Marina Gorbis's Blog, page 1551

Steve Ballmer's Big Lesson for the Rest of Us

The business media lit up over the weekend with the news that Steve Ballmer, the college friend who worked alongside Bill Gates to build Microsoft and was heir to the CEO job, will step down within a year. Ballmer, whose skills were in many ways complementary to Gates', took the helm of an already massive organization as it entered an era of relentless disruptive innovation by competitors. He managed to hold the stock price on a pretty even keel, but no better than that.

It's worth taking a step back to look at what all the chatter is about.

The debate has focused almost entirely on the leadership of innovation. Read just a few of the articles — some of the buzzier ones have been a condemnation by The New Yorker's Nicholas Thompson, an incisive critique by Derek Thompson of The Atlantic, and a counterargument by Timothy Lee in The Washington Post. There's a pattern in them. They argue over whether Bing was a respectable competitive response to Google or not; they give Xbox its due, while tending to cordon it off as a special case; they accuse Microsoft of being oblivious to the threat posed by Web and mobile apps, or point to evidence that it was responding. Ballmer is being damned or defended wholly on the string of innovative (or not) products released on his watch.

So the big lesson other CEOs should take away from this public trial is a cautionary one: this is how you, too, will be judged. We have known for a long time that innovation is the name of the game now. Peter Drucker made the point in HBR's pages 18 years ago, writing that "Core competencies are different for every organization .... But every organization needs one core competence: innovation."

We've known even longer that our legacy organizations are not geared to excel at innovation. This was the point of James March's classic 1991 paper Exploration and Exploitation in Organizational Learning. He pointed out that companies had much more to gain in the short-term, and therefore were tooled to compete, by exploiting opportunities already found than by exploring the business landscape for new ones. It's a point that Clay Christensen put his own twist on with The Innovator's Dilemma: Even when leaders know intellectually that groundbreaking innovation is imperative, they find themselves investing in incremental refinements to please their most sophisticated customers, and leave themselves wide open to disruption by upstarts. Geoffrey Moore once compared big companies trying to innovate to right-handed people writing with their left hands. All the apparatus may be in place, but if the organization isn't in the habit of doing it constantly, it will always be an awkward affair.

Despite two decades of seeing the problem, very few CEOs have thought seriously about how their organizations should be reinvented if innovation matters more than anything else. Well, guess what: it does.

Two other observations can be made about the public autopsy of Ballmer's career: It may constitute another small way that Steve Jobs left a dent in the universe. And it might be more about us in the end than about Ballmer — or any CEO.

I can't remember people obsessing about a CEO's legacy this much before Steve Jobs' decline forced the issue in his case. But I suspect this will not be the last departing CEO we will put under a glaring spotlight. And I predict, too, that the attention won't only follow titanic departures in the tech sector. We're figuring out that innovation is the be-all and end-all in every kind of business, and that the quality of leadership is a big factor in determining where it happens. At the same time, we have all gained access to immediate national conversations on the matters that interest us.

And the fact is that the matter does interest us. In the United States, there is a terrible anxiety about losing the innovative edge that has been our source of competitive advantage and can be our only salvation. Tyler Cowen's The Great Stagnation is a prime example; his reading of history convinces him that the U.S. has reached a "technological plateau" and reenergizing economic growth will be extremely hard to do. Peter Thiel, who innovated as a co-founder of PayPal, is similarly worried - and also worrying about the worry. "It would be hard to imagine the President of the United States declaring war on Alzheimers," he told a business crowd on Nantucket last year, "because our pessimism about technology has started to seep into the system."

This obsession over national competitiveness isn't only an American one. Smart people worldwide fret that the era of discovery is over and, economically speaking, we're now in for a rough ride. It makes me wonder if what we're really talking about, when we talk about Ballmer, is the fear of our own failure to innovate.

Women Don't Need to Lead Better Than Men. They Need to Lead Differently.

In the summer of 2008, I experienced a massive hormonal shift, moving from the largely-male, testosterone-charged environment of Harvard Business School, where I had spent the first 18 years of my career, to the nearly all-female realm of Barnard College, the all-women's liberal arts college where I now serve as president. Suddenly, after a life spent mostly around men, I was thrust into a totally new environment — an alien, intriguing place where women outnumber men in every classroom and meeting.

Nearly from the start, I started to notice subtle differences that marked an organization run by women from those run by men. The quiet assumption, for example, that everyone would, or at least should, agree. A drive to achieve consensus and prevent outright conflict. It wasn't necessarily better. Or worse. But it was markedly different.

Later, as the financial crisis reverberated across the world and on to my small campus, I was struck by another gender difference. Nearly all of the perpetrators of the greatest economic mess in eight decades were, well, men. What would have happened if more women had been around conference tables and in board rooms, weighing in on crucial financial decisions? Might things have unfolded differently? Could more women in positions of influence have better insulated the global economy from its near implosion?

