Marina Gorbis's Blog, page 1545

A Discount May Devalue a Product More Than a Giveaway

Consumers who were offered free bread sticks as a promotion from a pizzeria said they'd be willing to pay $5.06, on average, for them once the promotion ended, only slightly less than the amount consumers were willing to pay when there had been no promotion, say Mauricio M. Palmeira of Monash University in Australia and Joydeep Srivastava of the University of Maryland. By contrast, people who were offered the bread sticks at a discounted price of 50 cents were willing to pay just $2.76 once the promotion was over. The findings suggest that a discount promotion may devalue a product in consumers' minds, whereas a free promotion offer may not devalue a product at all.

What's the Point of Creativity?

Creativity and innovation are hot topics these days, and they are being studied more frequently and intensely. Great observations have come of the attention, as Will Burns writes for Forbes: A coffee-shop study from the University of Illinois concluded that moderate levels of noise, as opposed to high or low levels, foster greater creativity. A study from the University of Stuttgart found that low levels of lighting enhance creativity. And then there's my favorite, another study from the University of Illinois, that concluded that alcohol intoxication improves creative problem solving.

The attention is good, but too often creativity is studied and written about without examining context. Why would we want to be more creative? Why bother fostering the conditions for creativity? Why dim the lights, adjust the volume, and get drunk? What's the purpose of it all?

The unspoken assumption is that our goal is to gain competitive advantage, to crush the competition, to win. But I believe that the best creativity comes from a much deeper place than the desire to win. It comes from a desire to contribute to the lives of others, either by introducing something new that improves the quality of their lives or by showing people that something thought to be impossible is in fact possible. When you change people's perceptions about what can be accomplished or achieved, you contribute to their humanity in the richest possible way. You give them hope for the future — a sense that life is not the demoralizing, unchanging drudgery day after day that the world so often teaches us that it is. When you change the way people think about possibility, it is an existential experience. It makes them feel understood. More than that, it makes them feel loved.

When JetBlue said it was going to bring humanity to its business, it reunited two worlds that had been estranged for decades. When it put those TV sets in the backs of the seats, upholstered the chairs in leather, and gave everyone a little more room, people felt loved. "You know what it's like to be crammed in one of those tiny seats for five hours going out of your mind with nothing to do! You're one of us! You understand me!"

This, in a world in which people so often feel not just that they're misunderstood but that no one is even bothering to understand them. Have you ever been on hold with customer service and heard a recording that says, "This call may be monitored for quality assurance"? Have you ever once seen evidence of customer quality improving as a result of all of that monitoring?

Increasingly, creativity — and the study of it — is divorced from the real needs of real people. Adding ever more gimmicks to a smartphone in the interest of increasing market share, rather than giving people something revolutionary that will make their lives better, reeks of something other than love and has no power to stir peoples' enthusiasm.

So the question we have to ask ourselves in business is this: Why create? Are we doing it for the gratuitous sake of creativity itself, without any larger purpose? Are we doing it because Harvard Business Review writes about it all the time? Are we doing it out of fear? To make more money? To get on the cover of Wired? Or are we doing it out of a desire to improve people's lives and transform their sense of what possibilities life itself has to offer?

I write a lot about philanthropy. Philanthropy means, literally, love of humanity. You don't have to give a million dollars to charity to be a philanthropist. You simply have to actively demonstrate your love of humanity. Your empathy. If the purpose of our creativity is philanthropy — if it is love for our fellow man, an appreciation that people struggle in their lives, and a desire to somehow lessen that struggle and increase their joy, with a little more leg room or with an iPad — it will change the world. And that is the greatest competitive advantage of all.

What See-Through Pants Can Reveal About a Company's Weaknesses

Downward Dog, Perhaps


Lululemon, the upscale retailer of yoga clothing, is doing great. Except when it's not, which is becoming increasingly common — see the sheer pants crisis, the abrupt resignation of a CEO, a poorly-received job ad to replace said CEO, and a bit of media heat over a 2011 murder that occurred in a Bethesda store. And there's no denying that Lululemon founder Dennis "Chip" Wilson figured out something stupidly revolutionary early on: Women's exercise clothes should be made to fit women (not small men), and women will pay top dollar for what's comfortable, durable, and stylish. Hooray! But in this brief investigation by Beth Kowitt and Colleen Leahey, it's pretty clear that having an idea and running a company are very different things — and that Wilson may only sort of know how to do the latter.



