Marina Gorbis's Blog, page 1579

The SCOTUS Decisions Every Employee Should Be Talking About

The U.S. Supreme Court in recent years has often ruled in favor of employers in disputes brought by employees, and in the hectic final week of this year's term the Court issued two little-noticed rulings that continue that tack. Both decisions, by identical 5-4 majorities in which Justice Kennedy joined with the conservative wing of the Court, impose procedural requirements that will make it harder for some employees to prevail in cases of employment discrimination.

The first case, Vance v. Ball State University, decided the issue of whether a non-managerial employee with some modest supervisory responsibilities should be treated as a co-worker or as a supervisor in a workplace harassment case. Historically, a supervisor's racial (or religious or ethnic or gender-based) discrimination is directly attributable to the employer — so if a supervisor's racially-based harassment or job decisions create a hostile work environment, the employer is liable. If a co-worker discriminates, however, the employer is liable only if it was negligent in allowing the discrimination to take place, or by failing to take effective steps to protect the victim.

The Court, in an opinion written by Justice Alito, rejected the plaintiff's claim (supported by the EEOC's regulations) that the definition of "supervisor" should be flexible, based on the facts of each case, and determined by the extent of the alleged harasser's authority to assign specific workplace tasks, direct the plaintiff's performance of those tasks, and generally oversee the workplace. Instead, the Court adopted a stricter definition: A supervisor, for purposes of the employer's liability, is someone who has the authority to effect a "significant change in employment status," such as firing or refusing to promote an employee, reassigning her to significantly different responsibilities, or changing substantial benefits.

This is especially interesting given today's managerial and consulting environment, where shifting responsibilities abound. Take this passing observation by Justice Alito, where he addresses this managerial gray area: "Particularly in modern organizations that have abandoned a highly hierarchical management structure, it is common for employees to have overlapping authority with respect to the assignment of work tasks. Members of a team may each have the responsibility for taking the lead with respect to a particular aspect of the work and thus may have the responsibility to direct each other in that area of responsibility." In this environment, basing discrimination decisions on case-by-case determinations of whether the defendant has enough supervisory authority would be difficult to apply. By voting for a black-and-white test — does this person have authority to hire and fire, or not? — Alito hoped to help lower courts avoid this sort of uncertainty.

In second case, University of Texas Southwestern Medical Center v. Nassar, Dr. Nassar, a Muslim of Arab descent on the University's faculty , claimed that his department chair blocked his re-appointment to the staff of an affiliated hospital in retaliation for Dr. Nassar's accusation that an intermediate university supervisor was prejudiced against Arab Muslims. The case went to trial, and a jury found in Dr. Nassar's favor, awarding him $3,000,000 in damages (later reduced by the trial court to $300,000).

Before detailing the SCOTUS decision, some historical background: Title VII of the Civil Rights Act of 1964 prohibits not only employment discrimination based on status (race, color , religion, sex, or national origin), but also retaliation against any employee who brings a complaint based on that status, whatever the merits of the underlying claim may prove to be. The issue of causality — what the complainant must prove in court to establish the causal link between his status or action and the forbidden discrimination or retaliation — had proven troublesome. So in 1991, Congress amended Title VII to make clear that an employee complaining of status discrimination need not prove that his status (race, ethnicity, or whatever) was the sole motivating cause of the discrimination, but only that it was a "motivating factor" for a decision in which other factors may also have been at work. In doing so, however, Congress said nothing about whether that lesser burden of proof applied also to claims of retaliation. The issue before the Court was whether it did apply.

Dr. Nassar argued that it did, and that he therefore need not prove that he would have been re-appointed absent racial or ethnic discrimination; he should prevail if discrimination was a "motivating factor" in the decision, even if not the sole one. The Court rejected his argument, ruling in favor of the university. Justice Kennedy, writing for the majority, relied primarily on the fact that Congress had lessened the burden on employees only in the section of the law that prohibited discrimination based on status, and not in the separate section that prohibited retaliation. Title VII is a "precise, complex and exhaustive" statute barring discrimination, he wrote, and the Court should not infer that Congress meant to amend the allocation of burdens of persuasion in retaliation cases if it did not specifically say so. He goes on to say that the Court cannot infer "that every reference to race, color, creed, sex, or nationality in an antidiscrimination statute is to be treated as a synonym for 'retaliation.'" Dr. Nassar now appears to face the prospect of a new trial, and if he is to prevail again he must prove that retaliation was the sole reason he was not appointed.

In each case, Justice Ginsburg, writing for the four dissenters, criticized the majority's opinion as ill-advised, contrary to EEOC guidance, and needlessly burdensome for victims of employment discrimination or retaliation.

While employers (and especially their lawyers) will welcome these decisions, it is important to keep in mind that neither decision actually softens the long-standing federal prohibition on employment discrimination or on retaliation against those who bring such claims. In the Vance case, the Court moved an amorphous group of non-managerial supervisors into the co-worker cohort, requiring victims of harassment to prove negligence on the part of the employer - a step employees need not take if the harasser is a supervisor with power to hire, fire, or transfer. One question the Court did not answer, however, is whether a non-managerial supervisor whose recommendations for promotions and other job actions are so conclusive that a higher-up need only formally sign off on the paperwork would still be considered a mere co-worker, in the Court's construct.

