Harvard Business Review

The Secret to Leading Organizational Change Is Empathy

Harvard Business Review - Thu, 12/20/2018 - 10:00am
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I’m working with a CEO who’s in the midst of rethinking her company’s strategy so it can better meet customer demands and thrive financially. These are major changes that will affect every aspect of how the firm operates — from the services it offers to the structure of her organization.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Right Way to Use the Wisdom of Crowds

Harvard Business Review - Thu, 12/20/2018 - 9:00am
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Management teams are responsible for making sense of complex questions. Maybe it’s estimating how much a market will grow next year, or finding the best strategy to beat a competitor. One popular approach for navigating these questions is turning to the “wisdom of crowds” – asking many people for their opinions and suggestions, and then combining them to form the best overall decision. Evidence suggests that the combination of multiple, independent judgments is often more accurate than even an expert’s individual judgment.

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

The problem of independent judgments

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

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

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

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

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

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

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

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

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

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

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

How to make better decisions

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

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

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

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

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

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

Why CRM Projects Fail and How to Make Them More Successful

Harvard Business Review - Thu, 12/20/2018 - 8:05am
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In 2017, CIO magazine reported that around one-third of all customer relationship management (CRM) projects fail. That was actually an average of a dozen analyst reports. The numbers ranged from 18% to 69%. Those failures can mean a lot of things — over-budget, data integrity issues, technology limitations, and so forth. But in my work with clients, when I ask executives if the CRM system is helping their business to grow, the failure rate is closer to 90%.

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

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

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

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

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

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

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

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

5 Questions We Should Be Asking About Automation and Jobs

Harvard Business Review - Wed, 12/19/2018 - 11:00am
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We simply don’t know for sure whether automation, algorithms, and AI will ultimately create more jobs than they destroy. Opinions are all over the map. One widely cited study predicted 47% of jobs will be automated, and technological change has in fact contributed to declining employment in recent years. Some are already preparing for a world without work.

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

 

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

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

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

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

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

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

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

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

Harvard Business Review - Wed, 12/19/2018 - 10:20am

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

Download this podcast

Some recent picks:

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

How to Moderate a Panel Discussion

Harvard Business Review - Wed, 12/19/2018 - 10:00am
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As you rise in your career and your visibility grows, you’ll likely be called upon to participate in a panel discussion. It’s a powerful way to share your ideas and become recognized in your field, but there’s no question that preparing to speak on a panel can be stressful — you have to figure out what to say, practice being concise, and worry about overlapping with your colleagues.

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

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

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

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

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

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

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

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

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

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

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

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

Will the Huawei Arrest Influence the U.S.-China Trade Talks?

Harvard Business Review - Wed, 12/19/2018 - 9:00am
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The arrest of Meng Wanzhou, chief financial officer of China’s Huawei, by Canadian police upon the request for extradition by the U.S. Federal Bureau of Investigation has resulted in confusion regarding U.S.-China trade negotiations.

Some believe hardline national security elements of the U.S. government ordered the extradition request in order to sabotage the trade talks or at least to disregard them in the historic tradition of U.S. national security agencies putting their concerns above trade issues.

Some believe that President Trump ordered the extradition request as a way of bringing pressure to bear on Chinese President Xi Jinping for further trade concessions.

Some believe the U.S. has a vendetta against Huawei and senselessly got carried away by its hatred in a way that may undermine the trade discussion.

As it happens, the truth is almost certainly much less exciting.

Let’s start with the last issue. It is true that the U.S. government has a deep concern regarding Huawei. But that concern is not entirely without foundation. Huawei is the world’s largest telecommunications-equipment maker. Its founder came from the People’s Liberation Army  and has had a continuing close relationship with the PLA as well as with other security agencies of the Chinese government. It has been the beneficiary of extensive government subsidies, contracts, protection, and, some say, government-sponsored hacking of foreign technology companies and of the U.S. government.

The U.S. government has charged Huawei with illegally selling U.S. components to Iran, and the FBI has been tracking Huawei executives for some time for purposes of making an arrest. It was fortuitous that Meng happened to be in Canada when she was, but the FBI move was not made in a sudden fit of anger. The warrant for arrest had been out for some time.

Did a group of hawks deliberately try to sabotage the trade talks? The Chinese probably wouldn’t mind if this view were widely believed, but it seems unlikely. In the first place, the real hawks are the administration’s trade negotiators led by U.S. Trade Representative Robert Lighthizer and Assistant to the President Peter Navarro. They certainly didn’t want to sabotage themselves. Moreover, since the timing of the arrest was fortuitous, it was not something that could have been purposely arranged to sabotage the trade talks.

If it’s true that Trump and Lighthizer did not know of the arrest in advance, it does raise the issue of why no one told them. There are two possible explanations. One is that the FBI was focused on its case and simply didn’t think of the arrest in the context of the trade talks. However, National Security Adviser John Bolton was informed but did not pass the information on to the president. Informing the national security adviser would be a natural thing to do in this kind of a situation.

Why didn’t Bolton inform the president? One possible answer is that he saw it was a case of the FBI simply doing its job and thus there was no reason to interrupt the president who was in the midst of discussions with President Xi. Another is that Bolton is a national security hawk who might prefer a breakdown in trade talks that might relieve pressure within the U.S. government to take more vigorous defense measures with regard to China. Or maybe it was a combination of the two. Take your pick.

What about the notion that the president ordered the arrest precisely in order to wring more trade concessions from Xi? This is unlikely. First, the timing was unpredictable, and the president could not have known in advance that an arrest was even possible. Second, intertwining the arrest with the trade talks would be more likely to undermine the talks than to lead to greater concessions.

Of course, the president subsequently has thrown doubt into the equation by stating that he would intervene to halt proceedings against Meng if he got a really big trade deal from Xi. But the fact is that the president does not have the authority to intervene in the legal proceedings against Meng. So his statement seems to be something he thought of subsequent to, rather than before, the arrest.

A key part of the equation is Lighthizer’s strong insistence that the talks and the arrest are two completely different and unrelated activities. He knows the Chinese would probably like a public perception of some kind of relationship because that would weaken his negotiating hand. So he is emphasizing that the talks and the arrest are not at all entangled. Since Lighthizer would be the big loser in the case of any entanglement, it is easy to believe he was not part of any nefarious scheme.

In summary, it’s highly likely that Meng’s arrest and the new U.S.-China trade talks were not initially related. The degree to which the Chinese government and the Trump administration allow them to become part of the negotiations remains to be seen. I just hope that the Trump administration keeps them separate. Too many times in the past, the U.S. government has needlessly sacrificed crucial trade priorities to the goals or concerns of national security agencies. It would be a shame for that to happen again.

Case Study: Should a Direct-to-Consumer Company Start Selling on Amazon?

Harvard Business Review - Wed, 12/19/2018 - 8:05am
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Sitting in his office, Mark Ellinas frowned at his computer screen. It was filled with row after row of electric bikes, from expensive models to cheap knockoffs that seemed held together by spit and a prayer. Though they varied in style and price, the bikes did have one thing in common: where they were being sold. The website he was looking at, flush with options, was Amazon.

As the CMO of PedalSpark, a small maker of high-end electric bicycles, Mark was considering strategies for selling the company’s new ride. The market for electric bikes had exploded in the past few years, especially in China, and it showed no signs of slowing down. PedalSpark’s signature bike, a $4,000 luxury model available only through the company’s website, was selling well and had been named to a few “best e-bike” lists. Now PedalSpark was about to introduce a cheaper, entry-level model, which it hoped would have broader appeal. The bike was targeted at price-sensitive riders, people who were willing to trade higher battery life and motor power for a lower price tag.

Editor's Note

This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and email address.

Two years ago PedalSpark had hired Mark away from his marketing position at a children’s bicycle maker. That company had sold exclusively on its own site, and Mark’s expertise had served PedalSpark well with its first product. He was excited by the challenge of selling the new bike in an increasingly crowded market, but the question was how to do it.

His two direct reports were split. Gideon Bear, the sales manager, tended to favor aggressive approaches. He wanted to sell the new model on Amazon, which had, as he’d put it, “a few more customers than our site.” But Tamar Nourse, the product manager who’d recently come on board, was worried about whether the bike would stand out on Amazon. She thought that keeping the new model on PedalSpark’s site, where their team could control the entire sales process, would be better over the long term.

Bzzt. Mark glanced at his phone and saw a text from the CEO: Where are we on the online channel strategy? Looking forward to your presentation. The new model was almost ready, and the CEO wanted a decision soon. With the presentation scheduled in two days, Mark still had some time to think—but not much.

Giving Information to the Enemy

Mark closed his laptop and walked down the hall to Tamar’s office. He knocked on the open door. “Hey, got a minute?”

Tamar looked up and adjusted her thick-rimmed glasses. “Hi, Mark. What’s up?”

He sat down across from her. “So, about the bike. In the meetings with Gideon it feels like you’ve been holding something back. We have to make a decision, so I need you to tell me what you aren’t telling me.”

She took a deep breath. “Mark, I’m still new here, and I don’t want to rock the boat. But I really think selling on Amazon would be a terrible move for us.”

“Why, though?”

“The day we put the bike on sale, Amazon will start vacuuming up information about our customers, our margins, and the market’s potential. If it ever decides to get into the e-bike business, we’ll have hand-delivered all the data it needs to squash us.”

“I know worrying is part of your job, but is it possible you’re being a little paranoid here?”

“You should ask my B-school classmate Marta.”

“Who is she?”

“A few years ago she was the founder and CEO of a successful start-up. She’d had an idea for a new kind of tablet stand. She spent a year developing a prototype and finding a manufacturer in China that would work with her. Then she started selling on Amazon. Now she’s the former CEO of a company that doesn’t exist anymore.”

“Wow. What happened?

“For about a year the tablet stand got great reviews and sold well at $40 each. During the back-to-school season, she was moving a few thousand a month. Then a bunch of copycat products started popping up. She had to fight them off as best she could. She complained to Amazon, but it didn’t do anything, of course. Then AmazonBasics debuted its new tablet stand. It was a lot like hers, though different enough to avoid a lawsuit. It was also half the price.”

“E-bikes are a lot more complex than tablet stands, though. What are the chances Amazon will make one of its own?”

Tamar’s lips curled into a small smile. “I don’t know, but if we went head-to-head against Jeff Bezos, would you put your money on us? Amazon’s private-label products are projected to hit $25 billion in sales by 2022.”

Mark shuddered. “A dark thought to have before lunch. How do you figure our chances against the existing competition?”

“We do have great bikes, but quality isn’t enough on Amazon. Whatever your product is, there’s always a cheaper version, and usually that’s the one people buy. It’s a never-ending, anything-goes price war there. I’m guessing that isn’t what we want people to associate with our brand.”

Nodding slowly, the CMO rubbed his chin. “Good point, and I don’t disagree. Gideon is pretty keen on the Amazon idea, though.”

