Marina Gorbis's Blog, page 1512

The Real Battle Line on Gender? Men Versus Men

“I put my neck on the line for her, and now she’s coming whining into my office saying she’s not sure she can do the job??!” My friend, one of the most senior businesswomen in her country, is irate. She is the only woman on the Executive Committee of her global company, and has just worked hard to promote another woman into a senior role. She is shocked by the reaction: rather than gratitude, the woman is reacting with doubt and nerves and second thoughts. And I got an earful:

“Sheryl Sandberg is right, women need to step up and stop whining.”
“I used to be a good girl and worked hard and waited to be noticed — until I figured out that that would get me nowhere. You have to speak up, network, and don’t cry.”
“Women need to make up their minds. You want it? Get with the game!”
“It’s a tough world — don’t be naïve. Grow up.”
“Don’t think that just because I’m a woman, too, I’m going to be nice to you or assume we have a special connection.”

This echoes pretty closely a recent series of interviews published in the New York Times about the advice from top women to other women. The message is pretty consistent: If you want to succeed, adapt to the dominant norm. But I would argue that this isn’t ambitious enough for our times. And interestingly, most of the men I work with who are pushing on gender balance want to change those norms. They don’t want women to adapt. They want the system to adapt.

Women remain divided on the issue, and their complex and multi-faceted attitudes are usually a result of many variables, including age, political competence, support networks, and – especially — the context and culture within which they are operating. In balance-unfriendly environments, women can become cynical about the potential for change, and see men as the enemy and other women as a refuge, recourse and/ or responsibility. In balance-friendly environments, men and women tend to acknowledge the benefits of balance, and their shared pushing neutralizes the potential backlash of a more divisive, gender-wars approach.

I suggest to my frustrated friend that the real challenge in her story is not the reluctant woman she’d like to promote. It’s why she is (or feels) responsible for improving the gender balance in her company, rather than that balance being seen as the responsibility of the entire Executive Team. Why is it a woman who is trying to bring in another woman? Why is this all framed, even in her own mind, as a women’s issue, rather than as a business issue for her company?

Luckily, women are not the only ones debating gender issues anymore. The debate has dramatically shifted over the past decade. Now that women represent 60% of global university graduates and 80% of consumer goods purchasing decision-makers, the balance between men and women as both customers and employees has become a business issue of concern to many leaders and most large companies. Most large multinationals are actively pushing for gender balance (although they are achieving that goal with variable rates of success).

And since most large companies are still overwhelmingly led and dominated by men in senior roles, the real fault line on gender issues in all the companies where I work, is actually – and largely invisibly — between men and men. Between the progressive leaders pushing for major culture shifts and the male leaders who don’t yet see this as particularly relevant to their bottom lines.

The real battle lines are in endless board rooms and executive teams where, slowly but surely, men are pressuring, convincing and leading other men to gender balance their teams. It takes a lot of committed and convinced leadership. I’ve seen it in action in company after company and team after team.

It’s easier for men to lead on gender issues than it is for women. They are not seen to be pushing militantly for their “own camp.” They are not accused of self-interest and favoritism. They don’t have to deal with anxieties about the possibility of being a “token hire.”

I’m not suggesting it is easy for men, however. It takes a lot of courage for men to stand up to other men on a topic like gender balance. It is an emotional issue for both sexes, and it takes quite a bit of practice, understanding and finesse to become a good leader able to lead effectively across genders.

My job, over the past decade, has introduced me to thousands of managers, almost all of whom have been men, nudging, explaining and leading their colleagues towards balance.  Just last week, I was watching an exceptional male leader bringing his all-male, though very multi-cultural, team along with him. What did he do?

He allowed and encouraged a very open debate of the topic, among a hugely diverse team, including Brazilians, Indians and Chinese, inviting the quiet members to share their views. He never judged, but recognized where people were.
He led by example, using his own journey and lack of understanding of all the subtleties of the gender journey to say it was OK to admit needing to build skills, that he himself had taken a couple of years to really grasp what this was all about.
He explained how he personally was convinced of the benefits he had found in working with balanced teams and businesses.
And he insisted that he didn’t want women to adapt, but that he wanted to create a culture that allowed everyone to excel.

I couldn’t help comparing the tone and message that he was offering to his team with my friend’s tone and message to the woman she was trying to promote. What a different culture and context both were creating. One creative and positive, the other defensive and critical. One set up to succeed, the other set up to fail. One part of a corporate-wide push, the other a lonely hand up in an unfriendly desert.

This same scenario is playing out globally, at both country and company level. The number one key to gender balance is skilled, inclusive leadership with a determined focus on getting everyone on board to the benefits of balance.  And while today the common perception is that women are leading the way, the really untold story is how many guys are, slowly but surely, and somewhat quietly, involved in the shift. And getting good at it too.

Women need to recognize that this is not their battle alone, and that a growing number of men (though not the majority) are increasingly skilled allies, and absolutely essential to scaling the shift. We will not, as women, I can see from my front-row seat, change the balance on our own. Nor should we try. In order to buy into balance, men need to co-create it. And women need to expect nothing less of them.

Six Drucker Questions that Simplify a Complex Age

In 1981, Peter Drucker delivered a lecture at New York University titled “Managing the Increasing Complexity of Large Organizations.” Drawing on lessons from the auto industry, banking and beyond, he offered provocative prescriptions for coping in a world in which “the real challenge is to decide what you are doing” in the face of tremendous “technological change or market change.”

But, as was his wont, Drucker didn’t just provide answers. Speaking slowly, through his thick Viennese accent, he asked questions: “How do we organize the new within the old?” “How do you organize your entrepreneurial within the managerial?” “How do you maintain the cohesion” at a multinational corporation with far-flung operations spanning myriad cultures?