Across the public and private sectors, women are still underrepresented at the highest levels of power. Women today account for only 15.2% of the board members of Fortune 500 corporations, 16% of partners at the largest law firms, and 19% of surgeons. (I explored much of this research for my upcoming book.) Indeed, there seems to be some sort of odd demographic guillotine hovering between 15% and 20%; some force of nature or discrimination that plows women down once they threaten to multiply beyond a token few.

Even before the C-suite level, women's careers stall out for complicated, heavily ingrained reasons. Women often face difficult decisions about their personal and professional aspirations, decisions that can hold them back at key career junctures and which fall more lightly, if at all, upon their male counterparts. Without even realizing it, many once-equally aggressive women start backing away from their potential: they defer to their more assertive male counterparts to keep the peace, they modestly deflect praise when it is due, they fail to advocate for the raise or promotion they deserve.

To be sure, a handful of extraordinary women have broken through in recent years to the very top tiers of power. Sheryl Sandberg of Facebook and Marissa Mayer of Yahoo, for example, are among a small but meaningful population of women who have broken through the male-dominated ranks of their profession, forcefully changing the game for the next generation of women. There are PepsiCo's Indra Nooyi, Kraft's Ann Fudge, and the indomitable Martha Stewart.

Yet, impressive as these women are, it is not entirely clear why they remain so relatively rare. One possibility, explored in a fascinating study by John Coates and Joe Herbert of Cambridge University, is that women simply don't have the testosterone for it. The researchers deduced that on the trading floor, higher profits literally correlate with higher levels of the male hormone. Another study, examined in laboratory experiments conducted by Muriel Niederle and Lise Verterlund at the University of Pittsburgh, found that women are far less inclined than men to bet their pay on performance, even if they have evidence to suggest that they are superior performers.

For decades, corporations and other large institutions have sponsored expensive training programs to promote more women into their ranks. They have launched much-needed maternity policies and flexible work arrangements. Most of these initiatives, however, have been pursued to make life easier for the women involved — or, more cynically, to remove the threat of lawsuits or adverse publicity for the firms. But they have not successfully leveled the playing field or created the kind of true diversity that any great organization needs to thrive. To get there, companies need to bring men fully into the quest for diversity, and women need to bring men into their often too-private conversations.

We need women in leadership positions not only because they can manage as well as men but because they manage differently than men. We need them because they tend — over time and in the aggregate — to make different kinds of decisions and bring different ideas to the table. We need women who will approach risk from a different perspective, who take an altered view of time and conflict, and who understand diversity as something more than an abstract theory. We need women who operate as managers, not just as employees or critics; who are as competitive for themselves as they are for their children. And we need more men to recognize that having women around the table isn't just a nice thing to do. It makes for a better table.

Women in Leadership
Special Series





Women: Let's Stop Allowing Race and Age to Divide Us
Tell Me Something I Don't Know About Women in the Workplace
A Fairer Way to Make Hiring and Promotion Decisions
"Feminine" Values Can Give Tomorrow's Leaders an Edge

Do You Have the IT For the Coming Digital Wave?

With a tsunami of new digital technologies all converging simultaneously — social, mobile, cloud, analytics and embedded devices — there has been, once again, a cry for corporate IT to radically change to enable the digital transformation of businesses. But here is the daunting and exciting thing: we're only at the very beginning of the next digital wave.

Technology innovation is not slowing down or leveling off, but ramping up — and businesses will soon face a barrage of new digital possibilities. There is no time for complacency. Kim Stevenson, Intel's CIO, summarizes the challenge well: "[IT functions have] gone through ERP, they've gone through BYO and they've gone through cloud, and they think they've done it all. But the reality is, we're only at the very, very beginning of this next generation of computing, and I think that...industry leaders will be the ones that transform first. I don't care what industry you're talking about."

IT is already being asked both to industrialize traditional infrastructures and systems fast to save costs, and to innovate customer experiences and operations with new digital technologies. Cloud-based services are also now being bought directly by functions like HR and marketing, resulting in IT losing its control over technology purchase within the organization. Are all these changes just part of the natural evolution of the IT function? Or, in preparation for the coming wave, is a more fundamental re-invention needed? Research points to the latter.

Digital leaders, those companies that have managed their digital transformations successfully, all show common characteristics in the way they have shaped their IT to work differently with the business. They have changed their IT functions utilizing three related management interventions which, taken together, represent a fundamental re-invention of IT.

IT must play a central role in your digital transformation. It is no longer sufficient for IT just to be 'aligned' with your business objectives; a fusion is needed. As Angela Ahrendts, Burberry's CEO puts it: "I need [IT] to move from the back of the bus, where it traditionally sits, to the front of the bus...and it's traveling fast." It requires strong leadership from all senior IT executives, as well as new business acumen. Despite all the talk of 'shadow IT', digital transformations that happen without, or despite, IT are a myth. Company and unit leaders need to ensure that IT is in a leading position on all key digital projects. Also, it must become a key management responsibility to continually scan the technology landscape for fresh perspectives on how new digital technologies can improve business performance. In other words, IT must become a business-driven, front-office function.

