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4 Ways to Help Different Generations Share Wisdom at Work

Fri, 05/18/2018 - 11:56


“The world is more malleable than you think and it’s waiting for you to hammer it into shape…That’s what this degree of yours is — a blunt instrument. So, go forth and build something with it.” — Bono, singer for U2, 2004 University of Pennsylvania commencement

Right now, commencement speeches are being given, quoted, lauded and judged. Not every speaker will knock it out of the park, but all have the same goal: to impart some wisdom that will hopefully inspire the next generation.

It’s great to receive sage advice on this banner day signaling “adulthood.” But when else do we hear wise adages, aphorisms, and axioms? Shouldn’t we make more room for such guidance and reflection during our working years?

Ask yourself: When was the last time someone seriously “dropped some knowledge” on you? Something that really grabbed your attention? Your imagination? Made you laugh, shed a tear, both? Something that possibly inspired you to, as Steve Jobs said in his famous Stanford speech, “Stay hungry. Stay foolish.” Hopefully it wasn’t as far back as your college graduation. But, chances are, it wasn’t at work.

After graduation, people still seek this kind of wisdom and inspiration. Millions of Americans watch inspirational talks online, go to conferences, and hire coaches – but they often don’t look in their own workplaces. Yet, wisdom is not in short supply here. There are now five generations working alongside each other – an unprecedented opportunity to learn from such a diverse range of experiences. But there’s not always an obvious path for people to share with and learn from each other. Especially when generations are siloed, both older and younger workers keep their wisdom buried.

We need a new means of intergenerational wisdom sharing. Speeches are one way to do this, but I think companies can create many other avenues to encourage and facilitate the exchange of wisdom. Here are a few steps you can take to galvanize gravitas on a daily basis at work:

Offer mid-morning wisdom talks. Each day, give one employee a platform to share their wisdom, learning, or point of view. I was fortunate enough to address a recent Zappos All-Hands employee meeting and was impressed with the line-level staff who stood up to tell their stories of success and failure. Why not offer a similar platform weekly or monthly as a mid-morning shot of inspiration? Or, what about instituting a daily team huddle where each person shares what they’re focused on for the day? Or maybe try ending a regular team meeting with one member sharing their newest-found wisdom from the past few weeks?

Recognize your “wisdom workers.” You may know the sage souls who offer quiet, invisible productivity to your organization. But what about identifying and publicly recognizing them so they can share that wisdom with a larger audience in the company? On your employee satisfaction surveys, you might ask, “Who in the company – outside of your direct boss or a team member – do you look to for helpful advice?” or “Who in the company is a role model for wisdom?” Once you’ve identified these internal counselors, you can start determining how to leverage their wisdom. For example, why not allow your wisdom workers to spend 20% of their time acting as internal coaches in the company? (As Head of Global Hospitality and Strategy at Airbnb, I allocated one-fifth of my time to employees from all over the organization as a confidante and coach.) Or you can model what Procter and Gamble developed with their “Masters” program, an honor bestowed on those in the global company with decades of internal wisdom who can serve as wise beacons for those newer to the organization.

Develop a mutual mentoring program. Building bridges between generations is most effective when it’s baked into the company’s values, culture, and processes. I’ve found that mutual mentoring – where I’m learning from a Millennial about one topic and they’re learning from me on a different one – accelerates wisdom sharing across an organization. One of the ways companies can foster this kind of relationship is by connecting those just joining the company with “new hire buddies” – employees likely to be from a different generation – tasked with showing them the ropes. Liz Wiseman in her book Rookie Smarts: Why Learning Beats Knowing in the New Game of Work writes that Intel has created an intranet to provide mentoring matchmaking options across state lines and national boundaries based upon the shared interests of the participants.

Create an Employee Resource Group (ERG) focused on wisdom. Airbnb has seen great connections and support flourish in its Wisdom@Airbnb groups, which are open to any employees over the age of 40 and anyone committed to the goal of an age-friendly workplace. Approximately 90% of Fortune 500 companies have ERGs, but only a tiny fraction have an affinity group expressly serving their older demographic. Bringing your “Modern Elders” together can help you and them leverage their institutional wisdom and insight.

“We have, if we’re lucky, about 30,000 days to play the game of life…trust me…it’s wisdom that will put all the inevitable failures and rejections and disappointments and heartbreaks into perspective.”Arianna Huffington, Vassar College 2015

Last year, I was honored to be invited to give the commencement address to more than 10,000 people at the University of Michigan Stephen M. Ross School for Business. In preparation, I studied NPR’s exhaustive review of commencement speeches dating back to 1774. I tried to incorporate the common themes I noticed – humility, humor, and hugely idealistic ideas for transforming the planet – when I delivered my address. I also offered three questions for undergrads, graduate students, and their families to ponder:

Students: What world-class skills can I offer? Developing these could lead you to your calling.

Leaders: How can I support those I lead to do the best work of their lives here at this company? Helping your employees identify what resources they need to flourish lets them take responsibility for creating organizational and personal solutions.

Everyone: How can I turn fear into curiosity? Adopting a growth mindset vs. a fixed mindset lets you see more options, which can help reduce stress and anxiety and boost your resilience.

Get inspired by graduation season. Think about how your company can start institutionalizing wisdom and leveraging it, along with creativity and innovation, for greater inspiration and success.

Categories: Blogs

5 Behaviors of Leaders Who Embrace Change

Fri, 05/18/2018 - 09:00

Patrizia Savarese/Getty Images

At best, mergers and acquisitions (M&A’s) have a 50/50 chance of reaching their intended results. Study after study puts the failure rate closer to 70-90%. Why is the failure rate so high? Repeatedly, research cites the human factor as the leading reason why mergers and acquisitions fail.

Part of the issue is how organizations view the human aspect of the closing date, which is usually treated as the end of the transaction, when it’s really just the start of change. Organizations, processes, and cultures will be integrated for weeks and months after the organizations come together, causing disruption and uncertainty. Leaders in the M&A environment are managing an organization that hasn’t existed before. Their people are no longer part of the organization they joined. Their sense of normal is disrupted. In response, they may choose to hold on to the past and what’s comfortable or feel a bit disoriented as they search for their place in the new company. In the midst of the disruption, new challenges and opportunities will arise not just in the integration of the new organization, but in its marketplace and among its customers. And, the merger or acquisition won’t be the last change they are facing. CEB reports that the average organization has undergone five enterprise-wide changes in the past three years and 73% expect change to accelerate (URL: https://www.cebglobal.com/insights/change-management.html). In this environment, change agility needs to be part of the new organization’s and leaders’ DNA. It can’t just exist in a few people in the organization; it needs to be the way business gets done.

Successful change-agile leaders at all levels in the organization respond to changes in the business environment by seizing opportunities, including throwing out old models and developing new ways of doing business. They try to make change thinking contagious, embedding it into everything they do from the most fundamental daily interactions to the most complex strategy.

Change-agile leaders demonstrate five integrated behaviors that, together, create a competitive advantage for the organization. They:

Share a compelling, clear purpose: Purpose is the guardrail for actions. Change agility requires an answer to the question “Why?”, so that people can fight the natural instinct to resist change. The answer needs to tap into what’s meaningful and important, providing an irresistible invitation to come along. As CEO Shoei Yamana of Konica Minolta has said, “My belief is that people don’t work for numbers…they need to share the same belief that they are creating value in some way.” If you can’t articulate a clear purpose behind the changes being made, it’s unlikely that your employees will be able to implement them.

Insight Center

Look ahead and see opportunity: Most leaders view this as the role of senior executives. To infuse change agility into your culture, mid- and front-line leaders — who are closest to the markets, customers, and daily operations — need to be encouraged and incented to see opportunities in what they do every day. They need to look beyond this month or this year to identify trends and take action. History is littered with market leaders who didn’t see the opportunities ahead or take action on them. Kodak, Sears, and Motorola are just a few.  To build this behavior into the organization, leaders should:

  • Make opportunity-seeking part of the regular conversation. Simply asking questions like “What are our customers talking about? What do you think they will want a year or two from now? What new trends do you think will impact us?” sends the message that looking ahead is important.
  • Provide space to experiment. When a potential opportunity is identified, allow individuals or groups to experiment with ways to take advantage of it. Minimize the need for multiple layers of sign-off.  It makes the culture too risk averse and squelches momentum.
  • Advertise successes. Nothing breeds success like success. Tell the stories at company events and recognize middle and front-line leaders who are looking ahead and identifying opportunities. Show that the status quo is not enough anymore.

Seek out what’s not working: The old adage says that bad news doesn’t travel up. During the integration of an acquisition or even in the internal merger of business units, there will be bad news that the organization needs to learn from. But for real learning to occur, people need to feel psychologically safe to share the good, the bad, and the ugly.

Consider this example: Derek was leading the integration of several internal units into a merged organization. This integration created a new team of direct reports for him. Over the course of the integration, he worked on creating the psychological safety for his team to discuss the challenges of working together and of the integration overall. They used a trust framework to openly talk about what they were doing to build and breakdown trust with each other. Individuals discussed what they brought to the team and what they needed from their fellow team members.  They did pulse checks to assess their alignment and where there was work to do. They had difficult conversations. This type of open conversation and psychological safety cascaded through the new 250-person organization. It culminated in a two-day meeting for the entire organization that included open conversations about what was working well and what opportunities and challenges this new organization needed to address for its clients. The meeting also included a read-out of the employee engagement survey scores that, in the midst of the turbulence of an integration, were among the highest in the company’s history.

Promote calculated risk-taking and experimentation: Robert Kennedy, paraphrasing George Bernard Shaw, said, “There are those who look at things the way they are, and ask why. I dream of things that never were, and ask why not?” Too often, our traditional organizations’ first response to a risk is to ask, “Why?”  Change agility requires leaders to ask “why not?” and to establish opportunities for pilots, prototypes, and experimentation. Experimentation is an integral part of R&D. While an overall strategy informs the researchers’ focus, any R&D scientist will tell you that there are sometimes dozens of experiments that don’t get results and that, without the failures, they couldn’t find the successes.

Look for boundary-spanning partnerships: As work becomes more complex, it takes teams and cross-boundary collaborations to build products, attract customers, and achieve results.  Change-agile leaders and organizations are replacing functional silos with formal and informal organizations that allow for the rapid flow of information and decision-making around a product, customer, or region. For example, Maureen is a mid-level learning and development leader at a global tech company that’s growing rapidly through acquisition. Having growth and development opportunities for key talent has been critical for retention, and enhancing the employee experience is a strategic focus. Learning and development teams are dispersed across the organization, working independently to address business unit needs. Looking ahead, Maureen sensed that the company was also going to be focusing on efficiency in response to market changes and the continued integration of the acquired companies. Seeing the opportunity to improve the employee experience and create cost efficiencies across the learning organizations, she brought together her fellow learning leaders. They designed and implemented a new shared services organization that centralizes training development and vendor management. It will create standardized branding and processes, leverage tools, and create cost savings from consistently negotiated contracts. This creates a more consistent employee experience across learning functions and more efficiently addresses learning needs across the company.

These five behaviors, when used in concert with each other, create culture shifts that increase change agility. They are shifts that need to be made at all levels of leadership. They can mean the difference between M&A success and being an also-ran.

Categories: Blogs

How Our Hotel Chain Uses Data to Find Problems and Humans to Fix Them

Fri, 05/18/2018 - 08:00

Ron Berg/Getty Images

At Dorchester Collection of ultra-luxury hotels, we use big data and analytics to help us improve our guest offerings and marketing. Our tool, Metis, analyzes data from online reviews and social media to uncover problems and opportunities. But, as the Dorchester Collection’s director of global guest experience and innovation, I’ve discovered that often the data can only tell you where there’s a problem, not why it exists, or how to fix it. That requires human intervention.

For instance, last year Metis looked at customer sentiment about Parisian luxury hotels. Metis discovered that guests had little loyalty to ours — Le Meurice and Hotel Plaza Athénée — or to our competitors’ hotels. According to Metis’ analysis, guests view Paris’s 5-star hotels as interchangeable. They visit different ones simply to try something new.

But once Metis noted this lack of customer loyalty, it was up to us to figure out why, and what to do about it.

Observation and Investigation in Paris

We began by studying the market. Paris has ten Forbes five-star hotels – second only to Macau (which was awarded two this year). All Paris five-star hotels have Michelin-starred restaurants; they all provide luxury amenities (champagne, chocolates) on check-in; their rooms are roughly the same sizes and sell at similar rates.

No wonder people see them as interchangeable.

Our job would be to differentiate ours.

