strategy decisions that ultimately may be putting Detroit and the Big Three automakers back on the map. But in comparison with Ford, which has found success with its Fusion, and GM, which recently came out from under government ownership and just named its first female CEO, Chrysler's story is a bit rockier (albeit no less discouraging and inspiring in equal parts). It involves an M&A with GM that fell through, a controversial agreement with the labor union to create a tiered payment system for new workers, the design aesthetic of acquiring company Fiat, and good old American bootstrapping.

One example: The Jefferson North Assembly Plant had to cut its landscaping budget, resulting in a visual eyesore that matched morale. Richard Owusu, then the plant manager, rallied the small crew left working at the factory, applying the employees’ assembly-line knowledge to lawn cutting. When the production of Jeeps returned under Fiat, workers "walked through the gates of a plant that looked as if it had never closed." Sometimes the little things can help, too. 

'Cause It's Here That I've Got to StayThe Simple Change That's Completely Transformed How I Get Things DoneInc.

To be fair, the title is a bit of an overstep. While the change that entrepreneur and investor Brad Feld talks about is simple in theory, it may not be for the majority of workers. But it's nonetheless intriguing.

Feld, you see, used to spend 50% to 75% of his time traveling for business. He missed his family, was playing catch-up on his sleep during weekends, and eventually fell into a depression. So he decided to eliminate all business travel for the second half of 2013 — a challenge, no doubt, because the work he does is by nature international. He invested in videoconference software (no awkward Skype or inaudible conference lines) and adjusted his behavior so he was attentive even though he wasn't in the same room as his colleagues. And you know what? He's doing great work. He's not exhausted. Feld, it seems, is happy.

BONUS BITS'Tis the Season

Santa Brand Refresh (Quietroom)
Behold the Christmas Sweater Industrial Complex (Quartz)
'Merry Christmas' or 'Happy Holidays'? (Pew Research Center)

What to Do When Praise Makes You Uncomfortable

Not long ago, my mentor and friend, Warren Bennis, gave me a very generous unsolicited compliment.  I hemmed and hawed and went on about how he didn’t need to say that and really it was nothing. Warren in his loving, but not suffering foolishness (or false modesty) manner, stopped me and said, “Mark, when you hear something like I just said, there is only a single two-word response: ‘Thank you.’”

Giving a meaningful thank you is its own art form. But accepting praise? That can be even more complicated.

Since this is an area I clearly need to work on myself, I  sought out Christopher Littlefield, founder of AcknowledgementWorks, for advice. Littlefield coaches and trains leaders in the effective use of recognition in the workplace.  He interviewed over three hundred people over the course of a year while riding the subway in Boston. His understanding of how people related to giving and receiving recognition has been shaped by speaking with parking lot attendants, CEOs, doctors, Delta ground crew members, Harvard professors and many others.

According to Littlefield, I was correct in assuming I was not alone in my uneasy response to praise.  In his research, he found that although the number one thing people associate recognition with is a feeling of being valued (88%), nearly 70% of people associate embarrassment or discomfort with the process of being recognized.  Most of us can’t take a compliment and often don’t even realize it!

Think about how you commonly respond when someone recognizes you. Do you actually hear the compliment or do you laugh it off? Or, do you play what Littlefield refers to as “compliment ping-pong?” Someone compliments your dress and you then feel obligated to compliment his or her shoes. Do you pass the credit? (“It was a team effort!”) Or do you do what I did with Warren’s comment and downplay your success? (“It was nothing…it wasn’t that big of a deal!”) Or do you quickly say “thank you” but dismiss the compliment in your head?

Littlefield told me that there is nothing wrong with these reactions; often they are unconscious knee-jerk responses that we have learned from our culture, parents, and past experiences with recognition. He would argue, though, that none of those responses is actually accepting the giver’s compliment.

In our day-to-day interactions, it’s normal to respond to a casual thanks with a “you’re welcome” or a “no problem.” The discomfort arises when someone is authentically recognizing us and the same conditioned response won’t cut it. You know what I mean if you have ever mustered up the courage to approach a boss, mentor, or teacher and thank them for the impact that they have had on your career — only to have them respond to your heartfelt appreciation with…”It was nothing!” and walk away.