And in Dr. Nassar's case, the Court stiffened the requirements necessary to prove retaliation — but that ruling does not affect claims of discrimination based on race, color, religion, national origin or sex. And Congress, as it did in 1991, is free to amend Title VII, this time to make clear that retaliation claims must henceforth also proceed on the more employee-friendly standard. Labor and employee groups will likely mount such an effort. Whether this Congress is willing to go along, however, is a very debatable question.

Ten Steps to Planning an Effective Cyber-Incident Response

With cyber criminals successfully targeting organizations of all sizes across all industry sectors, organizations need to be prepared to respond to the inevitable data breach.

A response should be guided by a response plan that aims to manage a cyber security incident in such a way as to limit damage, increase the confidence of external stakeholders, and reduce recovery time and costs.

We've found in our work with large global organizations that many companies do have response plans but don't truly operationalize them. Often, the documentation prescribing how to act in the event of a breach is out of date, inaccessible to key decision makers, generic, unhelpful for guiding specific activities, or some combination of the above.

In many cases, especially in global organizations, response plans aren't integrated across business units. Developing individual plans in silos inhibits the sharing of critical information and best practices and leads to a lack of coordination during large response efforts.

And too many plans sit idle. Organizations that are highly conscientious about practicing fire drills fail to rehearse the steps they would take in the event of a data breach.

Here are 10 principles to guide companies in creating — and implementing — incident-response plans:

Assign an executive to take on responsibility for the plan and for integrating incident-response efforts across business units and geographies.
Develop a taxonomy of risks, threats, and potential failure modes. Refresh them continually on the basis of changes in the threat environment.
Develop easily accessible quick-response guides for likely scenarios.
Establish processes for making major decisions, such as when to isolate compromised areas of the network.
Maintain relationships with key external stakeholders, such as law enforcement.
Maintain service-level agreements and relationships with external breach-remediation providers and experts.
Ensure that documentation of response plans is available to the entire organization and is routinely refreshed.
Ensure that all staff members understand their roles and responsibilities in the event of a cyber incident.
Identify the individuals who are critical to incident response and ensure redundancy.
Train, practice, and run simulated breaches to develop response "muscle memory." The best-prepared organizations routinely conduct war games to stress-test their plans, increasing managers' awareness and fine-tuning their response capabilities.

An effective incident response plan ultimately relies on executive sponsorship. Given the impact of recent breaches, we expect incident response to move higher on the executive agenda. Putting the development of a robust plan on the fast track is imperative for companies. When a successful cyber attack occurs and the scale and impact of the breach comes to light, the first question customers, shareholders, and regulators will ask is, "What did this institution do to prepare?"

Data Under Siege
An HBR Insight Center





How to Have the IT Risk Conversation
Rethinking Security for the Internet of Things
The Escalating Cost of Software Malice
Cyber Security Depends on Education

The Next Big Opportunity for Startups

When I made the transition two years ago from working with a 100 year-old organization — one I had called home for almost eight years — to working with companies sometimes less than 100 hours old, I assumed I would see tremendous differences.

In my early career, I had experienced the textbook definition of outdated management thinking that centered on hierarchy and lack of trust.

Our physical presence at the office during the workweek was considered proof that we were doing our jobs. Someone was often assigned to stand at the door to make note of the people who were more than a few minutes late. Despite the fact that almost every employee was a working parent, if you wanted to see your child in a school play or take him or her to the doctor during work hours, you had to request a half-day off — time off was not allocated in hourly increments. There were also fairly rigid dress code requirements; for instance, if women wore skirts, we expected to wear pantyhose (and this was in 2003).

When I was finally in a leadership role at that older organization, I put a tremendous amount of energy into changing these outdated practices. I reached outside of the non-profit world and outside of our organization (an uncommon practice at the time) to people like Tony Hsieh, Jason Fried, and Seth Godin for insight and examples of what a better workplace could look like.

I think because I found so many examples of innovative workplaces in the startup world, when I transitioned to working with startups I expected that to be the norm. I expected that every founder would be building a company that was innovative not only in developing products but also in approaching the work itself.

There is a lot that is different: An idea can go from concept to creation practically overnight. Red solo cups are more common than red tape. Failure is seen as a bit more inevitable. The ping pong tables and the Kegerator purring quietly in the corner make work at a tech startup look different, too.

However, when you strip away those symbols, what's left are rows and rows of people typing away at computers, looking pretty much like any company in America. Every company, even the massive companies that are now known for having horrible cultures, began as startups with cultures that were often positive and passionate. As new companies are being launched, we have an opportunity to shift that trajectory, but while we're building better products, we're doing very little to build better companies.

In the last two years, I have watched successful startups begin to crack at the seams when resentment and frustration build. For instance, when a new company grew from a team of six people to a team of 90 in less than a year, it appeared that the founders had never bothered to think through things like organizational culture or vacation policies.

