Marina Gorbis's Blog, page 1576

The Innovation Mindset in Action: Sir Peter Jackson

Peter Jackson is a game changer who transformed the practice of filmmaking. Like Jerry Buss, who revolutionized basketball, Jackson and other effective innovators share a common set of qualities that we call the innovation mindset: they see and act on opportunities, use "and" thinking and resourcefulness, focus on outcomes, and act to "expand the pie." Regardless of where they start, innovators persist till they successfully change the game.

As an only child, Jackson was often left to entertain himself. His parents bought him an 8-mm movie camera when he was 8 years old. At 16, he left school to work as a full time photo-engraver, saving as much money as he could for film equipment. He began making short films with his friends. These were amateurish horror movies, but they won and had a cult following.

Jackson saw a unique opportunity in making hit movies with special effects that would keep people mesmerized in their seats. He got his first break with the Lord of the Rings (LOR) trilogy.

Jackson used "and thinking." He wanted the highest quality movies AND the lowest cost, so he made all three films in the LOR trilogy simultaneously. Hollywood's regular practice is to shoot movies in a trilogy one at a time, minimizing financial risk in case the first one flops. Lessons learned from the first movie can then be applied to the next, and cash flows from early films can be used to fund subsequent ones. Jackson, however, thought that shooting the trilogy in one go would decrease costs and improve quality. If all three films were shot simultaneously, sets would need to be built only once, rather than built up and brought down three times. Shooting the trilogy simultaneously would avoid the costs of actors' potential salary increases over time, especially if the first film proved a hit, and would also prevent characters from aging (or even dying) between one film and the next. New Line Cinema knew this was a gamble but had faith in Peter Jackson's vision and capabilities, trusting that the series would appear seamless if the three films were shot at once.

Jackson managed what may have been risks in others' eyes by being resourceful and focusing on outcomes.

By being resourceful, Jackson managed to keep costs down to $280 million for all three movies. He insisted on shooting the movie and doing all the animation in New Zealand so he could manage both the quality and the cost, despite Hollywood pressure to use animation studios like Pixar. The result was Weta Workshop—a group of organizations, co-founded by Jackson, and dedicated to special effects for movie and television. Jackson also introduced innovative ways to increase LOR viewership. For example, he made a free video for Air New Zealand to make the "seat belt and related" announcements—using LOR characters. Many who saw it got curious and went to see the movies.

His outcomes and accomplishments were extraordinary: The LOR trilogy made for $280 million grossed $6 billion and won 17 Oscars. Weta has grown to be a well-known animation and special effects company with a special twist on horror, employing thousands of people. With Weta, Jackson achieved his vision of dramatically increasing the amount of work done digitally, without affecting quality. As a result, Weta can digitally create environments, characters, creatures, costumes, weapons, props, and vehicles with animation and real life 3D effects.

In honor of his significant accomplishments and contributions to his country, Jackson was made a Knight Companion of the New Zealand Order of Merit in 2010.

Jackson expanded the pie and completely transformed the movie industry in New Zealand, so much so that Wellington has become Wellywood and filmmakers like James Cameron have purchased New Zealand property. Jackson also expanded the pie by extending LOR's success to others' projects. Ian Brodie, an extra in the films, wanted to write a book about the locations where LOR was shot. Jackson shared all the location details with Brodie and the resulting book, The Lord of the Rings Locations Guidebook, was a runaway bestseller. Jackson allowed Jens Hansen, the local jeweler who made the ring for the movie, to reproduce it. The book and the jewelry expand the audience for the movie, and vice versa.

Sir Peter Jackson is a game changer. He has transformed much more than the movie industry in New Zealand—he has also transformed filmmaking globally.

The Ethics of Using Paid Content in Journalism

In the days of yore, you'd sometimes come across a spread in a tabloid that didn't seem quite right. The typography was off, and the content seemed to make too big a promise: "Revolutionary Formula Lets the Stars Lose Weight without Dieting or Exercise" or "'My Eyesight is so good I can practically see in the dark,' Says Amazed Eye Doctor!" When you put on your reading glasses you might have seen the word "advertisement" or "advertorial" in small print at the top of the page, and felt a little cheated.

Nowadays, marketers are inserting their content in much more effective ways. But that doesn't always mean that they are hiding their provenance. Over the past decade, a new bestiary of ways to get paid-for content directly into the media stream has been developed, some of which directly assign authorship to the company bankrolling them. But what are the ethical lines this paid-for content should not cross?

