Marina Gorbis's Blog, page 1501

Evaluate Your Emotional Agility

Norman Vincent Peale, the author of The Power of Positive Thinking, was known for pithy, uplifting quotes like “Keep your heart free from hate, your mind from worry,” “Change your thoughts and you change your world,” and “When you get up in the morning, you have two choices — either to be happy or to be unhappy. Just choose to be happy.”

Unfortunately, it’s not that easy to do a “quick-fix” on difficult thoughts and emotions; the human brain doesn’t work that way. Thousands of thoughts and feelings course through our minds each day. And trying to avoid, ignore or “manage” the negative ones only make them more powerful.  My colleague Christina Congleton and I wrote an article about this for HBR in November, encouraging readers to build something we call “emotional agility” – that is, the ability to attend to and use one’s inner experiences (both good and bad) in a more mindful, productive way.

The first step in the process is to understand your patterns:  Do you buy into your negative thoughts and emotions? (Wow. I really blew that presentation. I’m not doing any more public speaking.) Or do you avoid them? (Just forget about the presentation. Focus on something else.)  Or both?

The response to the article has been so strong that we’ve worked with HBR to develop an interactive assessment designed to help you with this first part of the process and then offer advice tailored to your specific profile. Click here to take the assessment.

Hired by the Data, Fired by the Data

And That's a Good ThingThey're Watching You At WorkThe Atlantic

The term Big Data, admits writer Don Peck, "has quickly grown tiresome." But the power of analytics as a mechanism for making decisions about hiring and firing is still growing, and the "application of predictive analytics to people’s careers … is enormously challenging, not to mention ethically fraught." Indeed, the idea that stats may determine whether we'll flourish in careers or be temps forever is both promising and deeply concerning. Peck traces the history of hiring in America, noting that attempts at psychological testing based on "science" in the 1950s were largely abandoned in favor of ad hoc interviews. But we know that favoritism and bias are all too common in these situations. Now that science is making a comeback, Peck explores some of the new ways in which companies will be able to make some of their most important decisions.

One is a start-up called Knack, which uses video games to measure how people function neurologically when it comes to skills like problem solving; the game has been used by Royal Dutch Shell. In 2010, Xerox started using "an online evaluation that incorporates personality testing, cognitive-skill assessment, and multiple-choice questions about how the applicant would handle specific scenarios that he or she might encounter on the job." The color-coded rating (red, yellow, or green) generated by an algorithm helps guide the company in its hiring decisions. The attrition rate fell by 20% in the initial pilot period, and over time, the number of promotions rose. Then there's GILD, which uses data to search out software engineers who might have been missed by traditional forms of recruiting.

In the end, Peck surprises himself: He now believes "that we’re headed toward a labor market that’s fairer to people at every stage of their careers." That is, one that isn’t based on who you know or what kind of degree you have. 

Can I Get a "Toot Toot" Auto CorrectNew Yorker

First, two sets of stats: Americans are in 10 million car accidents every year, and 9.5 million are their own fault. Second, the Google self-driving car has covered 500,000 miles without causing a single accident, and it can go 50,000 miles on a highway without experiencing a major error. So what's not to love about a car that you can get to work in while playing Candy Crush and not killing anyone? In this lengthy piece on the past, present, and future of the self-driving car, Burkhard Bilger reports on the broad stakeholder issues facing our driving future. One player is the famed Google X lab, where extensive research on two cars — a Prius for regular street use and a Lexus for highways — is aimed at radically changing how we drive.

The company wants to eliminate people’s need to own vehicles — most are used for merely an hour or two a day, and public transportation featuring self-driving cars akin to taxis could shake the entire car industry. "They want to make cars that make drivers better. We want to make cars that are better than drivers," says one Google engineer. "They" — car companies — are also developing self-driving cars, but view automation as a process that helps make driving easier and much safer while maintaining the inherent pleasure many feel in driving a car. Indeed, notes Bilger, "Mercedes builds cars for people who love to drive, and who pay a stiff premium for the privilege." But what about young people who learn to drive distracted, with phones and gadgets at their fingertips? And then there’s a host of moral issues, like whether or not the car should stop or swerve to avoid hitting someone's cat. The technology is getting there — Bilger describes the Google Lexus as behaving "like a dancer in a quadrille" when it meets traffic. 

"Psssst. Your Waterproof Speaker Is Right Here."The Amazon Whisperer Fast Company

Fast Company editor Jason Feifer wanted a cheap, waterproof, Bluetooth-enabled, rechargeable speaker so that he could listen to podcasts in the shower (we've all been there). He typed his needs into Amazon, and one product popped up: something called Hipe (but was Hipe the brand or the model?). He bought it, and when he had questions, he sent an email, which produced a reply from a mystery man named "Sam." But what was this "Hipe" and who was behind it? The trail led Feifer to Chaim Pikarski, who essentially built a business around Amazon product reviews. Each of his “buyers,” as he calls them — the elusive Sam is one — "scours the web to learn all the features people wish a product had, and hire a manufacturer, often in China, to make the desired version." The buyer gets to name the product — hence the mysterious "Hipe." The company can then compete against speaker companies (or any other type of product manufacturer, for that matter) without needing to become one itself. Pikarski's company, C&A Marketing, is also pretty profitable: sales in nine figures and a 30% annual growth. 