Tamar adjusted her glasses again. “I get why—more customers and more visibility. That may help us sell bikes in the short term, but what about the long term? If people buy the new model on Amazon, will they be loyal to the maker or to where they bought it? We built the PedalSpark brand by selling the luxury bike on our website. Why try to fix what’s already working?”

Trying Something New

That afternoon, Mark asked Gideon to meet him in the cafeteria for coffee. The sales manager poured milk into his steaming cup and swirled it around with a straw. “Amazon, Mark. You know what I think. What are you thinking?”

“Undecided. There’s a lot of risk in selling the bike there, but a lot of upside, too.”

“Yes! I’m glad you see that. Amazon Prime has over 100 million members, and it’s growing. Imagine the sales if a fraction of them ordered the new bike—and imagine how many of them will if two-day delivery is available. Someone gets excited about e-bikes on a Wednesday, and by Friday she has one of her own to ride. The possibilities are endless.”

“It’s fun to daydream about, Gideon, but are we set up to handle higher volume and a shorter fulfillment window? Orders that come through our site have a shipping time of two weeks. I’m nervous about promising something we can’t deliver—and to a bunch of new customers, no less.”

“But that’s the beauty of Amazon,” Gideon said, his voice rising in excitement. “We have options. I know I’m telling you your job right now, but we can sell product to Amazon for it to resell, or sell the bikes ourselves and let Amazon handle the warehousing and shipping, or list them on Amazon and ship them on our own. You’re always talking about the value of running small, controlled experiments, so let’s try one and see what happens. If it doesn’t work, we’ll switch tactics and adapt as we learn.” He grinned. “Everyone in this company agrees we have a great new product. All I want is to get it to as many people as possible.”

“There are three options, yes, but they don’t give us a lot of wiggle room if things go badly. We may be able to play with the bike’s price a bit, but we can’t lower it that much or we won’t make any money—and it could make us look cheap, too. I do think a higher price point is fair for the bike we’re selling. Even luxury brands that sell on Amazon today hesitated about it for a long time, and it would be a good idea for us to think about why that is. The jury is still out on whether luxury brands benefit from being on Amazon.”

“You know who sells on Amazon? Apple. Versace. Rolex. Jimmy Choo, Mark—Jimmy Choo. And more will follow. Whichever companies don’t will be on the wrong side of retail history.”

“We aren’t Versace, Gideon. Besides, a lot of those brands sell a very small subset of their products on Amazon—and usually not their flagship ones. They save those for their own sites or stores, where they can control the buying experience. We’re trying to raise our profile as a high-end brand, right? How would we look if we were one of dozens of e-bikes in Amazon’s listings?”

“Sure, but we already have the luxury bike selling well on our site. I agree, we shouldn’t change anything there. But the new bike is for everyone. And everyone is on Amazon.”

Mark took a sip of coffee, thinking.

“Look, I get it, you have some concerns,” Gideon continued, “so let’s talk numbers. Based on what our competition is doing, I figure if we put the new bike on Amazon, we can reasonably expect to sell 10,000 units a year.”

“At what price point?”

“$899. That’s a little higher than we’ve been talking about, but it gives us some room to go lower when we need to.”

“And what are the latest numbers for luxury bike sales on our site?”

“Last year we sold 2,000 units at $4,000 apiece. Remember, the new bike won’t be only on Amazon. We’ll sell it on our site, too.”

Mark scratched his head. “What we really need is a way to quantify the risk that Amazon will enter the e-bike market. It would make this so much easier.”

“That’s the big mystery. Amazon will have all the consumer data, and we’ll have very little of it. But look at it this way—there are already a lot of e-bikes on Amazon, so they’re already watching the market. Even if they do make their own bike, that could be years away. We might as well find new customers while we can. People can’t buy our bikes if they don’t know about them.”

Mark stared at Gideon for a long moment. “Let me ask you something. How are you so sure about all this?”

Gideon laughed. “In my moments of doubt, I think of Instant Pot. It’s a quality appliance—not quite luxury, but good—that has a cult following and that made its name on Amazon. At one point, 90% of its sales were from there. Do you know how many Instant Pots were sold on Prime Day this year?”

“No, but I’m a little surprised you do.”

“I cook a lot. The number, Mark, is 300,000. In just 36 hours. I think we could be the Instant Pot of e-bikes.”

The CMO stirred his coffee. “You may be excitable, but I’ll admit it’s kind of contagious. I just can’t shake the feeling that once we open the door to Amazon, there will be no closing it.”

Gideon held up his coffee for a toast. “To opening the door—just a crack—and seeing what’s behind it.”

Searching for Answers

Back in his office at the end of the day, Mark was staring at his computer again. Tamar and Gideon seemed so sure of what to do, but the CMO was struggling to make up his mind. Both ways forward had their merits.

The screen of his laptop still showed the Amazon site, with its rows of e-bikes. Sighing, Mark opened Google and typed “What are the dangers of selling on Amazon?” into the search bar. The query returned almost 250 million results.

“Hard to tell whether there are more horror stories or more success stories,” he muttered. “Well, this bike isn’t going to sell itself. I have to decide something, one way or another.”

Question: Should PedalSpark sell the new bike on Amazon?

Tell us what you think in the comments below. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and email address.

How One CEO Creates Joy at Work

Harvard Business Review - Tue, 12/18/2018 - 5:16pm

Richard Sheridan, CEO of Menlo Innovations, says it took him years to learn what really mattered at work and how to create that kind of workplace culture. As a company leader today, he works hard to make sure both his job — and the jobs of his employees — are joyful. That doesn’t mean they are happy 100% of the time, he argues, but that they feel fulfilled by always putting the customer first. Sheridan is the author of Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear.

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Holidays Can Be Stressful. They Don’t Have to Stress Out Your Team.

Harvard Business Review - Tue, 12/18/2018 - 12:08pm
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The festive spirit is everywhere during the holiday season. For some, each day feels like waking up to a holiday song — “children laughing, people passing, meeting smile after smile.” But, for others, it can be the loneliest and most stressful time of the year. According to a 2015 Healthline survey, 44% of people say that they are stressed during the holidays, with more than 18% reporting that they’re “very stressed.” Almost half the respondents cited finances as the main culprit for their tension, while being over-scheduled, choosing the right gifts, and remaining healthy also contributed to people’s holiday woes.

“The holidays are filled with both joy and stress,” shares Ellen Braaten, PhD, in Harvard Medical School’s blog, On the Brain. Dr. Braaten blames our increased multi-tasking during the holidays as the reason the brain’s prefrontal cortex goes into overdrive. Long-term, this high-level demand on the brain can decrease memory, halt production of new brain cells, and cause existing brain cells to die. On the bright side, seasonal stress is acute, so it can be remedied. But preventing it all together should be the real goal.

Coping with personal stress is already challenging, but when combined with workplace stress, it’s no wonder holiday cheers soon devolve into holiday sneers. The American Psychological Association found that 38% of people say their stress increases during the holidays — only 8% of people say they feel happier. Employees are often contending with shortened deadlines, meeting expectations for the end of the fiscal year, and coping with stressed-out customers, which are just a few of the reasons for their increased anxiety. The resulting costs for employers can be quite significant.

Based on an analysis by Peakon of more than 15,000 employees across the U.S., the UK, the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland) and Germany, 7-10% of people reported reduced productivity for the entire month of December, with 30-40% reporting a fall in productivity by mid-December. Dr. Chris Rowley, Professor Emeritus at the University of London Cass Business School, writes in his article, “Festive Celebrations: Human Resource Impacts and Costs of Christmas,” that nearly one-half of the workforce hits “festive fizzleout” by December 18th, where they spend more time worried about the holidays than about work. Rowley claims that more than two-thirds of workers were less productive throughout December, with nearly one-half admitting that they did 10-20% less work. Reasons for reductions in output included a combination of exhaustion, lack of motivation, and even hangovers. Women tend to be hit the hardest, with nearly twice as many women reporting that they are more stressed about Christmas than men.

Unfortunately, the tools most employers use to improve company culture are backfiring. The annual holiday party is a great example. According to a 2017 survey by global outplacement consultancy Challenger, Gray & Christmas, Inc., 80% of companies plan to host a holiday party. However, according to new research from MetLife Employee Benefits, 37% of employees decline to attend the company Christmas party. The most cited reason for not attending was that the holiday parties, which are typically held in the evenings, clash with family duties at home. And, for those who do attend the holiday party, there is a 77% drop in productivity the next day, with more than half of the staff wasting the first four hours of the following day because they’re recovering from the night before — which is slightly better than the 20% who call in sick. And the U.S. isn’t the only country that struggles with this dynamic. For example, the festive fallout from employee stress and lost productivity cost U.K. companies roughly £11 billion in 2016.

So how can managers help combat stress and keep both productivity and spirits up during the holiday season? Here are a just a few ways:

Reach out. Ask your staff how they want to celebrate the holidays at work this year. Poll your team — there are plenty of online tools that make it easy to do a simple survey, such as Survey Monkey or Typeform.

Be inclusive. In an interview I conducted with Ben-Saba Hasan, SVP and Chief Culture Diversity & Inclusion Officer at Walmart Inc., he shared that leaders must recognize the different ways people celebrate the holidays. “As leaders, we need to create an environment where our team members feel comfortable and safe, so that we foster greater awareness among those in the dominant culture for those whose holiday observances look different from their own.”

Mini Khroad, Chief People Officer at Khan Academy, told me in a recent interview: “The holidays should always be an important time at companies. Ensuring that employees have the ability to recognize national or other holidays, at work and in their personal lives, helps to make the workplace enjoyable for everyone.”

Protect personal time. Why not offer one extra day off leading up to the holidays for employees to attend to personal needs like gift shopping, family demands, or down-time to regroup — whatever they need.  One mandatory day off can make all the difference in employee stress levels. These small but much-appreciated gestures increase loyalty and gratitude on your staff and offer long-term payoffs. Why does this matter? Research has proven that grateful staff are more engaged, community-minded, and happier at work.

Rebalance workloads. Competing demands sit at the top of employees’ stress lists. Work and home pressures converge at this time of year, and time seems highly compressed. Plan a review of the workload and see if some project deadlines can be extended into next year. “Periods of high stress such as the holiday season represent an opportunity for managers to treat employees as individuals by understanding and appropriately responding to their specific needs,” says David Almeda, Chief People Officer at Kronos. In a recent interview I had with him, he suggested that “tactics such as rebalancing workload among team members, or allowing atypical works hours for a set period of time, will deliver results, increase employee commitment, and materially decrease employee stress.”

Give time instead of gifts. Research by neuroscientists Dr. Jordan Grafman and Dr. Jorge Moll demonstrates that we are instinctually made to give. When the subjects donated to what they considered worthy organizations, brain scans revealed that parts of the midbrain lit up — the same region that controls cravings for food, and the same region that becomes active when money is added to people’s personal reward accounts. Ben-Saba Hasan connected this thinking back to his team as they bonded over volunteering in their community this season. “I believe one of the best ways to manage stress and care for yourself is when you turn your focus toward caring for others first.”

