Marina Gorbis's Blog, page 1514

Learning from Bad Decisions in “Disaster Lit”

Neil Swidey was at a neighborhood birthday party seven years ago when a lawyer friend told him about an unusual lawsuit. The litigation stemmed from a 1999 accident in which commercial divers had been sent on a risky mission to unplug a 10-mile unlit tunnel deep beneath Boston Harbor — a key step in the cleanup of the once-filthy waterway. Swidey, a reporter at The Boston Globe Magazine, had never heard of the incident, partly because it was subsumed by media coverage of John F. Kennedy Jr.’s fatal plane crash, which took place around the same time. In 2009 Swidey wrote a two-part story in the Globe Magazine reconstructing the accident, but afterward he remained interested in the larger questions raised by the incident — specifically in how organizations manage risky projects, and how decisions can go tragically wrong. “If you look around at all the infrastructure that makes modern life possible — the tunnels and towers — that’s all done on the backs of blue collar workers who assume the lion’s share of the risks,” Swidey says. His book on the Harbor Tunnel disaster, “Trapped Under the Sea,” comes out in February. He spoke with HBR about the broader genre of “disaster lit” and what it teaches about decision-making.

What other books about disasters did you consult while writing your book?

“Into Thin Air” and “The Perfect Storm” clearly belong in the canon. “Lost Moon,” which astronaut Jim Lovell co-wrote about his cursed Apollo 13 mission, was very instructive. I’m particularly interested in how people prepare for high-risk missions, and historically, nobody has done this preparation better than NASA. In “Trapped Under the Sea,” I use the Apollo 13 million to show the dividends that rigorous training can pay when things go wrong. The divers I write about in “Trapped” had been sent to the end of a 10-mile, pitch-black, unventilated tunnel built hundreds of feet under the ocean. It was so utterly remote that some people referred to it as a spacewalk under the sea. I also tend to take a broader view of what qualifies as a “disaster book.” Robert Kurson’s “Shadow Divers,” which details a deep-sea adventure that courted death, was hauntingly good. Same with “Five Days at Memorial,” Sheri Fink’s new book about the hospital where workers euthanized patients in the aftermath of Hurricane Katrina. It has some of the same dynamic — how things start to fall apart, and one bad decision leads to another.

Do most of these stories feature one big, poorly-made decision, or is it more often a cascade of smaller poor decisions that lead to tragedy?

More often it’s a series of small bad decisions, none of which would have caused a fatality on its own. In researching my book, I turned to the field of risk management. That’s where I learned that disasters are what happens when the holes in the Swiss cheese line up.

How many of the bad decisions you see in these stories are driven by context — exhaustion, time pressure, extreme conditions?

Those are huge issues. NASA training involves a ton of simulations — essentially war-gaming to forge cohesion within the crew, and between the crew and mission control. Those exercises are also designed to test an astronaut’s ability to work through a crisis by following proven protocols rather than by making panicked, gut decisions. In my book, I explore the physiology of what happens to the human brain and body in a crisis situation. When confronted with extreme danger, a person’s fight-or-flight response kicks in, producing a flood of stress hormones, notably cortisol and adrenaline. This leads to a big increase in the consumption of oxygen. The divers I write about had to remind themselves that if they had a breathing apparatus designed to provide them with an hour’s worth of oxygen, in a crisis they should cut that figure in half, because of this spike in consumption under stress. So stressful conditions are a big factor in many of these decisions.

Did working on this story change the way you perceive risk or make you more cautious?

I do feel that living with this story for five years has affected how I look at the world. One example of a counterintuitive lesson I learned: The most dangerous day on the job is often the last one. Injuries tend to happen late in projects, when confidence runs high and tolerance for delay dips especially low. You can see this when doing work around the house. When you start cleaning out the gutters, you tend to be careful and climb down the ladder every few feet to move it. But by the time you hit the last run of gutter, you’re more likely to try an extra-long, risky reach rather than taking the time to move the ladder yet again. So I have definitely become more aware how decision-making and risk tolerance change during the course of a project.

Do people learn lessons from the tragedies in these sorts of stories, and do they result in safer conditions or better decisions going forward?

It’s interesting that in his own book, Krakauer dismisses the idea that people can learn from a disaster like the one he wrote about. He writes: “The urge to catalogue the myriad blunders in order to ‘learn from the mistakes’ is for the most part an exercise in denial and self-deception.” Climbing Mount Everest is always going to be hazardous to your health, he argues. I agree with him, to a point. There are so many factors out of climbers’ control. Last year alone, 10 people died on Everest.

But I fundamentally disagree with him that other disasters, such as the one I write about, don’t offer important, widely applicable lessons. Some fatal accidents are going to happen. But I firmly believe, and the research backs this up, that many are quite preventable. If you’re more mindful of all those holes in the Swiss cheese, you can often prevent them from lining up. That’s true whether you’re on a job site or in the hospital ward, though maybe not if you’re climbing a 29,000-foot mountain.

High Stakes Decision Making An HBR Insight Center




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When Making a Big Decision, Think: “Eddie Would Go.”
How Anxiety Can Lead Your Decisions Astray
The Big Lesson from Twelve Good Decisions

How the Redskins Could Ditch Their Name – But Keep Their Fans

The team from Washington, DC had used the name for years. They had won a world championship and numerous league championships with that mascot. On the surface, to change it would be unthinkable. However, given the connotations that the name implied, the owner decided that the team couldn’t operate under that banner anymore and a change was made.  As a result, the Washington Bullets became the Washington Wizards in 1997.