Insight Center

The Plaza Athénée’s staff observed the clothes its guests wore and the shops they visited. Clearly, many were either participants in or close observers of the high-fashion world. Accordingly, the hotel decided to position and market itself as the Haute Couture hotel where, in 1947, designer Christian Dior debuted his inaugural collection. The hotel introduced the Dior spa and placed Guerlain products in the bathrooms. It created a ballroom called Le Salon Haute Couture, and for Fashion Week it presented a Dior-themed service at the restaurant. And, it came up with a slogan: “It’s not what you wear, it’s where you wear it.”

Le Meurice, on the other hand, has long been a place where artists go (Salvador Dali made it his Paris headquarters) and Le Meurice staff observed that many of the guests stayed there to visit the galleries and museums. Accordingly, the hotel decided to brand Le Meurice as the contemporary arts hotel. Among other things, it sponsored an award of €20,000 for promising artists two weeks before the Paris Foire Internationale d’Art Contemporain (FIAC) art fair and replaced the classical art typical of Parisian 5-star hotels with contemporary art. It also re-named one of its restaurants Le Dali.

It is still early days, but Dorchester Collection has observed year-on-year growth in loyalty at both hotels. An unanticipated benefit is that they have received excellent local press and social media coverage, driving more local business to the hotels. It is always good when locals (especially Parisians) support you and advocate for your brand.

Metis told us something needed to be done about loyalty, but it took people to determine exactly what needed to be done.

Fixing Weddings in L.A.

We also asked Metis to look at weddings. For several years, Dorchester Collection’s L.A. hotels (Hotel Bel-Air and The Beverly Hills Hotel) had increased the number of weddings they hosted, but had not seen a corresponding increase in revenue. We wanted to know why.

Metis discovered that reviews from guests attending weddings were more neutral than positive. The bride and groom, unsurprisingly, are stressed with pulling things together, but the family and guests also are stressed about helping the bride and groom. Plus, the family receives little special attention from the hotel.

Once we knew there was a problem, it was time to observe the end-to-end process, from invitations to thank you notes.

The hotel’s innovation team Googled invitations for weddings at The Beverly Hills Hotel and found many people copying and pasting its iconic banana leaf pattern — extra work for a stressed couple. So, the team created a network of preferred printing companies, provided them our logo and designs, and began referring guests to them.

The team also learned from our internal event planners that many brides check in to the hotel before they shop for the all-important dress — a fraught exercise, especially as many spend tens of thousands on their gowns. So, we partnered with Rodeo Drive dress shops, and referred brides to them, providing guest discounts and receiving a commission for the referrals, thereby creating a new revenue stream.

To better serve those stressed-out members of the wedding party, the team had our planners create family trees to understand who was related to whom, so they could engage them and treat them like VIPs.

Finally, the team made it easier to find our wedding program on our website and marketed our wedding services as a differentiator.

With these improvements, revenue has increased, and guest sentiment around weddings has improved.

Combining Machine Learning with Human Observation and Understanding

Big data and analytics, unburdened by human preconceptions, can reveal counterintuitive insights: people can grow bored with champagne and chocolates; weddings can make brides and grooms cranky, and their families and friends, too. However, information tools can’t always figure out why people feel the way they do or how to solve their problems. For that, you need humans: to look, and, once they have understood the problem, to apply their hearts and minds.

Categories: Blogs

When Should Entrepreneurs Write Their Business Plans?

Fri, 05/18/2018 - 07:00

Audi Santoso / EyeEm/Getty Images

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review. But while this might tempt some entrepreneurs to make writing a plan their very first task, our subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

A startup business plan seems a good idea at the very start because it answers basic questions like “Where are we now?”, “Where do we want to get to?”, and “How are we going to get there?”. By detailing out how to orchestrate complex interdependencies such as customers, competitors, operations, logistics, marketing, and sales, writing a plan first appears to schedule out actions and strengthen the link between actions and performance for the new venture. And, as we mentioned, planning does have value. In our previous work, we looked at more than 1,000 start-ups, separated them into planners and non-planners, and found that entrepreneurs who plan are more likely to create a viable new venture.

But the real key to succeeding in business is being flexible and responsive to opportunities. Entrepreneurs often have to pivot their business once it becomes clear that their original customer is not the right customer, or when it turns out that their product or service fits better in an alternate market. Because of these realities, business plans written at the start end up nothing more than a fable. And writing a plan takes time – time that could be spent evaluating opportunities. Another danger lurks. A plan might just lock the entrepreneur into a false sense of security that prevents them from seeing the actual opportunity — rather than an imagined one.

To provide startups with concrete and practical help, we went back to the Panel Study of Entrepreneurial Dynamics II’s data on 1,000 would-be U.S. entrepreneurs. Using these representative data, we then charted the entrepreneurs’ attempt to create a viable new venture over a six-year period (2005-2011). In tracking these entrepreneurs over time, we were careful in our analysis to control for an entrepreneur’s background and for startup conditions like a founder’s education and previous experience, which we knew from our earlier research affect the chances of success.

To control for these influences, we used a well-known statistical technique to separate out the would-be entrepreneurs into two groups: planners and non-planners. This allowed us to create “statistical twins” – pairs of startups similar along a number of dimensions, except that one is a planner and the other is not. As a result, we were able to robustly identify what impact business plan timing has on achieving venture viability.

We found that on average, the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business. Writing a plan in this timeframe increased the probability of venture viability success by 8%. But writing one earlier or later proved to have no distinguishable impact on future success.

Next, we examined how long founders should devote to writing a plan. We found that the optimal time to spend on the plan was three months. This increased the chances of creating a viable venture by 12%. Spending any longer than this was futile, mostly because the information used to inform the plan loses its currency. Spending just a month or two on the plan was just as bad. If the choice was between quickly writing a plan or not writing a plan, the entrepreneur was better off not writing a plan at all.

Further Reading These findings need to be understood in the context of what else the entrepreneur needs to do to make their start-up happen. The reality is that founders are juggling multiple activities and writing a plan is just one of these.

We found that when the plan is sequenced really does matter. Writing a plan alongside early activities like defining the market or collecting information on competitors added nothing to the chances of creating a viable new venture. Equally pointless was writing a plan when the entrepreneur had already hired workers or gotten external funding. In fact, if a plan is written while doing these activities, entrepreneurs have less chance of reaching venture viability than those that did not write a plan.

We found that the sweet spot for writing a plan was around the time when the entrepreneur was actually talking to customers, getting their product ready for market, and thinking through their promotional and marketing activities. Committing a plan to paper alongside these activities increases a start-up’s chance of venture viability by 27%.

But this should detract from the vital importance of spending time writing a good plan. For a plan to be effective, it needs to detail out what the opportunity is, who the customers are, why competitors should be fearful, and how the company operates and makes money.

What is novel about our research, though, is we show that timing really does matter. Our advice to entrepreneurs is not to write a plan too early, don’t spend too long on it, and make sure it is done alongside other activities that actually propel the venture forward.

Good advice not only for entrepreneurs, but also for managers in larger growing organizations who need to plan in contexts – like start-ups – where information is missing or the environment is highly uncertain.

Categories: Blogs

How to Fix MoviePass

Fri, 05/18/2018 - 06:05

PeopleImages/Getty Images

MoviePass, an upstart movie theater subscription service, has been a controversial topic lately. One Wall Street analyst called MoviePass a joke that would be out of business in 18 months. It lost nearly $100 million in its most recent quarter, its parent company’s stock has plummeted, and its auditor recently voiced skepticism over its ability to stay in business.

The company suffers from three fundamental problems. The first is a flawed business model. Its average subscriber sees three movies a month; for every ticket a subscriber uses, MoviePass pays the full retail price to the theater. The problem is that MoviePass collects only $9.95 per month per subscriber, and three movie tickets costs nearly $30, on average, meaning it’s losing nearly $20 per month per subscriber on a variable cost basis. This is a problem that scale (meaning more subscribers) cannot solve.

The second problem: Movie theater operators don’t want MoviePass to succeed because they fear its model will permanently devalue ticket prices.

The third problem: Although MoviePass touts its potential as a platform or advertising business, there is no clear definition of what that would look like or when it could happen.

But the current pessimism about MoviePass misses an important point: The company might find a viable model if it works harder to understand the economics, motivations, and aspirations of its superconsumer customers. We’ve done research into this group of people, and that makes us see potential here that others are missing. One key message from this research: Going to the movies is less about the movie itself, and more about the total experience.

For instance, the movie industry makes all of its profits on concessions. (Ticket sales don’t cover the costs of operating a theater.) Superconsumers, who we define as people who go to movies once or twice a month, and constitute the top 10% of spenders in the category, are a key driver of concession sales. Not only do they spend twice as much as the average consumer on concessions, but they buy a much wider breadth of food and beverage. Specifically, they buy just as much popcorn as average moviegoers, but they are 1.5x more likely to buy soda and candy or chocolate than the average consumer, five times more likely to buy hot snacks (for example, hot dogs), and 10 times more likely to buy alcoholic beverages (where offered).

Superconsumer motivations also yield helpful insights. The top reason why regular consumers go to a movie theater is they couldn’t wait to see a new movie. Superconsumers clearly care about seeing a new release, but they seek many more benefits. They are 2x more likely to want a great movie theater experience. They are 2.5x more likely to be a superfan of an actor, director, or movie franchise. And they are 10x more likely to want to rewatch a movie.

These insights into their economic behaviors and motivations can be the foundation for beginning to fix the flawed MoviePass value proposition, as well as getting movie theaters on the same team.

MoviePass’s value proposition needs to be as much about the concession revenue it’s delivering to theater owners as it is about letting subscribers see many movies for a fixed monthly price. Concessions are nearly pure profit and the most impulse-driven, expandable piece of a theater’s revenue. Movies are an excuse to eat like a kid and pretend calories don’t count, and MoviePass needs convince theater owners to factor that into the way it views the MoviePass model — and potentially to expand their assortment and upgrade their quality to make concessions even more appealing.

The revenue pie could be so much bigger if MoviePass, movie theater operators, and superconsumers all collaborated to create an entirely new type of movie experience.

For instance, how much more concessions could you sell if the experience length was doubled by adding an intermission, and then showing the “extras” that ordinarily only appear on the DVD?

What if the subscription had an add-on for unlimited popcorn (which, due to the salt, only increases demand for high-margin beverages), perhaps only for shows during the week in off-peak times?

Or, what if a customer could pay extra for the right to bring a limited number of their own snacks, which is a pure profit with no costs to serve?

What if the theater offered unlimited drinks to allow people to work and hang out, like a Starbucks?

What if you reimagined the concession stand and turned it into a full-blown candy store with exponentially more assortment of brands? We’re pretty sure confection companies would be happy to help create more distribution points.

This optimized movie theater experience would trickle down to attract far more consumers than just the superconsumer.

Superconsumer aspirations and imagination can also help MoviePass solve its final problem, which is a clearer articulation of its future state. Scaling to the point at which it has millions of subscribers could enable it to offer an advertising business, but we have yet to meet a superconsumer who aspires to be ‘advertised to.’ But a platform business model, where serious movie fans can interact with each other, is the real opportunity.

A movie theater is an inherently social experience, and MoviePass might create a social currency by match-making like-minded audience members. How much more of a premium could a theater charge for inviting only superfans to a showing of “The Rocky Horror Picture Show”? Connecting superfans together for a shared experience could be an amazing platform business and provide real differentiation for a movie theater operator.

Given its cash crunch, MoviePass doesn’t have much time. First, it needs to level with its current subscribers that they are in a beta mode, and some changes to its initial model are inevitable. One smart move would be to immediately shift to a good/better/best pricing model — one that limits the number of movies one can see for the $10 per month basic package, and then offers increasing benefits for a $20 and $30 per month package. Real superconsumers are not purely motivated by price.

Second, MoviePass needs to find a smaller movie theater operator who is willing to test and learn, in order to co-create a movie theater experience 2.0. Work together to understand why superconsumers go so much, so you know how to optimize your offer. Ask them about their origin story of how they became a superconsumer, so you know how to convert others. Ask them what would need to change to get them to double their spending on movie theater experiences. The average consumer would laugh at you, but a superconsumer will entertain that thought. When they do, they may reveal a future version of MoviePass that cinema buffs, theater operators, and Wall Street could all fall in love with.

Categories: Blogs

Lateral Moves

Thu, 05/17/2018 - 10:56

Could a lateral move help your career? In this episode of HBR’s advice podcast, Dear HBR:, cohosts Alison Beard and Dan McGinn answer your questions with the help of Priscilla Claman, a career coach and former HR executive. They talk through when making a lateral move will push you forward and when it will hold you back.

Download this podcast

Listen to more episodes and find out how to subscribe on the Dear HBR: page. Send in your questions about workplace dilemmas by emailing Dan and Alison at dearhbr@hbr.org.

