Marina Gorbis's Blog, page 767

How Big Companies Should Scout New Technologies

Don’t leave it to the high priests of R&D.

Are Your High Expectations Hurting Your Team?

It’s hard for people to stay motivated when nothing is ever good enough.

Why Open Secrets Exist in Organizations

And how managers can deal with them.

The Future of AI Will Be About Less Data, Not More

We need computers with some common sense.

The Secret to Leading Organizational Change Is Empathy

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I’m working with a CEO who’s in the midst of rethinking her company’s strategy so it can better meet customer demands and thrive financially. These are major changes that will affect every aspect of how the firm operates — from the services it offers to the structure of her organization.

When I sat down with the CEO and her executive team to think through their communication plan, I asked not about the change itself, but about how her employees might feel about what’s ahead. We started with her team because, in my work as a communication consultant, I’ve observed the same thing time and time again: how information is communicated to employees during a change matters more than what information is communicated. A lack of audience empathy when conveying news about an organizational transformation can cause it to fail.

Studies on organizational change show that leaders across the board agree: if you want to lead a successful transformation, communicating empathetically is critical. But the truth is that most leaders don’t actually know how to do it. In fact, at Duarte, the communication consultancy where I’m Chief Strategy Officer, we conducted a survey of over 200 leading company executives and found that 69% of respondents said that they were planning to launch or are currently conducting a change effort. Unfortunately, 50% of these same execs said they hadn’t fully considered their team’s sentiment about the change. Worse, about half said they were just approaching the change “going on gut.”

If you are a company leader hoping to undertake a successful organizational change, you need to make sure your team is onboard and motivated to help make it happen. The following strategies can you help you better understand your employees’ perspectives.

Profile Your Audience at Every Stage

Change consultants typically advise leaders to create personas of various audiences when they kick-off a change initiative. But, considering that people’s wants and needs will evolve throughout the process, you should reevaluate these personas during every phase of the journey.

With the CEO I mentioned earlier, we first created audience personas that mapped to key employee segments in the company by level and function. Then we interviewed individual employees in each segment to get a sample perspective on typical mindsets. During the interviews, we asked questions designed to uncover beliefs, feelings, questions, and concerns about the company’s current strategy. We also asked if there were specific changes they hoped management would (or would not) make. 

Using the insights from these interviews, we were able to identify how each employee segment felt about the change effort, and planned communications based on whether they were excited, frightened, or frustrated. Employees who were excited about the change, for example, received communication that encouraged them to motivate their reluctant peers.

As your organizational transformation unfolds and you enter new phases of the change, make sure you repeat the interviewing and empathetic listening process. That way, you can gauge how people are feeling over time, and tailor your communication to match their mood.

Tell People What to Expect

While you may need to keep some facts private during a transition, the general rule is that the more informed your people are, the more they’ll be able to deal with discomfort. So, learn about your team’s specific fears, then acknowledge them openly. 

While working with the CEO who was making strategic shifts in her company, we talked about how she could acknowledge some of the fears revealed in a company-wide survey. One employee had expressed concern that the changes would cause talented employees to leave, which would lead to a greater burden on remaining employees.

In the next company-wide meeting, the CEO acknowledged there was worry about brain drain, then shared statistics about how the recent company turnover was designed to reduce the number of low performers and alleviate resulting drag on other employees. She also explained how the HR department was redoubling its efforts to speed up the recruiting process and add more rigor to interviews to ensure new hires were more likely to be high performers.

Having the CEO talk about the departures in an open company forum might seem like a dicey proposition when HR usually prefers to keep exit details private. But feedback from employees afterward showed that the CEO was able to build credibility and trust by addressing the fear of talent loss head-on.

Involve Individuals at All Levels

A transformation won’t succeed without broad involvement. A large European retail bank modeled this well during an organizational overhaul. Following a “dialogue-based planning” model, the CEO created a top-level story for the bank, then asked his executive directors to add a “chapter,” sharing details relevant to their departments. Each director then asked their own team to add to the chapter, incorporating ideas about how a change would impact them and their unique responsibilities. This continued down five levels, all the way to branch managers, and helped every impacted individual understand their part.

