Marina Gorbis's Blog, page 1568

After a Disaster, Who Deserves the Cash?

Camille Biros is the business manager for the Feinberg Group LLP, the law practice that's become the go-to resource for communities coping with tragedy and faced with how to distribute funds to the victims. They've distributed funds after the shootings at Aurora and Virginia Tech, the terrorist attacks on September 11, 2001, and the BP oil spill as well as the Boston Marathon bombings. They're also serving as advisors to Newtown, Connecticut, in the aftermath of their December 2012 school shooting.

Each case has been different — in sheer size, in where the money comes from, and in how the Feinberg Group has distributed the funds. BP provided $20 billion after the oil spill and received over a million claims. 9/11 was "in a class by itself," in Biros's words. Then, the dollars came from taxpayers, and went to some 5,500 claimants — with each claim reviewed individually, a painstaking process that took three and a half years. In Boston's case, charitable donations eventually went out to some 237 people — in just 30 days.

We talked to her about how the firm balances efficiency with compassion. This is an edited version of our conversation.

Why these case-by-case funds? Why not go through a traditional, existing charity?

The American public is very generous and they start sending their checks to an entity — let's use the United Way for an example, or a local entity — and they think that entity will somehow get the money to the victims. But those entities are not designed to do that. What happens is they collect the money and sort of just park it. These types of charitable organizations are used to a community mentality. They ask, "How are we going to use that money to help the community get through the situation?" But what's happened is that [donors and victims] started suggesting that the money should go directly to the victims of these tragedies. That's when we're called in — when the entity is not sure how to handle it, and they want some assistance designing a protocol that's fair as it can be, and fast. The victims don't want to wait two or three years for the money.

Have you noticed a change in the last 11, 12 years in how technology makes it easier to donate? Now it's just, "text this number and donate $10." Has that changed the scale and scope of the giving?

It really has. The Boston Marathon administration that was just remarkable. First of all, the city immediately sprang into action and created their own 501(c)(3). I think the first donation was by John Hancock, a corporate donation of one million dollars, and then the city jumped in to create the OneFund. There was no third-party entity that had to deal with it. And with the online donation capability, the money came pouring in. When they called us in, the fund was between $7 million and $10 million, but we've now distributed over 60 million dollars.

The cases you've worked on are all so different. And yet your firm has developed a sort of blueprint for dealing with these kinds of cases. Is the blueprint flexible enough to deal with the diversity of cases, or do you need to tweak it on the fly?

We definitely tweak it in each situation. Although one thing we don't tweak is that we really feel that the families of someone who was killed should be entitled to a significant percentage of the monies. We have always provided the most for families of the deceased. Now in Boston, we did something a little bit different, since there were some double amputees. We decided that, in our view, that rose to a level of an equal payout as a death claim.

We also tweak [the blueprint] based on the information on the nature of the injuries. For instance, we tend not to provide any payment for trauma victims. In most of these things, everybody is traumatized. But with Virginia Tech, we made an exception for the students hiding under desks in the classroom where the shooter was killing everybody. In Newtown, we're just advisors, so we're not actually distributing the funds, but we recommended that a disbursement go to the 12 little kids who actually witnessed the horror in the classroom.

Thinking about that is just so horrible. It must be really hard to work on those sorts of cases. It makes me wonder — has working on these kinds of cases, which I believe you do all on a pro-bono basis, has that changed what it's like to work at the firm?

Well, Ken [Feinberg] and I have worked together for 32 years, and we've worked on a lot of different kinds of cases. But these are really unique and, yes, they're horrible. Each one is really horrible. We would never take money for doing one of these. We try to do them as well as whatever paying work we have at the time. Some of the smaller ones don't really take a tremendous amount of time, especially if we're just advisors. So in terms of what changes — well, it changes your day, it changes how you feel. You read the file and you see pictures, and that's a little tough sometimes. Especially when it comes to the kids.

What's the toughest part of deciding how to distribute the money?

When you do something like Boston, and you agree to do it and agree to do it very quickly — which was key, the whole idea was to do this in 30 days, and once we received the claim forms we promised a 2-week turnaround — when you do that, you have to make judgment calls. Many people were in the hospital for varying lengths of time, so we used the number of nights in the hospital as a proxy for how severely people were injured, and then gave a small fixed amount for anyone treated as an outpatient... If you are going to do something this quick and this efficient, you can't delve into the medical records and do a complete analysis. You'd need medical expertise. So you just make judgment calls. You just take a look at the horror of each of these tragedies and you figure out what's the worst situation and you go from there.



I can see that there's something really practical about giving money — people have medical bills, or, worse, funeral expenses — but, and I guess this is sort of a philosophical question, do you ever think there's something odd about giving money for something priceless, like a lost limb or — even worse — a lost loved one?