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 — “While step-downs generally detract from a CV, a lateral move is by no means a career killer. It may in fact prove beneficial in the long run if done wisely. For instance, a lateral move may be justified by the prospect of a promotion in the near future.”

HBR: 15 Rules for Negotiating a Job Offer by Deepak Malhotra — “Don’t get fixated on money. Focus on the value of the entire deal: responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks, support for continued education, and so forth. Think not just about how you’re willing to be rewarded but also when. You may decide to chart a course that pays less handsomely now but will put you in a stronger position later.”

HBR: Surviving M&A by Mitchell Lee Marks, Philip Mirvis, and Ron Ashkenas — “In such situations, most people tend to fixate on what they can’t control: decisions about who is let go, promoted, reassigned, or relocated. But in our studies and consulting practices, we’ve found that individuals faced with organizational upheaval have much more power over what happens to them than they realize.”

HBR: Managing Yourself: Turn the Job You Have into the Job You Want by Amy Wrzesniewski, Justin M. Berg, and Jane E. Dutton — “A growing body of research suggests that an exercise we call ‘job crafting’ can be a powerful tool for reenergizing and reimagining your work life. It involves redefining your job to incorporate your motives, strengths, and passions. The exercise prompts you to visualize the job, map its elements, and reorganize them to better suit you.”

Categories: Blogs

The Power of Listening in Helping People Change

Thu, 05/17/2018 - 10:00

Harry Haysom/Getty Images

Giving performance feedback is one of the most common ways managers help their subordinates learn and improve. Yet, research revealed that feedback could actually hurt performance: More than 20 years ago, one of us (Kluger) analyzed 607 experiments on feedback effectiveness and found that feedback caused performance to decline in 38% of cases. This happened with both positive and negative feedback, mostly when the feedback threatened how people saw themselves.

One reason that giving feedback (even when it’s positive) often backfires is because it signals that the boss is in charge and the boss is judgmental. This can make employees stressed and defensive, which makes it harder for them to see another person’s perspective. For example, employees can handle negative feedback by downplaying the importance of the person providing the feedback or the feedback itself. People may even reshape their social networks to avoid the feedback source in order to restore their self-esteem. In other words, they defend themselves by bolstering their attitudes against the person giving feedback.

We wanted to explore whether a more subtle intervention, namely asking questions and listening, could prevent these consequences. Whereas feedback is about telling employees that they need to change, listening to employees and asking them questions might make them want to change. In a recent paper, we consistently demonstrated that experiencing high quality (attentive, empathic, and non-judgmental) listening can positively shape speakers’ emotions and attitudes.

What Makes Listening Powerful?

Listening as an avenue for self-change was advocated by the psychologist Carl Rogers in a classic 1952 HBR paper. Rogers theorized that when speakers feel that listeners are being empathic, attentive, and non-judgmental, they relax and share their inner feelings and thoughts without worrying about what listeners will think of them. This safe state enables speakers to delve deeper into their consciousness and discover new insights about themselves – even those that may challenge previously held beliefs and perceptions.

For example, consider an employee who believes that she always respects her colleagues’ and customers’ feelings. If someone tells her this isn’t true, this will likely lead her to protect her view of herself by doubling down on her belief and discounting the other person’s judgment. In contrast, if someone asks her to describe her interactions with other people at work and listens attentively while encouraging her to occasionally elaborate, she is likely to feel more secure with the listener and open up in ways she might not otherwise. She might remember incidents where she was disrespectful to costumers or got angry at her colleagues, and be more open to discussing them and ways to change.

For example, in one laboratory experiment, we assigned 112 undergraduate students to serve as either a speaker or a listener and paired them up, sitting face-to-face. We asked speakers to talk for 10 minutes about their attitudes toward a proposal for basic-universal income or a possible requirement that all university students must also volunteer. We instructed the listeners to “listen as you listen when you are at your best.”  But we randomly distracted half of the listeners by sending them text messages (e.g., “What event irritated you the most recently?”) and instructed them to answer briefly (so the speakers saw that they were distracted). Afterward, we asked the speakers questions about whether they were worried about what their partner thought of them, whether they acquired any insight while talking, and whether they were confident in their beliefs.

We found that speakers paired with good listeners (versus those paired with distracted listeners) felt less anxious, more self-aware, and reported higher clarity about their attitudes on the topics. Speakers paired with undistracted listeners also reported wanting to share their attitude with other people more compared with speakers paired with distracted listeners.

Another benefit of high-quality listening is that it helps speakers see both sides of an argument (what we called “attitude complexity”). In another paper we found that speakers who conversed with a good listener reported attitudes that were more complex and less extreme — in other words, not one-sided.

In another lab experiment we instructed 114 undergraduates at a business school to talk for 12 minutes about their fitness to become a manager in the future. We randomly assigned these speakers to one of three listening groups (good, moderate, and poor). Speakers in the good listening condition talked to a trained listener, who was either a certified management coach or a trained social-work student. We asked these trained listeners to use all their listening skills, such as asking questions and reflecting. Speakers in the moderate listening condition talked to another undergraduate at the business school who was instructed to listen as he or she usually does. Speakers in the poor listening condition talked with a student from the theatre department who was instructed to act distracted (e.g., by looking aside and playing with their smartphones).

After the conversation, we asked the speakers to indicate separately the extent to which they thought they were suitable for becoming managers. Based on these answers, we calculated their attitude complexity (whether they saw both strengths and weaknesses that would affect their ability to be a manager) and extremity (whether they saw only one side). We found that speakers who talked to a good listener saw both strengths and weaknesses more than those in the other conditions. Speakers who talked to a distracted listener mostly described their strengths and barely acknowledged their weaknesses. Interestingly, the speakers in the poor listening condition were those that, on average, reported feeling the most suitable for becoming a manager.

We tested the relevance of these lab findings in three field studies conducted among city-hall employees, high-tech workers, and teachers (180 workers, in total). In these studies, we asked employees to talk about their colleagues, their supervisor, or about a meaningful experience at work, before and after participating in a listening intervention known as a listening circle. In the listening circle, employees are invited to talk openly and honestly about an issue, like a meaningful experience they had at work. They’re trained to listen without interrupting, and only one person talks at a time.

We replicated all of our lab findings. Namely, employees who participated in the listening circles reported lower social anxiety, higher attitude complexity, and lower attitude extremity regarding various work-related topics (e.g., attitude towards a manager) in comparison to employees who participated in one of the control conditions that did not involve trained listeners.

In concert, our findings suggest that listening seems to make an employee more relaxed, more self-aware of his or her strengths and weaknesses, and more willing to reflect in a non-defensive manner.  This can make employees more likely to cooperate (versus compete) with other colleagues, as they become more interested in sharing their attitudes, but not necessarily in trying to persuade others to adopt them, and more open to considering other points of view.

Going back to giving feedback, of course we do not claim that listening must replace feedback. Rather, it seems that listening to employees talk about their own experiences first can make giving feedback more productive by helping them feel psychologically safe and less defensive.

Listening has its enemies

Our findings support existing evidence that managers who listen well are perceived as people leaders, generate more trust, instill higher job satisfaction, and increase their team’s creativity. Yet, if listening is so beneficial for employees and for organizations, why is it not more prevalent in the workplace? Why are most employees not listened to in the way they want? Research shows that a few barriers often stand in the way:

  1. Loss of power. Research from our team has shown that some managers may feel that if they listen to their employees they are going to be looked upon as weak. But at the same time, it’s been shown that being a good listener means gaining prestige. So it seems managers must make a tradeoff between attaining status based on intimidation and getting status based on admiration.
  2. Listening consumes time and effort. In many instances, managers listen to employees under time pressure or while they’re distracted by other thoughts or work. So listening is an investment decision: managers must put in the time to listen in order to see the future benefits.
  3. Fear of change. High-quality listening can be risky because it entails entering a speaker’s perspective without trying to make judgments. This process could potentially change the listener’s attitudes and perceptions. We observed several times that when we trained managers to truly listen, they gained crucial insights about their employees — they were stunned to learn how little they knew about the lives of people they’d worked with for many years.

For example, several managers reported that when they tried listening to employees who they’d confronted about poor attendance, they learned that these employees were struggling with supporting a family member (a wife dying of cancer, a sibling with a mental disability). This realization threatened managers’ attitudes and views about themselves — an experience called cognitive dissonance that can be difficult.

Tips for becoming a better listener

Listening resembles a muscle. It requires training, persistence, effort, and most importantly, the intention to become a good listener. It requires clearing your mind from internal and external noise — and if this isn’t possible, postponing a conversation for when you can truly listen without being distracted. Here are some best practices:

Give 100% of your attention, or do not listen. Put aside your smartphone, iPad, or laptop, and look at the speaker, even if they do not look back at you. In an ordinary conversation, a speaker looks at you occasionally to see that you’re still listening. Constant eye contact lets the speaker feel that you are listening.

Do not interrupt. Resist the urge to interrupt before the speaker indicates that they are done for the moment. In our workshop, we give managers the following instruction: “Go to someone at your work who makes listening very hard on you. Let them know that you are learning and practicing listening and that today, you will only listen for __ minutes (where the blank could be 3, 5, or even 10 minutes), and delay responding until the predetermined listening time is up, or even until the following day.”

The managers are often amazed at their discoveries. One shared, “in 6 minutes, we completed a transaction that otherwise would have taken more than an hour”; another told us; “the other person shared things with me that I had prevented her from saying for 18 years.”

Do not judge or evaluate. Listen without jumping to conclusions and interpreting what you hear. You may notice your judgmental thoughts but push them aside. If you notice that you lost track of the conversation due to your judgments, apologize to the speaker that your mind was distracted, and ask them to repeat. Do not pretend to listen.

Do not impose your solutions. The role of the listener is to help the speaker draw up a solution themselves. Therefore, when listening to a fellow colleague or subordinate, refrain from suggesting solutions. If you believe you have a good solution and feel an urge to share it, use a question, such as “I wonder what will happen if you choose to do X?”

Ask more (good) questions. Listeners shape conversations by asking questions that benefit the speaker. Good listening requires being thoughtful about what the speaker needs help with most and crafting a question that would lead the speaker to search for an answer. Ask questions to help someone delve deeper into their thoughts and experiences.

Before you ask a question, ask yourself, “is this question intended to benefit the speaker or satisfy my curiosity?” Of course, there is room for both, but a good listener prioritizes the needs of the other. One of the best questions you can ask is, “Is there anything else?” This often exposes novel information and unexpected opportunities.

Reflect. When you finish a conversation, reflect on your listening and think about missed opportunities — moments you ignored potential leads or remained silent versus asking questions. When you feel that you were an excellent listener, consider what you gained, and how you can apply this type of listening in more challenging circumstances.

Categories: Blogs

Employees Who Use Social Media for Work Are More Engaged — but Also More Likely to Leave Their Jobs

Thu, 05/17/2018 - 08:10

Henrik Sorensen/Getty Images

Social media can be a powerful communication tool for employees, helping them to collaborate, share ideas and solve problems. Research has shown that 82% of employees think that social media can improve work relationships and 60% believe social media support decision-making processes. These beliefs contribute to a majority of workers connecting with colleagues on social media, even during work hours.

Employers typically worry that social media is a productivity killer; more than half of U.S. employers reportedly block access to social media at work. In my research with 277 employees of a healthcare organization I found these concerns to be misguided. Social media doesn’t reduce productivity nearly as much as it kills employee retention.

In the first part of the study I surveyed the employees about why and how they used platforms like Facebook, Twitter, or LinkedIn. Respondents were then asked about their work behaviors, including whether they felt motivated in their jobs and showed initiative at work. I found that employees who engage in online social interactions with coworkers through social media blogs tend to be more motivated and come up with innovative ideas. But when employees interact with individuals outside the organization, they are less motivated and show less initiative. These findings suggest that the effects of social media depend on who employees interact with; employees who interact with their colleagues share meaningful work experiences, but those making connections outside the organization are distracted and unproductive.

In the second part of the study I found that employees using social media were more likely to leave an organization. This may be because they were more likely to engage with potential new employers than their less social peers. In my study, 76% of employees using social media for work took an interest in other organizations they found on social media, compared to 60% of employees using social media only for leisure. When I examined how respondents expressed openness to new careers and employers, I found that they engaged in some key activities including researching new organizations and making new work connections. The chart below shows how respondents from both groups—those who used social media at work and those who didn’t– engaged in these activities.


These findings present a conundrum for managers: employees using social media at work are more engaged and more productive, but they are also more likely to leave your company. Managers can address this problem in two ways. First, managers should implement solutions that neutralize the retention risk caused by social media. They can leverage social media training to make employees focus on positive social media behaviors, like collaboration, which can increase satisfaction and attachment, countering turnover risks.