The public relations and communications company Edelman definitely has a horse in this race, but it has issued a useful paper on the relationship of paid content and journalism, which ends with "An Ethical Framework" that makes some unexpected points.

But before I tell you what I think, I have to do some heavy-lifting on the Benchpress of Disclosure: I did a day of paid consulting with Edelman, working the section that outlines the ethical framework. In addition, I count Richard Edelman and Steve Rubel — Steve wrote the report — as friends. I was frank with them about my discomfort with the practice of paid content, but I still took my fee. And, despite my efforts here to be neutral, I am undoubtedly influenced by my friendship and my paid involvement in the development of the work I'm now commenting on. If these are too many grains of salt for you to swallow, I understand.

Still here? Ok, then let's give it a try.

What the report calls "sponsored content" I prefer to call "paid content." These both can be distinguished from "branded content" — ads designed to look like they're part of the medium into which they've been inserted. These are sometimes called "native advertising," a phrase coined by Fred Wilson that stresses (in the words of Dan Greenberg) "ad strategies that allow brands to promote their content into the endemic experience of a site in a non-interruptive, integrated way."

Personally, I don't want paid content to be part of the "endemic experience of a site." I hate that I literally have to tilt my screen to see the yellow background of Google search results that indicates they're ads. I'd prefer that Google use a fire-engine red background and I'd be willing to bring back the flashing label that says:

"A company paid us to put this here so you'd think it's an honest search result."

I like that Reddit puts a border around links that a sponsor has paid for, that it puts "sponsored link" in bold, and that it includes a "what's this?" button to explain what "sponsored link" means, because we can be pretty certain that the public doesn't intuitively understand this jumbalaya of lingo. And I love that Reddit lets you comment on and upvote or downvote these sponsored links.

The Edelman report sees "three common approaches to sponsored content in the U.S. news media," and anticipates the emergence of more. "Paid syndication" consists of content that the client has paid the medium to insert. "Paid integration" is like product placement for journalism; "the marketer is weaved into a narrative, sometimes overtly." The Edelman report points to BuzzFeed as an example: a "brand's messages are weaved" into the "infectiously popular" posts. Third, there's "paid co-creation," which the report deems a "win for the reader, the marketer and the publisher." "Here an advertiser funds the development and staffing of a new site or section or even an app that currently doesn't exist. The sponsor guides the direction but does not necessarily have day-to-day oversight for the editorial content." The report cites the Forbes BrandVoice program as an example.

My problems with paid content come from asking the obvious question: Does it make the place better or worse? The answer seems clear to me. It puts partisan work that looks like journalism literally next to actual journalism. Even when it is properly labeled as paid for by a company, the proximity of actual journalism can elevate the seriousness with which the paid content is taken. Readers may mistake it for actual journalism if the label is too small or unclear. The wall can be too thin. So, when the Edelman report compares paid co-creation to "a brand naming a baseball or football stadium," I want to reply that when the Washington Redskins take to the field, they're not deciding plays with a concern about offending Fedex.

There are two arguments in favor of paid content that seem to me to have at least some teeth. The first is that paid content can be high quality and worthwhile, following journalistic conventions. It can stay factual and cite sources. This is something Richard Edelman favors. Good. I'm fine with feisty advocacy marketing in which a company makes its case as frankly and honestly as it can. I'd just be happier if the company posted it on their own site.

The second argument in favor of paid content is the one that adds the inevitability to the outcome: many media are desperate for cash. Having these media around directly enhances the ecosystem. So, yeah, maybe paid content brings a systemic benefit... so long as some rules are adhered to. Which brings us to the ethical guidelines proposed by the Edelman report.

Some of the guidelines are obvious: the fact that the piece was paid for has to be prominently and clearly indicated. Edelman says they will "strive to" work with media that support this, although here I'd go Yoda on them and say "There is no strive;" from the day I spent with them, I'd be surprised if they disagree. Likewise, the fifth and sixth guidelines specify that there will be no quid pro quo discussions that attempt to use the financial relationship to influence the media's coverage. To help enforce this, the guidelines say that those who do the media buying will not work with the medium's editorial staff. This is obvious, but it is apparently — and distressingly — not always the case in the industry.

But the guidelines are not just the ones that one would expect.

For example, the third guideline says: "Sponsored content programs will be primarily utilized to amplify that which is owned and/or earned media — not to replace it." That is, paid content should be used to further a discussion that has made its way into the media already, rather than using it as a way to ignite a controversy. This will be hard to enforce in practice both because the line is gray and because it is sooo tempting to buy your way onto the front page. But the intent seems to be to protect the ecosystem from the blatant suborning of journalism, and that's a good thing.