This was no mere rhetorical device. As I’ve explored previously, Drucker was always asking pointed questions—and, in turn, prompting people to challenge their assumptions, reframe problems and consider different angles.

More than 30 years after Drucker’s talk at NYU, the level of complexity confronting us has only continued to increase—or at least it feels to most managers like it has increased, given the outdated models and processes that most businesses tend to use (as both Steve Denning and Roger Martin have eloquently explained).

With that in mind, here are six questions—all of them straight out of Drucker’s writing—that I believe he would now pose to any manager trying to cope with, in his words, “the complexities of size, markets, products and technologies.” You should ask the first two from the standpoint of your overall organization. You should ask those who work for you the second two. And the final two you should ask yourself.

1. What does the customer value? This “may be the most important question,” Drucker advised. “Yet it is the one least often asked.” This insight is especially relevant in an age where customers have more power and choice than ever before. Unless there is a relentless quest to figure out what they want and need—and the only way to do this is “to go out to look, to ask, to listen,” Drucker said—it is easy to be left behind in relatively short order. Think BlackBerry, for example. “What is value to the customer,” Drucker wrote in his 1999 book Management Challenges for the 21st Century, “is always something quite different from what is value or quality to the supplier.”

2. What is our business, and what should it be? “Nothing may seem simpler or more obvious than to know what a company’s business is,” Drucker pointed out in his 1973 landmark Management: Tasks, Responsibilities, Practices. Yet “the right answer is usually anything but obvious.” This is particularly true in an era in which market structures can change with astonishing rapidity and new horizons are continuously opening because of technological advances. One of the reasons for Amazon’s great success, I would argue, is that it is constantly honing its answer to “What is our business?”—although doing so requires an extraordinary amount of discipline. Why? Asked seriously, “the question causes controversy, argument and disagreement,” Drucker noted. “It requires judgment and considerable courage. The answer rarely follows what ‘everybody knows.’ . . . It should never be made quickly; it can never be made painlessly.”

3. What is the task? No one ever would have asked this question to a 1950s blue-collar laborer. That’s because “in manual work,” Drucker observed, “the task is always given”: A car rolls down the assembly line, and someone bolts on the fender. But today, when knowledge work is predominant, tasks can be far more difficult to define. There is often no specific way for a knowledge worker to tackle an assignment. He or she typically has enormous discretion over what steps to take (and which ones not to take), and in what order to take them. Even outputs can be fuzzy when the “work product” is what lies between people’s ears, not what emerges from their hands. The key to improving knowledge-worker productivity, Drucker wrote, begins bottom-up, “with asking knowledge workers themselves: What is your task? What should it be? What should you be expected to contribute? And what hampers you in doing your task and should be eliminated?”

4. What are your ideas for us to try to do new things, develop new products, design new ways of reaching the market? More than ever, it’s imperative that all employees make innovation a priority, not just the R&D staff or the “new products” team. To be sure, not everyone has equal capacity for driving “change that creates a new dimension of performance,” as Drucker put it. “There are clearly people who are more talented innovators than the rest of us,” he acknowledged. But each person in the organization, from top to bottom, needs to adopt an innovative mindset. One way to foster this, Drucker counseled, is for senior executives to hold a session a few times a year with 25 to 30 more junior employees from across all functions. As Drucker scripted it, “the senior opens the session by saying: ‘I’m not here to make a speech or to tell you anything. I’m here to listen. I want to hear from you what your aspirations are, but above all, where you see opportunities for this company and where you see threats.’” Such gatherings, Drucker added, “are one of the most effective ways to instill entrepreneurial vision throughout the company.”

5. Who in this organization depends on me for what information? “Each person’s list will always include superiors and subordinates,” Drucker wrote in a 1988 Harvard Business Review essay called “The Coming of the New Organization.” “But the most important names on it will be those of colleagues, people with whom one’s primary relationship is coordination.” This notion rings even more true now, as traditional command-and-control structures slowly give way to more fluid and flexible arrangements at a growing number of enterprises. Asking this question—and making sure that the information you deliver to your peers comes in the right form and at the right time—is a central part of what Drucker termed taking “information responsibility.” After determining who depends on you for information, the follow-up question is also crucial: And on whom, in turn, do I depend?

6. What would happen if this were not done at all? There’s never been a more apt moment to ask this question, what with every manager these days struggling to preserve his or her most precious resource—time. In his 1967 classic The Effective Executive, Drucker recommended that everyone keep a detailed time log, tracking how minutes and hours are actually spent. Mark down events as they occur; don’t rely on your memory. After three or four weeks, analyze what you’ve recorded and ask what the result would be if a certain activity weren’t undertaken in the first place. “If the answer is nothing would happen,” Drucker wrote, “then obviously the conclusion is to stop doing it. It is amazing how many things busy people are doing that never will be missed.”

This post is part of a series of perspectives leading up to the fifth annual Global Drucker Forum in November 2013 in Vienna, Austria. For more on the theme of the event, Managing Complexity, and information on how to attend, see the Forum’s website.

What’s Different About Enterprise IT in Africa

Anyone following developments in the African IT space from afar can be forgiven for thinking that it’s all about the consumer, and that applications and services for business lag far behind. That’s understandable — the growth of the consumer mobile market in Africa has been spectacular.

I have held the view for a while, though, that it is mobile enterprise applications, especially when adopted widely by small and medium-sized enterprises (SMEs), that will set off the real IT boom in Africa. Recent tours in several countries have only strengthened this conviction, and made clearer to me how the coming African enterprise IT boom will differ from what has been seen in the West.