For years, the creative side of the company was the top priority, leaving things like finance, IT, and HR to suffer (yes, they tried to run their operations on spreadsheets). Lululemon was also slow to develop quality-control systems in manufacturing (thus the unfortunate pants), with fewer than 30 employees overseeing 90% of the 30 million units of clothing per year. After former Starbucks executive Christine Day was named CEO, Wilson also faced a passionate-founder's crisis: He didn't know what to do. Holding roles ranging from chairman to chief innovation and branding officer, he "tended to zoom in and out, creating confusion about who was in charge." While we don't know what led to Day's resignation, Kowitt and Leahey posit it had something to do with the ethos of the company, which was either all-in with the founders' ideas or, to quote Day, "peace out." Wilson, for his part, says that Day did what they brought her in for: "to replicate a perfectly set-up organization that just needed basically the knowledge of how Starbucks replicated what they did." Ouch. The authors also say Lululemon should probably pay more attention to its supply chain. After all, they point out, strong supply chains "are the hallmark of businesses that outlast their founders."

The Option You Can't Use

Workplace Flexibility is Top Consideration for Nearly Three-Fourths of U.S. Working Adults Mom Corps, Harris Interactive

Two-thirds of working adults surveyed by Harris Interactive for talent-acquisition firm Mom Corps say their companies would be willing to accommodate them if they requested flexible work schedules (for reasons such as taking care of their kids). Yet 47% of respondents feel that asking for flexible options would hurt their chances of advancement. So even though flexibility is gaining popularity as an abstract concept, organizations aren't doing enough to make employees feel secure in actually using it. That represents a "significant disconnect between employer and employee," says Mom Corps CEO Allison O’Kelly. —Andy O'Connell

There Are Actually Many Reasons

The Real Reason Women Are Leaving Wall Street Quartz

In Wall Street’s heyday in the early 1980s, author Margo Epprecht was a young analyst who worked across the hall from Maryann Keller. Keller, a top auto analyst, "never rested," working the phones and gathering industry data constantly. She had reached a level of high authority and was widely respected; yet when Epprecht went back and interviewed her recently, Keller reflected, with a laugh, that she had "thought she was going to die" with that workload. More important, she said Wall Street now is less appealing to women than it was 30 years ago. "It's not as intellectually challenging as it used to be," she said. "It's more like cage fighting."



This is just one of many interviews and observations that shed light on what, exactly, is going on with gender and Wall Street. While there's no single conclusive answer to the question alluded to in the title of the piece, the combination of a deep-rooted culture of man-to-man networking and the sheer number of market downturns over the past few decades — during which women were laid off disproportionately — has created a place where the brightest of the bright (yes, they're more often than not of the lady persuasion) can't actually thrive. And with their reluctance to take dangerous financial risks, something that led to the 2008 collapse, Wall Street probably needs them more than ever (as does the global economy).

Missing the "How" and "Why"

The Psychiatric Drug Crisis The New Yorker

"Why would an industry beat a hasty retreat from a market that continues to boom?" This is the million-dollar question facing the psychiatric-drug industry, a sector that has been wildly successful in making drugs like Paxil and Zoloft, says psychotherapist and author Gary Greenberg. Corporate giants like GlaxoSmithKline and Merck have been backing away from neuroscience research and from developing new drugs to ease anxiety and depression, and one reason is that the science behind these pills might not actually be science at all, but a psychopharmacological misunderstanding that's made billions.



SSRIs alter serotonin metabolism, but those changes don’t explain why the drugs work, and researchers have given up on the highly marketable but too-simplistic view that depression is just a matter of a chemical imbalance. Pharma companies are unable to produce new depression drugs because "scientists don't even know where to begin." Thus, "it makes no sense for the industry to stay in the psychiatric-drug business."

Sorry for Your Loss

Hallmark Struggles to Update Its Card Empire The Verge

When's the last time you received a Hallmark card on Facebook? ("Never," you say. "But my grandmother just sent me one in the mail for my birthday.") Now think about the last time you saw a Someecard on the site ("Just today," you explain, chuckling at its almost perverse yet perfectly applicable life message, which seemed like the opposite of anything your grandmother would ever dare send.) Such is the struggle facing the greeting-card industry, whose revenue has declined 5.4% over the past five years. Hallmark in particular, which by all accounts is doing better than most, with $4 billion in revenue last year and almost half the market, seems to know that it can't simply keep doing business as usual. A company spokesperson told The Verge that its analog products are doing great — who doesn't need ornaments, crayons, or, er, the Hallmark Channel? The company, writes Carl Franzen, is betting on nostalgia, which may not help Hallmark going forward — or protect Kansas City's third-largest employer. That's OK, says Someecards CEO Duncan Mitchell. "Maybe if we get big enough, we'll just buy them."