An exercise like this can help everyone feel like an active participant with something valuable to add. At that same bank, the director of retail operations wrote about how customers wanted the banking process to be faster. When members of the branch staff read this, they added that document imagers broke down frequently, which was a major headache and caused regular slowdowns. In the end, these frontline employees ended up bringing about a practical, useful change at the organization — one that improved things for all parties.

Business practices evolve rapidly, but there’s one technique business leaders should always rely on to effectively motivate and lead: empathic communication. Develop and show empathy for everyone involved in your corporate transition, and you’ll lead a team that feels valued, included, and driven to help your initiative succeed.

The Right Way to Use the Wisdom of Crowds

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Management teams are responsible for making sense of complex questions. Maybe it’s estimating how much a market will grow next year, or finding the best strategy to beat a competitor. One popular approach for navigating these questions is turning to the “wisdom of crowds” – asking many people for their opinions and suggestions, and then combining them to form the best overall decision. Evidence suggests that the combination of multiple, independent judgments is often more accurate than even an expert’s individual judgment.

But our research identifies a hidden cost to this approach. When someone has already formed an opinion, they’re far less likely to be receptive to the opinions of others – and this can lead to evaluating other people and their ideas more negatively. Fortunately, our work also suggests a few ways to minimize this cost.

The problem of independent judgments

The “wisdom of crowds” refers to the result of a very specific process, where independent judgments are statistically combined (i.e., using the mean or the median) to achieve a final judgment with the greatest accuracy. In practice, however, people rarely follow strict statistical guidelines when combining their own estimates with those of other people; and additional factors often lead people to assess some judgments more positively than others. For example, should the boss’s estimate count for more simply because of status? Shouldn’t an expert’s opinion count more than a novice’s?

In our research we find another factor that seems to impact how we evaluate other people’s opinions: when someone forms his or her own opinion. As team leaders, we started to notice that a common source of team friction came from members committing to their own ideas before the team as a whole agreed to a course of action. We wondered whether a simple matter of workflow ordering – forming a judgment before evaluating someone else’s judgments – was causing tension.

To test this question, we conducted an experiment where we randomly assigned the order in which individuals formed an estimate of their own versus evaluated the estimate of another. We asked 424 parents in the U.S. to estimate the total cost of raising a child from birth to age 18. They also evaluated another person’s estimate – which we framed as that of “another parent.” In fact, it was the consensus estimate created by financial experts.

Even though the estimate being evaluated was always exactly the same, we found that parents who had made their own estimates first evaluated the other person’s estimate more negatively. Parents who first made their own estimate were 22% less likely to think that the other estimate was at least “moderately likely to be correct” than were parents who evaluated the other estimate before making their own.

We wondered if this effect varied among different types of people. In this study and the others we conducted, we looked at whether men responded differently than women, whether older individuals responded differently than younger individuals, and whether experts responded differently than non-experts. None of these differences mattered. Regardless of their gender, age, or expertise, decision makers who first formed an opinion of their own were more likely to negatively evaluate another’s opinion.

In a second study, we asked 164 U.S. national security experts to assess a hostage-rescue strategy and evaluate what “another national security expert” proposed. Unlike the cost-estimation question of our first study, this question was not quantitative, nor did it have a clear right answer. Despite these differences, and despite the fact that the individuals in this case were experts, the effects of forming an opinion before evaluating someone else’s were the same. Those who first formed their own opinion offered systematically lower evaluations of a peer’s strategy, compared to those who evaluated the peer’s strategy before forming their own opinion.

We also asked participants how intelligent or ethical they perceived the other person to be, based on their recommendation. Even though the actual recommendations were exactly the same across our ordering conditions, those who first formed their own opinion made more negative inferences about the peer than those who formed their opinion later.

Why do people penalize the judgments of others after forming their own opinion? The key factor seemed to be how far someone’s estimate diverged from the other person’s. When we asked participants in these two studies to simply look at someone’s judgment and form an opinion about it, participants own estimates were pulled toward the estimate they were considering, a phenomenon often referred to as “anchoring.” By contrast, when participants made their own estimate independently, they were more likely to disagree with the estimate they had to evaluate later, viewing it as too different from their own, and thus less likely to be correct.