And, yes, Feifer eventually got to meet Sam. 

Baby StepsWhat to Expect When You're Expecting a Baby BoomWall Street Journal

China's revision of its one-child policy may be more illusion than reality, but its impact on the Chinese psyche and economy has apparently been significant. Makers of baby formula and diapers saw their shares jump. Same thing for companies that make pianos, because more babies means more little pianists. The Wall Street Journal says 48% of the 79 million Chinese women of childbearing age could be affected by the policy change; if just a quarter of them had second children, there would be 9.5 million additional babies in the next five years. Chinese bloggers have been joking about people’s pent-up desire for more children, saying that on the evening when the news broke, young couples went to bed early.

Despite the economic euphoria and the joshing, China still faces an accelerated demographic decline, Gordon G. Chang writes in Forbes. The one-child policy has led to a lopsided sex ratio, with more boys than girls, and the country's total fertility rate is low, well below what demographers call the "replacement" rate of 2.1 births per female. Many young women today are rejecting Chinese tradition and skipping marriage and motherhood altogether. The cautious, phased relaxation of the policy is seriously inadequate, Chang says; China's demographic trajectory is already set, with the number of young people declining and the elderly population ballooning. —Andy O'Connell 

A Silicon Valley of OneInsights from an App-Developer Veteran: Think Simple, Low-Risk VentureBeat

If you've been nursing a few app ideas and wonder what it takes to be a successful independent app developer, listen to self-taught programmer Rob Jonson, who has been releasing apps for a decade. When he looks at big-money app developers who are riding waves of hype and seeking venture capital or big tech buyouts, he wonders "why they didn't just build their app in the evenings, launch it, and see what happens. Most will disappear without a trace, but a good idea that fulfills a need will gradually find a market. And probably has as much chance of hitting it big as any other decent app, with a lot less risk." Jonson has never had employees and spends little on development, design, or launch. He finds that his most popular apps are those that he's developed for himself to satisfy his own needs. And he makes it a point to respond personally to users' emails. "People are surprised and pleased to get an email from the real developer," he says. —Andy O'Connell 

BONUS BITSCosts and Rewards

Just 90 Companies Caused Two-Thirds of Man-Made Global Warming Emissions (The Guardian)
How Snapchat Plans to Make Money (Business Insider)
What It's Like to Fail (Priceonomics)

Lean In — To a Balanced Life

Last year, in my junior-level management class, I showed Sheryl Sandberg’s TED talk, in which she presents the main ideas from her book Lean In. Aside from the fact that very few of my business undergrads knew who she was (seriously? Grrr), it was a great class experience. We had an in-depth discussion about gender and career choices.

We discussed Sandberg’s now-famous observation that many young women choose fields, employers, and career paths with less upside in terms of financial rewards and advancement opportunities because they are thinking ahead about lifestyle. Even though most are still 10-15 years away from marriage and children, they make choices with an eye to leaving room in their lives for their future families.

By doing so, Sandberg argues, they limit their abilities to earn or to rise to positions of leadership – and ironically, many fail to establish the career trajectory that would allow them to better control their work lives.

I believe Sandberg is right. Many of the 19-year-old female business students I have taught have made their future families a major driver of their career plans. Most end up in pretty good jobs, but I wonder whether, by “leaning out,” these talented young women are unnecessarily settling for lower career trajectories. And in our class discussion, it also became clear to me that most of my male 19-year-old business students hadn’t spent five minutes thinking about their future families when deciding on majors and careers. The vast majority were looking at financial success and advancement potential as their key considerations.

There’s nothing wrong with choosing a lucrative path, but I wondered if these young men were setting themselves up for work-family conflict and other challenges later in their lives.

It seems to me that it is just as important that young men learn to appreciate the truth that so many women spot early: that, once one commits to excelling in a demanding career, it becomes hard to scale back without jeopardizing all that one has worked and sacrificed for. Partner tracks and corporate ladders are not known for accommodating those who try to revise the deal. Big-time income also often means financial commitments to such expenditures as private schools or jumbo mortgages on houses requiring upkeep and landscaping. It is easy to get stuck on auto-pilot and continue pursuing a track, even after our lives change and it is no longer what is best.

So, while it is true that neither young men nor young women should close themselves off to certain career paths prematurely, it is equally true that neither should fall unthinkingly into careers that make it far more difficult to pursue other life goals.

As I realized that all my students would benefit from a balanced approach to initial career planning, I also recognized that the need wasn’t limited to them. The rest of us, too, would benefit from a balanced approach to the ongoing management of our careers. Whether it’s the first major step on the career path or the tenth, we should think about the implications for all the factors that have to balance out for a successful life, and whether those in fact need recalibrating. Making a move in light of the full range of considerations would mean thinking about:

Short- and long-term earning potential
The location of the job and whether relocation or a long commute is required
Opportunities for skill development
Career networking opportunities
How psychologically motivating the work is (e.g., does it offer autonomy, meaningfulness, and challenges)
Job security and benefits
Schedule flexibility and reasonable time demands
The match with one’s talents and interests
How personally fulfilling the work is

These last two may be the most important of all, and the most neglected. In fact, during my class discussion of career choices, the idea that one should look for the best match with one’s talents, interests, and sources of personal fulfillment was simply not raised (until I brought it up, towards the end). Of course, smart students know that they can’t eat fulfillment, and financial considerations are important. But many of us would be happier, perform better, attain more career success, and have a more well-balanced life if we were working in a career that we felt more passionately about and that brought us more fulfillment.