BONUS BITS:

Mommy (and Daddy) Dearest

We Post Nothing About Our Daughter Online (Slate)
Media Elites Are Creating Twitter Accounts for Their Babies (New York Magazine)
I Didn’t Know What ‘LOL’ Meant (The Daily Beast)

Don't Let Your Career "Just Happen"

We all know The Statistic: Only 4.2 percent of Fortune 500 CEOs are women. But the gender split in mid-level management is now nearly even. While women have made progress in being recognized as managers, why aren't they making it to the top?

In many cases, they've climbed to the last rung of a ladder that simply doesn't go all the way up, like a business function (HR, perhaps) that isn't generally tapped for the CEO position. In others, they lack the critical experiences or skills required to take the next step, such as an international assignment, high-risk project, or major P&L responsibility. While many complex factors contribute to women hitting the glass ceiling, more proactive career management and clearer manager guidance would help them identify and use the right tools to break through.

When Hay Group examined the performance and paths of 12 of the highest leading women in one Fortune 500 company and other executive women in large, global organizations, we found that, like their male counterparts, the highest-performing women had in common a strong orientation toward achievement. But more than men, this was manifested as a lifelong focus on continuous learning, which helped them prepare for the roles they took as they moved upward.

But we also found that these traits are not synonymous with proactive career management. Women — even high-performing women — still have a ways to go in becoming intentional and specific in their efforts to drive their careers up a particular ladder.

Our study found that women are less deliberate than men in their career progressions, thinking, "I will learn, grow, and build my capabilities," rather than, "I will create opportunities to learn X and gain experience in Y to get to position Z."

The former mindset can drive advancement to a point, but we found that without specific career plans, women often weren't the ones behind the wheel: Many high-performing women who participated in our study felt that their careers "happened" to them — driven by recognition from sponsors who gave them opportunities. Which is fine, unless you want to be the CEO, and the sponsor-identified opportunities don't give you the skills or perspective required to get there.

Those who want to move all the way up must create opportunities to understand how the organization works, how it makes money, and who its key people are. And they need to do so early in their careers. Sometimes a lateral move to gain experience across business lines is a better choice than a promotion within a department, and it can help women avoid being promoted up a functional silo by managers seeking to use their talents to advance their own agendas.

Because women won't be handed the experience they need, they must speak up. Many women in our study felt uncomfortable with the self-promotion of "asking for a job." Some have found it easier to think of such conversations as expressing interest in or speaking up about new ways to be helpful. Regardless of your approach, do speak up. You don't want management to pass you over because they thought your silence meant satisfaction with stasis, or there was a squeakier wheel.

Our research also indicates that women tend to hesitate when offered promotions because they didn't expect them, felt unprepared, or needed time to address work-life considerations. This is where women's tendencies to forego informal networking (like after-hours drinks) can hinder them: that inkling you're about to be promoted might be more apparent in a social setting than it is in the office. So stay in touch at work.

And stay in touch at home. While you're thinking about what your future job could be and learning new skills and roles to take it on, keep conversations open at home about how your life outside work could change if those career opportunities came to pass, and what would have to adapt. Having a forward-thinking home plan can help you say "yes" without hesitation.

Part of the blame for the c-suite gender gap lies with recognition and advancement policies — or lack thereof. Managers can help ensure the strongest leaders rise through the ranks, regardless of gender, by:

Providing employees with an orientation to the organization and the business, and advice for navigating one's career.
Clearly defining the criteria and experiences necessary to qualify for key leadership positions.

In doing so, the organization gives employees clearer pictures of the work, skill, and knowledge required to rise, and they help eliminate hiring biases that could otherwise push particular constituencies onto career ladders that don't go all the way up.

Women managers, of course, have a symbolic role to play once they reach the top, though many tend to shy away from it and hide family and "feminine" aspects of work-life balance. Please don't. Be a mentor. Join women's leadership groups. Show those coming up behind you how you prioritize, share your rationales for your personal and professional boundaries (yes, this means it's OK to say you're leaving early for the school play), and be as intentional in these realms as you are in your career decisions.

Customer Intimacy, Meet Operational Excellence

What is more important to company success, a strong external focus on customer experiences or an internal focus on effective and efficient operations?