There are five key approaches and challenges that I think characterize African enterprise IT today. And while almost all the examples I cite are from West Africa, many of these ideas and innovations are well suited for emerging markets around the world. The rich fertility of ideas in even one corner of Africa show that the undercurrents beneath the veneer of calm in the enterprise IT space are fierce, and a whole range of industries could be disrupted when the emerging-market boom comes. Here we go:

1.       Enterprise IT with an ‘Infrastructure Patch’

In emerging markets, infrastructure is always an issue. Roads are often impassable, electricity is unreliable, fixed-line communications nonexistent. The savviest designers of IT services in Africa are often those who actually incorporate an “infrastructure patch” in the application itself. You can almost think of it as: “infrastructure inside.”

Take Herman Chinery-Hesse’s Hei Julor. It is a personal-security/anti-burglary/neighborhood-watch service in a box. It is also an enterprise application sold to private security companies and radio stations in Ghana, and soon elsewhere. Thus, the service has a consumer front-end and an enterprise back-end (a common architectural approach in emerging markets nowadays, and a subject to which we shall return).

The consumer grabs a starter kit from the local gas station or other shop, and “plugs in” by registering the location of his house (geospatial coordinates may be uploaded), “graphing” trusted neighbors (by, among other things, providing their mobile phone details), and setting some keywords. One of a number of participating private security companies is matched to the new user.

When a user is under attack from robbers or burglars, he just needs to hit the “panic button,” which is as simple as flashing a short mobile number or sending an SMS or pressing a knob on an app. Automated voice calls go to neighbors, the local radio station is activated to send announcements, and the private security company ‘zoned’ to the user send around a response team. The police are also alerted, for what it’s worth.

From the point of view of the companies involved — the radio station and private security company — Hei Julor is a tool they have integrated into their enterprise platform for allocating spare resources and airtime. For everybody, it is seen as offering a framework in which the lack of a credible police emergency system encourages different actors to consider wholly new ways of interconnecting. The creative binding together of radio stations, private security operations (usually available only to the very wealthy), and neighborly values achieves what only massive infrastructure build-out in terms of police stations, communication lines, response vehicles, and training facilities could enable in another context.

Another example of an infrastructure patch that has already gotten attention in the West is BRCK, the spin-off commercial service from renowned NGO Ushahidi. Billed as a “backup generator to the internet,” BRCK not only provides consumers with uninterrupted Internet services in unlikely places, but it can also allow telcos in emerging regions to monitor the health of their sprawling cell-tower networks by enabling the telcos to farm out the work out to multiple SME inspection companies.

2.       The Legacy Vacuum Can Be a Double-Edged Sword

One of the old tropes of the “African Tech Rising” narrative is the advantage posed by Africa’s lack of what technology vendors call an installed base — that is to say, the lack of pre-existing installations of enterprise applications. The theory is that this provides an incentive for African decision-makers to think more radically about leapfrogging than their counterparts saddled with baggage from a bygone era. Presumably, the same logic operates in places like Bangladesh, Nicaragua, and Papua New Guinea.

The lack of an installed base, however, also means that most enterprises in these places have limited in-house appreciation for the standard operating procedures so critical to deploying enterprise systems of any kind. In my personal entrepreneurial experience, some very large companies in emerging markets struggle to enforce the discipline of even the most basic enterprise planning and standardization techniques.

This segues rather well into the viewpoint that architects need to more forcefully blur the lines between consumer and enterprise for new corporate adopters, but it also points to another issue: training. Traditional training courses often fly into cultural walls of hierarchy and formality that prevent managers from falling in line. Techcom Visions, a West African IT company co-founded by Tsonam Cleanse Akpaloo, is turning corporate IT training on its head by offering personal coaching to top executives, very often in their homes, before bringing the thoroughly groomed big bosses into the same room with their teams in the office.  That way the big bosses gain the confidence required to reduce the “power-distance” between them and their usually much-younger IT managers (I reckon that the age-gap between IT top managers and general managers is wider in Africa than in most places). This allows for a much more open discussion about options, because the bosses don’t have to admit gaping inadequacies before everyone. The new approach is already showing some impressive results.

3.       It Takes Partners to Make Enterprise IT Work

In most emerging markets, the suppliers, partners, and sales force of an enterprise cannot be subjected to some kind of strict regimen imposed from the top, as is often the norm in more advanced markets. The types of compliance tools, CRM (customer relationship management) platforms, and supplier network systems a company adopts need to reflect this reality.

Some multinationals simply rely on ‘co-imagination’ partners on the ground to help them think this through. Nsano, a West African company founded by Kofi Owusu-Nhyira, supports one of the world’s top-five telcos in managing a sales force made up of independent, semi-educated and illiterate street-side vendors who sell the companies pay-as-you-go devices and services. The ‘street-CRM’ designed for this purpose is like nothing traditional vendors to this telco giant can deliver, as you might imagine. The application front-end runs on basic phones designed for the hustle and bustle of the African street. Its authentication procedures must work for people who can barely spell their names. And the reporting feature is designed to mimic the language of ‘online chat’ and SMS rather than that of SAP.

Another company, DreamOval, founded by the charismatic Derrydean Dadzie, developed a re-imagined SCM (supply chain management) app for Ghana’s giant state-owned cocoa company, Cocobod, so the world’s second largest national cocoa trading company could better manage the tens of thousands of cocoa farmers who supply it with the beans it sells to the likes of Cadbury. Here, farmers who can barely send SMS were equipped with an interface to enable them interact better with extension services through a collaborative system that adapts as the user’s learning improves. The traditional concept of the tutorial as separate from the application is turned on its head, as functionality is made to grow in step with familiarity.

4.       The Nebuchadnezzar Challenge

The public service agencies in many emerging markets have yet to take on service-delivery roles, and remain formal bureaucracies. This is due to the infancy of the welfare systems of these regions, and the attendant lack of experience in providing a wide range of services to citizens.