What is important for employees themselves to remember is this: most holiday-related stressors are self-imposed and preventable. Financial stress can be avoided by purchasing less, overcommitting can be averted by saying no, multitasking brains can be managed with reprioritization, and exclusion can be prevented by reaching out. Start today. Ask someone how they’re doing. Listen with compassion, empathy, and kindness. If needed, offer help.

As we head into the busiest part of the holiday season and stress levels increase, remember:  many of us are feeling this anxiety, and much of it can be made more manageable with the tactics above. Bringing more awareness to the increased pressure your employees are feeling at home and at work during the holiday season can go a long way toward helping to keep both productivity and employees’ spirits up.

What Companies Can Do to Help Employees Address Mental Health Issues

Harvard Business Review - Tue, 12/18/2018 - 11:00am
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In November, Prince William joined a discussion on working in high-pressure environments at “This Can Happen,” the UK’s largest annual conference on mental health. Drawing on his experience as an air ambulance pilot, he noted that he had “worked several times on very traumatic jobs involving children” and that one in particular “took me over the edge.” His key to dealing with the incident: talking it through with colleagues. He pointed to the important role that leaders can play in supporting mental health by sharing their own stories — and making it safe for those who work in their organization to be open about their mental health challenges.

We at Accenture agree. We believe — and our research conducted on behalf of “This Can Happen” bears it out — that the number of people affected by such challenges is much greater than suspected or previously reported. For example, two-thirds of the UK workers we surveyed said they have experienced or are currently experiencing mental health challenges or have even had suicidal thoughts or feelings. And the vast majority, nine in 10, said they had been touched by mental health challenges in some way — affected either by their own health or by issues faced by a family member, friend, or colleague.

People are increasingly waking up to the magnitude of this issue and its importance in the world of work. It’s especially critical that people feel they can bring the issue out into the open without fear. But we see that change is slow. Just a quarter of workers said that they had seen any positive change in their workplace’s efforts over the past two years to show that mental health is important for everyone.

This matters not only for the individuals who are struggling but also for the organization. When employers create a culture that supports mental health, workers are more than twice as likely to say they love their job. They are also more likely to plan to stay with their employer for at least the next year.

What can companies actually do to take on this challenge? Research points to three keys.

Signal “it matters.” There’s a lot of concern about “opening up” at work. Many fear that doing so could limit their opportunities, get in the way of promotion, and generally be seen as a sign of weakness.

Senior leaders can make significant inroads in changing this perception by starting the conversation — talking about their own experiences and the company’s desire to actively help. In a study we completed earlier in 2018, just 14% of respondents had heard a senior leader talking about the importance of mental health. Just one in 10 had heard a senior leader talk about being personally affected.

Senior leaders can also ensure that employees at all levels are made aware of the services and support the company offers.

Raising awareness through training. It can be very hard, for both the speaker and the listener, to have a conversation about a mental health problem and then to know what to do next. Training in all forms is essential. Tools that the arsenal should contain include online training classes to help employees recognize signs of stress or mental ill health in themselves and in others, and webinars led by senior leaders.

Our own Mental Health Allies program includes both classroom-based and online training. In the UK alone, we have trained more than 1,700 employees — some 15% of Accenture’s UK workforce — to be “allies”:  colleagues others can approach in the knowledge that their discussion will be kept completely confidential. Each ally first took a short online course and then participated in a half-day classroom-based training session to increase his or her understanding of mental health challenges while building the confidence and skills to address common issues through role playing and scenario training. This training also explores the boundaries between the responsibilities of line managers, who must proactively intervene, having a duty of care to their people, and the role of a mental health ally.

Even small steps toward creating a more accepting and receptive culture can have a significant, positive effect. We found that most people who were able to talk to someone at work about the issues they faced were met with a positive reaction (one of empathy, support, kindness) from the first person they told. These individuals reported decreased levels of stress, decreased feelings of isolation, and increased confidence.

Curate and improve online tools. Most people are prepared to turn to online tools and applications for information and advice about mental health. It makes sense: They are available 24/7 and can be used anonymously. At Accenture UK, all employees have access to “Big White Wall,” a confidential, professionally managed chat environment in which they can remain anonymous.

Even companies with scarce resources to dedicate to these kinds of benefits can offer employees a curated list of the most trusted publicly available sources and provide access to those sources where possible. But it is one thing for an individual to seek support; it’s another for a company to shoulder the responsibility for curating (read: implicitly recommending) those resources to employees. More rigorous independent testing of available digital resources is needed; this would better enable companies and individuals to select those that are best suited to their needs.

The recently launched Mental Health at Work site is one exciting new resource that’s particularly valuable to smaller organizations that may not be able to offer a full range of support in-house. In one place, employers can find advice on everything from how to train line managers in mental health awareness to how to structure a full program of support.

One risk to bear in mind is the chance that an employee may over-rely on a tech resource when more direct and professional treatment is warranted. Business leaders need to ensure that they are also moving forward with in-person training and other initiatives that support mental health. And employees should understand what needs can be met online and when it’s important to get help from a medical professional.

Most employees we surveyed already actively manage their mental health and consider it at least as important as their physical health. Such a positive attitude toward managing mental health suggests that employees, and in particular millennials, are likely to welcome and embrace training and initiatives at work that help them thrive and recognize when they need help.

Much remains to be done. As Prince Williams says: “There’s still a stigma about mental health. We are chipping away at it, but that wall needs to be smashed down.”

As the lead for our mental health program in the UK, I love to run the training sessions for our new allies. As we explore the topic, one by one people tell their stories: a manager who has struggled with depression since his teens, an intern whose classmate at school took his own life, a new graduate living with a friend who has acute anxiety. A new joiner who had been caring for his girlfriend who has anorexia nervosa described being able to open up as an “utter relief” and “life changing.”

When I look around, I see how mental health challenges touch us all in some way at some time in our lives. As employers we have the power to help. To make it easier for people to talk, to help them get the support they need in the way that works for them, and to help them be their best selves at home and at work.

The author thanks Agata Dowbor, Dominic King, Dave Light, and Regina Maruca of Accenture Research for their contributions to this article.

The 5 Things All Great Salespeople Do

Harvard Business Review - Tue, 12/18/2018 - 10:00am
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The best salespeople know they’re the best. They take pride in their art form. They separate themselves from the rest of the pack regardless of circumstance. So how do they do it? What’s their secret? Are you one of them?

I’ve spent 16 years in technology sales, with most of that spent in sales leadership at Salesforce and other technology companies. I’ve had the luxury of observing great sales professionals in tech and beyond and have observed that the top performers share some of the same patterns, habits, and characteristics. I’ve distilled them down into five major categories and have begun integrating them into my work life — practicing them, honing them, teaching them. As a result, my teams have finished consistently at or near the top of the leaderboard year in and year out. Here’s what I’ve observed:

The best salespeople own everything. I used to give a speech to new salespeople, earlier in my career, titled the “It’s your fault speech.” It was very raw and full of overconfidence (chalk it up to leadership in your twenties) but the point was simple: Your success depends on you. The sales profession exists within a meritocracy. Statistically, it is not a coincidence that the same people are at the top of the leaderboard year in and year out. Some may think it’s because certain people have it easier, or are given this, or fall into that. We all have our starting points. Regardless, the most significant difference between perennial top performers and everyone else is attitude. Elite salespeople approach their goals with a total ownership mindset. Anything that happens to them, whether or not it was their doing, is controlled by them. It may not be their fault, but it is their responsibility. In the research, psychologists call this the internal locus of control. That’s a fancy way of saying that you think the power lies inside of you instead of externally. And you know what they found? Having an internal locus of control correlates with success at work, higher income, and greater health outcomes.

You and Your Team Series Getting More Work Done

This area has been the hardest to coach in my career because it seems to be so deeply rooted in one’s personality. The best way to self-assess is this: Take your current situation — your accounts, your role, your earnings — and ask yourself these questions: How did I get here? Did I build the right relationships? Did I put in the extra work? Did I speak up? Did I blame others for my failures but take credit for my successes?

You must own everything.

The best salespeople are resourceful. MacGyver was a popular show when I was in fifth grade. My friends and I would try to emulate MacGyver by turning a paperclip into a knife or a key or something, but we basically just twisted it around until it broke — we weren’t exactly aspiring engineers. But if you remember watching MacGyver, the premise was that the lead character was put in an impossible situation with few to no tools or weapons or resources, with very little time, and had to get out of the situation using only his wits and whatever he could find in his pocket or laying around near him. MacGyver didn’t stop and complain about how he only had a paper clip to work with, while other people had a blowtorch. He didn’t lament how hard his position was. He simply assessed his strengths and resources and made something happen. Every week, he figured it out. And every week he saved the day.

The best sales people I have seen are like modern day MacGyvers, sans the life and death scenarios. They’re often faced with difficult situations and time pressures, having to negotiate seemingly arbitrary obstacles armed with only their wits and their phones. Elite salespeople almost always figure it out. Resourcefulness is as much a mindset as it is a skill. If you don’t start with the MacGyver mindset, then you will never fully develop the skills associated with being resourceful. As an exercise, seek out or fully embrace the next ridiculous or impossible situation you find yourself in and then put your phone down, close your computer, re-focus, and apply your energy to find multiple alternative routes to your desired destination. Find a colleague and draw it all out on a whiteboard.

Embrace your inner MacGyver.

The best salespeople are experts. Sales is less about selling and more about leading, which requires high levels of confidence, which in turn requires knowledge and experience. This concept can be expressed mathematically as Knowledge + Experience = Confidence to Lead. You can control the first part of the equation; the second comes with time. Gaining industry knowledge and a strong point of view about the products they’re selling should be the top priority for any aspiring salesperson.

Study. Learn. Form an opinion. Expertise leads to confidence, which leads to trust, which leads to sales.

The best salespeople help others. Regardless of where you are in your career, there is someone else you can help. There is something you know about a product, a process, or an industry that someone new or less tenured does not. The best salespeople I have observed regularly pass their knowledge on to less tenured or less experienced sales people with no expectation of anything in return. Coincidentally or maybe ironically, the act itself becomes a catalyst for building confidence within one’s self. And others take notice as well. Shawn Achor, author of Big Potential, found that people who are social support providers at work (“work altruists”) are a whopping 40% more likely to receive a promotion.

The best salespeople move quickly. The best salespeople don’t move recklessly, but they do have a sense of urgency. I’ve often been amazed throughout my career when I’ve encountered salespeople who were slow in getting back to their clients or customers — who delayed in delivering contracts or materials needed to make a decision. Most elite salespeople get things done, to quote Norton in The Shawshank Redemption, “not tomorrow, not after breakfast, now!”