Of course, it's a false dichotomy — you need both. I described in an earlier post how Tesco worked for years to improve its supply chain capabilities, then leveraged this value by using deeper customer knowledge to enrich customer experiences. But let's flip the paradigm. Some organizations which have competed successfully for decades by focusing primarily on creating unique solutions for each customer are now embracing operational excellence to drive even more customer value.

For example, catalog and online retailers like L.L. Bean have had lots of information about customers for many years that they have used to tailor offerings and services. As they have grown their ability to analyze ever more data about their customers, they have found new ways to provide uniquely tailored catalogs and offers, increasingly online. But while such customized services used to be enough to compete effectively, these retailers are now finding they need to improve their operational reliability too.

L.L. Bean is embarking on a major investment in its systems infrastructure. Terry Sutton, vice president of business transformation, told me that "The systems we're implementing are about operational excellence. As a direct marketer we have been good at customer intimacy. We know a lot about our customers. But our new system infrastructure investments are about running better. We have known for a long time that we needed to be operationally excellent, but in the past we've fixed problems reactively, after the event, to keep customers happy. We've survived through heroics."

While retailers and consumer packaged goods companies are leaders in understanding and serving their customer uniquely, no industry is closer to its customers than healthcare. Doctors are driven to understand each patient deeply and to deliver a unique solution tailored to the patient's specific needs. And new tools are emerging to push the frontiers of personalized medicine. Gene sequencing, wireless physiological sensors, and digital anatomical imaging are creating more granular patient profiling and tailored treatments. For example, gene sequencing is enabling better prediction of disease susceptibility and drug reactions. By sequencing the tumor DNA of cancer patients, doctors are able to tailor treatments only to patients who will benefit. And all the data is being captured in patients' electronic health records, allowing more coordinated and customized care.

At the same time, many healthcare organizations have been working hard to complement their historic strengths in delivering unique solutions for each patient with an added focus on operational excellence. Patient safety is one motivation. The landmark report by the Institute of Medicine, "To Err is Human, Building a Safer Health System," chronicled the unexpectedly high incidence of medical errors. Many hospitals began pursuing the "triple aim": better patient experiences, consistent quality, and lower costs. Hospitals such as Virginia Mason and ThedaCare adopted process improvement systems from manufacturing ("Lean" and the "Toyota Production System") to deliver increased consistency, reliability, and quality. While skeptics are right when they say, "Patients are not cars," the reality is that medical care is, in fact, delivered through extraordinarily complex organizations, with thousands of interacting processes, much like a factory.

Consider ThedaCare, a health delivery system with five hospitals, 26 clinics, and over 6,000 employees, based in northeast Wisconsin. Like many healthcare institutions, Thedacare was good at diagnosing and delivering unique solutions to each patient. But in 2003 ThedaCare leaders decided to focus on designing processes that consistently work better, reduce waste, and enable staff to better meet the needs of patients. To learn more about how to approach process improvement, their leaders consulted with a nearby Wisconsin-based business, Ariens Outdoor Power Equipment Company, which had successfully employed Lean management for several years. ThedaCare built its version of the Toyota Production System, which it calls the ThedaCare Improvement System. Leaders engage staff in intensive week-long process improvement efforts. There are typically five of these projects running every week. The projects have improved clinical performance, including lowering the incidence of preterm births, improving heart attack response rates, offering same-day appointments in every office and clinic, and changing the way care is delivered to a collaborative, team-based approach. ThedaCare employees have increased productivity 12 percent since January 2006, saving the company more than $27 million. They have passed those savings along to patients and insurers. With a price increase rate that is half that of their nearest competitors, their costs are consistently the lowest in the state.

L.L.Bean and ThedaCare show that organizations that have historically competed on customer intimacy can simultaneously strive for operational excellence. But it isn't easy. Autonomy to make customer-specific decisions seems to be in conflict with the use of standards, which are essential to delivering consistency, reliability, and low cost. In another post, I described how the Cleveland Clinic standardized an approach for patient web searches, so they were able to scale easily to over 100 unique patient pathways.

The art is in finding ways to optimize these apparent opposites simultaneously: introducing standard operational work wherever possible, while continuing to get better and better at delivering tailored customer solutions.

Seven Types of Sales Managers

Over the past decade, I've worked closely with hundreds of vice presidents of sales, and like all of people, each has a unique personality. Some are gregarious. Some are assertive. Some are action-oriented. But even as I observe their individual differences, I have recognized patterns of behavior, which have allowed me to catalog their styles of sales management.

I have found that seven management styles are most prevalent: mentor, expressive, sergeant, Teflon, micromanager, overconfident and amateur. Most likely, a sales leader will use several different management styles and move from one style to another depending on the situation.