Oh, you thought I was talking about the Washington Redskins? From the way the punditry has been talking about the controversy over the NFL team’s name, a reasonable person might come away thinking no other team had ever successfully rebranded itself. But actually, it has happened a number of times in the past – and with great success.

Today, Washington Redskins owner Dan Snyder finds himself with a significant branding challenge.  More than other Native American-branded teams, the “Redskins” name and mascot are perceived to be quite offensive by some. In recent months, the chorus to change the team’s name has escalated through ongoing protests by Native American groups, a Bob Costas editorial on Monday Night Football, and a casual mention by President Obama. Meanwhile, the teamhas a legion of passionate fans who claim that the mascot’s 80+ year tradition celebrates and honors Native Americans with fight songs like “Hail to the Redskins.”

The lines are being drawn, emotions are taking over, and both sides appear to be entrenched for what appears to be a big battle. Redskins ownership is faced with the ultimate brand challenge. On one hand, if they continue to use the Redskins name, they will continue to field calls to boycott the team, ongoing protests, and a scenario where the controversy is always part of any team discussion. On the other hand, the team is the third most valued franchise in the NFL (according to Forbes) with a passionate fan base who feel strongly that the team’s name is an integral part of its tradition, heritage, and ultimately its brand. If Snyder acquiesces and changes the name, how will that affect the brand’s relationship with a significant portion of the fan base? Is there any way to change the name without alienating them?

AdAge estimates that a rebrand could cost $15 million. According to Forbes, the organization is worth $1.7 billion. What Snyder, and the team name’s defenders, need to acknowledge – if they can peek up from their foxholes – is that over time, the controversy over the name will erode the brand’s value. NFL commissioner Roger Goodell, originally a supporter of Snyder’s, has been careful to back down from a strong position of support. Influential sports journalists like Peter King and Christine Brennan have said they’ll no longer use the name. Members of Congress have weighed in. Snyder should act, now, before the controversy gets worse.

But how do you change a brand that isn’t working for you any more without alienating your most loyal customers? Here are some thoughts on how I would seek to resolve this extremely difficult branding problem.

First, understand your most valuable customers – and your potential customers. The team needs to understand the extent of the issue. How many are actually offended by the mascot name and how deep does it run? The Redskins must go out and survey members of the population, including Native Americans, passionate team fans, season ticket holders, and the general population to determine the degree of the controversy. They may find that a number of their loyal fans actually agree that the name should change, or that a number of potential fans would actually like the team more if they had a less polarizing name.

Focus on other elements of the brand, beyond the name and the logo.  The team has a number of attributes that go into the brand. Yes, the name is one, but there are significantly more. These attributes range from the current players, the stadium experience, and the team’s history and traditions. Research can tell them exactly where the name and mascot rank on that list, and what other factors are important.

Call some brand managers at other teams that have changed their names and get their advice. A team mascot/name change is hardly new. Beyond the aforementioned Washingon Bullets – Wizards change, there are at least 20 teams that have changed their names without relocating:  baseball’s Devil Rays became the Rays, the Tennessee Oilers became the Titans, the Houston Colt .45s became the Astros, and this year, the New Orleans Hornets will tip off as the New Orleans Pelicans. It is critical to understand how these teams implemented their name change and rebuilt their brands. And bringing them into the conversation would remind Washington’s fans that other teams have gone through this, too.

Consider ways to use a potential name change as an opportunity to increase the brand’s value. There is no doubt that if a name change is made, a significant rebranding initiative must occur. However, who is to say that with the right imagery, a new brand name can’t be as strong or even stronger as the existing name? Lots of fans will want to gobble up merchandise featuring the new mascot – especially if significant excitement is generated. A name that aligns more closely to the Washington, DC “brand” and what it represents might give fans additional pride in their hometown team. Furthermore, letting fans take part in helping to select the new name would help make it more personal.

It all comes down to managing the team’s relationship with its fans. Think about your own relationships. Over the course of our own relationships, one member may undergo a significant change with the support of their partner. Relationships are hurt when one partner makes that change without support the other. If the Redskins decide to take this big step and change their name, they will have to earn the support of their fan base. But by understanding what they really value, they can make the change in a way that helps their most valuable customers remain loyal.

Case Study: The Costs and Benefits of a Strong Culture

“How long is this list of escapees?” Kumar Chandra asked as he pointed at the slide on the screen. He was the head of operations at Parivar, a midsize Chennai-based IT services company.

Everyone in the room chuckled, except for Indira Pandit, vice president of HR. Nearly 100 employees had given notice in recent weeks.

“We’re losing them faster than your people can bring them in,” she said, turning to Vikram Srinivasan, the head of recruiting. “Our turnover rate is up to 35%.”

(Editor’s Note: This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and e-mail address.)

Vikram shook his head. “This isn’t our problem. It’s the Indian labor market. And it may not even be a bad thing. Some studies show that the more frequently employees move around within an industry, the more innovative it becomes.”

Indira gave him a skeptical look.

“This is to be expected, Indira, especially now that we’re rising above the second tier,” he argued.