Look at the top salespeople in your own company and see if they possess most if not all of these characteristics. My bet is that they do. And I also bet that they’d be willing to share their strategies with you.

You Can Be a Great Leader and Also Have a Life

Harvard Business Review - Tue, 12/18/2018 - 9:05am
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Tesla and Space X CEO Elon Musk tweets that no one changed the world working 40 hours a week. He rarely sleeps or sees his kids and had a famously public meltdown. Apple’s Tim Cook is on email before the sun rises. And billionaire Mark Cuban worked until 2 am launching his first business and didn’t take a vacation for seven years.

These intense work styles are often celebrated as the only way to get to the top and be a super-productive leader. Indeed, surveys show that managers and executives describe the “ideal worker” as someone with no personal life or caregiving responsibilities. And a majority of leaders themselves — the ones who set the tone for organizations and model behavior for everyone else — think work-life balance is “at best an elusive ideal and at worst a complete myth.” In an interview, three CEOs rated as top performers by HBR said the job was 24/7 and admitted they weren’t great role models.

But does it have to be that way?

That’s a question Jessica DeGroot sought to answer nearly 20 years ago when she started the nonprofit ThirdPath Institute, an organization dedicated to helping people find time for work, family, and life. She formed a group of about two dozen men and women in senior management at law firms, public and financial service entities, small businesses, and Fortune 500 companies like Booz Allen Hamilton, Eli Lilly, Marriott, IBM, and Ford who wanted to challenge the notion that work-life balance is impossible for leaders. “We all wanted to do work and life differently,” DeGroot told me. “But weren’t sure how.” They had no role models. And few people she talked to, she added, thought they could.

In regular phone calls and meetings for nearly two decades, as well as a biennial Pioneering Leaders summit, the group has been helping each other figure out how to work more effectively so they could have time for their lives, sharing successful strategies and learning from failures. During one of their monthly webinars I observed, the group began by sharing photographs of their families and talking about their lives outside of work. Then the group launched into an intensive discussion of boundaries, episodic and chronic overwork, and how they’re managing their work-life balance in the face of work or life emergencies — and sometimes both. One man, juggling work with caring for a sick child, said he’s now reaping the benefits of all the years he’s communicated and modeled how work-life balance is one of his core values. “It’s enabled me to have a bond with my daughter now that’s really amazing,” he said.

It is part shared confessional with peers and part trading research, strategies, tips and lifehacks that DeGroot collects and analyzes for best practices. For instance, DeGroot noticed that a handful of the pioneering leaders were really good about taking vacation, being able to turn off work, connecting with their families and friends, and returning refreshed. Their strategies have since become the “Vacation Checklist” DeGroot shares with others at the nonprofit. Some of the most effective strategies, they’ve discovered include planning vacations, where possible, around the seasonality of work; delegating and reviewing essential team work two weeks before leaving; creating a “what can wait” list one week before vacation; and avoiding scheduling meetings and phone calls one day before and one day after vacation to concentrate on essential priorities.

She’s done the same for strategies to create concentrated quiet time to focus on priorities at work rather than be in constant firefighting mode of responding to e-mails, meetings and emergencies, for managing email overload, for setting priorities and other thorny issues. “We kept trying. We kept tweaking,” DeGroot said. “Then we started to see, ‘Oh, this is not only a better way for me to work, this is a better way for everybody to work.’ And when you get leaders to behave differently, it sends a signal to the rest of the organization that they can behave differently, too.”

For leaders to stand up to status quo pressures and make work-life balance a priority, DeGroot discovered, these pioneers had to cultivate skills around three relationships: learning to work differently with their teams at work, making a plan with their families to put home and family first, and shifting their own mindsets to not only believe change is truly possible, but to give themselves permission to try, and speak up about it.  The stories of three leaders exemplify how this can be done.

Learning to Work Differently. Like many men of his generation, Ivan Axelrod, 72, a managing director of a financial management firm in LA, spent most of his life climbing the corporate ladder as a work-focused primary breadwinner. It wasn’t until he became a grandfather that he decided to change. His own parents had died when his children were young and never knew them. He wanted something different for his own grandchildren. “I wanted them to know their grandfather.”

So, when his daughter began lining up child care and preparing to go back to work after a three-month leave, the two grandmothers offered to take two days a week each. Axelrod volunteered to be the caregiver for the fifth day. He had to sell the idea to both his family and the other managers at work. “I said, ‘I have good people here. I’m going to push more responsibility onto them, which should help them develop faster. I believe it’s going to work,’” Axelrod said. “Reluctantly, they said OK to me. That was in 2008. And I’ve been doing it ever since.”

As a result, Axelrod has worked to create a culture where everyone can have time for work and life, promoting flexible and remote work and opening an office closer to where people live to cut down on commutes – efforts which have reduced turnover and recruiting and training costs, and increased employee morale and productivity. “If you have a structure that allows people some flexibility, they will produce better results for the organization. I see it all the time,” He said. “The bottom line increases when you make these changes.”

On Mondays, Axelrod takes his two grandchildren, now 11 and 9 years old, to school, works at home, picks them up afterwards and takes them to activities like swimming lessons. “I’m heavily involved in their lives. It has been huge for me, and terrific for them,” he said. “When I’m gone, they’re going to have a lot to remember.”

Believing in Your Plan and Speaking up. With few role models, and cultural expectations arrayed against them, someone like Axelrod had to first imagine something new: how he really wanted to combine work and life. Then he had to believe that not only was it important enough to try, but also — through a series of trials and errors — actually possible to sustain over the long-term.

This was also true for Michelle Hickox. In 2004, Hickox was a certified public accountant in Texas and at a crossroads in her career. She loved her work and wanted to make partner, but the only role models she had were men with at-home wives, and one woman with round-the-clock nannies, all of whom worked all the time and rarely saw their families. “I didn’t want that,” she told me.

When her eldest daughter turned five, the transition from year-round child care to the traditional nine-month kindergarten schedule forced Hickox to think hard not only about how to manage child care in the summer months, but what she really wanted out of work and life. Her own parents had been teachers, and she loved the summers the family spent together. So she imagined something no one else had: taking summers off and staying on the partner track. She negotiated an 80% schedule and took 11 summers off in a row while her daughters were growing up, and still made partner. “I’m not sure when I first asked if I thought it would be successful,” said Hickox, now CFO of Independent Bank in McKinney Texas. “I learned I needed to speak up. That just because something didn’t exist meant maybe nobody had ever thought about it.”

None of this is easy. Like all leaders, Hickox has hit a wall. A few years ago, when her work had been intense and she was feeling completely out of balance, she almost didn’t come to the pioneering leaders summit I attended and first interviewed her for this piece. “I had such guilt. I thought, ‘Wow, I’m supposed to be one of these pioneering leaders and I have totally sucked this past year. I shouldn’t even be at this conference,” Hickox said. “But that’s when you need this stuff the most.” What she has found – and behavioral science research reinforces — is that having a supportive, like-minded network of peers via the summit and their regular conference calls makes it more likely for behavior changes to stick.

Hickox, now 51, has since become the kind of role model she was looking for. Flexible work, remote work, paying attention to performance, rather than when people come and go in the office have become the norm. When she discovered the bank didn’t have a paid family leave policy, a word to the CEO changed that. “The culture in the bank’s accounting and finance team has changed totally since I got here,” she said. “I don’t think you have to work like a crazy person to get ahead. I just think, in the time you are working, you have to learn to be effective.”

Making a Plan to Put Family First. Imagining a different way to work and live also means adopting a mindset that recognized both work and family were important. Will Rowe, 59, a principal at Booz Allen Hamilton in Washington, D.C., and his wife Teresa, a pediatrician, began their marriage with vows promising to be equal partners and to put family, faith, friendships and flexibility first. They both wanted important, but not overwhelming careers. Rowe’s parents were workaholics, he said, who rarely saw each other and wound up divorced. So once Rowe and his wife started a family of their own, the couple committed to spending as much time with family as possible. Will worked four days a week, Teresa an alternate three, and a neighbor cared for their two children one day a week.

The flexible schedule has allowed him to be active in his neighborhood and faith community, and gave him the courage to ask his boss for a six-month sabbatical to travel the country with his family. As his kids grew and he rose through the leadership ranks, Rowe continued to work a flexible schedule, deftly juggling conference calls in the school pick up line, and “time shifting” his work to accommodate both his clients and his family. Being clear on family priorities, routinely talking them through and planning together as a family have been keys to making his work and family life work. “I sit down every week and color code my calendar. Family events and activities are in green. If I find it competes with my work, I will cancel, delegate or move work around,” Rowe said. “Some things in life are more important than work.”

What we see — our role models — shape what we think is possible. And right now, so many of us are stuck in the workplace overworking because that’s all we see in our leaders. So perhaps, if we are to change, what we need are fewer breathless articles about inhuman and insane CEO schedules that ignore the costs to health, families, and ultimately, innovation and business productivity. And we need to hear more stories like that of Alexrod, Hickox and Rowe. More about CEOs like David Solomon, the new head of Goldman Sachs who takes yoga classes with his daughter, led an effort to reduce punishing work hours, calls colleagues when they’re working too much to tell them to stop, and regularly performs and records electronic dance music as DJ D-Sol. More about how leaders like YouTube’s Susan Wojicki can run a $100 billion company and still be home for dinner at 6 p.m. with her kids.

Perhaps the more we hear stories of leaders like these, the more the majority of us who tell surveyors that we want both time to do great work and live a great life, people may start believing it’s possible.

How Western Multinationals Are Responding to the Escalating U.S.-China Trade War

Harvard Business Review - Tue, 12/18/2018 - 9:00am
Yuji Sakai/Getty Images

The furious reaction from China to the arrest of Huawei’s chief financial officer, Meng Wanzhou, in Canada at Washington’s request immediately raises the prospect of like-for-like retaliation against executives from North American companies, a fear reinforced by the arrests of a former Canadian diplomat-turned-NGO-researcher and a Canadian businessman.

Western business people are ensnared in low-level court proceedings in China far more regularly than is reported in the West, the risk remains low of a retaliatory move against a Western executive of similar status to Meng. It would undercut the high-ground that Beijing has occupied as self-appointed defender of “the rules-based international order.”

However, there are other ways for Chinese authorities to take reprisals against Western multinationals operating in China should they so choose. Day-to-day business operations can readily be interrupted through inspections, audits, and other tourniquets of red tape, and by the selective application of the letter of Chinese civil, administrative and criminal law. There’s also the possibility of travel bans on executives (including on those under unresolved court proceedings), and good, old-fashioned intimidation.

Add to this the current trade tensions between the U.S. and China and Western multinationals — such as the big U.S. technology companies — that use China as a source of assembly, semi-manufactures or components have an additional vulnerability: their value chain.