Ramp up distinctive digital capabilities quickly. Digital capabilities are about methods, processes and people — and a truly digital IT organization is different from traditional IT. It requires new modes of operation. Requirements and specifications are more flexible and developed within cross functional teams with constantly evolving business needs. Service delivery is marked by a 'good enough' approach to error tolerance, relying more on rapid iterations and short cycle times. New, more agile, software development tools and testing methods are utilized. Different standards of project and portfolio management are also required with more flexibility in demand management and budgeting methods. And, there is a need to leverage partners within the group's ecosystem to ensure best practice re-use. How close or far does this sound from your own ways of working?

People are the key, obviously. The new, ideal IT person — a kind of "Homo Digitus" — needs to combine excellent digital specialist skills with deep functional business knowledge. He/she is used to short delivery cycles and feels at ease operating across silos and working within cross-functional teams. Homo Digitus is also output-minded and helps the business visualize solutions through rapid prototyping and experimentation.

How do you build these capabilities? In my experience, what works is adopting a three-pronged strategy of hiring new talent, re-skilling existing employees and filling skills gaps (such as a need for data scientists) by looking to trusted ecosystem partners. And crucially, with digital IT in a more central role that is more integrated with the business, a new breed of leaders is also required. As Markus Nordlin, CIO of global insurer Zurich, explains: "I believe that the successful leaders of tomorrow, in any business or industry, are going to be true hybrid professionals who have spent some time in IT but have shifted to operations and vice-versa."

Adapt your governance model according to your digital maturity. Choose the governance model that fits your organization best. If you are just starting your digital journey, a standalone digital unit within your IT organization might be appropriate. 51% of organizations that are 'digital beginners' have such digital IT units as the primary driver of their digital governance. These units can host your specific digital initiatives, start developing a catalog of digital services and nurture and grow new digital skills. They can also unify technology initiatives and start to foster global collaboration. But with this essentially IT-centric model, dynamic connections with global business units, marketing, brands and external partners remain difficult to develop .

If you are already well into your digital transformation and want to accelerate and harmonize your efforts, then an integrated digital service unit might be the answer. 57% of digital leaders use both marketing and IT as primary drivers of digital governance. In this model, the unit becomes the central point for all your corporation's digital initiatives and services. Both digital marketing and IT staff work together with common budgets and objectives. Nestlé, the global food giant, has implemented such a digital service unit, with a view to accelerate the deployment of digital services, harmonize digital technology platforms and scale local innovation. Such units present strong advantages. They reduce duplication of efforts and skills, thus reducing operational costs. They drive innovation and speed up time to market. And, they align the KPIs of each function to common goals. But, they can also represent a significant cultural challenge to implement and require strong leadership and cooperation from your organization.

Companies that are successfully leading digital transformation, and preparing for the coming digital wave (and it is coming) use these three levers to re-invent their IT. Organizations in every industry need to follow their example.

Reinventing Corporate IT
An HBR Insight Center





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Google's CIO on How to Make Your IT Department Great

The Problems with Incubators, and How to Solve Them

There is a very real knowledge gap in the early stage start-up game, on both sides of the table. First-time entrepreneurs lack the seasoning to captain a steady ship through turbulent waters. Inexperienced friends and family (and, increasingly, crowdsourced investors) lack the ability to gauge the viability of a business, or to mentor naïve entrepreneurs.

This knowledge gap, I have come to believe, is best filled by savvy incubators. However, there are over 7,500 business incubators around the world. Most of them fail.

The first business incubator in the U.S. opened in 1959 and is still operating. In the last couple of years, we have seen a renaissance in the incubator business. Pioneered by YCombinator, Silicon Valley's flagship incubator led by Paul Graham, incubators have come back with a vengeance. YCombinator has seen some significant successes, including Airbnb, Dropbox, and Heroku. It has fueled a bit of an incubator bubble, I must admit. Incubators are now a global phenomenon, and there isn't a major city in the world where an incubator isn't cropping up.

For incubators to live up to their full economic potential, they need to overcome two pitfalls: they need to provide real value, not just office space, and they need to measure success in more than just outside funding.

Adding Real Value

During the dot-com era, every law and accounting firm decided they were going to become incubators. Many of those efforts failed. Charles D'Agostino, executive director of the Louisiana Business & Technology Center at Louisiana State University, offers some analysis: "Incubators do work, but they must be more than a real estate entity offering executive suite services. Effective incubators provide business counseling and management assistance to their client firms. The value-added business services differentiate them from an office suite."

Indeed, as I investigated why incubators fail, I was astounded to find that many incubators assume that cheap real estate, co-working spaces, used furniture, plus a phone and Internet connection equate with business incubation. Jim Flowers, president of the Virginia Business Incubation Association, says, "They mistake cheap floor space for meaningful program content."

Well, it isn't. Neither are discounted legal services, accounting, or other kinds of commodity services.

Two things determine whether a business can get off the ground successfully and sustainably: a validated market opportunity with customers willing to pay for a product or a service; and a product or service that addresses such an opportunity. The only incubators I consider "real" are the ones that help entrepreneurs achieve these two goals.