Now here is what most of us don’t realize; according to Littlefield, “Recognition is often more about the giver than the receiver.”  When someone is complimenting you, they are sharing how your actions or behaviors impacted them.  They are not asking if you agree.  It really takes something for someone to get up the nerve to share the impact you have had on them, and to them, giving you that recognition is liking giving a gift. As Littlefield says, “Even if you didn’t like the pink and purple socks your aunt knitted you for your birthday, you wouldn’t throw them back in her face! The key to accepting recognition is to relate to it as though it is a gift.” It doesn’t matter if you disagree with it or feel you don’t deserve it; it is someone else’s experience of you. Let them share that gift. If their compliment made a difference for you, let them know. It will make their day for them to know they made yours.

People often say, “I don’t need recognition,” and the truth is they are right.  We don’t need it. But like healthy food and exercise, life is a whole lot better with it.  When we are uncomfortable with recognition, we avoid giving it and, just as bad, we avoid letting it in. And when leaders are uncomfortable with recognition themselves, they can pass that standard on throughout their teams and organizations.

Remember:

1.Relate to recognition as though it were a gift.

2. Become acutely aware of how you respond when people recognize you. Even if you think the person has an ulterior motive, just say, “thank you.”  The more comfortable you become at accepting recognition, the more comfortable you will be with giving it.

3.   If you catch yourself diverting the compliment, it is never too late to go back and thank them. You can tell them, “I am working on being better on accepting compliments. Thank you for what you said earlier.”

4.   When others divert recognition, call them on it (in a friendly way).  By doing this, you interrupt their conditioned response, and help them develop their ability to accept compliments.

The American Way of Hiring Is Making Long-Term Unemployment Worse

There are currently more than 4 million Americans who have been unemployed for 27 weeks or more. This figure doesn’t include those who work part-time or on contracts — or those who, discouraged, have simply stopped trying. Many of them are older and well educated, and their situation doesn’t seem to be improving despite America’s slow crawl out of the recession. While last week’s jobs numbers extolled a decline in the national unemployment rate, the numbers for the long-term unemployed didn’t even budge. 

MIT professor Ofer Sharone is tackling this issue head on, piloting a new initiative to help the long-term unemployed and gather valuable research on both job-seeking and hiring practices. He is also the author of the recent book Flawed System/Flawed Self: Job Searching and Unemployment Experiences.  My edited discussion with Sharone is below. 

Why is it so hard for older, educated Americans to find jobs after they’ve been laid off?  

There are multiple explanations for this, but certainly employer stereotypes and beliefs about older workers play an important role.

One set of stereotypes is directly about the purported effects of age. For example, that older workers are less energetic or less able to use new technologies.

Then there’s a set of employer beliefs about workers who have significant work experience and who have attained higher levels in their former organizations.  Here employers worry that the worker may expect a higher salary than younger workers, or may be unhappy taking a position that pays less or comes with less responsibility than their prior job, and as a result will look to leave at the first opportunity or be otherwise disgruntled.

This set of beliefs is not directly about age. But it is almost always older workers who are trapped by perceived “overqualification.”

In my recent book, I describe how, after several months of job searching, unemployed 40+ workers frequently make the difficult decision to adjust their job search to positions that may not use their full range of expertise, and which pay less than their prior jobs, only to be turned down by employers who directly or indirectly convey concerns about overqualification.

One of the cruelest aspects of how our labor market currently works is that one’s past hard work and successes can become the very thing that keeps one from finding a new job.

And what about education specifically?

It’s not necessarily harder for older college educated Americans who have been laid off to find jobs than for those with less education. The surprising fact is that it’s not easier for them. Once laid off, the likelihood of becoming LTU is just as great for those with a college education than for those without.

This fact suggests that, for many job seekers, a lack of education is not the cause of long-term unemployment. From a policy perspective, this means that we need more than mantras about “more education is needed” to solve the ongoing crisis of long-term unemployment.

You hear a lot about this perceived mismatch of worker education and skills and company needs. But you seem to be saying that’s not the problem.

Most of the college-educated white-collar workers I study do not lack relevant skills, so the mismatch hypothesis does not explain their situation.  We also have some very compelling recent research that casts doubt on the idea that a mismatch between skills and employers’ needs explains our current levels of LTU.

For example, a recent study by Rand Ghayad shows that the likelihood of an employer inviting a job seeker for an interview is much higher for an applicant with no relevant industry experience than for a job seeker who has relevant experience but is unemployed longer than 6 months. This suggests that the stigma of LTU is much more important than any mismatch.

Wharton’s Peter Cappelli has also written a number of compelling articles and books dispelling the myth of the mismatch.

Aside from the overqualification issue, are there other hidden biases that hiring managers harbor?

The other key bias is based on the duration of unemployment. The systematic screening out of LTU job seekers suggests a strong presumption on the part of companies that LTU job seekers are in general not good candidates. This presumption is not only devastating for LTU job seekers but it also means that companies systematically overlook extremely talented and highly motivated workers.