Second, managers can turn the threat into an opportunity. Managers can create social media groups in which employees will be more likely to collaborate and less likely to share withdrawal intentions or discussions about external job opportunities. Managers can use social media to directly reduce turnover intentions, by recognizing employees’ accomplishments and giving visibility to employees’ success stories. This approach has the added benefit of serving as a recruiting tool: If, on one side, the use of social media can make your employees leave the organization, on the other side, the same use of social media from employees of other organizations could attract them to your organization.

Categories: Blogs

The Explainer: How to Negotiate Nicely Without Being a Pushover

Thu, 05/17/2018 - 07:09

Don’t avoid confrontation.

Categories: Blogs

How People Analytics Can Help You Change Process, Culture, and Strategy

Thu, 05/17/2018 - 07:00

Kenneth Andersson for HBR

It seems like every business is struggling with the concept of transformation. Large incumbents are trying to keep pace with digital upstarts., and even digital native companies born as disruptors know that they need to transform. Take Uber: at only eight years old, it’s already upended the business model of taxis. Now it’s trying to move from a software platform to a robotics lab to build self-driving cars.

And while the number of initiatives that fall under the umbrella of “transformation” is so broad that it can seem meaningless, this breadth is actually one of the defining characteristic that differentiates transformation from ordinary change. A transformation is a whole portfolio of change initiatives that together form an integrated program.

And so a transformation is a system of systems, all made up of the most complex system of all — people. For this reason, organizational transformation is uniquely suited to the analysis, prediction, and experimental research approach of the people analytics field.

People analytics — defined as the use of data about human behavior, relationships and traits to make business decisions — helps to replace decision making based on anecdotal experience, hierarchy and risk avoidance with higher-quality decisions based on data analysis, prediction, and experimental research. In working with several dozen Fortune 500 companies with Microsoft’s Workplace Analytics division, we’ve observed companies using people analytics in three main ways to help understand and drive their transformation efforts.

Insight Center

In core functional or process transformation initiatives — which are often driven by digitization — we’ve seen examples of people analytics being used to measure activities and find embedded expertise. In one example, a people analytics team at a global CPG company was enlisted to help optimize a financial process that took place monthly in every country subsidiary around the world. The diversity of local accounting rules precluded perfect standardization, and the geographic dispersion of the teams made it hard for the transformation group to gather information the way they normally would — in conversation.

So instead of starting with discovery conversations, people analytics data was used to baseline the time spent on the process in every country, and to map the networks of the people involved. They discovered that one country was 16% percent more efficient than the average of the rest of the countries: they got the same results in 71 fewer person-hours per month and with 40 fewer people involved each month. The people analytics team was surprised — as was finance team in that country, which had no reason to benchmark themselves against other countries and had no idea that they were such a bright spot. The transformation office approached the country finance leaders with their findings and made them partners in process improvement for the rest of the subsidiaries.

It’s unlikely the CPG company would have been able to recognize and replicate these bright spots if they had undertaken transformation with a top-down approach. And, perhaps more importantly, it involved and engaged the people on the ground who had unwittingly discovered a better way of doing things.

In bottoms-up cultural transformation initiatives, the how things are done is equally or more important than what is done. Feedback loops and other methods of data-driven storytelling are our favorite way that people analytics makes culture transformation happen. Often times, facts can change the conversation from tired head-nodding to curiosity. One people analytics team in an engineering company was struggling to help develop the company’s managers, for example. Managers often perpetuated a “sink or swim” culture that didn’t fit the company’s aspirations to be an inclusive, humane workplace. The data analysis found that teams whose managers spent at least 16 minutes of one-on-one time with each direct per week had 30% percent more engaged direct reports than the average manager, who spent just 9 minutes per week with directs. When they brought that data-driven story to the front lines, suddenly a platitude was transformed into a useful benchmark that got the attention of managers. In this way, data storytelling is a lightweight way to build trust among stakeholders and bring behavioral science to culture transformation.

Top-down strategic transformation is often made necessary by market and technology factors outside the company, but here people analytics is a critical factor for execution. A people analytics team can serve as an instrument panel of sorts to track resources, boundaries, capacity, time use, networks, skill sets, performance, and mindsets that can help pinpoint where change is possible and can measure what happens when you try it.

One people analytics team at a financial services company was trying to help the CEO manage growth while he worked to instill a new culture in which departments would be asked to run leaner and more competitive in the market – “scrappy” and “hungry” were terms that often came up. As the transformation accelerated, teams were asked to do more with less, generate more data, and make decisions faster. Amid this, department leaders began to hear anecdotes about burnout and change fatigue and questioned whether the pace was sustainable. To address this, the people analytics team provided their CEO with a dashboard showing the number of hours that knowledge workers were active for in different teams. When an entire team is over-utilized, he knows they can’t handle more change, while under- or unevenly utilized teams might be more receptive. He can also slice the dashboard by tenure, to learn whether recent hires have been effectively onboarded before approving new hire requests to absorb extra work.


As organizations increasingly look to data to help them in their transformation efforts, it’s important to remember that this doesn’t just mean having more data or better charts. It’s about mastering the organizational muscle of using data to make better decisions; to hypothesize, experiment, measure and adapt. It’s not easy. But through careful collection and analysis of the right data, a major transformation can be a little less daunting – and hopefully a little more successful.

Categories: Blogs

The Next Time You Want to Complain at Work, Do This Instead

Thu, 05/17/2018 - 06:05

Epoxydude/Getty Images

I looked at my watch. It was 3:20pm. I had been on the phone for over an hour, almost all of that time listening to Frank*, a senior manager at Jambo, a technology company, complain about his boss, Brandon. Jambo is a company I know well — I have many ongoing relationships there from when I used to work with their CEO — but they are not, currently, a client. In other words, I wasn’t soliciting complaints or asking for feedback.

“He’s so scattered,” Frank griped about Brandon, “He’ll waltz into a meeting — late, mind you — and share his most recent idea, which is often a complete distraction from our current plan. Totally ignoring our agenda. And then he’ll micromanage everything we do, reorganizing our work — though we’re still accountable for the stuff he’s ignoring. And that’s not the worst. The worst is he’s completely clueless. He thinks he’s great. At yesterday’s meeting . . .”

This was not the only complaining I heard from people at Jambo. Earlier that week I had spoken to several others, as well as a few members of the Board. And they weren’t just complaining about Brandon — they were complaining about each other as well.

I also spoke directly with Brandon who, just as Frank said, thought of himself as a very strong leader. Meanwhile, he had a mouthful of complaints about Frank and some of the other staff. He also complained about the Board.

I added up all the time I’d spent listening to people at Jambo complain about each other that week: 3 hours and 45 minutes. And that was just the time they spent complaining to me.

This is, unfortunately, not unusual. My friend, the legendary executive coach Marshall Goldsmith, interviewed more than 200 of his clients and what he discovered matched previous research he read, but found hard to believe: “a majority of employees spend 10 or more hours per month complaining — or listening to others complain — about their bosses or upper management. Even more amazing, almost a third spend 20 hours or more per month doing so.”

And that doesn’t even include the complaining they do about their peers and employees. Which would be hard to believe if not for the fact that, if you pay attention to what you experience during your day, you’d find it’s pretty accurate.

Imagine the productivity gain of reducing all those complaining hours.

Why do we complain about other people?

Because it feels (really) good, requires minimal risk, and it’s easy.

Here’s what happens: Someone annoys us. We’re dissatisfied with how they’re behaving. Maybe we’re angry, frustrated, or threatened. Those feelings build up as energy in our bodies, literally creating physical discomfort (that’s why we call them feelings — because we actually, physically, feel them).

When we complain about someone else, the uncomfortable feelings begin to dissipate because complaining releases the pent up energy. That’s why we say things like “I’m venting” or “I’m blowing off steam” (But, as we’ll see in a moment, that dissipation doesn’t just release the energy, it spreads it, which actually makes it grow).

Additionally, when we complain to people who seem to agree with us — and we almost always complain to people who seem to agree with us — we solicit comfort, camaraderie, connection, support, and justification, which counteracts the bad feelings with some fresh, new good ones.

Complaining changes the balance of negative/positive energy and, for a brief moment at least, we feel better. It’s actually a pretty reliable process. Addictive even.

Which is the problem (beyond even the wasted time): Like just about all addictions, we’re feeding the spin of a destructive, never-ending cycle. The release of pressure — the good feeling — is ephemeral. In fact, the more we complain, the more likely the frustration, over time, will increase.

Here’s why: when we release the pent up energy by complaining, we’re releasing it sideways. We almost never complain directly to the person who is catalyzing our complaints, we complain to our friends and families. We’re not having direct conversations to solve a problem, we’re seeking allies. We’re not identifying actions that could help, we’re, almost literally, blowing off steam.

Why is complaining such a bad move?

Complaining creates a number of dysfunctional side effects (again, beyond the time wasted): It creates factions, prevents or delays — because it replaces — productive engagement, reinforces and strengthens dissatisfaction, riles up others, breaks trust, and, potentially, makes the complainer appear negative. We become the cancer we’re complaining about; the negative influence that seeps into the culture.

Worse, our complaining amplifies the destructiveness and annoyance of the initial frustration about which we’re complaining.

Think about it: someone yells in a meeting. Then you go to the next meeting (where no one is yelling) and you complain about the person who just yelled. Now other people, who weren’t at the initial meeting, feel the impact of the yelling and get upset about it too. Encouraged by their support, your brief, momentary release transforms into righteous indignation and, becoming even more incensed, you experience the initial uncomfortable feelings all over again.

In other words, while the energy dissipates, it expands. The amount of time you spend thinking about it extends for hours, sometimes days and weeks. And you’ve multiplied the people who are also thinking and talking about it.

Meanwhile, our complaining improves, precisely, nothing.

In fact, that might be the biggest problem: Complaining is a violent move to inaction. It replaces the need to act. If instead of complaining, we allowed ourselves to feel the energy without needing to dissipate it immediately — which requires what I call emotional courage — then we could put that energy to good use. We could channel it so it doesn’t leak out sideways.

In other words, let the uncomfortable feeling you have — the one that would otherwise lead you to complain — lead you to take a productive action.

What’s a better move when we feel like complaining?

Go ahead and complain. Just do it directly — and thoughtfully — to the person who is the cause of your complaints.

Talk to the person who yelled in the meeting. If that person doesn’t listen, talk to their boss. If you don’t like that idea, then, when it actually happens, say “Hold on. Let’s respect each other in this conversation.” If you missed the opportunity in the moment, then meet with them afterwards and say, “Please let’s respect each other in our conversations.”

That, of course, also takes emotional courage. It’s a scary, more risky thing to do. But it’s why it’s worth developing your emotional courage — because, while scary, it’s far more likely to be highly productive. It holds the potential for changing the thing that’s the problem in the first place. And rather than become the negative influence, you become the leader.

If you want to brave this route, let your urge to complain be the trigger that drives you to take action in the moment (or, if you missed the moment, then shortly after):

  1. Notice the adrenaline spike or the can-you-believe-that-just-happened feeling (e.g., someone yelling in a meeting).
  2. Breathe and feel your feelings about the situation so that they don’t overwhelm you or shut you down. Notice that you can stay grounded even in difficult situations (e.g., feel, without reacting).
  3. Understand the part about what’s actually happening that is complain-worthy (e.g., it’s not okay to yell and disrespect others in a meeting).
  4. Decide what you can do to draw a boundary, ask someone to shift their behavior, or otherwise improve the situation (e.g., “Please let’s respect each other in our conversations.”)
  5. Follow through on your idea (e.g., actually say: “Please let’s respect each other in our conversations.”)

It’s not nearly as easy as complaining. But it will be far more productive and valuable.

But wait, you might protest, the whole reason I’m complaining is that I’m powerless in this situation. I can’t tell the person to be respectful because they’re my boss.

You may be right. It’s true that most people complain because they feel powerless.

It’s also true that most people have more power in a situation than they believe they have, even with their boss. And, just maybe, it could be worth the risk to say something. You could say “I see that you’re very angry and I can feel how it’s shutting me down. Can we go a little more gently here?”

It’s a risk. Because the person may blow up even more.

Or it may gain you their respect and, in one sentence, change the direction of the leader and the organization. And transform what could have become weeks of complaining into a moment of productive engagement.

More than once I have seen someone gain the respect of everyone in the room because they were courageous enough to be direct — caringly, compassionately, and truthfully. And almost always, everyone is surprised by the offending person’s response, who, almost always, was more open to the feedback then they thought. Not always. But almost always.

Let complaining — and the feeling that leads to complaining — be the red flag that it should be: something wrong is happening and you are probably not powerless to do something about it.

That’s what happened at Jambo, when Frank shifted from complaining to acting and told Brandon about the impact he was having. At first Brandon was defensive, but soon enough he began to ask questions and realized that he had a blind spot for how he was impacting the team.