This time only Kumar laughed, and Indira knew why. Sure, Parivar was growing — in revenue, profitability, and reputation — but it was still much smaller than companies like Infosys, HCL, and other leading global providers of low- to midrange business-process outsourcing services. In the past decade, Parivar’s charismatic CEO Sudhir Gupta had saved the organization from bankruptcy and made it an industry success story — but it was hardly in the first tier.

“I need to present these numbers to Sudhir at the end of the week, and I can’t do that without a theory on what’s happening and a solution to propose. That’s why I called this meeting,” said Indira.

“What about the ‘People Support’ idea that came up in the Future Vision exercise?” Vikram asked. Parivar had just finished its annual innovation process. Employees from all over the company — particularly new and young ones — were encouraged to join senior leaders in brainstorming and design sessions focused on how the firm could reach its goals for the year. This event, a hallmark of Parivar’s inclusive culture, was meant to foster collaboration and an entrepreneurial spirit. One proposal that had garnered attention was the creation of a new function whose sole purpose would be to support Parivar’s employees by hearing their grievances and figuring out solutions.

“I, for one, love the ‘People Support’ idea,” Vikram added. “It emphasizes Sudhir’s philosophy of genuine caring for our people.”

“It sounds genuinely expensive to me,” said Kumar. Indira loved his pragmatism.

“Cost aside, I’m not sure that’s the direction we want to take.” She pointed at the screen. “These people have told us that Sudhir’s ‘love culture’ — our attentiveness to both personal and professional matters —  isn’t so alluring anymore. They don’t necessarily want to feel like part of a family at work.”

“Come on,” Vikram said. “That’s our biggest selling point. Recruits love that they won’t be just a cog in the machine, that our company and its managers — Sudhir included — will listen to them. That everyone at Parivar matters.”

“That expectation may attract them, but it’s not keeping them here, especially when competitors offer a 30% pay raise,” Indira countered. “It’s what we’re hearing in the exit interviews.”

Vikram was clearly not convinced: “We need to go bigger. We should put our money where our mouth is with the People Support function, show that we’re 100% committed to our culture of inclusion. That’s the best way to reverse the trend.”

Big Brotherly Love

Amal, an associate in his twenties, had clearly prepared for his exit interview with Indira. He was checking off items on a handwritten list.

“Everyone says I’ll hate it at Wipro, that it’s too rigid there. But it’s Wipro! How can I refuse?”

“Yes, I’ve heard they have the same high expectations we do, but it’s more process-driven, far less personal. Here you get more attention from the top.”

Amal smirked. “Yes, if you’re one of Sudhir’s clan.”

“What do you mean?” Indira asked.

“Don’t get me wrong. Parivar promised access to senior executives, and I got it. But Sudhir doesn’t swing by the office, put his legs up, and chat with just anyone. There’s an ‘in’ crowd. Only his favorites get that family-like attention. I guess it’s understandable — one man can only do so much. But if I’m not seeing him or other top people, I’m just stuck at a company that wants to be overinvolved in my life.”

“This People Support idea, for instance,” he said, pointing to the last item on his list. He seemed to be on a roll, so Indira just listened. “I heard about it from my friend who was in that Future Vision group. You have to admit it feels a bit like Big Brother. A whole group of managers dedicated to walking around and asking about our problems? We don’t need more people to talk to. We need more money.” He sat back in his chair, satisfied.

“Thank you for being so candid,” Indira said. “This really is helpful, and we wish you the best of luck.”

A few minutes later, Amal’s manager poked his head into Indira’s office. “Did you get an earful?” he asked.

“I sure did,” Indira said, gesturing for him to come in. “I think he’ll be happy at Wipro — it seems more his speed.”

“You should know that Amal is an outlier. Most people on my team are not like him. They love our company culture.”

Thinking about her long list of “escapees,” Indira wondered whether that was really true.

A New Best Practice?

Sudhir’s office, where he regularly held big meetings, was crowded with inviting, comfortable couches. Indira scanned the room as people settled in. It was a typical gathering: most of Parivar’s senior leaders, including Vikram and Kumar, and a handful of younger employees.

“I’ve asked Nisha to tell us more about the People Support idea,” Sudhir announced. “It’s the brainchild of her Future Vision team. Ready, Nisha?”

Nisha, who looked to be fresh out of business school, began her slide presentation, describing how the new function would work. She included a scenario: An employee is worried about his future with the company because he has been given a time-consuming project that will involve working late, compromising his ability to look after a sick mother in the evening. Aware of the People Support function, he seeks out one of its designated “listeners,” as they would be called, and explains his dilemma. The listener helps him negotiate an arrangement with his boss that allows him not to stay late every night. In Nisha’s last slide, all the characters — the employee, the boss, the listener, and the sick mother — are smiling.

Everyone in the audience clapped, and Sudhir congratulated Nisha.  “This is what I love about coming to work every day: Fresh ideas from smart, young people.”

Not surprisingly, Kumar was the first with questions: How much would the function cost? How would it scale up as the company grew? Who would manage it? Nisha attempted to provide answers, but Sudhir interrupted before she got very far. “We must still work some things out, of course, and those all are legitimate concerns. But I think this would be money well spent.”

Kumar wasn’t satisfied. “OK, so we won’t discuss specifics today, but what about our broader plans for growth? Will all this family stuff be appropriate outside India, when we expand to the UK and the U.S.?”

“That’s also an important issue to explore. But people everywhere want their company to care about them and their lives,” Sudhir said, indicating with a glance at Kumar that the interrogation should cease. “Indira, do you have any questions? This obviously falls into your arena.”