I am often astounded by the personnel policies and employee handbooks of young companies that seem to be innovative but have severely outdated policies in place — similar to the policies I had worked to change at my old job.

A serial entrepreneur recently estimated that one-third of startup entrepreneurs prioritize their organizational culture and personnel policies, trying to do something innovative. One-third think about it but follow the template of how things were done in the past. The last third basically don't consider culture at all.

This may be in large part because there are pressures, especially from investors, in the startup community that are driving entrepreneurs to focus on the product rather than the workplace. I've spoken to investors who agree that establishing a good culture is important, but what they feel comes first is creating a viable product that has some potential for creating value or generating revenue. Many investors just want to know that their investments are working tirelessly on making that product happen, even in some cases taking up practices like emailing their investments late at night to see how fast the person responds.

The zeitgeist of the startup world is that if you are not grinding it out, if you are not "crushing it" on evenings and on weekends, then you are not only less likely to make it, but you're also not cut out to be an entrepreneur. It is a hazing ritual that says "you signed up for this. If you want to whine about the hours or about the toll on your life, then go somewhere else."

But it is taking its toll. Suicides of well-known startup founders and the substantial number of people who privately suffer serious depression and other mental health issues are grave examples. Recently, I heard that an anonymous suicide prevention hotline is launching just for startup founders and their employees. This does not provide a good starting point for building organizations with positive cultures that maximize not only employee potential, but organization potential and sustainability as well.

Some may argue that a "survival of the fittest" mentality is essential in challenging professions such as running a tech startup and by weeding out those who cannot make it, you make the whole system stronger. It shouldn't be this way.

Entrepreneurs are faced with a unique opportunity to not only build innovative products but also to build companies that break the cycle and do not play off of fear, false superiority, or treating work as simply an exchange of labor for money. Instead, startups can build companies in which every person they employ can flourish. The world will get better when we build better organizations, not just when we build better products.

Practical Tips for Overcoming Resistance

Although many managers and leaders are under pressure to get things done quickly, pressuring subordinates frequently leads to resistance. This is not due to stubbornness as much as it is due those subordinates simply feeling overwhelmed by the volume of work they have. Emotions also come into play; for instance, if you're trying to get through to an irate customer or shareholder, it can be tough to break through the resistance their anger creates.

To get some tips on how to overcome resistance I reached out to Xavier Amador, originator of the LEAP Method (LEAP stands for Listen-Empathize-Agree-Partner) and Founder of the LEAP Institute and author of I'm Right, You're Wrong, Now What? Break the Impasse and Get What You Need.

MG: Dr. Amador, or shall I call you, Xavier, how did you come up with the idea that we needed a more effective way of overcoming resistance than the usual pushy/persuasive approach?

XA: Mark please call me Xavier. Okay if I call you Mark?

MG: Of course!

XA: Before answering your question, I want to point out something that just happened. By asking me what name I prefer you call me by, you took a step toward connecting with me and not creating resistance — You did this before we were even out of the gate! I practice the same simple habit with almost everyone. Without asking, you didn't know if I would find "Dr. Amador" too formal and distancing, or "Xavier" too presumptuous and disrespectful. Either reaction would have raised a little resistance. And the fact that you pronounced my name correctly — "Javier" instead of "Zavier" — helped too. You obviously took the trouble to find out, or saw me speaking, and remembered the pronunciation. So without hearing one word from me you were already listening. And that's the cornerstone to lowering resistances.

Now to your question: I would love to say the idea was mine, but it's actually ancient wisdom and the result of paying attention to what actually works. The lesson learned is: You don't win on the strength of your argument. You win on the strength of your relationship. And you can strengthen relationships in seconds and easily by putting down your rusty overused communication tools and picking up some new ones. Feedback from thousands of LEAP followers who are owners, CEO's, managers and sales reps reinforced the universality of this vital lesson I learned years ago working with psychotic patients who were literally living in an alternate universe: it feels [like] "What planet is he on?" when someone gives us a reflexive no and resists what is obviously common sense.

You never win on the strength of your argument — or your negatively perceived directive if you are the one holding power in the relationship. Even if your subordinate does what you wanted, the initial resistance will fester and spread as they implement the details. If it was pushed down their throats, instead of something they felt some ownership of, they will resist...[and] it will come back to bite you later. What we hear over and over again is this: "When I stopped trying to convince her and instead focused on listening to his point of view and respecting it, the resistance just disappeared. It happened so fast it felt like magic!"

MG: Why do so many people especially managers and leaders approach resistance in such an ineffective manner?

XA: Because its natural to punch back. It's a lifelong habit most people have. We repeat ourselves, often more loudly and over and over again, when someone hasn't heard or doesn't agree. When I have a good idea, a solution to a problem, or a product/service I know will increase market penetration, I am eager to communicate it to the other person or group. And when I get resistance, it feels like I've been pushed back or hit. And so the reflex is to push or hit back — to counter punch in an effort to show the other side why they were wrong. The reflex is to stand my ground.

This type of interaction looks just like a boxing match. Using LEAP we've learned you can stand your ground without verbally hitting back. Here's the first and most important tool: When you get resistance, [say to yourself], "Shut up, listen and win!"