For every such company, especially those critically reliant on Chinese sub-contractors, their value chain is now actively at increased political risk. Local suppliers and their sub-contractors are susceptible to pressure to behave “patriotically” when authorities convey the message, however tacitly, that lack of cooperation with foreign multinationals is in the national interest. Something similar has occurred when Chinese consumers have on earlier occasions read the signals for when they were meant to boycott Japanese and South Korean products.

There are many ways to apply informal pressure along the value chain from delaying delivery to the easing of quality standards.  Suppliers and subcontractors could find themselves suffering sudden and “unexpected” shortages of inputs and disruptions from labour.

Companies need to take urgent steps to measure their potential exposure. Doubling up value chains, including alternatives outside China, would mitigate the risk of political and regulatory disruption. (It would also have the added benefit of providing insurance against ever-more-frequent natural disasters.)  In our analysis and consulting work, we have come across some forward-looking companies that have started to reconfigure their value chains where possible – particularly those who are vulnerable to U.S. national security concerns because they incorporate Chinese technology into their end products.

Doing so is neither necessarily easy nor cheap. China has accumulated a vast manufacturing ecosystem servicing foreign companies, encompassing everything from hard infrastructure to soft skills. Its growth has accelerated in recent years as China has embraced automation as way to offset rising wages that could make it less competitive as an offshoring center.

For that reason, building up a parallel value chain is not simply about shifting to another low-wage country. Both the quality and quantity of China’s manufacturing skills, particularly in the areas of automation and robotics, deter companies from relocating from China to elsewhere in South or Southeast Asia. Lower-wage countries like Vietnam and Cambodia have little spare production or skilled human capacity left, even in relatively low-skilled sectors like textiles and garments, let alone the advanced precision tooling, materials handling, and process engineering and development skills that a U.S. technology company needs. Nor do those countries have the resources to develop them rapidly.

Tim Cook, chief executive of Apple, a company so committed to manufacturing in China that it labels many of its products, “Designed in California. Assembled in China” recently noted that if he called a meeting of all the tooling engineers in the U.S., he wouldn’t fill a room, whereas in China he could fill multiple football fields.

Regardless of these impediments, and even before the heightened trade tensions between China and the U.S., there was business logic to the case for value-chain diversification — and a parallel process of value-chain reconfiguration already underway in some sectors with a regional focus. Production of end-products and components — ranging from bicycle parts to computer hard drives — has started to relocate, with low-tech production shifting from China to Indonesia, Cambodia, Bangladesh, and India, and higher-tech ones moving to South Korea, Taiwan, Singapore, and Malaysia. Vietnam straddles the two.

Burgeoning middle-classes in South and Southeast Asia provide a growing market for China’s consumer and industrial goods, especially for non-luxury goods that do not need the cache of a U.S. or European brand. Countries such as India, Indonesia, Malaysia, the Philippines, and Thailand are all forecast to be among the 20-25 largest economies during the second quarter of this century. Moving production nearer to those markets makes sense.

At the same time, for other Asian nations, China is starting to look like the “market of last resort” for selling what they manufacture. The U.S. has been that market been since the Second World War. But the Trump administration’s “America First” policy, with its emphasis on domestically produced goods, seems to put that in doubt.

Chinese companies, too, will be compelled to seek alternatives to the U.S. in response to Trump’s tariffs, especially those that have become U.S.-reliant, further accelerating the changes to regional trade and the value chains that support it.

The overall effect will be that more value chains will begin and end in China rather than beginning in China and ending in the U.S. There will be fewer global value chains and more regional ones.

Regional value chains do have an advantage: they are shorter than global ones. As global value chains have gotten longer and leaner, they have also grown more fragile, just as the pressures on them are increasing from technological change — particularly AI, robotics and big data, shifting relative labor costs, environmental concerns, such as carbon footprints, and reputational exposures.

The Trump administration’s trade policies will provide new impetus to the developing patterns of multiple, shorter regional value chains, but the transformation will not happen overnight. Value chains cannot be reconfigured any more quickly than a manufacturing plant can be rapidly rebuilt. Companies will hesitate to jump into new developing markets where investment laws can be unclear or nascent — like Myanmar, Cambodia, or Vietnam — and where labor and environmental standards lax. Nor will it be easy to replicate established relationships with factories, suppliers, and governments.

Complicated electronics value chains, in particular, are so entrenched in China, it is unlikely that all business will shift away from the country as a result of the new tariffs alone. For its part, China itself is still dependent on specific imported technologies such as chipsets and sensors. This constraint will ease as China develops, with some urgency, local capacities in these technologies, not least because the U.S. is set on preventing the export of crucial U.S. technologies and blocking Chinese companies from gaining access to them through inward foreign direct investment.

One scenario is that the current U.S. counter to China’s “strategic competition” — tariffs and technology export and investment controls — will further fracture value chains as it will lead to a dual global technology world with one part running U.S. technology on U.S. technical standards and another running Chinese technology on Chinese standards.

There would be no certainty that the hardware, software, and services of these two worlds would be interoperable, and, once a market is locked into one or other of the systems, it would be difficult for users to switch. This would add complexity to value chains, making it more likely they would default to specializing regionally.

Fostering Employee Innovation at a 150-Year-Old Company

Harvard Business Review - Mon, 12/17/2018 - 1:05pm
TheCrimsonMonkey/Getty Images

Bayer’s mission is “Science for a Better Life.” We want to enable discoveries to promote health and secure food supply. To achieve that goal, however, we must innovate not only in terms of science and R&D, but also in how we run our business. This means shifting the way we work so we’re able to match the pace of change happening in the wider world.  With more than 100,000 employees and 150 years of history, there is only so much we can learn from the usual Silicon Valley exemplars. “We cannot be like Google, but neither do we want to be,” says Kemal Malik, the board member responsible for innovation, “We need to plot our own path.”

Our solution – one transferable to other organizations pursuing innovation – has been to create an agile network of volunteer ambassadors and coaches throughout the company who have taken collective responsibility for making innovation happen and steering our organizational culture in the right direction.

The innovation agenda

The origins of our agile network can be traced back to an online idea forum called WeSolve that we launched in 2014 as a way of challenging Bayer employees to contribute solutions to specific technical or commercial problems. To help its implementation we appointed 40 WeSolve coaches: people from different offices around the world who were excited by the initiative and prepared to devote some discretionary time to it. Within 12 months, WeSolve had attracted 1,650 contributors and 23,000 Bayer employees had visited the site.

Its success confirmed the power of an informal network for shifting behaviors in our large company. So, in August 2015 we secured board approval to create an innovation committee of 14 top executives and a full-time innovation strategy team of five people, to orchestrate the portfolio of specific initiatives that would create a new way of innovating throughout the company. The first priority was to inspire people with stories of successful internal innovators at Bayer.  We then offered people the opportunity to learn new innovation methodologies and apply them to real business challenges. A third priority was to build more platforms like WeSolve, to help people collaborate and exchange information across the organization. Most importantly, cutting across all these initiatives, we created the network of senior and mid-level managers to connect and inspire people to get engaged in  innovation.

Building an agile network

In 2016, country and function heads were asked to identify innovation ambassadors for each of the markets we’re in: 80 people senior enough to connect innovation to strategy and make things happen. They then helped us identify innovation coaches who would be responsible for bringing ideas to life in their respective business units. More than 600 were selected. Inspired by John Kotter’s dual-operating structure model, we asked all of these employees to maintain their “day jobs” within the established hierarchy, while also using 5-10% of their time to  work on fast-cycle, informal innovation projects  across  silos.

We gave them a three-day on-boarding program – a broad overview of the agenda plus deep insight into one technique (Systematic Inventive Thinking) they could immediately use to support their colleagues. We also provided webinars and conference calls to explain our other offerings and to share learning. What do the innovation coaches actually do? One popular activity is the fast session – a short, structured workshop to address a specific problem.  A manager might be struggling with an overly complex process or a new digital competitor. The coach would quickly assemble a team of four to six people and, using tools from their training, create a simple workshop to address the problem.  In 2018, we counted more than 50,000 fast sessions across the company.  We put on a further advanced training course for highly active coaches (who have run at least ten fast sessions), and 49 have so far done gone to this extra level.

Innovation ambassadors, meanwhile, oversee the coaches, ensure that the initiatives in their respective countries are aligned with the priorities of Bayer’s senior leaders, and serve as cheerleaders for collaborative innovation.

Extending the network

By creating this volunteer network, we were able to make dramatic progress in developing other aspects of our innovation agenda.

For example, in 2017 we created the CATALYST fund, a combination of professional support (using Lean Startup principles) and money to explore larger business opportunities across the company.   By asking the innovation ambassadors, we were able to identify 120 specific challenges within two weeks. We put €50,000 behind 28 of them and by early 2018 we had three pilots: a new business model in animal healthcare, a digital solution for clinical operations, and a gamified education app.  We have also built on and reinforced the agile network through other activities, for example by getting them to run local innovation events, involving them in our open innovation funding platform, and our co-working Live Hubs in Boston, Berlin and Singapore.

The key point is the network has now reached a critical mass, making our job at the center much easier.  We have a waiting list of about 200 people who want to become innovation coaches. This allows us to be selective about who takes on the role. We get them involved informally at first and talk to their line managers to make sure they can add this work to their existing responsibilities.

We now have around 80 ambassadors and 700 coaches across 70 countries, and more than 80% are actively engaged, even though their innovation work is in goes beyond their official job. They in turn have mobilized others:  more than 5,000 people have taken part in innovation events, 5,000 have taken part in webinars and innovation training events, and more than 38,000 people are using Youniverse, the online hub for all our innovation activities.

Three key insights

Our experience in changing the way we work to hasten innovation has given us three key insights:

Innovation is a social activity, and connectivity is an asset. The image of the lone inventor is alluring, but almost always wrong.  Innovation actually happens in teams, in cross-functional workshops, and through the involvement of many.  It is also a highly contagious.  After we introduced the fast session concept, there were some countries where it took off, with fast sessions every week, and everyone wanting to get involved.   This happened not because of a central directive, but because of the energy and skills of a few key individuals.

The dual-speed model needs a new mindset.  The notion that people should spend 5- 15% off their time working on fast-cycle projects, while the rest of their work is conducted at a slower clock-speed, is attractive but requires a lot of adjustment. Fast-cycle work is about experimentation, tolerance of ambiguity, and openness to failure, and these qualities do not come naturally to those who have spent their entire working lives at Bayer.  This isn’t a challenge we have completely resolved. We are still working on defining the right metrics, putting the right leaders in place, and building the necessary level of understanding across the company.

Volunteers need to be refreshed and reinforced.  Now that we’ve built the agile network and created a portfolio of activities to support them, we move on to the next,  arguably  harder, step of institutionalizing the new behaviors across the company. For this to happen, we need to actively replenish our agile network. We’re heartened by the rising number of people signing up to get involved, but we’ll need to keep expanding the team to maintain its impact over time.