Indira shared Kumar’s concerns and more. But she wanted to ask something new. “Nisha, thank you for this thoughtful presentation. I was wondering if you’ve considered how the listeners will be evaluated. How will we know if they’re performing well?”

“Retention numbers,” Nisha said. “The lower our turnover rate, the better the listeners are doing.”

Indira contemplated the complexity of evaluating anyone on the basis of turnover, given the volatility in the labor market. She felt queasy thinking about it and dreaded delivering the most recent attrition numbers to Sudhir.

Vikram piped up to ask whether any other companies in India or elsewhere had tried a similar program or if Parivar would lead the way.

“As far as we know — and Nisha has researched it — no other company has done this before. Sure, HCL has its employee-first culture, but this is about truly understanding and meeting our people’s needs. Nisha and I were talking earlier about how someday this might become a best practice for all of India, perhaps beyond.”

Later, as everyone was filing out, Sudhir pulled Indira aside. “Thank you for going easy on Nisha. We want to encourage young people like her to put forward bold ideas. But of course I want your honest opinion. We’re meeting on Friday, yes? You had something for me?”

Honest Skepticism

Indira took the elevator to the fourth floor. She hoped her colleague and business school friend, Amrita, would be in her office.

“Thank God you’re not busy,” she joked, finding Amrita with her head down at her desk. The two women were always busy, but they had an open-door policy for each other.

Indira explained about the meeting in Sudhir’s office, the People Support function, the exit interview with Amal, and the horrible turnover numbers.

“So I’m skeptical of this People Support idea because I’m not sure we can really nurture Sudhir’s love culture across an organization that’s growing so fast. It’s one thing as a philosophy of how he interacts with people, but building processes and formal management structures around it is a whole different story.”

“That’s a tough message to deliver to someone who has turned the company around, tripled revenue, and quintupled profits with that culture at the center,” Amrita acknowledged. “I’m sure he thinks this is solving the problem of his limited capacity.”

“But can you formalize a culture as distinctive as ours into processes and roles?” Indira wondered honestly. “Will this People Support function even work? And if it does, won’t it alienate more employees like Amal? What if it worsens our turnover problem instead of fixing it? If we want to expand to Europe and the U.S., don’t we need to be less like a cult?”

Amrita laughed. “You know what Sudhir likes to say: ‘Cult is part of culture.’ But it’s not your style to just say what he wants to hear, Indira. If you think People Support is a bad idea, tell him. He’ll take your advice seriously.”

Indira knew she had more power than most HR heads. Sudhir wanted to run a humane company, and that meant giving her a say on big issues.

“I plan to be honest with him,” Indira replied. “But another thing Sudhir always says is, ‘Don’t come to me with a problem; come with a solution.’ If Vikram and Nisha are right, People Support could be just the edge we need against the likes of Wipro and Infosys, a way to retain our people and win new recruits. What if this helps us break into the top tier?”

“Do you really think it will, Indira?”

“I’m not sure, and I don’t have any better ideas right now.”

Question: Should Indira endorse the new People Support function?

Please remember to include your full name, company or university affiliation, and e-mail address.

Don’t Let Data Paralysis Stand Between You and Your Customers

Back when there were a handful of channels, interactions between customers and brands were relatively simple. Today, by contrast, more than half of all customers move through three or more channels to complete a single task.

To open a bank account today, for instance, a typical customer embarks on a multichannel journey: researching online; downloading an application; speaking to a call center agent; linking brokerage accounts; visiting a branch; and installing the bank’s mobile app.  Those steps leave a long and complex digital trail. That multichannel complexity, combined with the scale of the data — US companies store at least 150 terabytes of it — makes divining insights into customer behaviors a serious challenge.

Parsing this data, however, is critical to improving the customer experience and growing your business.  In our experience, the most productive way to get there is not by fixing individual touchpoints but by improving the entire customer journey – the series of customer interactions with a brand needed to accomplish a task. (For more see the HBR article, “The Truth About Customer Experience”). McKinsey analysis finds that companies acting on journey insights have seen a 15-20% reduction in repeat service visits, a 10-20% boost in cross-selling, and a drop of 10-25 basis points in churn.

To put big data to work in improving the customer journeys, companies should keep three things in mind:

1. Focus on the top journeys: Companies may feel they need to study all the bits and bytes available to them.  Our analysis across industries shows, however, that three to five journeys matter most to customers and the bottom line. They generally include some combination of sales and on-boarding; one or two key servicing issues; moving and account renewal; and fraud, billing and payments. Narrowing the focus to those journeys allows companies to cut through the data clutter and prioritize.

For instance, a cable television player used advanced data analysis of multichannel customer behaviors to focus on where drop-offs in the journey occurred in two journeys – onboarding and problem resolution – to address nagging customer retention and loyalty issues. The data team helped them identify key service troublespots and ways to improve the onboarding process.  Those insights led to several policy changes, including creating a “learning lab” that effectively operated as a mini-company to trial and refine new approaches. The changes improved customer satisfaction scores by more than 20 percent.

2. Don’t wait for the data to be perfect. Companies often hesitate to take action for fear their data is missing or a mess. In our experience, however, successful organizations tend not to over think all the details and instead just roll up sleeves and get to work. Most companies, in fact, already have the data they need. The challenge is pulling the data together.