That's what I say to myself to remember to use the tools I know work. "Shut up" may sound rude and counter productive, but for me it's a splash of cold water. It gets my attention so I can stop dismantling and start using my authority to build stronger relationships. That's the prize, a strong relationship. Strong relationships are the key to meaningful and effective partners and work relationships. Nothing else comes close to being as important. No productive business can exist without strong relationships — think about it. And yet, too often, we ignore the "state of the union" while resistance, defensiveness and even tempers are on the rise.

Now that you've stopped talking, to show you listened, repeat back what you've heard "So you don't think this will work and it's a bad idea because.... Did I get that right?" Just listen and make sure you've heard it the way the other person meant it.

Then explore just a little bit more. Go for the emotion behind the push back. Empathize. [Say something like,] "Now that I understand your position, I can see why you would be uneasy buying in." Take the resistance that is negative energy and use it, by absorbing it, so the person feels respected and safe, lowers their defenses, and as a result opens up to you.

In this exchange, instead of boxing, the verbal interaction looks more like Jujitsu. You meet the resistance, not with a push or punch but instead with open hands. As the person comes at you with their resistance, with open hands you step aside and embrace the negative movement, use its energy, to move the person where you want them.

MG: What would you say to those who may feel that "lowering their guards" and leading with "open hands" will undermine their authority?

XA: Well first I would listen to their resistance and lower it by communicating my genuine understanding and empathy for it.

With authority comes strength. You can use that strength to strengthen the relationship or to strong-arm the other person and create a resistance movement in your own backyard. You have the luxury of being able to speak softly knowing that you are the one carrying a much bigger stick.

Here's a life and death example of this principle. LEAP-trained hostage negotiators have far superior firepower when they've cornered the person they're trying to persuade, but they approach their subject with an open ear and open hands "Talk to me, tell me what you want?" is what works to engage someone who has taken hostages, and to convince them to release their hostages and come with you peacefully. "Come out with your hands up we have you surrounded and out-gunned," leads to a fire fight. Don't help others hold your ideas, proposals and directives hostage with their resistance by opening fire.

MG: I don't know if this is an example of Partnering with you, or just showing good manners, but Xavier I'd like to give you the final word. Do you have a quote or statement that will help remind our readers of the importance of LEAPing into better communication rather than jumping down people's throats when they are resistant?

XA: I will repeat myself because the following two things are that important. First, if you are getting push-back, shut up, listen and win. And second, remember when you are faced with resistance you never win on the strength of your argument, you win on the strength of your relationship. One final word, I hope your readers will let me know if our conversation helped them by contacting me at XavierAmador@LEAPinstitute.org. Thanks Mark for the opportunity to have this conversation.

Here's How to Actually Empower Customer Service Employees

There is perhaps nothing as fundamental for organizations as customer service. Any company in a truly competitive market suffers an inevitable decline if it ignores this basic discipline for too long. Take McDonald's for example—the organization's recent confession to franchisees that 20 percent of customer complaints are due to "unfriendly service," with "rude or unprofessional employees" as the number one complaint is a reminder that the final customer touch point often determines whether or not customers return. Despite spending nearly $2 billion annually on advertising, McDonald's service frequently leaves a bad taste.

Similarly, Brian Moynihan, CEO for Bank of America, one of the country's largest banks in both assets and branches, has implored employees to improve their relationships with customers. How committed is Moynihan to this? He mailed letters to the homes of 270,000 employees outlining the need to make it easier for customers to do business with the bank. This comes after nearly five years of internal discussions about becoming "customer centric"—more than three with Moynihan at the helm.

The importance (and difficulty) of engaging an organization's "front line" to deliver on the customer strategy has been a recurring topic for HBR. It's one of the fundamentals that companies in all industries must remember to revisit and for some, resuscitate after periods of neglect.

Our research into more than 20 front-line focused organizations (the basis for our recent book Judgment on the Front Line), led us to a set of principles for moving well beyond the basics of customer service by putting power, resources and trust in the hands of front line personnel. By doing so, an elite group of companies has enabled their employees to more rapidly address customer problems, anticipate unarticulated needs and drive customer-facing innovation.

We uncovered information about a variety of companies, ranging from the Ritz-Carlton and Yum! Brands to the Mayo Clinic and U.S. Navy SEALs. Consider what we can learn from the following examples:

Amazon, where CEO Jeff Bezos often insists on leaving an empty chair at meetings to represent the "customer's voice," has a data-driven culture which actively encourages employees to build experiments based on customer insight. Innovations such as shopping cart recommendations have been the direct result of entry-level employees taking initiative. Behavior-based search was first implemented by an intern, resulting in a three percent revenue increase.
Zara, the Spanish fast-fashion company, receives quantitative data and qualitative observations from store managers daily to better understand what customers want. Every day, store staff chat with customers, asking questions like, "What if this skirt was longer?" or "What other colors would you like for this item?" This has allowed Zara to limit failed product introductions to just one percent (the industry averages nearly ten percent) while producing nearly ten times the number of products as its largest competitors.