Adds D'Agostino, "Incubators must evaluate the management capability of the entrepreneurs and assist in finding management for these companies. Especially when the entrepreneur is a technologist lacking business skills, it is critical that the incubator assists the owner in finding managers that have the skills necessary to manage a successful entity and take it to the next level."

My take is that technologists can, actually, be taught these skills. Hiring managers may often be expensive, but high IQ engineers have historically been very good at picking up business skills with the right mentoring. So getting to the next level is well within their capacity, and the role an incubator ought to play is to guide them in that process.

The only "next level" worth getting to for a start-up is a validated business idea that has the endorsement of reference customers, and a product that caters to their needs. The rest — an office, legal documents, QuickBook files — don't build valuation or business value. The benchmark incubators should be measuring themselves against is simply their success in helping clients validate businesses, gain reference customers, and complete at least a minimum viable product.

Success is More Than Funding

Most incubators use funding as a success metric, which is a somewhat flawed criterion. Over 99% of companies should operate as organically grown, self-sustaining businesses — bootstrapped, without external financing. For them the goal is to achieve customer validation, not financing. Yet if the incubator uses financing as its success metric, it will try to force inexperienced entrepreneurs into an unnecessary financing round. And more often than not, they will fail.

YCombinator has mitigated this by partnering with venture capital firms like Sequoia, Andreessen Horowitz, and General Catalyst, such that every single company in their portfolio gets $80k in seed financing as they graduate from the incubation program. But most incubators in the world do not have that luxury. Nor do they have the deal flow deserving of such guaranteed financing.

Of course, where funding is appropriate and relevant, helping entrepreneurs connect with angel investors and venture capitalists is an important service. Equally important is to provide education on what is and isn't fundable.

Will this new generation of incubators perform better than the previous ones?

It remains to be seen.

My primary conclusion is that incubators need to be decoupled from financing. While they need to continue to act as a bridge to capital, predicating their success on getting businesses funded will keep them focused on trying to find the less than 1% of start-ups that are fundable. In other words, coming to the rescue of victory!

The other 99%, then, continue to be ignored.

A scalable incubation model for the other 99% is a requirement for the next rev of capitalism.

The Problems With Incubators, and How to Solve Them

There is a very real knowledge gap in the early stage start-up game, on both sides of the table. First-time entrepreneurs lack the seasoning to captain a steady ship through turbulent waters. Inexperienced friends and family (and, increasingly, crowdsourced investors) lack the ability to gauge the viability of a business, or to mentor naïve entrepreneurs.

This knowledge gap, I have come to believe, is best filled by savvy incubators. However, there are over 7,500 business incubators around the world. Most of them fail.

The first business incubator in the U.S. opened in 1959 and is still operating. In the last couple of years, we have seen a renaissance in the incubator business. Pioneered by YCombinator, Silicon Valley's flagship incubator led by Paul Graham, incubators have come back with a vengeance. YCombinator has seen some significant successes, including Airbnb, Dropbox, and Heroku. It has fueled a bit of an incubator bubble, I must admit. Incubators are now a global phenomenon, and there isn't a major city in the world where an incubator isn't cropping up.

For incubators to live up to their full economic potential, they need to overcome two pitfalls: they need to provide real value, not just office space, and they need to measure success in more than just outside funding.

Adding Real Value

During the dot-com era, every law and accounting firm decided they were going to become incubators. Many of those efforts failed. Charles D'Agostino, executive director of the Louisiana Business & Technology Center at Louisiana State University, offers some analysis: "Incubators do work, but they must be more than a real estate entity offering executive suite services. Effective incubators provide business counseling and management assistance to their client firms. The value-added business services differentiate them from an office suite."

Indeed, as I investigated why incubators fail, I was astounded to find that many incubators assume that cheap real estate, co-working spaces, used furniture, plus a phone and Internet connection equate with business incubation. Jim Flowers, president of the Virginia Business Incubation Association, says, "They mistake cheap floor space for meaningful program content."

Well, it isn't. Neither are discounted legal services, accounting, or other kinds of commodity services.

Two things determine whether a business can get off the ground successfully and sustainably: a validated market opportunity with customers willing to pay for a product or a service; and a product or service that addresses such an opportunity. The only incubators I consider "real" are the ones that help entrepreneurs achieve these two goals.

Adds D'Agostino, "Incubators must evaluate the management capability of the entrepreneurs and assist in finding management for these companies. Especially when the entrepreneur is a technologist lacking business skills, it is critical that the incubator assists the owner in finding managers that have the skills necessary to manage a successful entity and take it to the next level."

My take is that technologists can, actually, be taught these skills. Hiring managers may often be expensive, but high IQ engineers have historically been very good at picking up business skills with the right mentoring. So getting to the next level is well within their capacity, and the role an incubator ought to play is to guide them in that process.

The only "next level" worth getting to for a start-up is a validated business idea that has the endorsement of reference customers, and a product that caters to their needs. The rest — an office, legal documents, QuickBook files — don't build valuation or business value. The benchmark incubators should be measuring themselves against is simply their success in helping clients validate businesses, gain reference customers, and complete at least a minimum viable product.