When a Country is Facing Political and Human Rights Issues, Should Businesses Leave or Stay?

Harvard Business Review - Mon, 12/17/2018 - 12:00pm
Steve Bronstein/Getty Images

After the murder of dissident Saudi journalist Jamal Khashoggi, many companies had to urgently decide whether to attend Saudi Arabia’s Future Investment Initiative, a global business conference scheduled to take place just days after news of Khashoggi’s killing broke.

Questions like this involving issues like politics, human rights, or equality often present themselves sooner or later for any business operating in global markets. “I’ve had at least five instances where decisions like that had to be made,” the longtime CEO of Tupperware, Rick Goings, told me. The examples sound familiar: South Africa during Apartheid, China after the Tiananmen protests, Venezuela since the Chavez era, Egypt during and after the Arab Spring, and parts of Mexico today.

Over the course of the last few decades, multinationals have entered and left “frontier markets” like Venezuela, Cuba, Iran, Vietnam, Myanmar, and others. How did they, and how can they, make decisions about entering or leaving these markets, knowing it is never certain when a political, financial, or diplomatic crisis will happen?

Keep a long term focus 

A decision based on short-term financial or legal motives alone is destined to end in problems. It doesn’t matter whether that short-term motive is to make profits or to avoid losses, to follow sanctions or to evade them.

First, consider short-term profits and sanctions, and the cautionary tale of French bank BNP Paribas. According to Reuters reporting, until a few years ago the bank operated in Sudan, a country whose government was under U.S. sanctions for its “continued support for international terrorism, ongoing efforts to destabilize neighboring governments, and human rights violations – in particular with respect to the conflict in Darfur.” To do business in such an environment, as in many other places struck by unrest and turmoil, could still be profitable. According to the Manhattan District Attorney, who later investigated the bank’s practices there for violating U.S. sanctions, that was also the reason why BNP Paribas continued operating in the East African nation: it made financial sense. The compass that was guiding the bank was a financial one.

But that focus on short-term profit was short-sighted – even on purely financial terms. In the case of dealing with Sudanese authorities, BNP Paribas never really made a clear-cut choice when sanctions hit. It continued to operate in the country, even as international pressure on the Sudanese government mounted. It cost the bank dearly: in 2014, the investigating U.S. attorney slapped the bank with a record fine of nearly $9 billion, partially for its dealings in Sudan, partially for its activities in other countries facing U.S. sanctions, like Iran. Its short-term motives led to deep losses.

Leaving a country in order to prevent short-term financial losses isn’t a panacea either. The companies that know this best are those who have been around for a long time, like 152-year-old Nestle. “Financial criteria are very important,” Nestle Chairman Paul Bulcke told me, “but it doesn’t mean financial results today.” The company was and remains present in troubled markets like Cuba, Myanmar, Syria, and Venezuela. In the latter it has “no financial reasons” to be present, Bulcke said. “But Venezuela has been important to us and will one day make a comeback. People continue to eat. Our allegiance is to them. They remember the companies that left, and those that stayed. If you add the perspective of time, it’s not that dumb to stay. It’s an investment.”

Finally, consider the case of a company that adheres strictly to sanctions, but immediately re-enters a country when those sanctions end. The problem with this short-term legalistic approach is that sanctions come and go, but the underlying problems may remain. Cuba, Libya, Iran, and Myanmar in recent times saw sanctions come and go (and in some cases, come back again). A company can’t simply treat a sanction regime as a traffic light. If sanctions are dropped for diplomatic or geopolitical reasons but the beliefs or values of a country’s leaders haven’t changed, issues may surface again. A company’s presence may then backfire. More on that below.

Which decision factors provide a better “true north,” then? Here are a few tried and tested methods, that worked for companies in the past.

First, Do No Harm 

For business executives with a medical background, the Latin maxim “Primum non nocere” will be a well-known and non-negotiable rule. It can be of great help in deciding whether to enter or leave a country facing difficulties as well. For a consumer goods company, it might be easier to see in the Sudan example above why staying in the country despite selective sanctions on the government could be the right decision. All else being equal, a multinational producing milk, bread, or cereals might want to stay in business in a country with a corrupt or authoritarian regime to ensure the population continues having access to food. The alternative — leaving and therefore not supplying those things — may cause more harm to the population.

One country where this equation is particularly relevant today is Venezuela. The country, ever tighter in the grip of a government that erodes human rights guarantees and arbitrarily arrests opponents, has nationalized many companies, and seen many more leave. But consumer goods companies like Polar, Nestle, and Johnson & Johnson so far clung to their presence there, even if they increasingly must cut back production. “We have a connection with the consumers, not the government” Nestle Chairman Bulcke told us. “As long as we can serve them, we do that.” The same is true for Tupperware, CEO Rick Goings said: “If you see how much weight people lost on average, my first concern is: how do we not abandon them? We had to come up with lower priced product, and source locally, but we never left them.” That could be a good “true north” argument for others, too.

Who Benefits?

A second Latin phrase that can offer respite to business executives face with an ambiguous situation is “Cui Bono,” or “Who stands to gain?” In judicial matters, this question is considered to help determine who may have committed a crime. Business leaders providing services that benefit both a suffering population and a profiteering government could ask themselves this question, too. Weighing the interests of both their clients and the government, who stands to gain from us being here, and who stands to lose? If a Swiss engineering company is contracted in a junta-led Myanmar to advise on building a dam that provides electricity to hundreds of thousands of families, should it accept, because it benefits the population? Or should it decline, because the dam benefits the military junta? In this case, the company in question decided to move forward.

For U.S. companies in Myanmar, the dilemma didn’t pose itself for a long time, as there had long been sanctions on the Burmese government. But when opposition leader Aung San Suu Kyi came to power, the sanctions were gradually lifted, and companies could enter the “final frontier”. In 2013, executives from large tech companies, including Google, Cisco, Microsoft and Intel hopped on a trip organized by USAID. That same year, my own organization, the World Economic Forum, organized a major international meeting in Nay Pyi Taw, a city north of Yangon. But even if the largest government and international organizations greenlight a country, it’s important to make your own assessment about who benefits from your entry. Those that did not got a wake-up call this year. Suu Kyi, a heroine of human rights just years before, herself came under fire for the military and government intervention in the Rakhine state. One of the companies that came under scrutiny because of the events was Facebook. Members of the military were believed to have used to platform to spread hatred under the population. The claim is that they benefited from Facebook’s presence, and used it as a weapon against the Rohingya population.

Why Are You There?

A third reflection companies could make in assessing difficult markets, is what their “raison d’etre” is. For a profit-seeking company, profitability should at least be a theoretical possibility when they open a new foreign subsidiary. In a country whose currency in a given year is in free fall, like Argentina’s and Turkey’s this year, it may be non-sensical for a company that is not yet active there to make a large dollar-denominated investment to start operations. Similarly, while consumer goods companies may have a reason to stay in crisis-ridden countries like Venezuela, service firms may no longer see the point of being there. “We left Venezuela. There was no business there for us, and no future,” Patrick De Maeseneire said. He is the CEO of Jacobs Holding, a Swiss long-term investment firm, but talked about Adecco, the largest HR services firm in the world, which he previously led. “Our clients had left, and our leadership – mostly expats – went to Colombia.”

The raison d’etre can also differ per industry. For a services firm, De Maeseneire said, the calculation is different than for a manufacturer: services firms have fewer fixed assets to look after, and their clients often are fellow multinationals. They themselves leave when a crisis strikes. Conversely, companies with long term assets, like factories or buildings, may have an even stronger incentive to stay in troubled markets, but equally should think twice before entering a market.

But when circumstances change and the reason to operate returns, a company should also not hesitate too long to enter. “The first mover has an enormous advantage in growth markets,” De Maeseneire said. “You can capture market share and put up a barrier to entry for others.” When he was CEO of Barry-Callebaut, the world’s largest chocolate producer, he often was among the first to build a factory in Russia, China, and certain countries in Latin America and Africa, like Cote d’Ivoire, Cameroon, and Ghana. With the network of private schools he currently looks after for Jacobs Holding, he equally eyes expansion in emerging markets. “You have to dare to invest,” he said. “We’re in it for the long run. You have to learn to deal with volatility. Business survives politics, fortunately.”

What Are Your Values?

Finally, consider your own and your company’s values, and the priorities you put on each of them. That can be helpful in case a snap decision needs to be made about new events that need responding or emerging crises. Nestle got in such an emergency situation when its plant producing Maggi Bouillon in Syria was bombed and burned down in 2013. As a consequence, the company was forced to shut down its operations in the country. “If we cannot guarantee the safety of our employees, or the quality of our products, we cannot continue to function,” Bulcke told us. In other words, safety and quality is a red line for Nestle. He applied the rule in Congo as well, where he was forced to shut down a factory that he had himself opened many years earlier. But even when the company ceases operations it tries not to cut ties with a country all together. Nestle keeps some 100 people on the payroll in Syria, for example. “Our pain limit is high, and I’m proud of that” Bulcke said, referring to the company’s preparedness to accept short-term financial losses. “We respect ourselves, the other, and the future. Those are our values.”

Others go even a step further. As an executive at Avon in the South Pacific, and later as CEO of Tupperware, Rick Goings decided to remain active in countries that were seen in the West as flaunting human rights. To reconcile this ambiguity, Goings was both principled and pragmatic. In Apartheid South Africa, Tupperware decided to apply the Sullivan Principles, a set of corporate social responsibility rules aimed at putting pressure on the government to end Apartheid, while allowing the company to not “exit and abandon”. “The majority of our salesforce and workforce was black. If we left the country in protest, we took the food off their table, he said” In China, he followed a more pragmatic logic. “I lobbied Congress for Chinese membership of the World Trade Organization,” he said. “It later earned me the Marco Polo Award in Beijing, a rare honor for a foreigner. But because of my lobbying, I was able to protest [the government’s actions on democracy] directly rather than having to abandon.”

Ultimately, each board, and each executive team will need to make its own set of principles and rules to decide whether and when to enter or leave turbulent markets. But the personal compass of decision makers matters. “We can’t live in Fantasyland. Profits matter,” Goings said, summarizing his views. “But you need to be able to look back, put your head on the pillow, and say: wow, this is a good thing we do.”

Help Your Team Overcome Digital Distractions to Be More Innovative - SPONSOR CONTENT FROM WORKFRONT

Harvard Business Review - Mon, 12/17/2018 - 10:30am

Alexander Graham Bell once noted that “the inventor … looks upon the world and is not contented with things as they are.” I could say the same of most business leaders I’ve met. With rare exception, they’re not satisfied with the status quo and are driven to innovate and change.

And yet that drive for innovation fails to reach most people on their team — at least not in a way that employees can act on. 58% of knowledge workers say they’re so swamped with tasks that they don’t have time to think beyond their daily to-do list, according to Workfront’s State of Work report. And the average knowledge worker says they spend just 40% of their time doing the job they were hired to do.