While disagreement is not necessarily a bad thing – combining diverse judgments and estimates underpins the wisdom of crowds –in order to be effectively leveraged it first has to be correctly interpreted. In most cases, disagreement should signal that either or both parties are likely to be wrong. Our data suggest the problem is that people interpret disagreement in a self-serving way, as signaling that their estimate is right and the other party is wrong.

We ran a final study to test this interpretation. We asked 401 U.S. adults to form a judgment before seeing the judgment of another participant selected at random from a prior study. Some participants saw peer judgments that were in close agreement with their own, and others saw estimates that differed dramatically. We then asked them to evaluate the quality of both judgments. We found that, as disagreement increased, people evaluated others’ judgments more harshly – while their evaluations of their own judgments did not budge. Our participants interpreted disagreement to mean that the other person was wrong, but not them.

Across our studies we found that forming opinions before evaluating those offered by others (compared to evaluating first and forming one’s own opinion later), carried social costs – participants thought less of the other person’s estimates and ideas, and, in some cases, thought the other person was less ethical and intelligent.

How to make better decisions

What should a manager do if she wants to get to better judgments and minimize the costs that arise from people getting enamored with their own opinions? The evidence is strong that to maximize accuracy, team members should form independent opinions before coming together to decide as a group.

But our findings suggest that groups of decision-makers should also pre–commit to a strategy for combining their opinions. The specific strategy will depend on the type of question a team faces. However, committing to an aggregation strategy ahead of time can protect teams from the negative social consequences of evaluating each other’s judgments in light of their own previously-formed opinions.

Teams facing quantifiable questions should aim for strategies that, as much as possible, remove human judgment from the aggregation process. A team estimating how much a market will grow faces a quantifiable question; they should pre-determine an algorithm (such as a simple average or median) for combining the opinions of different team members.

Teams facing non-quantifiable questions will have to rely on human aggregation in some form. For these questions, teams should prevent the person responsible for the final judgment from forming an opinion of her own before seeing the opinions of others. This is not always easy. By the time managers evaluate their subordinates’ ideas, they often have already formed their own opinion.

This highlights an important point: committing to an aggregation strategy is as much a structural matter as an in-the-moment decision. Unbiased aggregation requires structuring work flows so that those responsible for combining opinions do not first form their own, or at least work to not let that opinion undermine the decision-making process.

At the individual level, team members should reframe how they think about disagreement. Our studies suggest that many people interpret disagreement to mean that someone else is incorrect. With a concerted effort toward intellectual humility, however, this does not have to be the case. For teams, disagreement should be thought of as valuable information. Thinking of it as signaling value, rather than as a reason to derogate, may be the single-best way to defray the costs of turning to the crowd to answer complex questions.

Why CRM Projects Fail and How to Make Them More Successful

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In 2017, CIO magazine reported that around one-third of all customer relationship management (CRM) projects fail. That was actually an average of a dozen analyst reports. The numbers ranged from 18% to 69%. Those failures can mean a lot of things — over-budget, data integrity issues, technology limitations, and so forth. But in my work with clients, when I ask executives if the CRM system is helping their business to grow, the failure rate is closer to 90%.

The primary reason they miss the mark in helping companies increase revenue is that CRM systems are too often used for inspection — to report on progress, improve accuracy of forecasts, provide visibility, predict project delivery dates, and provide a range of other business intelligence — rather than creating improvement in the sales process. Front-line sales professionals and managers rarely find the majority of these capabilities useful in winning more business for the company.

CRMs today also serve a lot of masters, from executives in the C-suite, technology, marketing, finance, and, oh yeah, sales. They try to address more objectives than are reasonable for any software system. I recently led a working session for a team of executives looking to select a CRM provider. By the time everyone weighed in on their must-haves, we had identified 23 unique objectives. With such a diluted focus, it’s virtually impossible to succeed.

I saw this clearly at another client where there was a wide range of answers to the question, “Was the CRM implementation a success?” The EVP of marketing was pleased she could now track the assignment of every single lead. The CIO was unhappy about data integrity issues that arose from the integration of more than 20 discreet databases. The EVP of sales liked the easy-access dashboard to report on metrics and the forecast. Sales management was less positive but acknowledged that it helped them monitor activity. And the sales team — well, they mostly hated it. They had to enter a lot of information that added little value (for them), and provided no help in selling more. Because the sales team had so little incentive to keep up with the data entry requirements, the quality of the data in the system became less and less reliable over the following year. The result? Incomplete or inaccurate information from the CRM was exported into Excel spreadsheets for further manipulation by each level of management.