So talk to the young people in your life about the need to lean in, but also about the need to have their eyes open, as they embark on certain paths, to what they are signing on for. And keep thinking, too, about your own choices. Spend an hour or two every six months to take stock of your career and how it enhances or strains the rest of your life. Evaluate where you are, and start making conscious career decisions. Don’t let the sheer force of momentum keep you on a path that no longer leads to the life you will love most.

To Understand Consumer Data, Think Like an Anthropologist

It was hardly what you’d call an “adequate sample size” for market research, but the results were nevertheless eye-opening for the maker of a pain-relief ointment: A single consumer posted an online photo showing how he placed foil over the ointment to prevent it from staining his pants.

Despite years of consumer research, the pharmaceutical firm hadn’t known about the staining problem. That photo prompted the company to change the product and its communications about the ointment, creating significant value for the firm.

The beauty of listening to social-media chatter is that one picture or one comment can have an outsized impact on your consumer knowledge and, as a consequence, your profitability. But a lot of people in business don’t appreciate that.

Corporate social-listening efforts are typically driven by econometricians, computer scientists, and IT technicians—the people who are expert in database management. They understand digital information, but they don’t always understand how to get from information to meaning. So they boil the data down to percentages, treating random comments (and pictures of people with foil on their legs) as noise.

But if you want meaning, you have to think like an anthropologist. You have to understand that social-listening data is inherently qualitative. That means learning to appreciate the value of the stray remark and synthesizing bits of information into a higher-order sense of what’s going on. That’s how you make the most of social media as a tool for peering inside people’s lives as they’re being lived and discovering what consumers are really thinking and doing.

“Sure, sure,” the numbers-oriented marketing executives may say. Social listening is great for “exploratory” research, but only as a precursor to “real” research that will determine the truth of what’s being said online. What’s needed, they’ll tell you, is broad-based consumer research using representative samples and adequate sample sizes.

Querying a representative sample is great for testing a hypothesis or finding a statistical relationship between known concepts. But often, in marketing, you’re dealing with multiple unknowns. Social listening doesn’t presuppose anything. It has no constraints. Although qualitative information won’t give you a simple equation or statistic that you can show the CEO, it can provide answers to questions you didn’t even know you had.

And comments from a non-representative sample can be highly illuminating. For example, in tech markets, think of the users who regularly post to discussion groups focused on tech products. These knowledgeable netizens provide critical knowledge about product uptake and issues around quality or perception. The same can be said of fan groups and user groups in a variety of fields.

An important player in the electric-shaver category discovered this. Before the launch of a high-end shaver that was to be priced at more than $500 and was encased in brushed aluminum, an Australian retailer posted pictures and specifications of the product online. Almost immediately, consumers began commenting about the product’s “plastic aesthetic” and “cheap look and feel.” The manufacturer took prompt action, posting a new photo series highlighting the quality manufacturing process and construction, neutralizing the negative sentiment spreading online.

Successfully disseminating the results of social listening requires skill at seeing stories and developing insights from messy data. It also requires a penchant for simplicity.

One company we worked with had gone a bit overboard on purchasing tools for integrating social-listening data into its business processes. It had no fewer than 19 dashboards for looking at market and customer behavior, yet none of them were really working. Rather than advise the company to implement yet another new tool, we suggested that an email go out daily, illuminating the most interesting positive and negative statements gleaned that day from customers. The result was that the company acquired a deeper understanding of its customers and drew more insights from the data.

Our work with social listening often makes us think of the comment by futurist Roy Amara that people tend to overestimate the effect of a technology in the short run and underestimate its effect in the long run. Amara’s Law seems perfectly apt when it comes to social-media listening. At first, marketers were ecstatic about social listening’s potential; then, influenced by the numbers people, their enthusiasm cooled. But they haven’t yet fully appreciated its long-term strategic potential. They don’t yet see that social listening can redefine the way managers approach marketing and that social-listening competency may well define competitive advantage in the digital age.

From Data to Action An HBR Insight Center




You’ve Got the Information, But What Does It Mean? Welcome to “From Data to Action”
To Avoid the Customer Recency Trap, Listen to the Data
Are You Ready for a Chief Data Officer?
Does Your Company Actually Need Data Visualization?

Accelerating Change at Microsoft

A recent Wall Street Journal article quotes Steve Ballmer as saying: “the best way for Microsoft to enter a new era is with a new leader who will accelerate change.” Amen to that.

Since I didn’t load up on Microsoft stock when Mr. Ballmer took the reins, I have no personal peeve against him. In fact, I can actually feel sympathy for him. He took over an organization that had gone through a period of incredible success. With it came all of the usual problems of such success: A culture of arrogance. Competitive juices turned inward creating a deeply political environment. Complacency. Good luck trying to accelerate with those anchors hanging on the corporate ship.