This isn’t a new issue, either. We’ve been surveying workers for five years, and the response remains consistent: workers are so busy with distractions that they don’t have time to focus on their primary job, much less invent the future.

Why do we let this happen? If I were the CFO of a manufacturing company and was asked by the board for my manufacturing capacity utilization and I said I didn’t know or that it was only 40%, I’d probably get released to ‘pursue other opportunities.’ And yet many executives who employ knowledge workers accept that there’s no choice but to fly blind and keep putting their people in a work environment that results in them devoting less than half their time to their real work.

That’s crazy. Digital technology should be freeing us up to be more innovative and productive. Instead our technology leads to over communication, a glut of distractions, and the tyranny of the urgent. At the same time, the complexity of modern business causes today’s leaders to struggle to get insight into what’s happening across their company.

What we’re talking about here is a digital work crisis. We’re over-instrumented, yet underserved. We’ve become so real-time we don’t have real time.

Some people look at this digital work crisis and say we will solve it by embracing incremental change and stretching existing platforms to do more than they were made for. So far, this approach has only failed. You can see this in research that found companies spending $1.3T on digital transformation, 70% of which will not achieve their stated objectives. Fortune 500 companies that stuck to antiquated approaches are not just suffering — they are vanishing.

A new generation of leaders know that confronting the digital work crisis isn’t just about surviving. It’s about learning to thrive by embracing a new way to work — an operating model that combines cultural changes and digital technologies in an integrated, well-planned approach to improve revenue, customer experience, and cost.

When it comes to cultural changes, this new model of work requires less hierarchy and more empathy. As I write in Done Right: How Tomorrow’s Top Leaders Get Work Done, the more a leader trusts their team to solve problems, the more their employees will own solutions and invest in securing successful outcomes. This approach gives people freedom to make mistakes and believe that they come to work to do their best. It’s about empowering people to speak their minds and then really listening to the wisdom in the room. In an era as complicated as today, no single leader can possibly have all the answers.

For instance, at Workfront we use a collaborative approach to identify our key initiatives. One way we do this is by gathering teams together and handing each person a stack of sticky notes. Then we set a timer for two minutes and ask everyone to write down one idea per sticky note that might help us accomplish our primary goal. At that point, each person sticks their notes to the wall in random order. We then divide into two teams and invite each team to take half the sticky notes off the wall and group them into four to six clusters or themes.

Every time I’ve done this I’ve found that one or more of the clusters are very similar across the two teams. These clusters become our key initiatives for accomplishing our primary goal. Since these key initiatives arise from the wisdom in the room, they come with team buy-in from the outset, making our chances of innovation and success far more likely.

This new model of work is also built on a system of record that tracks all activity across an organization, provides accurate reporting on what’s happening at each level, and integrates with the myriad of software tools used in an enterprise. Just as businesses use a financial system of record such as SAP, a customer system of record such as Salesforce, and an HR system of record such as Workday, they also use an operational system of record to conquer their digital work crisis. This way they bust down work silos, spend less time in useless status meetings, and free up time to innovate.

No leader today would say they want people to work more and accomplish less. But that’s exactly what’s happening with knowledge work around the globe. Unless today’s leaders figure out a way to successfully navigate their digital work crisis, they’ll be stuck with a workforce that doesn’t have time to innovate. And that’s a shame, because work matters. With an operating model that includes cultural changes and an operational system of record, modern leaders can overcome the digital work crisis and release a team that is able to do their best work.

To learn more click here.

 

 

When Managers Break Down Under Pressure, So Do Their Teams

Harvard Business Review - Mon, 12/17/2018 - 10:00am
Anthony Lee/Getty Images

As a leader, much of what you do is relatively forgettable. We don’t mean to insult, but your routine actions on routine days are experienced by your direct reports as, well, routine.

But for non-routine days — the days when you are under the gun, feeling the heat, or pushed to your limits — how you respond under the pressure makes an indelible impression on the people around you. Our latest research shows that your temperament in these crucial moments has a tremendous impact on your team’s performance.

When the hammer comes down, are you calm, collected, candid, curious, direct, and willing to listen? That would be ideal, wouldn’t it? Or would your direct reports describe you as upset, angry, closed-minded, rejecting, or even devious?

We asked more than 1,300 people in an online survey to describe their leader’s style under stress and the impact of that behavior on their work. We found that a large majority of managers and leaders buckle under pressure. Specifically, respondents reported that, when under pressure:

  • 53% of leaders are more closed-minded and controlling than open and curious.
  • 45% are more upset and emotional than calm and in control.
  • 45% ignore or reject rather than listen or seek to understand.
  • 43% are more angry and heated than cool and collected.
  • 37% avoid or sidestep rather than be direct and unambiguous.
  • 30% are more devious and deceitful than candid and honest.

One executive we worked with was adamant and deliberate about creating a fun and supportive atmosphere where his team felt safe to try new things. He saw his role as supporting people and developing talent. And yet, to his surprise, most of his team labelled him a “jerk.” As we described a time when his team found him to be extra “jerky,” he said, “I know what you’re thinking: you’re thinking I’m some sort of hypocrite. But I’m not. Ninety-five percent of the time, I’m the fun, supportive guy I’ve described. It’s only five percent of the time when I lose my temper or forget what I should be doing and I say stupid things like that. Those statements are not an accurate reflection of who I am.”

And while his team agreed he was great 95 percent of time, this non-routine behavior left a lasting impression. His team felt it was those few moments — the five percent of moments when stakes were high, and the heat was on — that revealed the truth about who he really is.

And there’s more to the story. The research found that when leaders buckle under pressure, it doesn’t just hurt their influence, it also hurts their teams. Respondents said that when their leader clams up or blows up under pressure, their team members have lower morale; are more likely to miss deadlines, budgets, and quality standards; and act in ways that drive customers away.

Our research reinforced this. One out of three leaders were seen by their direct reports as someone who can’t talk or engage in dialogue when the stakes grow high. And when leaders fail to practice effective dialogue under stress, their team members are more likely to consider leaving their job than teams managed by someone who can stay in dialogue when stressed. Team members are also more likely to shut down and stop participating, less likely to go above and beyond in their responsibilities, more likely to be frustrated and angry, and more likely to complain.

A leader’s brash communication style also has a domino effect on team morale and psyche. One employee of a large multinational company told us that his direct leaders were terrible in high-stakes conversations, and the more he tried to speak up and engage, the more verbally violent his leaders became. He and his front-line colleagues grew increasingly silent. It was so bad that people adopted the attitude: “They pay me just enough not to leave, and I work just hard enough for them not to fire me.” They also adopted the saying, “$1000/week for hide and seek.” It wasn’t that they were just a little disengaged; they deliberately avoided management, contributed as little as they could get away with, and picked up their check at the end of each week.

Our research reinforced this. One out of three leaders were seen by their direct reports as someone who can’t talk or engage in dialogue when the stakes grow high. And when leaders fail to practice effective dialogue under stress, their team members are more likely to consider leaving their job than teams managed by someone who can stay in dialogue when stressed. Team members are also more likely to shut down and stop participating, less likely to go above and beyond in their responsibilities, more likely to be frustrated and angry, and more likely to complain.

You and Your Team Series Communication

Let’s walk through an example to see how a few simple skills can help a leader be at their best even when the pressure is on. Imagine you’ve just come from a meeting with a customer, your boss, and your boss’s boss – and it didn’t go well. You thought your company’s agreement with the customer stipulated a 15-day order delivery. But that wasn’t what the contract actually specified. The timeframe was 10 days so you and your team have been missing the mark every time. Your boss and her boss were embarrassed and angry and as they left the meeting, put the onus on you to fix the situation ASAP. Now, you have to go back to your team, including the contract officer who originally misunderstood the contract, and get them to put in the evening and weekend work it will require to meet this week’s deadlines.

  • Determine what you really want. You’re humiliated and angry and you blame your contracting officer for the mistake. But before you allow your emotions to take over, stop and ask yourself, “What is it I really want long term, for myself, for the contracting officer, and for the team?” The answer to this question becomes your North Star, the purpose that guides your actions. In the moment, you might feel like proving to the contracting officer that you’re angry, but is that productive over the long term? Instead, focus on a positive destination like “Showing my best self” or “Making sure the team understands my appreciation for the sacrifice I’m going to ask them to make,” for example.
  • Challenge your story. It would be easy to make the contracting officer the villain. Not only does it sound plausible, but it would also make you blameless — a victim, even. You would feel justified in your anger. However, the best leaders challenge their stories. So you could ask, “Why might a rational, reasonable, and decent person make the mistake that she made?” and “What role did I have in allowing her mistake to go unnoticed and uncorrected?” These questions move us from angry judge to curious problem solver, and make us far more effective as leaders.
  • Start with facts. When we’re angry, we lead with our emotions, instead of with the facts. Skilled leaders tamp down the temptation to level accusations, and gather the facts. Specifically, focus on what you expected: the commitments, standards, policies, or targets that were missed. Then, add what you observed: the specific actions with dates, times, places, and circumstances as necessary. Don’t add your conclusions, opinions, or judgments. Because facts are neutral and verifiable, they become the common ground for problem solving.
  • Create safety. When you’re under pressure with your job or reputation on the line, how do you light a fire under your team without showing them your anger? Can you get your team to put in the overtime you’ll need from them without threatening them? The short answer is yes. Our study showed that teams work harder and more effectively if a boss doesn’t lose their temper with them. So you don’t have to threaten. Share your positive intent by saying something like, “This is not about blaming, it’s about fixing. I want us to focus on how we can solve our immediate problem. Then we can circle back to find ways to prevent it from happening again.” By framing your intent, you get your team focused on what they need to do, and not on how they are being mistreated.

When the heat turns up at work, most of us aren’t at our best. If you’ve lost your temper in the past, be easy on yourself. You may do it again. But don’t be discouraged – or complacent. Ask yourself, “When it matters most, who am I?” While it isn’t easy to step up to your best self under pressure, it is incredibly important. These are defining moments for you and for your team.

A Look into Microsoft’s Data-Driven Approach to Improving Sales

Harvard Business Review - Mon, 12/17/2018 - 9:00am
Orbon Alija/Getty Images

Companies are beginning to utilize their employees’ behavioral data — generally known as people analytics — to better understand and improve their sales operations, with strong results. Microsoft, where we work, is no exception, and B2B sales is one of the areas where we are seeing the most value. Our findings, and the ways we came to them, can be useful to other sales organizations looking to make internal changes of this type or optimize how their salespeople relate to customers.