It won’t always work like that, but you may be surprised how often it will.

*Names and some details changed for privacy

Categories: Blogs

Why Companies Are Using M&A to Transform Themselves, Not Just to Grow

Wed, 05/16/2018 - 14:50

Joe Beck/Unsplash/HBR Staff

A brick-and-mortar retailer buys an e-commerce platform. An internet technology company picks up a mobile phone manufacturer. A chain of pharmacies announces its intent to acquire a health insurer.

Today’s corporate tie-ups increasingly aim to transform the acquirer’s business rather than reinforce it. Why? Some point to major shifts in skill sets that companies need. Others note the diminishing number of attractive same-sector acquisition targets as industries consolidate, and as investors search for ways to put their growing cash reserves to work.

Insight Center

But there’s more to it than that. The current cohort of acquisitions goes well beyond the typical defensive, synergy-driven, horizontal integration that marked previous M&A spurts. These new deals are taking parent companies in uncharted directions. This tells us businesses aren’t acquiring other businesses simply to expand what they’re already doing. They’re doing it because, strategically, they have to – if they want to survive over the medium to long term.

Though recent acquisitions may seem idiosyncratic, they all have in common the need to find new avenues for growth in mature markets or deal with accelerating change. Let’s unpack some recent examples.

Capability upgrades. Technology, manufacturing, research and development, or human know-how – whatever the capability, acquisitions are a way to acquire it. It was along this vein that Detroit-based General Motors acquired Silicon Valley startup Cruise Automation, which makes autonomous driving systems. While Cruise is a far cry from old-line auto manufacturing, GM saw in it an opportunity to advance its own capabilities in autonomous vehicles by acquiring talent and technology that would have taken too long to develop organically. With Cruise’s capabilities, GM is now a serious contender in the autonomous vehicle race against competitors such as Waymo.

Market breakthroughs. It can take years to build distribution networks or gain a foothold in a particular market. An acquisition, though, can accomplish both in relatively short order. PetSmart, for example, launched an historic bid to take over online pet supply retailer Chewy.com, surpassing in deal value Walmart’s prior-year acquisition of Jet.com. In one fell swoop, PetSmart – a traditional retailer with more than 1,500 physical locations – claimed a place among the fastest-growing segments of the increasingly dominant world of e-commerce. Chewy, for its part, gained a bulwark against established brick-and-mortar competitors, including those operating in one of retail’s bright spots: pet care services.

Reshaping the consumer experience. When it comes to seizing opportunities among underserved consumers, industry needn’t be a barrier. That’s why recent speculation of a Walmart-Humana deal raises so many possibilities. With the average Walmart customer skewing older, its ability to offer Humana’s Medicare Advantage product – the insurer’s biggest line of business – could further serve the needs of Walmart’s senior shoppers even as it met federal value-based requirements for healthcare. And with Walmart’s presence in rural markets, Humana might just open a door to healthcare in areas where hospitals increasingly are folding up shop.

As these cases show, contemporary acquisitions increasingly cross sector lines. They often extend rather than consolidate and upend rather than consolidate markets.They also can open up vast new ecosystems. CVS’ planned acquisition of health insurer Aetna, for instance, is also a bid for the retail giant to enter an interconnected community ranging from digital health to provider networks to corporate customers.

Whatever the imperative, recent transactions suggest a growing belief among business leaders that many of the things considered essential to company performance – including technology, talent, customer bases, products and services – can be impossible to achieve unless they buy them outright.

Getting Ahead of the Risks

Still, these are very risky bets to make. For them to pay off, companies can’t assume that whatever they buy can be reshaped into something strategic. Any unknowns, from customer dynamics to the new organization’s value proposition against competitors, must be made known. How realistic is leadership’s vision for the acquisition? What role does the acquisition play in advancing a strategic agenda? What will it cost to make it all happen? With asset prices at record levels, careful due diligence is more critical than ever.

Business leaders also must consider the process they’ll use to capture sought-after strategic benefits once the acquisition closes. The tradition of absorbing target companies into the corporate parent is giving way to more nuanced approaches, including:

Preservation. This approach seeks to preserve the target’s organizational autonomy (because of skills, culture, geographic distance, etc., that need to be preserved) while the strategic benefits of the acquisition may be independent of the buyer’s business. This might be important, for instance, when a company seeking to enter a new market needs to keep the target’s focus on its own market. However, back-office functions might be integrated.

Symbiosis. A symbiotic integration starts as a preservation model except that there is a greater interdependence between the strategies of the two companies. For instance, GM would likely follow a symbiotic integration of Cruise in order to preserve how Cruise operates, but will need to integrate its capabilities into GM’s autonomous vehicle efforts.

Holding. A holding company keeps the acquired entity independent of the parent. No operational integration is necessary. Private equity firms are among those that take a holding approach with the companies they acquire as the markets, skill sets, customers and channels for each portfolio company are likely very different.

As acquisitions become more unconventional, and their stakes continue to rise, companies will find that their outcomes hinge on strong competencies in due diligence and post-merger integration.

No organization can remain the same. But the changes that modern companies face are happening too quickly for them to respond with the assets and resources they already have. In this environment, acquisitions – often daring ones – are a differentiating factor. As a result, they’ve become an ongoing responsibility among executive teams accountable to investors, customers, employees and their own exacting standards for success. The good news is that there’s an extensive body of knowledge around M&A best practices—and some novel approaches to capturing the value of a target without traditional post-merger integration. Firms should make the most of these to stay relevant during this period of historic upheaval.

Categories: Blogs

What Entrepreneurs Should Ask Themselves When an Economic Crisis Hits

Wed, 05/16/2018 - 09:36

Jonathan Knowles/Getty Images

After the stock market’s rocky ride in recent months, some analysts are wondering whether a new economic crisis might be around the corner. Judging by the economy’s overall performance, there is no need for immediate concern. But for entrepreneurs who prefer to be safe than sorry, the question remains: what should you do when the next crisis hits?

The answer is different for entrepreneurs and start-up employees than for investors. For most investors, the options are straightforward: sell shares to limit financial losses, hold shares and hope everything will blow over, or buy shares if there’s a belief the market has bottomed out. Either way, the gains and losses are mostly financial, and while the right choice may be hard to determine, the options are clear.

For entrepreneurs and employees, however, it’s not that simple. Imagine having put not only your money into a project, but also your sweat, tears, and time. When you’ve invested some of the best years of your life in a company, changes in the macroeconomic environment can be particularly tricky to navigate. You’re forced to consider not just what choice offers the best financial outcome, but also the best result in terms of your — and often your family’s — wellbeing.

When the next crisis does hit, I’d argue entrepreneurs and startup employees should ask themselves three crucial questions, to help decide whether continuing to work on your company is worth your while.

  • First, how much personal effort are you still willing to make, after accepting that your previous efforts amounted to little? After all, when a crisis hits, the time you have put into your company and many of the results obtained will be wiped out, and it would take considerable additional effort to even return to square one.
  • Second, what access to cash do you have left, and how willing are you to gamble with it? Here also, a crisis would make it necessary to relabel a lot of previous financial investments as sunk costs, while future investments and their returns should get re-assessed based on new, less favorable market realities.
  • And third, what is the proven viability of your company’s business model? If a company was profitable before the crisis hit, it is reasonable to assume it can be so again. But if there had never been any hint of profitability or even revenues, it might seem naïve to assume it would yield returns now.

Assessing these factors can help entrepreneurs and startup employees come to the right conclusions faster. Foresight is better than hindsight, after all.

Several individuals I spoke to for my book, Before I Was CEO, provide a helpful guide. I interviewed them about one of the last big crises for startups: the dot-com crash of 2000-2001. As the book’s title suggests, the people I talked to ended up becoming CEOs of successful companies: one became chief executive of a publicly-listed company, Infosys; another of a large private company, The Weather Company; and a third of a successful startup, Plumbee.

But when they went through the rollercoaster that was the dot-com crash, their then-companies’ future was uncertain, and so was their personal outlook.

Senapathy “Kris” Gopalakrishnan, a co-founder of the India-based Infosys, saw his company’s market value on NASDAQ drop 90% from 2000 to 2001. David Kenny, then CEO of Digitas, a U.S.-based online advertising agency, went from multi-millionnaire-on-paper in March of 2000 (his company was one of the last to go public), to struggling to keep the company afloat only a few weeks later. And Raf Keustermans, then CEO of CyGaNet, a European online community tools and services startup, hadn’t even been able to properly scale his company when the crash started in the U.S.

All of them decided to put up a fight and face the crisis head on. With the above questions in mind, it’s possible to assess why.

First, consider the question on the willingness to continue one’s own efforts. For Raf, even with a company that had a lot to prove (his was a local start-up) and a lot to lose (his angel investors’ money), he felt it was worth it for him personally double down on his company. He had quit college, and his only other work experience was junior marketer in an ad agency. Making his personal exit options limited. But, still only in his early twenties, he had plenty of energy left to make his first venture a success. The time he had so far spent on CyGaNet was time others had spent in college auditoria and bars, so in a way he was still at the start of his career.. He decided to continue the struggle and make the best out of it.

It was hard, and he and his partner could only just about keep their heads above water financially. But through “a lot of hard work, creativity, and a portion of luck” they managed they get without too much damage, he said. In the end, they managed to sell the company, and return money to the shareholders. “We didn’t have the success we hoped for,” Raf told me recently, “but perhaps that was the basis for greater successes later on. We learned that the going was tough, and that there are external factors you cannot control.”

Other founders and early employees may not be as willing to continue spending personal efforts and time. It’s good when we learn from failure, but it can really be sad to fail and get stuck. The years of your life you have spent on a project, unlike the capital invested, are always a sunk cost: while money can come back, your youth and most productive years won’t. So once your financial losses are clear, the only thing left to save from a company’s bankruptcy may be your own time. It’s worth considering that when you decide to stay and put up a fight for your startup, or let it go.

Second, consider the question how much cash is left in your company or can be raised, and how financially secure you are at home. If you do have access to more cash, how willing you are to throw it into what could be a bottomless pit? That was a question David Kenny had to address with Digitas. And to up the ante, the stakes in his personal life were even higher. In his mid-thirties, he had two young children at home, making every week, day, and hour missed at home count. If he was going to miss out on that, he had better make it worth it. Fortunately, however, his wife had independently earned enough money in her job that they didn’t have to worry about not being able to feed their family. On top of that, Digitas, where he was CEO, had just raised $223 million through its IPO in March of 2000, valuing the company at $1.4 billion. In other words, Kenny had a strong financial basis both at home and in the company, and so felt up to the task of trying and keep Digitas afloat.

That was possible, because the money Digitas had raised just before the crisis was still in the company’s bank account. It was firepower that could be put to use. The financial structure of a company isn’t always that solid. If your company has burnt through the cash generated from early investors, and revenues dry up because of a crisis, it may be better to call it a day. Bringing in more money through debt or equity – or worse, from your own pocket – may be like throwing it in a bottomless pit. In that case, it may be better to call it quits sooner rather than later, and mentally write off any shares or options you held.

Kenny however did believe in the fundamental idea of Digitas, which was that digital advertising was the future. If he could weather the storm, he figured, his company might be one of the last ones standing and win market share in an otherwise thinned-out market. And besides, he had a lot of personal upside: the stock options he had negotiated on his arrival were somewhere between 5-10% of the total. If he could turn around the company, he would be a multi-millionaire.

He thus embarked on an arduous journey, working days and nights, cutting costs wherever he could, and all the while trying to keep revenues flowing in. It left him with some scars – he had to fire many colleagues and miss a lot of family time – but it ultimately paid off financially. Digitas took years to recover to its pre-crisis levels, but it did survive and thrive. In 2006, CEO Kenny sold the company to Publicis for $1.3 billion, $100 million shy of its IPO valuation. Kenny himself had already sold 1.5 million shares in 2005, and had another 7 million left in 2006, securing another $20 million on the day of the sale.

Finally, consider the question of your business model. Even if you do have time and money left, it may still be better to call it quits if your business model hasn’t proven itself. Conversely, if you do have a viable business model, rest assured the sacrifices you’re about to make will likely be worthwhile.

Kris Gopalakrishnan is a case in point. The danger of the crisis was never really that his Infosys could go out of business. His challenge was to preserve what he built, perhaps more so on a personal level than financially so. Infosys, known by many as an Indian IT outsourcing company, had been in business for almost 20 years when the stock market crashed in 2000-2001. It had been profitable since many years. But Infosys shares, which were listed on NASDAQ, lost about 90 % of their value during that time, and the business was hurt.

