• Huugy Rao’s Market Rebels in The McKinsey Quarterly

    My friend and colleague Huggy Rao has a great new interview and article– including video — in The McKinsey Quarterly on his fantastic new book, Market Rebels.  Check it out, and as I wrote here, this is a compelling and remarkably useful book — although in the name of full-disclosure, Huggy is good friend of mine!

    P.S. I'd like to thank Dave Livingston for letting me know Huggy's article was out.

  • The Bailout

    Taxbank-1

    Many thanks to Peter Sims for sending me this gem.

     I am not quite sure where I stand on the huge new bailout and am reading different sides to form an opinion.  I am damn sure, however, that former Merrill CEO John Thain tops my last for the most clueless and selfish asshole of them all. He was looking like a selfish and dishonest jerk when he had clearly lobbied for a big bonus for himself, but denied doing so. The latest news, which I am sure most of you know, is he apparently paid-out three or four billion dollars in bonuses in the last quarter of 2008, right before his bank was acquired by Bank of America (which has taken 20 billion in TRAP money). He should be thrown in Hudson River. I also wonder, are there any lawyers out there who are smart enough to figure out how to get some of this money back from these selfish creeps?  If you are one of the former Merrill executives who got that money, I suggest not spending it — I suspect the wheels are in motion already to take it back. Laws aside, Thain's actions are the most shameful I have seen in this fiasco. Thain brings power poisoning to a whole new level –in a just world, his assets would be seized and divided-up among several thousands people who are unemployed or about to lose their houses. I am not easily shocked, but his actions really upset me.

  • “Everyone will get humiliated and encouraged together”

    As I wrote a few weeks back, I was delighted to discover that our interview with Brad Bird in The McKinsey Quarterly was the most downloaded in 2008.  I confess, however, that I had not got around to re-reading it until today.  It reminded me what a charming genius he is all over again — one of the most fascinating people I've interviewed. I was especially taken with his points about how long it took to persuade his team on The Iron Giant to start challenging his ideas — to engage in constructive conflict (to argue as they are right and listen as if they are wrong, as Weick put it).  In the interview, Bird described show he urged his team that they would learn the most and do the best work if they showed their work to each other, critiqued it, and improved it — as the quote says "Everyone will get humiliated and encouraged together."  That is one of the best lines I've ever heard about the best atmosphere for encouraging creativity and innovation. At the same time, the interview shows that saying "trust me" is a lot easier than earning trust, as Bird reports it took a full two months before people started challenging his ideas.

    P.S. Brad not only directs, he "acts" in his films, he was the voice of Edna Mode in The Incredibles, the half-Japanese half-German superhero costume designer.

  • John F. Kennedy on Myths

    PT 109
    I was re-reading Guy Kawasaki's Reality Check, and came on a quote that — for me — perfectly summarizes the need for evidence-based management (and the mindset that can make it so hard to implement):

    "The great enemy of truth is not often the lie — deliberate, contrived and dishonest — but the myth– persistent, persuasive, and unrealistic.  Belief in myths allows the comfort of opinion without the discomfort of thought."

    One of the main enemies of truth — and the main causes of persistent but false myths — is what psychologists call confirmation bias — we tend to seek out, believe, and remember facts that support or beliefs, and avoid, disregard, and forget facts that clash with our myths.  The upshot is that we travel through life seeing persistent support for the myths we cling to, despite the evidence.  Simon and Garfunkel summarized this well when they said (I think I remember this accurately):  "A man sees what he wants to see and disregards the rest." This applies to women to, of course.  

    One of the best defenses against "the comfort of opinion without the discomfort of thought" is to have strong opinions, weakly held.

    P.S. John, thanks for the information and correction, the Simon and Garfunkel song is from The Boxer, and is ""Still, a man hears what he wants to hear;
    And disregards the rest."

  • Nul røvhuller-reglen: The No Asshole Rule in Denmark

    NAR Danish
    The No Asshole Rule just came out in Danish.  They call it Nul røvhuller-reglen.  And here and here are a couple links out their for those who read Danish .  IN fact, I would love to here from a Dane about how you would translate the title and about whether their are issues with The No Asshole Rule in Danish organizations — I suspect there are, in part, because I have been getting a smattering of emails from Danish victims in the last couple weeks,including one fellow who wrote me this sad note:

    I've  been bullyed by a co-worker; the chief of staff didn`t do anything. My heart and
    body is damaged, and I`m in bad shape and left hurting and she`s still at work,
    hurting others.  I`m in a group of people, who all have had the
    "pleasure" to meet a a*shole.. We`re helping each other, but need
    research, help and money to continiue helping all these sweet but broken and
    hurting men and women.