In mid-2017, we executed a major redesign of our sales organization in response to what our customers needed from us, and to better align our selling approach with cloud services sales model (in this model, customers pay based on usage versus a traditional fixed licensing deal). We knew we needed a fast and effective transition to the new model without dropping the ball with our customers, but the undertaking was daunting and the stakes were high: With a complex sales organization of 20,000-plus salespeople covering large enterprises to small business customer segments, and spanning 100 countries, it was important to see how these changes impacted our customer collaboration and partnerships. We needed to get answers to some of our biggest questions, including:

  • Are we spending enough time with our most important customers?
  • Are new hires ramping up and collaborating with customers as quickly as expected?
  • Are they growing their internal and customer networks?
  • Are salespeople collaborating with one another effectively?
  • How is all this impacting our customers’ own business success?

Our hunt for answers started by using our own Workplace Analytics product to aggregate de-identified calendar and email metadata for thousands of enterprise salespeople. We then combined that with organizational and customer relationship management data to determine how the people selling via the cloud sales model were collaborating with their internal teams, customers, and partners. The next step was to correlate sales outcomes with these behaviors to identify the patterns that correlated with better results. These analyses were done in part to help us through a massive transformation and in part to better align us in responding to our customers’ needs and expectations. To date, the analyses revealed several actionable insights, which we came to with the help of our colleagues Ben Boatman, Chris Moss, Gabriel Zhou, Jared Baker, and Fabio Correa.

1. Networks are vital — and a reorg could destabilize them. One of the first things we learned is that salespeople with larger, more inclusive networks tended to have better outcomes. This is consistent with a number of other similar studies. Based on this finding, we initiated a program to coach our sales teams to focus on efficiently building and growing their internal and external networks. By looking at network size relative to tenure within the company, we were further able to establish that it typically takes roughly 12 months for most people to build these networks.

This underpins the importance of stability in roles over that time period, and beyond. It also left us concerned that the reorganization was forcing the salesforce to rebuild their networks from scratch, which could be costly and sub-optimal for our customers. To mitigate this cost, we rolled out programs to emphasize manager coaching and invested in facilitating rapid network growth for new hires.

2. We engage very differently with high-growth accounts. Another key aspect of the re-org was to ensure continued growth of our business and the right level of engagement with customers. Looking at the amount of time teams spent interacting with each of their accounts, as well as the number of individual contacts they were connecting with, allowed us to identify statistically significant differences in how teams engaged with the different account segments. On average, teams engaged with twice the number of customer contacts in our higher growth accounts, and collaborated double the amount of time with these customers as compared to lower growth accounts.

To make sure this wasn’t just a one-time anomaly, we also confirmed that this pattern was consistent month over month. Correlation vs causation is always an open question with an initial finding like this: are the accounts higher growth because we spend more time with them? Or do we spend more time with them because they are higher growth? Deeper analysis showed that investing more time and energy into partnering with some of these lower growth accounts could improve them. As a result, we adjusted our sales coverage models to enable more face time with these previously underserved customers.

3. Relationship investments correlate with customer satisfaction. It was important that the new sales model also drives happier customers and partners. Therefore, our next step was to look for patterns associated with customer satisfaction. We found that customer satisfaction is directly correlated with customer collaboration time (email and meetings) across all Microsoft roles and teams engaging with customers, including product engineering and marketing teams.

In the enterprise segment specifically, satisfied customers are the ones we spend the most time with and the least satisfied are the ones we barely keep in touch with. This and other findings encouraged our sales leaders to revamp internal business processes such as business reviews and forecasting meetings to be more efficient. We also reduced the number of enterprise accounts per seller to allow for more customer interaction. This enabled our sales teams to spend more time building and maintaining relationships across their entire account portfolios. We also observed behavioral differences in different countries — some use email more frequently than others, for example U.S. and Canada sellers directly schedule meetings with customers through Outlook, while in Japan customer meetings are more formal and scheduled via executive assistants. This confirmed our understanding of various cultural norms and collaboration patterns which was an important input to our analysis.

4. Customer satisfaction (and churn) can be predicted. As part of our ongoing organizational efforts to better understand our customers, one of our teams built a machine learning model that uses more than 100 features to predict customer satisfaction. We worked closely with this team to add the behavioral data about collaboration we gathered into the model. After our analysis, we discovered that collaboration became the top feature in predicting customer satisfaction, and helped increase the accuracy of the model from 78% to 93%.

Being able to predict satisfaction of each of our customers at any given time with this level of accuracy was a groundbreaking discovery for us. Further, having a deeper understanding of how our team’s interactions influence customer satisfaction by segment has huge upsides: it enables us to intervene in time to change high-risk customers into low-risk ones, and to offer new opportunities to highly satisfied customers. Our ability to predict customer satisfaction with this level of accuracy will help us keep an ongoing pulse on our transformation and intervene in a timely manner to ensure customer satisfaction at all times.

What’s next. Our goal is to arm each seller with these four insights on an ongoing basis, setting them up to be as successful as possible in creating value for our customers. We are currently testing a prototype in which a customized and automated email is sent monthly to each seller to help guide them toward behaviors that drive higher outcomes. Importantly, the data sent to each seller is set up for their eyes only; to protect everyone’s privacy and retain trust in the system, no one else, not even upper management, can see anyone else’s data.

Salespeople are provided the following every month:

  • Predicted satisfaction scores for their customers
  • Reminders to connect with customers they’ve lost touch with
  • Internal and external network size in comparison with benchmarks in their local areas
  • Recommendations on how to grow their customer networks through LinkedIn Sales Navigator
  • Time spent with each of their customers as compared to addressable market
  • Top internal collaborators and reminders to connect with other sales roles that are also working with their customers

We believe this information will empower our sellers with nudges and recommendations that are simple, actionable, and effective. Early reactions are extremely positive. If we continue do our jobs well, our sellers will be empowered to be as successful as possible, and will get better and increasingly connected to customers over time.

We also learned a few things along the way that were critical in helping us shape the story and vision to drive business impact.

  • Executive sponsorship is critical, and we couldn’t have gotten our analysis off the ground without it. Their support helped us get the right level of visibility for continuous analysis and digging deeper, which ultimately got us to something more meaningful and actionable.
  • Investment in business analyst, data science, and data engineering talent was essential. It takes a real commitment to unlock and operationalize the most powerful insights, and it takes a lot of people to do it. We believe bringing the right people onboard is worth it.
  • Freeing data from silos and cross-team collaboration was key to our success. As for any analytics project, we needed to source data from multiple sources across the company to correlate behaviors with sales outcomes. Without this, our efforts would be fruitless.

We’ve invested a lot of time and resources in building out our behavioral data capabilities, and they’re already generating tremendous value. However, we believe we are still in the very early phases of uncovering what’s possible. We have a long way to go, but so far, our transformation is working. Pushing the envelope on behavioral analytics has been a key ingredient to our success, and hopefully our insights can help your salespeople, too.  

When You and Your Friend Both Want the Same Promotion

Harvard Business Review - Mon, 12/17/2018 - 8:05am
Gemma Escribano/EyeEm/Getty Images

Research generally shows that having friends at work can increase productivity and engagement. However, a new study by Wharton researchers Julianna Pillemer and Nancy Rothbard finds that there can be a dark side to having friends at work, especially if what’s best for the friendship conflicts with what’s best for the organization.

Take this example: Suppose two colleagues, let’s call them Lata and Andreshave worked on the same team for over five years and are close friends. They’ve supported and coached each other whenever work challenges come up for one of them. They get together with their families on weekends. And they both cherish having a close friend who is also a colleague.

Recently, however, a point of tension came up for Lata and Andres. Their supervisor told Lata that they were both being considered for a major promotion and whoever received the job would end up managing the other. While both were excited about this possibility, they also felt uncomfortable. Their relationship had always been mutually supportive not competitive. And they both had good reason to want this promotion. Lata’s aging parents had moved in with her family, so she’d recently bought a bigger house — and now had a large mortgage to pay off. For Andres, as a single parent with three children, this promotion would mean he would be doing more team management and less client-related travel, allowing him to spend more time with his kids.

After a grueling round of interviews, Lata was selected for the promotion. Andres felt disappointed. While he was happy for Lata, his self-esteem had taken a hit. His closest friend at work was now his manager, which meant a new awkwardness between them which inevitably impacted their ability to work together.

What do you do when a work friend and you are both up for a promotion — or in any other competitive scenario where one of you stands to “win” while the other stands to “lose”?

First, emotional balance and perspective are critical. Remind yourself that this is just one of many promotions that will come up in your career trajectory. It’s easy to focus on the trees and not the forest and lose perspective — especially when you’re caught up in an emotional situation. Brain-imaging research shows that, when you are stressed or anxious, reason and logic are negatively impacted. Taking a step back, gaining perspective and seeing things from a broader point of view can help. After all, how much better is it to have a manager who respects, likes, and understands you than a stranger who may not “get” you as well? Given research that shows that our heart health is directly linked to our relationship with our boss, having a leader you like and who likes you can be a huge advantage. A supervisor who appreciates and cares about you is likely to help support your career. For example, Andres knows Lata will always vouch for him.

You and Your Team Series Friendships

Perspective will also help you realize that your friendship is probably more important to you than the promotion. Research shows that social connection is one of our greatest needs after food and shelter. We are happier and more engaged at work when we have positive social relationships with the people we work with (even more so than when we receive a large paycheck). Loneliness, on the other hand, can harm both our psychological and physical health, as leading loneliness psychologist John Cacioppo, coauthor of Loneliness: Human Nature and the Need for Social Connectionhas shown in his work. Friends at work lead to a host of benefits for us both personally and professionally, including higher performance and lower burnout rates. Rather than dwelling on his own unhappiness with the promotion outcome, Andres might remind himself of how delighted he is for Lata. That social connection is more beneficial for Lata than dwelling on what he’s lost.

Second, keep your feelings of self-worth in check. The outcome of the promotion selection is not a judgment on you. Promotions can often be arbitrary and subjective. It’s not always about who is better for the job. For example, research shows that people get ahead at work due to relationships more than technical skills. We all know that “politics” almost always plays a role in these sorts of decisions as well. In the West, we mistakenly overemphasize situations as being about us. As pioneering cultural psychologist Hazel Markus has written about in her book Clash!: How to Thrive in a Multicultural World, if you’re from an individualist country like the U.S. or many European countries, you (erroneously) tend to think that you are solely responsible for your successes or your failures. People from collectivistic cultures like East Asian countries have a more holistic view: understanding that whether or not you win has to do with many more things than your own merit. The decision to promote (or not promote) you may have little to do with your actual skill, and more with factors outside of your control.

Third, communication and planning are key. Talk to your friend about the situation to diffuse the tension. Discuss your discomfort. Share your determination not to let this work situation impact your friendship. Andres and Lata would benefit from discussing what they would like their work relationship to look like and how to make sure the imbalance of power doesn’t impact their personal relationship. Even before a decision is made, it would help both Andres and Lata to think through the possible outcomes and how they would maintain their friendship.

The upsides of having friends at work are undeniable. But, of course, there are tricky situations to navigate. The key is to use your emotional intelligence to make sure you — and your friendships — can survive despite what happens in the organization.

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