In a way, I totally do. I understand what you're saying. But at the same time, it's kind of wonderful. People think "Oh my God, it's so horrible — I have to do something." With the OneFund, we weren't collecting the money, but people knew we were working on the case, and so occasionally at our offices we'd get a check in the mail for even just 10 dollars. And I'd think, "Wow, all these people who just want to give something." People want to feel that they are doing something.

How Criticism Creates Innovative Teams

It's tough to find examples of successfully challenging the boss, even tougher to find stories of leaders who specifically ask to be challenged. The most common is a tale of Alfred P. Sloan at General Motors. During a meeting in which GM's top management team was considering a weighty decision, Sloan closed the meeting by asking." "Gentlemen, I take it we are all in complete agreement on the decision here?" Sloan then waited as each member of the assembled committee nodded in agreement. Sloan continued, "Then, I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what this decision is about."

What Sloan was looking for was something many of us seek to eliminate: dissent. There's a lot of discussion on how leaders ought to cast a vision, gain buy-in, or steer a group to consensus. There's a lot less discussion on how leaders ought to cultivate a culture that values the right kind of criticism. That criticism is what Sloan was looking for, and what research tells us we need in order to make the best decision.

When ideas are still being developed or decisions still being considered, criticism and constructive conflict are vital to testing the value of the ideas and helping increase that value. Conflict is an indicator that diverse viewpoints are being considered and that the competition for ideas is still ongoing. During this competition, ideas are strengthened through further research, consideration or through the blending of different ideas into one stronger concept. By contrast, when everyone in a group always agrees, it can indicate that the group doesn't have very many ideas, or that they value agreement more than quality suggestions.

In one study of conflict and decision-making, participants were divided into three experimental conditions (control, brainstorming, and debate) and formed into teams within those conditions. Each team was tasked with generating ideas for the same challenge: how to reduce traffic congestion in the San Francisco Bay area. The "control" teams were given no further instructions and told to develop as many ideas as possible. The "brainstorming" teams were given the traditional set of brainstorming rules, chief among those rules was the notion that all judgment should be suspended and no idea criticized or debated. The final, "debate" teams were given a set of rules similar to the "brainstorming" teams but with one important difference. Instead of deferring judgment, they were told to debate and criticize others' ideas as they were generated.

When the results were calculated, the winners were clear. While teams in the brainstorming condition did generate more ideas than the teams given no instructions, it was the teams in the debate condition that outperformed the rest, producing an average of 25 percent more ideas than the other two conditions in the same period of time. Even after the teams had disbanded, the influence of criticism on generating ideas continued. In follow-up interviews with each subject, researchers asked the participants if they had any more ideas for solving the traffic problem. Each participant from the control and brainstorming conditions did have one or two more ideas, but participants in the debate condition gave an average of seven additional ideas per person. Teams that utilized conflict in their process consistently outperformed teams that focused on cohesion. In a summary of the study's results, the researchers write "Our findings show that debate and criticism do not inhibit ideas but, rather, stimulate them relative to every other condition." The researchers had discovered what Sloan seemed to already know, that cultivating criticism and dissent could yield more quantity of ideas, and that quantity could help make better quality decisions.

Sloan wasn't the first to recognize that dissent and criticism could help strengthen decision. One organization has been doing it for centuries: the Catholic Church. Starting with Pope Sixtus V in 1587, the Catholic Church assigned one special dissenter to find and present reasons for why nominated candidates should not be canonized as saints. This person was referred to as the Defender of the Faith, or more commonly the "Devil's Advocate." Taking special care to consider a dissenting view provided an alternative perspective that strengthened their decisions. From 1857 to 1983, when the Devil's Advocate policy was removed, 98 individuals were named saints. From 1983 until today, over 500 hundred people have been granted sainthood. While it's difficult to compare the quality of decisions before and after the reform, the impact of the policy on the Church's decision-making process is clear.

If assigning a lone dissenter to be the bearer of bad tidings may not suit your team, consider the technique used by a notable but vastly different organization: Pixar. During the long process of creating a blockbuster film, the teams at Pixar rely on criticism to make their work stronger. To keep the benefits of criticism without the negativism, Pixar uses an idea called "plussing." Plussing means that anytime someone comments on another work, that comment must contain a "plus" — a way to improve or build on the work. Plussing gives the director or animator something they need besides just a critique, it gives them a place to build from and improve their work. Through plussing, Pixar has found a formula for keeping criticism positive, while positively improving the quality of their work.

Whether you rely on centuries old techniques like the devil's advocate, new methods such as plussing, or just choose to postpone meetings until someone brings in a counterpoint, your teams will make better decisions when you cultivate a little positive criticism.

