VIDEO: Listen to Your Inner Voice

John Baldoni - 3 hours 25 min ago

All of us need to pay attention to our instincts. So often what we think is a good choice may indeed be the right choice.

Such a decision may not be deliberative, but it was the right call. And I think the lesson for leaders is that we need to trust ourselves to make the right call in the moment.

On the other hand, spur-of-the-moment decisions can be disastrous. Deciding to buy a house you cannot afford, quitting your job because you are mad, or marrying a partner after a first date may not be sound decisions. They may work out, but chances are they will not.

Your inner voice no doubt will point you in the right direction.

First posted on SmartBrief on 3/10/2017

Categories: Blogs

Fostering Trust Between Managers and Employees (HBR)

John Baldoni - 3 hours 25 min ago

A colleague told recently me a story about a sales professional he knew who was struggling.

He was not making his draw and as a result was feeling tremendous pressure. His job seemed to be in jeopardy, save for one thing: his sales manager believed in his talent. The manager sat the young man down and told him to forget about not making the draw or repaying it. Focus on the customer. The young man did and, within weeks, his sales improved. Soon, he was the company’s top performer.

Stories such as these fuel the sales profession, but they have implications far beyond the sales transaction, including to those of us who have not sold anything except candy for a school fundraiser. The nut of the story demonstrates a key aspect of developing your people. Trust. We speak often of how managers need to earn the trust of those who report to them, but we don’t talk as much about how managers and employees need to trust one another. Here are some tips for fostering trust in the workplace.

Communicate openly. Just because you can speak doesn’t mean that you’re communicating. All of us are so pressed for time that we listen only when we are pushed against the proverbial wall. That’s too bad because when you take the time to listen — managers to employees, and employees to managers — you learn what’s really going on. Often you learn about problems before they occur; you may also learn ways to do things more simply and cost effectively.

Go with your gut. As with the story about the trusting sales manager, instinct plays a huge role in fostering trust. Managers who’ve been in the saddle for a couple of years soon learn to separate the strays from herd. They know who’s putting forth the effort and who’s just clocking time.

Tune your antennae. Watch for the warning signs – absenteeism, tardiness, and missed deadlines. But also watch for the positives – staying late, helping colleagues, and volunteering ideas and projects. Too often we focus on the negative (that’s our culture) to the detriment of looking for the good things people are doing.

Following these guidelines will help you foster mutual trust, but such pointers will not make up for the missed call. More than one manager – in fact most managers – have been burned by putting too much trust in an individual who did not deserve it. Your gut can deceive you, especially if you’re dealing with a crafty employee who knows how to pull one over on you. They know how to play you like a con-man coming in for a score. They specialize in emotional blackmail, getting the boss to feel bad for the employee’s inability to do the job.

As a result of these types, managers take a jaundiced eye at any employee, failing to provide them with the support they may need to succeed. It’s important to remember that the overwhelming majority of employees want to do a good job – chiefly because it’s in their best interest to do so – but also because their desire to succeed is grounded in their perception of self.

My advice to managers is simple: don’t let one or two connivers cause you to downplay the intentions and contributions of the people who really do work hard.

First posted on 9/26/2008

Categories: Blogs

The Best Leadership Books of 2018

Leadershipnow - 3 hours 59 min ago

The Mind of the Leader: How to Lead Yourself, Your People, and Your Organization for Extraordinary Results
by Rasmus Hougaard and Jacqueline Carter

(Harvard Business Review Press, 2018)

The Mind of the Leader offers a radical, yet practical, solution to solve the leadership crisis. Organizations need to put people at the center of their strategy. They need to develop managers and executives who lead with three core mental qualities: mindfulness, selflessness, and compassion. (Blog Post)

Leap: How to Thrive in a World Where Everything Can Be Copied
by Howard Yu

(PublicAffairs, 2018)

In today's competitive environment, where latecomers can copy almost any product or service, companies can no longer just be good at what they do. Is the displacement of early pioneering companies an inevitable fate in the modern economy? Outlasting copycat competition in any industry is difficult; doing so over decades is nearly impossible—unless you leap. (Blog Post)

Reinforcements: How to Get People to Help You
by Heidi Grant

(Harvard Business Review Press, 2018)

Asking for help makes most of us uncomfortable and we often go to great lengths to avoid doing it. We fear rejection. We fear that people we think less of us. We believe people don’t really want to help. But the truth is we need the help and support of others to succeed. To be sure, leadership is fundamentally about asking people for help. (Blog Post)

Never Stop Learning: Stay Relevant, Reinvent Yourself, and Thrive
by Bradley R. Staats

(Harvard Business Review Press, 2018)

What did you learn today? We often think of learning as something we are doing all of the time. But we aren’t. Mostly we are repeating or reinforcing what we already know. And that gets in the way of learning. Like most things worthwhile learning must be deliberate. (Blog Post)

What Happens Now? Reinvent Yourself as a Leader Before Your Business Outruns You
by John Hillen and Mark D. Nevins

(SelectBooks, Inc., 2018)

The ability to reinvent yourself is core to your success as a leader. As you take on more responsibility, the demands on you as a leader change. If disrupting yourself isn’t part of who you are, you will get left behind. If you are just doubling down on what you’ve always done, you will miss the opportunities. When conditions change, you have to change too. (Blog Post)

The Dichotomy of Leadership: Balancing the Challenges of Extreme Ownership to Lead and Win
by Jocko Willink and Leif Babin

(St. Martin's Press, 2018)

So much of leadership is managing tensions. Leaders must know when to adapt. After the publication of their first book, Extreme Ownership, many people latched on to the aggressive implications of the word “extreme” and missed the more nuanced balance that a leader must have. “Leaders must find the equilibrium between opposing forces that pull in opposite directions.” The Dichotomy of Leadership is meant to help leaders find that equilibrium. (Blog Post)

Professionalizing Leadership
by Barbara Kellerman

(Oxford University Press, 2018)

Over the last 40 years, the leadership industry has grown exponentially. Yet leadership education, training, and development still fall far short. Moreover, leaders are demeaned, degraded, and derided as they never were before. Why? Leadership in the first quarter of the present century is different from what it was even in the last quarter of the past century - which is why leadership taught casually and carelessly should no longer suffice.

Dear Founder: Letters of Advice for Anyone Who Leads, Manages, or Wants to Start a Business
by Maynard Webb with Carlye Adler

(St. Martin's Press, 2018)

What began as a project to provide guidance to a select group of founders in the Webb Investment Network has been expanded and offered to founders of all types and those who need to have a founder’s mindset. The result is Dear Founder. (Blog Post)

This Is Day One: A Practical Guide to Leadership That Matters
by Drew Dudley

(Hachette Books, 2018)

This is Day One is about choosing to lead. Everything worthwhile in life begins with a Day One. “If you want to be a leader, chose to be a leader today. Repeat that choice every day. It doesn’t matter if you failed to do it yesterday or if you’ve done it every day for a decade: every new day begins with a recommitment to that choice.” (Blog Post)

ICONIC: How Organizations and Leaders Attain, Sustain, and Regain the Highest Level of Distinction
by Scott McKain

(St. Martin's Press, 2018)

“Iconic organizations and leaders have become such universal symbols of distinction they are not only irresistible to customers in their marketplace, they compel interest and admiration across a wide spectrum.” How do you attain iconic status? The answer is explained in detail in this book. (Blog Post)

Five Stars: The Communication Secrets to Get from Good to Great
by Carmine Gallo

(St. Martin's Press, 2018)

“Your ability to communicate persuasively is the single greatest skill that will set you apart in the next decade.” There is so much in this book that will help you perform better in all of your communication. If only read one book on communication this year, this is it. (Blog Post)

Burn the Business Plan: What Great Entrepreneurs Really Do
by Carl J. Schramm

(Simon & Schuster, 2018)

If you are thinking of starting a business—and apparently nine million Americans are currently thinking about it and only about 500,000 actually do each year—you will want to read Burn the Business Plan. (Blog Post)

Powerful: Building a Culture of Freedom and Responsibility
by Patty McCord

(Silicon Guild, 2018)

When it comes to recruiting, motivating, and creating great teams, Patty McCord says most companies have it all wrong. Powerful is a book of advice gained from her experience at Netflix. She began working with Reed Hastings to identify the behaviors that they wanted to see become consistent practices and worked to instill the discipline of actually doing them. When established they were communicated over and over again and eventually became known as the Netflix Culture Deck. (Blog Post)

The Meaning Revolution: The Power of Transcendent Leadership
by Fred Kofman

(Currency, 2018)

Fred Kofman's approach to leadership has little to do with the standard practices taught in business school and traditional books. Bringing together economics and business theory, communications and conflict resolution, family counseling and mindfulness mediation, Kofman argues in The Meaning Revolution that our most deep-seated, unspoken, and universal anxiety stems from our fear that our life is being wasted--that the end of life will overtake us when our song is still unsung. Kofman claims that transcendental leaders, wherever they are in the hierarchy, are able to put aside their self-interests and help others to feel connected with others on a team or in an organization on a great mission and part of an ennobling purpose.

Questions Are the Answer: A Breakthrough Approach to Your Most Vexing Problems at Work and in Life
by Hal Gregersen

(HarperBusiness, 2018)

The questions we ask determine our outcomes in leadership and life. The key to success is asking a different question. Gregersen explains the conditions we can create in our lives that will give rise to better questions—life-changing questions—that will provide us with better answers.