Even with these successes, we've found that no single organization has all of the answers. But combining effective best practices from these diverse organizations and others provides a methodology for building a front line-focused organization, as well as the leadership required to enable your front line to make real-time judgment calls. This process encourages leaders to break down the individual elements required to build and reinforce front line judgment while ensuring they provide an integrated, systemic framework for action rather than a pastiche of so-called empowerment initiatives overlaid on a command-and-control structure. As companies seek to get more contribution and creativity from frontline personnel, here's a five-step process for moving beyond a suggestion-box mentality.

Step 1: Get Started: Connect the front line to the customer strategy. Paradoxically, empowering the front line starts with senior leaders, who have the authority to ensure frontline voices are heard. Senior leaders need to help match their customer promise to the capabilities of the front line while listening closely so they can help align the culture, training, work processes and reward systems. Yum! Brands CEO David Novak, for example, has given every employee the latitude to spend up to ten dollars to fix any customer problem.

Step 2: Empower Your Workforce: Teach people to think for themselves. Employees at every level need to understand the customer strategy. They also need simple problem solving frameworks that are used throughout the organization to promote cross-hierarchical dialogue. We found that the methodology mattered less than having a shared language and thought process for diagnosing root causes or exploring unmet needs. For example, Ritz-Carlton uses MR BIV as a common framework for spotting mistakes, rework, breakdowns, inefficiencies and variations in work processes.

Step 3: Experiment to Implement: Grant front line workers latitude to experiment. Front line workers not only see service breakdowns but also opportunities for serving customers in entirely new ways. Teaching front line leaders the basics for designing simple experiments enables organizations to test many more ideas than could ever be orchestrated centrally. Facebook puts this into practice during "hack-a-thons" designed to unleash pent-up employee creativity. Vital features such as Facebook Video, which has garnered billions of views, have come from giving individual programmers the time and resources to put their customer insight into practice.

Step 4: Eliminate the Barriers: Break down the hierarchy. Nearly every organization has embedded assumptions about roles and power. Freeing front line capacity requires frequent, diligent effort to eliminate decision processes or administrative work that gets in the way of enabling the front line to expeditiously serve customers. For example, at the Mayo Clinic of Scottsdale, nurses have the power to question any doctor's decision or diagnosis through its "Plus One" protocol, completely breaking down the traditional hierarchy. If nurses - some of whom have far more experience than many doctors - fear for a patient's safety, they can move up the chain of command or bring in a specialist to consult and potentially override the initial care recommendation. The hospital was recently named by Consumer Reports as the safest teaching hospital in the U.S.

Step 5: Invest in Your Frontline: Put budget behind it. Too often, companies reserve big budgets for senior management training while spreading funding thin for front line personnel. Similarly, too many companies are content to hire front line staff without carefully considering whether they possess the right attitude and values to represent their brand. At Zappos, it's not unusual for someone interviewing for a $13-per-hour call center job to meet with 15 people before being hired. If they do get the job offer, they will be required to sit through several weeks of training, including listening to recordings of real customer interactions, before they ever work a full day.

Delivering a great customer experience is a fundamental that every company needs to practice, and organizations that excel in this area focus on how to get the most from their front line. As companies such as McDonald's and Bank of America reconsider how their employees interact with customers, they will be challenged to move beyond just rhetoric. If they are truly serious about turning their people into their greatest asset, they'll invest in the front line.

Why You Might Make a Better Decision After a Quick Game of Solitaire

Research participants were nearly twice as likely to give the correct response to a complex decision-making problem if they were distracted by a simple three-minute number-matching task before being asked for their answers, says a team led by Marlène Abadie of the University of Toulouse in France. A more-demanding distraction had no such effect: Participants had a 75% chance of giving the right answer after the easy task, but just a 40% chance after a tougher task or if there was no distractor at all. During an easy distraction, the brain seems to unconsciously enhance the memory of a problem's essence, the researchers say.

Your Brand Is the Exhaust Fume of the Engine of Your Life

"How do you manage your brand?" I get asked that question really often, especially at public-venue speaking events. Typically, I sigh. It is not that the question is silly, or the questioner shallow, but because this question itself represents so much of what is stopping all of us from doing work that matters.

We talk about "reinventing your brand" when in reality the goal is to reinvent what you work on. We talk about the "brand called you" when we talk about being able to do more of the work you love to do. We talk about ways to "deliver on the impact equation" without asking first, "what is it you want to impact?" We are told by marketing gurus that "everyone now owns a media company!" — as if somehow this is, itself, the goal — rather than a means to an end. Marketing has become the default language — the lingua franca of the day — that we use to describe work, and it is distorting how we evaluate what matters.

Yes, it's true that web tools can let you be known for the work you do more easily and more cost effectively, letting you own how you present yourself to the world. But that's probably the least interesting thing about these social constructs and social media tools.

The much more relevant point is that you now get to create, share, and connect ideas with others to do work, ideally meaningful and impactful work. As in the person who was able to accelerate scientific research because of the online game, "Fold It." This particular game enables important research in the medical field, research that is usually conducted by scientists with PhDs. But making it a game that anyone could play allowed someone "unexpected" to help. A woman who worked as an executive assistant by day turned out to be the best protein folder in the world at night.