Poor Fitness Spreads Through Peer Groups

A study in which college students were assigned to spend most of their time with 30 other randomly chosen undergraduates shows that people may adopt the diet and exercise patterns of the least fit within a peer group, says a team led by Scott E. Carrell of the University of California-Davis. The data suggests that if half of your friends were to become among the least fit (for reasons unrelated to you), your own fitness level would drop by nearly 20% of a standard deviation. The people most susceptible to being influenced by the least fit are those who are already struggling to maintain their fitness, the researchers say.

Exploit IT for Strategic Benefit

IT leaders have long embraced the idea that the role of the IT unit, and of enterprise IT systems, is to enable business. However, when we ask CIOs how their "enabling" is going, they consistently respond that sometimes it goes well; sometimes not so much. In the digital economy, as IT becomes ever more integral to the strategic initiatives of firms, "sometimes" is not good enough. Companies cannot fritter away their valuable resources, whether in the form of money, systems, or most importantly, people.

We argue that leaders should stop thinking of IT as Enabling and start thinking in terms of fully Exploiting IT to strategic advantage. The word, Exploit, makes some IT leaders squirm. But the definition of exploit is "to employ to the greatest possible advantage." More specifically, the idea is that IT leaders should refuse to allow their companies to request systems that will not be used effectively or that aren't integral to business success.

At a recent CIO roundtable, one CIO said that the demand for IT in his company is infinite. Infinite! And other CIOs nodded in agreement. If that's the case, why would any company allow a business change initiative to fall short of its promised business benefits?

Business change initiatives (those that involve IT projects) engage enormous resources — not just IT and financial resources, but human time and emotion. These are finite resources. As another CIO noted, companies also have limited capacity for change. Every project needs to justify not only the resources it consumes but the alternative opportunities that the company cannot pursue because everyone will be busy implementing the chosen initiatives.

At most companies, business and IT leaders cannot immediately answer the question, "What percentage of your projects fully realize their expected business benefits?" Every manager in the company should know the answer to that question. Case studies at MIT's Center for Information Systems Research suggest that if people don't know the percentage of projects that meet their business objectives, the percentage is probably very low. That doesn't bode well for business success.

Of course, no company intentionally fritters away critical resources on under-used or ineffective systems and business changes. It's hard to get this right. How do great companies exploit IT? Here are 3 things that can make a difference:

Perform regular post-implementation reviews. Most companies write up a business case to explain the expected business benefits that justify the investment of company resources in a new project. But many companies fail to check if the benefits were ever achieved. That kind of follow-up is essential. This is not a matter of figuring out if a project was on time and on budget (although surely someone wants to learn that as well). This is about engaging project sponsors, system users, architects, and development teams in a clear understanding of the actual value received and how that relates to the business case originally used to justify the project. This exercise often identifies opportunities to drive additional value from existing systems. It also educates everyone involved so that future business cases become increasingly realistic. One financial services company we know reviews the viability of the business case at every major stage gate. If changes in technology or markets are challenging the likelihood that the business case will be realized, project sponsors have two choices: stop the project or revise the business case to reflect what they believe they will be able to achieve. This company gets a huge return on its IT investments.

Limit the number of people who can make project requests. Companies that use IT most strategically allow only a select group of senior leaders to request a project. For example, at Tetra Pak, the Swiss packaging company, the role of IT is to minimize the cost of business operations and facilitate global growth. To make sure that IT and business resources stay focused on that objective, only the company's high-level business process owners can submit project requests. These high-level process owners report to members of the senior executive team. The effect is that Tetra Pak is investing its business change resources (IT and non-IT) in enhancing global processes and related data. There are many things companies can do with IT, but if management doesn't establish priorities, it's easy to do many things badly. Tetra Pak has implemented standardized processes across 170 countries.

Think speed not functionality. The best way to get value from IT is to finish projects quickly and get people to start using new capabilities. USAA, the Texas-based financial services firm, closely monitors the average number of days required to complete projects. Since projects differ in scope and complexity, many IT leaders resist using this metric. However, if the CIO forces measurement of the time required to complete projects and then insists on lowering the average, people throughout IT — and eventually the business — will start looking for ways to reduce the scope of every project. They will break up big tasks into a set of smaller tasks. That effort will get technology into people's hands sooner — and accelerate the speed at which the business accrues benefits from IT.

All three of these activities are becoming habits in companies that get great value from IT. They are fully exploiting IT and, in doing so, identifying new opportunities for developing additional IT assets that can be further exploited. A bonus result: IT leaders have a better sense of what makes the business tick, and members of the executive leadership team have a better sense of when and how to make IT investments that matter.