What are the benefits to hiring someone over the age of 40 or 50? 

My research, involving in-depth conversations with hundreds of unemployed job seekers, indicates that no group of workers is more committed to contributing to a company that gives them a chance to prove their value than older workers who have been long-term unemployed.

Importantly, while some employers fear that older workers will not sticking around, my research suggests the opposite is more likely.  It’s worth considering whether, in fact, it is younger workers in their 20s and 30s who are more likely to be actively searching for opportunities to move across jobs in an effort to develop a portfolio of marketable skills and experiences. Older workers are really looking for a company where their considerable skills and experiences are valued and can make a difference.

And what happens when they can’t find such a company?

The often-overlooked toll of LTU is that after enduring months of rejections in the labor market, most American white-collar job seekers begin fearing that there may be something wrong with them.  In my research, this is what many job seekers described as the “hardest” thing about being unemployed.

It is striking that, while unemployed white-collar workers in Israel (as well as unemployed blue-collar American workers) perceive a flawed system, white-collar American job seekers perceive a flawed self.  What is it that leads white-collar American workers to blame themselves for their unemployment and to feel like they may be “flawed”?

It comes down to the way hiring works for white-collar Americans.  To effectively look for work, white-collar American job seekers must play what I call the “chemistry game.” They understand that to get hired, it is not enough that they convey their skills. They need to convey who they are: the person behind the skills.

At its core, white-collar job searching is about networking with others, which is primarily a matter of building rapport and relationships so that one is referred to hiring managers.   Likewise, at interviews with hiring managers, the focus is on conveying the intangibles and creating interpersonal chemistry that will lead the manager to conclude that you are a good fit — someone that the manager and other colleagues would like to have around.

This personalized job search “chemistry game” means that when job seekers are not hired, the rejection feels very personal and often leads to that terrible question: What’s wrong with me?

Given all of this, is there anything people can do to better position themselves to get hired?

There are a lot of advice books out there offering strategies for older workers, but none that I know of that are written specifically for those who are long-term unemployed and that are based on research data.  We simply do not have much data on what LTU job seekers can do to increase their chances of getting hired beside continuing to network and continuing to apply.  This is one of the key questions that we will explore in our new research project through the Institute for Career Transitions (ICT).

The central aims of the ICT are to provide direct support to older white-collar LTU job seekers by collaborating with dedicated and experienced career professionals who are volunteering their time for this project, and at the same time, research the best ways to support this group of job seekers, both in terms of optimal job search strategies (given substantial barriers such as discrimination on the basis of unemployment duration) and optimal ways of maintaining well-being (given how the job search “chemistry game” I previously discussed that leaves LTU job seekers vulnerable to internalizing labor market difficulties). The program is based in Boston now, but we’re in the process of seeking funding to expand it nationally.

On the flip side, do employers need to radically change how they think about hiring? How?

Absolutely.  We need to look more closely at applicants who are older and LTU. And we need to especially understand that the formal or informal filtering out of applicants based on the durations of unemployment is in many ways comparable to filtering out applicants based on their race or gender. As a society, we have come to recognize the damage of institutionalized forms of discrimination against entire categories of job seekers. The same should be recognized as true for discrimination against the long-term unemployed.

We’re currently experiencing an immense but silent crisis. The silence only reflects the fact that millions of Americans are internalizing this pain, and feeling that their exclusion from employment is their own fault. This is both untrue and unacceptable. There’s much more we need to do to help our country tackle the central social-economic crisis of our time.

Click here to anonymously share your experience with the MIT research team, whether as a current or past job seeker, or as someone on the hiring end.  

Talent and the New World of Hiring

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You Can Get Some Big Things Done When It’s Not All About You

There was a lunch held last week in New York to celebrate one of the most important American business leaders of the past half-century. It started off conventionally enough: the host and four prominent speakers recounted the deeds and impact of the honoree, at some length.

When they had finished, the great man himself, who had been sitting at a table in the audience eating a peanut butter and jelly sandwich, walked to the front of the room. After a few jokes and preliminary remarks, he spent the next ten minutes detailing the accomplishments, in particular the writings, of the people who had just praised him, with specific reading recommendations (the ones I remember are Alan Blinder’s After the Music Stopped, James Grant’s Mr. Speaker!, and Cliff Asness’s “My Top 10 Peeves” in the next issue of the Financial Analysts Journal). Then 84-year-old Jack Bogle walked back to his chair and sat down.