Connecting the Dots: Lessons for Leadership in a Startup World
by John Chambers with Diane Brady

(Hachette Books, 2018)

Since stepping down as CEO of Cisco in 2015, John Chambers founded the venture capital firm JC2 Ventures specializing in startups. That experience has led him to write Connecting the Dots as a way to help others to learn from the key events in his life and career as they navigate business and life. It has always been true, but it is worth repeating: “What will differentiate the winners from the losers won’t be technology or capital but leadership and a willingness to learn.” (Blog Post)

Entrepreneurial Leader: A Lifetime of Adventures in Business, Education, and Government
by William H. Donaldson with Karl Weber

(Greenleaf Book Group, 2018)

Donaldson and Karl Weber extract relevant lessons for leaders in Entrepreneurial Leader. The thread that runs through his career is the entrepreneurial mindset. That mindset is “about the application of creative thinking and prudent risk-taking to build innovative, long-lasting organizations in any sector of the economy.” (Blog Post)

Leading Matters: Lessons from My Journey
by John L. Hennessy

(Stanford University Press, 2018)

Leading Matters is about the journey. The stories Hennessy tells here are revolve around the ten elements that shaped his journey and how he relied on these traits in pivotal moments. The elements are relevant to any leader at any level. As he observes, the higher up you go the crises just get bigger and come faster. (Blog Post)

Leadership In Turbulent Times
by Doris Kearns Goodwin

(Simon & Schuster, 2018)

In this well-structured study, Goodwin begins by looking at the lives of Abraham Lincoln, Theodore Roosevelt, Franklin Delano Roosevelt, and Lyndon Johnson in turn, when they first entered public life. Unremarkable at this stage of their life they, like most young leaders, made mistakes stemming from inexperience, cockiness, lack of caution, outright misjudgments, and selfishness.” But more importantly we “see the efforts made to acknowledge, conceal, or overcome these mistakes.” This of course, is a key to their eventual success. (Blog Post)

Related Interest:
Best Leadership Books of 2017
Best Leadership Books of 2016
Best Leadership Books of 2015

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Categories: Blogs

Stopping Data Breaches Will Require Help from Governments

Harvard business - 5 hours 54 min ago
Martin Child/Getty Images

Not a month goes by without a major corporation suffering a cyber attack.  Often state-sponsored, these breaches are insidious, difficult to detect, and may implicate personal information relating to millions of individuals. Clearly, the current approaches to safeguarding sensitive data are insufficient. We need to reorient expectations for the role of the private sector in cybersecurity.  As the risk of cyberattacks has become better appreciated, we see an increasingly punitive focus on holding corporate America solely responsible.

Multiple, overlapping laws at the national and state level require companies to have “reasonable” security, a concept that is largely undefined and elusive, especially given that threats and available defensive measures constantly evolve. And regulatory enforcement actions and lawsuits in the wake of cyberattacks declare any exploited security vulnerability to be de facto “unreasonable,” without a meaningful assessment of the company’s overall security program or acknowledgement that the company has been the victim of a crime.

This approach is premised on an unreasonable expectation that every company in the United States has the resources and capability to defend itself against even the most sophisticated cyber actor.  We should move away from laws that focus on finding companies at fault, rather than as victims of criminal cyber activity.  This framework is neither fair nor effective in improving our collective cybersecurity.

In our experience, despite increasing security spend, most companies face significant obstacles to successfully managing cyber risk.  Although some industry security standards have emerged, they are  vague, and available security solutions are seldom turnkey.  Rather, effective security requires application of significant judgment in the context of unique and complex corporate network architectures, as well as the ability to adapt as security solutions and threats evolve.  Unfortunately, the talent pool with the requisite cyber experience and knowledge is limited.  It is simply not possible, at present, for every company in America to have sufficient internal cyber expertise to manage the risk.

The challenge is compounded by the resources and sophistication that state and criminal cyber attackers can bring to bear.  In no other arena do we expect every business to defend itself from foreign intelligence and military agencies or sophisticated criminal threats.

Although there has been a significant focus on sharing threat information, both within the private sector and between the government and the private sector, such sharing remains incomplete at best, particularly when it comes to the techniques, tactics, and procedures that particular actors are employing.  As a result, companies often lack sufficient knowledge of the specific threats they face so they can best defend themselves.

Given these and other factors, companies that suffer cyberattacks are, and should be treated primarily as, victims.  When a bank suffers a physical robbery, we do not think of blaming and shaming it – even though there is almost always some additional precaution the bank could have taken that might have helped prevent the attack (such as a police officer stationed at every teller window or limiting customer access to tellers).  While banks are expected to implement some security measures, there is no expectation that those measures will prevent criminal attacks entirely, and banks are not vilified if they did not have every available precaution in place that might have prevented them.  Yet in the cyber context, a company that suffers a breach faces a substantial risk of multiple regulatory investigations and class action lawsuits, all focused on assigning blame to the organization for having inadequate security measures to defeat the criminal attack perpetrated by others – no matter the strength of the company’s overall security program or the amount of the investment it has made in security.

That perspective is not only unfair, but counterproductive.  Instead of focusing on remediating the incident, restoring operations, improving security going forward, and mitigating potential harms, a company in the midst of a cyber breach also needs to worry about the record that is being created – what is being written down, whether lawyers are sufficiently involved in the forensic investigation, and other considerations bearing only on protecting against liability.  Moreover, the fear of potential downstream liability constrains what information a company is willing to share – it may not disclose the incident at all, let alone how and why the intruder was able to evade existing security measures, depriving the broader community of the opportunity to learn lessons from the incident, as happens in aviation and other industries.

Although the Cybersecurity Act of 2015 provided some protections, they are narrow and have not resulted in a material increase in information sharing.  As a result, our collective cybersecurity is diminished:  we do not harness the enhanced security or efficiencies that a more collaborative approach to threat intelligence and defense would yield.

We need to reorient our cybersecurity focus.  We should place less burden on individual companies by focusing more on systemic ways to address cyber threats.  In part, that approach would require the federal government to take a more active role in cyber defense.  The government has a number of comparative advantages over the private sector, such as the ability to collect and exploit intelligence and to coordinate internationally with other governments and law enforcement agencies.  The government should do more to give the private sector the benefit of these advantages.

For example, the government should devote more resources to collecting intelligence about potential cyber-attacks against private entities, particularly from nation-state actors, and then take steps to help prevent them — not merely notify companies believed to be at risk and then leave them alone, with imperfect and incomplete information, to investigate and respond.   As the Department of Homeland Security takes on greater responsibilities for identifying and minimizing cybersecurity risks to the U.S. economy it should issue pragmatic, cost-effective operational guidance to companies on how to defend against evolving risks.

We also need to focus more on incentivizing security improvements at points in the cyber ecosystem that can have a scale effect and protect large groups of users and companies, rather than leaving each one on its own.  We are collectively better off the more that software providers can use secure coding practices and thereby prevent a vulnerability – rather than requiring every user to install a patch somewhere down the line.  We will also be better served if more Internet service providers mitigate the effects of a botnet by filtering traffic to limit IP-spoofing – rather than requiring every target to fend off a denial of service attack.

Legal and policy reforms are likely needed to achieve these goals and encourage companies to collaborate with the government on these initiatives.  Such collaboration is unlikely unless the law provides greater confidentiality and liability protections than those presently available for companies that take actions to aid our collective cyber defense.  But with the right protections, companies may be more willing to join forces with the government in this way and others to reduce cyber risk.

While we are not challenging that it makes sense to impose some cybersecurity obligations on individual companies, those obligations should be reasonable and clear. Companies that meet a defined set of risk-based requirements, which could be developed through a collaborative, multi-stakeholder process, should have a safe harbor from liability – recognizing that they are victims, not perpetrators, of malicious cyber activity.

Categories: Blogs

Digital Growth Depends More on Business Models than Technology

Harvard business - 6 hours 54 min ago
Yagi Studio/Getty Images

For startups, 2009 was a good year. More than 20 companies launched at that time, including Uber, Slack, Pinterest, and Blue Apron, eventually achieved $1 billion-plus valuations. Given that those companies were all venture-financed and emerged from Silicon Valley, you might assume that the key ingredients that have ensured their success were cutting-edge technologies, digital platforms, and customer bases that were chiefly made up of digital natives. You would be wrong.

Yes, those companies had great technologies, platforms, and demographics, but the secret of their success turns out to be much more prosaic. Each was able to satisfy real customers who needed real jobs done — and by jobs, I mean a fundamental problem in a given situation that needed a solution. In other words, they had great business models.

Every successful company, whether it knows it or not, owes its success to its business model. I explained this in an article that was published in Harvard Business Review in 2008, before any of those companies began, and, now, 10 years later, that still holds true, as more and more of the business discourse is focused on digital transformation. A digital platform, or a digital solution, may enable a new epoch of transformative growth, but when you get under a company’s hood and look to see what’s really driving it, the engine of transformation turns out to be its business model.

In my article, I identified the four interlocking elements that, taken together, create and deliver value to both companies and its customers:

Customer Value Proposition (CVP), which is a way to help customers get a job done. The more important the job, the lower the level of satisfaction with other companies’ attempts to solve it, and the better and cheaper your solution is than theirs, the more potent your CVP.

The second is a Profit Formula, or how you create value for yourself while providing value to a customer. There are four essential elements to the formula: revenues, cost structure, margins, and resource velocity. The best way to create a profit formula is to work backwards, either starting with the price for lower cost businesses that is required to deliver the CVP, and then determining what the cost structure and other factors need to be or in highly differentiated businesses, start with the needed cost structure and margins that leads to the required price.

Key Resources are the assets that are required to deliver the CVP to the customer at a profit, meaning the people, technology, products, facilities, equipment, channels, and brand.

Key Processes are the operational and managerial capabilities that allow a company to deliver value in a way that can be repeated and scaled. These include manufacturing, budgeting, planning, sales and marketing, and customer service.

Successful business models have an exceptionally strong CVP, and a stable, scalable system in which all the elements mesh together seamlessly while complementing each other. As simple as this framework may seem, its power lies in the complex interdependencies of its parts. Major changes to any one of these elements affect the others and the whole.

Mature companies often look wistfully at successful startups like 2009’s class of unicorns and wonder if they can reinvigorate themselves by adding a digital component to their existing business model, in the way that clamping an outboard motor onto a rowboat makes it go that much faster. But what made each of those companies so valuable wasn’t their digital auspices — it was their powerful Customer Value Propositions, which investors believed they could deliver at profit and at scale. Being able to hail a car with your smart phone (a car that is driven by a self-employed contractor, who pays for most of the overhead him or herself). An instant messaging system that also allows for collaboration at work. A social media site that allows its users to visually share their interests with each other (and with advertisers, who sponsor content and pay for user data).

For an example of digitally-enabled business model transformation, consider Domino’s Pizza, which has experienced a massive turnaround since 2010. Forbes hailed it as a veritable case study “on how digital transformation leads to business value.” That Dominos has undergone a transformation cannot be disputed — an investor who bought $1,000 worth of Dominos shares in 2008, when it was on the brink of bankruptcy, would be able to sell them for more than $80,000 today. By comparison, $1,000 of Chipotle stock purchased the same year and sold at its peak in 2015, before the e-coli scare, would have only been worth about $5,000.

Along with introducing product innovations such as improved recipes and new menu options, Domino’s improved its processes around ordering and delivery by bringing its e-commerce technology in-house. Today, more Domino’s pizzas are ordered via digital devices than by phone.