Reinventing Corporate IT
An HBR Insight Center





IT Cannot Be Only the CIO's Responsibility
CIOs Must Lead Outside of IT
You, Too, Can Move Your Company Into the Cloud
The CIO In Crisis: What You Told Us

Innovation Needs a Lingua Franca

Shortly after my 21st birthday, I went on hiatus from university, and lived in Uruguay for a year as a missionary. Because I had studied Spanish in school, I thought I knew Spanish. It turns out I didn't; I could say little, understand less. After eight months, when I was assigned to a town in the interior of Uruguay where no one spoke English, I finally learned to speak, understand, and even think in Spanish. I had to, to survive.

In retrospect, as I look to implement disruptive ideas there are several lessons to be extracted from my experience of "do or die" language immersion:

The importance of translation. A decade ago, when I was still a sell-side analyst at Merrill Lynch, I had what I thought was a brilliant idea: invite our female institutional investor clients to a screening of a documentary about women on Wall Street. Ten years ago screenings were much more expensive, and still rather exclusive. Importantly, none of our competitors were doing anything like this. I was confident that inviting female clients to see a movie about women juggling career and family life would be a relationship-building event, paying off over the long haul. In retrospect, I had forgotten to convert my ideas into management's currency. If they were speaking costs in dollars, I needed to speak revenue in dollars. When I didn't, my idea got lost in translation.

The importance of speaking a "foreign" language was reinforced recently when I needed a new slide depicting the gears that drive innovation for one of my speeches. Because I don't speak graphic design, my explanation to designer Brandon Jameson went something like: "Uh, I kind of want this squiggly line, and these circles somewhere on the page, and the words over here somewhere. You know what I mean?", I finally drew something rudimentary. He did too. My simple attempt to speak in a language my graphic designer could understand, and his willingness to make the effort to understand me, produced a visual far better than I had hoped for.

When we're trying to implement a new idea, explore a dream, or disrupt ourselves, we often have to bridge a language gap: for example, the seemingly impenetrable dialect of technology, or the specialized lingo associated with a particular profession, jargon of venture capitalists, or even the patois of a different team within your firm. I realize now that living in another country was intrinsic in my understanding the importance of translating messages correctly, even when everyone in the room is speaking "English."

Why pulling people in is more successful than pushing them on board. The second lesson I learned was about soft power or the ability to "influence nations far beyond the hard edge of traditional balance of power politics," a concept developed by Harvard political theorist Joseph Nye. As one would imagine, soft power rests on foreign policy and political values. It also relies on culture. The U.S., for example, exerts soft power by exporting over a half a million U.S.-educated foreign students each year. Having lived in Latin America, I was on the receiving end of soft power.

It's true that I was primed to like Latin America, given that I had studied Spanish in school, and felt an affinity with the culture because I was born in a Spanish-speaking country. Once in Uruguay, I came to have a genuine fondness, indeed a love for its people and culture. So much so that when I graduated from college, I wanted my career to include Latin America. And it has. While working on Wall Street, I traveled to Latin America no less than 100 times, first as a banker, then an equity analyst. No employer had to sell me on the region: soft power had already made the sale.

There are a number of ways organizations can leverage soft power. Consider, for example, how ONE, a non-partisan entity that fights poverty and preventable disease, primarily in Africa, launched their ONEMoms partnership that invited and hosted a delegation of American mothers for a visit to Ethiopia last year. Having experienced the inner workings of another country and culture these women became committed ambassadors for the children of Africa.

One of the best ways to exert soft power is to make an organization a great place to work, as Marissa Mayer has done with Yahoo. With employee satisfaction at a five-year high, Yahoo employees have become brand ambassadors. Or consider Hubspot, an inbound marketing software company whose value proposition is soft power. One customer who used to spend $800,000 a year on newspaper ads now spends $12,000 on Hubspot software that helps their business attract customers rather than "coerce" them, with better results. It's easy to want to carry a big stick to get ideas implemented, but I have learned from my experience abroad that inviting people into your world and speaking softly is often the better way.

Why cross-disciplinary collaboration drives innovation. My third lesson — hindsight can be breathtaking — was the importance of reaching across the aisle. Immersed in a foreign culture, an American in Uruguay, I was on the margin of my culture, reaching across to the margin of another culture, trying to meet people in the middle. In this instance, being able to speak Spanish meant I could cross most divides and find the common ground necessary to be effective in my role as a missionary. More recently, I experienced this reaching out into unknown territory in my collaboration with MIT-trained engineer Juan Carlos Mendez. There was amoat separating our respective disciplines; as we did the work of bridging that moat, we each gained new knowledge and insights, and we ultimately co-wrote the HBR piece "Throw Your Life a Curve."

Dr. Belle Liang, professor of psychology at Boston College, explains, "The individual on the margin is associated with two different worlds, but doesn't completely belong to either. While marginal individuals experience negative consequences to their psychological well-being, as a result of an 'in-between' position, there is also a liberating perspective toward both sides of the fence."