The fourth guideline promises to update news stories to reflect a changing situation, I hope while retaining the original content in one of the standard ways sites do. I think this guideline also means that stories will be corrected when their statements turn out to be factually wrong. If journalists have to do that, so should marketers.

There's a line in the very first guideline that I particularly like, in part because of my personal sideways interest in metadata. (And, awkwardly, it's an idea I suggested.) The industry needs to settle on a clear, unambiguous vocabulary for describing the different ways in which content is paid for. The welter of jargon gets in the way of understanding. And even if the chosen terms are the clearest and bluntest possible, they still should come with a link to a glossary.

Finally, for me, one of the most interesting of the guidelines is #2; "For each piece of sponsored content Edelman produces for news sites, the firm will advocate including the opportunity for the audience to substantively participate in the conversation." This might be in a comment section, but might also entail an AMA at Reddit or some similar forum. If companies follow through on this, it could help to keep paid content honest. Which, if — sigh — paid content is here to stay is the minimal ethical requirement.

Praise Entrepreneurs, Not Cubicle Capitalists

Last week, I observed six senior Fortune 100 executives discussing a desperately-needed digital strategy. They each sported the obligatory hallmarks of business success: expensive Italian suits, carefully manicured hairstyles and company-issued smartphones resting on dark leather compendiums. You could almost smell the overhead. As the meeting progressed, it was clear that these Ivy-schooled individuals were slick, sharp, and well-structured. But when the time came to discuss promising start-ups in their industry, the surprising bitterness began:

"Why are we talking about Company X? I could probably buy them on my credit card."

"We are the kingmakers in this industry. Entrepreneurs should be tripping over themselves just to meet with us."

"I could have joined Company Y in the early days. But I decided to work for a real organization."

As the percentage of U.S. adults involved in start-ups hit a record 13% in 2012, the White House proclaimed that "entrepreneurs are the engine of our economy" [PDF]. But the three-hundred-pound-diet-coke-drinking-pepperoni-pizza-eating-founder in the room is that, in the minds of most American adults, entrepreneurship remains the domain of misfits: an odd pursuit of unwashed nerds that were unwilling or unable to secure real jobs and build "respectable" careers. Said one executive I spoke with: "I struggle to find any value in today's start-ups, because I believe entrepreneurship is all about luck." Another simply proclaimed: "Some choose to make apps and toys. I opted to get a real job." There is evidence of similar pessimism overseas. In a recent study [PDF], just 36% of Chinese students surveyed agreed that "entrepreneurs are popular amongst my friends and family members." Only half agreed with the statement that, "when looking for a life partner for my sibling, we would prefer an entrepreneur over a person who has a job." Even those who actually choose the bumpy path of starting a company often do so out of desperation, not choice. Although start-up ecosystems are surging around the world, it's clear that our negative attitudes towards entrepreneurship require significant reform. Founders, as the Erasure song goes, "need a little more respect."

Instead of rallying behind innovative entrepreneurs, we shower disproportionate reward on the "cubicle capitalists": the salary-heavy, mission-lite brazen careerists who hide behind ever-inflated titles and ascend the corporate ladder with pure personal gain in mind. While writing Passion & Purpose, I met dozens of recent graduates who, rather than applying their newly-acquired knowledge to solve important problems, had prematurely opted to extract value for themselves. Said one young executive: "I had big ideas when I started, but now it's all about getting promoted to partner." Said another: "I know I'm just pushing paper. But I like getting paid six figures for working nine-to-five and ordering room service at fancy hotels." Certainly not everyone who works at a large company fits this description, but most of us know someone who does: the type that creates activity instead of change, engages in endless office politicking and gets more than their fair share of promotions, bonuses and cushy paychecks at a time when the situation calls for bold new ideas. Harvard Professor Deepak Malhotra recently summarized this unfortunate predicament: "If we take more money home than the value we create, we are unintentional thieves. It's really that simple."

Entrepreneurs, we need you.

The pursuit of entrepreneurship, either independently or within an existing company, is not for everyone. Founders face real challenges. Said one: "I can't get a mortgage - the bank won't even look at me." Another lamented: "My wife divorced me because my business failed." Economists would argue that the high start-up failure rate (over 75%) combined with our loss-averse nature means your son or daughter probably should learn how to defend the status quo. But landing a secure, high-paying job is not an excuse to knock the "misfits": the courageous few entrepreneurs who choose to risk their own careers, reputations, and financial security to improve the world for us all.