But digitization was just the first step in Domino’s transformation. As it improved its online and mobile platforms, it introduced heavily-advertised features such as pizza profiles, which allowed users to order more easily, and loyalty programs, which boosted frequency of use. Domino’s transformation was enabled by its online storefront, but it worked because it successfully attracted and retained new customers while turning occasional customers into dedicated fans, at the same time that it extracted more value from each transaction.  More than that, it changed its branding and its relationship to its customers by making the experience of ordering pizza fun — which was the missing piece in Dominos old CVP. Now customers can play “Pizza Hero” on their iPhones after entering their personalized orders, or watch a clock click down the time to their pizza’s delivery.

Building its own digital platform was a game-changer for Dominos, but it’s not what changed its game. It did that by strengthening its CVP (adding more in the way of both convenience and fun), its Profit Formula (by increasing its volume and its resource velocity), and by upgrading the resources and processes that it needed to support them.

Any consumer or service company that doesn’t have a digital component certainly should; this is 2018, after all. But the key to transformational growth is still a powerful and coherent business model.

Categories: Blogs

Building a Direct-to-Consumer Strategy Without Alienating Your Distributors

Harvard business - 7 hours 53 min ago
Three Images/Getty Images

Companies increasingly use digital technologies to circumvent distributors and enter into direct relationships with their end-users. These relationships can create efficient new sales channels and powerful feedback mechanisms or unlock entirely new business models. But they also risk alienating the longstanding partners that companies count on for their core business.

The auto industry is a case in point. Porsche’s Passport program allows consumers to subscribe via a phone app to a range of vehicles for a fixed monthly fee. Your chosen Porsche is delivered to your house with insurance and maintenance as well as unlimited miles and flips to other models included. But if you’re a Porsche dealer, how do you like this idea? Now consider that similar subscription services are being offered by Volvo, Lincoln, BMW, and Mercedes, with more to follow.

These direct-to-consumer offers threaten the very livelihood of dealerships, who historically have owned the customer relationship. And many dealers are pushing back. The California New Car Dealers Association lobbied for a law that required subscriptions to go through dealers. Volvo’s program has elicited so much criticism that dealers have mobilized the Indiana state legislature to outlaw the business model.

This is but one example of the digital Catch-22, the dilemma that most manufacturers and service companies face when creating new distribution channels. As a result, many B2B companies remain stuck in a stalemate. Writing in the Sloan Management Review, Boston College professor Gerald Kane noted that 87% of executives surveyed indicated that digital technologies will disrupt their industries to a great or moderate extent. Yet fewer than half felt that their companies were doing enough to address this disruption.

We frequently find that executive teams understand the potential of a reinvented distribution strategy; however, they are unclear on how to proceed. While the opportunity is compelling, so is the potential to upset existing distribution partners and thereby damage the core business. Disgruntled distribution partners may retaliate in ways such as switching to rivals, favoring competing products, or even lobbying for legislative remedies.

How can companies position for the future without putting their current business in jeopardy? Here are three strategies for developing digital distribution approaches that minimize risk:

Embrace Stealth

In the past, companies looking to test new business models could quietly enter a new geography free from restrictive distribution contracts that limit their ability to go direct in their traditional geographies. But that is harder to do in the digital age, as customers and partners anywhere can easily see what you’re doing online.

Alternatively, the company can operate in stealth mode by targeting customer segments that have been poorly served or ignored by traditional distributors.

Recently, Verizon quietly launched a startup called Visible which offers no-contract mobile phone service subscriptions for a $40 flat fee and is only available for purchase through an app. This model competes mainly with smaller-brand, low-end providers and may not be seen as a direct threat by Verizon’s massive distribution network of company-owned, partner, and authorized reseller stores that are selling higher-margin services.

Sometimes, an entirely new product provides the right entry point. Starting in 2011, Mercedes chose to develop direct distribution capabilities for electric bicycle sales under its Smart brand.

Mercedes’ strategy preserves its traditional distribution network for its major lines of vehicles, while enabling the company to build the capabilities and infrastructure needed to support a reinvented distribution strategy — selling to consumers rather than through traditional dealerships.

Create Hooks

Distribution partners willingness to retaliate can be minimized if companies are able to create hooks that compel and reduce their negotiating leverage. There are many ways to build hooks, including bundling products, monopolizing a category, or developing features that are indispensable to a subset of customers.

For example, Cree Inc. made a splash when it introduced affordable consumer LED lightbulbs in the early 2010s. For several years the company was both a cost and product feature leader in the category. This enabled Cree to command significant shelf space in Home Depot, while simultaneously building a direct-to-consumer business. During this period, Home Depot was compelled to carry Cree products. This dual distribution strategy resonated with both consumers and investors — as Cree’s stock price tripled from 2011 to 2013.

In 2012, with the launch of the Surface product line, Microsoft began directly competing with the manufacturers and OEMs who had been its distribution partners for decades. Microsoft was able to do so largely due to its monopolization of the desktop operating system market. Traditional Microsoft partners such as Acer, Lenovo, HP, and Dell were already hooked on Windows and had little choice but to accept Microsoft’s direct-to-consumer strategy.

In fact, many of Microsoft’s partners, at least publicly, were supportive of the Surface. In 2012, Acer’s founder, Stan Stinh, indicated that he believed the Surface was only intended to stimulate market demand and that “once the purpose [was] realized, Microsoft [would] offer more models.” Today, the Surface product line has a greater share than Acer does in the U.S. market for personal computers.

Minimize Pain

Supporting downstream partners’ business can also reduce the risk of retaliation.

The heavy equipment manufacturer Caterpillar, for example, introduced a vehicle management platform that provides customers with insights on vehicle utilization, health, and location. The platform is sold directly to customers — frequently removing downstream partners from the sales process. Ultimately, though, the platform benefits partners because it alerts customers when they need to get their equipment serviced by these local partners — a key revenue stream for Caterpillar’s distributors.

UnitedHealth Group, one of the largest health insurers in the U.S., is on the verge of becoming the nation’s largest employer of physicians. But under its subsidiary Optum, UnitedHealth Group has pursued an aggressive M&A strategy to build its direct-to-consumer capabilities while being careful to not upset traditional healthcare providers. For example, Optum has continued to accept over 80 types of health insurances across its facilities and has avoided restricting United insurance customers to Optum-owned providers. Optum’s deliberate strategy has caught the industry’s attention, but to date has avoided direct retaliatory actions by incumbent healthcare providers.

Digital represents a significant opportunity for many B2B companies, but also risk. Failure to act enables competitors and new entrants, while action risks retaliation from existing partners. To break this stalemate, leadership should align on the imperative to act, acknowledge the risks of action, and identify the right strategy with which to move ahead. Your long-term partners are more likely to stand by you if they see your direct-to-consumer move not as an act of aggression but as a plan for growth.

Categories: Blogs

Study: When Leaders Take Sexual Harassment Seriously, So Do Employees

Harvard business - 8 hours 54 min ago
thatsval/Getty Images

When it comes to the issue of sexual harassment in the workplace, employees demand leadership accountability. Consider the recent Google walkout, which employees staged to protest the lofty exit packages paid to men accused of misconduct. In response, Sundar Pichai, Google’s chief executive, and Larry Page, chief executive of its parent company, Alphabet, apologized.

Business leaders want to do better. The high costs of sexual harassment are evident, from employee outrage to the loss of worker productivity and employee attrition. One study estimated that for each employee who was sexually harassed, the company lost an average of $22,500 in costs associated with just lost productivity. Yet, solutions are hard to come by.

Our research points to a single step that leaders can take to help reduce sexual harassment: communicate to employees that preventing it is a high-priority issue for their companies. In just a few sentences, this signals to others how much they should prioritize the issue and sets a culture in which sexual harassment is not tolerated.

This messaging is critical because, more than any other aspect of a company, it is organizational climate that best predicts the occurrence of sexual harassment. When the climate toward sexual harassment is lenient, members feel that there are few consequences – that those who engage in sexual harassment will be protected, while those who report it will be disregarded or even penalized. Such a climate characterized the environments in which recent high-profile sexual harassment cases like those of Harvey Weinstein and Charlie Rose happened. In contrast, in a climate intolerant of sexual harassment, people perceive that their organization takes a strong stance against it by taking complaints seriously and holding perpetrators responsible.

Our interest in the impact of leader messaging arose from our own experiences working in higher education. In 2015, many universities around the country conducted surveys to measure the incidence of sexual violence on campuses nationwide, and university presidents then issued statements outlining the findings. As the media picked up the statements, we noticed a great deal of variation in how they were written. Some expressed outrage; others brushed off the disturbing survey results. We wondered if the different responses shaped how students came to think about sexual assault on their respective campuses. So we conducted a national experiment to explore the impact of leader messaging more broadly.

In that newly published research, we found that the way leaders communicate can indeed shape peoples’ attitudes toward sexual harassment. In our experiment, 618 online study participants in the US read a brief statement from a fictional company about the results of a sexual harassment survey taken by its employees. For some participants, the statement included a quote from the CEO emphasizing the severity of the problem, such as: “The results of the survey are alarming.” Others read a CEO quote downplaying the issue, such as: “We are skeptical that the survey represents an accurate rate of sexual harassment at Soldola.”  The factual information about the survey was the same for all participants.

This simple difference in leader communication turned out to be powerful. Those who read the “skeptical” statement were less likely to rate sexual harassment a high-priority problem at the company, while those who read the message about the leader taking sexual harassment seriously were more likely to rate it a high-priority problem. This pattern held no matter the participants’ gender or political affiliation.

While our study showed that leaders can raise the level of concern about sexual harassment, some might argue that it is not in the best interests of a company. Why acknowledge that sexual harassment is a problem and risk damaging the company’s reputation?

First, downplaying the issue may result in more damage to a company’s reputation. As we have seen in many cases this year, when a leader signals to her or his employees that sexual harassment is not taken seriously, those who are victimized may ultimately turn to the media, and, as we noted above, negative coverage of these scandals can have profound and expensive consequences, including leadership and employee turnover, reduced productivity, walkouts, and even boycotts. The public perception of a toxic culture can have long-lasting effects on the corporate brand, making it difficult to attract and retain not only customers but also employees who want to work in a safe, fair environment.

Second, ignoring the problem amounts to institutional betrayal, which can compound the trauma suffered by victims of sexual harassment. People who are sexually harassed already experience negative health consequences; and research shows that when institutions fail victims of sexual violence, their negative health outcomes are exacerbated.