As I've written in more depth elsewhere, connected individuals can now achieve what once only centralized organizations could. The implications for this are huge. It changes the basis of market power for organizations because size no longer protects competitive advantage. It changes management because people can figure out for themselves what needs to be done to implement the larger strategy. It changes careers because we no longer need to belong to an organization to be able to create scale or impact. You don't even need to be "old enough" — five-year olds can invent consumer goods products. Today, what matters is the ability to create, not the ability to first prove you can.

So let's stop using the language of marketing to talk about meaning.

The truth is this: The brand follows the work. Your brand is the exhaust created by the engine of your life. It is a by-product of what happens as you share what you are creating, and with whom you are creating.

It is a sign, yes. Significant, yes. But the real signal comes from being able to answer these two questions:

What is it you care about? It takes courage to find and follow an individual path; finding our own path takes us off the path that others are following, in directions that can seem distinctly alone. Each of us is standing in a place no one else stands in as a function of our history, experience, vision and hopes. I call this onlyness, that thing that only you can bring to any situation. Go with it, and you end up being able to design your own life — and maybe redesign entire industries, too. At the very least, it lets you improve the results of any group you are a part of. Berkeley professors Charlan Jeanne Nemeth and Jack A. Goncalo have proven that "minority viewpoints" aid the quality of decision making by juries, by teams, and for the purpose of innovation. In other words, even when distinct points of view turn out to be wrong, speaking them lets everyone think better, create more solutions, and improve creativity. But if you don't know what it is you care about and why, you lack the ability to contribute meaningfully.

How will you find and work with allies? While it may be lonely to step into your own path, once you do, you attract those with affinity. The clearer you are in your onlyness, the strong your magnet for the right people for you (and possibly repulsion for others.) This is a good thing. It helps you find, filter, and formulate. It eliminates wasted effort to convince those who will never be convinced. It lets you know what kind of workplace is right for you, and it lets you find the right people for your projects. It lets you align in purpose with others. Esther Dyson points out that the "trick today is not just to find the right target (that is, a person), as social networks such as LinkedIn and search tools can do, but to enlist allies and manage the work to achieve a specific goal." (Emphasis mine.) Proximity used to reign supreme — where you lived, what school you went to, and whom your parents knew was more of a factor in what opportunities you had. Proximity is still one factor, but in the social era, the other four Ps of community end up growing in importance and power. Communities of passion who share a common interest (photography, or food, or books) can inform new product lines. Communities of purpose willingly share a common task to build something (like Wikipedia) together. Communities of practice, who share a common career or field of business, will extend your offer if it extends their expertise (like Intuit has with its accountant community). Communities of providence allow people to discover connections with others (as in Google+) and thus enable the sharing of information, products, and ideas.

Just recently, I passed up an opportunity to serve on a Fortune 100 Board of Directors. The company has a well-known history of dysfunctional board dynamics and it became clear to me that there was little one person could do to change it. When a friend asked why I was still considering the opportunity, I answered, "It would lend me legitimacy." When I heard those words come out of my mouth, I knew I had to turn it down. If I'd said yes, it would have been because of "brand" — because I'd want readers like you to see me with more esteem. But in truth, it wouldn't have meant I was doing more good work.

I've studied how actual value is created for over 10 years now, and what I know to be true is this: While what people think of us does matter, what matters much more is our ability to do and deliver. That's what makes the ultimate difference in the world. And that's what reputations are really built on. That's what will draw people to you.

Yes, we are in the middle of a vast sea change in which social can put the power of connection to work to solve meaningful problems. But in order to do that more meaningful work, we need to recognize what is holding us back. In a world of "personal brand" and "leadership brand" and "personal reinvention" and so forth, we should not forget: the real signal is the work itself, and the social signaling is just its echo.

Why I Phished My Own Company

Ten months ago, I was in charge of digital technology for the White House, where security was the top priority and it was inexcusable to let your guard down. Today, I make strategic and tactical technology decisions as the CTO of Atlantic Media. In a media environment, security is often trumped by functionality, convenience, or cost. It's frequently seen as peripheral or even an impediment to business operations.

In fact, many organizations face a similar problem: Tighter security introduces minor inconveniences into workflows, so employees don't comply. In Verizon's Data Breach Investigations Report, 97% of breaches could have been avoided through easy, simple controls. According to one study, 91% of all cyber-attacks are the result of phishing emails, another completely preventable attack. From my position, those are horrible odds. I would be guilty of dereliction of duty if I didn't take steps to mitigate this risk.

But how would I go about it? Would it start with educating the employees at my company? The problem with this solution is that people are inherently fallible. They will make mistakes, regardless of awareness training. Unfortunately, for most people, the cost of modifying comfortable behavior is too high. To the average employee, fixing bad digital habits yields intangible benefits and often creates annoying inconveniences.

Another strategy is to issue a corporate dictum announcing tighter security policies, though it likely would be perceived as draconian. This policy would be more effective than a call to take personal responsibility, but still doesn't address the fact that most employees don't fully understand why they need to change habits. Digital naiveté leads people to believe that bad things won't happen to them. (I should introduce them to Matt Honan.)