That also means that the public services, which in most of these countries command massive spending power, hate to specify their needs for vendors. Much of the corruption that vendors feel is inherent in tender, procurement, and public-private-partnership IT projects in emerging markets is not all due to unethical government bosses. It is inherent in the very lack of systems that define the problem to be solved objectively and comprehensively, creating misunderstandings and smokescreens easily exploited by actually corrupt vendors and officials.

It doesn’t mean of course that emerging market leaders don’t know what they want. Very often they have vivid (if not always realistic) visions. To be successful, vendors must go to the topmost echelons of decision-making and ‘show’ the bosses what the bosses are thinking about doing.

It brings to mind the biblical tale of the Babylonian king, Nebuchadnezzar, who assembled his top wise folks and asked them to guess what dream he had the night before. “Only then would I believe that your interpretation is also true,” said the shrewd monarch.

One only needs take a look at MasterCard’s recent coup in Nigeria, where a deal has been signed to power the national ID system with MasterCard. Anyone who has listened to MasterCard CEO Ajay Banga speak knows that his notions of a ‘cashless society’ tie into the full panoply of public service delivery, a broader vision shared by Nigeria’s all-powerful coordinating Minister of the Economy. Any ordinary vendor mouthing jargons about servers and middleware clearly stood no chance in this game.

5.       ‘Opportunity Vectors’ Trump Verticals or Geography

When solution providers are planning to penetrate a new market, they can’t help but think about which industries in the country are ripest for harvesting, and which resellers, distributors, or integrators in that specific market have the heft to help them quickly build relationships with prime customers. This is fine. This is the lifeblood of the “leads” methodology.

However, the world of enterprise IT is being disrupted by the cloud, as everyone knows. Drilling deep into a specific market and industry was all you could do in the days when deployment had to happen on site and big machines had to be lugged from one place to another. Now enterprises can access the capacities they need over the internet and pay on a subscription basis rather than upfront. This is changing the way companies build relationships.

A “vector” in math is a quantity with a defined direction. In business it invokes notions of scale and trending. What an enterprise wants more than anything is to scan for insight, looking for pointers in one market that might point to massive opportunities anywhere. Sometimes, great potential partners don’t shine in their current markets because the catalysts for their growth may be elsewhere. A multi-national enterprise may be in a pole position to see this, and its partner choices and philosophy should be greatly influenced by such “opportunity vectors.”

All said and done, enterprise IT companies need to become more open-minded about opportunity. If anyone had predicted even two years ago that a company like Oracle would find great commercial success within the region it has zoned as “African Transition Economies“ in Zimbabwe and the Democratic Republic of Congo (DRC), know-it-alls would have laughed at the very thought. But last year, Zimbabwe and the DRC were among Oracle’s fastest growing markets in Africa. So there you have it: Enterprise IT in Africa is never what it seems at first glance.

Constraints on Health Care Budgets Can Drive Quality

In 1980, the national expenditure on health care in the United States was just over 9% of Gross Domestic Product. Today it accounts for nearly twice that — close to 18%. This increase has come at a high price, hitting home most obviously in workers’ pay. According to data published by the Kaiser Family Foundation, workers’ earnings rose by 47% from 1999 to 2012, but their contribution to health insurance premiums during that time went up by 180%. Health insurance premiums rose four and half times faster than the rate of inflation over the same period.

This trend is unsustainable. Is it time to consider what would happen if the overall expenditures on health care were capped, with any future increases determined by the people or their representatives? From my experience heading Scotland’s National Health Service from 2010 until last August (and before as its director of health care policy and strategy), I know that such constraints can unleash innovations that will lead to better care — and better health — for communities.

Scotland’s NHS serves 5 million people with a fixed, tax-funded budget of around $18 billion. It covers the entire population, based on a set of principles which stress that access is free at the point of care and based on need rather than ability to pay.

Working under a fixed-cost ceiling was, of course, difficult. The Parliament would vote on an expenditure limit and the NHS had to live within that limit. We had little or no revenue-raising ability, and we had to meet a clear, challenging, and publicly reported set of quality objectives.

But while the budget ceiling and outcome transparency were challenges, they provided discipline, and incentivized the delivery of higher-quality care and improved population health. The constraints we operated within also required creativity, the formation of new partnerships, and an open-minded, outward-facing search for the best, most innovative models of care. We used Ed Wagner’s Chronic Care Model to redesign the management of chronic conditions. We also developed an approach that put the Institute for Healthcare Improvement’s “Triple Aim” (improving the quality of the health care experience, improving the health of a population, and reducing per capita costs) at the heart of Scotland’s universal system.

One success has been a marked reduction in the use of emergency beds for patients over 75. That said, many of the strategies put in place are still in their early stages and their results (in terms of patient outcomes) won’t be clear for some time. Nonetheless, it’s not too early to declare that NHS Scotland has made significant progress in creating the foundations for achieving the Triple Aim.

The Affordable Care Act and the emergence of accountable care organizations (ACOs) provide an opportunity to rethink not just how U.S. systems are organized for care but also how to forge new relationships and partnerships — between clinical groups, between clinicians and patients, and among communities and populations. The possibilities opened up by these changes are profound. But in order to optimize their potential, health care systems need to change their perspective from focusing on volume (provide as much care as possible) to focusing on value (provide the highest-quality care possible).

Changes in payment models may reinforce these changes. The traditional fee-for-service model prevalent in the United States has driven health care policy and practice, placing a stronger emphasis on volume of care than on quality. If some of the early proponents of accountable care are correct that the Affordable Care Act will lead to a transition in payment models from fee-for-service, through bundled payments, and towards fixed budgets, then U.S. health care would do well to benefit from the lessons already learned in countries where these constraints have been the norm.