To better understand these sales management styles, I asked more than 60 top vice presidents of sales from leading high technology and business services companies to estimate what percentage of their time they used a particular management style, and then to rank the applicability of the style to the success in their role on a scale of 1 (least important) to 5 (most important). Below, you will find a description of each style and the average results for the study group.

Mentors

Mentors are charismatic leaders and sales experts who measure their success using three criteria: exceeding revenue goals, creating an environment where the entire team can succeed, and helping all team members realize their individual potential. Mentors are confident in their own abilities and possess the business insight to know what needs to be done and how to do it. On average, study participants reported they used the mentor management style 26 percent of the time. In terms of importance as a driver of success, they gave mentor management style the highest ranking of all the styles at 4.3.

Expressives

Expressive managers are people-oriented with a flair for sharing their emotions and amplifying the emotions of those around them. They have a natural ability to put people at ease but are also quite comfortable extolling or admonishing the team. Expressive managers create an environment where a considerable amount of energy is focused on how their organization is thought of and perceived within the company. Study participants indicated they used the expressive management style 30 percent of the time on average and ranked the style's importance at 4.

Sergeants

The sergeant is named after the field sergeant in a military organization. Sergeants develop an intense loyalty to their team, perhaps even greater than their personal loyalty to their company. They are hard workers who are constantly worrying about their "troops." They will even sacrifice their own best interests and tolerate personal hardships if they feel it will benefit their team. The sergeant management style is used 18 percent of the time on average and its importance was ranked at 3.2.

Teflons

Teflon managers are pleasant, agreeable, and polite people. However, unlike sergeants, they tend not to have deep personal relationships with their sales team members. Another characteristic of Teflon managers is their ability to stay above the daily fray of politics. Regardless of the situation, Teflon managers are even keeled and rarely frazzled. The Teflon management style is used 10 percent of the time on average and its importance was ranked at 2.

Micromanagers

Micromanagers are the most organized and methodical of all the management types. They have a strong sense of responsibility to their company and they pride themselves on achieving their revenue goals. They tend to be all-or-nothing thinkers who want things done their way. The micromanager style is used 7 percent of the time on average and its importance was ranked 3.3.

Overconfidents

Overconfident managers tend to be more self-centered. They are charming and gregarious in public, excellent on sales calls. They tend not to be open to feedback and will get the job done their way and succeed at any cost. The overconfident management style is used 6 percent of the time on average and its importance was ranked at 1.8.

Amateurs



The amateur management style should not necessarily be equated to someone who is new to sales management. Rather, the style reflects that the person is outside of their comfort zone in a new management role, working with an unfamiliar product at a new company, or in a new industry. As a result, their management style may suffer an identity crisis until they are able to build back their practical sales experience. Study participants indicated they experienced the amateur management style 3 percent of the time on average and ranked the style's importance at 1.

The structure and effectiveness of the sales department will mirror the sales management style of its leaders. This is because sales leaders naturally imprint themselves on their organization. Therefore, it can be argued that the vice president of sales is the most important person within a company because this person is in charge of an organization's most critical assets: customers and the revenue they generate.

Don't Tell a Suffering Coworker "It Could Have Been Worse"

After being subjected to the upsetting experience of receiving negative feedback on a task, research participants felt particularly badly, scoring an average of 4 on a 7-point positive-affect scale, if they were indirectly told that getting a low score on a task was a "not serious" event. By contrast, those who could decide for themselves on the seriousness of such an event felt less bad (4.63), even though they too tended to classify the experience as "not serious." The research, by a team led by Kristin W. Grover of the University of Vermont, suggests that people who have suffered misfortunes feel worse when their experiences are minimized by others, but feel better when they internally minimize the experiences themselves. Saying "It was for the best" or "It could have been worse" makes sufferers feel misunderstood and isolated, the researchers say.

Our Self-Inflicted Complexity

People who make it their business to study large-scale problems (business theorists and economists among them) seem to be in broad agreement that the world is growing ever more complex — and that this trend makes their work harder. If this is true, then we should be grateful for their ongoing efforts and to a large extent let them off the hook for failing to make more progress. But is it true?

The claim can be hard to evaluate given the number of meanings that attach to the word complexity. But if we start from a solid, shared definition it becomes easier to consider. Of all the definitions, I like Peter Senge's old but simple one best. He spells it out in The Fifth Discipline, by way of explaining why seemingly sophisticated forecasting tools so often miss the mark:

[T]hey are all designed to handle the sort of complexity in which there are many variables: detail complexity. But there are two types of complexity. The second type is dynamic complexity, situations where cause and effect are subtle and where the effects over time of interventions are not obvious. Conventional forecasting, planning and analysis methods are not equipped to deal with dynamic complexity.