What about mandating tighter security policies on your systems — stronger password requirements, for example? Increasing the length and alphanumeric complexity is more secure, but introduces the issue of employees not being able to remember their own passwords. This solution erects a barrier, which will be perceived as hindering daily operations. Employees will receive the (intangible) benefit of security — which, to many, will seem more like a costly burden.

None of these campaigns were going to sell the benefits of greater security — not until employees understood the threat's reality. The only way to affect systemic, lasting cultural change at the company was to make the cost of not changing bad digital habits greater than the perceived cost of changing them.

To do this, I needed to demonstrate the ease at which someone could be scammed into handing over their password by sending a fake phishing email to the entire company. I sent the phishing email on a Friday afternoon and two hours later, I had the empirical evidence. Almost half of the company opened the email, and 58% of those employees clicked the faux malicious link.

Rhetoric wouldn't resonate with the masses. But now, I had data to back me up. Through this experiment, we raised that probability of a data breach dramatically. Hacking was now a high cost and probable event. Through company-wide awareness, the experiment's outcome effectively increased the cost of not improving personal security.

The follow-up email I sent to the entire company was sobering and extremely effective. We had irrefutable evidence to support an upcoming policy change, which would have been viewed previously as constrictive.

The company would enforce 2-step verification for all employee email accounts, which requires a second action (like entering a six-digit code from a text message) after entering one's password. This is a vastly superior form of security: Even if someone steals your password, they will be unable to hack into your account without also stealing your phone. Major social networking sites like Facebook, Twitter, and LinkedIn use similar log-in mechanisms.

The phishing experiment attained the crucial buy-in of employees; now that they personally understand the dangerous implications of not following the rules, they're more willing to take data security seriously. People are more apt to learn from an experience than listen to a recommendation or policy. Just like a regular office fire drill, senior leadership should be running random phishing drills to give them that experience. And, the experiential learning doesn't stop with these emails.

Placing someone in a cyber attack drill is the safest and most effective tactic to build the company's collective security intelligence. It successfully opens everyone's eyes and paves the way for a serious conversation about the initiatives I mentioned above — increased training, more effective policies — and this time, our employees just might listen.

Data Under Siege
An HBR Insight Center





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When Your Work Holds You Hostage. Literally.

Long Hours at the Desk


This week's "Seriously, that happened?" moment comes in the form of American medical-supply executive Chip Starnes being held hostage for six days by 80 employees at the company's factory outside Beijing. The hostage-takers, worried that he was in the process of shuttering the factory, were demanding severance. Starnes was released after both sides reached a financial settlement. The situation, while extreme, is a symptom of increasing worker nervousness about foreigners leaving them unemployed and unpaid on a whim. While there aren't hard numbers on how many times captive-taking has occurred, a thousand workers held a Japanese boss hostage earlier in 2013. Owners do have a nasty habit of walking away from manufacturing plants, especially given rising wages and labor shortages in parts of China. The Economic Information Daily newspaper says more than 400 bosses abandoned their factories in a single province in 2008. And because most of these operations were foreign-owned, there was little the employees could do to recoup losses. Legal analysts interviewed for this piece stressed that miscommunication is often at the root of such incidents, and that workers are often unaware of their rights. In the end, there's some fear that foreign companies will be less inclined to set up shop in China, though the perks right now for doing so seem to outweigh the risk of being confined to your office for a week.

TGIT

Why Four-Day Workweeks Are Best CNN

When the owner of a graphic design firm started giving herself and her employees four-day workweeks, she saw it as a temporary solution to a problem — namely, that she was having a hard time getting around after knee surgery. Three years later, her firm is still on a four-day schedule (her knee is fine). The company has grown by 20%, and she says the short week has "played a role for sure." A number of organizations have tried the four-day workweek and found that they like it: When the state of Utah introduced four-day schedules for many of its employees in 2008, the move boosted productivity and worker satisfaction (the state reverted three years later, after residents complained about not having access to services on Fridays). And software CEO Jason Fried wrote in the New York Times that when his firm is on a four-day schedule, from May through October, less time is wasted, and people focus more on what's important. Besides, we all work weekends anyway — what's the difference if the weekend is two days or three? —Andy O'Connell

Selective Bidding

How eBay Uses Data and Analytics to Get Closer to Its (Massive) Customer Base Sloan Management Review

There's Big Data and then there's Big Data at eBay. The site, which spans 30 countries, has more than 1.5 million sellers and 100 million registered users. Leading the daunting task of collecting all the data on these people, crunching it, and improving the customer experience is senior director of research Neel Sundaresan, who gave a lengthy interview to MIT's Sloan Management Review. Sundaresan stresses that employees in today's companies must be data driven. That doesn't mean everyone needs to handle the data, but everyone must understand where it comes from, how it's parsed, and what's significant about it (and what's just noise). "Otherwise,” he says, "you will make decisions that are not data-driven, which won't be correct in this new world." And in this new world, you have the power to not only ask your customers what they think but also to combine that information with knowledge about what they do. EBay's biggest challenges? How to manage the collection of more and more data, and how to figure out whether available analytics tools can keep up with the deluge.