Success is More Than Funding

Most incubators use funding as a success metric, which is a somewhat flawed criterion. Over 99% of companies should operate as organically grown, self-sustaining businesses — bootstrapped, without external financing. For them the goal is to achieve customer validation, not financing. Yet if the incubator uses financing as its success metric, it will try to force inexperienced entrepreneurs into an unnecessary financing round. And more often than not, they will fail.

YCombinator has mitigated this by partnering with venture capital firms like Sequoia, Andreessen Horowitz, and General Catalyst, such that every single company in their portfolio gets $80k in seed financing as they graduate from the incubation program. But most incubators in the world do not have that luxury. Nor do they have the deal flow deserving of such guaranteed financing.

Of course, where funding is appropriate and relevant, helping entrepreneurs connect with angel investors and venture capitalists is an important service. Equally important is to provide education on what is and isn't fundable.

Will this new generation of incubators perform better than the previous ones?

It remains to be seen.

My primary conclusion is that incubators need to be decoupled from financing. While they need to continue to act as a bridge to capital, predicating their success on getting businesses funded will keep them focused on trying to find the less than 1% of start-ups that are fundable. In other words, coming to the rescue of victory!

The other 99%, then, continue to be ignored.

A scalable incubation model for the other 99% is a requirement for the next rev of capitalism.

Students Learn Less in States with Stronger Teachers' Unions

A 1-standard-deviation rise in teachers' union dues per teacher is associated with a 4% fall in student proficiency rates, according to a study of 721 U.S. school districts in 42 states by Johnathan Lott of the University of Chicago Law School and Lawrence W. Kenny of the University of Florida. Dues support union lobbying, which typically pushes for policies such as blocking merit pay and limiting the Teach for America program. Consequently, student proficiency is lower in states with stronger teacher unions, the researchers say.

America's Brand with Frontier Entrepreneurs

Walter Landor was a branding legend who helped companies from Coca Cola to Levi's define their brand for the public. "Put simply," he said famously, "a brand is a promise." The more important the promise and the better you fulfill it, the better your brand.

Few countries rely on their brand promise as much as the United States. Beyond its power in binding Americans together, the US brand promise has a powerful influence abroad. Ronald Reagan is famous for articulating a vision of the U.S. as "a city on a hill." That precise image was also evoked by John F. Kennedy when he was President-elect, and long before him by Massachusetts Bay Colony Governor John Winthrop. "We shall be as a city upon a hill," Winthrop wrote in 1630, "the eyes of all people are upon us." From its earliest origins, America has been conscious of the message she projects abroad.

I spent much of the last year writing a book on how CEOs in Africa think about their continental ambitions. Along the way, I learned a bit about America's brand promise abroad, and why people "buy" America. Many (really almost all ) of the African CEOs I met with have an enormous appreciation for the US, far outstripping trade and investment flows between the US and Africa. Nigeria's Tony Elumelu pointed out to me that "Even in the very Muslim parts of our country, you will see kids on the street with an Obama T-Shirt. I myself stayed up watching each of your presidential debates and your election." Kenyan business leader (and popular DJ) Chris Kirubi has pictures of US leaders on his screensaver. In the latest polling by Pew, the US enjoys massively favorable ratings in every African country surveyed.

Some might ascribe the favorable perception of the US to the strength of American media. But American media have not exactly bathed themselves in glory when it comes to Africa. Most African businessmen I know take the US media to task for routinely stereotypical portrayals of Africa. They are fond of the US despite our media, not because of it.

In my experience, it's the American brand promise that is resonating abroad. That promise rests on three characteristics. None is ever-present in the US, but their evocative power is great, and they resonate with the experience of business leaders I've met.

Opportunity. The promise of the US is a culture that creates opportunity for all, regardless of where they originate. It's a powerful message in every frontier market I've visited. Mobile technology CEO Ken Njoroge and I were talking recently about his company Cellulant when he peered past the thin glass partition separating his workspace from a bullpen of young engineers. "I want them to see you don't need to be someone's cousin to make it," he said. "Ken and Bolaji (Ken's Nigerian partner) are guys who came around starting with no money and built a successful business. That's going to change the mindsets of the twenty-somethings out here."

Individuality. The primacy of the individual is captured in our myths, in our politics, and in our Constitution, in which individual rights are protected even at the expense of majority rule. Bharat Thakrar, who leads Africa's largest communications firm, speaks with passion about the rugged individuals "who migrated West. It was not easy but the guys with the [expletive] went and did it. They went, they settled, and they succeeded." For all the controversy of that imagery, its power abroad is substantial.

Liberty. "We can sit today with government and... without fear or favor, you are able to question and discuss openly issues and new ideas of where to go in this country." That's how Kenyan business leader Vimal Shah describes today's Kenya. He said it with a bit of a wonder, because in many markets it's not true. Business, like other elements of society, are compelled to self-censor significantly or be marginalized by a powerful state. The US brand holds out the promise that businesses, civic organizations, and individuals can voice dissent and still thrive.