And that brings us to the challenge for the new boss. He or she needs to get the organization to accelerate, yes. But the new CEO will have people who probably think they are already going as fast as they can. And they’re probably going in six different directions, or around in circles. He will have people who think they’re smarter than the new boss and who probably begrudge that they, or their mentor, didn’t get the CEO job. And he will likely be surrounded by people who will tell him that if only we do this little thing, or that little set of things, we can break out of our stall — which is a fantasy. It’s a big, heavy stall and nothing little is going to break them out of it.

Can such a large, hierarchical organization accelerate into a better future? Can it become more strategically nimble in an increasingly chaotic environment? Yes. But the problem is systemic and can’t be solved with a quick fix. As I have written about previously, we need a whole new system that enables the organization to capitalize on opportunities and dodge threats, and yet still make the numbers — a kind of dual operating system. This system is real and I have seen it in action,  but it takes real work to build.

Step one in the journey toward building this totally new way of operating at Microsoft will be creating a genuine sense of urgency around the right big, rational yet emotionally compelling opportunity. And I mean urgency not just among the 5% of “important” people. The new boss will need at least 51% of everyone. 80% would be better. This is so far from where they’re at right now. Where there is arrogance, people have no sense of urgency, and where there is politics, people, even if they do have urgency, will never have any alignment.

So, is it possible for the new boss to break Microsoft out of its slump, where for the last decade its batting average has been about .109? The answer is yes. But change will only be real and sustainable if he or she steps back to look at the whole operating system, and then focuses on the right opportunities to raise urgency.

The CEO Who Led a Turnaround Wearing a Helmet

One of the key lessons that Huggy Rao and I learned from studying scaling up excellence is that, to spread new ways of thinking and acting, just talking about the importance of new beliefs and behaviors isn’t enough. You need to live the mindset that you aim to instill in others. This is especially important for senior executives because – since the people they lead watch their every move so closely – if they say they believe in something, but act in ways that clash with such beliefs, people quickly conclude that it is just hot air.

I was reminded of this lesson a couple months back when I heard a story about executive Paul Anderson from one of his former colleagues, Paula Rosput Reynolds (former Chair and CEO of Safeco, now CEO of PreferWest). Paula encouraged me to talk with Paul because he “is the real thing when it comes to global business leadership.”  Paul Anderson has a long and impressive resume, which includes serving as CEO of companies including Pan Energy, Duke Energy, and BHP Limited – which became BHP Billiton under his leadership (now the largest company in Australia, among the world’s largest mining companies, and also a major oil and gas producer).  I spoke with Paul a couple months back about his successful turnaround effort at BHP Limited.  Paul was funny, wickedly smart, and consistently modest as he described the mess that BHP was in when he took charge in 1998. The company had been without a CEO for nine months, the earnings and stock price were in the tank, good people were running for the exits, and multiple projects in recent years had failed.

Paul’s new senior colleagues were skeptical about him, in large part, because they were nearly all Australians and “they did not want an American.” Paul started the process of both winning their trust and trying to figure out what to do with the company by having each of the top 80 people in the company write a two-page document that answered, first: Who are you? What are your responsible for? And then: What issues do you believe are most pressing? What would you do if you were me?  He met with each of these executives for at least an hour to discuss the memos they had written.

To make a long story short, rather than acting rashly, Paul listened to the collective wisdom of his top people, and implemented a turnaround strategy that he believed would enable the company to survive and thrive. The centerpiece was a “charter” he wrote that made clear BHP was a resources company (and would not migrate to becoming a services company as some executives proposed) and that spelled out the company’s values, goals, and paths to success. Paul also made some tough and controversial decisions, such as closing a titanium plant that was losing 10 million dollars a month, and exiting peripheral IT and engineering businesses. It took time to turn around this big and broken company. BHP lost over $2 billion in the 1999 fiscal year (which ended on June 30th). But in 2000, just 18 months after Paul took charge, there were multiple signs that the turnaround was on track. In fact, BHP posted a $1.6 billion profit – the largest in company history. And in 2001, profits jumped to $2.2 billion. (See here for more about the turnaround and Paul’s leadership style and philosophy.)

The part of the story I want to focus on, however, was one thing that still wasn’t going well in 2000. Although most other performance metrics were heading north, Paul was concerned because there was little evidence that safety was improving throughout the company. Progress was stalled even though safety was emphasized in the charter and it was something he asked every senior manager about. In fact, the company-wide injury rate increased slightly between 1999 and 2000.

Keeping people safe was essential to company’s international reputation and its ability to attract skilled employees – and, as Paul insisted, was simply the right thing to do. So he called in his head of safety and started pressuring him to explain why these numbers weren’t on the upswing – why the number of lost days due to accidents and injuries weren’t improving, for example. “He hemmed and hawed,” Paul told me, “but he finally blurted it out: ‘it is your fault.’” Then the head of safety explained how Paul’s personal actions were speaking louder than his words:

Everyone knows that you prefer to ride your Harley-Davidson motorcycle without a helmet.
The speed limit is 5 miles per hour in the garage. Everyone knows your car, and that you drive far faster.
When you visit plants, you don’t follow safety rules such as holding on to the handrail or wearing safety glasses at the right times.
When you visit a plant, safety is never first thing you ask executives about – you ask them about cost, reliability, and quality of output. Then you get around to safety.