    That phrase "sweet but broken and hurting men and women" is touching and heartbreaking.  I also take this is a sign that no matter how great a culture or country, there are always assholes. Even in Denmark, which some research shows has the happiest people in the world.

  • Miracle on the Hudson: The Group Dynamics Angle

    Like everyone else, I am just tickled by the astounding story about US Airways Flight 1549 and the heroics of Captain Chesley Sullenberger.  Clearly, the guy deserves to be a national hero and he is the model for the pilot that we all want on our flight.  But I noticed something interesting in an AP story today, "The flight was supposed to have been the last leg of a four-trip day.
    The crew had begun the day in Pittsburgh, flown to Charlotte, N.C.,
    then to LaGuardia, and were to head back to Charlotte in the afternoon."

    Immediately, I thought of the research on airplane cockpit crew dynamics and effectiveness done by Harvard's Richard Hackman and others.  Richard is the world's expert on group effectiveness and I am lucky to count him as one of my mentors, as I worked on a group dynamics project that he led when I was in graduate school. I have also seen him now and then over the years.  Some people in the groups area are more well-known in business circles, but Richard is the best, especially if you care about evidence rather than faith-based practices.

    One of Richard's biggest research projects was on the dynamics of airline cockpit crews, and he devoted many days — for over a year of his life — sitting in the jump seat of the cockpit and observing and coding the dynamics if the dyad or triad. One of the main lessons that came from this –and related — research is that the less time that a crew has been together, the more group dynamics problems they have and the more mistakes they make.  In his book, Leading Teams (see pages 54 through 59), Richard cites research based on National Transportation Safety Board data indicating that 44% of the errors (called "incidents")that pilots make are on their first flight together and 73% happen on their first day together (although the incident on Flight 1549 happened their first day together, it was their fourth flight). Richard also cites an especially interesting study done at NASA Ames Research Center in flight simulators.  It compared the performance of two different kinds of crews that were put through some very challenging problems — bad weather, closed airports, mechanical problems and so on. These were pairs of pilots, just like Flight 1549.  One kind of crew was fresh, and as often happens on commercial flights, they had never worked together. The other crews had just come off several days on duty, but had flown together during that period –so they had established their group dynamics.  The tired crews made far fewer errors than the fresh crews — because they he had worked out their roles and routines. As Hackman writes, he sometimes has the impulse, when boarding a commercial flight, to stick his head in the cockpit, and ask the crew if it is there first flight together — the odds against an incident are very low even on first flights, but Hackman points out that your risk as a passenger would be far lower if you avoided first flights together. 

    To return to the Miracle of the Hudson, besides fitting Hackman's research in general, the AP story provides hints of good group dynamics. Fir example, good groups instantly divide up tasks so the best people are in the best positions. Note that the role switch and quick division of labor reported by AP:

    In the cockpit, Sullenberger took over flying from Skiles, who had handled the takeoff, but had less experience in the Airbus.

    "Your aircraft," the co-pilot said.

    While the pilot quickly leveled the plane off to keep it from stalling
    and thought about where to land, Skiles kept trying to restart the
    engines. He also began working through a three-page list of procedures
    for an emergency landing. Normally, those procedures begin at 35,000 feet. This time, he started at 3,000.

    Indeed, to take this a step further, an astounding book by Scott Snook (who was one of Hackman's students) called Friendly Fire
    examines why U.S. Black Hawk Helicopters were accidentally shot down over
    Northern Iraq in 1994, and one of the contributing factors he
    identifies as a cause of this problem was that the crew of the plane
    that had made the decision to shoot down the Blackhawks has only two
    prior flights together, despite Air Force policy (based partly on
    Hackman's research) that, whenever possible, "hard crews," those who
    had flown together many times before, had developed themselves into a
    team, and were "tight cohesive and stable" should be used whenever
    possible, and especially during combat missions.

    To go beyond the cockpit, as Hackman's suggests, and I discussed here, there is also evidence from product development teams, top management teams, and surgical teams that being together awhile — or having worked together on teams in the past — is linked to greater performance.  The research on product development teams suggests that they do eventually go stale, but that takes several years — at which time, some "musical chairs,"  rotating people among different teams, may help refresh the teams.  The implication is that familiarity seems to breed performance, not contempt or laziness.  And if you are designing teams, err on the side of assembling them with people who have worked together before and on the side of keeping them together longer.

    Of course, there are many many angles on the Miracle on the Hudson, but this one caught my eye because Hackman and Scott Snook make such a big deal out of it.  And it has implications for so many other settings.