The irony in the "entrepreneur versus large company" debate is that all of the latter exists because of the former. Those Prada-wearing executives are so precisely because one or more individuals once took a calculated risk with limited resources at their disposal, and built a company capable of providing secure employment to many. But this isn't about pitting those working on start-ups against the corporate types, nor is it about the merits of joining a fledgling organization versus a large company. Being an entrepreneur is a mindset that can be practiced in any situation and regardless of seniority or prior experience. Whatever your title, you are free to choose progress over process. If you manage others, you have the option to usher in real change by elevating those who display true innovation over those simply seeking a promotion.

For all the founders who were ever discarded by the establishment, know that your contribution is valued. My hope? That the tide turns and we begin respecting the very entrepreneurs on which the world is built.

Five Roles You Need on Your Big Data Team

While many companies obsess about how to turn their data into value, we find they spend too much time on the "data" and not enough time on the "people" side of the equation.

Getting the people side of the equation right, however, is not just about hiring the best talent (though that's important, of course). In our experience, companies overlook two critical items: 1) Identifying the roles they really need and 2) building a "customer-service" mentality in their advanced analytics bureau.

The right team

Big Data talent is a critical issue. By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with deep analytical skills, according to the McKinsey Global Institute. But companies need to spend time upfront to identify the kinds of roles they need to make the Big Data machine run rather than just rushing to recruit math and science jocks. While different companies will have different talent needs, here are five important roles to staff your advanced analytics bureau:

1. Data Hygienists make sure that data coming into the system is clean and accurate, and stays that way over the entire data lifecycle. For example, are the time values being captured the same? One data set might be measuring calendar days in a year (365), another working days in a year (260), and yet another hours in a year (8765). All the values have to be the same so that comparisons are possible. Or have old data fields been populated with new types of data but under the old field names? If this is not addressed in the database, new product data may override old product data, rendering a meaningless result. This data cleaning starts at the very beginning when data is first captured and involves all team members who touch the data at any point.

2. Data Explorers sift through mountains of data to discover the data you actually need. That can be a significant task because so much data out there was never intended for analytic use and, therefore, is not stored or organized in a way that's easy to access. Cash register data is a perfect example. Its original function was to allow companies to track revenue not to predict what product a given customer would buy next.

3. Business Solution Architects put the discovered data together and organize it so that it's ready to analyze. They structure the data to ensure it can be usefully queried in appropriate timeframes by all users. Some data needs to be accessed by the minute or hour, for example, so that data needs to be updated every minute or hour.

4. Data Scientists take this organized data and create sophisticated analytics models that, for example, help predict customer behavior and allow advanced customer segmentation and pricing optimization. They ensure each model is updated frequently so it remains relevant for longer.

5. Campaign Experts turn the models into results. They have a thorough knowledge of the technical systems that deliver specific marketing campaigns, such as which customer should get what message when. They use what they learn from the models to prioritize channels and sequence the campaigns — for example, based on analysis of an identified segment's historical behavior it will be most effective to first send an email then follow it up 48 hours later with a direct mail.

It is important to map the movement of data across the Big Data team and ensure that all data hand-offs between humans and machines have clear owners. This mapping ensures that each person in a given role is held accountable for complete delivery, not just for completing his or her individual tasks.

Developing a client service culture

It's demoralizing to build a product or service that no one uses so the burden is on your team to demonstrate how its models can benefit internal business owners. That requires thinking of the business owners as customers. As any good retailer will tell you, you need to understand your customers to be successful. Have regular meetings with them to understand their needs and get feedback on the performance of the team's models. Always ask yourself, "Who in the business will be helped by my analytics?" and "Do they agree you helped them succeed?"

We also see Big Data initiatives fail because the internal customers don't have confidence in the team and don't trust the models. Trust starts with being transparent. Be completely open about who is working on what. Provide estimates of realistic finish times. Be clear about trade-offs when determining which models to build so your internal customers make an informed decision that will get to the best end product.

To ensure adoption of a service bureau culture, measure personal performance by business success not just volume or speed as too often happens. Track how many new models were used by internal customers to drive new results. Some companies have developed bonus criteria for members of their Big Data teams based on how quickly and broadly a model was adopted by the internal customers rather than how innovative the model was. This approach prevents the classic war of words: "I built a brilliant model. It is not my fault no one is using it!" It also nips in the bud the problem of building analytics for its own sake rather than for business impact.

Creating a successful analytics team requires both the right people and the right culture. When it comes to Big Data, your teams should spend less time worrying about crunching it and more time focused on serving it.

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)