Paul got the message. He stopped complaining about the laws in Australia that required him to wear a helmet. He drove slower in the parking lot. He started following the safety rules during plant visits. He talked about safety early in his conversations with company leaders, talked about it more often, and did so with more feeling. And more systematic efforts were made to instill a safety culture throughout the organization, most notably a new workshop that started with Paul’s senior team and that was cascaded down and around BHP. As Paul explained:

We brought in a consultant from DuPont who spent a full day with myself and my direct reports. We set a 20% year over year improvement target for Lost Time Injury Frequency Rate (LTIFR) and examined what could be done to achieve it. In the days that followed, each of my direct reports met individually with each of their direct reports to discuss their personal commitment to the safety of everyone under them. That next level then met individually with their direct reports, and so on. The whole process was very personal.

People at BHP got the message. They noticed the changes in Paul, and came to believe that the emphasis on safety wasn’t just hollow talk. And the workshops taught employees new ways to reduce accidents and injuries. Within a year, BHP Limited’s Lost Time Injury Frequency Rate had fallen nearly thirty percent (28.5% to be precise). The company’s safety statistics had improved so much that they were among the very best in the industry.

Our research on scaling suggests that spreading a new mindset doesn’t always happen so quickly. The fact that Paul had a lot of credibility – because the company had improved so dramatically in other ways in the prior 18 months – probably helped speed things along. But his story suggests a few broader lessons that can help any leader at any level who is trying to spread excellence:

The people you lead often know more about your behavior than you do. And they certainly know more about how it affects them. They are watching you more closely than you are watching them. The best leaders – like Paul – find ways to get in tune with what it feels like to work for them.

If your tendency is to shoot the messenger, give up now. When one of your folks has the courage to speak out, to give you bad news and point to your mistakes, how you respond has ripple effects that extend far beyond that conversation. Even if you are usually the most reasonable and understanding leader on the planet, the news of any intemperate reaction will spread and it will color future interactions. And if you are a very senior executive like Paul, your reaction to feedback such as “it is your fault” also sets the tone for how other leaders throughout the company will react when people bring them bad news.

You need to be dogged, consistent, and even downright boring about sending and reinforcing the message. This was a point Paul emphasized several times as the key to changing an organization’s mindset. It is especially true for large companies, but applies to every leader. It might be old news to you, but remember that some people you encounter are hearing your message for the first time – and many are watching to see whether you really meant it. People who hear you say something just once or twice, or act in ways to support it just a few times, tend to conclude that “this too shall pass.” Indeed, one of the main lessons that runs through our work on spreading and sustaining excellence is that leaders and teams that do it well often sound like a broken record. Playing the same phrase over and over signals that “the boss really means it” and helps fill organizations with people who also believe.

Fast scaling starts with slow thinking. Paul’s actions demonstrate that, to scale faster, it helps to take the time at the outset to really think through what you are doing and what you ought to do. Those 80 two-page memos and subsequent conversations at BHP were essential for helping Paul decide the right thing to do, rather than to act rashly and unwisely. In fact, this is one of the main lessons Paul has articulated from the turnaround effort at BHP (and also from his later experience at Duke Energy). When you first take charge of a troubled company, he says, “You have to assess the situation rather than act quickly. Everyone wants you to do something, so the first thing you say, very calmly, is, ‘We’re not going to do anything today.’” Paul’s advice echoes Nobel Prize Winner Daniel Kahneman’s findings about the virtues of “thinking slow” – switching gears from a fast, automatic and mindless mode to a laborious, reasoned, deliberative, and conscious mode of thinking. It’s the best way to advance when “you are in a cognitive minefield”—when you don’t know enough, risks are high, or you are stuck.

Finally, I asked Paul if he had any additional advice for executives who find pockets of excellence in their organizations and want to scale them up. It might sound silly because it is so obvious, he noted, but his advice was to remember to thank people when you find that they are doing the right things. They will remember. And if you never thank them, they will notice that, too, and it will undermine your message. Paul isn’t the first senior executive who has given such advice. The late Robert Townsend, CEO of Avis and author of the classic Up the Organization, described the phrase “thank you” as a “really neglected form of compensation.” And two of our favorite researchers, Wharton’s Adam Grant and Harvard’s Francesca Gino, did a series of studies that confirm the motivational magic of remembering to thank the people that you lead.

The CEO Who Led a Turnaround Without Wearing a Helmet

One of the key lessons that Huggy Rao and I learned from studying scaling up excellence is that, to spread new ways of thinking and acting, just talking about the importance of new beliefs and behaviors isn’t enough. You need to live the mindset that you aim to instill in others. This is especially important for senior executives because – since the people they lead watch their every move so closely – if they say they believe in something, but act in ways that clash with such beliefs, people quickly conclude that it is just hot air.

I was reminded of this lesson a couple months back when I heard a story about executive Paul Anderson from one of his former colleagues, Paula Rosput Reynolds (former Chair and CEO of Safeco, now CEO of PreferWest). Paula encouraged me to talk with Paul because he “is the real thing when it comes to global business leadership.”  Paul Anderson has a long and impressive resume, which includes serving as CEO of companies including Pan Energy, Duke Energy, and BHP Limited – which became BHP Billiton under his leadership (now the largest company in Australia, among the world’s largest mining companies, and also a major oil and gas producer).  I spoke with Paul a couple months back about his successful turnaround effort at BHP Limited.  Paul was funny, wickedly smart, and consistently modest as he described the mess that BHP was in when he took charge in 1998. The company had been without a CEO for nine months, the earnings and stock price were in the tank, good people were running for the exits, and multiple projects in recent years had failed.