A perfect example of this is Dave Blakely, who began his career at IDEO as an engineer. He could have worked his way up to manage technical staff, but instead he volunteered to become a project manager. As Dave made the decision to move to the margin, many of his peers dismissed this an escape route from the rigor and detail of engineering. But by learning to associate himself with two different disciplines, Blakely broadened his skills, so that today he is the head of technology strategy at IDEO — a firm which by the way, has an ethos of managing on the margin.

Innovation happens when we cultivate diversity and cross-disciplinary collaboration, when we play in the in-between. If you've learned a new language or lived in a foreign country for a time, you have likely experienced these kind of mind-opening lessons. This can, at times, feel very unpleasant, just as immersing myself in a new language and culture required a big move out of my normal way of living and thinking. But it's this willingness to live in the unknown for a while that opens a space for truly new ideas. As you are attempting to collaborate, if it feels foreign and outside of your comfort zone, you just might be on the right track. Sprechen sie the language of innovation?

Liberté, Egalité, Fraternité (Unless You're a Working Mom)

There's the Rub


There's nothing new about comparing global policies pertaining to working parents, particularly when it comes to working mothers. But Claire Lundberg, a 30-something mother of an 18-month-old who moved from the U.S. to France two years ago, found that the glorious-sounding parental leave laws in the European nation are just that — the reality is much more complicated. True, France "has both the highest birth rate in Europe and one of the highest percentages of women in the workforce," offering generous four-month-long maternity leaves. But upon further research — and an interview that involved her being grilled about her child-care arrangements and plans to have more kids — it turned out there was a lot Lundberg didn't know about France as an alleged beacon of employment equality. In a 2010 survey, for example, only 25% of French employers said they were "strongly interested in hiring mothers," and 41% feared there would be "less flexibility in the schedules of mothers who worked" (they didn't have this fear when it came to men). There are a whole bunch of other statistics that echo this, and anecdotes about what's called "mise au placard" — when working mothers are frozen out of jobs by being stripped of responsibilities until they inevitably quit. So is there a balance that can be reached for working moms? And would Lundberg have had better opportunities if she had stayed in the U.S.? "I don't want to live (or pay taxes) in a country with a busted safety net," she writes, "but I also don't want that safety net to make the workplace so calcified that there's little mobility."

Forget Instinct

Know the Game, Change the Game London Business School

Does this sound like you? "I had better be incredibly busy; proving to all and sundry how truly indispensable I am. I need to ensure I get the credit for everything good that happens round here, and that my boss can see that I’m too good for the position I’m in now." If so, your mind might have been poisoned by a false belief that organizations are ordered meritocracies in which there's one alpha, a handful of betas, a few dozen gammas, a few hundred deltas, a couple thousand epsilons, and thousands and thousands of zetas. We think this way because we're primates, and primates are innately hierarchical, says Nigel Nicholson, a professor of organizational behavior at London Business School. A better way would be to acknowledge that we all have multiple abilities and motivations, that we all can learn and improve in most of the roles we take on, and that people's talents and interests change with time. In fact, we should be constantly reviewing how well our current positions suit us. There's nothing wrong with competition, he says, but people should compete for a chance to exercise their talents, not to climb on top of one another. —Andy O'Connell

Not That It's Actually Up to You

What's a Fair Price for Medical Services? Washington Monthly

Three times a year, 31 eminent medical specialists gather in the most private of back rooms to agree on what a “fair price” should be for their own services. They are the members of the AMA’s Specialty Society Relative Value Scale Update Committee, “one of the most powerful committees in America that you’ve never heard of,” says Washington Monthly editor Haley Sweetland Edwards. The RUC (pronounced “ruck”) sends its recommendations to the Centers for Medicare and Medicaid Services, which for 22 years has transferred about 90% of them directly into law. “In a free market society, there’s a name for this kind of thing — for when a roomful of professionals from the same trade meet behind closed doors to agree on how much their services should be worth,” Edwards comments sardonically. “It’s called price-fixing.” The RUC basically has de facto control over how about $85 billion in U.S. taxpayer money is divvied up. And that’s just the start of the trouble, as this article, well worth reading in full, makes harrowingly clear. —Andrea Ovans

Staying in the Sweet Spot

Would You Refuse a Promotion to Stay in a Job You Love? Wall Street Journal

It might be hard to imagine wanting to do exactly what you're doing now for the rest of your life. But according to a survey by staffing service OfficeTeam, three in four workers don't actually want to move up, their reasons ranging from being comfortable with their work/family arrangements to not having any interest in becoming a manager. The rub, of course, is that most people in this situation fear being seen as slackers — some companies refer to such employees as "blockers" — and keep their positive feelings about their jobs to themselves. This, however, can lead to communication problems between you, your manager, and your coworkers. And you can have a successful career even after you decline a promotion or other type of advancement. Just highlight what it is about your current job that you love — and how you can continue to develop your skills to make yourself valuable to your company. And always revisit the intrinsic rewards that make work meaningful. Moving up may pay you more, but will you still find your job satisfying? And on the flip side, keep this in mind, from executive coach Debra Benton: "People are more afraid of trying for success and not getting it, than of settling for what they have."