If leaders do nothing, they are not just acting neutrally. They may be fostering a culture where sexual harassment will become more prevalent. But if a leader instead identifies sexual harassment prevention as an issue that the company prioritizes, our research shows that this stance will push other people in the organization to take it seriously as well.  Of course, leader communication alone will not solve this issue. Companies that wish to eradicate sexual harassment must follow words with actions, taking steps to bring transparency and accountability to policies and investigation processes. However, setting the right tone with a clear zero-tolerance message is an important first step.

Categories: Blogs

How to Talk to Your Boss When You’re Underperforming

Harvard business - 9 hours 48 min ago
Tim Macpherson/Getty Images

It’s normal to underperform on occasion. After all, everyone has an off quarter — or even an off year — from time to time. But don’t just sit back and wait for that painful performance review. You need to have a conversation with your manager sooner rather than later. How should you position the news? How can you maintain your reputation while being honest? And what sort of explanation — if any — should you give?

What the Experts Say
When you’re having a bad time at work — your big project isn’t coming together as planned or you’re missing your sales targets by a wide margin — talking to your manager may be the last thing you want to do. But you shouldn’t shy away from the topic, according to Jean-François Manzoni, president of IMD and the author of The Set-Up to Fail Syndrome. “You don’t want your boss annoyed at you and wondering” about what’s going on, he says. It can be a tricky conversation, however. Dick Grote, a management consultant and author of How to Be Good at Performance Appraisals, says you must do two things to preserve your professional standing. First, “come clean” about your underperformance “before your boss has had a chance to discover it another way,” and second, focus on “solutions, not excuses.” Here are some ways to think about — and prepare for — the discussion.

The first step in owning up to your underperformance is determining the source of the problem. For starters, says Manzoni, you need to consider “whether you really are underperforming.” Often our efforts don’t “immediately translate into desired organizational outcomes.” In other words, “you could be doing all the right things but, unfortunately, it’s taking a long time for it to lead to positive results.” Look at what both the “leading and lagging indicators” tell you. If both point to underperformance, Grote recommends a period of “soul-searching.” You need to figure out if this “is a one-off situation or more of a trend.” If the missed goals are an anomaly or due to extenuating circumstances that’s one thing, but if they’re indicative of a pattern, they ought to “trigger some career thinking,” he says. This bad stretch might mean that “you are really struggling” and perhaps in “need of more development,” he says. It could also mean that “you’re not in the right job.” (More on this below.)

Next, says Grote, you need to think about your underperformance from your boss’s perspective. Ask yourself, how will my boss react to this news? “If you have a boss who has a propensity to blow up, you need to prepare for that,” he says. “You don’t want to go in naïvely thinking ‘I hope my boss is in a good mood today.’” Think especially about how you will explain what happened, says Manzoni. It could be, for instance, that you “took a risk” that didn’t pan out as you’d hoped. “You thought the market would turn. The odds were good. It was a reasonable bet, but it didn’t work out.” Or maybe you’re dealing with an outside distraction — an ailing parent, for instance — that’s the reason you’re “not at your best.” A “reasonable boss will be able to understand that,” he says.

Own up
When the time comes to talk to your boss, be straightforward and direct, says Grote. “Start the conversation by saying, ‘I have some bad news for you.’” Doing so “rivets the person’s attention” and ensures “no mixed messages.” Second, “appropriately express contrition and remorse.” A sincere “I’m sorry” goes a long way. Finally, segue into how you can make it right. “Focus on correction, not blaming, shaming, or fault finding,” he says. It’s natural to get defensive in these situations but do your best to avoid listing excuses. In difficult discussions like these, it’s natural to want to end on an optimistic note. And yet, “there are some conversations that won’t have a positive outcome,” says Grote. For this reason, he advises that you “ought not give too much thought about how to put a happy sheen on things.” The bottom line: “Don’t try to circumnavigate the problem.”

Ask for advice
As you offer ideas and suggestions on how to improve the situation, it’s worthwhile to ask your manager for guidance, according to Manzoni. “Asking your boss for advice shows that you respect your boss’s intellect and that you trust your boss,” he says. Asking for assistance is “flattering to your boss,” but you shouldn’t be obsequious, adds Grote. He suggests saying something like, “Here’s what occurs to me to make sure this doesn’t happen again. Does this make sense to you? How else would you handle this?”

Think long term
If your underperformance is representative of a bigger problem, you need to address it. This will be a separate and “longer conversation” with your manager, says Grote. He recommends saying, “When we get over this hump, I’d like to schedule a time to talk with you about the implications of this and what I can do in the long term to make sure it never happens again.” Possible interventions include more frequent check-ins or some sort of training to boost your skills. Your underperformance might also be a sign that you need to find a position at your company that’s better suited to your strengths. In this case, Manzoni advises talking to your boss about a possible move. “Say, ‘I appreciate your trust and support. I’m trying hard, but I am still struggling,’” he says. If you “establish your good intentions,” hopefully your boss can support you in identifying and transitioning to a more suitable role.

Principles to Remember 


  • Try to figure out the source of the problem by engaging in some soul-searching.
  • Offer ideas on how to improve the situation and ask your manager for guidance.
  • Resist any overly optimistic impulses. It’s not worth trying to put a positive spin on your underperformance.


  • Wing it. Prepare what you’ll say and think about how your boss will react.
  • Mince words. Begin the conversation with “I have some bad news for you.” This ensures no mixed messages.
  • Ignore red flags. If you’re struggling, it might mean that you need more frequent check-ins with your boss, more development, or a job change.

Case Study #1: Admit your mistakes and generate ideas on how to improve
Matt Lee works at ResumeGo, a resume writing service company. Matt joined the company in 2016 and has consistently been a strong performer — until he recently found himself in an unexpected slump. The company offers money back guarantees for clients who are not satisfied with its products, and a little over 10% of his clients had asked for refunds. “This was the highest percentage of unsatisfied clients I’d ever had,” he says. “I had to explain it to my boss.”

First, he thought about the source of the problem. “A lot of the issues stemmed from a lack of communication with my clients,” he says.

In looking back, he noted that several of his clients said they didn’t like the formatting of their new resume. “I realized that if I had simply showed them the format I was going to use beforehand and explained the reasoning behind why I chose that format, this [trouble] could have been avoided.”

Second, he thought about how his boss would react and prepared what he was going to say. “More refunds requested by customers ultimately means less revenue for the company, so I was definitely nervous [to talk to my boss],” he says.

Matt began the conversation by “openly acknowledging” that there was a problem. “I wanted my supervisor to know that I was very serious about finding ways to improve my performance.”

Matt says he didn’t want to come across as defensive in trying to justify his poor performance, but he also wanted to make sure his manager understood his perspective. “While I acknowledged that there were things I could have done differently, I also defended the specific decisions I made with regards to how I wrote each resume,” he says. “I’m the expert here when it comes to how to write and design resumes, so I can’t simply alter my standards every time a client disagrees with how I approach their resume.”

Ultimately his boss agreed with many of Matt’s points. “It’s important with these kinds of issues to stand your ground and justify your actions — especially when you are confident in the decisions that you made.”

Matt ended the conversation with ideas on how to improve. “I had a list of things I could do that would potentially increase my customer satisfaction numbers,” he says. “These mainly revolved around communicating with clients more extensively at the very start before making certain decisions about their resumes.”

Since the conversation with his boss, Matt has worked on his communication with clients, and his customer satisfaction numbers have improved as a result. “I think that particular quarter was likely just an outlier,” he says.

Case Study #2: Work together with your boss to improve your performance
Each January, Tracy Nguyen, an online media relations associate at Tiny Pulse, a Seattle-based startup that provides technology to assess employee morale, sits down with her boss to outline her goals for the coming year.

“This way I am always able to track my performance,” she says. “As many PR practitioners, my main responsibility is managing brand reputation through generating positive media coverage. Last May, I did not meet a monthly goal of securing seven unique instances of press coverage.”

She reflected on the reasons for her missed goal. “I sat back and looked at all of my approach methods to see what was working, what was not, and what needed to be improved.”

She figured out that her long pitch needed work. “It was not getting the attention of my target journalists,” she says.

Second, she did a lot of research on how to improve her pitching. She also sought advice from her peers on how she could get better at it. Then she prepared what she would say to her boss.

When it came time for the meeting, she told her boss that she missed her objective. She apologized for falling below expectations but then launched into a discussion of what she would do to improve. “I wanted to bring this to my manager’s attention instead of waiting to be asked about what holds me back,” she says. “I was determined to lead with possible solutions.”

Tracy also asked her boss for suggestions on how to enhance her pitching skills. “Together, we came up with a solution to try an 80/20 method, which means spending 80% of the time targeting middle-tier publications and 20% on top-tier ones,” she says.

To measure the effectiveness of this method, they compared the impact of the new practice to the previous one. “As a result, two months later I exceeded my goal,” she says.


Categories: Blogs

How to Manage Multiple Priorities – Friday Distraction

Hr Bartender - 12 hours 57 min ago

(Editor’s Note: Today’s post is brought to you by our friends at Kronos, a leading provider of workforce management and human capital management cloud solutions. Want to create an inspired workforce? Check out this Forbes interview with Kronos CEO Aron Ain where he talks about being an un-leader. Enjoy the article!)

There’s quite a bit of research that says multi-tasking isn’t good for us. And that we don’t really do it well. Even when we think that we do. But what does that mean in a world where we’re constantly being asked to manage multiple things…at the same time.

I don’t know about you, but somedays I feel like this Time Well Spent from our friends at Kronos. I feel like I’m playing Whack-A-Mole. And that’s not good. Over the years, I’ve figured out a few things that help me manage multiple things without feeling like I’m sacrificing quality – for both the project I’m working on AND my personal sanity.

Learn how to plan. I’m not talking about how to put appointments in your planner, although that can be helpful. I’m referring to finding time to think. Finding time to analyze information. Not just quickly glance at it and hastily make a decision. Having (the right) time to think, explore, develop crazy ideas and vet them can be immensely valuable. 

Prioritize and reprioritize. New priorities are always popping up. The answer isn’t to simply add another priority. That’s a recipe for spreading ourselves way too thin. Whether you’re an organization or an individual, we need to decide if a new initiative is really a priority and where it falls on the list. Maybe it’s not priority number one. OR maybe it is, and we need to shift some other priorities. 

Renegotiate commitments. I don’t’ want to say, “Don’t overcommit.” I think the better approach is, when faced with changing priorities, renegotiate your other commitments. Again, whether you’re an individual or an organization, go to the people you’ve promised a deliverable and discuss a new timetable. You’d be surprised how many people will be willing to work with you.

I don’t know that it’s realistic to think we’re never going to be asked to work on multiple projects or strategies at the same time. But that doesn’t mean we can’t reprioritize our commitments, so we can do our work well. 