Paul’s new senior colleagues were skeptical about him, in large part, because they were nearly all Australians and “they did not want an American.” Paul started the process of both winning their trust and trying to figure out what to do with the company by having each of the top 80 people in the company write a two-page document that answered, first: Who are you? What are your responsible for? And then: What issues do you believe are most pressing? What would you do if you were me?  He met with each of these executives for at least an hour to discuss the memos they had written.

To make a long story short, rather than acting rashly, Paul listened to the collective wisdom of his top people, and implemented a turnaround strategy that he believed would enable the company to survive and thrive. The centerpiece was a “charter” he wrote that made clear BHP was a resources company (and would not migrate to becoming a services company as some executives proposed) and that spelled out the company’s values, goals, and paths to success. Paul also made some tough and controversial decisions, such as closing a titanium plant that was losing 10 million dollars a month, and exiting peripheral IT and engineering businesses. It took time to turn around this big and broken company. BHP lost over $2 billion in the 1999 fiscal year (which ended on June 30th). But in 2000, just 18 months after Paul took charge, there were multiple signs that the turnaround was on track. In fact, BHP posted a $1.6 billion profit – the largest in company history. And in 2001, profits jumped to $2.2 billion. (See here for more about the turnaround and Paul’s leadership style and philosophy.)

The part of the story I want to focus on, however, was one thing that still wasn’t going well in 2000. Although most other performance metrics were heading north, Paul was concerned because there was little evidence that safety was improving throughout the company. Progress was stalled even though safety was emphasized in the charter and it was something he asked every senior manager about. In fact, the company-wide injury rate increased slightly between 1999 and 2000.

Keeping people safe was essential to company’s international reputation and its ability to attract skilled employees – and, as Paul insisted, was simply the right thing to do. So he called in his head of safety and started pressuring him to explain why these numbers weren’t on the upswing – why the number of lost days due to accidents and injuries weren’t improving, for example. “He hemmed and hawed,” Paul told me, “but he finally blurted it out: ‘it is your fault.’” Then the head of safety explained how Paul’s personal actions were speaking louder than his words:

Everyone knows that you prefer to ride your Harley-Davidson motorcycle without a helmet.
The speed limit is 5 miles per hour in the garage. Everyone knows your car, and that you drive far faster.
When you visit plants, you don’t follow safety rules such as holding on to the handrail or wearing safety glasses at the right times.
When you visit a plant, safety is never first thing you ask executives about – you ask them about cost, reliability, and quality of output. Then you get around to safety.

Paul got the message. He stopped complaining about the laws in Australia that required him to wear a helmet. He drove slower in the parking lot. He started following the safety rules during plant visits. He talked about safety early in his conversations with company leaders, talked about it more often, and did so with more feeling. And more systematic efforts were made to instill a safety culture throughout the organization, most notably a new workshop that started with Paul’s senior team and that was cascaded down and around BHP. As Paul explained:

We brought in a consultant from DuPont who spent a full day with myself and my direct reports. We set a 20% year over year improvement target for Lost Time Injury Frequency Rate (LTIFR) and examined what could be done to achieve it. In the days that followed, each of my direct reports met individually with each of their direct reports to discuss their personal commitment to the safety of everyone under them. That next level then met individually with their direct reports, and so on. The whole process was very personal.

People at BHP got the message. They noticed the changes in Paul, and came to believe that the emphasis on safety wasn’t just hollow talk. And the workshops taught employees new ways to reduce accidents and injuries. Within a year, BHP Limited’s Lost Time Injury Frequency Rate had fallen nearly thirty percent (28.5% to be precise). The company’s safety statistics had improved so much that they were among the very best in the industry.

Our research on scaling suggests that spreading a new mindset doesn’t always happen so quickly. The fact that Paul had a lot of credibility – because the company had improved so dramatically in other ways in the prior 18 months – probably helped speed things along. But his story suggests a few broader lessons that can help any leader at any level who is trying to spread excellence:

The people you lead often know more about your behavior than you do. And they certainly know more about how it affects them. They are watching you more closely than you are watching them. The best leaders – like Paul – find ways to get in tune with what it feels like to work for them.

If your tendency is to shoot the messenger, give up now. When one of your folks has the courage to speak out, to give you bad news and point to your mistakes, how you respond has ripple effects that extend far beyond that conversation. Even if you are usually the most reasonable and understanding leader on the planet, the news of any intemperate reaction will spread and it will color future interactions. And if you are a very senior executive like Paul, your reaction to feedback such as “it is your fault” also sets the tone for how other leaders throughout the company will react when people bring them bad news.