Your Vacation Photos Aren't that Important

Facebook's Surprising Dependency on Premium Content Creators AdAge

Facebook denies that it's a media company. "We actually define ourselves as a technology company," VP Carolyn Everson once said, a bit sniffily. But in the long run, Facebook will inevitably become dependent on providing premium content, says AdAge's Ben Elowitz. Baby pictures and status updates will go only so far to engage the FB's huge audience. The way to build true connection, he says, is through conversation spurred by compelling content. Look at LinkedIn, which launched a content program last year, providing business news and opinion pieces. Traffic and engagement soared. Thought-provoking, emotion-inducing content is the currency of conversation. Without it, Facebook risks fading into irrelevance. —Andy O'Connell

BONUS BITS:

What's in the Piggy Bank

Rich People Who Make $1 a Year (New Republic)
The Case for Paying People More (HBR)
Billions in Debt, Detroit Tumbles Into Insolvency (New York Times)

Six Fundamentals Every Entrepreneur Needs to Succeed

As an entrepreneur who founded and runs a successful and growing business, Getaroom, I see many entrepreneurs with great ideas but no clue how the business will be profitable. For certain websites or apps, if the idea is good enough you can get lucky and sell the business after you get a spike in interest. However, most companies require considerable planning and need both a competitive advantage and a solid business plan in order to succeed. For my company, I focused on a big market and found a profitable and attractive niche.

If you're thinking about starting your own company, here's my advice:

Set realistic expectations.

While enthusiasm and faith are needed when planning out your business, you do want to temper those thoughts with realism. Your projections for the business should not be wildly optimistic so you can manage your expectations and those of any partners. Consider the type of business and industry. Are you selling a lower margin product that will take time to gain traction? Or are you taking a shot with an app that might be a dud or might attract 100,000 downloads a month? Plan for a realistic amount of sales and interest so you can conservatively manage your finances. Are you counting on advertising to bring in customers? Remember that most advertising simply does not work, and you'll need to attract customers through other channels and the power of word-of-mouth referrals.

With Getaroom, I understood the lodging market is massive and knew a niche player could capture a large amount of revenue, but my initial projections were modest and I watched expenses closely.

Have a clear value proposition.

Your product or service should offer true value. The value assessment has to go beyond your own biased opinion. You're invested in the business, so of course you'll feel it has value for your customers. Gather some outside counsel to be sure the value is clear and easily explained to your targeted audience. Envision someone referring your service to a colleague, saying "You need to get Service X because it will help you do A, give you B, and offer you insights into C." If the value proposition is unclear, then you're likely setting up the business for failure. Getaroom.com's value proposition is based upon superior pricing and service. In an environment with rate parity such as in lodging, companies that can offer consumers reduced prices and exemplary service are able to really stand out as valuable.

Offer unique attributes.

Does your intended service or product bring something new to the consumer? If they already possess what you are offering, can get it for free, or can an easily acquire it from myriad competitors, then how do you expect to stand out? Will customers be able to identify and discuss your competitive advantage? Getaroom stands out because it presents a new model for hotel room booking. It features an unpublished rate program which gives consumers typically 10 to 20% (but up to 70%) off standard rates at thousands of partner hotels who want to move room inventory. What is markedly different about the company is these rates are only available through the Getaroom.com call center. The model is also different because we tell the traveler the name of the hotel, but not the actual rate until they book, while other models offer the rate but not the hotel name. We serve a clear segment of travelers who are looking for deals, but who also want to control where they stay. That sets us apart from our competitors. What attributes would set your venture apart from the competition?

Find your niche in a sizable market.

Knowing your clear value proposition and your unique attributes will help you determine where you fit in the market. We don't offer every possible hotel, but we do offer unpublished rates for tens of thousands of the very best. Lodging is a $500 billion annual business, so for Getaroom, we don't require too much of a share of that market sum to reap considerable rewards. Travel is a good market for entrepreneurs, but it's not the place for copycats. You can't compete with big booking sites unless you have an angle. Several of the large online travel agencies have a model of offering access to all hotels in every location; their angle is the sheer breadth of coverage. Others travel sites outsource their call centers overseas and really push all interactions to be electronic.