Companies need to figure out where that data is stored, and what it takes to extract and aggregate it so they can understand the customer journey across multiple touchpoints.  Since data often lives in systems managed by various functions, bring the necessary operations, IT, in-store sales, and marketing people together to identify the touchpoints. We’ve seen companies create small “SWAT” teams from across functions to break through bureaucratic logjams. Track performance from the outset, mistakes and all, since that experience helps teams test, refine and learn and ultimately accelerate the benefits.

In one example, a leading European energy company generated a lot of data, but most of it was siloed within the web team, call center, and marketing functions. As a result, key insights were falling through the cracks. Using data the company already had, a marketing and operations team came together to analyze the journey customers took when they changed addresses. Looking into data patterns, the team found the moving process alone accounted for 30-40 percent of all churn. Customers were canceling their old accounts and not renewing at their new address.

In response, the company chose to manage customer expectations better along the core touchpoints of the journey. They fine-tuned its communications, providing a set of easy-to-follow instructions on its website with links that made setting up a new contract a matter of clicking a few buttons. That reduced churn by 40 percent and increased upsell opportunities throughout the journey.

3. Focus on analytics, not reporting.  Companies tend to focus on generating reports from their data about what has happened. Much greater value, however, comes from analyzing data to pinpoint cause and effect and make predictions.

One bank, for instance, was looking for ways to use big data to spot early indications of loss risk in its small business lending and service operations. Touchpoint data revealed subtle changes in customer behavior that raised questions in the fraud team’s mind. It was only when the team connected the dots across touchpoints, however, that the bank discovered behavior patterns that highly correlated with imminent risk of default. These included changed behaviors in online account checking frequency, number and type of call center inquiries and branch visits as well as credit line use. Analyzing those complex patterns allowed the bank to develop an early warning system that flagged high-risk customers.

Big data harbors big opportunities to improve customer journeys and value. What it requires is a commitment to focus on what really matters.

How to Make Use of Your Anxiety for Positive Results

Research participants who were asked to give an impromptu three-minute talk scored higher on persuasiveness and confidence if they first said to themselves “I am excited,” in comparison with those who said “I am anxious” or explicitly tried to calm down, says Alison Wood Brooks of Harvard Business School. Similarly, karaoke singers who first said “I am excited” scored an average of 81% on pitch, volume, and rhythm, compared with those who said “I am anxious” (69%) or “I am calm” (53%). People who are in a “high arousal” state tend to believe that calming down will help them perform, but it can be better to channel that arousal in a positive direction by being energetic and passionate, Brooks says.

Why Sales and Marketing Don’t Get Along

Sales teams and marketing teams pursue a common objective: create customer value and drive company results. But sales and marketing don’t always get along. Certainly, all-out war between the two teams drains productivity. Yet having the two teams work in perfect harmony and reach an easy consensus on every decision is a pipedream, and in fact, is not the best answer either.

Some tension between sales and marketing is healthy and productive.

Sales-marketing tension can stem from differences in marketers’ and sellers’ perspectives. Marketers think in terms of aggregate customer segments; sellers think in terms of individual customers. Marketers design strategies; sellers implement tactics.  Marketers focus on analysis and process; sellers focus on relationships and results. These diverse perspectives often lead to conflict. For example, marketing says, “We develop thoughtful strategies that can drive sales force success, but most salespeople won’t even take the time to understand them.” Sales says, “Marketers are locked in the ivory tower. Their plans look good on paper, but don’t work with real customers.”

But the tension created by diverse viewpoints also has a positive side. It sparks creativity and ensures that multiple sides of issues are expressed. Sales makes certain that customer needs are addressed and that short-term company revenue goals are achieved; marketing ensures that product and customer segment strategies anticipate the evolution of longer-term customer needs. Sales pushes for competitive pricing; marketing ensures that the company uses discipline in pricing.

Sales-marketing tension can also stem from the co-dependence of the sales and marketing teams. Especially when things don’t go well, situations can quickly turn to finger-pointing. Marketing says “We worked hard and generated good leads for sales, but they didn’t follow up.” Sales says, “Marketing’s leads aren’t worth my time; the last lead they gave us was for a business that shut down two years ago.”

But the mutual dependence of sales and marketing creates a productive sense of urgency and encourages both teams to do their jobs better. Sales insists that marketing provide better leads. Marketing makes sure that sales follows up. Sales helps marketing develop strategies and sales collateral that address customer needs. Marketing urges sales to spend time strategically and implement the marketing plan.

Accomplishing the common objective of creating customer value and driving company results requires competency in a wide range of tasks which fall into three categories.

Sales tasks. Account management, personal selling, distributor management, merchandising, sales compensation design, and numerous other sales management activities typically fall within the purview of Sales.
Marketing tasks. Market research, competitive analysis, market segmentation, brand positioning, packaging, and dozens of other market-focused undertakings are usually the responsibility of Marketing.
Joint Sales/Marketing tasks. Sales strategy formulation, lead generation, sales collateral development, pricing, sales forecasting, and many other tasks frequently require the participation of both Sales and Marketing.

Entire books, journals, business courses, and consulting companies are dedicated to helping marketers and sellers with these tasks. Yet very little is written about how to get sales and marketing to work together to keep all of the tasks aligned around the common objective.

Four strategies help companies accomplish all of this work with a healthy balance of sales-marketing harmony and tension.