Here’s what we learned in Scotland: In an environment where generating revenue by increasing the volume of hospital care is not an option, success requires doing the following things well:

Balance Investments in Population Health and Treatment

The challenges facing health care (demographic change, multiple morbidities, obesity, etc.) are such that, unless systems invest in improving population health to reduce demand for sick care, they risk being overwhelmed. A fixed budget forces you to invest in wellness. Investments we made in Scotland include national programs to improve behavioral health and early detection of cancer and targeted programs to reduce disparities in the prevalence of heart disease.

Work with Outside Partners on the Social Determinants of Health

Once you prioritize wellness, you are forced to think beyond the 20% that health care contributes to improving people’s health and address the behavioral, social, and environmental issues that make up most of the other 80%. Members of the health care sector need to stop thinking that they can do all of this heroically on their own. Instead they should start thinking about being a better partner in communities and working with schools, voluntary groups, housing authorities, faith-based groups, and other community activities to promote wellness. Earlier this year, we launched the Early Years Collaborative, which aims to give all Scottish children the best start in life. Already, the collaborative has pulled together health care workers, social care workers, the police, and education professionals to reduce infant mortality.

Build a Strong System of Primary Care

As the core business of health care is increasingly devoted to supporting people with chronic disease (particularly those with multiple chronic diseases), it’s crucial to have primary-care teams able and prepared to help patients manage their conditions and avert hospital admissions. Preventive, coordinated, and team-based care has proven a successful strategy for managing these high-cost, high-utilization patients. (A 2011 Commonwealth Fund survey of 11 high-income nations found that patients in the UK experienced the fewest coordination gaps overall and the fewest gaps involving a hospitalization and/or surgery.)

In addition, reliable systems to track patients’ conditions and use the data to effectively predict demand for care are essential tools for improved primary care.

Get Care Right the First Time

While preventing infection and harm are at the very forefront of our professional duty to provide excellent care, such events also add to the costs of care from the purchasers’ perspective. We should continually drive down infections not only because it is good for patients but also because it reduces length of stay and bed utilization.

In addition, we should see unnecessary readmissions as waste rather than as a second opportunity to bill the payer. We should tackle inappropriate variation in practice. We must plan to address the growth in the number of frail elders with multiple conditions. And we must address the problem of multiple prescribed drugs and their interactions.

Finally, we should involve patients in shared decision making because we know it gives them the care they want and need, improves outcomes, and can reduce costs. (The same 2011 survey I mentioned above found that 79% of UK patients reported a positive shared-decision-making experience with a specialist.)

***

As we change the payment models, what if we also cap the growth in expenditures? The international evidence suggests that this would mean that health care systems would need to work with communities to improve wellness in addition to improving care; to shift the balance of care towards the community and the home; and to reduce harm, waste, and inappropriate variation no matter where it exists. This is what increasing value in health care has to look like. That doesn’t sound too bad, does it?

Follow the Leading Health Care Innovation insight center on Twitter @HBRhealth. E-mail us at healtheditors@hbr.org, and sign up to receive updates here.

Leading Health Care Innovation

From the Editors of Harvard Business Review and the New England Journal of Medicine




A Role for Specialists in Resuscitating Accountable Care Organizations
Make Physicians Full Partners in Accountable Care Organizations
Employee Engagement Drives Health Care Quality and Financial Returns
Why Can’t U.S. Health Care Costs Be Cut in Half?

Why Is Resilience So Hard?

Resilience has long been touted as an essential capability for bouncing back from leadership setbacks. Earlier this year, Rosabeth Moss Kanter advanced the conversation with an excellent article on the topic.

Yet despite the overwhelming consensus and supporting evidence that resilience is vital for success in today’s business environment, the truth remains: resilience is hard. It requires the courage to confront painful realities, the faith that there will be a solution when one isn’t immediately evident, and the tenacity to carry on despite a nagging gut feeling that the situation is hopeless.

In an attempt to better understand the struggle-recover process in writing my book, Leadership and the Art of Struggle, I spoke with extraordinary leaders across sectors and industries, all of whom had faced an array of challenges, setbacks, and adversity. As I listened to their stories, I began to realize why so many executives struggle with resilience. Each of the leaders I interviewed has been thrown off balance, in one way or another, by his or her ordeal. This state of imbalance manifested in a variety of ways. Some experienced anger and even rage, projecting the blame outward. Others became depressed and filled with self-doubt. Still others suffered physical symptoms, like a disruption in sleep patterns. One female executive told me: “My hair started falling out. I didn’t realize it was stress. All I knew was I could see my scalp in the mirror when I brushed my teeth.”

If left unchecked, this condition of imbalance can undermine a leader’s functioning at a crucial time, making a bad situation even worse, and all but eliminating the ability to act with resilience. Anger can turn into vengeful behavior further compounding the problem by destroying relationships critical for success. Self-doubt can inhibit the proactive behaviors necessary for renewal, recovery, and advance. This risk is compounded if the leader is not aware that he or she is out of balance, as is often the case.

When facing a difficult or challenging situation, it is natural to fall out of balance. The most important first step is to recognize and acknowledge that you are off balance. Once you reach this awareness, you can consciously take action to regain your foothold by engaging in a set of grounding and centering practices, allowing you to channel your energy more adaptively and constructively.

Adopt a growth mindset

Psychologist Carol Dweck observed differences in performance between individuals who assumed their abilities were innate and fixed, and those who held a model that their abilities were fluid and subject to change and growth. Those with a growth mindset performed significantly better on difficult and challenging tasks.