At Getaroom.com, we are a deal and value site, where we use pricing and a well-trained call center to stand out. We built a U.S.-based call center staffed with highly trained agents so they can offer enhanced services and act more like a travel agent than just a process person.

In large and expanding markets, there is always a value proposition to be found with niche players who can provide a compelling service. In travel, there is always someone looking to help research it, track it, or provide services for certain areas or class of travel. As long as the niche service has a true value proposition and a reasonable market audience, it can pull in profits.

Design a sound business model.

An entrepreneur can have the most unique product offering, one that offers tremendous value, but if her underlying business plan is not sound she has nothing. A quality plan is the key "how" of a business: how you are going to move forward with your service while keeping costs down? How do you ensure there will be demand for your product that can be reasonably sustained over the long term? How will you market your product or service to the intended audience on a reasonable budget? You need to be a hawk on the bottom line and ruthlessly manage top line expenses. The hard truth is that most businesses fail, and not always because the idea itself was not sound. A well-constructed economic plan does not of course guarantee success, but it is necessary and can turn a failure into a learning experience instead of a catalyst for personal financial ruin.

A sound model doesn't mean you can't deviate from the model and innovate when it is the right call. For instance, we instituted flash sales, where travelers have a limited amount of time to book, typically up to 24 hours. We usually offer these sales at 10 to 60% off, which creates an incentive for immediate action. This model is also a great driver for traffic to the site, as these sales are not pre-announced, but just pop up whenever the timing is right.

Pull in customers cost-effectively

Once you have the product or service and a solid plan lined up, you need to drive customers to make purchases. As I mentioned before, advertising typically does not work. Look at inexpensive promotions or contests and your social media strategy as cost-effective ways to attract consumers. Encourage conversations about your brand by asking for reviews or finding a way for consumer-created content that shows off your product's unique features.

While none of this advice may seem particularly surprising, I'm always amazed by how many entrepreneurs have neglected to do this homework before they launch. If you want to beat the odds, make sure you've carefully thought through these non-negotiables before you start your business.

Reinvigorate a Disengaged Sales Force

A stunning 70% of U.S. workers say they are "not engaged" or "actively disengaged" with their work, according to Gallup's ongoing study of the American workplace from 2010 through 2012. Sales reps — the people who represent your firm with customers — are not an exception. What must you do, at a minimum, to regain the trust and recharge the talent of sales people? Two steps are foundational.

1. Understand and communicate, in the C-Suite as well as with the reps, the crucial role played by the sales force in strategy implementation. Some might say that sales forces have less relevance because customers are buying more online. In 2012, according to U.S. Department of Commerce data, online spending reached almost $200 billion. That may sound like a lot, but it's less than 5% of total retail spending (even in a recession) and less than half of what just one retailer, Wal-Mart, sells annually. In fact, if you peek behind the server farms of online firms themselves, you will find traditional face-to-face sales organizations as the engine of revenue acquisition and firm value. At Groupon in 2012, over 45% of employees were in Sales; at Google, it's over 50%; and at Facebook the sales force's ability to translate "likes" into advertisers will make or break that company's valuation and fortunes going forward.

The issue facing most sales forces is not disintermediation. What is true is that online options are realigning sales tasks. Consider the century-old practice of selling cars at dealers. Relatively few cars are actually bought online. But an estimated 80% of Americans first research the purchase via Edmunds.com and other online sources. They visit dealers less frequently and sales reps must be better at closing the sale with more-informed customers. Selling skills are now even more important. The options available to customers put greater pressure on the rep's value-add during the sales experience, and this engagement has implications for the next foundational element.

2. Redesign processes with sales tasks, not the technology, in mind. Many C-suite leaders, years removed from actual customer contact in the field, welcome "Big Data" but don't understand the realities facing their salespeople during an information revolution. It's estimated that each U.S. firm with more than 1,000 employees already has more data in its CRM system than in the entire U.S. Library of Congress. The role of data is not to make a manager sound "analytical." In business, it's more important to be contextually right and make decisions that people can execute effectively than it is to be school-smart or statistically significant.

New technologies can improve lead generation and qualification (through Search Engine Optimization techniques and tailored online communities), determination of specifications (the use of third-party websites, webinars, and online demo's), and price negotiations and closing (online tracking systems and pricing algorithms). But despite good intentions, many Big Data transformations are failing because firms haphazardly download data onto sales reps. Communication is mainly one way and there is too little of it. Smarter firms complement training with use of resources like Darwinator, a web-based tool that enables individuals to vote on ideas in a fast and effective manner. Others help reps cope with the growing analytical requirements of sales tasks through tools like visualizing.org, which helps to convert big amounts of spreadsheet or correlational data into value propositions that can be communicated to customers. Equally important, firms should use these capabilities to off-load administrative tasks from salespeople to increase selling time. And that's a managerial and organizational issue, not simply a data or sales issue. According to Gartner Research, chief marketing officers will soon spend more on IT than CIOs, increasing the need for coordination between marketing and sales throughout the buying cycle at many firms. At a minimum, these groups need a shared understanding of their firm's strategy, value proposition, key sales tasks, and relevant selling behaviors.