Make sure all sales tasks to get done well. Design a high-impact sales organization, hire sellers with characteristics such as interpersonal ability and results-drive, and develop the competencies sellers need to succeed. Support the sales force with structures, processes, systems, and programs that enable sales success.
Make sure all marketing tasks get done well. Design a high-impact marketing organization, hire marketers with characteristics such as analytical savvy and strategic thinking ability, and develop the competencies marketers need to succeed. Support the marketing team with structures, processes, systems, and programs that enable  marketing success.
Implement processes and systems that encourage communication and collaboration. Ensure that Sales and Marketing communicate about tasks that the two teams perform independently, and collaborate around tasks that require joint effort.
Create a culture that facilitates teamwork. Start with strong sales and marketing leaders who, through their words and actions, consistently reinforce a cooperative, customer-focused culture.

It Will Take a Village to Keep Wikipedia From Failing

Wikipedia is in the mature phase of its development, but there may be some trouble ahead. Its contributor base is shrinking, and the recruitment of new editors has proven difficult at best. These aren’t reasons to sound the alarm bells as of yet — in fact, a moderate amount of turnover in an online community can be good thing — but the managers of the crowd-sourced encyclopedia should make a few changes. A good place to start is with more openness to outsiders. Wikipedia, like any mature community, has developed a sophisticated set of norms and best practices that can be daunting to navigate for new members. Policy changes would help to remove some of the roadblocks, yes. But if the community wants to prosper, experienced members will need to step up and offer support and guidance to new members.

How Simplicity Principles Could Fix Obamacare

As everyone now knows, Healthcare.gov – the $394 million website that was supposed to enable millions of Americans to shop for health insurance – is experiencing some initial technical failures. Critiquing the troubled rollout is easy, but not helpful considering that the current framework is the law of the land. So, what should the administration do now to right the ship?

To answer this question, we have to think about the Affordable Care Act not as a piece of legislation that needs to be implemented, but as a complex organizational transformation effort – similar to a large-scale company turnaround. To be successful, leaders need to focus on reducing complexity rather than amplifying it. Here are four “simplicity principles” that can help to do this, and how they might be applied to Obamacare.

Make someone explicitly accountable for end-to-end implementation. Complex processes need a leader with a larger perspective. We saw a similar situation in our recent work with a technology company, in which the executive team complained that major quality initiatives impacting multiple business units had fallen through the cracks. Everyone acknowledged that quality needed to improve and busied their teams with improvement initiatives, but there wasn’t any single person responsible for collective results. In the same vein, who’s responsible for the end-to-end challenge of implementing the Affordable Care Act? (Not just the Healthcare.gov launch, for which Health and Human Services Secretary Kathleen Sebelius is clearly now taking the blame.) Whether it’s business, politics, or running a book club, there needs to be a single person on the hook for success.

Begin a series of rapid cycle experiments to solve long-term issues. Getting Healthcare.gov up and running is a good thing, but it’s not a complete turnaround strategy. Take, for example, the problem of attracting young, healthy Americans to get insured. For the longer-term problems, setting “unreasonable”, tightly bound 100-day goals – like attracting 50% more people under 25 in Pittsburgh to buy insurance – would help get some early results and inform how to scale up successes nationwide. The short, 100-day time frame ensures that problem solvers are working on the most critical problems in the leanest possible ways.

Engage unusual partners. Complex transformational challenges usually benefit from injections of fresh thinkers, who can challenge the way things have been done in the past and look for simpler or better alternatives. For example, in 2011, GSK announced an unexpected partnership with the McLaren Group, a British racecar company who could offer the pharma company a fresh perspective on innovation, analytics, and decision-making. We now know that a standard mix of government contractors built Healthcare.gov, with reportedly some light help from Microsoft. But now there is a tremendous opportunity to involve a much more diverse group of stakeholders. What if part of the website surge included a hackathon with a select group of Silicon Valley’s best programmers? What if health insurance leaders were invited to collaborate with the government on customer development plans to attract new buyers to the market? What if customers were invited to weigh in on what Obamacare needed to deliver via crowdsourcing, sandbox testing, and good old-fashioned face-to-face conversations?

Embrace transparency. Nothing amplifies complexity more than a lack of information. In fact, much of the firestorm about the Obamacare website was caused by the fact that the issues were never fully explained or even communicated ahead of time. However the Healthcare.gov development team did not wake up on launch day and say, “Wait, there may be some problems here!” They spent months fretting about potential issues, likely in denial of their dire consequences. Yet the public heard not a peep about what to expect. So either the feedback loop broke down, or there was a conscious decision to withhold bad news. But now is the time to introduce openness into the Obamacare communications and development process, however difficult that may be for an organization like the government. Being clear about snags in rollout plans will not spare those responsible their share of criticism. However, it will position them to respond to it more effectively.

It’s dangerous to rush to judgment when it comes to transformational change. The success or failure of Obama’s healthcare policy will play out over years, not weeks. Still, we now have an opportunity to step back from the finger-pointing frenzy of Congressional hearings to say, “How do we make this big, complicated, messy thing work better?” As any leader worth her salt will tell you, accountability, experimentation, involvement, and openness will all help to cut through the complexity to achieve better results for the country.