If you want your CRM implementation to increase revenue (which it only will if it enables your sales organization to increase sales), I recommend doing the following:

Re-think your CRM as a tool to increase revenue. Period. That is why you bought this system and spent millions, sometimes tens of millions, on its deployment. Broadcast this message loud and clear from the CEO and sales leadership. Your sales team needs to understand that they drive the execution of your strategy every time they interact with a client or prospect. Your implementation of a CRM system is not about the technology, and it is not to fulfill an administrative reporting requirement, which is how too many sales teams view them. The CRM is a tool to help them sell more, access support resources during sales cycles, and manage their territory or “book of business.” If the sales team recognizes the value of this tool, you’ll get all the metric and forecast information you desire. If not, you’ll be back to modifying guesses in Excel spreadsheets.

Integrate your marketing efforts with sales activity. Historically, these two functions collaborate on CRM implementation so poorly it’s almost a cliché. Marketing blames sales for not following up on all the leads produced. Sales points out that marketing doesn’t understand field reality and truly qualified leads. Overcoming these interdepartmental squabbles requires a collaborative effort by both teams throughout the sales process. Early in the sales cycle, marketing and sales have roles to play in identifying and qualifying opportunities to actively pursue. As sales cycles develop, they should have a shared understanding of what constitutes a qualified lead, as well your ideal customer profile — both in terms of the company and level of buyer. This helps filter out business you shouldn’t pursue. Later in the sales cycle, marketing works with sales to create materials that can be customized to client objectives and case studies, instead of the generic collateral sales teams often see as low value. Finally, working together on win/loss analysis provides an active feedback loop for joint planning and addressing future needs. This kind of integration, using your CRM as the glue, will improve marketing’s efforts to create gravity with prospects, and sales’ ability to accelerate sales cycles. It’s an advantage for the business if you can use at least some of the same metrics to evaluate the success of both departments.

Managers provide coaching to improve, not reporting to inspect. The pivotal role in driving CRM success is not individual sales people. It’s sales management. They will determine how the sales team uses and experiences the CRM. If they use it solely to check on the amount of activity, call volume, or other measures of efficiency, it’s of low value to the sales team and likely be rejected or filled with fictional data. Instead use it as a tool to jointly create strategies for major opportunities, and help the sales team to maximize opportunities by coaching them throughout the sales process. I’ve written in the past about the high value of coaching and the fact that it’s rarely done well. But CRM can be a powerful mechanism to support coaching for individual sales calls, as well as opportunity, account, and territory management.

CRM is an important tool, but it is just a tool. When the laptops are shut down for the day, it’s your sales team that is responsible for bringing value to clients and driving revenue. Implement your CRM with that in mind and you’ll be pleased with your ROI.

5 Questions We Should Be Asking About Automation and Jobs

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We simply don’t know for sure whether automation, algorithms, and AI will ultimately create more jobs than they destroy. Opinions are all over the map. One widely cited study predicted 47% of jobs will be automated, and technological change has in fact contributed to declining employment in recent years. Some are already preparing for a world without work.

But automation has been going on for centuries, and jobs still exist: that’s because automation replaces some kinds of human labor while boosting demand for others. Furthermore, job upheaval today is relatively modest. The mix of jobs in the economy is changing more slowly in recent decades than in the 1940s and 1950s, for instance (see the chart below). Today, economists worry that the labor market isn’t dynamic enough: numerous measures of fluidity and dynamism, like migration and job turnover, have been declining for decades.

 

But this uncertainty should not blind or distract us from other pressing questions about automation that we’re sure to face regardless of whether automation adds to or subtracts from the total number of jobs. Here are five important, overlooked questions about automation and jobs:

Will workers whose jobs are automated be able to transition to new jobs? The pain from automation arises not only from how many jobs are eliminated, but also from whether workers in automated jobs can transition to other work. On Indeed’s site we have data on how some workers in threatened occupations are seeking new opportunities, such as retail workers looking at customer service and sales-rep roles. But transitions may be harder than in the past. Job churn has slowed in recent decades, as firms both hire and fire less than they used to, and because people move less than before. The labor market may be changing less today than in the 1940s and 1950s, but today’s slower employment growth and lower mobility could make transitions more drawn-out and painful.