Kris and his fellow founders could by now easily trade their shares, and choose a bird in the hand over two in the bush. Similarly, having spent almost two decades working for the firm, they could decide to hand over the executive reigns. They had options. But they had gone through enough ebbs and flows to know their company was on solid ground. And as lifelong friends and partners, they would also throw away what had been a rich social life, as well as a professional partnership, if they walked away now.

Why would they do that? It had taken the company and its eight founders almost eight years to get to their first $1 million dollars in revenue. In those early years, they practically lived together in the small office they had. “The first 10 years was about survival,” he told me. “It was about making enough money to get around, to grow slowly.” It took them another few years (until 1993) before they went public. But since then, and until 1999, the stock price had multiplied 85 times. The 90% drop was thus relative. By now, these men were certain their business model was viable, and they were willing to sit the crisis out. They also stayed on in their respective executive positions, thus keeping their partnership alive.

It worked. The rise of Infosys after the crisis was much more spaced out than that in the years prior – 10 years to be exact. But over the course of that decade, the company did recover to 85% of its dotcom bubble high. Of the eight founders, four also became CEO after the crisis, including Gopalakrishnan. It provided them with the pinnacle of each of their careers, and a continuation of their lifelong partnership. The lesson is that when a business model is proven, a stock market crash shouldn’t necessarily lead to major strategic revisions or to drastic revisions of the executive team. In at least some cases, if you keep the compass steady, at some point the situation will normalize.

That realization won’t soothe individual employees or founders in the midst of a storm, and it isn’t guaranteed unless certain conditions are met. But is important to ask yourself whether the slumps and crises are worth it for you personally, and for the individual company you work for. When the next financial crisis hits, figure out why you’d go on, or whether it’s best to limit your losses – personally as well as financially. Because while you can’t erase your past you always have the decisive hand in your future.

Categories: Blogs

How to Strengthen Your Reputation as an Employer

Wed, 05/16/2018 - 09:14

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Many companies are aiming to be more transparent and authentic about their products, services, and costs. For example, McDonald’s has an online FAQ about how the company’s food products are made, while Southwest’s Transfarency initiative aims to give customers a clearer picture of the total fare they will pay, with no unexpected fees.

But when it comes to communicating authentically about the employee experience, companies still have a long way to go.

A new study by my firm, Weber Shandwick, in partnership with KRC Research, found that only 19% of the nearly 2,000 global employees we surveyed feel strongly that the work experience their employer promotes publicly is matched by reality. In other words, what employees saw on a careers site or on their company’s social channels, or what they heard from recruiters, was often inconsistent with what they experienced when they joined the company. Imagine, for example, being promised a culture of innovation only to have every new idea you put forward dismissed. Or banking on career advancement opportunities only to realize that your employer seldom fills open roles from within your organization.

This may help explain other data showing that almost one-third of new hires leave voluntarily within the first six months. Beyond the cost to replace staff, which is estimated at 50%–75% of the new hire’s annual salary, this type of attrition damages coworker morale, disrupts customer relationships, and, in the age of employer review sites like Glassdoor, inhibits companies’ ability to attract new talent.

The timing couldn’t be worse. The combination of weak employee engagement rates globally and the 3.9% unemployment rate in the U.S., a record low, creates the perfect storm for employee attrition. Inauthentic employers, with a reputation for failing to deliver on workplace promises, stand at a disadvantage in the race to fill vacancies.

On the other hand, we found that employers who deliver on the experience they promise enjoy better recruitment, engagement, employee advocacy, and retention outcomes. Their employees are more likely to recommend their employer as a place to work, to post or share praise about their employer online, and to put more effort into their job than is required.

If your company is among those struggling to attract or retain the talent they need, it’s possible that it has a credibility problem. Consider these steps to achieve a more authentic employer brand.

Be True to Who You Are

The most effective employer brands are rooted in a clear corporate purpose and set of values, which serve to attract job seekers who share those fundamental beliefs and weed out those who don’t.

Take outdoor apparel retailer Patagonia. The company has long stood for enjoying nature and protecting the environment. Its employer brand is a natural extension of that, promising an “unusual blend of work, play, family and environmentalism.” The company delivers on that promise through paid environmental internships, time off for civil disobedience training, reimbursements for commuting to work in a way other than driving, and a flex-time policy that allows employees to catch a good swell when they feel so inspired.

Patagonia’s clear articulation of what the company stands for enables a strong fit between employer and employee, resulting in just a 6% voluntary turnover rate among full-time employees (compare this with the retail industry average of 35%). There’s strong brand affinity, as evidenced in this statement from one engaged employee: “Patagonia’s culture and my own ‘culture’ feel inseparable. I often struggle with drawing a line between my personal life and the company’s identity [and] well-being.”

Assess the Gap

Most brands don’t enjoy such close alignment between what they promise and what they deliver. They can benefit greatly from assessing the distance between their recruitment marketing and the actual employee experience.

This assessment includes talking to new hires, conducting employee engagement surveys and exit interviews, engaging in social listening, and paying close attention to online reviews that employees have written about the company. Employers should outline the claims they’re making about the employee experience and assess whether they are or aren’t supported by employee feedback. They should also seek to understand what employees think the company is doing well and determine whether these features could be better promoted externally.

Surfacing and addressing these gaps helps protect against employee backlash and reputational risk. This was the lesson learned by a client in a remote area that had been emphasizing its global reach in its recruitment messaging. The company conducted employee focus groups and found that working there didn’t actually feel like working for a global company. Few employees had been to regional offices or even interacted with colleagues in other markets.

In partnership with HR, my client was able to build connection points between its offices globally and revamp its rotational program, allowing interested staff to complete temporary assignments in different locations around the world. The change led to a better employee experience, improved cross-office collaboration, and gave the company the right to market itself as an employer of choice for globally minded job seekers.

Let Your People Do the Talking

As companies craft their “best places to work” narratives, it’s important to realize that your first and most important audience isn’t potential job candidates — it’s your current employees. Internal marketing around your employee value proposition serves to re-recruit staff, reminding them why they joined, strengthening their commitment to stay, and prompting them to refer others to the company. And in an era when only 12% of employees put a lot of trust in what employers say about themselves, companies must increasingly rely on their employees to be their spokespeople on the employee experience.

It’s an approach that has paid huge dividends for networking giant Cisco Systems. Beginning in 2015 the company made a conscious decision to build a more authentic employer brand. “We stopped posting like we were a 70K+ person company, and…started posting like we were 70K+ people working for the company,” explained Carmen Collins, who runs social media for Cisco’s talent brand. Today the employee voice is front and center on the company’s Life at Cisco recruiting blog, its careers site, and all of its social channels. In fact, the company regularly turns its Snapchat account over to employees to give a real view into company culture, a move that resulted in a 600% follower increase week over week after launch.

Cisco has proved that employee-generated content works. The recruiting blog is now the second most popular among Cisco’s more than 50 blogs. In six months the company grew its Twitter followers by 400% and launched an Instagram account that brought in 2,000 followers and above-industry engagement — and both platforms drove increased traffic to its jobs site.

The best way to turn your employees into content generators and online advocates? Follow through on your promises. According to our study, 50% of employees who think their company delivers on its promises use their personal social media channels to talk about their employer, as compared with 32% of employees at companies that fall short.

Give Yourself Room to Grow

A desire to be authentic shouldn’t stop companies from aspiring to be better. You may not be the workplace of the future today, but if you can show progress in that direction, it should be part of your positioning. In fact, without aspirational elements, your employer brand is likely to be a bland collection of undifferentiated promises that will do little to compel candidates to look closer.

Much like other elements of corporate identity, the best employer brands are a mix of different attributes, such as:

Table stakes attributes. These are what the employer must offer to employees as the price of entry, such as competitive wages and advancement opportunities.

Legacy attributes. These are elements of the employee experience that have always defined the employer and always will, such as Johnson & Johnson’s values, outlined in a credo written by the founding family in 1943, or Zappos’s philosophy on “creating fun and a little weirdness” in the workplace.

Forward-looking attributes. These are things an employer has not yet achieved but is earnestly working toward, often with the goal of setting itself apart from the competition. For example, a manufacturing company may strive to create a digital workplace as a way of differentiating. It may not become Apple overnight, but there should be incremental progress over time.

Before including forward-looking attributes in employer branding, employers should ask their people, “Are we close enough to our goal that this attribute feels attainable?” If the answer is no, they may want to rethink it.

Of course, what is forward-looking today will be table stakes tomorrow, so companies must act quickly to improve the employee experience and reflect those improvements in their recruitment marketing. In the end, companies must acknowledge that their employer brand is inextricably linked to their corporate reputation. Any effort to engage authentically must extend beyond the consumers buying your products, to the job seekers signing up for your employee experience, and to every other stakeholder group.

Categories: Blogs

How Companies Can Use the Data They Collect to Further the Public Good

Wed, 05/16/2018 - 07:00

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By the end of 2017, Yelp had amassed more than 140 million reviews of local businesses. While the company’s mission focuses on helping people find local businesses more easily, this wealth of data has the potential to serve other purposes. For instance, Yelp data might help restaurants understand which markets they should consider entering, or whether to add a bar. It can help real estate investors understand where gentrification might occur. And it might help private equity firms with an interest in coffee decide whether to invest in Philz or Blue Bottle.

The potential value of the large data sets being amassed by private companies raises new opportunities and challenges for managers making strategic data decisions. While there are plenty of well-publicized examples of data repurposing gone wrong, we think it would be a shame for companies to decide the only option is to hoard their data. Before you decide that your data can’t be put to a new use, consider how it might help augment public data sources.

Insight Center

For example, in a recent paper, we explored the potential for Yelp data to measure local economic change and augment the official data, often from the U.S. census, which has long been the bread and butter of economic analyses. Our motivation was simple: Census data is valuable but can be slow-moving and coarse. Public-facing census data can tell you whether more restaurants are opening in a ZIP code, but only after several years. Yelp data can tell you, almost in real time, not only whether restaurants are opening in a ZIP code but even whether more-affordable restaurants are opening on a specific block. We found that Yelp data can help to meaningfully predict trends in the local economy well before census data becomes available, especially in more urban, more educated, and wealthier parts of the country.

This speaks to the broader potential for data from online platforms to improve our understanding of all of America. Just as Yelp can shed light on local economic changes, Zillow could inform our understanding of housing markets, LinkedIn could provide insight about labor markets, and Glassdoor could teach us about the quality of employment options in an area. Companies increasingly recognize the possibility of repurposing their data in these ways for the public good. But repurposing data can have benefits for a company far beyond the warm glow of having done some good. As researchers work with the data, new insights about their data and platform design choices may surface. As policy makers rely on the insights from the data, new relationships can form and facilitate valuable collaborations. Public-facing data efforts can also increase awareness of a company’s brand — allowing companies to do well by doing good.

Of course, there are times when repurposing data is not an option, because the data is either sensitive or not that useful. But we often see examples in which a potentially successful use of a new data source fails to deliver because of poor execution.

Drawing on our academic research assessing repurposed data sources, as well as our work with organizations, we see that simple guiding principles can help companies understand how to successfully repurpose their data.

Principle 1: Understand your unique perspective. When deciding whether and how to use your data, it’s crucial to take the time to understand whether it has real value relative to the information people already have access to. Start by looking for the best data available. Choose a broadly accepted benchmark, and set a narrow goal to see whether and where you can meaningfully add value.

When looking at Yelp data, for example, we considered census data a significant benchmark, since it is something commonly used within research and policy work. And we set the narrow goal of understanding whether Yelp data can augment existing data points with additional variables and provide more up-to-date information (since it’s updated in real time, while the census happens every 10 years). This flavor of incremental improvements can, paradoxically, lead to the largest gains, by making sure that you are going down the right path.

Principle 2: Develop credible analyses. For every exciting new use of digital data that we’ve come across, we’ve seen countless others fail to deliver. Successfully repurposing data requires taking benchmarks seriously and cross-validating against them. If your data doesn’t match existing benchmarks, then you have to understand why. If the differences are irreconcilable, then you might reconsider the value of your data on that dimension. And if you do go forward with using the data, it’s important to think through the best approach to analysis, taking the mismatch into account.

Credible analytics also requires understanding — and being transparent about — the strengths and limitations of your data. Returning to the Yelp example, we highlighted the strengths above. One limitation is that Yelp coverage varies over time and across places. Maintaining credibility and making the most of the data requires understanding and factoring this and other limitations into the analysis and conclusions drawn from the data.

Principle 3: Build partnerships. Even a company that has a great internal data team may not have the right skills to produce public-facing data that will have a real impact. Working with outside researchers and policy makers can help you gauge general interest, build a product that will have credibility, and develop insights that will create value for a broader audience.