When we face setbacks, it is natural to fall into a fixed mindset, which leads to comparing ourselves with others, turning our energy inward, away from solving the problem, further amplifying the negative emotional spiral. This began to happen with one newly emergent public relations leader I interviewed. “There was a point where I just thought, ‘Maybe I’m crazy. Maybe I don’t know what I’m doing. Maybe they shouldn’t put me out there in front of clients.’” Fortunately, she quickly transformed her thoughts, focusing on how she could grow through the experience. She sought accreditation in public relations, which improved her skills, boosted her self-confidence, and improved her credibility with her boss, setting her on a path leading to greater career growth and fulfillment.

Those that constantly remind themselves that they are on a learning journey have the advantage. In the words of my friend, and former Microsoft CFO, Frank Gaudette: “I reserve the right to wake up smarter every day.”

Center your mind, body and spirit

When feeling the stress of time, it is easy to break from the routines that are so important to healthy living, like exercise, self-reflection, and meditation. Investing the time and energy to maintain and even enhance these centering practices during difficult times pays off handsomely, as scientific studies show. It gives your mind greater clarity and can be the source of new, out-of-the-box thinking, necessary to solve your most vexing problem.

One leader told me about how she would prepare for particularly stressful meetings: “I would not only do pilates, but I would also run eight miles. I would get myself totally pumped up so I could be as energetic and authentic as possible.”

Seek sources of support

After suffering a setback, it is natural to feel the burden of embarrassment and retreat into isolation. However, this is exactly the wrong thing to do. The leaders I interviewed had strong social support systems, and they tapped into them during difficult times. Not only did they get the support and encouragement they needed to keep going, but also their social support system was an important source of new ideas and inspiration. The PR leader, mentioned earlier, got her idea for accreditation by reaching out to a peer support group of fellow female PR leaders.

Adversity, setbacks, and challenges can throw any leader off-balance, which can lead to cascading difficulties. It is important to notice that this is happening and to take action to ground and center yourself, intentionally bringing yourself back to an emotional and physical state where you can constructively confront your problems. Only then will you be able to react with the resilience necessary to overcome your struggle.

Managing “Atmospherics” in Making Decisions

One offshoot of the fast-advancing research in neuroscience is the growing body of literature on decision-making. Hugely popular books like Malcolm Gladwell’s Blink and Daniel Kahneman’s Thinking Fast and Slow (which introduced us all to the distinction between Type 1 and Type 2 thinking) reveal how far actual decision-making varies from the logical decision-tree analyses and case study deliberations traditionally taught (and being taught less now).

Yet the truth of human decision-making is even less rational than the cognitive biases and limitations these works describe. Other important research shows the extent to which people deciding – even on matters of great consequence – are influenced by what we could call atmospherics.

For example, to cite just a few studies:

The type of music being played in the background of a liquor store affects purchases. When German music is played, more German wines are sold.
Adding the color red to a medical pamphlet (versus printing it in black-and-white) raises the likelihood of a patient’s opting to receive a recommended vaccination.
Showing investment opportunities in green instead of red makes a difference, too.
Informing an investor that a perspective comes from an “expert” causes them to “turn off” their independent consideration of evidence that contradicts that view.
“Priming” decision-makers to make associations that they would not otherwise make (such as by showing pictures or words that evoke images in advance) causes them to behave differently.

And of course, any marketing researcher knows the impact of the order of presentation and the curious effects that arise when test products are either labeled (“A” tends to win over “B”) or branded versus blind-tested. (Recall that “new Coke” won in blind-tasting, yet people shunned it when it became brand Coke.)

The overall message of such studies is clear. It’s not just that decision-makers don’t refer to data in making choices – they don’t even necessarily decide based on “gut feel.” Decisions are being made because of external and seemingly extraneous factors that work on a wholly unconscious level, bypassing even the gut.

In a sense this “new” discovery is not surprising in that businesses have long recognized that humans as consumers are susceptible to all sorts of urges and emotions which guide them toward decisions to buy things they don’t need or didn’t previously recognize they needed. Even “considered category” items such as cars are advertised with exciting sound effects and music, acknowledging the role of something other than rational thought in important purchase decisions.

Understanding why a given decision was made requires insight into EQ as much as into IQ. It requires an understanding of subjective emotions as much as of objective ROI and Bayesian models.

But despite what we know about decision-making by consumers, we’re slow to accept that humans as executives are subject to the same influences. Unfortunately, it’s true.

So, what can or should we do to improve decision-making? Can we really study it at all? Can we get better at it?

Let’s take the latter question first. Yes, we can get better at it, starting with acknowledging that irrational factors are always at play. To counter unconscious influences, such as the ones described above, we can apply scientific approaches like making sure to consider all alternatives under the same conditions, or rotating the order in which ideas are presented. For important decisions, we need to consciously anticipate possible biases and, if we cannot be objective, we need to enlist second and third opinions from trusted parties. We might force more rationality by considering what information would compel us to overcome our initial preference, and then do the research to find that information if it exists. Alternatively, we might simply go with that initial preference, especially if the real payoff is likely to be in the execution of the idea, anyway. We can make the rational decision not to waste additional time and money on gathering information we will never accept, but will have to pay for.

As for the question about studying decision-making, the task only becomes more interesting and important when we recognize decision-making as a complex and messy phenomenon. I’m reminded of a 2007 New Yorker article in which Malcolm Gladwell cites Gregory Treverton’s thinking. Treverton, a national security expert, observes that there are two kinds of problems in the world – puzzles (which have absolute answers although the solver has not yet discovered them) and mysteries (for which definitive answers don’t exist because they depend on dynamics among many, unknowable factors). Instead of treating decision-making as the former, we must accept that it is the latter. It requires, simply, seeing the process as art more than science. That doesn’t negate the value of research about it, but it means that we have to accept that there will be a mysterious imprecision in how we make and evaluate decisions.