Who will bear the burden of automation? Regardless of how many jobs are eliminated by automation, the pain will be uneven. The less-educated are far more likely to work in “routine” jobs, which are more susceptible to automation, than workers with a college or graduate degree. Men are more likely to work in routine jobs than women are. And the geographic divide is stark: just one-third of jobs in metro Washington DC and San Jose CA are routine, versus half or more in much of inland California and many smaller southern and Midwestern metros. These regional differences line up with the partisan divide: counties that voted more strongly for President Trump in 2016 have a higher share of routine jobs and therefore are more likely to be affected.

How will automation affect the supply of labor? Automation might affect labor supply, not only labor demand. Just as past technological innovations, like washing machines and kitchen appliances, reduced the time needed to do household work and contributed to the entry of women into paid employment, future technological advances related to automation might also shift how much people are willing and able to work. For instance, autonomous vehicles might turn commuting into productive work time. Or, autonomous vehicles could chauffeur kids to school and activities, freeing up parents to work more hours. Alternatively, automation could boost productivity and lower consumer prices, possibly reducing labor supply since people will need to work less to afford the same items. It’s far from clear which of these effects will win out.

How will automation affect wages, and how will wages affect automation? The pace of automation depends on prices, not just technological feasibility. Just because a robot or algorithm can perform a task as competently as a human doesn’t mean that human will be replaced. Automation depends on the cost of the technology relative to the cost of human labor. In today’s tight labor market, for instance, rising wages and worker shortages might encourage automation and boost productivity. At the same time, automation that replaces workers in some sectors could push them into the labor supply for other sectors, potentially depressing wages, slowing productivity, and aggravating inequality. Again, it’s not clear which force will be stronger.

How will automation change job searching? Artificial intelligence has the potential to predict better matches between job seekers and open positions. Automated screenings and tests can potentially remove human biases that disadvantage certain candidates. However, algorithms might also reinforce human prejudices if the algorithms are trained on biased datasets. Plus, algorithms might be differentially applied to certain groups: one expert warns of a future where “the privileged … are processed more by people, the masses by machines.” Finally, people might be skittish about automated hiring. A recent survey found people less enthusiastic about algorithms evaluating job candidates than about driverless cars or robot elder care-givers, which could slow down their adoption

We don’t need to wait to discover whether automation creates more jobs than it destroys to start answering these questions and acting on the answers. Making job transitions easier, focusing on those most at risk of job loss, and thinking about labor supply, wages, and job search are all essential for navigating these new technologies — whether or not automation ultimately adds to or subtracts from overall employment.

Not Everyone Can Build a Digital Ad Business, Plus Debating Radical Transparency

Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai discuss Verizon’s write-down on Oath (Yahoo, AOL) and the challenges with building a digital advertising business. They also debate the notion of Radical Transparency, before sharing their After Hours picks for the week.

Download this podcast

Some recent picks:

Bloomberg article (“Wall Street Rule for the #MeToo Era: Avoid Women At All Cost“) and Response from Jefferies CEO Richard Handler
21c Museum Hotels
The Truth As Told By Mason Buttle (by Leslie Connor)
TikTok (phone app)
Robert Stavins (follow on Twitter)
FRED (Federal Reserve Economic Data)
RBG (Documentary on Amazon Video)
The Man in the High Castle (Amazon Video)
The Ringer website

You can email your comments and ideas for future episodes to: harvardafterhours@gmail.com. You can follow Youngme and Mihir on Twitter at: @YoungmeMoon and @DesaiMihirA.

How to Moderate a Panel Discussion

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As you rise in your career and your visibility grows, you’ll likely be called upon to participate in a panel discussion. It’s a powerful way to share your ideas and become recognized in your field, but there’s no question that preparing to speak on a panel can be stressful — you have to figure out what to say, practice being concise, and worry about overlapping with your colleagues.

It’s even more fraught, however, when you’ve been asked to moderate one.