Senge's distinction between detail complexity (driven by the number of variables) and dynamic complexity (heightened by any subtlety between cause and effect) is not only key to explaining why some overhyped tools don't deliver. More broadly, it is consistent with how growing knowledge in a field inherently advances and generates complexity.

The starting point for knowledge is mystery. Everything we now know started as a mystery in which we couldn't even discern the variables that mattered, and therefore had no capacity to understand cause and effect. Think of how the world was baffled, for example, in the very early days of the AIDS crisis. We didn't know how to think about this new and horrible condition.

But in due course, as is the case in many domains of knowledge, AIDS became less of a mystery. With hard work and study we advanced to a heuristic — that is, we started to understand what variables mattered and developed a sense of the cause and effect. We came to the conclusion that it is an acquired autoimmune disease transmitted primarily through sexual contact. This enabled researchers to focus on the relevant variables and better understand cause-and-effect relationships — for example, the relationship between unprotected sex and transmission.

Some knowledge gets advanced all the way to algorithm, in which every relevant variable is specified and the cause-and-effect relationships are precisely defined. This has happened, for example, with polio. We figured out what causes it and developed a vaccine that if taken protects the individual against the disease forever. We haven't driven AIDS knowledge to an algorithm yet. It is not entirely clear what all the relevant variables are and there are still plenty of subtleties to attempt to understand between cause and effect. But our understanding is far advanced from a mystery — and hence the many treatments that help HIV-infected patients avoid developing full-blown AIDS.

AIDS researchers and every other scientist since Aristotle have attempted to ferret out cause and effect because they want to explain how the world works. They want to drive knowledge toward an algorithm like E=MC^2 with all the subtlety gone.

The question is: How do they do it? How do they eliminate the subtlety between cause and effect in order to drive knowledge toward algorithm? Typically, the approach is to tackle cause and effect (dynamic complexity) by reducing the number of variables considered (detail complexity).

My own clan — the economists — is particularly inclined in this direction. There are a thousand economists working on partial equilibrium problems for every one working on a general equilibrium problem. This is despite the fact that no one would contest that general equilibrium clarity is the most valuable knowledge by far. Why? Because it is really difficult to specify any general equilibrium cause-and-effect relationships.

Instead, most of the guns deployed in modern knowledge advancement are aimed at narrow problems for which the cause-and-effect relationship is specified with the famous "all other things being equal" proviso. Each narrow knowledge domain develops analytical tool-sets that deepen the narrow knowledge domain. Each narrow domain develops ever more algorithmic knowledge, and those developing the knowledge are extremely confident that they are right because they are so specialized within their own domain. The liver expert is completely confident that he or she is correct even if it is the interaction with another condition that threatens your health most.

This approach has created another kind of complexity: inter-domain complexity. Every field is segmented into multiple domains, each with deep algorithmic knowledge, specialized tools, and experts in the domain who think they are absolutely right. And they are indeed right, as long as we ignore the reality of detail complexity.

However, the real world we live in, and have always lived in, is a world of detail complexity. So when we sacrifice dealing with detail complexity to focus on dynamic complexity, the solutions don't produce the outcomes that we really want. For all their great work, it is unclear that economists have actually helped government officials manage the complex task of managing a national economy any better than they ever have. And despite massive advances in narrow domains of medical knowledge, actual health outcomes have been difficult to improve, especially in errors of high detail complexity.

This is, I believe, what makes it feel that complexity has increased. I absolutely do not believe that the subtlety between cause and effect has increased at all in the world. But the negative manifestations of the largely unaddressed inter-domain complexity make it feel like we have massive un-addressable complexity overwhelming us.

In other words, we are bedeviled by manufactured complexity — complexity that could have been avoided but has instead been amplified by the pursuit of narrow knowledge in a broad world.

It is vital, therefore, to our ability to make progress against large-scale problems that we figure out how to tackle inter-domain complexity.

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.

Ambitious Women Face More Obstacles than Just Work-Life Balance

For the past year and change, the American conversation about women and leadership has revolved around challenges of work-life balance — which most of the time actually means "work-family balance."

The women we're hearing from — Anne-Marie Slaughter, Sheryl Sandberg, and the rest — aren't jetting out of the office at 5:30 to train for a marathon or learn Chinese or even just binge-watch Law and Order: Special Victims Unit. They're leaving "early" to take care of their children. And so we talk about having it all, leaning in, or opting out — and we talk about women who don't make it to the very top of their companies, still, as if it's a personal choice.