My point is not that these business leaders seek to replicate the US; they do not. Nor is it that the US has lived up to its brand promise all the time, for we surely have not. But when we do, we build up capital abroad, and an extension of power few nations can match.

Colorado Senator Mark Udall recently said that, in the effort to achieve US security, "The Bill of Rights is the biggest, baddest weapon we have." Pew's just-completed survey from across emerging markets supports Udall's point:

Conversely, when the US does not fulfill its brand promise, we erode our capital and undermine American interests abroad. And there's reason to be concerned that we're doing that today. The decreasing income mobility in our economy; the stalling of immigration reform; the expanding surveillance by our state all erode our brand overseas.

Immigration reform may be the least intuitive of these. I was brought around on this by James I Mwangi, my friend and the general managing partner of the firm where we both worked. Born in Kenya, James earned his way to Harvard and then to jobs with McKinsey & Co. and Dalberg, contributing to US commercial and social wealth while learning skills that would propel him to leadership in Africa. Yet that was not the experience of many other talented Africans who studied in the States. "The U.S. has a resource in Africans graduating from top American schools," he said. "If the U.S. were more open to them staying and working in the U.S. for a few years, you would get several years of good utility from them. It would also cement a really favorable impression of the U.S. with many of the people who will be leading Africa in the future. That would serve the U.S. better than frog-marching these graduates directly to the airport upon getting their diploma."

Immigration reform is rightly the subject of a deep policy debate, as are income mobility and the balance of liberty and security. As we debate the prescriptions, we correctly focus on the consequences at home. However, at the same time, we have a unique opportunity to strengthen or weaken our global brand promise. We should be conscious of the unique power that brand provides. Given the high barriers our rivals face in duplicating that power, we should have a bias towards it.

Taking Your Brand Global Is Easier Than You Think

There's a prevalent myth that I've encountered repeatedly in my years advising companies with intentions of going global — that it's a massive project, one that takes extensive advance planning, and one that only the largest companies can pull off successfully. This conclusion is understandable. After all, it's hard enough to build a business within one's home market.

Recently, I spoke with the head of marketing at a multi-billion-dollar company which had been global for decades, long before it became trendy. In reviewing the countries and languages he appeared to be targeting with his website, I asked him why the company had selected the specific markets they are in today. His answer? "We didn't. It just kind of happened."

This process plays out repeatedly, even among some of the world's largest brands. Take Apple as a prime example. After opening up retail locations throughout the United States, the American stores were flooded by foreign buyers purchasing iPhones in bulk in order to take them back and sell them to the scores of people yearning for these products overseas. At first, Apple didn't target these international customers in a strategic way, which would have been making their products easily available in those countries from the start. Instead, they noted the demand and, little by little, gradually expanded their global footprint; to the point where today, a great deal of their growth strategy is focused on other countries. At the end of their 2012 fiscal year, 83% of new Apple Stores were found in international locations.

While it's true that many companies make a concerted decision to enter a given market, it's actually more common to see the reverse scenario take place — their customers make the decision for them, or at the very least, these customers play a significant role in steering the company toward those decisions. As a result, more and more companies are going global without any sort of grand master plan. Instead, they are easing into an international presence one small step at a time, often learning as they go, creating plans in response to what they learn, and experimenting along the way.

In the past, launching a presence in a new country required an office in that location, several trips to scout out office space, and a significant commitment of both time and money. But in today's digital age, people in faraway places can find your website, learn about your company, and have an experience with your brand. Marketers and brand managers today cannot always control the traffic streams — and their sources — that arrive at their website. Customers are more empowered than they used to be.

Marketers are empowered by this new world order too, but in a different way — through analytics. While they may not be able to strictly control who is visiting their website and where these visitors are coming from, they can use demographic and behavioral data in order to determine the next best steps the company should take. If they see significant traffic from a given country or in a given language, this data can help inform the decision to launch a website for a specific locale.

Yet, sometimes, even when all of the signs are clear that demand exists outside of a company's home market, many companies ignore the data — and therefore, the market opportunity — due to a fear of how hard it will be to expand across international borders. They envision massive up-front costs with unclear return on investment. The word "international" seems far bigger and scarier than it really is.

The problem for many of these companies is figuring out what to do next. How do you capitalize on these signs of potential global momentum?

Add a little fuel to the fire with translation. If you're already seeing international interest among your customer base, consider translating some of your online marketing content in order to make your products and services that much more accessible — and desirable. Don't make the expensive mistake of translating everything at once. Instead, try a "test launch" or a pilot in a given country.

Support your customers without going overboard. Many companies believe that they have to provide full-fledged customer service and support to customers in every language and country into which they expand. The reality is that if you're already seeing interest from your customer base without any support at all, even providing minimal support (online help, for example) will often be a step in the right direction — at least until you have more customers, and therefore more revenue, to fund greater levels of client service.