Ultimately, companies don't execute strategy; people do. And talented sales people remain the key lever for strategy implementation in most firms. But companies must be worthy of real talent and, to benefit from that talent, provide the right environment for those people to flourish.

Use Catalytic Questioning to Solve Significant Problems

For almost twenty years, I have refined a systematic approach to uncovering the right questions—those that start to unlock entirely different solutions and perspectives—with hundreds of teams around the world, from the C-suite to the shop floor. The method, which I now call Catalytic Questioning, incorporates five simple, unconventional steps to help change our questions — and creatively solve significant problems both in our personal and professional lives:

Step 1: Find a white board or flip chart where your team can do its question-centric work (for what it's worth, standing up seems to jumpstart better questions than sitting down). Step back for a brief moment, take a deep breath, and try your best to check your assumptions at the door. Question-centric leaders like Pierre Omidyar, founder and chairman of eBay, consistently work at "wiping the mental slate clean," tackling a problem with fresh eyes through fresh questions.
Step 2: Pick a problem that your team cares about intellectually and emotionally. Engaging head and heart matter—if your team doesn't care, the next steps will undoubtedly stall. Also, double check to make sure that the problem (or opportunity, for the optimists of the world) is one that you honestly don't have an answer to. It makes the quest much more intriguing.
Step 3: As disruptive innovators, from Albert Einstein to Jack Dorsey, put it, "Question everything!" Engage in pure question talk, with one team member writing down each question verbatim. This gives everyone the chance (especially introverts) to see each question, reflect a bit, and then create even better ones. Don't give preambles to the questions and don't devote any time or energy to answering them. Just ask. Ask as many questions as you can. Go for at least 50, perhaps 75. But don't give up when your mind goes blank around question 35. Savor the momentary dead space and continue the search for even better, more provocative questions, which will come with patience and persistence. It usually takes 10 to 20 minutes to exhaust a group's questioning capacity. Push for exhaustion.
Step 4: Step back and decide which questions on your list seem most "catalytic," or which ones hold the most potential for disrupting the status quo. Focus on a few questions that your team honestly can't answer but is ready and willing to investigate. Winnow your questions down to three or four that truly matter.
Step 5: Get to work! Find some answers. Questions alone might be clever, but as Jeff Dyer, Clayton Christensen, and I found in our research behind The Innovator's DNA , they rarely produce positive impacts. If you prefer observing the world to get answers, go out and make some systematic observations. If you love to network for new ideas, go talk to people who don't think or act like you (those from a different industry or country-of-origin are prime candidates) to get diverse responses to the questions. If you get new ideas by experimenting, go to work with a series of rapid prototypes—fast, cheap, virtual experiments to get instant feedback about which potential solutions matter most. After doing your homework as a team, regroup and use the best traditional brainstorming techniques to leverage all your new input into creating even better solutions to your problem. And if needed, engage the Catalytic Questioning process again to help deliver even deeper insight, and ultimately better solutions, to your challenge.

Becoming a Question Catalyst

At a recent World Economic Forum workshop, this five-step Catalytic Questioning process took 24 minutes. It rapidly engaged the group, turbocharged a subsequent brainstorming session (conducted right after by Tim Brown from IDEO), and helped identify several intriguing new areas of potential industry disruption. During the debrief, most participants agreed that asking nothing but questions was a surprisingly powerful tool for revealing innovative solutions. They left the session highly energized to become even better question catalysts within their everyday work.

Across the globe, I have seen the same process—and success—occur with thousands of executives and entrepreneurs, including Ahmet Bozer, president of Coca-Cola International, who realized, "if your questioning muscles have atrophied, it's time to start exercising those muscles." Catalytic Questioning ensures this essential leadership skill improves over time to unlock even better, more creative solutions. What you discover in this questioning quest might not only surprise you, but may also unearth an entirely new direction for your team, organization, or career.

Why You're More Deferential to Peers than the Boss (in Your Emails)

In emails, employees tend to show much more deference — using hedges and disclaimers such as "This may be a bad idea, but..." — to people at their own level than to higher-ranking employees, according to a study that included an analysis of hundreds of corporate emails. Employees load their messages to peers with deferential and polite language in order to avoid suggesting that they're trying to inflate their own status, say the researchers, who were led by Alison R. Fragale of the University of North Carolina. By contrast, employees' emails to bosses contain relatively few deferential phrases.