The truth is — as many have pointed out — that lots of ambitious people, male and female, make personal choices that take them off the path of leadership. It's also true that women are often gently but firmly nudged off this path more frequently than men, when work and family invariably clash. And that is a problem. Not just for the women, but for the companies missing out on the benefits of diversity and the economy that's not playing with a full talent deck.

But while that is a major obstacle to getting more women into senior roles, it's far from the only — or even the most important one. Yesterday, I interviewed HBR Editor Amy Bernstein about our current issue, which spotlights women in leadership. We agreed that it's time to shift our focus away from issues of work and life, and personal career decisions about "sitting at the table" or "leaving before you leave," to look at some of the institutional barriers that women still face.

One of these challenges is what Herminia Ibarra, Robin Ely, and Deborah Kolb call "second-generation gender bias." The basic idea: we become leaders iteratively, by taking increasingly challenging roles, learning, and then having our performance affirmed by those around us. For women, this process is often interrupted for a simple reason: when women display leadership behaviors we consider normative in men, we see them as unfeminine. When women act more feminine, we don't see them as leaders.

A previous McKinsey study also identified another barrier: women aren't given as many high-profile, big budget, or international assignments as their male peers. These are the developmental projects that put talented women on the path to the C-Suite.

Work from Catalyst identified another challenge: women aren't sponsored by higher-ups to the same degree that men are, although women do tend to have lots of mentoring relationships. This translates to women receiving lots of well-meant advice, but not a lot of growth roles.

(The depressing list goes on. My colleagues at HBR have pulled together some of the latest research on these and other barriers, along with a curated reading list from HBR's deep archive on this issue.)

It would be disingenuous to say that none of these challenges are related to the joys and burdens of parenting, which still disproportionately fall to women. But increasingly, men share in those joys and burdens too. And the women we're talking about — ambitious mid- to senior-level executives with their eye on the C-Suite — can afford to mitigate a lot of those burdens. So I think it's also disingenuous to portray — as so much of the popular press does — the lack of women at senior levels as evidence of some personal choice on their part.

At the same time, it's not exactly that there's a glass ceiling (or a glass cliff, or a maternal wall): the days of blatant discrimination are (mostly) behind us. Today, it's more like a glass obstacle course of a hundred hard-to-see hurdles.

No wonder so many women seeking leadership roles suffer from bruised shins. No wonder so many of them never make it to the other side.

And yet, as Bernstein was quick to point out, when I asked her if it was depressing that we're still, in 2013, talking about this:

But we can deal with it. We can address it. Nissan addresses it, Avon addresses it, Merck addresses it. Big companies that don't turn easily address it, and they make a difference, and they have seen results. So yes, [gender bias] is bad, and no one want to have to talk about it, but given that it's still out there, isn't it wonderful that we can figure out how to deal with it, how to address it, and how to overcome it. And then we can go on to the next thing.

Here's to overcoming it.

Six Classes Your Employer Wishes You Could Take

School is back amid growing controversy and cynicism. The quality, validity and economic value of college degrees and MBAs have rarely been under such sustained assault. Employability of graduates has never been so dismal. Machines are clearly getting smarter at many of the things people traditionally do on the job. That means people need to become non-traditionally smarter at things machines are not quite yet ready to think about or do. And that means educators worldwide must revisit how they want to make their most important product — their students — more valuable.

Were I advising aspiring top-tier universities — or their students on what they should expect from their high-priced education — the following classes would represent excellent starting points for fundamental curricular reform.

Multimedia Editing. Increasingly, knowledge workers won't simply be creating or generating information but assembling, reorganizing and prioritizing information from others. In other words, they'll be editing. They will need to extract, abstract, synthesize and linearly present other people's — and machine's — work. Much of this information will be incomplete or inchoate. (Just ask my own editor.) The ability to write a sentence or video a sequence is not the same as editing them. The ability to immerse oneself in terabytes of data, identify (individually or collaboratively) what's most important and restructure it in an accessible, meaningful and usable form for a variety of audiences will increasingly be an essential skill. What enterprise isn't interested in graduates capable of transforming a petabyte of information into a slick 12-minute interactive multimedia presentation?