High Stakes Decision Making An HBR Insight Center




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Getting Buy-In for Innovation that Doesn’t Fade at the End of the Quarter

You’ve prepared a business plan for a promising new entrepreneurial venture. You’ve got funding and the blessing of your CEO and Board to go ahead with this high-profile “experiment”. Your venture could be a growth engine for your corporation’s otherwise large but slow and steady core business.

Then you start worrying.

Even though there is a three-year execution horizon, they expect results in the first year. In fact, given the risk-averse culture of the organization and the tough market environment, you suspect they will likely re-evaluate within six months. So, realistically, you have to show progress before the mid-year cost cutting exercise. And even though you have been assured that your business will be treated differently since it is “like a start-up”, you have a lingering feeling that your business may be targeted before it can really demonstrate traction.

What can you do?

Here’s where Mission Analysis can help. Mission Analysis — the foundation to the Military Decision Making Process — is a seventeen-step process, in which the military commander begins his battlefield visualization, and the staff defines the tactical problem and determines feasible solutions. At its core, it is essentially an objective-setting and tracking tool, and I have used a modified 5-step version to run my own businesses, as well as my clients’ new ventures. I found it to be helpful because it bridges the gap between Big Company Processes, and smaller entrepreneurial start-up goal-setting.

For the large organization, Mission Analysis gives the necessary reassurance that there is a plan in place with specific measurable deliverables, which can be translated and absorbed into the overall planning process of the corporation. It helps ease the uncertainty around the stereotype of the “swashbuckling start-up that’s experimenting with various business models, and gaining access to some of our most valuable, stable customer relationships”.

For the entrepreneurial new business unit, Mission Analysis gives the necessary focus to demonstrate progress and success inside a large company by assigning tangible, step-by-step deliverables that approximate the funding rounds and deliverables of a venture-backed start-up. Here are five steps an “intrapreneur” can take to create a Mission Analysis that satisfies the concerns and needs of both the corporate parent as well as the entrepreneurial business:

Begin with the “What,” a clear and actionable mission for your business. For a business incubated by a large company using an annual funding cycle, you generally need a one-year mission that clearly articulates to direct reports and colleagues what you are aiming to do and what the result should be. For example “Our mission is to launch a new U.S. Consumer Healthcare Data Aggregation and Predictive Analytics business, and build awareness and adoption in order to achieve $X million revenues in 2014″. This fictitious example already signals that 2014 will be about building a product, marketing it, and demonstrating key customer willingness-to-pay by targeting a tangible revenue goal. There is no mention of margin, hence profitability is not one of the main drivers for 2014.

Follow with the “Why” to describe the background behind the mission. This is called the “Strategic Intent”. In a nutshell, it is your “raison d’être”, your purpose. In larger companies, it could simply be put as your boss’s mission, and your boss’s boss’s mission. These cascading missions should dovetail seamlessly; if each direct report in your team succeeds in their specific missions, you should automatically succeed as well.

Specify your Objectives, Measures and Targets, all on one table, ideally on a single page.

Objectives define the ideal end-state for the mission. For example, “Validate Willingness-to-Pay with Pilot Customers” clearly signals that you need to test their offering with a handful of carefully picked customers and ensure that they sign on the dotted line.
Measures indicate quantitatively the level of progress towards achieving the objectives — and will ultimately drive employee behavior. For the objective described above, a tangible measure could be: “Percentage of Pilot Customers who are converted to Revenue Generating Customers in 2014″.
Targets are the specific level of performance we wish to achieve against any particular measures. So in this case, an appropriate target could be: “75% of Pilot Customers subscribe to the service in 2014″.

As with any start-up, don’t be surprised if these OMTs change through the year based on course-corrections, so be prepared to update them accordingly. Just remember that proper justification should be given for the course correction. It’s acceptable (and advisable!) to change course if your team finds that willingness-to-pay was significantly less than anticipated. On the other hand, it’s obviously not a good idea to change objectives if you simply didn’t complete the test in the planned timeframe.

Elaborate by identifying your Implied Tasks, Timelines and Resource Requirements, again, ideally in one table on one page. The aim of this part of the process is to structure the way in which the team approaches the delivery of the mission.

Implied Tasks are a listing of the granular actions required. In the example above, they would outline (among other things) the process of targeting customers, approaching them, enabling them for usage, obtaining feedback on price points, and ultimately having them buy.

Timelines should be assigned to these tasks, e.g. “by Week 15”, or “by end Q2 2014”. The scope of activities and timelines would lead to an estimate of the internal and external Resource Requirements.

Finally, describe your “Freedoms” and “Constraints”. A “Freedom” is a factor that helps to achieve the mission, e.g., a dedicated, autonomous team, or high-level sponsorship from an influential partner. A “Constraint” is a restriction that is placed on the freedom of action for the team in delivering the Mission. Examples of constraints are regulatory, legal and ethical issues, or infrastructural or technological restrictions. These are not meant to be “disclaimers” for being unable to succeed; they are legitimate issues that need to be tackled or planned around.

By following these five steps, you will have a solid plan to move your new venture forward. Mission Analysis, when used in this context, forces intrapreneurs and their executive sponsors to focus on tangible deliverables. The credibility of established business processes gives additional assurance to a large process-driven corporation — while allowing the intrapreneur to maintain the razor sharp focus of a start-up looking to nimbly capture a market opportunity.

Business Plans and Other Works of Fiction

The purpose of a business, Peter Drucker famously said, is to create a customer. Yet, rather than creating customers, many innovators create a fantastical piece of what you might call Microsoft fiction.