You need to be dogged, consistent, and even downright boring about sending and reinforcing the message. This was a point Paul emphasized several times as the key to changing an organization’s mindset. It is especially true for large companies, but applies to every leader. It might be old news to you, but remember that some people you encounter are hearing your message for the first time – and many are watching to see whether you really meant it. People who hear you say something just once or twice, or act in ways to support it just a few times, tend to conclude that “this too shall pass.” Indeed, one of the main lessons that runs through our work on spreading and sustaining excellence is that leaders and teams that do it well often sound like a broken record. Playing the same phrase over and over signals that “the boss really means it” and helps fill organizations with people who also believe.

Fast scaling starts with slow thinking. Paul’s actions demonstrate that, to scale faster, it helps to take the time at the outset to really think through what you are doing and what you ought to do. Those 80 two-page memos and subsequent conversations at BHP were essential for helping Paul decide the right thing to do, rather than to act rashly and unwisely. In fact, this is one of the main lessons Paul has articulated from the turnaround effort at BHP (and also from his later experience at Duke Energy). When you first take charge of a troubled company, he says, “You have to assess the situation rather than act quickly. Everyone wants you to do something, so the first thing you say, very calmly, is, ‘We’re not going to do anything today.’” Paul’s advice echoes Nobel Prize Winner Daniel Kahneman’s findings about the virtues of “thinking slow” – switching gears from a fast, automatic and mindless mode to a laborious, reasoned, deliberative, and conscious mode of thinking. It’s the best way to advance when “you are in a cognitive minefield”—when you don’t know enough, risks are high, or you are stuck.

Finally, I asked Paul if he had any additional advice for executives who find pockets of excellence in their organizations and want to scale them up. It might sound silly because it is so obvious, he noted, but his advice was to remember to thank people when you find that they are doing the right things. They will remember. And if you never thank them, they will notice that, too, and it will undermine your message. Paul isn’t the first senior executive who has given such advice. The late Robert Townsend, CEO of Avis and author of the classic Up the Organization, described the phrase “thank you” as a “really neglected form of compensation.” And two of our favorite researchers, Wharton’s Adam Grant and Harvard’s Francesca Gino, did a series of studies that confirm the motivational magic of remembering to thank the people that you lead.

How John F. Kennedy Changed Decision Making for Us All

Late in the evening on October 18, 1962, Attorney General Robert Kennedy squeezes into the front seat of his car. With him is the CIA director, the chairman of the Joint Chiefs of Staff, and a driver. Six other high-level officials crowd into the back seat. The packed car secretly speeds off from the State Department to the White House, where President John F. Kennedy waits.

What are all those hotshots doing jammed into a car that evening in Washington? It’s all part of a plan for President Kennedy to make the most critical decision in his life—how to respond in the Cuban Missile Crisis.

And as it turned out, the way President Kennedy orchestrated and led the decision-making process made all the difference. For that, he leaves a huge legacy in management.

But at the time, success was hardly assured.

Eighteen months earlier, he’d made arguably the worst decision he ever made, to support an ill-conceived covert operation to unseat Fidel Castro, known today as the Bay of Pigs fiasco. Yale psychologist Irving Janis used the debacle to coin the term “groupthink,” which refers to a psychological drive for consensus at any cost that suppresses dissent and appraisal of alternatives.  Historian Arthur Schlesinger, who took part in that decision process, later wrote that “our meetings were taking place in a curious atmosphere of assumed consensus, [and] not one spoke against it.”

And yet, as I write in more detail in Collaboration, after the Bay of Pigs Kennedy brilliantly retooled his group decision-making process. He ordered a review (keep in mind that not even the military was doing formal after-action reviews at the time) and subsequently instituted four changes to how his top team would make critical decisions:

Each participant should function as a “skeptical generalist,” focusing on the problem as a whole rather than approaching it from his or her department’s standpoint.
To stimulate freewheeling discussions, the group should use informal settings, with no formal agenda and protocol, so as to avoid the status-laden meetings in the White House.
The team should be broken into sub-groups that would work on alternatives and then reconvene.
The team should sometimes meet without Kennedy present, so as to avoid people simply following his views.

The whole idea was to solicit diverse viewpoints, stimulate debate, explore options, probe assumptions, and let the best plan win on its merits.

Then, on the morning of October 15, 1962, President Kennedy and his team learn that the Soviets are placing nuclear-armed missiles in Cuba—missiles that a few minutes after being fired would kill eighty million Americans.

That very morning, top military brass insist on an immediate and massive military strike to take out the missiles. But this time, instead of debating only the one plan, they follow the new approach, which calls for exploring options. So someone suggests an alternative—a naval blockade to force the Soviets to remove the missiles.

As the new process unfolds, Kennedy instructs his brother to lead a thorough deliberation of the two alternatives. The group of more than a dozen men meets in an unassuming office at the Sate Department and shuttles secretly back and forth to the White House (hence the ride with ten men stuffed into the car that evening). Frank discussions ensue. “There was no rank, and in fact we did not even have a chairman…the conversations were completely uninhibited,” Robert Kennedy would later recall.

As time passes, they deploy another new approach: they divide into sub-groups, with one developing a position paper arguing for the military strike, the other for the blockade. They then swap papers, dissecting and criticizing one another. In this way, the groups are able to probe decisions and surface pros and cons. Two days later, the group presents the fully developed alternatives to President Kennedy, who chooses to pursue the blockade. The blockade is successful, and prevents a nuclear confrontation with the Soviet Union.