Increase your sales and marketing presence. As you begin to see more traction from your small-scale efforts, consider amping up your sales and marketing presence for the international locations that seem most promising, using research and your own analytics to inform your decisions. As you see return on investment, you can provide more in-language content and spend more on local campaigns. You might even want to hire salespeople who speak the language of your newfound customers — but they don't necessarily need to live there. You can recruit expats who live in your country but would love to travel back home frequently until you're confident of the need to hire locally.

Decide whether you need a physical presence. You might never actually need a physical office location in the country where your customers are located. Granted, this decision is made easier for dot coms, digital media companies, SaaS developers, and others who primarily sell on the web. However, even if you are selling physical goods, a wiser strategy may be to take advantage of distributors and resellers in order to obtain the same benefits without investing in actually setting up camp in another geography.

Don't panic when you spot global demand for your products and services. Instead, start making small, incremental investments in expanding your global presence. Before long, you'll see that going global is simply a path — not an obstacle course.

How Women Drive Innovation and Growth

Women represent a growth market more than twice as big as China and India combined. They control $20 trillion in global consumer spending, own or operate between 25-33% of all private businesses, and earn an estimated $13 trillion. This "power of the purse" is growing rapidly; expectations are that it will swell to $18 trillion by 2014. For companies that figure out what women want, the future looks rosy indeed.



But CTI research reveals that, while most companies target women as end-users, few effectively leverage the talent most likely to know what these end-users want and need: female employees. Specifically, we find that companies fail to realize the full innovative potential of women in their midst because leadership either doesn't know how to elicit their insights or lacks the perspective necessary to endorse their ideas.

In 2007, Rajashree Nambiar, head of branch banking for Standard Chartered India, acted on a hunch. She hired a firm to survey the bank's female clientele, whom she suspected weren't happy with the service they were getting. Their findings affirmed her own experience: women felt condescended to and intimidated by the male bankers they encountered. So Nambiar proposed that two down-at-the-heels branches in Kolkata and New Delhi undergo a complete overhaul. Not only would the staff, including the security guards, be female; the way they delivered financial advice and even the kind of products they offered would acknowledge women as wage-earners, purse-wielders, entrepreneurs, and family supporters. One such offering, the Diva card, induced them to transfer balances to a credit card that acted as a social club and networking nexus. The bank supported her idea. Between 2009 and 2010, the Kolkata and New Delhi all-women's branches drove net sales up for the bank by 127 percent and 75 percent, respectively, compared with a paltry 48 percent average among its other 90-plus Indian branches.

It's hardly surprising that women have valuable insights when it comes to devising products or services that better serve female clients and customers. What our research shows, however, is that teams with even one woman come to feel the "point of pain" necessary to perceive new opportunities and act on them. For companies tasked with understanding female consumers (and 74% of our respondents work for companies that target women), tapping women improves the likelihood of their success by 144%.

Having women among the firm's innovators is but half the equation, however. Women's ideas won't translate into marketable products or services unless leadership backs them. Consider the Standard Chartered example: Just as important as Nambiar's idea was the environment in which she pitched it. She felt she could afford to propose an unorthodox idea; she believed executives would be receptive to the business case she constructed. Had leadership been less receptive, she might have kept her observations about the problem — and her thoughts on its solution — to herself.

Our study finds that a "speak-up" culture, where all voices get heard and everyone feels welcome to contribute, is indeed crucial to unlocking women's insights. Leaders who make sure women get equal airtime are 89% more likely than non-inclusive leaders to unleash women's innovative potential. Leaders who are willing to change direction based on women's input are more than twice as likely to tap into winning ideas. And leaders who make sure each female member on the team gets constructive and supportive feedback are 128% more likely to elicit breakthrough ideas.

To capture a piece of this crucial new market, our research shows, companies must develop and deploy two kinds of diversity: inherent — meaning more women and people of color make up the workforce — and acquired, meaning leaders behave inclusively to foster the speak-up culture that unlocks a broad spectrum of perspectives and toolkits. Companies replete with both inherent and acquired diversity, we find, out-innovate and outperform the competition. Employees who work for companies like these are 45% more to report that their company improved market share in the last 12 months. And they're 70% more likely to report that their company captured a new market in that time frame. That's a remarkable testament to the impact of diversity — not just on innovation, but on market growth.

Bottom line? Companies don't need more Boy Geniuses. To court the $20 trillion market of female consumers, companies need to get serious about leveraging female talent.

The Steep Psychological Price of Starting Your Own Company

Too High?


"Fake it until you make it" might sound like a manageable way to approach your entrepreneurial efforts, but it's also worth considering this man-riding-a-lion analogy from EnSite Solutions CEO Toby Thomas: "People look at him and think, ‘This guy's really got it together! He's brave!’ And the man riding a lion is thinking, ‘How the hell did I get on a lion, and how do I keep from getting eaten?’" This quote is only one of the candid and deeply felt points relayed by the entrepreneurs interviewed for this piece on the anxiety, depression, and stress that often go hand-in-hand with building a start-up (95% of which fail). The good news is that people are slowly talking publicly about their bouts with depression and the factors that lead to it. Vulnerability, says former entrepreneur and psychiatrist Michael A. Freeman, might actually be a positive trait for leaders to have. He also suggests that redefining failure, keeping close human connections, and separating net worth from self-worth can go a long way in easing a mind amidst the chaos and competition of building a company from scratch.