The Two Most Interesting Things You’ll Read This Week Are About Corporate Taxes

One Country's Robin Hood Is Another's Scourge Man Making Ireland Tax Avoidance Hub Proves Local HeroBloomberg

If I were a slave to narrative, I would begin the tale like this: One man sits on a folding chair in a garage outside Washington D.C., scrupulously tackling the problems in the corporate tax code without partisan leanings. Another splits his time between an apartment in the south of France and a million-dollar house in a Dublin suburb, being celebrated by his countrymen while helping clients like Google avoid taxes. These are the stories of Marty Sullivan, profiled in The Washington Post, and Feargal O'Rourke, featured in Bloomberg, and while it's tempting to see one as a hero and the other as a villain, the title of the Bloomberg piece is an indication of just how complicated the debate over corporate tax reform really is. O'Rourke, as the tax head at PwC in Ireland and an adviser to politicians, has carved out a nice little niche that both helps multinationals save money and supports his home country. He talks with pride about "selling Ireland" to companies and asks, "Why should Ireland be the policeman for the U.S.?"



So what might an ideal tax code look like to Sullivan, who initially called out drug and tech companies for transferring patent and trademark ownership to Ireland? For one thing, any business with more than $50 million in sales would be subject to a corporate tax — no more LLC loopholes. For the rest of his ideas — and much more on O'Rourke's philosophy and dealings — read both features. Seriously.

Only If It's a Surprise Do Employees Work Harder for Higher Pay? HBS Working Knowledge

Once, long ago, I received a paycheck that was 20% higher than usual, which I took to be an unsolicited bonus from a grateful boss. Elated, I redoubled my efforts the next week until I found out that it had simply been a mistake — six days had been recorded on my time sheet instead of the usual five. Turns out, though, that I’m not the only one who would work harder in response to an unsolicited raise. In a clever field experiment, doctoral student Duncan Gilchrist and Michael Luca and Deepak Malhotra of Harvard Business School hired 266 workers through oDesk for a four-hour data-entry job. A third of them were paid $3 an hour. Another third, who didn’t know about the first group, were paid $4. The extra money had no effect on the second group’s efforts — most likely, Malhotra says, because the latter bunch simply concluded that $4 was the going rate for the job. But workers who were hired at $3 an hour and then given an unlooked-for raise to $4 worked 20% harder than either of the other two groups. Having perceived the raise as a gift, they wanted to reciprocate, and they did — with higher productivity. —Andrea Ovans

Do You Like Scary Movies?I Challenged Hackers to Investigate Me and What They Found Out is ChillingPandoDaily

Almost 15 years ago, Adam Penenberg asked a private detective to investigate him for a Forbes story about how much information can be collected (and sometimes sold) about you. He recently repeated this experiment, this time turning to a white-hat hacker who's hired by big companies to detect security flaws (and who, strangely, doesn't have recognizable fingerprints). The results are predictable but no less horrifying: The hacker and his crew were able to access Penenberg’s wife's computer via a phishing email, which led them to a trove of personal documents. What does all this mean for the rest of us in this data-saturated digital world? Here's the fascinating way one "person" approached that question. 

That's Comforting Research: Corporate Executives Hugely OverconfidentDuke Fuqua School of Business

Researchers studying decision making in business are often criticized for recruiting undergraduates for their experiments. The assumption behind this criticism is that seasoned veterans know a lot more than college students. But do they? A study of CFO surveys shows that corporate financial professionals are way too sure of their ability to predict the future. Over the course of a decade, the CFOs were asked to state the range of one-year stock-market forecasts that they thought would lead them to be right 80% of the time. An analysis of those surveys and the reality of the stock market shows that the ranges they picked "were way too narrow," says researcher Campbell R. Harvey of Duke. "They barely got more than 1 in 3 correct." The executives' overconfidence about their knowledge of the stock market appears to have filtered into their companies' policies, affecting decision making at high levels. Maybe the companies would have been better off listening to a few college students. —Andy O'Connell 

Whose Fault is Debt? The ProphetPacific Standard

Is it ethical to charge people money in exchange for telling them that their debt is their own lazy fault? In the case of personal finance guru Dave Ramsey, the answer is "probably not." This excellent piece from Helaine Olen delves into the contradictions that lace Ramsey's extraordinarily popular debt-reduction philosophy (which is built around the Bible, his own experience filing for bankruptcy, and American rugged individualism), asking whether it's possible to go debt-free using mere self-restraint in the face of issues like, oh, massive and unexpected hospital bills. While there are scientific studies to both support and detract from Ramsey's formula, which is detailed further in the article, Olen questions whether he's setting a dangerous trap: "By telling people they have more power than they really do," he motivates his audiences to take action; but his message also encourages them to ignore the structural realities that are at the root of economic trends. A profitable business if you can get it (and I'm not sure I want it). 

BONUS BITSThe Way We Work Now

The True Challenge of Managing Remote Workers: People Who Work Too Hard (Inc.)
As I Lay Lying: Standing Desks are Taking Over, So I Worked From Bed to Protest (The New Republic)
Commuting's Hidden Cost (The New York Times)

Angel or Devil: Who’s Really Investing In Your Start-Up?

A friend called me heartbroken, crying. She had spent months looking for investors to fund her fledgling startup and now she had a big problem. Someone was ready to give her the money.

Trouble was, the cash came with a catch. The only investor willing to pony-up the money was someone she didn’t like. She also got the feeling he did not like her much either, and yet, he wanted to invest. “If he was involved, I have the feeling I would quit my company down the road,” she told me over the phone.