How often do we see leaders learn from their mistakes this profoundly?

President Kennedy’s redesign of his decision making process has had enormous influence on today’s management thinking on leading teams. The idea of instilling candid debate to avoid groupthink has become a guiding principle in many business school classrooms and boardrooms.

It would be easy to assume that we’d always made high-stakes decisions through a structured method of seeking different options and debating which was right. But that would be wrong; first, someone had to decide to invent it.

Thieves Take Advantage and Deal Another Blow to JC Penney

Department-store chain JC Penney, already hurting financially from a misguided plan to end price promotions, was so plagued by shoplifters in the third quarter of this year that it lost a full percentage point of profit margin to theft, says the Wall Street Journal. When thieves learned that Penney had removed sensor security tags as part of the transition to a new type of inventory tracking, they targeted the company’s stores. At the same time, Penney stopped requiring customers to provide receipts with returned merchandise, so shoppers grabbed merchandise and “returned” it at cash registers without leaving the stores, the Journal says.

If You Want to Change the World, Partner with China

China has packed the equivalent of 200 years of industrialization in America into just two decades.  A population of two million is considered a small city.  A Chicago of new skyscrapers is built every year.  And 200 million more people will move into cities in the next 12 years.  Here, big is bigger than you can imagine.

This vast scale means that if China can’t carry out breakthroughs in sustainability fast enough, the consequences will break the planet.  But the speed of change means China has an opportunity to leapfrog to the latest practices.  And changes in infrastructure and behavior are in many ways easier to trigger here.

In order to support an expected one billion people living in cities by 2030, China is the only country building whole communities at a time. It’s using this development to rapidly experiment with new technologies, policies, and financial systems. In fact, China is innovating at a city level, designating tens of cities at a time as pilots for every viable clean technology. Each of these pilots exploring sustainable urbanization is a potential model that China might be able to scale to go green. Its ability to experiment and accept failure is making China not just the world’s factory, but its cleantech laboratory as well.

Local mayors in charge of these pilot cities have the flexibility to implement their own approaches, but they lack solutions. That means these mayors are eager for social and technological innovation and they’re keen to partner with organizations and governments overseas. The government of Singapore, along with Singaporean companies, is working with Tianjin on testing eco-city concepts in clean energy and urban planning. A coalition of German companies and the German government is working with Changzhou to provide vocational training at scale based on German manufacturing equipment.

Chinese cities can implement, test, refine, and bring to market innovative solutions to large-scale infrastructure problems faster than anywhere in the world.

Because of the corporate nature of China’s centralized government, one announcement from the top can make an impact on the behavior of 1.3 billion people. On June 1, 2008, China banned free plastic bags in grocery stores across the country. The policy has led to at least 67 billion fewer bags in its first five years.

When President Xi Jinping took office, he popularized an “Empty Plate” campaign that promoted less food waste. The number of official banquets immediately plummeted. Share prices of Chinese liquor Kweichow Maotai dropped 37% because no banquets means no toasting.

Ministries across the government are constantly reviewing new policies to implement. Constant incremental reform is the norm, so bringing good ideas to China has the potential to create significant long-term change.

In cities, the Party Secretaries and Mayors are the key decision makers, and they exert CEO-like control. China’s heavy industries, similarly, are state-owned, with only a few large players and decision makers. This means that introducing economically viable systemic changes in these industries is more straightforward in China than other countries.

For example, a small group of researchers at Lawrence Berkeley National Lab working with China’s National Development and Reform Commission have been working on one of the most effective energy efficiency programs in China.   The Top 1,000 Energy-Consuming Enterprises Program saved 150 million tons of coal equivalent (Mtce) during China’s 11th Five Year Plan. Its success led to a Top 10,000 Program covering two thirds of China’s total energy consumption, or 250 Mtce savings by 2015. The program’s success is tied to the fact that all these enterprises and buildings are owned by the government.

In practice, implementing new systems is problematic and dependent on growing a skilled labor force, but the first step — getting the ball rolling with a few crucial influencers — is simple.  One way to influence government leaders is through China’s government training system, which doles out mandatory annual training to city, state, and central government officials.  As a curriculum development partner on sustainable development, my organization — the Joint U.S.-China Collaboration on Clean Energy — has trained close to 600 leaders at Central Organization Department academies.   The COD not only dictates the content of training programs but also promotions for government leaders.  This makes it an effective channel for introducing new memes, best practices, and technologies to the Party.

Though the power structure in China makes massive change possible, and the government is willing to partner with Western NGOs, governments, and businesses, culture remains a barrier to international collaboration.  Chinese culture is not just different from Western cultures; it’s opposite. When I introduce myself in the West, I say “Hi, my name is Peggy Liu, Chairperson of JUCCCE, from Shanghai, China.” In Chinese, I would say “Hi, I’m from China, Shanghai. I’m JUCCCE’s Chairperson, Liu Peggy.” That speaks volumes on the importance of the collective versus the individual.

China’s culture is changing as rapidly as its infrastructure, as its younger generation and emerging middle class are beginning to travel more freely and interact more with the West.  But for now, if you want to create sustainable change here, you have to find a locally trusted partner on the ground.

China’s Next Great Transition An HBR Insight Center




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