What a Shirt Can (and Can't) Do

Kevin Plank, the Man Under the Armour Men's Journal

Under Armour, a $2 billion company known for its tight-fitting, sweat-wicking clothing, is run by Kevin Plank, a man who legendarily took a simple idea — making workout clothes more comfortable — and built it into an empire. And now Plank, with his innovative foresight and devotion to the city of Baltimore, is making his biggest bet yet. In this glowing yet skeptical-in-all-the-right-places article, Jason Fagone introduces readers to the SpeedForm, a shoe made in a bra factory that just might be Under Armour's best chance at chipping away Nike's 40% hold on the athletic shoe market. Plank says the shoe is cheap enough to be made in the U.S. — and could bring 25,000 jobs to Baltimore. But he's not just trying to save his city while simultaneously beating Nike. By joining the Head Health Initiative (a joint technology venture between the NFL and GE that focuses on detecting and preventing brain injuries), Plank is also not-so-subtly getting his foot in the league's door — one that's propped open by Nike (of course), which currently holds the contract to make NFL uniforms. But measuring heart rates with clothing is one thing; preventing brain damage is another. As Fagone claims, "innovation probably can't do anything to protect the shy sack of mayonnaise that is the human brain if the human it belongs to is hitting another human with the force of 15 to 20 Gs." This all begs the question: when you have both the best of intentions and the desire to cut into a market, where's the line between doing good and losing track of its feasibility?

Go Figure

Why Job Dissatisfaction Diminishes Auditing Quality Australia School of Business

In the up-or-out world of Big-Four accounting firms, turnover among junior auditors is a fact of life. No one expects these people to be happy, and if senior management pays any attention to them, they tend to worry only about making sure the few obvious stars aren’t among the disgruntled masses thinking of leaving. But a new study by Australian School of Business accounting professor Gary Monroe and colleagues suggests that these firms might want to take a closer look at life at the bottom of their organizations. The researchers asked 76 young auditors in Malaysia, most of whom worked for one or another of the four major accountancies, to rate their job satisfaction and then asked them to weigh in on a tricky inventory valuation. The unhappy juniors consistently rated the value of the inventory higher than their happier counterparts. Why? The researchers chalk it up to an unconscious desire to please the client in an effort to open up future employment opportunities — a mind-set that, the researchers argue, exposes their employers to significant risk from both inaccurate work and the appearance (if not the fact) of a conflict of interest. —Andrea Ovans

Can They Sense My Dislike of Ben Roethlisberger?

Scientists Seek to Help Advertisers Capitalize on How We Watch Sports The Guardian

With DVR and iPhones (not to mention regular trips to the fridge for a beverage) keeping us nice and occupied, it's no secret that advertisers are scrambling to figure out how to keep TV viewers engaged. And because sporting events are more likely to keep viewers engaged during the entirety of a few hours, the financial stakes for companies and networks are astronomically high: Verizon, for example, spent $345.5 million in 2011 on ads, and companies are increasingly wondering whether parting with so much cash for broadcast is actually worth it. MediaScience, also called Ad Lab, is a research facility in Texas that is trying to answer these questions by paying people to watch sports in their building — "resembling living rooms and giving off the scent of fresh linen" — while tracking "which viewing angle of a goal or touchdown makes hearts beat fastest." It's unclear as to whether televised sports will wind up being tested "as rigorously as the sort of consumer goods you can buy in a supermarket," but one of Ad Lab's initial findings — that viewers found an ESPN news ticker helpful, not distracting, during commercial breaks — probably gave the advertisers a brief yet needed sigh of relief.

It Can Be Done!

Making Red Tape Fun Boston Globe

"Papers, Please" is a video game about bureaucracy. Seriously. Jesse Singal goes into detail about the bizarre and sort of brilliant idea behind the dystopian game created by Lucas Pope. As a player, you have a seemingly simple objective: working a border crossing checkpoint to make sure "among other concerns, that the issuing country and city match, that the photo matches the person you’re looking at, and that their documents aren’t expired." Yeah, it may not sound all that fun (or different from your daily slog), but Singal explains that it's compelling because it allows you to carefully think through the everyday decisions we're all required to make under the cloud of time, money, and influence. In the game, you have some power but work for a state that has much more, and you're charged with balancing these pressures. On the one hand, you need to do your job efficiently in order to feed your family; on the other, you might be morally inclined to let a scared asylum pass through the border without proper documentation (something that will cost you). "It's a wonderful example of how video games can be used to help shed light on complicated human social structures," Singal explains. Wonderful, terrifying, and, for some, too close to home. And now I know what I'll be doing all weekend.

BONUS BITS:

Cheers?

How the Coffee Cup Sleeve Was Invented (Smithsonian Magazine)
The Case for Getting Drunk at Work (Slate)
Industries' Dirty Little Secrets (Reddit)