Scenarios. In addition to knowing how to create a compelling narrative out of reams of data, there will be a premium paid to those who can paint vivid pictures of possible tomorrows. Scenario planning is as essential for strategy formulation as it is for the design of next generation technologies and industries. Thinking in terms of scenarios forces people to rigorously examine fundamental assumptions and unexpected risks. Scenarios demand expository and analytic, as well as literary, skills. What serious employer doesn't want to hire someone who can envision and articulate scenarios describing the future(s) of the enterprise?

Fantasy Sports Competition. Understanding probabilities, statistics and analytics is increasingly vital to identifying and effectively managing high performing talent. As Moneyball and the rise of quants in professional sports worldwide attest, the ability to relentlessly improve the quality and specificity of performance analytics is key to success. Luck matters but so do the data-driven odds. This class requires small teams of students to compete against each other in at least two data-rich team sports. The student teams, with budgets and other constraints, have to assemble and field the best-performing teams they can and justify their investments and trade. Their grades are, indeed, dependent on their teams' "on-the-virtual field/court" performance. Credit given for the development of novel/innovative metrics for performance assessment (for example, attendance figures as a "team economics" variable). The goal is not creating teams or leagues of aspiring Nate Silvers but to assure that students come away with the statistical savvy not to be probabilistically buffaloed by Nate Silver wannabees.

Reverse Engineering. This class looks at what makes experiments, inventions and artifacts tick and then takes them apart and rebuilds them. In other words, this is a hands-on class where students gain knowledge and skill by seeking to replicate and recreate things that work. What makes Amazon's web page work? What are the ingredients of a touchscreen? How does a mobile phone cam take a picture versus a video? What makes a prosthetic limb responsive? What makes a toaster toast? This is a class that puts things together by first deconstructing them. The goal is giving students a vocabulary and capability for interactively understanding the links between technology design and construction. Fixing, maintaining and/or repairing technologies is not the purpose; empowering students to identify and understand the fundamental physics, materials science and design technologies that combine into valuable outcomes is. Appreciating the essence of technology and the technology of essence is key. Grasping how difficult, challenging and important design integration can be — and why it must be managed well — is an essential takeaway.

Comparative Coding. Another blog on this site asks, "Should MBAs Learn to Code?" Alas, that's exactly the wrong question. The better question is: What aspects of coding should MBAs (and university students) learn? When the world is filled with cascading style sheets, XML, Erlang, Python, Ruby-on-Rails, Objective C, C++, Java, SQL, etc, "coding" becomes a misnomer. The pedagogical challenge becomes what are the most important things people need to understand about the grammar, semantics and culture of computer languages? If fluency isn't possible or practical, what is? Does value primarily come from the ability to code? Or from an ability to read, follow or grasp a program's limits and strengths? Designing a coherent course that gives people who use software genuine and actionable insight into the languages underlying the apps and services they use remains one of the great educational challenges of the digital era. Perhaps "comparative coding" will evolve into a class not unlike "editing," where the key to cognitive and conceptual success is the ability to identify the code that's most important and effectively tweak it. A classroom experience that gives students confidence that they know why — and how — their software works (and evolves) as it does will be of inestimable value to the students themselves and the employers who hire them.

Cooking Science & Technology. Another hands-on course integrating fundamental scientific principles with real-world knowledge challenges students to transform their understanding of food. Everybody eats. But too many people think that food comes from supermarkets and that cooking simply means heating up food according to a recipe. Understanding the chemical and material properties of ingredients is, indeed, a science. Appreciating the role of technologies in every stage of the cultivation, preparation, presentation and preservation of those ingredients requires a genuine grasp of high-tech engineering. The role of local sourcing and global supply chains are integral to knowing why, how and how much food ends up on people's plates. Controversial GMO foods challenge notions of what's natural while moleculer gastronomy innovations transcend expectations about food tastes and textures. The ability to improvise is just as important as the willingness to follow a recipe to the gram. Planning and successfully executing a complex meal is an exercise in project management. Understanding how convection, radiation and microwave ovens work — and why — in relation to various ingredients represents the antithesis of perishable knowledge. The kitchen can and should be a laboratory for innovation. There are few better courses for combining scientific insights, raw materials, new technologies and customer satisfaction.

These classes strive to balance the transmission of knowledge in classroom environments with the cultivation of real-world skills. Coursework here demands an appreciation of how to collaborate; interact with more data and analytics; generate and communicate testable results; and improvise and innovate if things don't go as planned. Students are not simply studying for tests; they're testing their own ingenuity and intuition. Students achieving competence — let alone mastery — in their coursework would be both cognitively enriched and more economically desirable to potential employers. It wouldn't hurt their ability to be entrepreneurial either.