The post How to Manage Multiple Priorities – Friday Distraction appeared first on hr bartender.

Categories: Blogs


Harvard business - Thu, 12/13/2018 - 15:10

Are you worried about being seen as a job-hopper? In this episode of HBR’s advice podcast, Dear HBR:, cohosts Alison Beard and Dan McGinn answer your with the help of Allison Rimm, a career coach and the author of The Joy of Strategy: A Business Plan for Life. They talk through how to leave after a brief time on the job, explain a series of short stints on your résumé, or know when to stick it out.

Download this podcast

Listen to more episodes and find out how to subscribe on the Dear HBR: page. Email your questions about your workplace dilemmas to Dan and Alison at

From Alison and Dan’s reading list for this episode:

HBR: Managing Yourself: Job-Hopping to the Top and Other Career Fallacies by Monika Hamori — “The notion that you get ahead faster by switching companies is reinforced by career counselors, who advise people to keep a constant eye on outside opportunities. But the data show that footloose executives are not more upwardly mobile than their single-company colleagues.”

HBR: Setting the Record Straight on Switching Jobs by Amy Gallo — “In fact, people are most likely to leave their jobs after their first, second, or third work anniversaries. Millennials are especially prone to short stays at jobs. Sullivan’s research shows that 70% quit their jobs within two years. So the advice to stick it out at a job for the sake of your resume is just no longer valid.”

HBR: 10 Reasons to Stay in a Job for 10 Years by David K. Williams and Mary Michelle Scott — “It’s easy to quit over perceived unfairness or serious challenges. But it shows much stronger character to persevere, to find and enact solutions to problems, repair damage, and to take an active role in turning a situation around.”

HBR: Managing Yourself: Five Ways to Bungle a Job Change by Boris Groysberg and Robin Abrahams — “A hasty job change, made with insufficient information, is inherently compromised. When under time pressure, people tend to make certain predictable mistakes. They focus on readily available details like salary and job title instead of raising deeper questions, and they set their sights on the immediate future, either discounting or misreading the long term. Many also have an egocentric bias, thinking only of what affects them directly and ignoring the larger context.”

Categories: Blogs

How to Follow Up with People After a Conference

Harvard business - Thu, 12/13/2018 - 11:03
Marcus Franzen/Getty Images

Attending a conference is a whir of activity — flying to a destination, engaging in several days of nonstop networking, and coming home to an inbox that has spiraled out of control in your absence. Back at work, most of us immediately go into catch-up mode; the last thing on your mind is following up with the people you just met. That’s especially true if you’re an introvert and feel overtaxed by the whole process.

But a small amount of focused effort can reap long-term benefits and ensure the arduous days you spent connecting face-to-face weren’t wasted. Here’s a framework for structuring your post-conference follow up to maximize the chances that your new connections turn into meaningful professional relationships.

First, it’s important to set aside “processing time.” The conference has probably left you with business cards scattered in your briefcase, pockets, and travel bag. Unless you transfer them quickly into whatever database system you use, they’re likely to get lost quickly. The system doesn’t much matter; it’s personal preference whether you use a business card app or add them to a spreadsheet manually.

What matters is capturing the data (including writing down where you met them, so you don’t forget over time), and also making a list of people you spoke with whose cards you didn’t obtain. That may be a substantial number if the conference discourages card exchange (some conferences fear that people trading business cards will make the gathering appear too “salesy”), or if your encounter has been brief, such as a chat in the lunch line. After I spoke at the recent Global Peter Drucker Forum in Vienna, I took close to 45 minutes to go through the program booklet listing conference attendees and circling the names of those I had conversations with. I hadn’t exchanged contact information with most of them, but they were still connections worth maintaining.

Second, for each person you’ve written down, take a moment to identify your goal for that relationship. You can’t invest in all connections equally, of course — so where should you prioritize your time? You may want to discard some connections upfront — for instance, someone who came up to you, handed you their card, and immediately started pitching you to buy their product or service. It’s not worth subjecting yourself to that in the future.

But most new relationships will fall into three categories. Specifically, those are “miscellaneous interesting people,” with whom there’s not an obvious point of connection; people with whom you have a specific reason to follow up; and people you’d like to build a deeper relationship with.

Miscellaneous interesting people. At the Drucker Forum, for instance, I had a nice conversation with a woman who is an executive with the Port of Vienna. My work doesn’t generally overlap with hers, but I’d be glad to keep in touch because it’s always nice to know a diverse set of people. For instance, in the future, I could imagine a hypothetical situation in which I was hired to speak to a shipping company. Having a contact knowledgeable about industry trends would be valuable as a way of understanding what was important to the client. Similarly, there may be unexpected ways I could assist her in the future.

For connections like that, I apply an “ambient awareness” strategy and send a friend request on LinkedIn, so that we can stay in touch through that channel and she may periodically be exposed to my posts in her news feed, and vice versa. Note that it’s important to be aware of national preferences related to social channels. Immediately after Vienna, I headed to Moscow to teach an executive education program and discovered that most Russians don’t have LinkedIn accounts because the service is officially blocked there. I connected with those colleagues on Facebook or Instagram, instead.

A specific reason to follow up. For other conference attendees, my mission is clearer: they mentioned specific business opportunities (an invitation to speak at a university, give a talk for a large company, etc.). I make a point of emailing them them in a timely fashion — within a week is ideal — to remind them of their suggestion and request a follow-up call.

Building a deeper relationship. Finally, you’ll meet some people with whom you’d like to build a long-term connection. Their work may be extremely salient to yours (they’re a VC and you’re an executive coach that works with startups), or you may just have great personal rapport. Either way, you want to develop a strategy to turn a one-time encounter into something more meaningful, as I describe in my e-book, Stand Out Networking. If they live in your city, the options are more plentiful; you can invite them to join you at a future professional event, such as a Chamber of Commerce gathering, a tech meetup, etc., or to a hybrid business/social event (after meeting a theater executive at a conference and hitting it off, he invited me to join him a couple of weeks later at a Broadway show for which he had an extra ticket).

If you live in different cities, you’ll need to develop a more deliberate strategy. Perhaps there are future conferences coming up they might be likely to attend; you could get in touch to inquire if they’ll be there, and if so, plan to meet up in person during the event. If you’re a frequent business traveler, you can also put them on the list of people you ping when you’re in town for visits. Even if it’s unlikely you’ll meet in person again anytime soon, you can be on the lookout for interesting articles to send them, or look for ways to be helpful (for instance, if they mentioned they’re looking for new contributors for the magazine they edit, you could suggest talented colleagues).

Of course, it’s essential to make sure the help you offer is actually helpful; there’s a big difference between connecting an editor actively seeking contributors with great candidates, and connecting an overwhelmed editor with would-be columnists they don’t have the time to deal with. It’s essential to listen to their stated needs, not make assumptions about what might be useful and risk turning yourself into a burden in the process.

Almost every professional attends at least a few conferences per year. By following these strategies, you can make sure the time, effort, and money you spend on them actually turns into true relationships, not just one-time conversations that are quickly forgotten.

Categories: Blogs

AI in 2019: The Good, The Bad — And the Unknown - SPONSOR CONTENT FROM PWC

Harvard business - Thu, 12/13/2018 - 08:45

Twenty percent of executives at U.S. companies with artificial intelligence initiatives report that they will roll out AI across their business this year, according to PwC’s 2019 AI Predictions report. These companies expect their AI investment, which is often part of intelligent automation initiatives, to go beyond improving productivity and cutting costs. They see AI as a path to growing profits and revenue in 2019.

However, the executives in the survey said that there are challenges, such as training employees to use AI systems, and security threats remain a concern. Success in leveraging AI will be built on strategies for the organization and the workforce, for creating responsible AI and AI-ready data, for reinventing the business, and for integrating AI with other technologies.

For more practical steps to deliver on your 2019 AI priorities, click here.


Categories: Blogs

Using AI to Improve Electronic Health Records

Harvard business - Thu, 12/13/2018 - 07:27
splain2me/Getty Images

Electronic health record systems for large, integrated healthcare delivery networks today are often viewed as monolithic, inflexible, difficult to use and costly to configure. They are almost always obtained from commercial vendors and require considerable time, money, and consulting assistance to implement, support and optimize.

The most popular systems are often built around older underlying technologies, and it often shows in their ease of use. Many healthcare providers (including the surgeon and author Atul Gawande) find these systems complex and difficult to navigate, and it is rare that the EHR system is a good fit with their preferred care delivery processes.

As delivery networks grow and deploy broad enterprise EHR platforms, the challenge of making them help rather than hinder clinicians is increasing. Clinicians’ knowledge extends far beyond their clinical domain — care procedure knowledge, patient context knowledge, administrative process knowledge — and it’s rare that EHRs can capture all of it efficiently or make it easily available. What’s more, in the U.S., regulatory, billing and revenue cycle requirements add additional complexity to the electronic healthcare workflow and further reduce the time clinicians have to engage with patients.

The options for improving this misalignment between systems and processes are limited. One is to design EHR systems to be more integrated and streamlined from the beginning. One Medical, for example, a concierge medical practice across 40 cities in the U.S., developed its own EHR system that is closely aligned with the care and patient relationship practices it employs. Flatiron Health, a data and analytics-driven cancer care service recently acquired by Roche, bought a company with a web-based EHR and tailored it to fit its OncoCloud EHR for community-based oncology. Although these bespoke systems do seem to fit clinician workflows better, they are themselves difficult and time-consuming to develop (One Medical required ten years to build its system) and they are relatively narrow in scope. Building a system from scratch or extensively customizing a commercial one would probably not work for large delivery networks.

Using an open source EHR is a second option. However, most current ones are designed for small medical practices and aren’t easily scalable or need substantial configuration. And even though the software is free, considerable programming and IT infrastructure is required to implement it and tailor it to the individual practice. Further, open source EHRs are less carefully maintained and less frequently updated than commercial ones and so can quickly become obsolete. Finally, regulatory requirements and reimbursement rules change rapidly. Relying on either open source or internally developed systems in keeping up with those requirements creates both compliance risks and financial challenges.

A third and more promising option is to use AI to make existing EHR systems more flexible and intelligent. Some delivery networks, sometimes in collaboration with their EHR platform vendor, are making strides in this direction. AI capabilities for EHRs are currently relatively narrow but we can expect them to rapidly improve. They include:

Data extraction from free text Providers can already extract data from faxes at OneMedical, or by using Athena Health’s EHR. Flatiron Health’s human “abstractors” review provider notes and pull out structured data, using AI to help them recognize key terms and uncover insights, increasing their productivity. Amazon Web Services recently announced a cloud-based service that uses AI to extract and index data from clinical notes.