This hit home for me during a recent client project. I was working with a team that had been tasked by the company’s CEO to develop a new venture in a promising market space. Its three members had been working for about six weeks. They’d conducted detailed research, talking both to prospective customers and numerous industry experts. And then they used Microsoft’s most popular products to produce what they thought was a business plan. But it actually was a kind of fiction built in three chapters: an Excel spreadsheet with sophisticated analyses showing breathtaking financial potential, a PowerPoint document blending facts and figures with compelling videos and pictures, and a Word document summarizing all of it in prose so lucid Malcolm Gladwell would shed a tear.

Still, it isn’t a business until you create a customer. After listening to the team describe its work, I asked a simple question: “Who is your first customer?”

The team turned to page 12 of chapter 2 of their Microsoft fiction, proudly displaying a PowerPoint slide citing detailed demographic figures. The slide said that 60% of the target market would be 18-to-34-year-old males with annual incomes within a certain range.

So I asked the question again. Instead of summary facts and figures, I wanted the team to be very precise. What is the customer’s name? Where does he live? What does he look like? What are his hopes, dreams, and aspirations? What does he love? What drives him crazy? How would the team’s idea fit into his life?

After we had that first customer mapped out, we then turned to thinking about how the very first transaction with the customer would work. This involves answering questions like:

What exactly will the customer be offered?
How will he hear about the offering?
What will trigger him to purchase it?
How much will he pay? When and how will he pay it?
How will he receive it?
What has to happen to make and deliver it?
What will induce him to use it for the first time?

By the end of the process, we had mapped out a real first version of a business model – the way the team will create value for the customer, deliver it to that customer, and capture  value for the company.

It’s always easy to confuse motion for progress, particularly inside large companies where executives often demand Microsoft fiction. Start from the customer and the value he or she seeks. Detail your first transaction. And begin the real process of building a business.

Beware the Plumbing Firm That Advertises a Lot

Residential plumbing firms that advertised on Google searches tended to be lower-quality companies, according to a study in Illinois by Ryan C. McDevitt of Duke University. Specifically, the firms that advertised on Google received, on average, more than 3 times as many Better Business Bureau complaints per employee as companies that didn’t advertise. Because of an inability to establish lucrative relationships with long-term clients, low-quality firms have a greater incentive to rely on Internet search engines and other forms of advertising to aim at infrequent customers who aren’t willing to devote time to seeking out good companies, McDevitt suggests.

The Three Reforms China Must Enact: Land, Social Services, and Taxes

China’s global economic power continues to grow, yet the decision-making dynamics of its top leadership remain a mystery. This complicates the ability of outsiders to understand the purpose for and implications of policy changes.

Gaining insight into this process is particularly important as China’s new leaders prepare to unveil an economic roadmap at the Third Plenum, which begins this coming week. The plan is expected to outline policies intended to ensure that China continues to see average annual GDP growth of 7%  through this decade, the growth rate required to meet Premier Li Keqiang’s stated goal of doubling GDP by 2020.

Since Party Secretary Xi Jinping and Premier Li Keqiang assumed office, the urgency of economic reform has been Topic A and expectations for the Plenum could not be higher. Failure to present a groundbreaking new vision risks leaving in place old economic drivers, especially the over-reliance on fixed-asset investment, that have created serious challenges such as China’s “ghost cities” and high levels of local government debt. These factors have led to questions over the quality of banks’ balance sheets and whether many of the loans extended in recent years can actually be repaid, raising further doubts over the sustainability of the debt-fueled model.  However, even though China’s leaders have stated that they want a consumer-driven economy, consumption’s contribution to GDP in the Third Quarter of 2013 sat at a five-year low and investment’s share of GDP growth rose to a five-year high of 55.8%.

What Needs to Change

Three longstanding systems have to change if China is to set itself on a path towards sustainable endogenous growth. The first is the rural land ownership. Currently, all rural land is collectively owned by the people, with farmers leasing the right to use it. China must reform land-use rights and ownership rules to enable farmers to receive fair compensation when selling their land or use rights.

The second is hukou, the residence system that ties people to the areas in which they were born and denies them access to services like social security, healthcare, and education in other cities. According to a recent survey by the Development Research Centre, a think-tank under the State Council, 74% of “migrant workers” want to settle in cities because of the better services available. However, the same survey also showed that since they cannot currently get the full social benefits of urban hukou, the same “migrant workers” do not want to give up their rural land. The goal should be to allow these same farmers (and those already living in cities as “migrant workers”) to take their new income from land sales, move to the cities, and receive the same social benefits of urban residents.

The third is the tax system. The central government must start to give more tax revenues to local governments. This would ensure that the cities where farmers settle can afford to provide these social services.

If all three types of reform are tied together, China can unlock the huge consuming potential of its rural population (estimated at 900 million, including those “migrant workers”) and begin to make the shift from an investment-led economy to a consumption-led one. With concurrent financial liberalization, including interest-rate reform and the broadening of investment options, these changes could lead to higher returns on savings and lower savings rates in China — just as we saw happen in the UK and Nordic countries in the 1980s.

Significant Opposition

If the party leaders do tackle these reforms, success is far from assured. Standing in opposition are the politically powerful local governments, which have plenty to lose. Land sales account for nearly 60% of local government revenues, so a land-reform scheme that forces them to pay a higher prices for land acquired from farmers (at artificially depressed rates) is unpalatable — particularly as the reforms will require these same local governments to spend more on social welfare programs.

Given this opposition, reform could be slow to implement. But expectations are rising that Xi Jinping, in an effort to enshrine himself as China’s third paramount leader after Mao Zedong and Deng Xiaoping, will tackle the thorny issues and stubborn interest groups, pushing through reforms like the ones above and expanding China’s middle class—giving rise to a powerful consumer culture.

China’s Next Great Transition

An HBR Insight Center




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