There is no such thing as a perfect data set. This is both why new data sources are valuable and why repurposing data can be hard. Tech companies are now collecting unprecedented amounts of data, and they have the potential to greatly improve our understanding of the economy and policy. Yelp ratings are now being used for a variety of purposes, from predicting which restaurants are most likely to have health code violations, to helping understand which businesses are going to be impacted by increases to the minimum wage, to shedding light on how gentrifying neighborhoods are evolving. Other platforms have similar potential. And when done carefully and incrementally, each platform adds one piece to the puzzle, leading to a deeper and more nuanced understanding of the economy — all the while harvesting benefits for the company.

Categories: Blogs

5 Questions New Working Parents Should Ask Themselves

Wed, 05/16/2018 - 06:05

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The demands of both work and parenting are rising. While working hours globally are falling (partially due to aging populations), those employed full-time are often working more. In the U.S., for example, full-time employees are working 47 hours per week, and four in 10 people work more than 50. And the bifurcation of those working both more and less is growing — with marked increases in those working “extreme” hours, particularly in high-skill professions. In addition, according to the World Bank, women now constitute 40%–50% of the workforce in many countries around the world, meaning work outside the home is impacting men and women more equally.

But we are also parenting more. Researchers at UC Irvine found that parents in 11 countries spend nearly twice as much time with their kids as they did 50 years ago, with moms spending almost an hour more each day than in 1965 and dads spending nearly an hour each day with kids (as compared with 15 minutes in 1965). Pew has found that dads now see parenting as being just as central to their identities as moms do (though moms still parent more), and households with kids are now 66% dual-income, versus 49% in 1970. It is no surprise, given these time commitments, that 50%–60% of parents find work-life balance difficult.

You and Your Team Series Working Parents

When we decided to start a family years ago, our lives were very different. We slept in. We had more free time. We had different jobs and different working hours. Our financial situation was simpler. Our decision to become parents has been worth every trade-off, but it changed nearly everything in our working and personal lives. We’ve seen other couples experience the same shifts, through Jackie’s prior work as a marriage counselor and John’s experience as an executive. And based on that personal and professional experience, we encourage working couples who are new to parenting or are considering becoming parents to start the conversation by asking five questions.

What does each person actually want? Men and women now often have more freedom to choose work inside or outside the home. As previously noted, an increasing number of women work outside the home, and according to recent surveys, a small but growing number of men are choosing to raise children full-time. But cultural norms still place immense pressure on a couple. When we had our first child, Jackie originally planned to return to work following a short maternity leave, but ultimately she decided to take an extended period of time to stay home with our children. This was a perfectly valid choice and the one she ultimately wanted to make — but nonetheless she felt enormous pressure to return to work. Conversely, many women would love to pursue their careers but feel pressure to stay at home with children. And men still are often assumed to be better suited to working outside the home, rather than to staying home to raise a family.

Depending on your social circles, there can be overwhelming pressure to prioritize either work or family — navigating an ambitious career or creating flexibility to spend more time with kids. There is no right answer to these questions, but there is a right answer for you and your family. And the answer starts with honesty and openness with yourself and each other. What do each of you really want? Ask the question frequently, as the answer may change over time.

What are the financial needs and constraints? Few of us are free from financial constraints. They are the reality within which we operate. When working parents have kids, a sober evaluation of finances — how much money you want, how much you need, and how much you have — is a foundation for interpreting the constraints under which each family operates. Some people do not have a choice to navigate two-career households, because of child care needs or health issues, for example, while some must choose the dual-career path due to financial demands. In the U.S. each child costs approximately $230,000 to raise — $12,350 to $14,000 per year — and according to care.com, day care costs more than $10,000 per year, on average, while the average cost of a nanny is more than $28,000 per year. The costs of rearing children are real and meaningful. Each family’s financial situation is different, but a clear-eyed evaluation of that situation is critical in order for working parents to properly evaluate the choices they make.

What roles will each person play? Prior to having kids (or early on), it is helpful to be clear about who will be responsible for what, while noting that you’ll likely also need to be flexible and step in for one another when necessary. Simple division of labor can make day-to-day decisions less stressful. Who pays the bills? Who takes out the trash or does the dishes? Who is responsible for dropping off or picking up the kids from school? Who will stay home from work if the child is sick? Research has shown that frankly working out household division of labor (particularly if that division is fair) can help eliminate the tendency of “partners to express displeasure toward one another as they completed their chores,” and while couples always need to be open to flexibility and helping one another, outlining a mutually understood view of household roles can be extraordinarily helpful in minimizing conflict.

Who’s losing when? Jobs sometimes require moves. Financial needs sometimes require jobs that are not fun. Be honest about who is losing in decisions that require tough choices, and make sure it’s not the same person every time. Relationships require compromise. Decision by decision, one person may have to be prioritized over the other, but over a happy life together, one person cannot lose or win every time. For example, we have witnessed one partner in a relationship receiving a great job offer that requires a move, which may be fine, but when it happens again and again, the partner forced to adapt each time can quickly feel taken advantage of. If one partner feels that they always have to make the trade-offs, they should speak up. And each partner in the relationship must be open to listening to the concerns of the other.

How can we stay close to each other? While juggling work and kids, it can be easy to neglect your spouse or partner. And if the relationship is failing or festering, both work and kids become infinitely more difficult. It is important to keep your relationship and each individual’s mental, physical, and spiritual health prioritized over all else — including over kids and jobs. What will prioritizing your relationship look like, realistically, in the chaos of work and kids? How often will you go on dates? Can you carve out time for meaningful conversation each day? This may mean allotting money for a babysitter for one night per week, spending a day away from work to reconnect with your partner, or finding time to share a long lunch together. Perhaps the most important thing to “solve for” in the complex work-and-family dynamic is one another, and discussing in advance the rules of the road for sustaining your relationship can be essential as the burdens of work and parenting pile up.

Parenting can be remarkably rewarding. The decision to become a parent is not for everyone. But for partners considering the balance of work and parenting — as we have experienced time and time again, both in a marriage counselor capacity and in our personal experience — openly discussing the ways to make that complex dynamic work will lead to happier and healthier relationships and careers. If you and your partner are considering having children or are thinking through your current balance of work and parenting, we encourage you to ask these five conversations of each another before you embark on the journey.

Categories: Blogs

Dual-Career Couples Are Forcing Firms to Rethink Talent Management

Tue, 05/15/2018 - 11:34

Jennifer Petriglieri, an assistant professor of organizational behavior at INSEAD, asks company leaders to consider whether they really need to relocate their high-potential employees or make them travel so much. She says moving around is particularly hard on dual-career couples. And if workers can’t set boundaries around mobility and flexibility, she argues, firms lose out on talent. Petriglieri is the author of the HBR article “Talent Management and the Dual-Career Couple.”

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Categories: Blogs

Assessment: Are You a Compassionate Leader?

Tue, 05/15/2018 - 10:17

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Compassion has become increasingly recognized as a foundational aspect of leadership. One study from 2012 found that compassionate leaders appear stronger and have more-engaged followers. Other studies have found that organizations with more-compassionate leaders have better collaboration, lower turnover, and employees who are more trusting, more connected to each other, and more committed to the company. When we surveyed more than 1,000 leaders from 800 organizations, 91% of them said compassion is very important for their leadership and 80% said they would like to enhance their compassion but do not know how.

What do we mean by compassion? It is the intent to contribute to the happiness and well-being of others. A compassionate leader has a genuine interest in seeing their people not just perform and increase profits but thrive. But this doesn’t mean “being soft” or trying to please people by giving them what they want; rather, it requires giving people what they need, such as tough feedback. Compassionate leadership requires having wisdom about how to lead for the greater good and for the long term.

The good news is that compassionate leadership can be learned. With simple practices we can become more compassionate and bring more wisdom to our leadership. This assessment will help you understand how wisely compassionate you are. Answer each question honestly. After you take the assessment, you will get a report outlining where you can improve, along with practical tips for becoming a more compassionate leader.


Categories: Blogs

How Multinationals Should Be Planning for Brexit

Tue, 05/15/2018 - 09:30

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The UK will exit the European Union on March 29, 2019, and many companies are struggling to prepare for how it will change doing business there. Only a minority of firms is well ahead in planning and preparing a UK market strategy. At the recent Brexit Workshop we held for clients — in this case, 19 UK heads of some of the world’s largest multinational firms — 10 of them had not started or had only just begun planning for Brexit.

There’s no template for how companies should change in response to Brexit. Information about what it means is limited, and opinions are fast-changing and increasingly contradictory. But that doesn’t mean companies shouldn’t start the work required to come up with a plan. It’s possible to think through the ways your business could change, even without having the perfect information at hand. Below we’ll outline some of the most important questions multinationals should be asking.

We’re noticing that many multinationals are falling into three serious traps when it comes to planning for Brexit: (1) They’re taking a wait-and-see mode until they feel confident that they have enough information to prepare their businesses for the post-Brexit environment; (2) they’re setting targets using historical data that may be irrelevant; and (3) they’re failing to take into account the Brexit spillover effects (for example, on currencies, regulations, and cost increases) that will impact different parts of their businesses.

Waiting for perfect information to start planning is a risky approach because sufficient clarity may come too late, if at all, to take crucial action. The nature of Brexit talks, both within the UK and with the EU, ensures that each side will use time as leverage, dragging issues to the last moment in order to extract concessions. It is possible that we won’t have perfect information by April 2019. Companies risk running out of time to prepare for the changes that will most affect their businesses. For example, adjusting supply chains can take up to nine months or longer depending on internal and external constraints. Internally, several parts of an organization may have to sign off on making such changes; externally, the process of finding new suppliers and contracting can be time-consuming.

Relying on historical data is risky too. For example, a company we work with that supplies appliances to restaurants in the UK is finding itself very minimally affected by Brexit directly, but its customers are already seeing more consumer price sensitivity, labor issues in hiring EU nationals, and rising operating costs — all of which are putting more pressure on them to transfer costs to our client. And this is happening before Brexit has even taken place. If the supplier had used its 2016–2017 sales data, which showed greater demand for its products as a result of the boom in UK tourism, to predict future results and set next year’s strategy, it may have overestimated future performance and ended up with too much inventory, higher costs, and pressure to discount heavily to move product.

Brexit’s complexity can also easily lead to analysis paralysis and a sense that all planning is useless. At our workshop, leaders of 14 client companies said that the biggest Brexit planning challenge they faced was constantly changing information.

But companies risk falling behind better-prepared competitors if they take a wait-and-see approach. Seven participants in our workshop said they are worried about Brexit leading them into a price war with competitors, while six were worried competitors would change their offerings to better fit customer needs, undermining their overall performance and market position. The sooner firms have a Brexit plan, the faster they can focus on managing these competitive dynamics.

How to Plan for Brexit

When it comes to planning, multinationals shouldn’t apply quick fixes to mitigate short-term operational risks (for instance, financial hedging to manage exchange rate fluctuations, or cursory assessment of distributors to evaluate their supply chains). Companies need a working group that regularly assesses Brexit impacts relative to competition, and a strategic plan for their UK business that is straightforward, flexible, and easy to track. We recommend a six-step process:

1. Understand how exposed you are. Companies first have to understand the primary impact of Brexit on their business in terms of key exposure (exchange rate, supply chain, competition, demand dynamics, talent) and their value chain (suppliers, logistics, customers, stakeholders). Broadly, Brexit should be a top strategic concern for firms that:

  • export raw materials and/or finished goods or services from Ireland to the UK, from the UK to Ireland, from the UK to Western Europe, or from Western Europe to the UK
  • have a direct presence or a manufacturing facility in the UK
  • have EU staff as part of their personnel in the UK
  • use the same distributors for the UK and Western Europe
  • have products that must comply with UK regulations or particular specifications

2. Create a strategic Brexit team. Once a company understands the broad exposure of Brexit on the business, it needs to form a team responsible for its strategic plan. Few companies can afford to dedicate staff full-time to this task, but a cross-functional working group for whom this is a special side project can be sufficient. This group should represent a variety functions within the organization exposed to Brexit: supply chain, channel managers, procurement, marketing, sales, public affairs, governance, and financial controlling, among others.

Individuals on this cross-functional team should work together to thoroughly analyze Brexit’s possible impact on the business. The group should be responsible for aligning the company strategy in terms of priority areas and decisions, as certain parts of the business will be impacted sooner than others.

The company should look to bring in staff from other markets to apply their skill sets and ideas. In some ways, the UK in this Brexit environment resembles the uncertain operating environment of some emerging markets. Thus, the firm can delve into its best practices for emerging markets, where its teams are accustomed to political, regulatory, and demand volatility and unpredictability.

3. Understand possible scenarios. After the Brexit team understands the broader impact of Brexit on the business, it needs to start scenario planning around potential developments of Brexit negotiations and the UK economy. After this, the firm should decide which scenarios it believes are the most likely to occur and are most threatening to the business.