Diagnostic and/or predictive algorithms Google is collaborating with delivery networks to build prediction models from big data to warn clinicians of high risk conditions such as sepsis and heart failure. Google, Enlitic, and a variety of other startups are developing AI-derived image interpretation algorithms. Jvion offers a “clinical success machine” that identifies patients most at risk as well as those most likely to respond to treatment protocols. Each of these could be integrated into EHRs to provide decision support.

Clinical documentation and data entry Capturing clinical notes with natural language processing allows clinicians to focus on their patients rather than keyboards and screens. Nuance offers AI-supported tools that integrate with commercial EHRs to support data collection and clinical note composition.

Clinical decision support  Decision support, which recommends treatment strategies, was generic and rule-based in the past. Machine-learning solutions are emerging today from vendors including IBM Watson, Change Healthcare, AllScripts that learn based on new data and enable more personalized care.

While AI is being applied in EHR systems principally to improve data discovery and extraction and personalize treatment recommendations, it has great potential to make EHRs more user friendly. This is a critical goal, as EHRs are complicated and hard to use and are often cited as contributing to clinician burnout. Today, customizing EHRs to make them easier for clinicians is largely a manual process, and the systems’ rigidity is a real obstacle to improvement. AI, and machine learning specifically, could help EHRs continuously adapt to users’ preferences, improving both clinical outcomes and clinicians’ quality of life.

However, all of these capabilities need to be tightly integrated with EHRs to be effective. Most current AI options are “encapsulated” as standalone offerings and don’t provide as much value as integrated ones, and require time-pressed physicians to learn how to use new interfaces. But mainstream EHR vendors are beginning to add AI capabilities to make their systems easier to use. Firms like Epic, Cerner, Allscripts, and Athena are adding capabilities like natural language processing, machine learning for clinical decision support, integration with telehealth technologies and automated imaging analysis. This will provide integrated interfaces, access to data held within the systems, and multiple other benefits — though it will probably happen slowly.

Future EHRs should also be developed with the integration of telehealth technologies in mind (as is the EHR at One Medical). As healthcare costs rise and new healthcare delivery methods are tested, home devices such as glucometers or blood pressure cuffs that automatically measure and send results from the patient’s home to the EHR are gaining momentum. Some companies even have more advanced devices such as the smart t-shirts of Hexoskin, which can measure several cardiovascular metrics and are being used in clinical studies and at-home disease monitoring. Electronic patient reported outcomes and personal health records are also being leveraged more and more as providers emphasize the importance of patient centered care and self disease management; all of these data sources are most useful when they can be integrated into the existing EHR.

Most delivery networks will probably want to use a hybrid strategy — waiting for vendors to produce AI capabilities in some areas and relying on third party or in-house development for AI offerings that improve patient care and the work lives of providers. Starting from scratch, however, is probably not an option for them. However necessary and desirable, it seems likely that the transition to dramatically better and smarter EHRs will require many years to be fully realized.

Categories: Blogs

When a Leader Is Causing Conflict, Start by Asking Why

Harvard business - Thu, 12/13/2018 - 07:00
Charles Orr/Getty Images

Not long ago, I received a call from an HR manager at a large corporation seeking an executive coach for one of their senior leaders. He was described as arrogant, tactlessly blunt, and lacking empathy. Despite his challenges, all of which hadn’t improved much despite several previous coaching interventions, the company hadn’t fired him because he was considered one of the industry’s most brilliant engineers, responsible for several of the firm’s most profitable patents. The company simply couldn’t afford to let him go.

How do you coach a leader whom others think is a hopeless case? Sometimes you can’t. The person may well turn out to be a jerk who won’t change their toxic ways. In that case, the company needs to fire the individual. Tolerating destructive behavior will send the signal that it’s ok to mistreat others as long as you get results. But, often, as was the case with my client, the leader who everyone thinks is hopeless is simply being misunderstood and their behavior misdiagnosed.

Whether you are a coach, an HR leader, or an executive trying to help a challenging subordinate, your credibility, and that of the leader you’re trying to help, depends on an accurate understanding of what’s actually going on. Here are three ways you can be sure you’re addressing the right problem with a challenging leader in the right way.

Manage your assumptions and judgements. Without realizing it, those of us in advisory roles often bring our own issues to our work helping others. We make assumptions and judgements based on our own experiences that often have little to do with the leader we’re trying to support. Before I even met this leader, I found myself feeling anxious, dismissive, and judgmental toward him based on what others had said. I imagined how I would respond to his insulting behavior and what I would say if he made an arrogant comment. But my defenses were unwarranted and my assumption that he was a jerk proved wrong. He was engaging, open to learning, and willing to accept his need to improve. When I asked him why he thought he was so harsh toward others, he seemed stumped and genuinely troubled by how others had characterized him.

You and Your Team Series Difficult Conversations

I’d heard from the company’s HR manager that this executive was especially cruel toward one colleague. Why had he singled out one person to treat in a uniquely nasty way? As we explored this, it became clear that something about the younger engineer triggered the executive’s anger and it eventually clicked: The young engineer reminded him of his older brother, with whom he had a contentious relationship. My client was raised in an excessively achievement-oriented family, that prized blunt candor over tact, and he was regularly sent the message that he was inferior. His brother had been the family’s golden child while he was never good enough. This direct report was a daily reminder of that pain. This back story in no way excused his behavior, but it did explain it. More importantly, it revealed a path forward toward changing it. But I had to set aside my biases and prejudgments to build the trust necessary to access these important insights.

Look past symptoms to contradictions. Determining what lies beneath seemingly destructive behavior requires looking beyond symptoms. My client’s colleagues had described him as mean and insensitive. His previous coaches had focused on various interpersonal techniques, like how to give constructive feedback, work with different personality styles, and delegate effectively. But they’d neglected to probe into the dynamic with that one engineer. To thoroughly diagnose a leader’s behavior, look for breaks in patterns. Are there people this person works especially well or poorly with? Specific circumstances in which they shine or falter? No one is the same all the time, so understanding where people deviate from predictable habits can isolate important clues. In my client’s case, his unique contempt toward one colleague was an important data point. Further, I learned later that his widely regarded technical expertise coupled with his family background made him feel anxiously responsible for the company’s technical reputation. His team members experienced this as micromanagement and dismissive of their expertise. If we’d focused on those symptoms, we wouldn’t have gotten very far. We needed to understand the root cause. It’s not uncommon to inaccurately diagnosis bad leadership behavior. One Arizona State University study found that toxic leadership pathologies are often confused with behaviors that might fall into a normal range of pathology. To avoid confusing common leadership shortfalls with serious pathologies, it’s critical to dig deeper behind symptoms.

Have a broad repertoire of solutions. For many in advisory roles, their diagnostic lens is narrowed to problems they are best equipped to solve. Every hammer looks like a nail, as the saying goes. For example, I’ve seen some consultants whose specialty was team building, so it was no surprise that their findings and recommendations were all around improving team trust. Leadership coaches use their favorite personality instruments to solve everything from poor financial performance to low morale. It’s important to be open-minded to solutions that fall outside your expertise. Ineffective leadership behavior can originate from deep-seated pathologies to problems with organizational culture. Having a repertoire of tools and approaches helps avoid the dangers of applying a one-size-fits-all solution to all situations. And don’t be afraid to refer people to others who have different expertise that may be able to better help your clients with particular issues. In the case of my client, I recommended he also see a therapist to work on his anxiety and unresolved family issues. He and I worked on more effective ways to engage, teach, and empower his team, and how to recognize when his triggers were getting in the way of doing so.

Consistent scholarly research suggests when it comes to empirically measuring the effectiveness of those advising leaders, we fall far short. Mislabeling behavior or a person as beyond help is one way we fail leaders. If you don’t look for contradictions, get to the root cause, and have a range of solutions, you could unwittingly limit someone’s growth or, even worse, derail their career. But if you do those things, with an open mind, you may be able to help save the job of a valuable leader who might otherwise have been let go, and in turn, provide great value to those you serve.

Categories: Blogs

Dealing With Managers Who No Show for Interviews – Ask #HR Bartender

Hr Bartender - Thu, 12/13/2018 - 02:57

I’ve been in this position before. Many times, as a matter of fact. It’s not fun. And frankly, it’s not right.

Hi! I work as a candidate experience coordinator, and one of my biggest pain-points is dealing with last minute cancellations from our hiring managers that create 30-60-minute gaps in the middle of a candidate interview. I always try to scramble and find a fill in or to rework the schedule, but I’d say more often than not, it’s not manageable due to their tight schedules.  

In the past few months, the amount this has happened has decreased significantly (due to a couple of new policies and our killer recruiters!), but it’s still an issue. Too many times I must give a tour and then sit with the candidate to talk about company culture and essentially just kill time until the next scheduled interviewer arrives. I think it’s obvious and doesn’t shed the best light on our company. Any creative suggestions or ways we could fill this time when this does happen? Thank you!

I’m going to start by pointing out the elephant in the room. This is an organization that has a person dedicated to the candidate experience, which is a goodgreat thing. The candidate experience is important. There’s a well-known case study from Virgin Media documenting how they discovered a bad candidate experience cost the organization over $5M annually and how they turned it around. So, the candidate experience isn’t just some feel good thing. It costs organizations significant dollars when it’s not done right.

Which is why I want to point out the obvious. If your organization has someone dedicated to the candidate experience and hiring managers don’t seem to respect the candidate experience, then this needs to be addressed first and foremost. With unemployment at historic lows, organizations cannot afford to send this message. Now, there are potentially some power dynamics at play and we could speculate all day long about them. Bottom-line: there’s an underlying issue that needs to be addressed.

That be said, I do understand that sometimes emergencies happen. But I’d like to think that candidates understand that. Recruiters can explain emergencies. But if the company is facing a 30-minute emergency and asks the candidate if they can stick around, here are a few things to consider:

Train a second interviewer. I know at some point the candidate will have to meet the primary hiring manager, but in the meantime, they could meet a supervisor. Or a senior employee. Just make sure the person doing the interview has attended some kind of interview skills training.

Tour the facility. I know the reader note mentioned that they do tours to fill time. If ‘no show’ managers are a frequent occurrence, I would hold the tour until the end of the candidate’s time, so I could always move it up. Versus planning the tour and then discovering a manager isn’t available. 