Now you have to bring order to an unwieldy group of strangers and somehow unify their disparate perspectives into a meaningful conversation. As a professional speaker, I give more than 50 talks at companies and conferences each year, participating in everything from keynotes to panels. Here are four strategies I’ve developed to ensure that when I’m moderating, I create the conditions for an insightful exchange.

First, it’s important to prepare your panelists in advance for what to expect. At one recent conference where I was a panelist, my moderator didn’t contact me until the morning of our session. “Unfortunately I couldn’t find your email address in my mailbox,” he wrote me, “and I couldn’t obtain it from the [conference organizers]. They’ve been a bit overwhelmed I guess these last few days. But [fellow panelist] gave it to me this morning and so here is the outline. Let me know if it works and see you later today!”

I’m comfortable improvising onstage, so this wasn’t a problem for me; but for any panelist who might want to prepare before giving a presentation, this would have been panic-inducing. It doesn’t take much to get on the same page with your panelists — one pre-event conference call, a couple of emails asking for their thoughts on the topic, or even sharing your draft questions in advance should suffice. But forcing your panelists to go into the event blind, with only a couple of hours to prepare, is frankly a dereliction of moderator duty.

Second, realize that your sole mission is to ensure a great audience experience. As moderator, one of the hardest — and most frequent — challenges you’ll face is whether to cut off long-winded panelists, and how to do it tactfully. It’s awkward to interrupt someone, especially if that person has stature in your field, and you may naturally worry about offending them. But it has to be done.

The moderator’s sacred responsibility is not to assuage panelists’ egos; it’s to stand as an advocate for the audience, asking the questions they wish they could and ensuring a thoughtful discussion. You want to keep the panel from turning into a platform for someone’s bloviation. If the event organizers had wanted that person to monologue, they would have given them a keynote. Instead, they put them on a panel in order to get their perspective as part of a group conversation, and you’ve been chosen to uphold that intention.

If you’re wondering whether someone is droning on too long, the audience probably thinks they are. It’s crucial to remember that the audience will be rooting for you to stop the soliloquy. I’ve discovered one way to help the verbose panelist save face: cut them off with a positive statement. You can capture their attention by simultaneously making a hand gesture and breaking in verbally, and say something like, “That’s a great point, Joe, and I’d love to hear how Preeti would respond to that.” Cutting them off is a far better alternative than simply sitting there and looking uncomfortable, or making half-hearted attempts to catch the offending panelist’s eye.

Third, don’t be afraid to wield the power you’ve been given. Too many panel moderators seem uncomfortable with the responsibility they’ve been given and take a hands-off approach to the session. For example, they’ll “toss out” questions to the entire panel, without specifying who should respond, resulting in awkward silences, as people try to figure out who should go first — or complete chaos, as the most aggressive panelist dominates the conversation. Maybe the moderator does specify a speaking order, but it’s the rote mechanics of Panelist A, then Panelist B, then Panelist C — the predictability of which will bore the audience by the second round.

Instead, direct your questions to the person who will have the most relevant answers. That means, of course, that it’s important to research the panelists in advance to know enough about which topics are in their wheelhouse. If Panelist A says something incendiary about tech founders, and Panelist C launched a startup last year, don’t wait for Panelist B to respond just because it’s his “turn.” Instead, follow the action and direct the conversation appropriately.

Of course, you want to be fair as moderator and not allow one person to dominate at the expense of other voices. But fair doesn’t necessarily mean equal: if Panelist C gets five questions and everyone else answers three, that’s not the end of the world if that panelist is especially interesting and adds to the conversation.

Fourth, remember that the moderator needs to embrace the role of interlocutor. When panelists say something interesting, or confusing, you should jump in with a follow-up. “Tell me more,” you could say, or “What do you mean by that?” or “Can you explain that in more detail?” That enables the conversation to go deeper, away from the panelists’ typical talking points and into more fruitful territory.

Moderating a panel can be a challenge even for experienced professionals. It’s true that you’re not answering any questions yourself, and you know them all in advance, but there are still unpredictable elements. You have to choreograph the interaction of multiple opinionated leaders, keep everyone on topic, and probe for deeper insights. If you take the steps above to proactively craft a great experience — rather than sitting back and hoping it will take care of itself — you’ll set yourself apart as a uniquely thoughtful moderator.