I’d never seen anything quite like that before. Bogle had taken an event that was by definition all about him and found a way to make it about other people. Then again, that’s sort of what Bogle’s been doing since 1974, when he took a crisis that was all about him — he’d been fired by his business partners — and somewhat inadvertently turned it into something that was about defending the interests of retail investors everywhere.

There are surely lessons in this for all of us, although most seem too obvious and sappy to expand much on. So I’ll stick with Bogle. The thing he created in 1974 was Vanguard, now the world’s third-biggest manager of other people’s money, with more than $2.2 trillion in assets — a figure doesn’t even begin to get at Vanguard’s significance. Unlike the two organizations that surpass it in size, BlackRock and Allianz, it has grown not through acquisitions but entirely organically. It has done this by popularizing one of the two or three really important financial innovations of the past 50 years, the index fund. Its success has come not from promising its customers grandiose results or charging them lots of money, but by promising and delivering nothing but low, low fees. In the process Vanguard has transformed its industry, pressuring rivals to emulate its low-cost ways and changing the popular conversation about investing, possibly forever. And Vanguard is likely to be around for generations to come — as a customer-owned mutual organization, it doesn’t have shareholders who might be tempted to merge it out of existence. The Bogleheads, legions of individual investors who espouse the master’s low-cost, no-nonsense approach, will I hope be gathering and debating for generations to come as well.

In terms of lasting influence and impact, then, it’s hard to think of many other living business leaders (Sergey Brin and Larry Page? Jeff Bezos?) who can compare with Bogle. He certainly seems more important than anyone else in the financial realm. Warren Buffett is a great investor and a great guy, but how has he changed the investing business? What lasting legacy will he leave?

There is that $60 billion or so that Buffett has pledged to the Gates Foundation and a handful of family foundations. Bogle doesn’t have anything like that kind of money. He’s a wealthy enough guy by normal standards, having salted away big chunks of his paychecks over the years — in Vanguard funds. In comparison with his financial sector peers, though, he’s a pauper. But again, that’s part of the reason why Bogle has been so influential. It hasn’t been about him or his pocketbook.

This is especially rare in the financial sector, of course. In other fields, CEOs and company founders can credibly assert to be motivated mostly by things other than self-enrichment. In finance, that’s a pretty hard case to make. Bogle certainly didn’t start out committed to self-abnegation. In the early decades of his career he was a pretty conventional businessman, rising up the ranks of the mutual fund company Wellington Management and then, as its president, trying to keep it relevant during the go-go investing boom of the 1960s. Bogle pushed through the creation of the all-stock Windsor Fund (the Wellington Fund’s big selling point had been that it conservatively mixed stocks and bonds), then a merger with an aggressive upstart money management firm. That all worked okay for a few years, but during the bear market of the 1970s business turned ugly and Bogle’s new partners forced him out.

Only, because of a quirk of the mutual fund business, they couldn’t force him out entirely. The Wellington Fund and the Windsor Fund still had their own boards, which were separate from Wellington Management and elected by investors in the funds. These board members remained loyal to Bogle, and he turned to them to preserve some semblance of his job. They balked when he suggested taking over Wellington Management and throwing out his rivals, but agreed to his plan to form a new, customer-owned organization — Vanguard — that would handle “administration” of the funds while leaving their management and distribution in the hands of Wellington Management. In short order, Vanguard began selling shares in the funds directly via mail (which technically didn’t count as distribution) and launched a new, unmanaged index fund.

This was, as Bogle has since put it, “one of the most disingenuous acts of opportunism known to man.” He was mainly just out to keep his job. But in the process he redefined that job and changed the incentives he faced to make looking out for Vanguard’s customers his main responsibility. He remained a fierce competitor — last week he still couldn’t resist a dig at Ned Johnson, whose Fidelity was once Goliath to Vanguard’s David but is now substantially smaller — and has described himself as an at times tyrannical CEO. But he also became “Saint Jack,” the outspoken advocate for investors and critic of his industry’s greedy ways, a role he has expanded on since retiring as CEO in 1996. His activism has sometimes put him at odds with his Vanguard successors, but they’ve let him keep an office at Vanguard HQ where he has kept plugging away well into his 80s. He even has an article in next month’s Financial Analysts Journal alongside Asness’s. It’s about mutual fund fees.

I’ve talked to Bogle a few times over the years about how his mid-1970s career crisis freed him from the lucrative but limiting set of rules that governs the behavior of most modern business executives. Not being answerable to outside shareholders — but also no longer having any prospect of building a huge fortune of his own — liberated him to do what he thought really mattered. The results have been astounding.