Move the HR interview. Speaking of juggling schedules, if this is happening on a regular basis, I would make the HR interview the one with flexibility. Again, instead of interviewing with HR and then finding out a manager needs to shift their time, I would work around the managers. 

None of these solutions are ideal, but they could work. Ultimately the solution is that managers need to conduct their interviews on time. Because if they don’t, all the schedule shuffling in the world by HR isn’t going to help. And they will lose candidates. 

Candidates have options. If managers don’t show up on time for interviews, it sends the message that the manager doesn’t respect the candidate’s time. That’s the issue to address. 

Image captured by Sharlyn Lauby while exploring Duval Street in Key West, FL

The post Dealing With Managers Who No Show for Interviews – Ask #HR Bartender appeared first on hr bartender.

Categories: Blogs

Everything Begins with a Day One

Leadershipnow - Wed, 12/12/2018 - 11:37

LEADERSHIP IS intentional influence. Leadership is about being intentional. It’s about taking responsibility for everything we do. We affect others in ways we never imagined. It is prudent of us then to be intentional about how we live out our life. It gives us the moral authority to lead. The value we add becomes the meaning in our life.

This is Day One by Drew Dudley is about choosing to lead. Everything worthwhile in life begins with a Day One. “If you want to be a leader, chose to be a leader today. Repeat that choice every day. It doesn’t matter if you failed to do it yesterday or if you’ve done it every day for a decade: every new day begins with a recommitment to that choice.”

And it’s a daily choice. With everything in our environment to distract us from that choice, to push us into being reactive rather than proactive, some days that choice will take a huge effort. But the payoff is big. Your most enduring legacy will very likely have nothing to do with your plans. The greatest impact you will have on the people around you and the organizations of which you are a part will almost always be a result of the unplanned consequences of your everyday actions.
It’s the daily behaviors that add up to a successful life—to successful leadership. So we must plan to make a difference.

Our leadership plan must revolve around who we want to be—our values. We must identify and define those values and then do something every day that embodies those values. “When you no longer must consciously align your behavior with your values—when it happens by instinct—you have created a ‘personal culture of leadership.’”

Dudley has identified six values in his life that drive his behavior every day. Yours may be different. They are articulated through six questions that when asked in advance of your day can lead to a change in your behavior. His six questions are:

1. Impact—What have I done today to recognize someone else’s leadership?

“Leadership recognized is leadership created. What if we all worked to create a culture in which the true measure of our lives is how many people smile when our name is spoken twenty years after they last saw us.” Answering this question “will create moments of impact that remind others they have mattered, do matter, and will matter in the future.” Let people know they are leaders to us.

2. Courage—What did I try today that might not work, but I tried it anyway?

Courage is demonstrated through action. “Effective personal leadership is the willingness to honestly ask ourselves: ‘In what areas of my life am I settling? Leadership is having the courage to be honest with yourself about where in your life you are allowing yourself to settle and taking action to ensure you don’t do it for a single day longer.”

3. Empowerment—What did I do today to move someone else closer to a goal?

We are responsible. “One of the reasons so few people put up their hand when asked if they are a leader is they’ve accepted a situation where the things that they are chasing in their life—the things they believe will make them happy—can only come from someone else.” A driver in New Orleans told Dudley, “We serve others whenever we help them move closer to one of their goals. For some people that might mean an educational goal, a career goal, or a goal related to their legacy. But let me tell you, the most important goals you can help someone reach are the goals related to their dignity. People need to feel seen, they need to feel understood, they need to feel connected to another person. Too many people in this world don’t have those goals met.” Acting for the success of others.

4. Growth—What did I do today to make it more likely someone will learn something?

Expand your capacity. “Go too long without appreciable growth in your life and not only does it become difficult to see yourself as a leader, it become difficult to feel like you matter.” I liked this statement: “You can’t lead on a need-to-know-only basis. You can fix things, you can maintain, but you can’t lead.” We must continually expose ourselves to the new and uncomfortable. “It’s not enough to be supportive when you see opportunities to help people, you must be a catalyst for creating those opportunities and forgiving others the tools to create them for themselves. Forget power, influence, and control: make people feel like they’re better when you’re around and they will follow you anywhere.”

5. Class—When did I elevate instead of escalate today?

We can choose our response. We don’t have to operate on autopilot. “Class is elevating a situation when your instincts push you to escalate, when it would be easier to escalate and when you have every right to escalate. The difference lies in your goal for the resolution of the situation: elevating means trying to succeed, escalating means trying to win.” Treat people better than they deserve to be treated.

6. Self-Respect—What did I do today to be good to myself?

“The fact that we have the rest of our lives ahead of us is the biggest reason we don’t do things today that will make the rest of our lives better.” Plan failure into your plans. It’s inevitable. “The most extraordinary leaders I’ve known are the ones who are best at healing.” Only hurt people hurt others. “It means leaders have got to forgive and leaders have got to heal. If we don’t evict the things living rent free in our heads, we will carry them with us and one day use them as weapons against those we care about most.”

The last section of the book is a workbook of sorts to help you define your own values and create your own questions based on those values. This is Day One will help to see leadership as a responsibility everyone has. It’s a choice. We can build a community of leaders one day at a time.

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Categories: Blogs

The Student Debt Crisis, and the FIRE Movement

Harvard business - Wed, 12/12/2018 - 10:05

Youngme Moon, Felix Oberholzer-Gee, and Mihir Desai discuss staggering student debt levels, the FIRE (Financial Independence, Retire Early) Movement, and share their After Hours picks for the week.

Download this podcast

For interested listeners:

Some recent picks:

  • Today, Explained Podcast, Nov. 30 Episode (Humans 2.0)
  • Babylon Berlin (Netflix)
  • The Prison Inside Me” (Reuters)
  • 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
  • Janesville (Amy Goldstein)
  • Airtable (software)
  • Small Fry (Lisa Brennan-Jobs)

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

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

Categories: Blogs

How to Be A Better Virtual Communicator

Eblingroup - Wed, 12/12/2018 - 08:55

Surely you’ve noticed that most conference calls, video conferences, e-mail threads and virtually any other form of virtual communications pretty much stink. Why is that and what can we do about it?

Dr. Nick Morgan has the answers. In this recorded interview with Nick, I asked him to share some of the fascinating research he gathered and conducted for his new book, Can You Hear Me? How to Connect with People in a Virtual World. He did and, even better, he shared his best tips for how we can all be better virtual communicators. (Here’s a cryptic hint. We need to overcome our sensory deprivation.)

In 2018, everyone engages in virtual communication all day long. Want to make it less painful and a lot more effective? Listen to my interview with Dr. Nick Morgan. Better yet, buy and read his book!

If you liked what you read here, subscribe here to get my latest ideas on how to lead and live at your best.

Categories: Blogs

Impact Investing Could Accelerate the Fight Against Cancer

Harvard business - Wed, 12/12/2018 - 08:00
Luxy Images/Getty Images

A new generation of philanthropists, whose wealth was created via entrepreneurship in technology-driven fields, has the unique opportunity to make a real difference in speeding the pace of progress in the fight against cancer. Not content with having hospital pavilions named for them or with giving large, open-ended gifts for academic research, they want to use their wealth to have a direct and visible impact on patients’ health. Research we have conducted has revealed a variety of new, highly impactful investment approaches that can help accelerate the pace of the development, approval, and commercialization of new cancer therapies. By embracing these new approaches this new generation of philanthropists has the opportunity to truly help cure cancer.

The results-oriented attitude of the new generation of philanthropists couldn’t have come at a better time. Rapid advances in precision medicine and immunotherapy are ushering in a new era in the treatment and cure of many cancers. And new approaches to philanthropy, often termed impact investing, have emerged as a path to meet their goals. As part of our work with the Harvard Business School-Kraft Precision Medicine Accelerator, funded by a $20 million gift from the Robert and Myra Kraft Family Foundation, we have been studying these approaches. It is our belief that they have the potential to dramatically speed the pace at which more and more cancers are either cured or become chronic, rather than deadly, conditions.

Three big ideas underlie these new approaches: precision medicine, disease-focused investing, and investing at scale. Precision medicine refers to delivering the right medicine to the right patient, at the right time, and in the right sequence. It can only be realized when the scientific understanding of a particular cancer includes knowledge of the genetic and molecular aberrations that that are causing the disease. Once the science reaches this point, the chances of creating a disease-modifying therapy go way up. To illustrate, 10 years ago personalized medicines accounted for less than 10% of the U.S. Food and Drug Administration’s drug approvals. By 2017, that number had increased to 34% and is heading to over 40% this year.

The improved odds of success in drug discovery are providing new opportunities for donors to back what has become known as venture philanthropy. In this approach, drug discovery is developed around a specific disease and is financed by the efforts of a disease-focused foundation. For example, it was the venture philanthropy of the Cystic Fibrosis Foundation that allowed Vertex Pharmaceuticals to refine and test the drugs that have resulted in three FDA-approved treatments that enable 90% of CF patients to live symptom free. Because CF is a relatively rare disease, affecting roughly 70,000 people worldwide, pharmaceutical companies were unwilling to invest in potential cures. But that didn’t stop the Cystic Fibrosis Foundation which raised over $200 million specifically earmarked as venture philanthropy to back drug-discovery and clinical-trial efforts. As Josh Boger, the founder of Vertex, has stated, “Without Cystic Fibrosis Foundation funding, Vertex would not be in CF.”

This same approach offers an enormous opportunity in the cancer space. What is needed are many investments aimed at the different underlying causes of each specific cancer type. While this creates concentration risks, which are typically avoided by venture funds, they are precisely what disease foundations should be doing and where the new generation of philanthropists can make an enormous difference by taking on one particular type of cancer.

One timely example illustrates the point. Senator John McCain recently died from glioblastoma, a relatively rare but very deadly form of brain cancer. Ted Kennedy and Beau Biden, former Vice President Joe Biden’s son, died from the same disease. Treatments to cure or modify glioblastoma could come from a large, say $150 million, venture philanthropy fund whose only mission is to identify and fund start-up companies with a variety of approaches to conquering this disease. Developing such funds — be it in glioblastoma, ovarian cancer, or any of the other less-common cancers for which no effective treatments exist — is a unique opportunity for young and older philanthropists who want to see their dollars create cures.

While venture philanthropy funds represent a way to invest at scale in a particular cancer, larger funds are beginning to emerge that invest at much greater scale in a broader range of cancers. Andrew Lo, a finance professor at MIT, has been a trailblazer in this area. Armed with numerous simulations, Lo has argued that a large megafund of investments in cancer companies could not only help find cures but also produce more predictable returns for investors.