Each Brexit scenario — such as a no-deal Brexit, a free trade agreement, or a “softer” Brexit where the UK maintains many benefits of remaining in the EU — comprises distinct drivers that will determine the progress of Brexit negotiations, as well as signposts that indicate which scenario the UK is moving toward. Drivers include the UK government’s continuous commitment to control migration, the EU’s nonnegotiable condition that the UK cannot restrict migration while maintaining single market access (preserving four EU freedoms: labor, capital, goods, services), and the state of the UK economy. Signposts include the results of key UK-EU meetings, deadlines for votes in the European Parliament on Brexit, and decisions on the Irish-UK border. Each scenario should be assigned a likelihood of occurring and outline the estimated impact on the business.

4. Conduct a thorough impact analysis. After identifying the primary areas of impact from Brexit and creating your Brexit team, it’s time to assess the nature, level, and timing of the impact on your firm’s operations in detail. This analysis will help the firm prioritize what is most at risk and needs to be addressed first. An international fast-moving consumer goods firm we worked with on its Brexit plan established that its supply chain was the most exposed, compelling the organization to take action early. The firm reconsidered the standard level of inventories, shelf life, and conservation process of its products. Other concerns, like staffing of EU nationals or compliance with packaging requirements, were deemed less of a priority but would be addressed in the future.

5. Model demand and costs based on Brexit. While an impact analysis for each scenario looks at what will happen to the company with the UK’s exit from the EU, modeling means quantifying how sales and costs may be affected by these different scenarios. Firms should model how their sales and costs would evolve in each case and incorporate them into their existing strategic plans for the UK. Certain scenarios will incur differing costs from labor, tariff and non-tariff barriers, and regulations. As a base case, suppliers could face cost increases and pass some of this on to customers. For instance, the pound is likely to depreciate from its current point in an FTA-type agreement deal, driving inflation up and making imports more expensive. Companies would instinctively look to increase prices to balance out their costs.

Likewise, demand will differ according to each Brexit scenario, and firms need to model and evaluate how each scenario might affect their current product offerings in the market. Sales volumes are likely to fall across the board, as the UK economy is likely to weaken under every Brexit scenario, but the level of falling sales will vary for each product. Differing economic developments may also change customer preferences and price sensitivity, which would force firms to rethink their target customers and portfolio of goods. We should note, though, that this modeling of future costs and demand using pre-Brexit historical economic and sales data should serve as guidance, not be taken as the final answer.

6. Evaluate your value proposition, act, and monitor. Before making decisions, leaders need to answer: How will your value proposition evolve over the long term to support your market strategy as you adjust to operational disruptions from Brexit? Our clients revealed that they were increasing their focus on innovation to enhance their value proposition. They’re seeking to deliver continued value to customers through more services and technical support.

Once you’ve thought through the impact each scenario could have on your business, as well as your value proposition, your organization is now in a position to start making decisions around pricing, product portfolios, supply chain management, channel management, and people. Your Brexit team should be regularly monitoring economic indicators and key events signaling the course of the negotiations, to see whether your plan is on track or needs adjustment.

Brexit will pose numerous challenges for business as well as some opportunities. Companies with a plan will be better able not only to protect themselves but to identify opportunities to get ahead.

Categories: Blogs

How to Make Sure Agile Teams Can Work Together

Tue, 05/15/2018 - 08:10

Marina Nasr / EyeEm/Getty Images

Increasing volatility, uncertainty, growing complexity, and ambiguous information (VUCA) has created a business environment in which agile collaboration is more critical than ever. Organizations need to be continually on the lookout for new market developments and competitive threats, identifying essential experts and nimbly forming and disbanding teams to help tackle those issues quickly. However, these cross-functional groups often bump up against misaligned incentives, hierarchical decision-making, and cultural rigidities, causing progress to stall or action to not be taken at all.

Consider the case of an organization in our consortium, the Connected Commons, that uncovered a ground-breaking audio/visual technology which would differentiate the organization in existing channels but also had the potential to open up entirely new markets. The CEO heralded it as a pivot point in growth and formed a cross-functional initiative of 100+ top employees to bring it to new commercial channels. Yet, unfortunately progress did not match expectations. Employees assigned to the effort struggled to make time for the work. They often did not understand the expertise or values of different functions, and advocated too aggressively for their own solutions. The group was surprised several times by the demands of external stakeholders. Despite this project’s visibility, critical mandate, and groundbreaking technology, the organization was ultimately hindered when it came to agile collaboration. This story is not unique.

Insight Center

A significant part of the problem is that work occurs through collaboration in networks of relationships that often do not mirror formal reporting structures or standard work processes.  Intuitively, we know that the collaborative intensity of work has skyrocketed, and that collaborations are central to agility. Yet most organizations don’t manage internal collaboration productively, and assume that technology or formal org charts can yield agility. These efforts often fail because they lack informal networks—for example, employees who share an interest in a technological innovation like artificial intelligence or a passion for environmental sustainability, who can bridge the organization’s entrepreneurial and operational systems by bringing cutting-edge ideas to people who have the resources to begin experimenting and implementing them.

Our research focuses on agility not as a broad ideal, but rather on where it matters most — at the point of execution, where teams are working on new products, strategic initiatives, or with top clients. All of these points of execution are essential for organizations, yet all encounter inefficiencies unless they’re managed as a network. We assessed these strategically important groups in a wide range of global organizations via network surveys, which were completed by more than 30,000 employees.  We also conducted hundreds of interviews with both workers and leaders in these companies. We found that agility at the point of execution is typically created through group-level networks such as account or new product development teams formed from employees drawn throughout the organization, lateral networks across core work processes, temporary teams and task forces formed to drive a critical organizational change or respond to a strategic threat, and communities of practice that enable organizations to enjoy true benefits of scale. These and other lateral networks provide agility when they are nurtured along four dimensions — 1) managing the center of the network, 2) engaging the fringe, 3) bridging select silos, and 4) leveraging boundary spanners. Leaders who nurture their internal networks in this way produce better outcomes—financial, strategic, and talent-related. Here’s how:


Managing the Network’s Center

When agility is viewed through a network lens, it becomes apparent that collaboration is never equally distributed. We typically see that 20-35% of valuable collaborations come from only 3-5% of employees. Through no fault of their own, these people become overly relied upon and tend to slow group responsiveness, despite working to their wits’ end. They are more likely to burn out and leave the company, creating network gaps, which then become another barrier to agility. Senior leaders need to consider where overload on the network’s center might preclude agile collaboration and:

  • Encourage overwhelmed employees to re-distribute collaborative work in conjunction with their managers. Groundbreaking work from the Institute for Corporate Productivity(PDF) found that acknowledging and shifting collaborative demands in this way is a practice that’s three times more likely to be found in high performing organizations compared to those with lower performance.
  • Understand how employees have ended up in the center – and if it is a result of formal position or personal characteristics, then take the corrective actions necessary to reduce overload. For example, simple shifts in a few behaviors can yield as much as 18-24% more time for collaboration. Such behaviors include: managing meetings more efficiently, creating an effective climate of email use, blocking time in calendars for reflective work, negotiating role demands, and avoiding triggers that lead us all to jump in on projects or meetings when we shouldn’t, to name just a few.
  • Map the interdependencies between different teams where your central players contribute, in order to understand and plan for potential risks. When a star sits at the center of multiple projects, a surprise shock in one team can create nasty ripples well beyond the jolted team. Be sure team leaders have a backup plan to cover these emergencies.
Engaging the Network’s Fringe Players

Agility requires the integration of different capabilities and perspectives to understand VUCA issues and figure out what kinds of experts are needed to tackle them. But those who see the world differently or who are new to a group often languish at the network edges. Whereas those in the center may be over-relied upon, those on the fringes are often not tapped in a way that allows for agile collaboration. For example, our research shows that it can take three to five years for a newcomer to replicate the connectivity of a high performer. Few organizations provide such luxury of time, however: our research also shows that if an experienced hire doesn’t get integrated into substantive projects within the first year, they are seriously at risk of leaving before they reach the three-year mark.

Getting others to trust fringe employees is essential for drawing them into agile collaboration.  Their competence isn’t usually in question, if you have rigorous hiring and merit-based promotion processes; the trick is getting others to trust their motives (“Will he take undue credit?” or “Will she walk away with my clients?”) if few colleagues can vouch for their character. Senior management can help by taking the following actions:

  • Create a “hidden gems” program to help unearth high-potential but overlooked experts who could take some of the burden off of overworked central players. Role model this behavior by, for example, assigning an up-and-comer to co-lead a high status initiative.
  • Help those on the fringe to create “pull” for their work. Instead of pushing expertise on others across the network, these employees need to be seen as a strategic resource to be pulled into opportunities. This is done by identifying mutual value and matching capabilities from the fringe to needs across the network.
  • Pair newcomers and network influencers through staffing or mentoring. This simple practice triples newcomer connectivity compared to those who do not get this experience.
  • Create inclusive and trusting environments to facilitate agile collaboration. A culture of fear exists when employees do not feel safe to come forward with ideas, and those on the fringe may be less confident about contributing. High performing organizations are 2.5 times more likely to facilitate an environment of safe communication (PDF).
Bridging Select Silos

Every organization we studied struggled with silos across functions, expertise, geography, level, and cultures — whether occupational or national. The network lens can help uncover specific points that if crossed could yield agility benefits, rather than inefficiently bridging all silos. Often, this means connecting people across units or geographies doing similar work to yield benefits of scale, or identifying points where integrating different perspectives yields agile innovation. This type of multidisciplinary collaboration produces higher revenues and profits because it tackles higher-value problems. Motivating experts to engage in agile collaboration requires them not only to identify and appreciate knowledge from other silos, but also to be willing to give up some control and autonomy over a project’s direction. Senior leaders can help motivate experts with the following actions:

  • Set specific goals and reward agile collaboration. Our research found that, compared to lower performing organizations, high performance organizations are three to five times more likely to reward collaboration (PDF), motivating employees to move beyond silos. Our studies of firms that use peer feedback to effectively identify and celebrate agile collaborators show that these bottom-up processes often uncover excellent people whom the formal performance reviews might otherwise overlook.
  • Use data and analytics to understand where silos exist, in order to unlock possible agile collaboration. In one study, we found discrepancies in connections between headquarters and affiliates, and poor collaboration between engineering and sales. This insight produced the business case for holding brainstorming sessions to build connections and improve communication. A data-driven approach is not only more accurate and less biased than relying on individuals’ perceptions, but also more convincingly demonstrates the quantifiable upside for agile collaboration.
  • Identify experts scattered across silos and key cross-points in the firm for agile collaboration. Set up “communities of practice” or business development initiatives to help share expertise or resources. For example, many business service firms are prompting professionals who serve customers in similar industries such as insurance or biotech to meet informally and share sector insights and leads. The well-connected act as bridges to and from silos. Some firms have successfully tasked high-potential employees with tracking the evolving expertise in adjacent departments, which has to be a dynamic process—definitely not a knowledge database. These employees should be recognized for identifying opportunities to use cross-silo knowledge. Exchange programs or rotational programs can help here, too.
Spanning External Boundaries

Agility thrives when employees understand their organization within the broader ecosystem, and continually scan for market developments that pose either threats or opportunities. Doing so requires dynamic knowledge of external bodies such as competitors, customers, regulators, and expertise communities or associations. Those who span the boundary between internal and external actors can solve problems in unique ways, because they can access knowledge from these different worlds. They can also facilitate agile collaboration by efficiently integrating disparate viewpoints and creating multi-stakeholder solutions, but they need to be properly empowered, managed, and resourced in order to do so. Senior managers can facilitate this by doing the following:

  • Identify and enlist boundary spanners to help tackle vexing problems. People who connect the organization with its ecosystem can propose plans that can be feasibly implemented, since they have access to the shortest informational paths in the network and legitimacy in the broader environmental context.
  • Nurture relationships and promote the exchange of information by organizing forums or special events that convene key players from across the ecosystem. This approach helps to create more people in your organization who are capable of functioning as bridges to external parties, and it provides insights on pain points and opportunities in the ecosystem.
  • Promote connectivity to key external stakeholders. High performing organizations are 2.5 times more likely to encourage interaction with external stakeholders (PDF) such as clients, suppliers, regulatory bodies, or professional associations. Senior managers should require employees who are well-connected internally to work on external connections, or suggest that those who are well-connected externally mentor junior employees in networking to ensure boundary spanning.

Managing these collaborative players as part of a network can help organizations be more agile.  Although agile collaboration requires continual re-assessment of complex problems, it is possible for firms to combine and recombine essential expertise from across points in the network to address VUCA issues. By steadily nurturing agile collaboration, senior management can more effectively and more efficiently access the necessary depth of expertise of key collaborators within the organization.

Categories: Blogs