Down, Down, Down

Opinion Briefing: Brazilians' Growing Discontent Gallup

For a granular look at what's eating Brazilians these days, check out this Gallup report on the state of the country's discontent. Satisfaction with services and quality of life started diving in 2011: Brazilians' satisfaction with the availability of quality health care in their communities fell to 25% in December 2012, down 16 percentage points since 2010 and a new low. Slightly less than half (48%) were satisfied with local schools, down nine points — again, a new low. The proportion satisfied with their local roads fell to 44%, down from 53%. For public transportation, the figure is 48%, down from 56%. Seven in 10 Brazilians believe corruption is widespread, up nine points, just 47% approve of the county's leaders, down from 68%, and only 36% feel safe walking alone at night, down 12 points. All this as Brazil is spending billions to host the world at the World Cup and Summer Olympics. Recent protests are sending the government a simple message: It’s misplacing its priorities. —Andy O'Connell

Hunt and Peck

Is Your iPhone Turning You Into a Wimp? Working Knowledge

Your contracted posture when you're hunched over a smartphone affects your behavior. In an experiment, people who had been using smartphone-sized iPod Touches were 47% less likely than desktop users to get up and try to find out why a researcher hadn't come back after leaving the room to fetch paperwork so that participants could be paid. Of those who did take this assertive action, the iPod Touch users took 44% longer to do it than desktop users. Working at a desktop computer for just a few minutes, in a (relatively) expansive body posture, makes you more likely to engage in power-related behaviors than people who have been tapping away on their itty bitty phones. Maarten Bos, a post-doctoral fellow at Harvard Business School who conducted the research with HBS Associate Professor Amy Cuddy, says he wouldn't go so far as to advise anyone not to fiddle with a smartphone just before doing something that requires assertiveness, mainly because people wouldn't listen to that kind of suggestion. "But if you realize that, 'Hmm, I'm pretty quiet during this meeting,' then maybe you should pay attention to how devices impacted your body posture beforehand," he says. —Andy O'Connell

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How Money Actually Buys Happiness

Warren Buffett's advice about money has been scrutinized — and implemented — by savvy investors all over the world. But while most people know they can benefit from expert help to make money, they think they already know how to spend money to reap the most happiness. As a result, they follow their intuitions, using their money to buy things they think will make them happy, from televisions to cars to houses to second houses and beyond.

The problem with this approach is that a decade of research — conducted by us and our colleagues — demonstrates that our intuitions about how to turn money into happiness are misguided at best and dead-wrong at worst. Those televisions, cars, and houses? They have almost no impact on our happiness. The good news is that we now know what kind of spending does enhance our happiness — insight that's valuable to consumers and companies alike.

Buffet recently penned an op-ed titled "My Philanthropic Pledge" — but rather than offer financial advice about giving, he suggested we give as a way to enhance our emotional wellbeing. Of his decision to donate 99% of his wealth to charity, Buffett said that he "couldn't be happier."

But do we need to give away billions like Buffet in order to experience that warm glow? Luckily for us ordinary folks, even more modest forms of generosity can make us happy. In a series of experiments, we've found that asking people to spend money on others — from giving to charity to buying gifts for friends and family — reliably makes them happier than spending that same money on themselves.

And our research shows that even in very poor countries like India and Uganda — where many people are struggling to meet their basic needs — individuals who reflected on giving to others were happier than those who reflected on spending on themselves. What's more, spending even a few dollars on someone else can trigger a boost in happiness. In one study, we found that asking people to spend as little as $5 on someone else over the course of a day made them happier at the end of that day than people who spent the $5 on themselves.

Smart managers are using the power of investing in others to increase the happiness of their employees. Google, for example, offers a compelling "bonus" plan for employees. The company maintains a fund whereby any employee can nominate another employee to receive a $150 bonus. Given the average salaries at Google, a $150 bonus is small change. But the nature of the bonus — one employee giving a bonus to another rather than demanding that bonus for himself — can have a large emotional payoff.

Investing in others can also influence customers. Managers at an amusement park were unable to convince patrons to buy pictures of themselves on one of the park's many rides. Less than one percent purchased the photo at the usual $12.95 price. But researchers tried a clever variation. Other customers were allowed to pay whatever they wanted (including $0) for a photo, but were told that half of what they paid would be sent to charity. Now, buying the picture allows the customer not only to take home a souvenir, but also invest in others. Given this option, nearly 4.5% of customers purchased the photo, and paid an average of more than $5. As a result, the firm's profit-per-rider increased fourfold.

Warren Buffett, happiness guru. Just as we have taken his advice on making money, research suggests we should now take his advice on making happiness. By rethinking how we spend our money — even as little as $5 — we can reap more happiness for every dollar we spend. And Buffett's happiness advice comes with a financial payoff as well. By maximizing the happiness that employees and customers get from every dollar they receive in bonuses or spend on products, companies can increase employee and customer satisfaction — and benefit the bottom line.