  • Market Rebels: Professor’s Rao’s Masterpiece is Available

    I wrote a rave review for my friend and colleague Huggy Rao's book Market Rebels: How Activists Make Or Break Radical Innovations a couple months ago. His book is now for sale on Amazon and everywhere else. 

    As I said then:

    'The book is full of useful ideas, but perhaps the central one is that,
    if you want to mobilize networks of people and markets to embrace and
    spread an idea, you need the one-two punch of a "Hot Cause" and "Cool
    Solutions."  A hot cause like deaths from tobacco or medical errors can
    be used as springboards to raise awareness, spark motivation, and
    ignite red-hot outrage.  And naming these as enemies is an important
    step in mobilizing a network or market. But creating the heat isn't
    enough; the next step needs to be cool solutions.   This doesn't just
    mean identifying technically feasible solutions, it also means finding
    ways to bind people together, to empower them to take steps that help
    solve the problem, and to create enduring commitment to implementing
    solutions.'

    Market Rebels is a remarkably useful and evidence-based book, it isn't light and fluffy, as it is an academic book. But it is well-written and chock-full with great stories. If you want to learn how a small group of people can have a big impact on networks and markets, this is the book for you.  It is especially relevant entrepreneurs, people in sales and marketing, and social activists — but anyone who wants to spread a message and change behavior on a large scale will find it extremely helpful

  • Bosshole: The Perfect Word for the Modern Office?

    Images My post on Hassholes prompted Melanie to comment that her friend Bob Conrad used the term "Bosshole." on his blog. I couldn't find it there, but I checked the Urban Dictionary: Bosshole is a word that has been used in at least five different ways. My 12 year-old daughter Eve is rather obsessed with The Office, and having seen a lot of episodes on iTunes, this might be the perfect word to describe Michael Scott, the insensitive jerk played by Steve Carell — pictured to the left.

  • The CEO of Japan Airlines: He Cut His Pay Below Pilots

    Check out this CNN video story. If that doesn't work, try here. This guy made about $90,000 bucks in 2007.  He also cuts all his own perks and eats in cafeteria with the rest of his employees.  Rick Wagoner of GM's total compensation in 2007 was about $15,700,000 in 2007 — a year that his company lost almost 40 billion dollars. Can you imagine him cutting his pay below a UAW worker? or even a plant manager? I can't, as I have ranted about here before, he is held cultural hostage in a system that glorifies hierarchy and social standing rather than doing good right — or challenging the wrong thing. I would also note that this is not a purely cultural thing — some U.S. CEOs have voluntarily slashed their pay during bad times. JetBlue CEO Dave Barger, for example, cut his own pay to annualized rate of of $250,000 in mid-2008 when fuel prices shot through the roof, and I don't believe he has raised it yet. I want GM to be saved, but believe that most of the senior management needs to leave — for the good of their workers,the good of the company, and the good of the country.

    P.S. I also have a question based on my last post: Have their jets been sold, or are they simply for sale?  

  • Sleazy Legitimacy: How to Keep Your Corporate Jet

    The notion that organizations often make symbolic moves that are meant to increase their legitimacy, without otherwise affecting the organization, is one of the core ideas in a widely applied sociological perspective called "Institutional Theory."  For better or worse, senior executives and their PR people are the
    masters of hollow moves that are designed to protect their firm's reputations
    without making any actual changes that inconvenience anyone, especially the top dogs. 

    One of the most common tricks is to make announcements with much fanfare that you are GOING to do the right thing, but never quite get around to actually doing it.  A remarkable percentage of the changes that firms announce are never actually implemented – there is evidence, for example, from the late 1980's and 1990's that many companies that announced they were going to implement stock buyback plans, but never got around to actually implementing them, still enjoyed increased share prices anyway — so they didn't have to "waste" money buying back all that stock, just promising to do it was enough to impress the market.

    The latest example of such creative sleaze can be found in this Economist story on corporate jets, called Deeply Uncool.   Note the ending sentences of the article:

    "But not all companies that have put their jets up for sale are
    cash-strapped. And according to analysts at JPMorgan, asking prices for
    used jets actually rose by 3.4% in the year to November. Jonathan
    Breeze, chief executive of Jet Republic, a private-jet operator,
    suggests that some announcements that firms are selling their jets are
    “elaborate window dressing”. By putting jets up for sale at a high
    price that ensures nobody will buy, companies can appear frugal—even as
    their bosses continue to fly as usual."

    Elaborate window dressing is much of what Institutional Theory is all about, It is brilliant in a sick kind of way, isn't it?  They get the advantages of both keeping and selling their jets at the same time.  Perhaps the old saying "You can't have your cake and eat it to" is not quite right?