An illustration of this concept comes from the UBS Oncology Impact Fund which raised $471 million in 2016 to invest solely in ventures that would “accelerate the development of new cures” from investors who had to commit a minimum of $500,000, an amount within reach of UBS’s private wealth clients, many of whom are looking for investments that have social impact. UBS’s role was to market the fund to its private wealth clientele. The selection of investments and nurturing of new ventures is handled exclusively by the highly respected and experienced venture capital firm MPM, which has a track record of achieving high returns in the cancer space. We believe the success of the fund represents a model that others could emulate or build upon to attract large amounts of new capital to the cancer space in either general funds as with UBS-MPM or large focused funds focused on say immunotherapies or data analytic start-ups.

Curing cancer will require brilliant science and lots of investments dollars. It is our hope that the new generation of philanthropists, with their entrepreneurial and results-oriented approach, will lead the way in having their philanthropy and investment make a real difference in halting the onslaught of this devastating disease.

Categories: Blogs

When Competition Between Coworkers Leads to Unethical Behavior

Harvard business - Wed, 12/12/2018 - 07:35
Andrew Olney/Getty Images

Many of us love competition and, more important, winning. Competition drives us toward our goals and motivates us to improve our performance, while the prestige and power that come from winning can provide a powerful morale booster. What’s more, winning increases testosterone and dopamine hormones, which, in turn, increases our confidence and willingness to take risks, and thus our chances of further success.

At the same time, the need to win can blind us to ethical considerations. It’s a potential problem in all kinds of areas: colleagues who have a strong rivalry at work, managers who need to make their numbers for the quarter, even political parties that spend campaign funds to attract votes. A common theme in these situations is that there are only a few winning slots — and maybe just one — with massive stakes in terms of money, advancement, and fame.

What’s often driving this fierce competition is the knowledge that our performance is being assessed not in absolute terms but in comparison with others’. In the workplace, such “rank-and-yank” methods — also known as the vitality curve, forced rankings, and stacking systems — are regularly used to judge performance, whereby, say, the top 20% of employees are categorized as high performers and the bottom 10% face redundancy. Similarly, the bell-curve grading in an MBA classroom ensures that students are categorized and graded relative to peers, without considering their overall performance.

In our research, recently published in the journal Human Resource Management, we found that performance evaluation schemes based on peer comparison can encourage unethical behavior. In one study, we asked 164 MBA students to read a hypothetical scenario (based on a true story) about an investment banker facing an ethical dilemma, and to estimate the likelihood that this banker would indulge in unethical behavior. The students were randomly assigned to three conditions for how the banker would be paid: a fixed salary with no bonus; a fixed salary with a bonus tied to the banker’s number of trades; and a fixed salary with a bonus tied to the banker’s performance relative to his peers. (For more details of this study and the ones below, see the sidebar “Our Studies.”) Our results showed that the students in the relative performance condition expected the banker to be more likely to behave in an unethical manner.

Our Studies

Study 1
We asked 164 MBA students to (1) read a hypothetical scenario about an investment banker, Sam, who faced an ethical dilemma and (2) estimate the likelihood that he would indulge in unethical behavior. The scenario was motivated by the true story of an investment banker whose trading practices ultimately drove his bank to insolvency. According to the scenario, Sam was one of the key traders for his bank’s recently launched operations in Singapore. He had a successful trading career at the bank’s London operations: In the past two years his trades made millions, accounting for 8% of the bank’s annual profit. The bank had hired 10 other traders in its Singapore office, all of whom handled independent accounts without interfering or knowing much about the others’ work. Recently, the scenario continued, Sam had noticed that he had a big trading loss on one of the accounts, costing his bank $100,000. Sam was thinking about what he should do, as performance appraisals were coming soon. Now, Sam also managed the bank’s error account. Most banks have an account like this, which is used to account for genuine trading mistakes. Sam could use the error account to hide his losses without the knowledge of the bank. Of course, this is illegal and unethical.

Participants were randomly assigned to one of the three conditions that differed in the performance management system applied to Sam: control (a fixed salary of $300,000 with no additional bonus possibilities), absolute (a fixed salary of $300,000 with additional bonus related to the total profits from his trades), and relative (a fixed salary of $300,000 with additional bonus based on his performance as compared with the other traders’). We found that the average likelihood of using the error account in the relative performance condition was significantly higher than that in the absolute and the control conditions. Our results showed that the participants under relative performance evaluation expected the banker to be more likely to behave in an unethical manner.

Study 2
We investigated people’s ethical behavior in self-reporting their performance. We invited 160 participants of U.S. origin on Amazon’s Mechanical Turk online platform to participate in a 10-question IQ quiz. They were asked to self-verify their answers and report their score to us. Again, participants were randomly assigned to one of the three groups that differed in their evaluation and compensation schemes: control, whereby all participants were given a fixed participation fee of 10 cents irrespective of their performance; absolute, with participants having a bonus possibility based on the number of correct answers they reported; and relative, where only the top scorers were to be rewarded with a bonus. Specifically, in the absolute condition, participants were informed that of the approximately 50 people who were participating, 10 of them would be randomly selected and we would pay an additional 10 cents for every point they scored. In the relative condition, participants were informed that of the approximately 50 people who were participating, at the end of the study we would award $1 to the 10 highest scorers based on their final scores. We deliberately kept the monetary incentives close to zero in order to study the effects of evaluation and comparisons instead of money and rewards.

The results surprised us. Participants averaged 3.39 correct answers (out of 10 questions) with no significant differences between the three experimental conditions. However, most participants — 85.6% (137 out of 160) of our sample — overreported their performance. Moreover, both the incidence and magnitude of overreporting was higher in the relative performance condition than in the other two conditions. 100% (56 out of 56) of participants in the relative performance condition overreported their performance, which was significantly greater than the 86% (44 out of 51) in the absolute performance condition and the 70% (37 out of 53) in the control condition. The self-reported score in the relative performance condition was also significantly greater than in the absolute performance condition, as well as in the control condition. In short, the competitive pressure and comparison seemed to encourage rule breaking.

Study 3
Again on Mechanical Turk, we invited 184 participants of U.S. origin to participate in a decision-making scenario. Participants assumed the role of a university professor who is close to tenure evaluation and is being considered for nomination to a prestigious national congress. The professor has a manuscript under review with a top journal, and its publication is key to both the tenure and nomination decisions. The data analysis for the manuscript had not provided desirable results and the professor is tempted to manipulate the data. Participants were asked to provide their likelihood of manipulating data on a scale of 0 (not at all) to 100 (certainly). They were randomly assigned to one of two conditions: control and consequential reflection. The only difference between the conditions was that participants in the consequential reflection condition were asked to list possible consequences (both positive and negative) of their decision before providing their likelihood judgment. We found that the average likelihood of data manipulation in the consequential reflection condition was significantly lower than in the control condition. We replicated our findings with another study, conducted with 142 MBA students who, instead of assuming the role of the professor, were asked to assess the likelihood that the academic would indulge in such data manipulation.

Further Studies
Across three additional experiments, we found that taking a moment to reflect helped to put short-term benefits and long-term potential losses into perspective. For example, in the consequential reflection study described above, after providing their likelihood judgment, all participants were asked to rate the magnitude of both the perceived risks and the perceived benefits involved in the situation they faced, using a scale of 0 (low) to 100 (high). For each participant, we combined these assessments to construct an assessment index. Our results showed that participants in the consequential reflection condition perceived significantly higher risks vis-à-vis benefits than those in the control condition.

In another study, we investigated people’s ethical behavior in self-reporting their performance. Using Amazon’s Mechanical Turk platform, we invited 160 participants of U.S. origin to participate in a 10-question IQ quiz. They were asked to self-verify their answers and report their scores to us. Again, participants were randomly assigned to one of three compensation groups: a fixed participation fee of 10 cents, irrespective of performance; a fixed fee with a bonus based on the number of correct answers they reported; and a fixed fee with a bonus for only the top scorers. The results surprised us. The groups didn’t differ much in performance, and most participants overreported their scores. But both the incidence and the magnitude of overreporting was highest in the third group, the one in which only top performers received a bonus. Notably, every single person in the group overreported their score. In short, the competitive pressure and the comparisons encouraged rule breaking.

Organizations continue to experiment with and debate the pros and cons of comparison-based performance management systems. In recent years, for example, Yahoo endorsed them, while Microsoft abandoned them. One thing is clear, though: Relative comparisons are widespread and here to stay. Given that, what can be done to limit possible temptations of ethical breaches that accompany such competitive comparative settings?

We propose a subtle and simple intervention we call consequential reflection: prompt individuals to reflect on the positive and negative consequences of their decisions. In another study of ours, participants who took a moment to think and write down such possible consequences were less willing to act unethically. Again on Mechanical Turk, we invited 184 participants of U.S. origin to participate in a decision-making scenario. Participants assumed the role of a university professor, close to tenure evaluation, who had a manuscript under review with a top journal. The data analysis for the manuscript had not provided desirable results, and as a result the professor was tempted to manipulate the data. Participants were asked how likely it was that they would manipulate the data, with some participants being prompted to consider the consequences. We found that those participants were significantly less likely to take unethical action.

Why would this kind of prompt be effective? Research on the human mind tells us we run on autopilot much of the time. The pressures of our jobs mean we often don’t take time to pause and reflect. Therefore, our intuitive, habitual behaviors take over. In matters of ethics, this can lead to a self-centered, “me-first” attitude, focused on the immediate benefits for ourselves and ignoring the long-term consequences of ethical lapses.

To put this idea into practice, we propose that leaders try the following:

  • Conduct pre-mortems. Ask employees and teams to regularly stop and reflect before making crucial ethically charged decisions. Instead of diagnosing decisions after the fact, take the time to think about their positive and negative consequences early on.
  • Organize ethics hackathons. On a regular basis, get team members together to share upcoming decisions. Let peers dissect them, play devil’s advocate, and raise possible issues with various stakeholders.
  • Train for reflection. Encourage employees to embrace a reflective, mindful approach to decision making. Training sessions on mindfulness can be beneficial for helping employees to slow down and think critically.
  • Make ethics part of culture. Include consequential reflection in values statements and culture guidelines in your organization. Reminders such as “Think first” and “Seek opinions” can be placed prominently in offices.

We believe the strengths of our intervention are that it’s effective, cheap and easy to implement, and unlikely to provoke strong objections from people. As our research shows, simple psychological interventions can be a valuable part of an organization’s tool kit for creating an ethical culture.

Categories: Blogs


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