Time was running out; she needed the funds and with no other investor ready to commit, she feared she’d have to take the money from someone she couldn’t stand. The very thought made her sick in the stomach.

I felt for her and her dilemma piqued my curiosity. What differentiates a great early-stage investor from someone no entrepreneur wants to take money from unless they absolutely have to?

Negative Value

Last month, famed investor and Sun Microsystems co-founder, Vinod Khosla, shocked a tech conference audience claiming, “95 percent of VCs add zero value. I would bet that 70-80 percent add negative value to a startup in their advising.” Can Khosla be right? Can investors be a liability rather than an asset?

“I don’t know a startup that hasn’t been through tough times,” Khosla said, and it is during these rough patches that he believes many investors fail their companies. But there are more ways an investor can screw a company than giving crummy advice.

A classic Harvard Business Review article demonstrates how investors can negatively impact the psyche of startup founders, often with toxic, long-lasting repercussions. The paper’s authors, Manzoni and Barsoux, describe a disorder they call the “set-up-to-fail syndrome.” Though they focus on how this affects the manager-to-employee relationship, I believe the affliction can also manifest in the context of an investor-to-founder partnership, particularly when a first-time entrepreneur is involved.

What is this sabotaging syndrome? It begins innocently enough. The chain reaction usually begins with the “tough times” Khosla says are part of every company’s lifecycle. Sometimes the investor has pre-existing doubts about the CEO’s abilities, but the infection usually starts when the company misses a minor target or isn’t progressing as quickly as anticipated.

When things do not go as planned, many investors increase supervision of the company and its CEO. The investor’s doubts in the founder begin to show through subtle cues like body language and tone, as well as in not-so-subtle ways like sending emails asking for more frequent progress reports. The investor may also initiate lengthy discussions, wanting to know how the company intends to get itself back on track.

The investor’s questions are legitimate — it’s his or his firm’s money after all. But the byproduct of the increased scrutiny is the deterioration of the founder’s confidence and creativity. The entrepreneur suspects the investor is losing faith and responds by overcompensating in an attempt to fight the investor’s perception.

The CEO may start working at an unsustainable pace and demand the company’s employees do the same, squandering mindshare and team morale on unnecessary tasks to placate the investor. Fearful of further disappointing her patron, the CEO may unintentionally paint a rosier view of the company or stop asking for critical feedback.

As the founder shares less, the investor interprets the CEO’s closing-up as an inability to surface problems — a sign of poor judgment and a lack of competence. The investor becomes increasingly frustrated and is now convinced that the CEO requires further oversight.

As the study’s authors point out, “Perhaps the most daunting aspect of the set-up-to-fail syndrome is that it is self-fulfilling and self-reinforcing — it is the quintessential vicious cycle.”

Taking cues from the more experienced investor, the first-time CEO begins doubting her own abilities. She begins performing her job mechanically, avoids risk-taking and spends more time and energy catering to the investor’s requests. The CEO’s self-doubt fuels poor performance, validating the investor’s suspicions and throwing the company into a self-perpetuating death-spiral, which leaves the once-promising CEO dazed, confused, and often times, out of work.

Stopping the Syndrome

The tragedy of the syndrome is that it is fueled by good intentions. The founder wants nothing more than for the company to succeed and the investor has no intention of destroying value in a company he’s invested in. But according to Manzoni and Barsoux, how people with power react in times of trouble can have a considerable and often deleterious impact on others.

But the set-up-to fail syndrome is preventable and reversible. Both entrepreneurs and investors can take steps to vaccinate themselves from the disease.

When my friend faced the unfortunate choice between an investor she did not want to work with and the potential death of her fledgling company, she had a difficult decision to make. In her case, she decided to keep looking for other investors, believing that starting a company with the wrong person was worse than not starting a company at all.

But merely finding a good investor is not good enough. Even well-meaning angels can become devils when conditions are challenging.

An antidote to the syndrome is to acknowledge how people in positions of authority influence the performance of others. Whether it involves investors, bosses, or managers, any supervisory relationship can fall prey to a breakdown of confidence. Investors must beware of the trap of labeling founders as deficient and instead stick to judging objective outcomes and circumstances.

In addition, expectations about the degree of supervision should be set early in the relationship. Companies that institutionalize regular dialogues between hierarchies can head-off the syndrome before it gets out of control. A similar practice can help CEOs and investors get along.

Perception Matters

For their part, company founders can prevent the onset of the syndrome by understanding its potential impact and guard themselves from the performance drains that come from the downward spiral.

The set-up-to fail syndrome can only continue if the CEO perceives that the investor is losing faith in her abilities. Ultimately, founders and investors are on the same team and both want the company to thrive. Therefore, regardless of what the devil investor may say or do, the startup CEO must perform a bit of mental acrobatics to keep her sanity.

If the perception of disappointing an investor is getting in the way of guiding the company, the entrepreneur must choose another point of view. Founders must ward-off the demons of self-doubt by never interpreting investors’ actions as, “You are failing,” but rather, “I want us to succeed.”

Real Angels

In my own experience having worked with several fantastic investors, it was always the great ones who not only had insight, but also the humility to confirm that the CEO knew best. Even during the company’s tough times, interacting with real angels leaves the entrepreneur energized, confident, and more creative than before.

The best angels remain faithful in the face of uncertainty and help CEOs rise to the challenge. They imbibe founders with an omnipotent sense that they can do anything. In short, real angel investors make founders feel like Gods.